PROTECTING OUR INFRASTRUCTURE – ASSET MANAGEMENT (2022)
Background
Canadian families and businesses rely on municipalities to manage and provide transportation networks including road maintenance and public transit, policing and public safety measures, social services and housing, water and wastewater services, waste management and recycling, climate action, GHG reductions and resiliency, parks, recreation, libraries and culture, and public health including community vaccinations.
Asset Management is an integrated process, bringing together skills, expertise and activities of people; with information about a community’s physical assets; and finances; so that informed decisions can be made supporting sustainable service delivery [1].
Municipalities manage some 60 percent of the public infrastructure, deliver vital services and help achieve federal social, economic and environmental objectives. Yet, they continue to confront 21st century challenges with 19th century fiscal tools: user fees, property taxes and other land-based tools [3],[4]. In recent years, all orders of government in Canada have increased their investments in infrastructure.
The growing responsibility for core infrastructure needs places significant strains on local governments in Canada, which do not have the same revenue-raising capacity as their Federal and Provincial Peers [5]. In turn, this places greater financial pressure on businesses in our communities, by way of increased taxes because municipalities are limited in their means to raise revenues.
There are 196 municipal governments and 198 First Nations communities in British Columbia. Our communities, industry and businesses rely on our utilities, transportation and power system to sustain our business. Business interruptions due to broken water mains, poor roads, inadequate transit and other disruption causes economic loss to businesses and limits our ability to attract new businesses to our communities. Our communities also face financial challenges from increasing standards and regulations without adequate financial mechanisms to pay for them. The primary resources at the municipal level are property tax. Our businesses pay a much higher tax rate than our residential taxpayers. Significant increases in property taxes are not affordable either for our businesses or for many of our residents.
Our built environment or infrastructure is critical to the economic capacity and livability of our communities and the viability of our businesses within them. Many communities are struggling with competing financial pressures and aging, failing infrastructure. Municipal budgeting processes currently fail to require accounting for future demands for infrastructure upgrades and replacement. Government support at all levels is required to renew our infrastructure as well as assist with paying for new and increased regulations and standards [6].
Local leaders are making the most of these outdated tools. But to renew and increase the resiliency of the infrastructure in our communities that supports the economy and our quality of life, it is time to modernize the tool box [7].
The Canada Community-Building Fund (formerly Gas Tax Fund) is the federal funding tool that empowers municipalities of all sizes to renew core infrastructure. Federal Budgets 2019 and 2021 doubled the transfer for those two years [8].
The Federal government should expand the existing infrastructure renewal tools by increasing the annual transfer to the Canada Community-Building Fund in 2022-2023 to $4.6 billion, and boosting its annual growth index from 2.0 to 3.5 percent to reflect construction realities without passing the cost along to businesses [9].
Through the Investing in Canada Pan Infrastructure Program, the Government of Canada has committed over $180 billion over 12 years for infrastructure that benefits Canadians. To date, the plan has invested over $118 billion in over 78,000 projects, 98% of them completed or underway [10].
Infrastructure plays a key role in Canada and the Province of British Columbia’s future. In 2018, Canada and British Columbia signed the Integrated Bilateral agreement for the Investing in Canada Infrastructure Program (ICIP)[11] .
The program invests in infrastructure that:
- Creates economic growth;
- Sustains well-paying jobs;
- Builds inclusive communities; and
- Supports a low-carbon, green economy.
For BC as the nation’s Pacific Gateway, the Provincial government must actively formulate an overarching strategy to prioritize investment and attract federal funds. As communities in every Province compete for funding, it is important that a consolidated provincial strategy is in place to ensure that attention is paid to the needs of British Columbia communities.
THE CHAMBER RECOMMENDS
That the Provincial Government:
- Develop a long-term Infrastructure Strategy for British Columbia which is coordinated with the long-term strategic planning processes of the Province’s Regional Districts and includes funding incentives for municipalities that are tracking and reporting asset management.
- Amend the mandatory municipal budgeting process to require identification of future infrastructure needs and direct a portion of the Canada Community-Building Fund dollars to municipalities that have adequately assessed their need asset management needs.
That the Provincial and Federal Governments:
- Execute as quickly as possible upon notice of Federal funding, the necessary Provincial-Federal agreements to ensure funding continues in a sustainable consistent manner that accrues to our communities for infrastructure improvements and upgrades, especially smaller communities for existing infrastructure, and required upgrades resulting from new regulations and standards.
- Clarify their readiness to continue a dialogue about a modernized fiscal relationship that empowers municipalities with tools to tackle a broad range of locally-defined priorities—efficiently, cost effectively and with robust planning horizons.
That the Federal Government:
- Expand the Canada Community-Building Fund by increasing the transfer in 2022-2023 to $4.6 billion, and boosting the annual growth index from 2.0 to 3.5% to reflect construction realities without passing on the additional costs to businesses.
[1] Asset Management BC, Asset Management for Sustainable Service Delivery A BC Framework 2019, page 1
[2] Asset Management BC, Asset Management for Sustainable Service Delivery A BC Framework 2019, page 1
[3] Federation of Canadian Municipalities, Partners for Canada’s Recovery 2021 Report, page 35
[4] Federation of Canadian Municipalities, Partners for Canada’s Recovery 2021 Report, page 7
[5] Federation of Canadian Municipalities, The Case for Growing the Gas Tax Fund 2019 Report, page 11
[6] Federation of Canadian Municipalities (2016) Informing the Future: Canadian Infrastructure Report Card, page 6
[7] Federation of Canadian Municipalities, The Case for Growing the Gas Tax Fund 2019 Report, page 21
[8] Federation of Canadian Municipalities, Partners for Canada’s Recovery 2021 Report, page 21
[9] Federation of Canadian Municipalities, Partners for Canada’s Recovery 2021 Report, page 21
[10] https://www.infrastructure.gc.ca/plan/about-invest-apropos-eng.html
[11] www2.gov.bc.ca/gov/content/transportation/funding-engagement-permits/funding grants/investing in Canada infrastructure
program