Making Federal New Deal Infrastructure Dollars Unconditional

Year: 2006


Be it resolved that SUMA request that the Provincial Government work towards allocating the federal gas tax funding directly to the municipalities on an unconditional per capita basis because individual councils are capable of determining their own infrastructure needs.

Provincial Response

In August 2005 the provincial government signed a bilateral agreement with the federal government on the transfer of federal gas tax revenues under the New Deal for Cities and Communities. The New Deal agreement, which provides $147.7 million of new federal funding to Saskatchewan municipalities over the first five years of the ten year agreement, is a good deal for communities, a good deal for the environment and a good deal that will create jobs in our province. In advance of the agreement negotiations and during the negotiation process, significant work was undertaken through the Municipal Forum, of which SUMA is a participant. The work of the Municipal Forum's working committee guided the province's negotiation of the agreement and resulted in an agreement that both meets the federal government's objectives for the New Deal and the federal gas tax funding while also accommodating the needs of Saskatchewan communities. The federal government has signed agreements with 12 of the 13 provinces and territories and all agreements provide funding on a conditional basis to municipalities to achieve environmental outcomes. Government Relations will continue to seek additional flexibility within the agreement. We do not have any indication that the Federal Government is willing to consider providing unconditional funds through this agreement.

Federal Response

Municipal governments are clearly best positioned to understand local infrastructure needs of their citizens. This fact should be recognized when we choose how to deliver infrastructure programs. Local knowledge and understanding should also be reflected in how we define appropriate roles and responsibilities for infrastructure for the different levels of government. There are of course situations of interdependence between local interests and the broader provincial and/or national interests with respects to infrastructure. In such situations, it seems reasonable that the different levels of government would work together collaboratively to ensure that local, provincial and national community interests are all served to the extent possible. Joint results should be achievable, while at the same time respecting the autonomy of local governments in purely local matters. The 2006 federal Budget includes an additional $5.5 billion of new infrastructure funding over the next four years. We want these funds to be used effectively to address infrastructure priorities. We also want to ensure that our infrastructure funding makes a contribution to restoring an appropriate fiscal balance between levels of government. I am currently consulting with provinces, territories, and the Federation of Canadian Municipalities on matters including infrastructure priorities, how federal infrastructure funding can contribute to restoring fiscal balance, and, regarding the point you raise, on how to best allocate and deliver federal infrastructure dollars. I assure you that your organization's views regarding allocations of federal infrastructure dollars to municipalities will be considered in the context of our consultations this summer and as we move toward decisions this fall.

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