Thank you very much, Mr. Chair. It's a great pleasure for me to be here.
I was particularly excited to be asked to come before the finance committee for two big reasons: one, because I've never appeared before committee with your able chairmanship; and two, I have great admiration and respect, and even a bit of affection, for the finance critic of the official opposition. When I was asked to come here, I just thought what a great opportunity it would be for him to ask me questions and to have an exchange with him. As I'm not the finance minister, I don't have that luxury in the House of Commons. I have great respect for him, and I'm looking forward to his able questions and his wise helmsmanship of the finance file for the official opposition.
So thank you for being here, Mr. McCallum.
I have prepared a speech, but I thought I might just speak off the cuff about infrastructure spending.
Obviously we're facing some global economic uncertainty, global economic challenges. Canada is not immune to that. All the G20 leaders have agreed there is a need for major stimulus. We started that in 2008 with significant tax reductions. We started that with significant infrastructure investments, but we realize we have to build on that. We think it is incredibly important to push infrastructure projects. We believe they are not the whole answer, but they could be an important shot in the arm for the Canadian economy. That's why we're moving aggressively on infrastructure spending.
The one thing that successive governments have established is that, in a federation like Canada, you have to work together with provincial and territorial governments, and you have to work together with municipalities across the country. These issues are never easy. They're never fast.
The previous government and our government have set up programs and often taken a year or even three years—in the case of the previous government's infrastructure program announced in 2003—to negotiate framework agreements with every province and then to get projects going. Particularly, major projects don't turn on a dime. We're moving forward aggressively, for example, as a partner with the Spadina subway extension in Toronto, and the City of Toronto—the TTC—doesn't have the luxury of being able to have significant amounts of engineering work and design and environmental assessments all done before federal funding kicks in, because they simply don't have the financial flexibility to do that.
We have to deal with a lot of regulatory, legislative, and process issues. When the Prime Minister asked me to take on this position, one of the mandates he gave me was to speed up the process, because I don't think any of us—any provincial or territorial or municipal government—is satisfied with the speed with which infrastructure programs have worked, even over the last 25 years.
We are making record investments in infrastructure. One of the principal ways we do that is by providing a gas tax transfer directly to municipalities. We made that permanent in last year's budget, and those cheques are sent out twice annually to municipalities across the country, sometimes through the provincial government and sometimes through municipal associations, depending upon where you are in the country. That's very important, as is the GST rebate, which is another source of financial support that municipalities have to be able to count on in the long term. That is dealt with by the Department of National Revenue.
Those two constitute the majority of infrastructure spending. When it comes to the individual framework agreements we have with provinces, they have taken too long. They are too slow. They are too bureaucratic. And when the Prime Minister gave me these responsibilities he asked me not just to work with my officials but to speak to every single province, every single territory, and municipal leaders from across the country. We did that in December and concluded a final few in January.
I went out to every single provincial and territorial government and asked what the barriers were to things happening on infrastructure. We listened and we learned. We looked at the work that had been done by successive committees in the House of Commons. We got a lot of advice from the Federation of Canadian Municipalities. We got it from the Association of Municipalities of Ontario. In these infrastructure meetings around the country we invited municipal leaders to participate, and I think the process was stronger because of that.
We've come forward with a five-point action plan, which is the federal response to what we could do to speed these projects up. We're going to be proposing amendments to the Navigable Waters Protection Act. Everywhere we went there was virtual unanimity that we had to tackle this problem. One premier called it the biggest job-killer in his province, and we agree. We got unanimous consensus from all of the provincial and territorial leaders to make changes. Those are contained in the budget bill. They're in the budget bill because they're an important part of our national economic plan, and we believe we need to move expeditiously on it.
We looked also at the issue of regulatory reform. Every single province and territory that we spoke with asked, do we need one, two, three, four different types of environmental assessments? We need to protect the environment and we do that in different ways.
I was interested to learn that under the infrastructure program our government inherited, the overwhelming number today—before any changes are made—of environmental assessments preclude requiring any federal environmental assessment to take place. We'll give $20-odd billion for the transfers in the gas tax for infrastructure, and then the GST rebate, and there's not a single requirement whatsoever for any federal environmental assessment to take place in those direct transfers; neither is there in the base funding of our federal infrastructure program, which gives a base to every province, however big or small, to deal with.
We talked to all the premiers. I talked to premiers who are particularly well respected for their role on the environment: Gary Doer, Gordon Campbell, and Dalton McGuinty particularly. We said, could we not have one environmental assessment that could be done? The challenge is that if there is an infrastructure project all ready to go—“shovel-ready” is the common word—it can't go forward. It can't go forward because they don't have money, and the minute the federal government gives them one dollar, in today's regime, directly it triggers a full federal environmental assessment. That could delay the project for 18 months or two years, despite the fact that it's had a full environmental assessment at another level of government.
So we're making changes under existing legislative authorities for the next two years to fast-track these projects. I think that's a result of what we heard in our consultations. It's also an acknowledgement of the significant economic challenges we're facing.
We're also making changes to try to streamline consideration of issues under the Fisheries Act with my colleague the Minister of Fisheries and Oceans. We're looking at what we can do to have more direct consultations with first nations. If you're going to build a 300-kilometre highway, obviously that's a significant issue; if you're simply repaving a road at a $25,000 cost, that's a very different issue.
Finally, we're looking at what we can do to streamline the bureaucratic rule-making and red tape within government. Wayne Wouters, the Secretary of the Treasury Board, was reported to have given a speech recently in which he talked about the web of rules that has been built up by successive governments. Every time, under a Conservative or a Liberal government, in this country that there was a scandal, there were more and more rules placed on these projects, and they have almost strait-jacketed us.
None of the ones that we put forward in the Federal Accountability Act dealt with these, but when I was the President of the Treasury Board I appointed Frances Lankin, now the Honourable Frances Lankin, to head up a blue-ribbon task force on the web of rules and what we could do concerning grants and contributions, particularly in non-profit agencies, to make sure that we had important accountability measures in place but that we didn't measure accountability by the tonnage of paper used annually. They came forward with some significant positive recommendations for us, and we're looking at what we can do to reduce some of that red tape web of rules at Infrastructure Canada.
We're committed to doing our part to make things happen. Things have not happened fast enough. There is often a significant delay from the time we announce the project until the shovel goes in.
Finally, I'd highlight that one of the good financial administration practices brought in by the previous government, of which Mr. McCallum was a member, was that we have very tight money management policies. We don't give a $2 billion cheque out to someone if they're not ready to start putting a shovel in the ground.
For example, we're very proud to be supporters of the Spadina subway extension at Infrastructure Canada. We announced it two years ago. We didn't give them all the money up front because they weren't spending it. They're going to be putting the shovel in the ground shortly.
And we've come forward with a new policy to guarantee to municipalities and provinces that we'll pay invoices within 30 days. If there are specific requests for advance payments that will allow the project to go forward, we will entertain those and respond as expeditiously as possible.
That gives you a bit of an outline of where I see things standing, Mr. Chair. I particularly look forward to the well-respected questions from my colleague the member for Markham—Unionville.
You are significantly downgraded in your level of critic, but you know that from your prior provincial experience and from a few days ago.
I'd like to pick up from where we went in the transport, infrastructure and communities committee, because I'm sure, Mr. Minister, you didn't have a fulsome response then in terms of the time we had available.
A few days ago, you put out this performance report for Infrastructure Canada. There's a very nice picture of you in it and your signature and so on. In it you basically admit that your department, your government, couldn't spend any of the money it allocated in 2007-08. Of the $899 million you put forward in five different programs, only 4% of it was expended in that year. I guess there's been a lot of talking. You've talked to a lot of people and you're talking to us today, but I'm wondering if you could get more specific.
Can you tell us the specific actions you're going to take, and can you tell us very specifically how much money you're getting out the door this year? How much money is actually projected now to be spent? Because this most recent record...I think you'd have to admit that 4%, notwithstanding all the caveats you might like to put forward, is a pretty dismal achievement. It's your report card. It's signed by you. There's no money for the Building Canada Fund even committed in estimates and none out the door. There's money committed for a whole range of other programs in terms of the borders, in terms of P3s and so on, and as you see in the report, not a nickel of it is spent.
So we need to understand, Mr. Minister, your grasp on how it is you're going to turn that around so completely. So I'm wondering if you could tell us the specific actions you're taking, because these are your programs that didn't work up to now.
One of the things we did before making any decisions is go out and we listen. I was impressed that on the Navigable Waters Protection Act, the Conservative Party, the Liberal Party, the Bloc Québécois, and the NDP did a lot of work on this--the transport committee--and responded unanimously. These changes were all looked at over a year ago, long before the current economic crisis that we now face. So we're coming forward with legislative changes and we're coming forward with regulatory enhancements that again build on what we heard from Liberal governments, from Conservative governments, from Progressive Conservative governments, from NDP governments across the country.
My premier, Dalton McGuinty, said that the discussions on infrastructure were perhaps the most positive, both in the November and January meetings, that he's seen in the first ministers conference. So we've developed an unprecedented consensus for action. I think that's important. We're looking at a variety of areas as well within my own department. With the web of rules that it has built up--and I don't point fingers at any political party--with scandal after scandal after scandal, where people with good intentions came forward and established more red tape, we're doing everything we can to streamline that.
We've also asked the provinces and municipalities to do their part as well, and they're all agreed. I was pleased with that.
I think, though, one of the things that are important is that it requires leadership at the top and a cooperative spirit. I think when I talk to folks in my constituency of Ottawa West--Nepean, what they want to see in this challenging time in the Ontario economy is their federal government and their provincial government working cooperatively together to put aside politics. I think the current relationship, for example, in your province and mine with the provincial government is probably at a high-water mark. Gone are the cheap shots on both sides; gone are the political manoeuvring . There's a real commitment to work together. That leadership comes from the top. It's coming from Premier McGuinty, it's coming from Prime Minister Harper, and we're committed to do that.
One of the areas that I think can delay projects is just political agreement, and we've been working hard, directly. I jumped into this. I met all my provincial counterparts, all the premiers directly on this issue. We've done a lot of work and we're committed to continue that spirit of cooperation. Without that, nothing can work. No matter how many regulatory changes we make, no matter how much money we throw in the system, it's been particularly constructive with Ontario. This is a sea change on both of our parts, and I think that's positive.
I hope there will be many benefits environmentally. I worked quite hard with one of our members of Parliament on a project in Merrickville, where the waste water treatment plant is about to collapse, with the potential of sending raw sewage down the Rideau, which is now a UNESCO world heritage site. If we can come out of these economically challenging times and can put people to work to provide a stimulus to the economy--which will go far beyond those people who work in construction or in providing materials--it will provide big benefits throughout the economy, and if they have an environmental infrastructure investment that can last a hundred years, I think that'll be very good.
One of the things I talked about with the Saskatchewan government and one of the members of Parliament there is mining. If we can make investments in transportation and roads or rail that will facilitate economic growth well into the future, that will be positive. If we can make investments in public transit, as we've committed to do in Toronto--the ground will be broken quickly--and in Vancouver and elsewhere, we'll have quality of life, less congestion, and less air pollution, which I think will be a benefit.
Everyone has their top priority as to what they'd like to see. Obviously I'm Minister of Transport, so I want to see transport infrastructure. In Prescott, they want improvements to their port. In Belledune, New Brunswick, they want improvements to their port. I'm facing a significant amount of lobbying from various ports
in the province of Quebec, in areas such as Sept-Îles, in Quebec city and in Montreal. This is a matter that falls under federal jurisdiction. The investment process was intended for areas of federal jurisdiction, such as airports as well.
But as a former environment minister, obviously clean water is something I think is important. Public transit is important. So too is basic infrastructure for roads, for water treatment, for sewer upgrades, which are important.
Good morning, Mr. Baird. Good morning to the officials from the Department of Transport, whom I've met several times in the past few years.
Mr. Baird, I, for one, am deeply disappointed with the current situation. Since last September, rather than meeting to begin reacting to the economic situation, the government triggered an election which brought us back to the same situation. Following that, in November, when we resumed business, we missed an opportunity to present a budget that would have contained an action fund for the economy. That opportunity was missed because of the prorogation of Parliament. Today, in February, we are discussing matters that should have been discussed in September.
Everyone can agree that there is a lot of catching up to do. You want to launch projects quickly. However, we can't just start projects anywhere anyway and anyhow. You are well aware that under our system, provinces have areas of jurisdiction. That is where the problem lies.
I'm told that last September, there was a Canada-Quebec agreement with respect to previous funding from Building Canada. To my knowledge, none of those projects have been implemented because there was no agreement signed with Quebec. Now we are talking about new budgets for shovel-ready projects. My concern is the following: Would you only be choosing shovel-ready projects? Would some provinces be penalized because they were informed too late?
Since you know that you will have the support of the Liberals to pass your budget, have you taken measures to make sure that projects will be implemented immediately, once the budget is officially passed in House of Commons? Since you can count on the support of the Liberals, measures should be undertaken right now so that projects can get started quickly.
I'll hand the floor over to you so that you can give me the reassurance that the issues that we should have dealt with last September are making progress. As elected members of Parliament, we all have an interest in letting people see that you are taking measures to stimulate the economy; we have to prove this, to make sure that our actions follow our words.
The gas tax, I think, has been a successful model. In last year's budget we made it permanent, which I think is important if municipalities want to borrow on that revenue stream.
I guess we had to take a balanced approach. In the pre-budget process, whoever we spoke with.... When we spoke with municipalities, they said, give all of that money to municipalities because we can move quickly. When we talked to the provinces at the first ministers meeting, all of the provincial and territorial premiers wanted to give it all to the provinces via a territorial trust. Some wanted to build provincial prisons, some wanted to build provincial office buildings, and some wanted to fulfill all of their dreams with respect to infrastructure.
So rather than choosing one or the other, we took a balanced approach. We have a significant amount of money in gas tax and GST rebates for municipalities. We have a $4 billion fund. I would suspect a significant, if not overwhelming, percentage of that will go to municipal projects where we can get deals.
The good news is that while not every municipality can afford.... We do see municipalities like Toronto that have expressed concerns that they can't afford it. They underspent their capital budget by $200 million, which says they could work with us. If they can't, we have a program that Minister Flaherty and Mr. Menzies came forward with to provide low-cost loans to municipalities to allow them to participate.
I know that my own city of Ottawa has already come up with a list of $300 million to $400 million in projects that they could cost-share.
The good news is that, to a t, every single provincial government is prepared to join that effort. Premier McGuinty spoke very strongly that the economic downturn is not a federal or a provincial issue, but has to be shared. I am confident that we will have no problem, particularly with the $4 billion stimulus fund, to be able to identify projects that can be cost-shared. The good news is that if we work together, we can take a $4 billion stimulus and turn it into a stimulus program of up to $12 billion just with that one program. If we gave it just to the provinces with no strings attached, we'd only have $4 billion.
In my home community, as I have said on occasion, the province gave them $16 million for capital and they spent it on snow removal. The provincial government is changing the rules to stop that from happening again, but if we can have some streamlined accountability, I am confident we will work together.
I would like to thank the chair and this committee for the opportunity to speak today on how the federal and municipal governments can work together to help Canadians at this time.
FCM has been the national voice of municipal governments since 1901, and during those 108 years we have represented the interests of Canada's municipal governments to the federal government. I'm here today to continue
continue the tradition, while respecting provincial jurisdiction. The Federation has always worked in a manner that showed respect for areas of provincial and territorial jurisdiction.
FCM believes that Canada's quality of life and economic growth depend on healthy cities and communities.
To attract new talent and investment, improve productivity, and protect our environment, Canada must have strong, secure foundations at the local level.
One area where federal, provincial, territorial governments have worked together to strengthen those foundations is in infrastructure investments. Federal infrastructure programs have helped us provide safer roads and bridges, clean drinking water, modern sewage treatment, and improved public transit.
While a municipal infrastructure deficit remains a long-term challenge, that's not what we came here to talk about today. We are here because Canada is caught in a growing recession, caused by a global economic crisis. That recession is felt in cities and communities right across this country.
The recent federal budget provided powerful new tools for creating jobs and fighting the recession. Now we must put those tools to work. The budget committed new funding for infrastructure rehabilitation, recreation facilities, green investments, affordable housing and broadband Internet service. With a fast, flexible action plan, these commitments will produce tens of thousands of new jobs this year alone. They will also leave Canada better equipped to meet the social, economic, and environmental challenges of the future.
To prepare new projects for this year, municipal councils, project managers and contractors will all need to work progressively over the coming weeks and months. Before we can get started, municipalities need to know how much federal money they can access; how much they need to find in new matching funds; what projects are eligible; and when new funds will start to flow.
We know that Minister Baird and his officials are working hard to answer these questions. We also know that finding the answers will take some time. But the start of the construction season is little more than a month away, and there's no time to waste.
The FCM is ready to sit down with the federal government to develop and implement a plan that will transform budget promises into new jobs.
As a first step, FCM recommends that the following five principles guide federal action.
First of all, let money flow quickly to create jobs now. A significant number of new infrastructure projects must get under way during the 2009 construction season to create jobs in time to offset the recession. This must be the overriding policy objective of new infrastructure spending.
Second, there must be dedicated funding for municipal infrastructure. Municipalities own more than half of Canada's infrastructure and virtually all water, sewer, and public transit systems. To create jobs and improve local assets, we need to know that the federal government is going to invest significant new funds in municipal infrastructure.
Third, adopt a simple, predictable, and fast-moving application process. The sooner funding decisions are known, the sooner construction can proceed. The federal government must adopt an accountability model that allows upfront approvals to be made quickly in accordance with simple guidelines, while using follow-up reporting tools to ensure projects deliver value for taxpayers.
Fourth, work through cost-sharing challenges. By the time the federal budget is approved, thousands of municipalities across Canada will have finalized their 2009 capital budgets. Reopening those budgets to find matching funds will take time and in some cases simply won't be possible. The government can help by being flexible. Cost sharing must not become the sole determining factor in federal funding decisions.
Fifth, put new federal loans to good use. We applaud the federal government for helping communities that do not have the funds to meet cost-sharing provisions. Now we must ensure that these funds deliver on their promises. The federal government must sit down with FCM as soon as possible to develop a workable program that gets new money into the economy quickly.
The federal budget says infrastructure programs “will be structured to flow funding and get shovels in the ground quickly”. These five principles will make it possible to meet that objective.
In closing, let me reiterate that Budget 2009 makes important investments in cities and communities, and gives the country powerful tools for fighting the recession. It must be implemented fully, fairly and efficiently if it is to counter the recession and deliver long-term value for Canadians.
The Canadian Construction Association welcomes this opportunity to appear before you today and share with you the views of our nearly 16,000 member firms across the country on the infrastructure measures contained in the recent federal budget. It probably comes as no surprise to you that since our industry builds that infrastructure, we very much welcome these measures. We certainly believe that investing in Canada's infrastructure provides the biggest bang for the stimulus buck in the short term, in terms of job creation and economic impact. For every $1 billion, according to an Informetrica Limited study, some 11,500 jobs are created, more than half of which are not created in the construction industry.
But perhaps more importantly, it is also our belief that investing in Canada's infrastructure is an absolute priority, not just for the short term but for the long term as well, in order to secure our country's future economic prosperity and social well-being.
Because of past neglect, our vital public infrastructure—our roads, bridges, sewer systems, hospitals, and schools—are in a critical state of disrepair. It has come to the point that, rather than providing a safe and healthy environment and quality of life for our citizens, our public infrastructure is beginning to threaten those basic, fundamental necessities. Instead of providing the tools by which to allow business and industry to compete, thrive, and remain productive, our crumbling public infrastructure adds to business costs, makes us less competitive, and inhibits productivity. We need to upgrade and maintain our public infrastructure so that it once again works for Canadians and works for Canadian business and Canadian industry, rather than against.
Some of you may have seen the University of Waterloo study of last year that was presented in the August publication of the Institute for Research on Public Policy. It concluded that not only had Canada's infrastructure deficit reached $200 billion, but that our failure to invest in our public infrastructure in any meaningful way during the 1990s was the primary reason for the productivity gap that exists between the manufacturing sectors in the United States and in Canada. In looking at aggregate investments on the part of governments in both the United States and Canada, it found that the U.S. managed to increase its productivity advantage over Canada by more than 20% in the past 10 years alone. During that period, Canadian investments in infrastructure declined by 3.5%, whereas in the United States they increased by more than 24%.
Why dwell on this? It is to make the point that a nation must not simply invest in its public infrastructure to create jobs in the short term or to kick-start an ailing economy, which it will do, but a nation must invest in its key strategic public infrastructure because it is the course of sanity. It is no coincidence that every nation in the world that has recently announced a stimulus package has, as a key cornerstone of that package, significant reinvestment in critical public infrastructure. Those nations understand that, yes, investments in infrastructure will provide the stimulus in the short term to help their stagnant economies along, but their governments also know that, much more importantly, those investments will ensure that they have the modern and efficient infrastructure in place to best position their nation to take advantage of the economic growth that will come when the global economy begins to recover.
Mr. Chair, this is why CCA strongly supports infrastructure renewal. But investing in infrastructure is also wise not only for tomorrow but also for today.
The landmark investment that budget 2009 makes in university and college infrastructure renewal is worth particular note. CCA has been a strong proponent of increased federal investment in college renewal. As most of our labour force comes through the college system, we know how stressed the situation is currently for colleges. Unfortunately, community colleges remain the poor cousins within the Canadian post-secondary educational family. Many of them were built 40 to 45 years ago and have been sorely neglected. Many community colleges of sizable enrolment have backlogs—for some colleges, a three-year wait for a construction trade program. The equipment is woefully outdated, there is no capacity, and yet college enrolments are on the climb. The downturn in the economy has only exacerbated these challenges as many displaced workers turn to colleges for retraining or upgrading of their skills.
A Canadian Federation of Independent Business study in 2006, in surveying their members as to where their new workforce was coming from, said that for every university graduate, they're going to need six college graduates in the future. Our college system just does not have the capacity and has been neglected for far too long. We certainly welcome the novel, first-time identification in a federal budget of the need to support community colleges. We would ask, however, that this committee consider providing for a better proportion of that program. Currently it's been established that 30% only of that program would go for college infrastructure. We'd like to see a much more equal situation.
In closing, I'd like to leave you with one thought. Quite frankly, our greatest fear is that infrastructure, having had its 15 minutes of fame as the stimulus solution to these recessionary times, will soon fade from sight, and that we in Canada will lapse back into our previous culture of design, build, and forget.
I look forward to your questions.
Good morning, ladies and gentlemen.
For those unfamiliar with the Association of Canadian Engineering Companies, we represent the interests of over 500 companies in the consulting engineering industry. They collectively employ about 90,000 Canadians, generating over $15 billion in economic activity.
To echo Mr. Atkinson's point--this will probably come as no surprise, from a group that designs infrastructure--we too are very pleased with the infrastructure announcements in the 2009 budget. With this budget's announcements, which are on top of already planned federal investments from prior budgets, the federal government is taking strong steps to address the massive infrastructure debt facing the country. Although the stimulus package will indeed create and sustain employment in engineering firms, the real benefit, we feel, will lie in the long-term accrued benefits to all Canadians--greater economic competitiveness, quality of life, enhanced safety, more sustainable transportation, and other infrastructure solutions.
Let me also quell a misperception that's been discussed in the media and by some within this government about the capacity of the Canadian engineering workforce to perform the work that will be created by the infrastructure measures in the 2009 budget.
Just before Christmas, ACEC surveyed our full membership, inquiring as to their existing capacity levels and what they forecast in terms of workloads for 2009. Engineering firms were clear in their response. As a result of declines in primarily private sector work--namely, oil and gas resources, housing, manufacturing, and so forth--many engineering firms were already experiencing layoffs in late 2008. Many more are considering layoffs in 2009.
So the message for policy-makers is clear: engineering firms are ready, willing, and able to get to work on building and rebuilding our infrastructure.
As the government implements infrastructure projects announced in its budget, the Association of Canadian Engineering Companies wishes to recommend four principles that will guide the implementation of those measures.
These recommendations seek to maximize the stimulus effect of these projects on the economy and on the labour market. These measures seek to ensure that the projects accomplished will yield optimal value and that they will benefit from the very best that technology and innovation has to offer.
Firstly, infrastructure projects funded by the federal government should be awarded to the private sector. Too often, government uses its own internal resources for design and infrastructure projects. The stimulus effect of infrastructure programs can be maximized if these projects are achieved by private firms that can then hire the very best engineers and entrepreneurs. Government and other key players could deal with their own agendas internally and subsidize their own activities.
Second, in implementing projects, governments at all levels must seek to reduce red tape and duplication, and minimize approval processes, as the minister just described. To do so will require a concerted effort on the part of all governments to ensure that administrative processes are kept to a minimum.
Yes, due diligence and proper environmental assessments must be respected, but given the urgency being placed on quick implementation, processes such as procurement, contract negotiations, project identification, rezoning, and so forth should all be expedited by the responsible order.
Third, the selection of professional consultants for infrastructure projects should be based on the principles contained in InfraGuide's document on best practices to selecting a professional consultant. This InfraGuide document, released about two years ago, written by a team of third-party experts, recommends a process of what is known as qualifications-based selection, or QBS, for engineers. The principle is very simple: professional consultants should be selected based on their competencies rather than lowest price. It's akin to any of you hiring an employee for your office. Do you hire the best-qualified for the job or do you hire the cheapest?
Quebec recently became the first jurisdiction in the world outside of the United States to legislate the use of QBS in all government departments in that province. Such a policy was recommended by the Johnson commission, which reported on the collapse of the Laval overpass in 2006. We would recommend it to the federal government.
Last, we would urge governments not to compromise long-term strategic value for expediency. Although it will be important to identify and act on shovel-ready projects, other key considerations need to go into project selection. Economic competitiveness, enhancement of sustainability, improving quality of life, and protecting health and safety of Canadians need to be key litmus tests that go into project identification before the speed at which they can be implemented.
In closing, Mr. Chair, I want to reiterate our key message. Engineering firms across Canada are looking forward to working with federal, provincial, municipal governments, first nations, post-secondary institutions, airport authorities, and others to roll out infrastructure projects not just quickly but very strategically.
Thank you, Mr. Chair. Merci. I look forward to the discussion.
I thank all of you for your testimony.
I have specific questions regarding the economic stimulus fund on reconstruction and building renovation.
The government seems to be telling us that $2 billion will go for renovations in each of the next two years. Currently, if you look at the studies that are out there, only about 14% of infrastructure building is renovation. That suggests there may be a need. In other words, there's a lot of new build and not so much the other.
I wonder if you could tell us from your different expertises, the municipalities first, perhaps, what that looks like. You've put forward what I think is a very helpful list of $14 billion in shovel-ready projects. What proportion of those would fit the government's intent? It has a very narrow intent for that particular fund. I'm wondering how that lines up with your outlook, and then, to both of the associations, how we might look at that affecting capacity.
I accept from Mr. Morrison, certainly, the general assurance, and I'm sure Mr. Atkinson has something similar in the sense of why we're here. We know that 44,000 construction workers lost their jobs in December. We wish that this had happened then. We did something to try to bring this about.
We would really like to focus on some idea about that particular strategy and its implications, because I think the finance committee, as well as the trade and infrastructure committees, will want to have some understanding about implementation. Distinct from other years and other times, perhaps, we're all going to be very interested in how this will actually work on the ground. I'm wondering if you can comment on that focus and how it looks from the standpoint of your different perspectives.
From what I gather, we want to go fast, and projects in the long, long, long term are not the objective of that fund. We'll see about that in the procedures that will come, but there are so many projects we have on our table that don't need long planning and are ready to go. It could be recreation facilities, arenas, and all these subjects that we will be able to have access to for our members.
From what we gather from the minister, this has to be done very rapidly. We also want to be very rapid, so we urge the minister to cut the red tape, which is what he's saying all the time, and put the shovels in the ground. That's a really good message. We feel that we need to put these funds in rapidly so that we can have buildings to repair and projects that are ready to go. It's not long-term projects that we need. If we have an acknowledgment today, we have to make big plans, with
a lot of planning and environmental requirements, etc. We believe that money should flow quickly to municipal projects that are straightforward, such as road repair, sidewalk repair, waste water systems, and existing buildings. Members have already told us that there are infrastructure projects worth some $14 billion that are ready to start immediately.
The Montreal-Toronto train project is going to take longer than repairing houses that were flooded, a direct result of global warming. Those renovations are easy to accomplish, and do not require anything else than money. They do not require five or six-year planning.
We're very happy to see that there are a great number of projects for the next two years. They are ready to go. All we need is money.
Absolutely. Small municipalities deal almost exclusively with private sector professionals. Cities like Sherbrooke, Montreal and Quebec City employ generalist engineers who work with the private sector. Most of our projects are subcontracted out. We call for tenders and we work with private companies. If we are eligible for this funding, we must absolutely find a way to get it.. We don't have all of the staff that we would require to meet these objectives. We need a green light to go ahead and get the funding and start planning. If we want shovels in the ground by September, then we need to have the go-ahead today, so that we can plan, hire professionals and borrow money.
You asked earlier if the cities are able to engage in cost-sharing, to share in the funding. It isn't quite that simple for 2009, since we have already done our budgeting, the tax bills have been sent to our citizens, and we have already gone into debt.
If you ask me whether or not, as the mayor, I would be prepared to pay one third next year, I would say that I would rather pay one third than three thirds. I would much rather pay one third, rather than have to pay the entire amount to meet the needs of a city.
The government requires participation...The gas tax is a recurring amount. That allows you to determine how much money will be going to cities like Montreal, Quebec City, Toronto or Vancouver. The province also has to be included, in order to respect its jurisdiction. The federal government will have to act quickly in sending money to the province, so that we can then be given the green light. Give us the green light now, and we will be able to put people to work.
If I don't have the money this year, could the government be a little flexible? The government wants to split the funding three ways so that a total of $12 billion will be invested rather than $4 billion. I understand that. That will put more people to work. If it is flexible, then we could contribute one third in 2009 and start the projects in 2009. We could pay in 2010. It seems pretty straightforward to me.
Thank you Mr. Chairman. Welcome to our guests.
I would like to address my first question to Mr. Morrison. You alluded to the study undertaken by Pierre Marc Johnson after the collapse of the de la Concorde overpass. It was, in fact, the second collapse, since the du Souvenir overpass had collapsed before that. However, the two situations were different: in the case of the du Souvenir overpass, it was under construction, whereas the de la Concorde overpass had been built in the 1970s.
You spoke about the rules for awarding contracts to engineers. You said that it was advisable to follow the established model. I have a question that does not necessarily relate to a formal examination nor to official rules of attribution. How can you be sure that when you award a $50 million contract, the costs will not go beyond that amount? I know that I will have an opportunity to ask Mr. Atkinson the same question a little later. He said something quite important about the need to include the long-term costs for maintenance and resurfacing in assessing a project.
The public is having a more difficult time understanding how we can announce the construction of an overpass or a highway interchange. There is a well-known case in Montreal. This is not a criticism of the companies involved nor of the engineers; I want that to be very clear. Work began on the Acadie interchange at a cost of some $50 million. The latest construction work cost more than $100 million, and the public can't understand why. There was a call for tenders, but it soon became obvious that a great deal of work was required. The fault does not lie with the contractor. There is something almost akin to a sub-profession besides the engineer and the contractor, and I am referring to the person who is responsible for finding all of the "extras" and negotiating their cost.
How can people who are responsible for guarding the public purse be sure that, once a contract is signed, everything possible will be done to determine the real cost of the work and ensure that the amount will be the same once the dust has settled?
Mr. Mulcair, I think the public has an erroneous concept of the way in which contracts are awarded for infrastructure projects in Canada.
If I may, I would like to continue in English.
First of all, there is still a very strong misperception that the cheapest proposal, the cheapest bid for a particular infrastructure project is the best. It brings the greatest value to the taxpayer. What the Johnson commission recognized and what experts across the country have recognized is that this is not the case. Given the nature of infrastructure, given the public trust that goes into any infrastructure project, professionals involved in the development, the design, and the construction of that project need to have a qualifications-based assessment process in place. That is not the way it's done right now, with the exception of the Province of Quebec, which has now recognized that qualifications need to be central to the procurement of any sort of professional.
You alluded to the notion of what I would call life-cycle costing. All too often another misperception is that the upfront cost of a particular project is it, and that once a municipality or a province pays for the design and construction of a particular project, its hands are washed and the project is in place. We of course know that's not the case. Any project, be it a building or an overpass, has life-cycle costing attached to it. In terms of an evaluation of a project, we have always argued that life-cycle costing needs to be a component of the evaluation.
Right now, I can tell you, the federal government rarely does that. At Public Works, Government Services Canada, Defence Construction Canada, when we've asked the question as to whether there is an environmental cost, a life-cycle cost involved, there isn't—
Well, I said it a few minutes ago. I think flexibility is the word that should be used. You know that there is $15 billion already committed, that has been accepted in all municipal budgets. You were a city councillor before. When it's passed, it's very difficult, and it takes a lot of time.
For instance, if tomorrow I have an acknowledgement from the federal government and the provincial government that I have $2 million, and I have a project for $6 million, and I have to put in $2 million and borrow $2 million, it will take, as a city, at least three to six months before getting approval to borrow the money.
When you make a demand for money.... Well, in Quebec, and in other provinces it should be the same, you have to put in your request what you are going to do with it, what your plan is, and what the details of your project are. Then you will get approval from the Quebec government saying, okay, you have your money. Then you can start.
So if I put in the request now, February 12, and it takes between three and six months to approve that funding, I'm almost at August. Then I have to put out tenders, and that will take at least four to six weeks. Then I have the decision, maybe in October, and snow will start in November in this country. So it's very difficult for us right now to say okay, just....
The minister says that he has 1,000 projects on his table and says they acknowledge this. Well, I have to talk about my 1,720 members, which are small communities of 200 and cities like the City of Toronto, which is the biggest one. Right now we need flexibility to say to the ones that can't, the ones that have not had the one-third approved by their city councils because of the long process, yes, you're in accord right now; make your investment, and next year, by resolution of the city council, you can borrow the money and put it in.
I would be disappointed if the
municipalities in this country would not have access because they do not have the opportunity now, like the others. Some municipalities are richer. You were talking about the city of Mississauga. It's a little bit different from other cities. They have some money, from what I gather, and so on. But I don't want to take an individual example. Smaller municipalities have the right to access this federal funding, even if they don't have it this year.
So flexibility could be for next year.
Yes, Mr. Carrier, public transit is important to all Canadian communities. The Federation of Canadian Municipalities is extremely happy with the astronomical sum that we have before us today. We are talking about billions of dollars. We must find some way to distribute this funding quickly. It has to be done through the provinces, which is fine with me. It has to be done. We would like the money to be transferred from the federal government to the provinces so that we, the municipalities, can work with the provinces to acquire the required funding.
The Federation of Canadian Municipalities is working with Minister Baird. We met him immediately after he was appointed. As I said earlier, we were quick to meet with Mr. Harper. We invited him to attend our board meeting. There are 72 elected members from all of the provinces and territories in Canada. Mr. Baird was very open. I am convinced that he will come up with some flexible solutions. From what I understood, he will need extra staff, but I don't think that is necessary: he simply needs to send the money to the provinces. It will get to us more quickly that way. I think that we currently have some influence over the Canadian government. When I was president of the Union des municipalités du Québec, we tried to influence the government to step up the contributions towards the municipalities. I think we are a good partner. We know how to operate on the ground, how to provide services to our citizens. Moreover, there is the infrastructure side, where the need is extraordinary.
With respect to mass transit, we prefer to use the word “collectif” in French rather than refer to public transit, because small communities want to have a common service, in this case, transportation. This means that people could travel from the Lac-Mégantic region to Sherbrooke, for example, where they could then use the Sherbrooke transit system. A collective type of system is all encompassing.
We have buildings to construct, commitments and financial services to offer our transportation companies, so that these services can be provided to our citizens. As a Canadian federation, we have an important role to play. I am proud to be the president of the federation, because we represent the collective interests of tiny communities as well as those of Toronto, which is Canada's biggest city.