OGGO Committee Meeting

    Committee members, can we settle down?

     To discuss the economic stimulus package and its impact on municipalities and stakeholders, today we have witnesses from the Federation of Canadian Municipalities, Hans Cunningham, Brock Carlton, and Michael Buda. On videoconference, for the Fédération Québécoise des Municipalités, we have Bernard Généreux and Erika Dufresne-Desjardins; and from the Union of Quebec Municipalities, we have Jean Perras and Joël Bélanger.

     I understand that Mr. Carlton and Mr. Cunningham have a five-minute presentation and they will be splitting it. Monsieur Perras and Monsieur Généreux also have opening remarks.

    We will start with Mr. Carlton and then go to Mr. Perras and Mr. Généreux.

    You may commence.

    Thank you, Madam Chair.

    Carlton will start the first part of our opening statement and I'll continue with the second part, if that meets with your pleasure.

    Thank you.

    It's a privilege for us to be here today to share our thoughts on Canada's economic stimulus plan.

    FCM has been the national voice of municipal government since 1901. We represent 90% of the Canadian population—more than 1,800 municipal governments. Members include Canada's largest cities, small urban and rural communities, and 18 provincial and territorial municipal associations.

    It was a little more than a year ago that the bottom fell out of global markets, plunging the world into a severe economic downturn. Along with most other countries, Canada needed an immediate strategy to create jobs and fight the recession. As it was then, infrastructure spending is now one of the most effective stimulus tools available.

    As you likely know, spending on infrastructure delivers twice the economic boost—and twice the number of jobs—as an equivalent tax cut. This spending is used to build quality roads and bridges, enhance public transit and renew water and sewer systems, as well as to initiate projects which protect our environment and improve our quality of life. Infrastructure spending can strengthen the foundations of our economy.

     Thank you, Brock.

    In the 2009 budget, Parliament set aside $5 billion in new federal stimulus funding for provincial, territorial, and municipal infrastructure projects. Today municipalities are matching federal investments in their communities. We manage stimulus projects from design right through to construction and completion. We're working flat out to put stimulus dollars to work, creating jobs and meeting local needs. Working together we have made progress, but the job is not done and there are lessons to learn from the work done in the past year. If we make the right decisions now, we can continue to strengthen our economy, deliver greater value to taxpayers, improve infrastructure programs, and respond more effectively to future economic crises.

    To that end, on behalf of the Federation of Canadian Municipalities, I would like to underscore a few key points.

    First, while governments implement the stimulus plan they must also begin to look beyond the immediate economic crisis. We must position Canada to succeed in a tough, competitive post-recession world. As we come out of the recession and budget deficits reappear, we cannot afford to repeat the mistakes of the 1990s. That was when the federal, provincial, and territorial governments pushed deficits off their balance sheets and into local streets. They cut programs and offloaded responsibilities, leaving the municipalities to pick up the pieces. Those decisions added to the burden on property taxpayers and fuelled growth in what is today's $123 billion municipal infrastructure deficit.

    The federal stimulus plan, along with the 100% GST rebate, the federal gas tax fund, the Building Canada fund, and the public transit capital trust are helping municipalities repair their aging foundations. They are also helping to provide the modern infrastructure and transportation networks that Canada needs to compete in the post-recession world. While stimulus spending is inherently short term, if Canada is going to thrive in the post-recession world, the federal government must protect and build on these other investment programs. Therefore, secondly, all governments must commit to keeping the stimulus plan on track and to make sure to put every single dollar to work in communities across the country.

    Canada's economic recovery is fragile and new jobs will be scarce for years to come. As many Canadians struggle to find work and make ends meet, they need to know their governments won't be letting stimulus dollars collect dust in Ottawa or in their provincial capitals. Therefore, thirdly, as municipalities co-fund and manage thousands of stimulus projects across the country, federal and provincial governments must be supportive and flexible to ensure cities and communities have the time and resources to put stimulus dollars to work.

    As you know, the infrastructure stimulus plan was rolled out faster than any previous cost-shared infrastructure program, but the time required to get it up and running still meant that many municipalities lost much of the 2009 construction season. Cities and communities waited, although not always patiently, for federal, provincial, and territorial governments to negotiate funding agreements, to design programs, and to approve individual projects. Today, no order of government has more at stake in the stimulus plan than municipalities. Communities have been hard hit by the recession and are looking to their mayors and their councillors for answers. Municipalities across the country have re-opened their capital budgets to find the money to match federal stimulus dollars, often taking on additional debt or shifting dollars from other priorities.

    In addition to matching federal investments in their communities dollar for dollar, municipalities are the front-line project managers for most of Canada's stimulus projects. To successfully finish these projects and to turn every stimulus dollar into a new job, municipalities will need the same support and flexibility, the same patience they showed the federal, provincial, and territorial counterparts during the start-up of the stimulus plan.

    Municipalities must not be held responsible for project delays beyond their control. Where federal, provincial, and territorial governments are responsible for delays--and this is key--they must also be prepared to extend the March 2011 construction deadline for municipal projects, where necessary.

    Another key point, and one of particular note, is that we should not wait for a crisis to hit before building better infrastructure programs. When the economic crisis hit, the federal government not only faced the challenge of getting new programs up and running across the country, but it also had to fix programs that had been a drag on cost-shared, application-based programs for more than 15 years.

     Minister Baird and his officials worked hard to clear the funding backlog in the Building Canada fund, to deal with excessive red tape, cumbersome application forms, and drawn-out approval processes. But none of these problems were new, and they've been an ongoing source of delay, inefficiency, and cost overruns for almost a generation. A serious effort to fix these problems before the economic crisis would have saved time and resources when the crisis hit.

    Finally, all orders of government need to work together to build better infrastructure programs. A lot has been said recently about how stimulus projects are being selected, how spending announcements are being made, and how the government is tracking the number of jobs that its plan is creating. These are fair questions that deserve good answers. But they are questions about the way government works, not the value of infrastructure spending.

    Governments must always decide on how to set policy objectives, allocate resources, communicate decisions, and evaluate results. How they do it will go a long way in determining the success of a program, whether we're talking about infrastructure spending, health care, tax policy, or unemployment insurance. The case for investing in infrastructure is strong. The question is how the federal government should design its spending programs. As a first step, it should sit down with provinces, territories, and municipalities to establish national objectives for federal infrastructure spending and work with them to design programs that achieve those objectives.

     During the past year, Canada was tested by a severe global economic crisis. Federal, provincial, territorial, and municipal orders of government responded to that crisis by working together. There is still a great deal of work to get the country back on to solid ground, but we have made a good start. Crisis management is never perfect.

    Mr. Cunningham, you have one minute. Could you wrap up? Thank you.

    Two pages? Thank you.

    Crisis management is never perfect, and there are important lessons we must learn from this experience, lessons that we need to act on. The country must put every single stimulus dollar to work creating jobs in cities and communities. Federal, provincial, and territorial governments must be supportive of municipalities as they carry out thousands of stimulus projects across the country in the next two years. Most importantly, we must make cooperation, communication, and program reforms an ongoing feature of Canada's infrastructure strategy.

    We have long-term infrastructure challenges that can only be met by funding commitments made over decades, not years. We know that we can't build strong communities and a strong economy with a single spending package. It takes vision, coordination, and sustained funding. By working in partnership, all orders of government can achieve lasting results that include safe, healthy, and economically viable cities and communities.

    Thank you for your time and attention, and of course we'd be pleased to respond to any questions.

    Thank you.

    Next we will have M. Jean Perras.

     I forgot to mention that you are the mayor of Chelsea and that you're not seeking re-election. Welcome, Mayor. We would like to hear some things from you.

    Thank you, Madam Chair.

    Members of the committee, the Union of Quebec Municipalities was eager to accept the invitation to take part in your deliberations regarding the implementation of economic stimulus measures, because this is a question of crucial importance to its members.

    The President of the Union, and Mayor of Maniwaki, Robert Coulombe, has asked me to represent him, as he was unable to be here today. He asks that I convey his greetings.

    The UMQ represents municipalities of every size and in every region of Quebec. Its mission is to promote the fundamental role of municipalities in the social and economic progress of Quebec as a whole and to support its members in building democratic, innovative and competitive communities. More than 5 million Quebeckers are represented by the Union of Municipalities.

    For several years, the Union has been calling for massing spending by governments to make up the deficit in municipal infrastructure.

    At the request of the UMQ, the Conference Board of Canada did a study on municipalities' fiscal situation and the hidden infrastructure deficit. The findings were clear: the deplorable state of municipal infrastructure in Quebec is the result of underfunding since the 1970s; the infrastructure deficit in 2003 was estimated at $18 billion, or $1 billion per year for the next 15 years.

    Since then, the UMQ's voice has been heard, and major efforts have been made by all levels of government to rehabilitate municipal infrastructure. The federal government's economic action plan has been implemented to rapidly stimulate the economy in the global financial crisis and the economic recession. It has added to existing programs by targeting projects that can be carried out between now and March 31, 2011.

    Our reading of the current situation as it relates to implementing economic stimulus measures for municipal infrastructure has resulted in the following observations and recommendations.

    In Quebec there are hundreds of projects underway, illustrating the positive effect of the plan. However, there are many projects still waiting for approval before they can start up.

    Some delays can be explained by the discrepancies between the priorities of the various levels of government. It is sometimes difficult for a project to reflect both federal and provincial intentions.

    Greater consistency between provincial and federal considerations is needed for each program. It would be preferable to agree on common priorities that projects will have to meet in order to facilitate approval, and ultimately implementation.

    For example, the agreement between the federal and provincial governments on the Green Infrastructure Fund has not yet been signed. In the meantime, projects have to continue to fit into the requirements of each government and start-up is delayed.

    The Union believes that the gas tax transfer program is an example that should be followed. It enables municipalities to do long-term revenue planning and offers them the flexibility they need in order to adapt better to their circumstances.

    The UMQ would also like to see greater flexibility in the program criteria to enable municipalities to meet the needs of their own communities.

    For example, socioeconomic infrastructure projects could be made eligible.

    In addition, infrastructure projects require municipalities to invest a significant minimum amount, up to one third of total spending. But the fact is that municipalities do not have new sources of revenue to fund that contribution.

    Property taxes are still the main source of revenue for Quebec municipalities. In addition, for every dollar invested in infrastructure, and funded equally by the three levels of government, Quebec City and Ottawa share $0.35 in direct tax refunds, while municipalities receive zero.

    At present, for a $100 million investment, Ottawa gets a refund of $18 million, Quebec City gets $17 million, and the municipalities get zero.

    That is why the Union would like to see a little more flexibility in the programs, to recognize municipalities' ability to pay.

    The Union would also like to see investment maintained at a constant level, to allow us to move ahead with rehabilitating our infrastructure. It would therefore be desirable to ensure that programs like Building Canada are permanent.

    The UMQ is also concerned about the current status of public finances and believes it is imperative that the budget is not balanced on the backs of municipalities.

    On May 15, at the UMQ annual convention in Gatineau, the members of its executive committee had discussions with the Rt. Hon. Stephen Harper, Prime Minister of Canada, and with Michael Ignatieff, the leader of the official opposition, and Gilles Duceppe, the leader of the Bloc Québécois, regarding the importance of maintaining and speeding up investments in municipal infrastructure and working in close cooperation with Quebec to secure economic prosperity for our province and for Canada.

    The return of Parliament led to debates about the federal government's plan to balance the budget. This is a major issue, one that is of the utmost concern to municipal leaders. Given this situation, the members of the UMQ board of directors unanimously adopted a resolution on September 18 calling on the leaders of the federal parties to make a formal commitment that any plan to balance the budget would rule out postponing the funding allocated to infrastructure projects and preserve the other gains that have been made, such as the GST refund and a permanent gasoline tax.

    They are also calling for a firm commitment from the federal political parties to make infrastructure programs permanent so that we can continue to catch up on the needed rehabilitation of municipal infrastructure. The strategy of balancing government budgets cannot be pursued on the backs of municipalities without directly affecting services to the public and the quality of the infrastructure.

    In conclusion, Quebec municipalities are key economic actors and partners. Every year they inject $11.5 billion into the Quebec economy. Investing in infrastructure will mean an environment for the public and business that will support sustainable development. In terms of infrastructure alone, they invest $2.7 billion dollars every year, and they will invest an additional $2.5 billion over five years in contributions to the new programs.

    Municipalities want to support economic growth and job creation by investing their share in infrastructure programs. Stable funding, permanent programs and greater flexibility in program terms and conditions will enable them to do their full share as engines of socioeconomic development in their communities.

    Thank you for your attention.

    Merci beaucoup.

    Now we go to Monsieur Bernard Généreux, who is the president of the Federation of Quebec Municipalities. He's also the mayor of Saint-Prime, and he has taken time off from his canvassing to be here. Thank you very much.

    You may proceed, Mr. Généreux.

    Thank you for inviting us to this meeting on infrastructure, Madam Chair.

    The Fédération Québécoise des Municipalités is very pleased to be able to present its views on the progress being made under Canada's Economic Action Plan as it relates to infrastructure. However, I would note that the Fédération Québécoise des Municipalités, unlike the Union of Quebec Municipalities, which mainly represents the larger urban centres in Quebec, represents over 1,000 members, municipalities and RMCs, in all regions of Quebec, and this colours the Fédération's views in terms of progress under the action plan.

    Certainly, like the FCM and the UMQ, the Fédération's reaction to the injection of $4 billion into infrastructure is very positive. It notes that this measure will create new jobs in economic hard times. We are pleased that the federal government realizes the urgency of the updating of infrastructure that has been called for, for so long.

    We have to make sure, starting now, that these programs are permanent and continue beyond the action plan, so that infrastructure continues to be central to the catching up that must be done in any event if we want our municipalities to continue to be competitive.

    I will now make a few comments on the program. First, one of the major problems in implementing this action plan was how slow the process of getting the agreements officially signed was. It was hugely delayed, and that means it is even more complicated for municipalities to adhere to the notorious two-year deadline imposed by the federal government for using the money. As well, the two-year deadline already seemed to us to be very short, when the municipalities' applications have to be processed by the governments before work can start, in a relatively short construction season. Our first request is therefore that the period for the work be extended to more than two years.

    In terms of the speed for analyzing it, it is currently hard to evaluate the impact of the action plan because the agreements were not officially signed until the spring or even the end of the summer of 2009. Several municipalities are still preparing their requests, while others have been in processing for only a few weeks.

    Is the money available quickly? Will it be available? It is up to the government to answer these questions, because it is the only one with the figures for the exact number of projects approved to date.

    What are the times between when a municipality submits a project and when it receives approval from the government? It is up to the government to monitor this and evaluate the efficiency of its internal process.

    In terms of the low-interest loans program for municipal housing infrastructure, we would note that the municipalities of Quebec still do not have access to the program, while the other Canadian municipalities have had access for several months. Given that money has not been allocated by province, Quebec is clearly being disadvantaged in the case of this program.

    To speed up processing of requests and ensure that the money is allocated fairly, the FQM suggests that the money for Quebec municipalities be transferred directly to Quebec City under framework agreements, which would significantly reduce the red tape and allow for criteria to be developed that are more tailored to the situation in Quebec municipalities. We would note that recent statistics tend to show that at present, only 7% of the money is committed in Quebec municipalities, while Ontario is to receive 54% of the funds.

    The FQM has also already made the government aware of the possibility of overheating if numerous actions are taken in a relatively short time. We are still concerned about this, and we have to ensure that as broad a spectrum of actions as possible is taken to avoid all the projects starting up in the same sector of the economy in a relatively short time.

    The Fédération has noted another concern: modulation. We know it is essential to modulate the criteria to take the situation in rural communities into account. They generally have less capacity to pay than some municipalities. We must ensure that these programs are accessible to municipalities of all sizes, small as well as large. This is achieved by modulating programs.

    In addition, their remoteness from major centres means that they have fewer private enterprises, and thus fewer bids. This often raises costs for contracts and subcontracts. Costs are relatively higher in outlying regions. This is another reason why the principle of modulation must be applied to programs that benefit municipalities.

    Given that the labour force is smaller and often less skilled, it is more difficult to assess the condition of infrastructure, and this can create problems. The costs of accessing workers are high and comprise a larger share of the expenses in connection with existing infrastructure programs.

    The entire question of rural life must also be considered in looking at Quebec's situation. Rural is defined, in Canada, as including communities of with a population of 100,000 or lower. We think it would be wise for the definition to instead cover populations of 25,000 or fewer, to better reflect what rural actually means in many of the municipalities of Quebec represented by the Fédération Québécoise des Municipalités.

    As well, we know that government infrastructure programs are mostly based on a funding formula under which each level of government covers one-third of the costs. That requirement does not reflect municipalities' ability to pay. It is unfair, in that municipalities receive no direct tax refund for their investment, while the federal and provincial governments receive $0.18 and $0.17, respectively, for each dollar invested in infrastructure. The FQM wants to see the share that all municipalities are being asked to pay to fund infrastructure projects reviewed, so that it better reflects their financial situation.

    In closing, I would like to talk about access to the Internet. We know that $250 million has been proposed to extend Internet access throughout Canada. We would like to know what progress has been made under that program.

    Thank you for your attention. We are prepared to answer your questions.

     Thank you very much.

    I would like to make a suggestion before we go into the first round. There are many witnesses and advisors around, so if you want to get the biggest bang for your dollar, please point to whom you want to answer, or if you want everyone to answer and take up your minutes, that's fine too. We're very strict with our time, to be fair to all members.

     Madam Hall Findlay, you have eight minutes.

    Thanks very much, Madam Chair.

    I would like to thank all the witnesses who are with us today.

    The Chair is correct. Because we really don't have a lot of time, we hope that fairly short questions will produce equally short answers.

    On my first question, I would like to get a short answer from each of the representatives.

    The first one is the big one. We're hearing from the government that 90% of the economic action plan has been implemented. I want to drill down to the number of projects the municipalities have had approved and how many have actually started. Can you confirm or not whether that percentage of infrastructure projects that involve the municipalities has been started? I don't mean started in the sense of going through the paperwork. How many have actually broken ground?

     To get the exact figure, you will have to speak to the federal government. However, it is our understanding, from our analysis of the September stimulus report, updates that Minister Baird has sent to our members, and discussions we've had with officials, that more than 3,000 municipal stimulus projects have been approved.

    I know you were asking me about breaking ground. I think these terms are very important. When we say “approved”, it means that municipalities now have authorization to finish any design work necessary, tender the project, and begin construction. Of the 3,000, as of last month about 1,000 of those projects are finalizing design work, going to tender, or already under construction. Those are the numbers we're able to interpret.

    Just half an hour ago I got the latest update that since the beginning of the year, 5,000 projects worth $8 billion have been approved. That includes the infrastructure stimulus fund and the various components of the Building Canada fund. That's more than just the pure stimulus fund. It doesn't include the recreation fund or any of the other non-municipal-related funds.

    What has your experience been?

    We have not done a study like the one by the Federation of Canadian Municipalities. We therefore cannot state an opinion on the question. The process is fairly lengthy, however. Given that a number of projects will have to be approved before and over the summer, they will not start up until the end of the fall or even the spring of the following year.

    Mr. Généreux?

    We have essentially the same concern regarding technical oversight, the progress made on each project. Certainly a number of announcements have been made by mail, but between the starting gun and when these projects take concrete form, there is still a considerable time. It also has to be noted that for most aspects of this action plan, it took a very long time for administrative agreements to be signed, particularly in Quebec. In fact, in some cases, the agreements have still not been completely finalized.

    We are very concerned about the time allowed in the action plan, the notorious two years. At the beginning of the summer, there was what was called the PRECO program. It was announced as a program that could be carried out very quickly. Unfortunately, it has also had its share of problems. We now seem to have got up to cruising speed, so some catching up can be done, but in terms of giving a clear breakdown of how work is progressing, I think only the government could do that.

    Thank you.

    My next question relates to that notorious two-year deadline.

    There is the requirement that projects be finished by March 2011. I understand that some have been started, but there's a big gap between the number you say have been approved and the number that have actually been started. It is now halfway through October. We've clearly missed the 2009 construction season.

     I'll focus on the FCM for the moment. What have you been told by the federal government about that continued requirement that the projects be completed by March 2011, now that thanks to the delay we've missed a year of construction?

    Thank you for the question. The position at present is that funding will be terminated come the deadline of March 2011. After that municipalities will have to finish the projects by themselves.

    Sorry to interrupt, but that gives me some concern. We all understand what can happen with construction projects. If you're not sure as a municipality that you can finish the project by March 2011, what is that telling you now that a year has been lost? Are municipalities now holding back on projects because they may not be able to pick up the balance of the funding in case they go longer?

     Of course that is speculation at this time. I think when municipalities applied, they knew there was a finite window they had to work within.

    However, as I mentioned in my speech, things happen in discussions between the federal and provincial governments, or within construction seasons and so forth, that may inexplicably cause delays. Therefore, I think further discussions on the question of termination are important.

    The Liberal opposition, right from the beginning, has called for federal stimulus money to be transferred to municipalities through a gas-tax-like formula. This is something we repeatedly recommended to the government, because we knew there would be significant delays that would require a matching program.

    Had it been done in that fashion, do you think this construction season would have been missed, or would those projects have been undertaken?

    I'm afraid I can't answer that question. I don't know.

    I do know, however, that FCM has advocated for a gas-tax-like funding program for several reasons, as we explained previously. However, we have also worked with application-based programs before very successfully. I'm afraid that's about the limit of what we can expect.

    Madame Bourgeois is next for eight minutes, please.

    Thank you, Madam Chair.

    Good afternoon, gentlemen. I am very pleased to see you today, because your presentations give us a chance to see and understand the problems facing municipalities in Canada and Quebec.

    What I notice from your three presentations is that you are talking about the infrastructure needs of cities in Canada and Quebec in terms of support, flexibility and time. You have talked about all three. The recovery plan is a sudden event. I think it was the Union of Quebec Municipalities that pointed out that for many years there has been a hidden deficit of over $18 billion in chronic underfunding that started under numerous federal governments, without naming them. You are also asking for more flexibility in the programs. I think this committee will try to take your requests into consideration and make recommendations in that regard.

    I was expecting to see considerable divergence between the views of the Federation of Canadian Municipalities and the two groups from Quebec. The only difference I see relates to the speed with which infrastructure projects are being approved. Mr. Généreux tells us that the process of signing the agreements was lengthy. In April or May, the Minister told this committee that he was making every effort to speed up the process, particularly in Quebec. We know that there must first be an agreement signed by the Government of Quebec and the Government of Canada.

    Mr. Généreux, can you tell me what you attribute the slowness with which the agreements are being signed?

    We are dealing with the perennial problem of jurisdiction. For infrastructure programs, the municipalities are the project managers. Because of the special relationship between municipalities in Quebec and the Government of Quebec in relation to this program, all of the necessary parameters had to be agreed on with the various levels of government, and unfortunately this caused some excessive delay in signing the agreement.

    Some of the components we are dealing with should perhaps be used for agreeing on the approach. I am thinking of the entire "recreation" component, for which the governments in Quebec City and Ottawa have agreed on a framework agreement under which projects will be submitted, rather than always having to bring in various levels, where one party's approval does not always match another party's, so projects are delayed. We will therefore have to sign a framework agreement with the Government of Quebec, under which the municipality could deal directly with one interlocutor, who would give the green light that is needed to start up projects. We have to look for easy solutions.

    I have a question for you, Mr. Généreux, and the representative of the Union of Quebec Municipalities. You both seem to be saying that the federal government does not understand certain features of the situation in Quebec. You talked about not understanding the rural situation, and about programs that are not a good fit for Quebec.

    Do you think, given that the federal government does not understand the situation in Quebec, it should simply have set aside an amount for Quebec and given it to Quebec and told it to make its own arrangements with the money?

    It would probably be the ideal world if we could achieve that kind of framework agreement, and give each one responsibility for dealing with the money or programs within the parameters established by the governments and for which they would not be penalized. That clarification regarding responsibility was probably a fairly painful step in implementing all that.

    I have to note that for some components of the action plan there has still not been an agreement signed. The money has to be spent in Quebec, in the proportions that Quebec is entitled to. It would be tragic if we were to continue wasting time because of administrative agreements, when there are so many needs to be met. It is entirely unacceptable and unimaginable that the money in question not be spent in full, regardless of the time limits. We will have to come back to the question of time limits.

    If the curtain comes down at the end of two years and we have not been able to complete the share of projects we are entitled to, that will be tragic.

    The Union...

    Ms. Bourgeois, if you will allow me, I would like to add something. I agree with my colleague Mr. Généreux, but still, an investment of $5 million in Toronto or Calgary is one thing. An investment of $5 million in Saint-Prime or Chelsea or St. Mary's, Newfoundland, is another thing; it is a major project. It takes time for us in small and medium-sized municipalities to get together the resources to do studies, prepare tender documents and make sure everything is working. It takes a little more time in small municipalities than in bigger ones. That is one of the major distinctions between rural Canada and urban Canada.

    Do I have any time left?

     You have half a minute.

    I will ask the people of Quebec to get ready to give me answers about social housing an loans to cities. This is extremely important to me.

    Thank you.

    Mr. Gourde, you have the floor for eight minutes.

    Thank you, Madam Chair.

    I am pleased to have the opportunity to speak to the committee today. I would like to say hello to Mr. Généreux and Mr. Perras. I am more familiar with the situation in Quebec because this summer I had the opportunity to make a number of announcements and meet with several of your fellow mayors in several municipalities, both in small municipalities located in the regions and in larger ones. This was a real pleasure for me.

    Mr. Généreux, I do not understand why you are saying things are slow. In the February budget, we announced a bold economic recovery plan. Agreements were signed with Quebec in early June, so that was only three months. More announcements were made by the Conservative governments in seven months than I think there were during the last seven Liberal years. I think we have made an unprecedented effort.

    Do you acknowledge that in all cases it is Quebec that is administering the submission of new projects? We are a key partner of the Government of Quebec, but it is that government that administers all the files. We are happy to collaborate with it. We have a very good partnership, but it is really Quebec that determines what the projects will be and the speed at which they are to be set up.

    Is that a comment or a question?

    Mr. Généreux, is it really Quebec that decides that? At the federal level, we work in partnership with the Government of Quebec. Are you aware of that fact?

    Completely. In any event, what we have been calling for since this action plan was first put in place is ease of access to the program. It absolutely has to be acknowledged that from the moment the agreements were signed, things speeded up visibly, particularly in the case of PRECO, the Pipeline Renewal Program, where we have seen things obviously speed up in implementation of the program and the ability to get projects in motion quickly.

    That program has how reached cruising speed, although after the waiting period, in the weeks or months following the announcement, particularly in Lévis, it took some time to get the machine in gear. Nonetheless, we are seeking project implementation speed up. Not everything is perfect, but ideally, if we could have broken ground and got access to the money earlier, there would probably be even more projects in advanced stages.

    Our concern is the two-year time limit, and it will always have to be kept in mind. We will have to ensure that for all components of the action plan, and not just PRECO, we are able to spend funds available. We do not want to leave a penny on the table. We have so much to catch up on, in terms of infrastructure, that I might say, "Fortunately, there is an economic crisis, because that means we can speed up the infrastructure program."

    Apart from the economic crisis, the lag to be made up for is so large that we need a permanent infrastructure program. I don't want to play the game of comparing the successes of this government and the former government. We have to get programs up and running, from which we receive our fair share, and renew them in the long term, so we can do our own planning for the development of our communities under programs that are guaranteed permanent. I can assure you that it is not easy to manage development with an ultimatum every two years. These programs have to be unsealed or unlocked and made accessible on a permanent basis, so we can plan accordingly.

    Mr. Généreux, whatever the reason, rural communities in Quebec have lost vitality. In some infrastructure projects, the federal-provincial government partnership is as high as 90 or 92%. Do you think this is a good initiative?

    It is certainly a good initiative that must be encouraged and supported in every case. These programs mean that we will be able to abide by our communities' ability to pay, the communities that have to carry out these projects. As Mr. Perras said, being in Chelsea doesn't make a kilometre of pipe cost less than in Toronto. It often costs more because of the availability of workers and shipping costs; you know the situation as well as I do.

    If we want to make our communities successful, there has to be fairness in the availability of funds and programs, regardless of community size, because the need to upgrade infrastructure is the same everywhere, in equivalent proportions, obviously.

    Out of the $4 billion, Quebec will receive $936 million. Over $750 million has already been committed to projects.

    Do you think this is fast enough, or should we commit the rest as quickly as possible? Do you think you have the skilled work force needed for 2010, so you can carry out all these projects?

    I think you are alluding to a concern expressed earlier.

    First, it is often difficult to measure the gap between the commitment to a project, achieving an investment objective proposed to us, and carrying out the project, getting it started on the ground. What we are interested in are concrete projects that are actually in action. In addition, speeding up these projects and the capacity to complete them in the time allowed by the program are constant concerns for us.

    We must not compromise the quality of what we are doing for program purposes, that is, the two-year deadline. That concern must be central to what we do. No matter how large or small our communities, the support that is needed for carrying out high-quality programs must be constantly taken into consideration. Certainly that is not equal everywhere.

    Merci.

    Mr. Martin.

    Thank you, Madam Chair.

    It seems to me, gentlemen, that we're dancing all around the key issue. When there are billions of dollars flying out the door at unprecedented, breakneck speed, people compromise some of the due diligence that used to take place. They also leave the door wide open for hanky-panky, political mischief, and political interference at the highest level. When we had Minister Baird here at this committee in the early days of the stimulus package, he sort of said, “Here are the rules: there are no rules; this is all brand new.” Now we find ourselves with serious allegations that certain municipalities are getting punished because they didn't vote for the ruling party. In the absence of any fair system, like a simple gas tax transfer on a per capita basis, it's like a lottery. It's more like one of those rigged ring tosses on a carnival midway, with the minister acting as the carnival huckster who decides who wins or loses. That's what we are wrestling with, gentlemen.

    The leader of my party used to be the president of the Federation of Canadian Municipalities. From day one, Jack Layton was demanding that this money flow on a gas tax per capita basis, so that every municipality could choose its projects for itself and there would be no lottery system or sketchy new application system that gives all the power to the minister.

    Would you have preferred a replica of some gas tax transfer model instead of this carnival ring toss that you're being subjected to now?

    Thank you, Mr. Martin.

    First, you know as well as I do that the municipalities have to abide by various provincial statutes and regulations: the Civil Code, the Municipal Code, the Elections Act, and so on.

    In itself, the federal excise tax on gasoline is a very good tax. It has allowed most municipalities that receive it to do better long-term planning for infrastructure work. But the negative side of the tax, if it is applied to all infrastructure programs, is that small municipalities in rural Quebec and Canada, the ones with 500 to 1,000 people, would receive very small amounts. That would not make it possible for them to do major infrastructure work such as water and sewer lines, community centres, arenas, and so on. I think we always have to look at it from both angles.

    I would also like to note that municipalities...

    I understand that smaller municipalities would get very little gas tax transfer. I'm talking about the structure of a program that is urgently trying to get $4 billion out the door. Do you not agree that the current program they designed leaves an incredible amount of arbitrary discretion to the minister and has created winners and losers in a fashion that can be traced to the voting patterns of the electorate?

    If I may, Madam Chair.

    Oui. Do you want to answer the question?

    I think the member's question is entirely appropriate. Regardless of the terms and conditions, we have to make sure there are permanent infrastructure programs. That is the objective we are all going for. They have to be government programs. How can we get party politics out of access to the money and make sure that fairness is the foundation of the programs, so that regardless of how big a municipality is it will have access to funds at all times, so it can gradually fix things and catch up from the lag that everyone has been talking about for years? How do we make sure that these funds are available? I think there are costs and benefits in both cases, whether it be from the excise tax or infrastructure programs.

    The Fédération Québécoise des Municipalités can never argue too much for modulation. Communities that urgently need money have to have speedy access to it. How can we make sure that a program is accessible, regardless of how big or small our municipalities are and, most importantly, regardless of what the allegiance of the riding where we live is? That is a government guarantee, the government has to give us this assurance that a program is in the first place a government program, not a party program. You see the difference? In my opinion, society must be given that guarantee.

    I want to thank you, sir, for pointing out that fairness has to be the underpinning. The guiding principle is transparency and fairness, but they've put together a structure that I would argue is neither. It's arbitrary. It's based on either good luck or your connections with the minister or by how your municipality voted, and that's what has to be exposed here. If we do any one meaningful thing here today, that's what we're talking about: a system that hasn't got this room for abuse. It shouldn't be hanky-panky and political mischief; it should be a transfer based on need and equal access of opportunity to this money.

    Mr. Cunningham, were you waiting for the floor?

    Yes, I was. Thank you.

    Of course, the gas tax has always flowed money to meet local needs with efficiency and accountability, as you've mentioned. That's, of course, why municipalities supported its introduction in 2005 and its extension in 2008 by the present government. And that's why we also applauded Mr. Ignatieff and Mr. Layton when they recently committed to flow more funding through the gas tax fund. It's also why we thought the gas tax fund model would be a good way to get stimulus dollars to quality projects quickly.

    Having said that, it should be noted, first of all, that we as FCM were not part of the decision-making process. In the end, the government stimulus plan wasn't based on the gas tax fund, although it's certainly more streamlined and less centralized than other cost-shared, application-based programs. What counts for us is that it's a powerful tool for fighting the global economic crisis.

    It should also be mentioned that just because we didn't get to participate in choosing the program, it doesn't mean that we don't believe, like all Canadians, that the program has to be accountable and transparent.

    Sorry, your time's up.

    We're going to the next round. It's the round of five minutes, and we'll start with Ms. Foote.

     Thank you, Madam Chair.

    And thank you to our witnesses today for being here. This is a very interesting conversation we're having.

    When I think about the stimulus program and what it was meant to accomplish--to deal with the aging infrastructure in the country and to create badly needed jobs at the same time--I'm always a little nervous about this two-year deadline, because if you're talking about building anything of any significant size.... Having been a minister of education and having built schools in our province, I know it's very difficult to get something built within two years. So it's always been an issue for me that you set a deadline of that timeframe.

    I represent a riding in Newfoundland and Labrador. I have 180 communities in my riding alone, and 35 of those communities actually received letters of intent, and in some cases the money is actually flowing. But when I think about Newfoundland and Labrador.... We all know there's going to be a shorter construction season in some parts of the country than in others. I'm not sure if that was ever factored into what governed this particular program and how it was put together.

    My concern is that if you start something like an arena or a stadium or whatever, and you're doing it through the use of stimulus money and it's not completed by the end of the deadline, the municipality then has to assume responsibility for it. I can tell you from my perspective that there are going to be a lot of boondoggles throughout the country. I know in my riding you're going to have buildings that are partially constructed that aren't going to go any further than that, because in the communities I know of where they've received funding, they just will not have the money to complete them.

    The point I'm raising in all of this is to say to you, as organizations representing municipalities throughout the country, that it's incumbent on you to be more aggressive in making the point to the government that this arbitrary deadline has to go by the wayside. Otherwise, it's going to be a waste of taxpayers' money if we have construction that doesn't get completed, because, as in my case, municipalities of 1,000 people won't be able to complete the initiatives they started.

    Where are you in your approach with the government on this? You obviously recognize that there's a problem here. I put this to Mr. Cunningham, and to Mr. Généreux as well.

    Thank you. You've posed a very interesting question.

    I'm sure the government recognizes the problems of the deadline. Speaking--

    Excuse me. Haven't you already said, though, that they said the deadline is the deadline?

    Yes, that is what they have said. And I believe that if you want to make sure somebody is going to do something, you set a deadline. Having said that, though--talking about my kids--even though I've set deadlines, sometimes when we get near the deadline and we get pushed, things get stretched a little. I would not expect--I would certainly hope--that as we see.... We know the funds need to be rolled out and the projects need to be finished. It's not going to look good for anybody if, as it gets close to 2011, you have half an arena. With that said, I would certainly like to see a little bit of extension, certainly a little bit more flexibility with regard to the line. That's always been our point at FCM.

    Is Mr. Généreux still there?

    My view on that question is that we have to do away with the impression that this is some kind of obstacle course where the game ends at a certain point. In fact, the progress of, or preparation for, projects must not mean that projects stay on the drawing board because the deadline will come on a particular date in 2011. It would be tragic if we were unable, as a society or a country, to adopt a rule or to agree at the outset that the size of the infrastructures that need fixing goes beyond some deadline foolishly set by some program or other. We risk creating a situation in which municipalities will be reluctant to propose projects, thinking they will have to cover a fairly large part of the project if the deadline isn't met.

    We have already made this request to the proper authorities and we will have to make it again as long as that assurance is not received. The government has absolutely got to authorize extension of the deadlines so projects started under these programs can take their course, with all the time needed for them to be completed.

    It would be dangerous to be completing projects in a rush, with the risk of flawed and slap-dash infrastructure because we had to meet a foolish, ill-advised deadline.

    Merci.

    We'll go now to Monsieur Dorion for cinq minutes, s'il vous plaît.

    Mr. Généreux, Madam—I hope you can see and hear—thank you for being here. This is an opportunity for us as well to get away from abstract figures and see how it is actually working on the ground.

    My question is for Mr. Généreux. On the question of the costs engendered by the fact that the program was not simply transferred to Quebec, and has been subject to all sorts of complications at various stages, you mentioned figures of which only 7% will be spent in Quebec versus 54% in Ontario. I would like to check something.

    Is this all of the money available for infrastructure programs, or money that has been advanced so far? What are those figures referring to?

    I am referring to an article that was recently published in L'Actualité where we were told that 7% of the budget available in Quebec would be committed. In any event, I don't want to get into a war of statistics and figures. The concern I want to state loud and long is that we have to simplify the project approval process. It seems to us that the best way to achieve that objective in Quebec is, again, to sign framework agreements between the governments in Quebec City and Ottawa so that we, the municipalities, can initiate the discussion needed for carrying out our projects with one interlocutor. That is how we usually do things in Quebec. The more parties there are, the longer it takes, and the greater the risk that the funds available for our projects cannot be put into the projects that are being prepared.

    Along another line, the programs provide for the possibility of low-interest loans to the municipalities up to $1 billion. It seems that 38 loans have been made to date. Have any of those loans been made in Quebec, to your knowledge?

    My colleagues might have to confirm this, but at this stage, my information is that the framework agreement between Quebec and the federal government has not yet been signed, for the low-interest loan program. It has been available for several Canadian provinces since April, but it is still not accessible in Quebec.

    So there is an example we should not be following. How are we going to succeed? Time is passing and the clock is ticking, and the more we delay signing our agreements the more we risk ending up when the program is over with things that have to be made up, and this would be inexcusable and unacceptable, given Quebec's needs.

    Madam Chair, if I have any time left, my colleague would like to speak.

    I am going to give Mr. Généreux a little break and address my question to the Union of Quebec Municipalities. It seems that these funds were to be invested in social housing. Have your received these funds in Quebec? Are you familiar with this?

    Unfortunately, I can't answer your question, I'm not familiar with it.

    Mr. Généreux, how about you, are you familiar with whether funds were to be invested in social housing for seniors and people with disabilities? Are you familiar with this?

    I don't have any up-to-date statistics or data. I only know that a breakdown has been agreed to in how the funds are to be allocated. Unfortunately, I don't have any figures to give you in terms of the current use or commitment of the funds.

    I would like to take 30 seconds to say that all three of you also agree that infrastructure investment programs have to be continued and we have to stay at the cruising speed we have now achieved. Essentially, I understand that things had bogged down and your municipalities were not able to get out.

    What I also understand is that the notorious one-third, one-third, one-third split is bad for you. Would you like it to be 45%, 45% and 10% instead? Give me a number.

    We don't have a number. You have to understand that when the federal government and Quebec each invest 33% in projects, the sales tax means that they recover $17 or $18 million, but we recover absolutely nothing.

    We thing that is unfair. We have already spoken to our colleagues in the FCM and we are in agreement with them. The FQM and the UMQ are both members of the Federation. They come to our annual meetings. We speak all the time and we support the approach of striking a new balance and making it fairer.

    Perfect, thank you.

     Thank you.

    Go ahead, Mr. Warkentin, for five minutes.

    Thank you, Madam Chair.

    I want to follow up on some of the things that Pat Martin discussed in his rant.

    He talked about the political nature of this framework. While he talked specifically about the punishment that voters were receiving as a result of having elected certain members of Parliament, I thought it was important to mention the folks of Halifax, who feel very punished after having received $18.3 million for an initiative in their riding. We have the folks from Skeena--Bulkley Valley, who also elected an NDP member, and they have received $130 million in a single investment in that riding. We also have the folks in Toronto, who have received over $600 million for specific subway extensions. We have another investment in Toronto that actually, Madam Chair, goes through your riding; it's an investment of over $300 million for an extension of a rail line. I think it's important that a million dollars--

    Thank you. I thought you had lost your math.

     Well, we certainly don't want to be adding zeros to some of these numbers. It's an exorbitant amount, Madam Chair, and your constituents will be proud of the work you've done to represent their needs with these infrastructure funds.

    Anyway, that's not so much for your edification, gentlemen, but because I think it is important to correct the record. We know there are people in the media who are clear about the facts, but we don't want the public who are watching these events to be left with any misunderstanding. I'm sure the honourable member would correct the record, especially since it was an NDP government with which our government negotiated the investments in his riding and province. As a matter of fact, I have three pages of investments for the Manitoba communities that he represents.

    Having said that, I'll move on to other discussions, as I do want to talk about a number of things.

    We've had a number of comments regarding the timeline. Obviously there is a requirement that this money be spent in a timely way. That is part of the initiative and part of what makes it stimulus. If we continue to drag out the deadline, it's no longer stimulus; the money will get spent when the money gets spent and the jobs will not be created now. Our government has been very focused on ensuring that the jobs are created now, and I know you all appreciate that. That's one of the challenges as we approach this impending deadline.

    My understanding--and you can correct me if I'm wrong--is that 75% of the projects planned for this construction year were started as of September 1. That was a month ago, and the report to our government was that 75% of the projects that municipalities committed to starting this year were already under construction or in the process of being under way. Are you familiar with that statistic? That information might be helpful as you undertake your analysis.

     Obviously only the Government of Canada is going to have the most exact figures. FCM doesn't undertake its own reporting with our members, for the simple reason that there's a very clear set of reporting guidelines through the contribution agreements that flow these moneys through provinces to municipalities, and we don't want to duplicate reporting. In the September stimulus report card it was reported that $3.2 billion of the $4 billion infrastructure stimulus fund had been committed.

    Our understanding, anecdotally from our members, but partially from the quarterly reports that provinces are required to deliver, is that not all of that $3.2 billion has yet resulted in construction work on the ground. However, as I said, it is important to note that once project funds have been committed and municipalities receive approval, they can begin the design work, the tendering. There are a lot of jobs required, especially in the design work. We do a fair bit of work with the associations of consulting engineers, and they'll be the first to tell you how important those types of jobs are.

    I don't have specific information on those numbers, since those are government numbers.

    I think it's helpful information that these projects, as far as we understand, are being undertaken; they're already moving quite quickly.

    In terms of the stimulus, though, I think it's important that we all recognize we have to continue in this effort to get things done and to move as expediently as we can. There will be projects--a good number of projects, actually--that are expected to be in the ground as of next spring, with full intentions of being completed before next fall. I can identify several in my own community, and I know you will be familiar with those as well.

    Thank you.

    We go to Madam Hall Findlay, for five minutes.

     Thank you.

    I understand the desire to be a little bit politic, given that there is still an expectation of projects being approved and hope for more money. We're hearing pretty clear evidence and serious concern about significant delays resulting from the matching process. We also heard, and made, loud and clear calls for a gas-tax-type approach, specifically to avoid the delays we're hearing about. Today we're hearing confirmation that there have been significant delays in getting shovels to ground. Despite all of the warnings that delays would result from insisting on a matching project, this is exactly what happened.

    With all due respect, we have been asking for a list of projects, with details on what has actually been spent, what has actually broken ground. On air the other day, I was promised by another Conservative member that I would get my list of the projects. We have been asking for months; we have not found a list. I'm hoping we can get information from the FCM, not a repeat of what the government has been saying without any evidence to back it up.

    So far we have from you that only a third of the projects that were announced have been started. Half of the two-year time limit has now been lost, and there's been confirmation from you that if you don't meet the 2011 deadline for completion, then the municipality in question will be on the hook. I don't know about you, but that means I can't budget. It means I have a real question about whether to undertake a project next construction season, if I don't think I can finish it.

    The conclusion I can't avoid is that this government has been happy to get the benefit of all of these thousands of announcements, knowing that at least two-thirds may not ever happen. If the money doesn't flow, come spring, lo and behold, this government might look a little more fiscally positive than their present projections would lead us to expect. I think that's pretty damning. We're looking at municipalities that have asked for help and Canadians that have asked for jobs to be created.

    It sure looks to me as though this has all been more PR than job creation. So I will ask if you have any further information. We're not getting anything from the government. We would like to have details on the projects that have actually been approved, the projects that have started to break ground. We'd like to know where we stand. We want to know exactly how many jobs have been created. It's not enough for us to get a repeat of what the government is telling us, because what the government is telling us is not a hell of a lot.

    I throw that open to anybody who can give me more detailed information about projects. I understand you have to be politic. You don't want to bite the hand that feeds you, but we're trying to get to the bottom of this.

    We're not being politic here. Our members have a reporting mechanism. They report to the provinces, the provinces report to the department, and the department has numbers. Those are the numbers that we work with. It would be inappropriate for us to go to our members and tell them they have to make two reports. That would duplicate work and create an awful lot more stress for our members, who are working extremely hard to implement the work that is under way.

    As we have stated publicly, we believe this is a national program of serious importance and that all this money must be spent to create jobs so that the economy can be stimulated. As we move towards the March timeframe, if this is becoming a problem, we are going to be saying so loud and clear. The fundamental point is that the money has to be spent, so that the jobs will be created and the projects will be finished.

    We will be echoing that. We feel strongly that we approved the budget to stimulate the economy and get people back to work. If only a third of these announced projects have actually started, that's a whole lot of empty jobs that have been announced. Announcements don't create jobs; actual work creates jobs.

     Thank you.

    Mr. Holder.

    Thank you, Madam Chair. I appreciate being recognized. I'd like to thank our guests for being here today.

    Lest we all forget, what prompted all of this was our concern that we're in a global recession, and as a result of trying to do some things that would assist us in getting out of that global recession, we, like other industrialized countries, made the decision to try to help stimulate our economy.

    If I have a minute at the end, Mr. Jean would like to say a couple of things. I hope to give him that time.

    It is rather interesting. I was trying to think of what the definition of “stimulus” was, and Mr. Cunningham said it best--and I will quote you, sir. You said that if you want to be sure something gets done, you set a deadline. I have not heard any one of our guests say—and I'm delighted you are all here today—that when the municipalities were offered up their projects they did not understand clearly that there was a deadline. Obviously, there is a time deadline for some.

    One of the members of our committee made the comment that she was looking for divergence and was surprised that she didn't hear it, but actually nor did I, and I would like to agree with her. I heard Mr. Généreux state that he was very happy that the federal government recognized the importance of infrastructure and was very happy that the federal government invested $4 billion. I heard Mr. Carlton say that infrastructure funding is one of the most effective tools. I heard Mr. Cunningham say not to go back to the 1990s and that John Baird has worked to cut the red tape. Mr. Perras said that hundreds of projects are running. So I agree that the divergence is not there.

    I would also say that without the timeliness set for these infrastructure projects, I wonder how long it would take for the cities to spend these dollars. That is the whole point of stimulus, ladies and gentlemen.

    I've heard talk about this gas tax format as being the best way to do it, but if that had been the case, there would have been no commitment necessarily from the province and certainly none from the municipalities to be able to create the kind of initiative that in fact we have. What we've been able to do is expand the value of a dollar to three dollars, and that's what's happened as a result of all of the levels of government participating in an unprecedented way.

    My fast question for Mr. Cunningham is on the talk of inappropriate funding in ridings across this country. Sir, do you believe that the premiers of Manitoba, Quebec, Ontario, B.C., and Nova Scotia have conspired to help rig federal ridings in terms of stimulus funding?

    That's a very interesting question, and of course it asks for an opinion on my behalf. You asked if I believed that they conspired. I can't answer that. I have no way of knowing. I read the newspapers like everybody else, and that's as much as my level of knowledge goes. I'm sorry, I can't answer beyond that.

    I apologize. It probably wasn't a fair question. Okay, thank you.

    Madam Chair, I will pass to Mr. Jean.

    Thank you very much, and thanks for the opportunity to be here today. I'm wondering if that was Ms. Finlay's mayor and premier telling her about the Spadina investment in her own riding from this government and the over $1 billion we're recently announced in Toronto south, where there are no Conservative MPs. But that's probably another story for another time.

    I'm just wondering what the reception has been from your organizations in relation to some of the things we have done. Let's not talk about the money, because it is fairly obvious from anybody who looks objectively that we have represented all Canadians, because all Canadians are receiving benefits from this stimulus funding and the infrastructure funding in a fair and equitable manner. But there are some other things that we've done, such as making the one-page application, cutting some of the red tape. The Liberals, for instance, since they're the only other governing party, have never spent more than $3 billion in any given year. Obviously we have an amazing challenge in front of us, and we've done some of that.

    What is the reception in relation to cutting the red tape, for instance, and doubling the gas tax from $1 billion to $2 billion per year, and even accelerating that funding by some three or four months? What has been the reception by your organization?

    Thank you for that.

    Actually, the reception has been very good in all of those cases, and that's one reason we advocated for the continuance and the permanence of the gas tax, which has been a large stimulus and has been very well received. I certainly thank the government for saying, yes, it's permanent. As you know, the leaders of the other parties have also agreed that the gas tax was a very good way to go and it's worked well. That is something that we all agree on, no matter where we sit.

    I agree with my colleague, the federal excise tax on gasoline has been welcomed in Quebec. It allows us to plan for more than a year or two, something that is very rare in municipal government. Because of the money that is now available, we can do that.

    That's probably why your premier said, on August 14 of this year, that the Quebec economy is in better shape than the rest of the country because its infrastructure funding is flowing. I know the partnership with the federal government has worked well.

    Do I have another 30 seconds, Madam?

    No, not really.

     Not even if I force myself in there for 10 seconds?

     I could give you 10 seconds.

    Ten is all I need.

     I'm just curious, who's responsible for the engineering, architecture work, designing the projects, doing the environmental assessment—which this government is never going to leave to the side—buying the shovels, organizing the shovels going in the ground, hiring the employers, and giving the contracts? Who's responsible for that?

    We are.

     Is the federal government responsible for that?

    No.

    Thank you.

    Madame Bourgeois, for cinq minutes.

    Thank you, Madam Chair.

    I just want to go back to a few questions you were asked. You answered one question that I thought was a little special. Certainly your municipalities are responsible for the engineers and the plans and specifications, but I think that if you are given time, you will be able to get them done. You don't have enough time. Maybe it isn't up to the federal government to look after this, but still, as you said earlier, there could have been more flexibility in the allocation of the funds. They could at least have helped you, have given you time to have the plans drawn up.

    When the Minister came here in April or May, he was asked whether he didn't think that to build a bridge, or to build a road that was already planned ... I'm not talking about plans already drawn up by a municipality and specifications already in place. I'm talking about a road that is needed but that the municipality doesn't have the money for. It has no money to spend on plans and specifications and it can't invest in the road right away. It will need two years, is that not correct, gentlemen? So it is important to have some flexibility. I don't understand the question you were asked.

    That being said, the third report says that 90% of the Economic Action Plan funds have been committed, and you don't seem to agree with this. We are also told that over 220,000 jobs have been created, and you don't seem to agree with this. Correct me when I'm wrong. We are also told that all of the necessary agreements are in place so you can receive the money, and you don't seem to agree with this. And we are told that the federal economic stimulus funds ... The Government has made commitments to over 4,700 provincial, territorial and municipal infrastructure projects, but you don't seem to be sure, and you are the ones on the ground.

    Gentlemen, I may be putting you in a corner, but do you think the third report and the items I have just referred to are correct?

    I will repeat what I said earlier, Ms. Bourgeois. It is hard to say, because we haven't done that exercise with our members. You understand that there will be an election on November 1 in Quebec.

    Ms. Diane Bourgeois: Absolutely.

    Mr. Jean Perras: So our mayors' current priority is not necessarily answering questions from the Union des municipalités. But I promise we will have results right after that.

    Please.

    Does the representative of the Fédération Québécoise des Municipalités want to add anything?

    In the circumstances, we have to trust the federal government, because it is the only one with the statistics at present. We have no way of ascertaining what a commitment is and what a project actually underway is. I think that is where we want to have as much detail as possible.

    My goodness, as one of our former premiers would say, "give us our share" so we can do our work as easily as possible. I can't say it too often: our interlocutor is the Government of Quebec. Let the federal government make agreements with the Government of Quebec, as fast as possible, so we can start our projects and just have one interlocutor to deal with. I think that is the solution, the formula, the recipe, that is the easiest for us to work and understand, the one that will also allow for the necessary adjustments and modulations, given that a number of our communities have needs.

    I would like to come back to something said earlier. The infrastructure projects that a number of our small municipalities want to start up are future projects, while in large municipalities there is often an engineering, consultation and research department, that means there are always projects in the box. But we can understand that starting a process of defining an infrastructure project for a smaller community involves numerous steps. The project has to be defined and built, and documented before it is carried out. We have to find ways to ensure that these projects can also be completed within the time allowed.

    Can a representative of the Federation of Canadian Municipalities answer me?

    Do you have figures that corroborate this third report?

    We have presented figures. I want to add that the economic recovery program is much larger, must larger than the corner occupied by municipalities. When it says 90%, that is for the whole thing. Our corner is less than that.

    You think it is less? That's what I want to know.

    [Note from the editor: inaudible]

    Thank you.

     Mr. Martin, for five minutes.

    You will be the last questioner, after which we will do a wrap-up, and then we have some committee business to deal with.

    Very good. I do like having the last word, especially with Mr. Warkentin in the room.

    Let me start by saying, and maybe even reminding committee members and witnesses, that we're the government operations and estimates committee of the House of Commons. As such, it's our obligation to challenge the veracity of proposed government spending to test whether it will in fact achieve what it promises to achieve. So when the Government of Canada overspends the budget and spends us into deficit by billions and billions of dollars, it's entirely appropriate for us to be challenging the veracity of that spending, whether it will in fact achieve what it set out to achieve. But they've made it very difficult. As members of Parliament and members of the Standing Committee on Government Operations and Estimates, it's strange that we should be relying on you to bring information to us because we can't find out, neither for love nor money, where the spending has taken place. We get rationed little tidbits of information in a lippy sort of backhanded way from junior rookie MPs, backbenchers. We find out little tidbits of information instead of a complete list.

    On a point of order, this is getting out of hand.

    Which is it that you're objecting to, “lippy” or...?

    It's the name-calling over on the other side.

    Mr. Warkentin, you said he was “ranting away” and I did not stop you.

    Mr. Pat Martin: That's right.

    The Chair: So if he wants--

    --to continue to rant--

    --he can rant. It's his job.

    Thank you.

    It's on the action plan website.

    Fair enough.

    He has the floor.

    On a point of order, Madam Chair, as likely the “junior rookie MP” at this table, I hope that wasn't intended to be a personal negative comment towards me. I'd like to have negative comments saved for question period, not for committee, please.

    Mr. Holder, I will ask Mr. Martin to explain himself. Thank you.

    Mr. Martin, continue.

    We have to remind ourselves that it was the culture of secrecy that allowed corruption to flourish during the Liberal years, yet the shroud of secrecy has fallen over this particular spending program in a way that we've never seen before.

    It's rare as a member of Parliament that you get to witness the genesis of a boondoggle, but I honestly believe we've watched in slow motion a potential boondoggle unfold and flourish and blossom before our eyes. We have an obligation and a duty as members of the Standing Committee on Government Operations and Estimates to blow the whistle on that when we're not getting sufficient information to convince us that things are in fact copacetic.

    That said, my specific question to our witnesses is regarding social housing. We might be the only developed nation in the world now that doesn't have a national housing strategy. We've offloaded that onto the municipalities. We haven't even offloaded onto the provinces; it's all the way down to the municipalities, with no corresponding stable core funding associated with it.

    Even though I understand there will be pickup on the offer of low-interest loans, is it the position of the municipalities that it is an adequate national housing initiative, and where does that stand in the relative wish list of the municipalities in terms of a true commitment to a national housing strategy?

    If you're speaking about the housing stimulus funds available in the economic action plan, there's no doubt that the $1 billion available for housing renovations and retrofit is a significant sum. It is only available over a two-year period, because the policy objective of that program is to actually create jobs, first, through investments in housing.

    We strongly support that, but there's no question that two years of funding does not represent a long-term national housing plan, which we've been calling for over many years. It's really about the longevity of the funding.

     Could I ask just what is a low-interest loan when the lending rate is already a quarter of 1%? How low do you go when prime is already so ridiculously low?

    First, just to clarify, that loan program is actually for infrastructure, it's not for housing. But you're right, the low-interest loan is going to be available essentially at cost to what the government achieves with its own borrowing.

    It's over a 10-year period, and the 0.25%, of course, isn't a daily overnight rate. For most provinces and municipalities, 10-year loans are running at about 3.5% to 4%. For the Government of Canada, it's a couple of points less.

    This indeed is a very low-cost loan program. It was made available primarily to help municipalities take out additional loans to help fund stimulus programs, for which, of course, it didn't receive approval until after they had approved their own budgets.

    That's interesting.

    And you're out of time.

    Mr. Warkentin, I know you have some information you'd like to give us. If you give me one minute, I'd like to wrap up some things. Then we'll take that information.

    As Mr. Martin indicated, this is the committee that reviews the way government spends money. For any government, whichever label it carries, it is important that taxpayers understand and are comfortable that there is an oversight. That's what this committee does.

    We called you as the stakeholders of or the beneficiaries of some part of the infrastructure funding. Whatever information you give or do not give us, this is how the committee will proceed. It is in your best interest to give as much information as you possibly can to us. That's your prerogative. It's the committee that can ask you the questions, and if you don't supply the information, the committee does not have any more things to do then. Then it says, “Fine, that's what they want.”

    But you represent large municipalities and small municipalities. It's your membership that you're representing. It's your membership that's being affected by these investments.

    For example, were you aware that the government had demanded $3 billion way back in March that they wanted to give to projects that were shovel-in-the-ground-ready projects? Nothing happened. That money went back to the consolidated revenue fund. So if you are familiar with it.... Then the money got rolled over to the other funding. That's what public finance is: if you commit and do not utilize, it goes back. Then another budget comes. That is why the questions you've been asked were so direct.

    What I would suggest is that in your closing remarks, if you have any additional information from your membership that has been rolled out to you as to the number of jobs that have been created.... It says there'll be 220,000 jobs created, or 190,000 jobs created. Has your membership indicated to you the number of people that they have employed or that the municipality has invested in? If you have that information, that would be good. If you don't have that information, I'm sure Mr. Warkentin has some information that he'll supply.

    But I'll give you another example. Mr. Warkentin said my riding had investment. I did a photo op with my counterpart, and I got calls to my constituency saying that has not happened: the province put up the money, but the feds have not given the money. Those are the things people are dancing around saying, “What is the reason we're not getting the funds?” It was supposed to stimulate the economy. Did it stimulate the economy? You do not know because stimulation is an economic thing, as economists will say.

    In your closing remarks, then, would you take the liberty of giving us as much information as you can?

    Who will be speaking for FCM?

    Mr. Cunningham, you will supply us information later?

    Yes, Mr. Jean.

    On a point of order, Madam Chair, you mentioned the federal government part hasn't flowed yet. But you know, as everybody knows in this room, that the federal government pays on an invoice received from the municipality or the province, except for, of course, the gas tax fund.

    I just don't want the record to be showing that the federal government hasn't put the money out, because we don't put the money out as a government. No government does.

    No, no, no, I am very clear. I do public finance. Commitment is commitment. It's not been expensed.

    But it's paid on an invoice.

    Yes.

    Okay. I just want to make sure the record's clear on that.

    The $3 billion was supposed to have flown to municipalities because it was claimed that there were shovel-in-the-ground-ready projects.

     But it doesn't flow until the invoice is received, Madam Chair.

    That's right. So we are playing with semantics.

    To conclude then, you will have a few minutes to give us your closing remarks. We will go from Mr. Cunningham to Monsieur Perras and then Monsieur Généreux.

    Thank you, Madam Chair.

    I wish I could give you more statistics other than what Mike has already given. But these are our key messages.

    One, our biggest concern is about the stimulus package and what happens after it's gone. We're worried about a long-term infrastructure deficit and how to fix it.

    Two, we cannot afford to repeat the mistakes of the 1990s when federal and provincial governments pushed deficits off their balance sheets and into the local streets. Key investments such as the gas tax fund, GST rebate, and cost infrastructure programs must be maintained to protect our quality of life and strengthen our economy.

    Three, in the near term, all orders of government must commit to keep the stimulus plan on track and put every single dollar to work in communities across the country. I think we all agree on that.

    Four, to keep the stimulus plan on track, governments must continue to work together and show flexibility. Of course, it's a tripartite union to put these projects there. It's the federal government, the provincial or territorial governments, and of course the municipalities. Everybody has to be pulling in the same direction.

    Thank you.

    Monsieur Perras.

    Thank you, Madam Chair.

    The key message is that in spite of the fact that this is a short-term economic stimulus plan, efforts to rehabilitate infrastructure have to continue on a 15 year horizon. Unfortunately, I can't give you the information you want. I told Ms. Bourgeois that once the November 1 municipal elections in Quebec are over, we will be able to consult our members.

    The Union had been calling for infrastructure programs for a long time, and we are pleased with it.

    I'd like to remind everybody around this table of what we are talking about from a strategic point of view, and we've discussed this with our friends at the FCM and FQM. Forty-six percent of all the federal, provincial, and municipal revenues go to the federal government. Forty-six percent goes--tax, income tax--to the provinces and 8% comes to the municipalities. With that 8% we're supposed to do everything that we're being asked to do, plus there's downloading from our respective governments. We have been asking for a long-term view of structural adjustments on what we consider our key elements, such as infrastructure programs.

    Work on infrastructure in Quebec has increased visibly, but nothing is perfect, it will take time. There have been examples in Quebec where programs were considered to be ending on a certain date. Extensions were given because of various things that happened.

    All kinds of things happen. I'm doing a structural project right now in one of our villages. We dug to see if there were rocks. We dug in five places, but in between the places where we dug we found rock. This threw the project into an uproar because we had to come back and deal with the rock differently. There are all kinds of reasons why projects are not going as fast as possible. That's reality. We live in an imperfect world.

    In conclusion, the UMQ would like to see both higher levels of government coordinate their priorities better so the programs will be better tailored to the situation in Quebec.

    Thank you.

    Thank you.

    Monsieur Généreux.

    Thank you, Madam Chair.

    Certainly we are again pleased and would like to point out how important this program to assist in upgrading our infrastructure is. I also join my colleagues in calling for permanent programs because of the need to plan the work of upgrading our infrastructure over time.

    In terms of knowing the extent to which the programs have been rolled out, you are asking us to take on a responsibility that may lie with your own committee or the government. To ensure that what is going on everywhere in the country is being monitored, you need the resources to go and get that information. Providing accurate information requires considerable resources.

    The discussion today hinged to a large extent on actual progress made in the infrastructure strategy. It is somewhat unfortunate that we did not have more concrete facts or ways of assessing it, but we still feel that things are moving in the right direction.

    We have to agree on better terms and conditions, that will make it possible to move ahead quickly on these programs. We must not forget that it would be unacceptable to leave the money needed for upgrading our infrastructure on the table.

    Once again, this means abiding by the division of powers. We have to find formulas that simplify access to this money and also provide flexibility in terms of deadlines.

    I am not saying there should be no cut-off dates, but we must make absolutely sure that the money available is fully committed for improving the quality of life in our communities.

    I hope we will be able to benefit from these programs and at the same time be able to avert any of the temptations of party politics that so often arise when these measures are rolled out.

     Thank you.

    This was supposed to be non-partisan stuff that we were trying to get you to say, and I think a cities agenda where the cities and communities sit down with the federal and provincial governments will probably help you in your discussions.

    What you have to say, Mr. Warkentin, is to the committee, so I will let the witnesses go meantime.

    I'd like to thank you all for being here, and thank you for taking time off to supply us with information. Thank you very much.

    Mr. Warkentin has some information that he'd like to share with the committee.

    The floor is yours, Mr. Warkentin.

    Thank you, Madam Chair.

    I just thought for the sake of transparency I would provide the committee with some documents that some committee members may not have been able to find. I found some that are not secret, but are actually available to the public. I specifically pulled out a document that outlines all of the projects that will be funded under the infrastructure stimulus fund in the province of Manitoba. I'll give this to the committee; it's in both French and English. It think it will be helpful to Mr. Martin, who said he had not yet been able to find out what's being funded under that stimulus fund. So I have that document.

    In addition to that, I also have a backgrounder from the FCM. There were some questions with regard to the number of jobs being created as a result of this. In this backgrounder they actually do a calculation as to the numbers of jobs being created: it's 11,500 for every $1 billion spent. I can provide this document in English and French.

    You can provide it to the clerk who will have it translated.

    Perfect. Thanks so much.

    Thank you very much.

    The next item is the minutes of the steering committee, and I guess, Ms. Hall Findlay, you have an amendment to item number 4?

    Yes, thank you, Madam Chair.

    In the first two points we had mentioned the people by name who we had asked to be included. I just note that on the fourth one, we had in fact specifically requested not only the President of the Treasury Board and relevant representatives as needed, but also the former clerk of the PCO, the current clerk of the PCO, and the catch-all language, “whatever other representatives would be needed”.

    So you want us to name whom we are going to invite?

    Or just put them down by title: the President of the Treasury Board, the PCO clerks, former and present.

    Fair enough.

    Since we had received your request and had asked members of the committee to send a list of suggested witnesses, we will make those amendments.

    Perfect. Thank you very much.

    Mr. Anders, and then Mr. Warkentin.

    I just want to make sure we have the wording of that correct. Would it be the Treasury Board president or his officials?

    We're requesting that the President of the Treasury Board and relevant officials or representatives attend.

    We will leave it to the clerk.

    Mr. Warkentin.

    Obviously, I wasn't at the steering committee meeting, and I don't know if we can work the following witnesses into these meetings, but can we at some point have representatives from the Canadian Construction Association? I think they could provide some testimony relating to many of the things being undertaken currently. Maybe it would be appropriate to have them for the fifth meeting. As well, I believe the Association of Municipalities of Ontario would also be appropriate, as there's been some discussion here about projects in Ontario.

    We had invited them, but they couldn't make it here for this meeting. What we have suggested in point 5 is that members give the clerk the names of additional witnesses and we will do what's necessary.

    Thank you. I appreciate that.

    Is there any other business?

    We have to pass the minutes. Can we approve the minutes as amended?

    Some hon. members: Agreed.

    The Chair: Thank you. Merci.

    The meeting is adjourned.