:
Good morning and thank you.
On behalf of the Association of Manitoba Municipalities, which represents all 198 municipalities, we want to thank you for the opportunity to present here today.
Municipal government has played a huge role in Canada's stimulus plan. Manitoba municipalities have been working flat out to make it a success and want to ensure that every dollar is working to create jobs and build our rural and urban economies for a stronger province and stronger country.
As we all know, the recent economic crisis was one of the worst since the Great Depression. Research has shown that investing in infrastructure is the best way to create jobs and grow your economy. It has been shown that when it comes to fighting a recession, investing in infrastructure is twice as effective as tax cuts.
Weeks before the government even released its economic action plan, municipalities in Manitoba had compiled a list of many shovel-ready projects. Municipalities in Manitoba and right across this country were ready to go to work. In January 2009, we applauded the government's decision to make infrastructure a cornerstone of its economic action plan. In the following months, new funding was rolled out in record time, although there were some challenges.
It took time for the government to negotiate funding agreements, design programs, and approve projects in all provinces and territories. That created time pressures, which we are still trying to manage. The Association of Manitoba Municipalities certainly welcomes the federal government's commitment to being fair and reasonable when it comes to the stimulus deadline.
A lot has been achieved in some 20 months in Manitoba, with 73 approved municipal projects with a total project cost of $75.5 million. Under the Building Canada fund communities component top-up, there were 22 projects approved, for a total of $54.4 million.
From the time all agreements in Manitoba were given the green light, Manitoba municipalities have been going flat out to ensure that those stimulus dollars are working in their communities. Infrastructure Canada has been working closely with Manitoba to monitor these projects and has found that vast majority are on track.
AMM has been in close contact with our members. From what they are telling us, projects are on or ahead of schedule in most places. However, there are also some communities in Manitoba where projects started unusually late. Through no fault of their own, Manitoba municipalities have had to deal with excessive rainfall, delay in provincial approvals, and late approvals in trying to meet the stimulus deadline. In Manitoba, out of 73 projects approved, four are at risk and one will not be completed. Out of the top-up of the 22 projects, two projects are at risk and one will not be completed.
In Manitoba, most budgets were done when the stimulus and Building Canada funds were announced, so expenditures were not in the municipal financial plans and therefore had to go to an additional municipal board hearing for borrowing approval and also public hearings, causing unfortunate delays.
That's one of the problems that we see in Manitoba: the provincial regulations and provincial delays. When there are time-sensitive deadlines, these really play into trying to get these projects completed, because even if you go to the municipal board for a borrowing bylaw, they have up to 90 days to make their decision, therefore delaying projects. It's an unknown for municipalities as to whether or not they will get their borrowing approved. In regard to provincial regulations like the highway traffic board environmental approvals, these are necessary steps in the process, but have also been shown to be barriers in regard to time-sensitive deadlines. That's what we were finding in Manitoba.
Working together, federal, provincial, and territorial governments have helped pull Canada through the darkest days of the recession. Things have not gone perfectly, nor will they ever, especially when you're responding to a global crisis. When it comes to the stimulus deadline, we welcome the federal government's promise to be fair and reasonable.
We have two specific recommendations to help the government live up to that commitment.
First, the government should commit immediately to showing flexibility wherever a community has worked hard to meet the deadline but, through no fault of its own, requires more time to finish a stimulus project. It should encourage the Province of Manitoba to do the same.
Second, the federal and Manitoba governments should direct the public service to start working on the individual communities to adjust project schedules as necessary.
In conclusion, up till now, the three stimulus partners--federal, provincial/territorial, and municipal—have shown flexibility where necessary. The federal government showed flexibility when it worked with each province and territory to design specific stimulus programs that met their regional needs.
Municipalities showed themselves to be flexible when they waited months, and sometimes as long as a year, for all levels of government to approve projects. Now, as we enter the home stretch of the stimulus plan, it is clear that continued flexibility is the key to continued success.
After stimulus, we cannot say that the problem is solved. We must look back at the stimulus program and the lessons learned so that we can work toward a long-term plan for investing in our infrastructure and our communities. We must use what we have learned to look at our longer-term infrastructure needs and to start designing the next generation of federal infrastructure programs. That way, when the fiscal outlook improves, we will be in a position to protect our recent gains and to build the infrastructure that Canada needs to thrive in the 21st century.
Thank you very much.
I'm still finding it somewhat strange to be trying to assign the blame to the municipalities.
[English]
You've done your homework. I think we need to show some flexibility, period. It's a case-by-case issue, but I believe that because you've done your homework you deserve to have that flexibility.
[Translation]
I would like to ask a few questions.
[English]
We mentioned “fair and reasonable”.
[Translation]
If you get this extension, it is certainly going to have an impact on the next year. If you don't get it, it will interfere somewhat with your planning for the next year. How are you planning to deal with all this? We have the impression, for good reason, that you are currently in a grey area. If you don't get any news, that you should go ahead and do the work and the work is not completed, it's going to have repercussions for work in the following years.
As an association of municipalities, how to you plan to meet the needs of your people? I always thought that municipalities were the ones closest to the people, as compared to other governments. In some cases, Ottawa is remote. You might not just be using the shovel, you might be getting it used on you.
Thank you very much to our witnesses for appearing here today.
Let me first of all congratulate our municipal partners. For the last two years, I think they have done a considerable job in terms of their part in trying to make a stimulus a reality, to impact the economy in the window it needed to hit. I think that's the reason why we're not talking about problems across the board. It's certainly one of the variables in why we're not talking about across-the-board problems for municipalities with respect to these projects. We're having a high degree of success, so I want to congratulate our partners on that.
I also want to congratulate the associations for their part in reaffirming the importance of the deadline all the way along. Of course, that keeps a certain amount of drive moving forward to complete projects, so we appreciate that very much.
I do want to correct just one minor thing, if I may, Mr. Dobrowolski, with respect to the ISF and RInC projects. The primary focus isn't on dealing with the infrastructure deficit, but with stimulus and job creation as part of the recession that we've been in, and hitting that two-year timeframe in which to stimulate the economy. We happen to have the corollary benefit of addressing the infrastructure deficit.
We already had the BCF, a seven-year program to deal with long-term infrastructure deficit issues. That's why we introduced BCF and the permanent gas tax fund. I just wanted to be sure that we could be in agreement that the ISF and RInC projects were to deal with a global recession reality and Canada's part in getting jobs created in communities.
In terms of a background, just so I understand, how many municipalities are part of your association?
:
Okay. I appreciate that.
The federal government, I think can we can agree, has been, first of all, quick, or relatively quick if you look at the history of how the federal government moves on programs. We had the earliest budget in Canada's history, the economic action plan, in January 2008. It was, I think, a considerable all-of-government response because of the need to stimulate the economy.
I do want to correct Monsieur Gaudet. In terms of being fair and flexible, we've already announced, long ago, that substantially complete projects will get pro-rated federal funding--not cancel the projects.
We're also working to re-scope projects in order to deliver fully funded on-time projects with municipalities. You've talked about how less than 5% of the projects may come up short in some degree. Is re-scoping helping or can re-scoping help these individual projects in Manitoba, to the best of your knowledge?
:
Thank you, Mr. Chair, Deputy Chair, and members.
The Union of Quebec Municipalities was eager to accept the invitation to participate, again, in the work of the parliamentary committee on the impact of the deadline of March 31, 2011, for completion of infrastructure stimulus projects.
In my presentation to you in June, I cautioned the members of your committee about the various problems associated with keeping the March 31, 2011, deadline for Quebec municipalities.
Today, I can confirm that the fears expressed by the UQM in June were valid. If the government does not allow some flexibility on the deadline, many municipalities will be penalized and some projects will be jeopardized.
The mission of the UQM is to promote the fundamental role of municipalities in social and economic progress in every part of Quebec and to support its members in building democratic, innovative and competitive communities.
The UQM has recognized the importance of the government's economic action plan, and the investments and infrastructure that have made it possible to catch up on the municipal infrastructure deficit, estimated at over $18 billion in 2003.
This issue has been a priority for the Union of Municipalities for several years. In light of the sixth economic report tabled by the Minister of Finance, the hon. Jim Flaherty, in September 2010, it is obvious that Canada's Economic Action Plan has benefited the economy and infrastructure.
It must be pointed out, however, as the ministers of the Government of Canada have noted on several occasions, that if municipalities had not acted quickly to get a number of infrastructure projects underway, the effects of the economic crisis would have been much more serious.
For economic stimulus measures alone, the municipalities of Quebec have undertaken nearly 1,000 projects, representing investments approaching a billion dollars. The municipalities' contribution to the success of the program is undeniable.
The municipalities where there when the plan was implemented. Today, they hope the Government of Canada will be there for them, by agreeing to their request for greater flexibility.
In a nutshell, we hope that the partnership that has started out so well will be able to continue on a congenial basis.
We must not be too impressed by the recent economic report that paints an extremely optimistic picture of the implementation of the economic action plan. The report states that 97% of the work begun under the action plan is underway or has been completed.
The picture is very different in Quebec, however. According to the figures collected by the ministère des Affaires municipales, as of August 30, only 38% of the work had been started and no funds in the funding envelopes had yet been refunded to the municipalities.
Under PRECO, 70% of the projects said to be at risk are at risk because of time shortages, since the second layer of asphalt has to be laid in two separate steps based on the freeze and thaw periods.
In fact, this is the main problem the city of Laval is facing, where some 15 projects will not meet the deadline, representing losses of several million dollars for the municipality.
After broad consultations with its members, the Union of Municipalities can confirm that the situation of Laval is not an isolated case, since the results of the survey show the same thing more or less everywhere in Quebec. The initial results show that more than 80 projects in some 40 municipalities are at risk of being completed after the deadline, thus jeopardizing an investment of a little over $100 million in works.
The municipalities of Quebec are working hard to complete their projects, but they must not be penalized if they can't finish on time, for several reasons.
First, they have had delays caused by the lengthy negotiations between the governments of Canada and Quebec. Of the four Canada-Quebec framework agreements, two were signed as late as the end of January 2010, nearly a year after the economic action plan was adopted. That means that once the legal process for awarding contracts was completed, there were only a few months left for the municipalities to complete all of their projects.
Second, the municipalities are dealing with the heated construction industry, and this is exacerbated by the imposition of this deadline. It means that in some regions of Quebec, contractors are experiencing shortages of materials. In the Montreal metropolitan region, manhole covers are starting to be in short supply. Across Quebec, there is a shortage of temporary water supply pipes. Municipalities are victims of the shortages and are having to use other materials and other methods, and to absorb the extra costs and delays. This is the case in Beauharnois, for example.
Elsewhere, municipalities are suffering because contractors' order books are full and they sometimes have to issue new tender invitations because they haven't received bids on their projects. This is the case in Roberval, for example, which has had to deal with the lowest bidder in the first tender invitation withdrawing because it was overloaded and could not meet the deadline. Roberval was forced to issue a new tender invitation and it is now facing the fact that this time it has received no bids.
It is important to point out that PRECO, which is intended to rehabilitate water infrastructure, is a program unique to Quebec. It is therefore to be expected that these situations will arise only in Quebec. Adding a deadline has only exacerbated these problems.
Last, we would note that harsh winters reduce the period when road work can be done by several months more or less everywhere in Canada, of course, but we have no relief from this at all in Quebec.
The Union of Quebec Municipalities is bringing a message from its members today, municipalities of all sizes in all regions of Quebec, representing five million Quebeckers. The Union of Quebec Municipalities is asking Mr. Flaherty, who said the government of Canada would be "fair and reasonable", for a much firmer commitment, to reassure Quebec municipalities.
The Government of Quebec has committed to continuing its financial contribution beyond March 31, 2011. In addition, the National Assembly has passed a motion supporting the municipalities' request in this matter. The Union hopes that these actions will inspire the Government of Canada.
In closing, the Union of Quebec Municipalities reiterates its request that the federal government allow municipalities that have already started their projects to complete them after the March 31 deadline and still receive the financial contribution the Government of Canada had promised. The Union believes this is a reasonable request, given the situations and the circumstances in which it is made. A positive response will help to consolidate the economic recovery in Quebec and Canada and will benefit all Canadians.
Thank you, Mr. Chair.
Thank you for your attention, gentlemen.
:
Good afternoon, gentlemen, Mr. Vaillancourt.
While I won't reiterate what Mr. Vaillancourt has said, I will say it is apparent that the fears expressed by the Fédération Québécoise des Municipalités at its last appearance unfortunately seem to have materialized.
With only a few weeks left until winter, when infrastructure work will be forced to stop, the municipalities are again, and still, having to deal with this famous deadline, which is becoming increasingly worrisome in terms of actual capacity to complete the projects announced.
I don't want to reiterate the figures given by Mr. Vaillancourt, but we note that fewer than 40% of the projects undertaken by the municipalities by September 16 had been completed. You will understand that concerns are obviously growing as time passes.
Circumstances are mounting up to hinder the capacity of the thousand members of the FQM to complete their projects. It almost amounts to subjecting the municipalities to mental cruelty, given that projects have been recognized and funding for them confirmed by agreements. We are increasingly facing the anxiety of the period imposed by the program ending, which will probably mean that hundreds of projects all across Quebec will not be completed, for all sorts of reasons. It may be a question of delays associated with completing these various projects, or authorizations that are needed from various departments, for example the ministère de l'Environnement, or from the Commission de la protection du territoire agricole, in the case of projects that affect those areas.
In the present overheated situation, where bids are often considerably higher than initial estimates, there are all sorts of situations that mean that in many cases municipalities are unfortunately having to conclude that it is impossible to complete these projects. That observation is also shared by the Canadian Federation of Independent Business, which has reached the same conclusions itself.
At present, municipalities are still calling for tenders. It is easy to understand how some bidders, given this inexplicable and unjustifiable deadline, are not risking bidding, given the risk of a major penalty that some of them are facing. This means that the number of bids being submitted is low.
There is also the problem with materials, which is becoming a matter of growing concern. The overheating observed last spring has now hit head-on. Delivery delays, which have become common because materials are increasingly rare, are causing major stress and interfering with the capacity to complete projects.
In the circumstances, you will understand that the resolution passed by the Fédération Québécoise des Municipalités asking that this deadline be pushed back, which was adopted at the annual general meeting held at the end of December, is entirely appropriate.
We seem to be hearing that the economic crisis is behind us. When we see the difficulties in many of the regions and places in Quebec, we understand that the economic recovery has not always been on time. We still need this infrastructure program to stimulate the economy. The federal governments wants to make us believe the recession has ended. That is what it sees when it puts on its rose-coloured glasses, but we have to step back a bit.
Denis Lebel was also present for the opening presentation by the Fédération Québécoise des Municipalités. He took good note of the unanimous request by the members at the convention to postpone the deadline. Mr. Lebel also committed himself at the end of September to conveying the message stated very clearly by the Fédération Québécoise des Municipalités to his government, to lift the constraints associated with this program.
What we are asking, in fact, is that for all the projects that have been announced, 100% of the money announced be allowed to be spent beyond this famous deadline. Objectively, there is no justification for the deadline. When an agreement is submitted to a municipality and signed by the government, that money itself is set aside for the project. What would be the problem if the project were completed within a reasonable and acceptable time, rather than rushing projects through and having the quality risk being jeopardized? Impose requirements for completing these projects as soon as possible after the deadline, certainly. Look, we have a winter to get through here at the end of this program, and that winter is a major obstacle to being able to complete these projects.
More specifically, in my own municipality, I recently received an agreement signed for a recreation centre. It is a $1.5 million project. You may say that's not much, but it's important to my community. I received the agreement on October 5, 2010, with the requirement that the project be completed by March 31. In objective terms, how do you expect me to start the process for borrowing and for the plans and specifications, to do the work in the winter, and have it all completed by March 31? What we're asking is that the money committed under the agreements be disbursed in full. It is unacceptable to leave amounts like that on the table. Several hundred million dollars could expire because of this obstinate insistence on a deadline.
The list of municipalities facing problems completing these projects might go on at quite some length. The 40% of projects authorized to date alone illustrates the gap we still have to close between projects undertaken and March 31. This burden absolutely has to be lifted as soon as possible.
Thank you for your attention.
:
Thank you, Mr. Coderre.
First, I have to say that Mr. Lebel, whom I did not necessarily meet at a convention, but at another meeting, seemed to be very open. Quite recently, I met with Mr. Strahl, who said he was genuinely looking for a solution based on fairness.
We know what happened in Quebec: the negotiations were not between the municipalities and the federal government, as the law requires, but between the provincial government and the federal government. We did not receive the authorizations and we were not informed about the rules of the program until the end of January this year, in some cases. We can't do the impossible.
Trying to be fair raises a question. While 97% or 98% of the provinces have been able to meet the deadline, there is only one exception: Quebec. The reasons are easy to understand, and you know what they are. Why should Quebec municipalities have to make a larger contribution to their government's economic recovery, through property taxes? That would be very unfair.
So give us different deadlines, and make sure we are able to meet them. I reiterate that if the municipalities in Canada had not had projects, the recovery plan would probably have been a big failure. There have to be people who have infrastructure projects. Municipal government is always the one that is closest to the people and is, in fact, most essential in their everyday lives. There is no ill will. Quebec municipalities haven't wasted their time, but they aren't capable of making up the time that was wasted. They are here before you today to avoid being penalized, and to avoid property taxes becoming too high for Quebec taxpayers and Canadian taxpayers in other provinces to bear.
:
If I may, I would like to say that, once again, I am wondering how it would change the government's budget not to honour the commitment signed in the agreements for projects agreed to, which were analyzed by the government and confirmed to the municipalities.
We don't want to be penalized for delays caused by the negotiations between Quebec City and Ottawa about implementation of these infrastructure programs. It's a fact that the negotiations took longer in Quebec than elsewhere. Nonetheless, projects worth hundreds of millions of dollars were submitted, analyzed and recognized. What would it change, for the federal government, if the funds committed were allocated after the deadline set, to allow these projects to be completed?
According to the figures I have, there are currently 152 projects at risk. That doesn't mean they will all be in danger. According to the figures from the ministère des Affaires municipales, des Régions et de l'Occupation du territoire, there are 152 projects at risk, worth $31 million in federal money that is also at risk. Because funding for these programs is split three ways, we can imagine that what is actually at stake is $120 million.
The main reasons cited for the projects that are at risk is the question of the time needed for completing most of the projects, the issue of paving, because of the fact that asphalt plants are going to shut down in a few days, and the issue of bids that were too high and caused the overheating we spoke about earlier. There are also several other reasons. And in addition there is the constraint of a deadline that is creating both overheating and a real inability to complete the work, because weather conditions don't allow it.
:
First, I would like to tell you that Canada's Economic Action Plan has been a very good thing for municipalities. I said that last year, when I AME here. I have repeated it in several forums. It was the right decision to make. So bravo and congratulations for that.
Last year, I told you I understood that there had to be a deadline right away, to make sure that everyone clearly understands there is an end and they have to reach the finish line.
This morning, I came here to tell you that in my opinion, we need some flexibility. Mr. Strahl, with whom I have met, seemed to agree. We need to find a solution that is fair and is ultimately acceptable to everyone.
Mr. Généreux, while the program has worked very well in 97% of cases, the ones who have been able to achieve that could not say today that they are dissatisfied. For example, in the case of all the projects carried out where I come from and for which the requirements have been met, I am completely happy.
For some $30 or maybe $40 million, why not find the flexibility needed so as not to have to pay that $30 or $40 million out of the municipal pocket?