Members of the committee, the Union of Quebec Municipalities eagerly accepted the invitation to participate in your committee's examination of how competition can make infrastructure dollars go further. This is a very important issue and one that we are in fact working on at this time.
The UQM represents municipalities of every size and in every region of Quebec. Its mission 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. Its members represent the voice of nearly six million citizens and over 80% of the territory of Quebec.
In the last year, the UQM has launched an important initiative to optimize the management and planning of municipal infrastructure investments in Quebec. The starting point was the exhaustive study done by Deloitte and E&B Data, which enabled us to assess municipal infrastructure needs. The findings are clear: municipal infrastructure as a whole comprises a substantial body of assets, with a total value of over $200 billion; the municipal infrastructure deficit has grown, and today amounts to $3 billion. This means that the need is significant. To rehabilitate our assets and maintain them in good condition, the three levels of government are going to have to increase their tripartite investments by $3 billion.
There is a diverse range of needs. They relate to roads, public transit, cultural and recreational facilities, municipal buildings, and so on. Ultimately, the municipalities themselves bear an unfair burden. They are responsible for 76% of the net cost of the funding for municipal infrastructure. This analysis demonstrates the full extent of the challenge represented by the renewal of our public infrastructure, in circumstances where the state of public finances makes our decisions all the more difficult.
For that reason, the new Long-term Infrastructure Plan announced in the last budget is an important asset. It will enable us to maintain our efforts and continue the catching up that has been begun in recent years. However, this level of investment does not match the extent of the need. The review clause in the Building Canada plan, which provides for the situation to be reassessed every five years, will be an excellent option when our public finances have improved. But between then and now, we will have to work to maximize our investments and optimize the way we do things, with the goal of doing more with the same resources. The issues being examined today are therefore very timely. The UQM believes that optimizing the way we do things will enable us to get more competitive bids and the best work for the best price.
I will now address question 1, reducing red tape.
For several years, the UQM has been calling for red tape to be reduced and for greater municipal autonomy. This is primarily because municipalities are in the best position to know what the needs and priorities of their communities are, and also because they have the necessary expertise to carry out their projects at the best cost. Making dollars go further must therefore mean that they are able to spend the most possible time on carrying out their projects, by reducing red tape to a minimum.
As well, as we have unfortunately experienced in the past, municipalities have often had to pay the costs of lengthy negotiations between the federal government and the government of Quebec, the effect of which has been to delay the start of the work. The UQM hopes that this mistake will not be repeated in the next Building Canada plan, because it would be taxpayers and the economy that would suffer the consequences.
I will now move on to question 2, the contracting process and increasing the number of bidders for projects funded by the federal government.
For several years, the UQM has been calling for stable and predictable long-term funding, to enable municipalities to plan their investments better and to avoid "overheating" of prices. The new Long-term Infrastructure Plan, spread out over 10 years, will therefore be beneficial.
It offers municipalities an opportunity to plan their investments better and foster a climate of healthy competition.
For a long time, the UQM has also been calling for more flexible infrastructure programs to be set up, covering a wider range of infrastructure types, to meet what are increasingly varied needs and to enable municipalities to diversify their investments, to avoid "overheating" prices.
The announcement in the last budget concerning the expansion of the categories of eligible infrastructure is another measure that encourages better competition. The UQM believes that municipalities have to have the best tools for identifying suspicious situations and properly assessing the cost of the bids received.
For that reason, the UQM is proposing a number of measures, including creating a municipal price evaluation board. The board's mandate would be to collect data about public contracts and produce annual indexes for each region of Quebec. We believe this kind of tool would enable municipalities to identify situations where there were flaws in the competitive process, among other things.
I will move on to question 3, which relates to expanding private sector infrastructure.
The first role of municipalities is to offer essential services to the public and to businesses, in order to improve the productivity of businesses and the quality of life for for families, and to enable municipalities to attract and retain workers. Municipalities' investments in infrastructure are therefore essential for creating an environment that is conducive and attractive to private investment. Those investments come before private investment.
To summarize, given the growing infrastructure needs and the precarious state of public finances, we have to work on improving the way we do things and making businesses more competitive. While the new Long-term Infrastructure Plan is a first step, there are other actions that can still be taken.
In concrete terms, that means there should be Canada-Quebec agreements that do not penalize the municipalities and do not delay the start of work, through programs that cover a broader range of infrastructure that will enable us to diversify our investments better, through investment that reflects the needs of our businesses and our residents, and through a strengthened tripartite federal/provincial/municipal partnership that will enable us to continue our efforts and the catching up we have been doing in recent years, on an ongoing basis.
Thank you for your attention. We are now prepared to answer your questions.
:
I am perhaps going to answer your question a different way.
The key partner at the municipal level is the FCM. In fact, it is the federal government's interlocutor. When there were discussions, Quebec was called in. We did submit our study that defined the infrastructure deficit in Quebec. The funding for the program that had been requested, through the FCM, was about $5.8 billion. That was what we considered to be the minimum needed for rehabilitating infrastructure and carrying out new projects.
In the current budget context, we are in fact pleased to see that, first of all, the program has been put in place. Funding under it is not the full $5.8 billion hoped for. As well, since there is no indexing, there is a delay. As I was saying, in Quebec, $3 billion should be invested annually. However, if we calculate the ratio, the funding would be at the same level, that is, $1.2 billion rather than the $3 billion hoped for.
:
Mr. Mayor, Mr. Bélanger, I am pleased to meet with you again.
Obviously, as you said, the interlocutor is the FCM, but that does not mean things have not been done in Quebec. In fact, you recently produced a white paper. A lot of things are being done in Quebec. I am trying to be constructive today. Of course, we are always short of money, we all know that.
As had been requested, the government has proposed this for ten years, which is advantageous in that it gives you an opportunity to spread it out a little over time. Spreading it out is the strategy that is to your advantage and our advantage, because it affects all of us. Certainly, the UQM is not the Fédération québécoise des municipalités. If we consider the UQM's perspective, we see that it is increasingly a matter of the smart city concept.
There is also the issue of doing more with less, taking new practices in public finance into account, but in particular in relation to the creation of infrastructure. Have you examined that issue?
Municipalities have always been said to be creatures of the provinces, and I see that as causing a problem. In any event, we should revisit that later. However, there can be a role for the Canadian government in relation to anything involving innovation, because it is not a matter of just green infrastructure, basic infrastructure or recreational and tourism infrastructure. More and more, it is a matter of innovative infrastructure.
Have you looked into this issue, which addresses your problems when it comes to sustainable development, energy savings, traffic congestion and water loss?
:
Sir, the reason is that there has really not been any increase in revenues. In fact, when it comes to the municipalities' balance sheets, this is actually additional taxation that has been transferred directly to residents.
The other factor relates to budget growth. When you talk about revenue, that is because it comes from taxes. We collect property taxes from ratepayers. There has also been an increase in responsibilities that the municipalities did not previously have.
If I may draw a parallel: barely 20 years ago, for municipalities, there were services directed at properties, and very few services for people. Today, the pendulum has swung, which means that nearly 60% of our revenue is devoted to people services and 40% to property services.
The other factor relates to what you call revenue: the public's capacity to absorb another tax. To give an example, at present, in programs, for any project carried out by a municipality, 76% of the budget, or the investment, is paid by the residents of the municipality. Even if we are talking about programs funded on a one-third, one-third, one-third basis, we still have to be careful about that, because the the federal government and the government of Quebec get money back in taxes. For the municipalities, the equation is very simple: they get nothing back. That means the real cost to the residents of each of the municipalities is 76%. That is why there has been an increase in what you are calling revenue.
:
You are entirely correct. It is 100% the public who provide the revenue, regardless of the type of government.
However, I would like to say something about a statement you made when you said people think there is a river of money. When I gave my presentation, I do not think I ignored the reality. We are aware that there are specific issues and there are difficulties, whether it be at the federal, provincial or even municipal level. There are no rivers of money. Today, what we have explained to you is the situation as it relates to the programs that have been set up. However, I would also not want to present a different picture of the situation.
When you ask me why the ratepayers in a municipality do not pay for all of the services, the best example I can give you, since we are in the national capital, is the one of Ottawa or Gatineau. Municipal responsibility cannot be transferred solely to the ratepayers of the city of Ottawa when it comes to infrastructure. There are many aspects to be considered. Some people live on the outskirts and use the public services in the big city. Those services are often intended for a larger community than a single municipality. That is why my answer is yes, when you tell me they are the same people. However, should the residents of Ottawa be the only ones paying for infrastructure for all of the people, whether they be visitors, or workers, and so on?
:
In fact, expanding the programs would enable all municipalities in Canada to benefit from them. However, it is limited to certain sectors. Take the example of drinking water. Some rural municipalities, both in Quebec and elsewhere in Canada, have no water system. At this point, it is more difficult for them to be able to benefit from the programs.
That is why we say it could include cultural, sports or community infrastructure. Ultimately, it should be expanded to cover everything that falls under the municipalities' responsibility in relation to infrastructure. That is why we say a way should be found for it to benefit all Canadians, regardless of the size of the municipality.
However, there are things that are specific to the biggest cities. We were saying just now that there could perhaps be structuring programs, something we would completely support.
Overall, the coverage of the programs has to be expanded so that more Canadians can benefit from the programs set up by the federal government. That said, we are extremely happy that this program has been set up, because it meets our expectations and the public's expectations.
:
Right. So what we'd have is a situation where, due to the competitive nature of having more people involved, the broader the spectrum is, the better.
You also talked a little bit about the ability of the municipalities to even be able to work together. You touched on that a little bit in your remarks to Mr. Coderre.
Having an understanding and a knowledge of what one municipality is paying for a certain product or for a certain type of maintenance, and being able to share that knowledge, is that something your municipality group, your union, would actually be doing? Would you be helping to share that knowledge and acting as a catch point for that, and then dispersing it out so that there is a sense of knowledge as to what the cost for certain things should be?
You touched on the fact that there are differences in regions, and things like that, but there also has to be a reasonableness within that context. Is that something you would work towards sharing with all your counterparts and all the members of your union, so that they would actually be able to see if they're getting the best value for their dollar?
:
I have to say it is hard for me to answer your question. I am trying to grasp the meaning. In terms of the public funds you refer to, our goal is to get the most out of the investment. We are talking about the board and the desire to make sure there is competition. That is how we want to use public funds, whether they be federal, provincial or municipal. We want to get the maximum impact from them.
In terms of transparency, I do not see how it applies in the case of the program that has been set up. The question is more one of whether we would like to see diversification in terms of infrastructure. We answered that earlier, and the answer was yes. We would like to see expanded coverage, so that all types of municipalities could benefit from it.
The Union of Quebec Municipalities was said earlier to represent mainly the bigger cities. I can tell you that we represent a community with a population of 50 people. On the other hand, we also represent Montreal, which has a larger population, and all of the municipalities of Quebec. Given the structure of our organization, those are the interests we want to represent.
We have specific groups within our organization. There are groups of local municipalities, central cities, regional towns and large cities. There is also the metropolis. This means that no one is left out.
As a union, our interest is in making sure that members are able to benefit to the fullest extent from the programs offered by governments.
:
Thank you, Chair, and my thanks to our guests for being here today.
I found this testimony very interesting. As we go through this process, your perspective on what we are looking to do nationally, provincially, and municipally in terms of infrastructure is very helpful, because you work with the people who make things work.
We look to leadership around our country and our various provinces. Certainly, part of that leadership is the Union of Quebec Municipalities, as far as our approach to infrastructure is concerned. One of the comments that we received from the Federation of Canadian Municipalities was that we initiated a gas tax at 1%, then we doubled it, and then we made it permanent. In the most recent budget, we've indexed it, which has great bearing. I come from the 10th largest city in Canada, and even for a population of not quite 400,000, people, that's worth some $21 million to my city. I would imagine it's much greater in the province of Quebec. We had a very unequivocal statement from the FCM, from the Federation of Canadian Municipalities, that they thought that it was a very positive step.
Did you take a formal position on the gas tax in the budget and the indexing of it? Could you comment on that, please?
:
I appreciate that, so I'll take that as a yes. The gas tax being made permanent, indexed, is a positive thing, obviously, for the Union of Quebec Municipalities, because of the guarantees. I don't want to put words in your mouth, but I got a sense that you felt positive about it.
Let's go at this a different way. One of the questions you've touched on, which I think is important, is that you said the funds from the gas tax should be for dedicated programming. I think you said long term, but I don't want to put words in your mouth.
I asked that very question in my own city, whether the funds that are received through the gas tax should go for things like streets and gutters, things that I would call normal maintenance, or whether they should be put aside for larger infrastructure projects. I have my own opinion on it and I'll tell you what my own constituents said. But I would like your view in terms of the moneys for the gas tax, on the presumption that a municipality would get whatever number of millions a year—some smaller, some larger. If someone had a $100-million project, and in my case, in my city, they were getting $21 million a year, they could actually fund that over five years.
Do you think the funds out of the gas tax should be dedicated toward, as you've said, long-term programming—in other words the larger infrastructure projects—versus the streets and gutters type of maintenance?
:
The answer is yes. However, there is a limited amount in terms of the gas tax rebate.
I will give you an example. In the gas tax program, in Quebec, there is one portion, I do not know what percentage, that goes to public transit. How much is that?
A voice: It is 25%.
I am told it is 25% that goes to public transit, and a majority of that type of transit is provided in the bigger cities. I do not know what the share is elsewhere in that regard. I cannot speak for the other provinces, but in Quebec, I agree with what you are saying. However, at some point, if infrastructure projects are concentrated in certain cities, there are some communities that will not benefit from them. That is why I said earlier that in Quebec, the program is very much appreciated, because all communities are guaranteed a gas tax rebate.
If you want to clarify your question further, I will be pleased to answer.
:
I will try to answer as simply as possible.
In fact, we would like to be able to work with the federal government. However, in the present circumstances, as you know, we have to deal with the government of Quebec. That is the partner identified as being between the federal government and the municipalities. In other provinces, for some programs, the federal funds are transferred directly. I do not think I am mistaken, but in Ontario, the transfer is directly to the municipal association, which then arranges to work with the municipalities. However, on this first question, I cannot go any further than to tell you that the federal government has to deal with Quebec at present.
Concerning P3s for small municipalities, two or three people have asked me about this. In fact, to be able to carry out a P3 project, you have to understand that, essentially, the partner that is going to participate in this kind of project is wanting to make a profit. Often, these really have to be major projects. In small municipalities, and even in bigger municipalities, that is not an easy matter. There are not often $40 or $50 million dollar projects in the municipalities, no matter how big they are, to get them to participate in that kind of project. It is worth considering, however. We have to see a public-private partnership happen and assess the type of partnership we might have in that regard. I think it is something to think about and we can consider these questions.
On the third point, there is an infrastructure committee at the Federation of Canadian Municipalities. I am the vice-chair of that committee. So perhaps, Ms. Chow, we can discuss this at the convention in Vancouver, because it is an extremely active committee. It was the FCM's advisory committee in the talks between the federal government and the opposition parties on the position to take on the budget. I think we can move forward on this issue and make improvements.
I appreciate your bringing this issue up so that, once again, we can make sure that public funds are being allocated and spent in the best way possible.
:
Thank you for being with us today. We appreciate it very much.
[English]
I'm unfortunately going to speak in English.
I'm not surprised that your study shows that unionized work forces or Quebec construction is 2% cheaper, because my experience has been that good contractors with good work forces can work faster, can work more efficiently, and can compete better than others.
My questions, though, have to do with the nature of our study, which is whether or not—I'll use the term—public-private partnerships are something that should be a natural part of every infrastructure spend by municipalities if it includes federal money. The rules, as I read them in the budget, are that any time a municipality wants to spend federal money on a project of a certain size or over, it has to do what is called a P3 screening.
So even if everybody understands there is no way that a project is going to be a P3 project, you are forced to do the red tape that the government provides—a P3 screening—and you're forced to spend that money. The government says they'll give you half of the money for that screening, but that's money that is wasted. That's money that is spent with no benefit to the taxpayer because there is no likelihood that this would ever be a P3 project.
Is that a good use of taxpayers' money, to force every municipality that is asking for federal money to go through a P3 screen?
:
I am going to try to answer your question precisely.
When you talk about type of infrastructure, that means all types of infrastructure, be it underground infrastructure, road infrastructure, cultural facilities, recreational facilities, community facilities, and so on. These various types of infrastructure are part of the responsibilities of the municipalities. Those responsibilities are increasingly diverse. There was, quite correctly, the fact that work had to be done for drinking water, and a majority of the investments were made in that.
However, I would like to mention one of our concerns, which is the new wastewater regulations. We are talking about billions of dollars for the next 30 years. So the municipalities have to have support for that. We are in favour of regulation, but we would like to have the tools to go with it.
Mr. Bélanger, what is the total amount for 30 years?
:
Absolutely, and I would agree.
Coming back to our question, that efficiency comes back to actually bringing that dollar further, right? I mean, the faster we can get to a project, the less delays we have in getting to the project.... Everybody would agree with you also that the assessment and the protection of the environment on the project is paramount. There should be no shortcuts on that. However, the question becomes, is one process enough, or do we have to go through two or three processes in order to see that there is protection? That's really the crux of the matter.
I just wanted to go to P3 projects. There have been some questions about the P3 projects.
I've seen some extremely successful projects, actually, through the P3 process that have worked very well. I can speak of one in the city of Winnipeg, where a roadway was done. It was done under budget and it was done nine months ahead of schedule, and the quality of the work.... Everybody praises this roadway in Winnipeg. It's probably the best built roadway we have in the city, and it's been there for about two years now. Because the P3 proponent is actually also responsible for the maintenance, they have built this road to standards that probably are above and beyond what we would have, say, as our conventional normal standard.
Can you share any projects through the Union of Quebec Municipalities that have been done in the same way, where a project has come in on time, or ahead of time, and on budget, and with the ability to also have the costing of that maintenance actually lowered over the course of time?