Annual federal support for provincial, territorial and municipal infrastructure increased from $571 million in 2003–2004 to nearly $5 billion in 2015–2016, peaking at nearly $8 billion in 2010–2011.[1] Infrastructure Canada provides the majority of federal support for public infrastructure and does so largely through time-limited transfer programs, with the exception of the statutory Gas Tax Fund. In 2007, a number of programs were grouped together and presented as the $33-billion Building Canada Plan.[2] The New Building Canada Plan was announced in 2014, whose component programs amount to $53 billion.[3] The purpose, timing, amounts and cost-sharing requirements of the federal government’s main transfer programs for public infrastructure since 2000, including those comprising the two Building Canada Plans, are described in the sections below.[4]

1.  Infrastructure Canada Program (2000–2010)

The $2.05-billion Infrastructure Canada Program (ICP) was launched in 2000 with the objective of funding projects that protect the environment, and support long-term community and economic growth. Under this contribution program, projects were selected and approved on an individual basis. In terms of funding, the Government of Canada matched provincial/territorial contributions by providing up to one‑third of the cost of each infrastructure project.[5]

2.  Canada Strategic Infrastructure Fund (2001–2017)

In 2001, the federal government announced that it would establish a new contribution program to support large-scale strategic projects of major federal and regional significance. Commitments to the Canada Strategic Infrastructure Fund (CSIF) were reaffirmed in the budgets for 2003 and 2006 bringing the fund to a total of $4.3 billion. The federal government provided funding for up to 50% of the costs of eligible projects to recipients. The main categories of investment under the CSIF were highway and rail infrastructure ($1 billion) and local transportation infrastructure (i.e., public transit) ($900 million).[6]

3.  Municipal Rural Infrastructure Fund (2004–2014)

Announced in Budget 2003 and increased in 2006, the $1.2-billion Municipal Rural Infrastructure Fund (MRIF) was a cost-shared contribution program that focused on the infrastructure needs of smaller communities.[7] For most projects the MRIF provided up to one-third of eligible project costs. More than 80% of the funding was dispersed to municipalities with populations of less than 250,000 by the federal regional development agencies.[8] This fund, which supported nearly 2,000 projects, was largely concluded on 31 March 2014.

4.  Border Infrastructure Fund (2004–2014)

The $600-million Border Infrastructure Fund was announced in 2001 and has been fully allocated. This fund was intended to improve the physical and transportation system infrastructure and analytical capacity at the largest Canada–U.S. surface border crossings. Transport Canada delivered up to 50% of the eligible projects costs to recipients. Eleven border improvement projects were announced under the Border Infrastructure Fund, representing a total investment of $1.2 billion.

5.  Gas Tax Fund (2005–Present)

The Gas Tax Fund (GTF) was first announced in Budget 2005 as part of the New Deal for Cities and Communities. The GTF “provides predictable, long-term, stable funding for Canadian municipalities to help them build and revitalize their local public infrastructure.”[9] At that time, it was billed as a five‑year program with an annual allocation of $1 billion.[10] However, the GTF was extended to 2013–2014 in Budget 2007.[11] In Budget 2008, the federal government announced that the program would be made permanent with funding of $2 billion per year beyond 2013–2014.[12] This announcement was followed by a Budget Implementation Bill in December 2011 which legislated the GTF as a permanent source of funding at $2 billion per year,[13] and then by legislation that indexed the GTF at 2% per year (to be applied in $100-million increments) in June 2013.[14] As a result, Gas Tax Fund payments are now a statutory item in the main estimates.

GTF Agreements must be signed with provinces and territories to establish accountability for the flow of funds. Unlike other contribution programs, the GTF provides recipients with annual funding up-front and allows municipalities to pool, bank, borrow against, and cash manage the funds. The GTF does not have any cost-sharing or other requirements. Between 2005 and 2014, $13 billion has been transferred to municipalities through the GTF.[15]

6.  Public Transit Fund (2005–2010)

Also announced as part of the New Deal for Cities and Communities, the Public Transit Fund (PTF) was a $400-million transfer payment program designed to provide funding to improve transit services in Canada. The purpose of the PTF was to contribute to the federal government’s environmental objectives related to reduced greenhouse gas emissions and decreased traffic congestion.[16] The PTF was delivered with the terms and conditions similar to the GTF agreements.

7.  Public Transit Capital Trusts (2006–2009)

The Public Transit Capital Trusts (PTCT), with a combined funding envelope of $1.4 billion, were made available to provinces and territories following Budget 2006 ($900 million) and Budget 2008 ($500‑million top-up).[17] The PTCT provided funding to provinces and territories to assist them with capital investments in public transit infrastructure that would reduce traffic congestion as well as carbon dioxide and their emissions.[18] The beneficiaries of the PTCT owned their portion of the funds and the federal government provided guidelines on how they were to be spent. The entire $1.4 billion that was committed by the federal government under PTCT was spent on the delivery of public transit infrastructure.[19]

8. Asia-Pacific Gateway and Corridor Transportation Infrastructure Fund (2006–2017)

The $591-million Asia-Pacific Gateway and Corridor Initiative was implemented in 2006 to enhance the capacity and efficiency of major ports, airports, border crossings, road and rail connections in British Columbia that connect the North American supply chain to the Asia-Pacific region. The maximum federal contribution is 50% of total eligible project expenditures.

9.  Goods and Services Tax Rebate (2007–2014)

The Goods and Services Tax (GST) Rebate was part of the 2007 Building Canada Plan. The GST rebate to municipalities was increased from 57% to 100% of the GST they paid over seven years and was expected to amount to more than $5.8 billion in incremental funds.[20] Unlike other federal infrastructure funds, municipalities directed the GST Rebate towards their highest priorities, including the maintenance and operation of existing infrastructure, and were not required to submit expenditure reports to the federal government.

10.  Provincial-Territorial Infrastructure Base Fund (2007–2014)

The $2.3-billion Provincial-Territorial Infrastructure Base Fund (PT Base) was announced in Budget 2007 and all funds had been committed as of 31 March 2014.[21] The PT Base provided each province and territory with a $175-million allocation over seven years (from 2007 to 2014) to address their infrastructure needs. The program was designed “to provide predictable funding to provinces and territories to address core infrastructure priorities.”[22] Provinces and territories were required to prepare and submit a capital plan in order to receive funds, which were distributed in advance. The provinces were expected to contribute equally to the entire capital plan (not individual projects), whereas the territories had to contribute at least one-third to their overall capital plan. As with the GTF, recipients were permitted to pool, bank or cash-manage the PT Base funds.

11.  Building Canada Fund (2007–2014)

Launched in 2007, the $8.8-billion Building Canada Fund (BCF) was a contribution program that was designed “to address national, regional and local infrastructure priorities … in three areas of national importance: a stronger economy, a cleaner environment, and strong and prosperous communities.”[23] Funding under the BCF was allocated based on population size taken from census data. The program operated under two frameworks in the provinces: the Major Infrastructure Component (BCF-MIC) and the Communities Component (BCF-CC).

The BCF-MIC targeted larger, strategic projects of national or regional significance. Projects funded under the BCF-MIC were selected through federal-provincial negotiations and measured against minimum federal eligibility requirements.[24] The federal government contributed up to a maximum of 50% of eligible project costs, but limited its contribution to one-third for municipal projects and 25% for private sector projects. At $3 billion, public transit infrastructure was the investment category that received the most BCF-MIC funding, followed by national highway system infrastructure at over $2 billion.[25]

The BCF-CC contributed one-third to the cost of projects intended to construct, renew and improve infrastructure in communities with fewer than 100,000 residents.

12.  P3 Canada Fund (2007–Present)

Announced in Budget 2007,[26] the $1.25-billion P3 Canada Fund was created “to improve the delivery of public infrastructure and provide better value, timeliness and accountability by increasing the effective use of P3s [public-private partnerships].”[27] P3s for infrastructure projects usually involve a government entering into a contract with a private consortium to transfer a number of the components of procurement and management (e.g., design, financing, construction, operation, maintenance) as well as some of the risks.[28] In Budget 2013, the federal government committed to providing an additional $1.25 billion for the renewal of this contribution program.[29] The New Building Canada Plan added $1.25 billion for the P3 Canada Fund in 2014.[30]

Other than requiring that projects get delivered through a public-private partnership, the P3 Canada Fund differs from other federal infrastructure contribution programs in that the federal government will contribute up to a maximum of 25% of a project’s total eligible costs.[31]

13.  Gateways and Border Crossing Fund (2008–2018)

This merit-based program was established in Budget 2007 with $2.1 billion to improve infrastructure at key border crossings between Canada and the United States. Transport Canada administers the fund, of which at least $400 million will be used to build access to the new bridge between Windsor and Detroit from Highway 401.[32]

14.  Infrastructure Stimulus Fund (2009–2011)

The $4-billion Infrastructure Stimulus Fund (ISF) was announced in Budget 2009 following the onset of the global financial crisis and focused on construction-ready infrastructure projects.[33] Initially intended as a two-year contribution program, the deadline was extended to 31 October 2011 to provide sufficient time for some of the 4,000 beneficiary projects to be completed.[34] The ISF funding was allocated to provinces and territories on a per-capita basis and covered up to 50% of eligible project costs.

15.  G8 Legacy Fund (2009)

Infrastructure Canada administered this $50-million fund to help build infrastructure related to the G8 meeting that took place in Huntsville, Ontario and provide legacy tourism and community assets for the region.[35]

16.  New Building Canada Fund (2014–2024)

In Budget 2013, the Government of Canada announced the creation of the $14-billion New Building Canada Fund.[36] The New Building Canada Fund is divided into two main contribution programs: the $4‑billion National Infrastructure Component (NIC) and the $10-billion Provincial-Territorial Infrastructure Component (PTIC). The NIC is reserved for projects of “national significance,” is a merit-based program that does not have any predetermined provincial allocations, and has objectives related to long-term economic growth and productivity.[37] Under the PTIC, each province and territory is scheduled to receive a base amount of funding ($250 million) plus a per-capita allocation to fund national, regional and local priorities that contribute to economic growth, a clean environment and stronger communities.[38] A $1‑billion envelope from the PTIC is reserved for projects in communities with fewer than 100,000 residents. Under both the NIC and the PTIC, the federal government may provide up to the 50% of eligible costs for provincial projects and up to 75% for projects in the territories.

According to Budget 2015, after only one year in operation contributions from the New Building Canada Fund have already been committed to support projects with total costs of more than $5.7 billion. These projects include highway improvements and a new bridge in Prince Edward Island (up to $5.7 million), highway improvements in Nova Scotia (up to $20 million), expansion and enhancements at the Port of Montreal (up to $43.7 million), extension of the subway in Toronto (up to $660 million), a new water treatment plant in Manitoba (up to $12.1 million), and highway improvements in Saskatchewan (up to $22.8 million).

17.  Green Infrastructure Fund (2009–2014)

The $1-billion Green Infrastructure Fund was announced in 2009 for projects in aid of cleaner air and water as well as reduced greenhouse gas emissions. Infrastructure Canada administered this merit-based fund, which was fully allocated amongst 19 proposed projects by 2011.[39] Through the GIF, the federal government provided up to 50% federal funding to recipients, including other levels of government, public sector bodies, not-for-profit organizations and private sector companies. The major investment categories under the GIF were wastewater infrastructure ($300 million) and solid waste management infrastructure ($80 million).[40]

18.  Inuvik to Tuktoyaktuk Highway Fund

In 2011, the federal government announced $150 million towards an all-season road between Inuvik and Tuktoyaktuk in the Northwest Territories. The amount was increased by $50 million in 2013.[41]

19.  Investments in Federal Infrastructure (2014–2021)

In November 2014, the federal government announced $5.8 billion for improvements to federal, rather than provincial/territorial or municipal, infrastructure between 2013–2014 and 2020–2021.[42] Investment commitments to date include:

• Improvements in national historic sites, parks and marine conservation areas ($2.8 billion)
• Repair and construction of on-reserve schools ($500 million)
• Repair and upgrade of Canadian Armed Forces facilities ($452 million)
• Replacing border infrastructure ($440 million)
• Maintenance, upgrading and construction of federal buildings and other assets ($400 million)
• Repairs and upgrading federal laboratories and research facilities ($380 million)
• Repairing and maintaining small craft harbours ($288 million)
• Enhancements to federally-owned and operated airports and VIA Rail’s infrastructure ($204 million)
• Renewal of and repairs to heritage and museum sites ($191 million)
• Repair and procurement of vessels and small craft for the Canadian Coast Guard and Fisheries and Oceans Canada ($183 million)

20.  Infrastructure Funds Included in Budget 2015

Budget 2015 proposes $750 million between 2017 and 2019 to PPP Canada in order to promote public transit infrastructure projects. Budget 2015 would also invest $1 billion per year in a new Public Transit Fund, which would start in 2020 and continue for decades. The long-term stream of annual contributions to public transit operators through the Public Transit Fund would guarantee a portion of the revenue to project proponents, reducing the risk and increasing the financing available for such projects. The federal government projects that $10 billion dispersed in this manner though the Public Transit Fund could enable capital investments in public transit totalling $65 billion over the same period.

Budget 2015 also proposes a Canada 150 Community Infrastructure Program which would “support the renovation, expansion and improvement of existing community infrastructure in all regions of the country.”

In Budget 2015, the federal government proposes to increase the borrowing limits of the Government of the Northwest Territories to $1.3 billion (up from $800 million) and the Government of Nunavut to $650 million (from $400 million) to allow them to invest in their infrastructure. These proposed increases in the territorial borrowing limits would require approval from the Governor in Council.