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View Larry Miller Profile
CPC (ON)
I'll call the meeting to order.
We have with us representatives from the City of Vancouver.
Thank you very much for being here in person.
We have two video conferences today. The first witnesses are with us for an hour only. They are from the City of Kitchener. Just so members know, and hopefully agree, they have a YouTube video they would like to show the committee; however, it's in English only, but the clerk has told me he has the transcript of it in French for opposition members.
Is that acceptable to everyone?
They can't join us for the first hour, but some representatives from the City of Montreal will be joining us for the second hour.
With that, we'll start with Mr. Vrbanovic.
Thank you for being with us. I'll turn it over to you for 10 minutes or less, please.
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 15:32
Thank you, Mr. Chair, for your introduction. Thank you to the committee members, particularly Peter Braid, MP for Kitchener—Waterloo, for extending an invitation to the City of Kitchener to participate in your study of updating infrastructure in Canada.
I'm pleased to be here on behalf of the citizens of Kitchener and more broadly as a Region of Waterloo councillor. I'm proud to represent one of Canada's fastest growing economies and our country's most vibrant technology, financial services, and innovation cluster.
Kitchener is the largest city in Waterloo region. Kitchener is innovative, creative and culturally diverse, offering a wealth of opportunity for residents, businesses, investors, and visitors.
We have an extraordinarily dynamic metropolitan economy rich in industrial heritage where the development of innovations in technology, education, and arts and culture are highly valued.
We know that if we're going to sustain a strong economic presence on the national and international stages we must constantly aim to reinvent ourselves in ways that will continue to attract investors and a high calibre of talent, as well as maintain strong relationships with our current pillar sectors: advanced manufacturing, start-ups, financial services, academia, and the technology sector.
The Federation of Canadian Municipalities has presented information to this committee on a number of occasions. As a proud member of FCM and the Big City Mayors' Caucus, I, on behalf of my council colleagues, strongly support FCM's important advocacy on these issues.
I am pleased to share the time today with our friends from the City of Vancouver and the City of Montreal and I welcome their input into this important discussion. FCM has spoken about broad-based municipal concerns regarding reducing gridlock, and increasing and protecting our social housing stock and infrastructure.
As FCM stated in its May 12 presentation, Canada is at a crossroad. I’ll quote from their presentation:
The core infrastructure that Canadians rely upon is at risk. That’s what the first edition of the Canadian infrastructure report card told us in 2012. The report card measured the physical condition of municipal roads, drinking water, waste-water and stormwater infrastructure and found that one-third of these assets are at risk, requiring significant investment in the years ahead.
In addition, we know that ongoing investments are required in our social housing sector. The need for affordable housing is growing and existing units must be sustained and maintained. In my own community and across the country, without the reinvestment of federal operating dollars, one-third of Canada’s social housing stock is at risk, pushing our already strained rental sector over its limits and putting vulnerable Canadians at risk of homelessness.
Achieving local affordable housing solutions isn’t merely a matter of municipalities asking Ottawa for greater financial resources. It’s about cities being best positioned to structure and implement the types of programs that address their particular circumstances. The outdated model of a one-size-fits-all prescription needs updating, as it does for infrastructure and public transit.
Finding solutions requires all orders of government working together. Protecting and renewing federal investments in social housing is an important step in keeping housing affordable for all Canadians. That speaks to the national situation that cities are facing.
Also, during my time today, I want to take the opportunity to share information about Kitchener’s major transportation and transit priorities, and by doing so outline the important role cities play in job creation, reducing gridlock, and improving the lives of our citizens.
Canada's cities are leading centres of creativity and innovation. They attract the talent and investment required for large-scale and leading-edge start-up initiatives to succeed. As fundamental drivers of the economy, cities are best positioned to provide a path to economic prosperity. Strong cities are the foundation for a strong economy. Livable cities are key for the future of our country and our children.`
Collectively and collaboratively, local, provincial, and federal governments need to work to build a Canada where our cities compete with the very best in the world. If we all work together under a balanced model of shared responsibilities and resources, it’s a future within our grasp.
I will now ask the committee staff to open the two-way all-day GO map.
In Kitchener and Waterloo region, one of our primary challenges is our employers’ ability to move their people from one location to another on a daily basis. We need all governments working collaboratively to develop 21st century transit for our 21st century economy. Quite frankly, moving people matters.
In Waterloo region, we are witnessing the benefits of a strong partnership among the federal, provincial, and municipal governments through the construction of our regional light rail transit system, the ION. Nineteen kilometres of railway are being built through an equal funding partnership that secured the $818 million required for the initial phase of our light rapid transit.
Moving beyond our municipal boundaries, Kitchener is working with the municipalities of Waterloo, Guelph, Halton Hills, and Brampton on our joint transportation and transit priority: two-way, all-day GO rail from Toronto-GTA to Kitchener. Investing in two-way, all-day GO rail service will enable economic growth, attract talent, and reduce daily commute times.
Our business case quantifies the significant job creation and environmental and social benefits that two-way, all-day GO rail service would unleash for the regional economy of Waterloo region and Toronto. It would create 40,000 new jobs in the innovation sector—technology, financial services, and advanced manufacturing. It would connect 13,000 companies, attract 3,000 innovation start-ups, save $344 million in annual commuter and environmental costs, and generate $547 million annually in additional income tax revenue.
The upgraded service would allow for an increase in the more than 10,000 professionals currently commuting daily from the greater Toronto area into Waterloo region for positions in technology, financial services, life sciences, academia, and other growing sectors.
However, this project requires the financial support of both the provincial and the federal governments. The partners are calling for 50% of the funding for this project through the federal government’s new building Canada fund.
I’ll pause here and provide you the opportunity to view a short video that succinctly articulates the economic, social, and environmental need for two-way, all-day GO rail service.
[Video Presentation]
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 15:42
This is an infrastructure and public transit request, but more than that, it's a job creation strategy.
I believe this is the type of transportation infrastructure project that should bring all orders of government together. Again, our municipal partners—Kitchener, Waterloo, Guelph, Halton Hills, and Brampton—are all calling for 50% of the funding for this project through the federal government’s new building Canada fund.
In conclusion, I'd like to thank the federal government for the recent investments in the federal budget. They have signalled the beginning of a broader partnership with the federal government and Canada's municipalities. It shows what we can achieve when municipalities and the federal government work together to ensure a strong future for Canada. Our goal is to work with the federal government as an equal partner to secure local and national improvements in infrastructure, public transit, and affordable housing.
Collectively and collaboratively, local, provincial, and federal governments need to work to build a Canada where our cities compete with the very best in the world. If we all work together under a balanced model of shared responsibilities and resources, it’s a future within our grasp.
Thank you.
I look forward to addressing any questions you may have at this time.
Penny Ballem
View Penny Ballem Profile
Penny Ballem
2015-06-02 15:43
Good afternoon, Mr. Chair and members of the committee. I am happy and honoured to be appearing before your committee.
I appreciate the opportunity to present today on your study of updating infrastructure in Canada.
I'm here on behalf of Mayor Gregor Robertson and am representing the City of Vancouver as the city manager. I have with me today our acting general manager of engineering, Mr. Jerry Dobrovolny, and Fred Cummings, the vice-president of TransLink. TransLink is the regional transportation authority in the metro Vancouver region, which provides an integrated and regional transportation service to 23 municipalities in the area.
I think you know the importance of the federal government and the shared investments across Canada over the past 20 years in terms of infrastructure. I'm here to provide you some opportunities to understand what is our highest priority for the City of Vancouver for our transportation infrastructure, and how it fits overall in a very coherent, robust regional plan.
The City of Vancouver has had a very strong partnership with the federal government in many areas, including, as you may be aware, the recent completion of a $50 million project called the Powell Street overpass. This was a rail-port-city project in which we expanded real access to our port, which has the largest capacity in the whole country. We managed to undertake some changes, which allowed another whole rail of railway access. It allowed us also to create an overpass with an important rail corridor that previously had an at-grade separation. So it was a very successful project where we worked with federal officials to actually complete that, along with the railways and our port authority.
The metro Vancouver region is composed of 21 municipalities, Tsawwassen First Nation, and electoral area A. We constitute half the population in that area of British Columbia. We have a population in the metro Vancouver area of 2.5 million. We have a unique situation in which we have a single transit authority for that whole area. In fact, by that virtue, it is the largest transit service area in the whole country.
We have geographic constraints. Those of you who have had the opportunity to come to the Vancouver area know we're surrounded by mountains and there's the border with the U.S. on the other side. Therefore, we've had to have a very coherent planning process to make sure that we're densifying along transit corridors, and that we're managing growth in our urban areas and protecting agricultural land, but making sure we have a highly effective transportation system.
Growth in our region will be significant over the coming years. Our region will grow by more than a million people and 600,000 jobs over the next 25 to 30 years. We have a regional plan to address that, and transit investments are a fundamental part of that.
As you heard from testimony from other presenters to this committee, it's very clear that investments that are sustained and appropriate for transit are a very good return on the investment in terms of economic potential. We've looked at two recent studies that have come out of the United States from the American Public Transportation Association. They actually show a nearly four to one return for investment in public transit, so for every $1 billion that's invested, you achieve a $3.7 billion increase in your GDP.
Furthermore, we know that properly planned transit that is integrated with appropriate urban planning allows you to develop business clusters. That's certainly what we've seen in the metro Vancouver region and in our city.
Through very strategic investments, in which the federal government has played a key role.... You can see from this slide, if you look at the red line, that is the participation by ridership in rapid transit infrastructure. You can see the little bumps in the line every time we made a major investment in the extension of our SkyTrain system, the last of which—with a very vertical part of that curve in 2010—was the Canada Line, in which the federal government was a partner. You can see the remarkable increase in rides and use of public transit that happens with that.
The blue curve on that slide represents the growth in overall transit ridership that's happened in our metropolitan region from the late 1980s and early 1990s, when our SkyTrain system came in. That's a reflection of a plan that is integrated across the 21 municipalities, participation of all three levels of government, and really intensive work with our public to ensure they understand the real benefits of public transit. Essentially, transit ridership in metro Vancouver has doubled over the past 20 years.
Competitive cities across the world have recognized that investing in transit accommodates growing populations and is a key to fostering economic growth. In the last year, the mayors in the 23 jurisdictions in metro Vancouver have come together and developed a very coherent, integrated transit plan that looks ahead for the next 10 years. That plan was approved by 21 of the 23 municipalities that partook in the planning exercise.
The transportation plan is designed to cut congestion by providing improved transportation and transit service to people throughout both our city and our neighbouring 22 jurisdictions. The cost of congestion in our region and in other regions of Canada, as you know, is in the billions of dollars.
This plan is comprehensive. It's not just rapid transit. It involves rapid transit, rail service, bus, and SeaBus, as well as sustainable transportation improvements in walking and cycling. This will lead to safer and less congested roads and enhanced goods movement.
We have strong support from our business community for this plan. They know it will protect the economy. They will grow it. It will also be a balanced approach to our environment and help the quality of life in our region to continue to improve.
The total cost of this plan is $7.5 billion. With an investment of this sort, our analysis shows that it will grow the region's economy by $450 million per year by the time we get to 2025. It will create 7,000 direct new jobs by 2030 with corollary impacts in job growth. We've studied the impact on households in terms of actual savings, and we're finding with an effective public transit system more and more families are making a choice. They don't need to own a car, much less two cars. We've calculated that a net saving per household will be to the tune of about $360 per year.
We have just completed a mail-in referendum ballot to look at a new revenue source for helping fund this. From the regional perspective, we are looking for a partnership with the federal government and the province, as well as with our own region, and we've undertaken a plebiscite over the last 10 weeks. The results are not in, but we're awaiting them. The province has made a strong commitment. This is a priority for them. It was the province that requested that we come forward with a 10-year plan from the mayors.
We're here today, first of all, to thank the federal government for the investments in various infrastructure in our city and region over the last 10 to 20 years and to help you understand the importance of keeping going and the critical importance of infrastructure funding programs to help us address our issues.
This plan contains two major rapid transit projects to meet our growing needs. You've heard about one from the City of Surrey, their light rail transit plan to connect their city with the three economic centres adjacent to their city, and also the Broadway SkyTrain extension, which involves the City of Vancouver and is an extension of the existing SkyTrain system, which ends at Broadway and Commercial, and extending that ultimately all the way to UBC, but this is about phase one in the next 10 years, which will take us about halfway there, to Arbutus Street.
I want to talk to you a little about the corridor that this transit extension will address. The Broadway corridor will be a tunnelled extension of SkyTrain. It is the second largest economic centre in the province, the first economic centre being the downtown core of Vancouver.
It is basically a tech economic centre. It encompasses high tech and the largest hospital and academic health centre in the province. It is a centre and an area of our city that has had higher overall employment growth when compared with the whole province. We expect this job growth to double in the next 20 years.
At the far end of the corridor is the University of British Columbia. As you probably know, UBC is ranked one of the top 40 universities in the world. It has a student base of 60,000 and an extensive faculty. It also has a growing community around it.
The first phase of this project will take us to the end of the central Broadway corridor. We hope to see a second phase following in the near future to complete it.
If you look at the dots on this map, those purple circles identify the highest intensity of jobs and population and students along these transit lines. Every one of those lines—the orange, the yellow, the blue, and the light blue—are current transit lines in the Vancouver area. You can see the high intensity of jobs in the area of central Broadway. It is a key link that will not only take care of congestion on that corridor now but also link in the new LRT that Surrey is proposing and the Evergreen Line, which is under construction. You can see that to the right on this slide.
The current transit demand on this Broadway corridor is staggering. There are 100,000 bus boardings per day. A bus runs in the peak hours every two minutes on the corridor. It's the highest intensity bus corridor across North America, across the U.S. and Canada.
The Evergreen Line opening in the fall of 2016 is a very significant project that has had extensive participation by the federal government, for which we're very, very grateful, but just that addition alone will increase the congestion on Broadway by 25%. This line is something that's been critical for us. We see it as fundamental to this plan that the mayors have brought forward and to the success of the economy in our region and also our city.
SkyTrain technology has been recommended for this corridor because it is high capacity and it builds on the platform of infrastructure that's already present. The business case for it is very powerful, with nearly a 3:1 advantage in terms of cost-benefit ratio using SkyTrain technology. It will attract the most daily riders. We know, based on our experience with the Canada Line, that opening day we'll have 160,000 people travelling on this corridor, which is very dramatic capacity engagement on the first day of a public transit extension like this.
We submitted this extension to P3 Canada in round six. We're developing another extension in round seven. As I said, it will be shared funding for this project, local and regional funding, which we're working on with TransLink. We're already in the pre-design phase, funded through TransLink and city funds, to make sure we're ready.
As you can see, this is a long-awaited project. It is urgent. It is a project that is made for capacity and demand that already exist and that we actually can't meet.
View Libby Davies Profile
NDP (BC)
Thank you very much.
I'm not usually on this committee, but I'm delighted to be here today because we have the officials from the City of Vancouver.
Thank you very much for being here, Dr. Ballem, and other officials from Vancouver and from TransLink.
I absolutely concur with you about the busyness and the importance of the Broadway corridor. I have to say that the Broadway station is the perfect place to do political canvassing, because as you saw in the picture, the lineups are so long in the morning that they go all the way around the block. It's the perfect place to hand out leaflets. I know people would much rather be getting on the buses or the SkyTrain to go to work and so on.
You've outlined the very ambitious plans from the mayor's transportation transit plan—$7.5 billion over 10 years or so. It's a huge amount of money. Of course, as you say, we've just concluded the voting on the referendum, which I think is a first in Canada. Maybe there was one after the Second World War, but it's really something quite new. I'm very happy to say that I've sent in my ballot voting “yes”.
In terms of getting down to the money, the whole debate about infrastructure and public transit funding has been there as long as I can remember, going back to the 1980s when I was on city council. It was always the issue of not having the sustained, long-term funding that metro Vancouver needed to rely on. Now we're down to a referendum.
I have a couple of questions. Do you have concerns that now, with a precedent of a referendum and having that local base—I think it's $250 million a year that will have to be generated—this is creating a new order of things? Is this something that you anticipate we're going to have to rely on 10 or 20 years from now, another referendum?
In terms of the federal role, of course this is critical. You say in your brief that you're hoping the federal government will be a partner and will make it a reality, so it doesn't quite sound as if it's absolutely there yet.
How confident are you in terms of the federal program and its continuity? Ideally, what is the situation that we would need to see in metro Vancouver to see that sustained level of funding so that you can make your long-term plans and all of the investments that are required?
Penny Ballem
View Penny Ballem Profile
Penny Ballem
2015-06-02 16:00
Thank you very much, madam deputy, for your questions.
First of all, the referendum was a first in terms of transit. We've had other referenda in British Columbia, as you know. It was a referendum required by the province to identify a new source of funding. There's real clarity at the provincial and the local regional levels that there needs to be investment in transit. That's very clear. As to whether or not a referendum will be another standard requirement, what we've seen is that decisions have been made about expansions of transit infrastructure and transportation infrastructure that are also significant without a referendum. My sense is that our governments are looking at whether or not this works well. There is a cost. It takes a significant amount of time and effort to actually put forward a referendum.
I would say that the jury is out as to whether this will become regularized or whether it's just a one-time experience.
In the statute that governs TransLink there are other options for funding investments in transit. It was really the work of the mayors, and to some extent the province, to look at whether there was one that was more broadly applicable. The understanding is that everybody benefits from transit, and there is no one area that could pay for it all. It needs to be a combination of funding sources from all levels of government. This referendum was really about choosing a source, versus whether the investment should be made. What we know from all the work that's been done on polling is that there is very strong public support for this plan. They understand that there will have to be more paid by them. Whether or not they like this forum, the provincial sales tax as a place for funding transit remains to be seen.
View Libby Davies Profile
NDP (BC)
How confident are you that the federal government will be a partner that's sustainable in terms of funding? It's been very much on again, off again. It's not something that metro Vancouver has been able to rely on with a great deal of confidence. Are you confident about the funding arrangements now going into the future, or what would you like to see change to have that long-term continuity?
Penny Ballem
View Penny Ballem Profile
Penny Ballem
2015-06-02 16:03
As you know from FCM, we own 60% of the public infrastructure in municipalities across Canada. We collect 8¢ on the dollar of taxes raised. We have huge infrastructure needs, and we plan for them in terms of regulatory requirements often 10 years or longer in advance.
When you're planning for infrastructure and you're trying to align the growth of your cities, you need a sustained approach. You need to have clarity and predictability with regard to sources of funding, and you need to have clear processes for how to access that. The more certainty we have around the investments that are possible from the federal government and the menu of options the federal government has an interest in investing in, the better it is for us.
Clarity, sustained investment over time, certainty and predictability, and processes that are streamlined and relatively clear for us to participate in, and knowledge of when decisions will be made all make our lives really much easier in order to get our public onside, to locally raise the necessary funds to create the matches, and to bring all three levels of government together.
View David McGuinty Profile
Lib. (ON)
Thanks, everyone, for being here. Welcome to Ottawa.
To begin, I want to get one quick question off the table for the benefit of all my colleagues.
We are studying infrastructure. One of the things we heard in testimony was that Infrastructure Canada is incapable of telling us what kind of conditionality is attached to receiving federal dollars, in the sense of, for example, job creation or in the sense of sustainability, whether it's for materials efficiency or energy efficiency. These conditions are not attached.
One of the conditions that is attached—and some of you may know where I'm going with this—is that the cities and the provinces that receive federal infrastructure money are forced to put up billboards advertising economic action plan slogans.
I'm just wondering, very quickly, Ms. Ballem and Mayor Vrbanovic, if it would be possible for you to deliver to this committee at your earliest convenience the number of economic action plan billboards you've been compelled to erect in your municipal jurisdictions, what they cost, and whether we can get a copy of the agreement that governs the relationship among, in the case of B.C., Vancouver, British Columbia, and the federal government, and in the case of Kitchener, the feds, Ontario, and Kitchener, so that we can get a better idea of why this is happening.
We can't get a definitive answer from the government, but access to information requests have revealed that it's just over $30 million now and that 9,860-odd signs have been erected across the country.
We don't understand why. Some members say they want to defend them at the door; I'm anxious to see that. I'm wondering if we can begin by just getting commitment on the part of both of you, both from Vancouver and from Kitchener, to get an answer to this as soon as possible.
Perhaps we could begin with Ms. Ballem.
Penny Ballem
View Penny Ballem Profile
Penny Ballem
2015-06-02 16:06
Certainly. I don't have those numbers with me today, but I'm happy to look at providing that information.
The agreements that we have are publicly available in the city. They can be requested under FOI. They're there for the public, so that wouldn't be an issue for us.
View David McGuinty Profile
Lib. (ON)
Would that include a sign count?
Penny Ballem
View Penny Ballem Profile
Penny Ballem
2015-06-02 16:07
Yes. I'm sure we can do that.
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 16:07
Mr. McGuinty, I would say that is certainly information that I can speak with our staff about gathering and making available to you.
I would say on that point in particular that, obviously, municipalities are always interested in maximizing the dollar value they can contribute to the projects at hand, but at the same time, I think there is value for all orders of government in having Canadians understand the investments being made and the rationale behind some of those investments. I think that understanding helps raise awareness about the infrastructure deficit and the importance of governments working together.
When I think back to when I first started as an elected official locally some 20 years ago, infrastructure was not even on the radar of the average resident in our community. Today it's a very different story.
View David McGuinty Profile
Lib. (ON)
Mayor Vrbanovic, let me ask you this, then. For example, in the city of Ottawa, they have 98 signs that have cost the city just over $50,000. The only thing on the billboard are the words “economic action plan”.
Can you help us understand how that helps your constituents in Kitchener understand the merits of this project?
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 16:08
Again, I'm not getting into specific merits and so on. I'm simply pointing out, Mr. McGuinty, that I think there is some value—I'm not saying how much; that's for you folks to debate—in raising awareness among Canadians about investments in infrastructure projects by all orders of government.
I think the premise should be that as many dollars as possible get to the projects themselves.
View David McGuinty Profile
Lib. (ON)
I agree.
That's why, for example, $30 million on these billboards would pay for one million bus passes for seniors on pensions. I would think that would really raise the profile of the need for infrastructure and the fact that governments are working together. The $30 million would pay for the salaries of 500 registered nurses for one year. I think that would help identify the need for us to cooperate on health care. There are a lot of alternative uses for these very scarce taxpayer dollars.
My second question is for you, Ms. Ballem, and it is on deploying private capital.
I know your administration is giving some thought on how to best dislodge a lot of private sector money, whether it's sovereign wealth funds, or whether it's the $600 billion sloshing around in Canadian corporate bank accounts right now—largely from corporate tax cuts—that has not been deployed. The disappointing fact in corporate Canada is that we're not seeing the deployment of that the way we thought we might.
I wonder if you can help us to understand your view. You are a major Canadian leader in sustainability in Vancouver. You know the infrastructure needs. I had the privilege of writing the original first cities deal, with Mike Harcourt, when I drafted it and produced it for Paul Martin, then the minister of finance. Vancouver has always been at the forefront.
What's your thinking in terms of how we can best use federal mechanisms, fiscal or otherwise, to get a hold of some of this private capital and deploy it properly for infrastructure needs?
Penny Ballem
View Penny Ballem Profile
Penny Ballem
2015-06-02 16:10
Well, I think since I've been in a senior level of public service, obviously the use of public-private partnerships is something Canada has done a lot of work on, and British Columbia was a leader in that way.
I came from the health sector, and as deputy of health was responsible for building the first public-private partnership hospital in British Columbia, the Abbotsford Regional Hospital, a long-awaited facility. Obviously, that is a way of leveraging private capital. At the city level, to undertake a P3 that's the size of a hospital....
We have a lot of infrastructure. My city engineer here is responsible for a significant percentage of what is anywhere from a $250 million to $300 million capital spend on an annual basis in the city of Vancouver. We're learning how to leverage private capital in different ways, at a smaller scale, as well as the big projects such as this proposal we've put on the table today, the Broadway line. Certainly a lot of the transit infrastructure that has been built in metro Vancouver has been through P3 arrangements—not all of it. Whether or not that would work for the Broadway extension really depends on the criteria. So I think that's a major way....
We have a lot of different initiatives under way right now. We're leveraging private capital through partnerships that are not as formal as a traditional P3 but cause us to end up in the same place.
We know that pension funds are interested in housing now. They're moving out of some of their more traditional real estate holdings, and they're very interested in market residential housing and seniors housing. Housing is a huge priority, as you know, for Vancouver, and we're looking at those sorts of opportunities.
They're complex, and I think one of the most important things for our senior levels of government to understand is that there are no free goods out there. If you leverage private capital, it still has to be paid for; financing costs have to come with it. It's understanding what a deal looks like, what the impact will be over the long term, and how a local government that doesn't have the same fiscal capacity as a senior level of government is going to manage that long-term relationship.
I think that's a learning point for municipalities across the country. There is a lot of great work being done, and some really remarkable partnerships, some of which are long-standing. We're building our capacity in that area.
View Peter Braid Profile
CPC (ON)
Thank you to all of our witnesses for being here this afternoon.
The first question I'd like to pose will be for both Ms. Ballem and Mayor Vrbanovic.
You've both made a very strong link between the importance of investing in infrastructure and the impact those investments have on the economy, the impact on economic growth, on job creation. Could you both elaborate on that notion to begin with? We'll go with ladies first, Ms. Ballem.
Penny Ballem
View Penny Ballem Profile
Penny Ballem
2015-06-02 16:14
Thank you very much.
At the end of the day, if you look at an investment in public transit, first of all, it's a very inexpensive way for people to travel to work. If it's properly done in an integrated way with city planning, it's a very positive place for developers to build density, and it's well suited to that because you have ready access to transportation that's accessible, very affordable, and has very high capacity.
As I said, if I refer to the report we included in this presentation, the American Public Transportation Association has done a lot of work on measuring the development that comes when you actually drive transit through. For those of you who might have come to Vancouver and ridden on the Canada Line, the Canada Line was an example of where we didn't have the density. We had nodes of density at either end, certainly in our downtown core, which is a very dense urban environment, and out at the airport, but over the last few years we have developed. There's an incredible amount of development going on that's mixed development, in some cases commercial development, the commercial nodes.
As we look at the Broadway corridor, that's already a well-developed corridor, but we know that if there's public transit available, there's already a huge amount of interest to increase the density there, to create more job space, and to enhance those tech jobs that are already there. It's just part of the cycle of economic growth.
View Peter Braid Profile
CPC (ON)
Great. Thank you very much.
Mayor Vrbanovic, thank you very much for being here this afternoon by video conference. Do you have any thoughts to elaborate on this important linkage between investments in infrastructure and impact on economic growth?
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 16:16
Absolutely, and thank you, again, Mr. Braid, for the opportunity to join you and your colleagues.
I'll look at it, really, from two fronts: some general comments, and then specifically in terms of the two-way all-day GO transit proposal I spoke of.
From a general front, we know that investments in infrastructure are key for both job growth and sustainable economic development. As an example, coming right from the Conference Board of Canada, we know that every dollar invested in infrastructure generates $1.20 in annual GDP growth. We think that is very positive and demonstrates how the government, how the nation, can benefit from these investments. We saw that, quite frankly, during the economic stimulus program that the late Minister Flaherty brought forward, which helped us see some progress on that front and put Canadians to work.
We also know anecdotally that by improving our road infrastructure and so on we're going to keep people and goods moving, which ultimately adds to quality of life and improves the economy as well.
When I look specifically, for example, at the two-way all-day GO proposal I spoke of in my presentation, there are a number of examples of economic growth attached to that. Part of our proposal is based on looking at the San Francisco to San Jose geography, which essentially has a population of 4.3 million and almost 400,000 tech workers, and comparing it to the Toronto to Waterloo region what we're calling the tech supercorridor, which has a population of 6.2 million but only 205,000 tech workers. By looking at how we grow that area, we believe that we can ultimately connect up to 13,000 companies, attract 3,000 innovation start-ups, and create 40,000 new jobs in the innovation sector, which will ultimately generate another $547 million in annual personal income taxes for provincial and federal governments. That kind of economic growth and all its spinoffs, obviously, would be significant for both Ontario and the country.
View Peter Braid Profile
CPC (ON)
Right. Thank you.
Mayor Vrbanovic, in response to a question, you said you'd like to see as many dollars going to infrastructure as possible. What trend have you seen over the last decade with respect to federal government investments in infrastructure?
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 16:19
Certainly I think, as you're aware, the gas tax fund was a program started under the previous government around the 2005 period, and was continued with significant investments from your government over the past decade. In our own municipality, we've seen that amount that we receive annually. We're in a two-tier structure here in the Kitchener and Waterloo region, where certain responsibilities lie with the lower tier municipalities and certain ones with the region. In our case, in the early years of that program, we went from where we were receiving essentially several hundred thousand dollars a year, to now receiving over $6 million annually, and as you know, that amount is now indexed as a result of the work between the federal government and the FCM to see those kinds of enhancements.
More recently, the commitment to investment that occurred in the budget in terms of a national transit infrastructure strategy has certainly been beneficial to the municipal sector. It's something we were looking for and have asked about. Certainly some questions still need to be resolved: Who's eligible? What's the federal share going to be? How do P3s factor into this?
I would encourage as much dialogue as possible with the FCM to resolve those issues. Ultimately, if this program is only available to the few, the very largest municipalities, it probably won't achieve the ultimate benefit it could if it's a little broader in scope.
View Jeff Watson Profile
CPC (ON)
View Jeff Watson Profile
2015-06-02 16:20
Thank you to our witnesses for their contributions here today to our ongoing look at infrastructure in Canada.
Looking at needs and investments, a chart is available in our budget. It looks at federal spending on provincial, territorial, and municipal infrastructure. I'm sure you don't have it in front of you, but as I'm holding it up here, it charts from 1990 out to about 2022-23, showing a significant drop in funding between 1995 and 2005, and then an onward trend. It even shows the stimulus period where there was an additional injection of federal funding. It shows, I think accurately in the graph, the federal divestiture of ports infrastructure, for example, in the 1990s, the offloading of the national airports system, privatization of rail. There were a number of policies at the time whereby there was significant offloading by the federal government, perhaps to help balance federal budgets in the 1990s. It's not exactly what we could term a “partnership”, I think, as both of our witnesses today and the FCM earlier were talking about.
I think you made reference, Mr. Vrbanovic, that federal investments are signalling the beginning of a broader partnership with the federal government. I think, Dr. Ballem, you referred to it as a renewed partnership. I think we can all agree that it's an important and necessary partnership for us to have.
One of the foundational ways we've embarked on this...Mr. Vrbanovic, you referred to the gas tax fund, which is now permanent and indexed and gives some real clarity in baseline funding. Mr. Vrbanovic, Kitchener's allocation is how much in gas tax funding a year, about $6 million-plus? Is that correct?
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 16:23
That's correct. That's the city's share. We have six other municipalities in the region, two urban centres, four rural, and they would obviously get smaller amounts, and the region itself, because we split it on a 50-50 basis, gets about $15 million.
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 16:23
From a city perspective, it's getting allocated and prioritized into a variety of infrastructure projects.
As a municipality, a number of years ago we took what I think was a responsible view on the pending infrastructure deficit and developed an accelerated infrastructure program. We were certainly making some of our own investments into that and then taking the additional dollars coming from the feds and the province and putting that into roads, sewer pipe enhancements, water pipe enhancements, bridges, and so on, that kind of core infrastructure.
View Jeff Watson Profile
CPC (ON)
View Jeff Watson Profile
2015-06-02 16:24
Did you do an asset management plan for the City of Kitchener to evaluate where your strengths and your weaknesses are to quantify potentially what infrastructure renewal would look like for the community and therefore how funds such as the gas tax fund—or maybe the prioritization of seeking out other funding arrangements, such as grants from other levels of government—would fit into asset renewal?
Berry Vrbanovic
View Berry Vrbanovic Profile
Berry Vrbanovic
2015-06-02 16:24
Yes, absolutely. We felt that it was important. In fact, as we know, due to changes in accounting practices, municipalities were required to have a better sense of where they sit with their assets over the last number of years. We certainly have that in place.
We know that as a municipality we're sitting in the range of approaching a billion dollars in terms of assets, and we have a plan over the next number of decades to address that, but we can't do it on our own. We certainly require the partnership with the provincial and federal governments.
View Jeff Watson Profile
CPC (ON)
View Jeff Watson Profile
2015-06-02 16:25
Asset management is a key part of understanding what your needs are. In the town of LaSalle in my riding, we just celebrated the ribbon cutting for a new municipal building, which involved gas tax funding in the neighbourhood of about a million dollars. I asked the mayor what the oldest asset is in the town of LaSalle now, with this brand new facility, and he said it is a recreation complex built in 2005. They began years ago with an asset management plan and have consistently sought out opportunities, both from prioritizing their existing tax base and from seeking out leverage opportunities in order to renew their assets. That's critical.
Ms. Ballem, you mentioned that some of the important indicators in the relationship are that the funding be clear, long term, and offer predictability and a streamlined process. I remember that in the early days—I have a little bit of experience now, being at this for 11 years—we had the original building Canada plan, which was a seven-year plan of about $34 billion when you put all of the elements together.
We then renewed with the new building Canada plan, and it's a 10-year plan with $75 billion. Now there's a new public transit fund that looks out at five years at this particular point. CUTA was here to explain how the number was arrived at in defining a federal share over five years, ramping up with the timing of projects coming on stream from communities.
Additionally, I would add that probably the criteria I heard Mr. Vrbanovic refer to, at least implicitly, is flexibility in how priorities are determined. The federal government is not telling you what the priority is for Vancouver versus Kitchener, for example. Is that a welcome direction now? Is that the type of partnership...? Of course, it's something that can be built on over time as well.
Penny Ballem
View Penny Ballem Profile
Penny Ballem
2015-06-02 16:27
Yes, I think that as you look at the availability of the funds that have come on stream.... The gas tax was mentioned. That was a huge opportunity for us. In fact, in our region, we've actually dedicated all the regional gas tax money to TransLink with the view that we needed to continue to invest in our regional transit system. That was a good source.
With regard to the rest of the funds, certainly we very much welcome the incremental increase in the availability of money for infrastructure. I think Mayor Vrbanovic has signalled that at the municipal level we deal with regional responsibilities. We are part of a local region. We have our provincial priorities, the federal priorities, and then the P3 lenses that things are often put through in British Columbia. It's standard that if you have a project and you wish the province to participate, you have to put it through a P3 business case.
I would say, having come from being the deputy of health to running a city, that cities don't have the same kind of capacity to deal with all of the complexities of these different arrangements and business cases on a frequent basis. We're developing those platforms. The more they can be simplified and, as I said, have clarity.... When we look at the transportation fund, we're very excited about that. We'd like to have more opportunity to understand how that's going to work. That will be a really value-added opportunity for us for these kinds of projects.
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