January 2017
Backgrounder

Municipal governments own more of Ontario’s infrastructure than any other order of government. Most of it is essential to our economic prosperity and our quality of life, including:
 
  • Drinking water
  • Sewage and waste disposal
  • Parks and recreational facilities
  • Social housing
  • Local roads and bridges
  • Public transit
 This infrastructure is under mounting pressure. Much of it was first built in the 1950s and 1960s and needs modern upgrades or replacement. A growing population is also increasing the burden on existing infrastructure and fueling the demand for new investments. It was estimated in 2008 that Ontario faces a municipal infrastructure gap of $60 billion that will take 10 years to close, leaving municipalities with a bill of $6 billion each year.

AMO has advocated for dedicated, long-term, sustainable infrastructure funding programs from the federal and provincial governments. The 2008 agreement to upload provincial social services and some court security costs to the Province has helped municipalities free up property tax dollars for infrastructure investment. Ontario’s municipalities have also put recent federal and provincial funding programs to good use with projects that are improving infrastructure across the province.

Municipalities appreciate the ongoing increased Ontario Community Infrastructure Fund (OCIF) and recent federal Phase 1 funding for public transit, clean water and wastewater and social infrastructure. The federal government has also committed to funding these programs through Phase 2 as well as expanded support for rural and northern communities and trade infrastructure. Details are expected in the 2017 federal budget. Continued municipal asset management planning will also help councils prepare long-term infrastructure financing plans and make good investment decisions for their residents.

Federal Government
  • The federal government’s Fall Economic Statement committed federal Phase 2 funds, $81 billion over 11 years, including $2 billion for Canada’s rural and northern communities.
  • In 2016, the federal government announced $2 billion for the Clean Water and Wastewater Fund (CWWF) nationally. Ontario will receive $570 million for CWWF. ROMA and AMO were pleased that these funds have been distributed based on a funding formula, rather than application process. This will ensure that all Ontario municipalities will receive funding for this important infrastructure.
  • In 2007, the Building Canada Plan provided $33 billion for infrastructure over seven years. The 2015 New Building Canada Plan (NBCP) builds on these long-term infrastructure investments, with an additional $53 billion for provincial, territorial and municipal infrastructure over 10 years. This includes:
    • Community Improvement Fund: consists of the federal Gas Tax Fund and incremental Goods and Services Tax Rebate for municipalities, providing over $32 billion to municipalities for infrastructure projects.
    • New Building Canada Fund: a $14-billion fund that encourages infrastructure projects of national, regional and local significance to promote economic growth, job creation and productivity.
      • $4 billion goes towards the National Infrastructure Component (NIC), and $10 billion is allocated for the Provincial-Territorial Infrastructure Component (PTIC).
      • Each province and territory will receive a base amount of $250 million, plus a per capita allocation over the 10 years of the program.
    • Public-Private Partnerships Canada Fund: an additional $1.25 billion in funding administered by PPP Canada.
  • The federal government’s Small Communities Fund (SCF), part of the PTIC within the New Building Canada Fund, provides Ontario with $272 million for projects in municipalities with populations less than 100,000. Ontario has agreed to match this funding amount.
  • The federal Gas Tax Fund (GTF), which became permanent in December 2011, has been renewed as part of the New Building Canada Plan. The renewed GTF will provide $775 million annually to Ontario municipalities from 2014 to 2019.
  • The Community Infrastructure Improvement Fund provided nearly $150 million for community infrastructure upgrades and repairs. FedDev Ontario invested in 430 infrastructure projects through the Fund starting in 2012. All funding for this program has been committed.
  • The federal government has also committed to an additional $60 billion over ten years to support transit,
  • green and social infrastructure.
Ontario Government
  • The Infrastructure for Jobs and Prosperity Act, passed by the legislature in spring 2015, makes asset management planning mandatory for broader public sector organizations such as municipal governments.
  • Regulations specifying the form and content of these plans are in the consultation phase. However, given that Ontario municipal governments have asset management plans, AMO doesn’t believe it is a policy priority to re-do these plans. Funding is the priority
  • Budget 2015: Building Ontario Up includes a record investment of $130 billion in public infrastructure over 10 years.
  • The Ontario Community Infrastructure Fund (OCIF) was increased in 2016 with funding under OCIF formula support growing to $200 million and application funding to $100 million annually by 2018-19.
  • Budget 2015 also included a $2.6 billion increase in dedicated funds for Moving Ontario Forward, for a total of $31.5 billion over 10 years, which includes:
    • $16 billion for transit projects in the Greater Toronto & Hamilton Area (GTHA).
    • $15 billion for transportation and priority infrastructure projects outside the GTHA.
    • $15 million annually will go to the new Connecting Links program to help pay for the construction and repair costs of municipal roads that connect communities to provincial highways.
  • Since 2008, several funding programs have provided more than $1 billion for various municipal infrastructure initiatives.

Funding from the Ontario government has helped support asset management planning in many communities to ensure that municipal councils identify needed capital investments to best use funds.  It is particularly challenging for small, rural communities with limited staffing, but large geographic coverage, to have the capacity for this planning work.  ROMA, AMO and its subsidiary, Local Authority Services (LAS), are working to build capacity for asset management at the local level.