OTTAWA — Provincial governments have been warned that they have until this time next year to start assigning billions in infrastructure cash to eligible projects, or else they could lose control over how it can be spent.
The Liberals are finalizing details about the fate of any money left over in the New Building Canada Fund for large, provincial or nationally important projects after next year’s deadline, including following through on a vow to shift unused infrastructure money to the gas tax fund, which allows cities to spend on roads, highways, transit, water and sewer systems without having to apply for federal funding.
The Liberals have already moved about $30 million in idle infrastructure money into the gas tax fund after provinces and territories couldn’t allocate all $837 million from four separate funds before last March.
Infrastructure Canada’s website says the New Building Canada Fund’s national and regional project stream still has $6.6 billion of an original $8.8 billion in funding that has yet to be allocated.
The deadline for provinces and territories to prioritize projects for funding is April 1, 2018.
The timing is part of the Liberal government’s push to spend as much infrastructure money as it can to boost the economy through construction jobs and help raise government revenues amid concerns from the parliamentary budget watchdog that the promised funding is moving too slowly.
It also doesn’t hurt that more spending could help the party’s political fortunes if projects are completed or at least underway just in time for the next election in 2019.
But that push for provinces to spend money left over in the marquee program set up under the previous Conservative government has raised concerns within Infrastructure Canada that officials reviewing funding applications could end up buried in paperwork.
A November briefing note to the department’s deputy minister shows the deadline “created a growing pressure to streamline and accelerate” the review and approval process. Officials wrote that ways to accelerate the review process should ease burdens on regional officials and that the department was considering more changes to further speed up approvals.
The Canadian Press obtained a copy of the briefing note under the Access to Information Act.
The issue with the leftover money from the New Building Canada Fund is part of a larger concern among federal officials that Infrastructure Canada won’t be able to handle the number of applications rolling in under old and new programs, that combined will dole out some $186 billion in spending over the next 11 years.
The concern was part of the reason the government split its infrastructure promise into two phases.
The first, outlined in last year’s budget, set aside $11.9 billion through to 2019 on projects that could be completed quickly. The second phase, which had a few more details outlined in this year’s budget, is aimed at large transit, drinking water and housing projects and comes with a price tag of about $81 billion.
What the two-part approach also did was give the Liberals a chance to learn from the approval process under the new infrastructure program so as not to make the same mistakes when applications open for the second and more lucrative phase of the program.
The department still has time before the complicated funding applications roll in.
The Liberals first need to sign funding agreements with the provinces with negotiations expected to begin by the summer. The government doesn’t expect to have agreements finalized for another 12 months.\