Infrastructure money can’t move fast: Morneau

OTTAWA — The finance minister would like to see billions in new federal infrastructure money flow faster to provinces and cities, but Bill Morneau says that moving too fast would risk wasting money.

The federal Liberals have come under heavy criticism from the parliamentary budget watchdog for the pace of infrastructure spending that the government sees as a pillar of its strategy to spur economic growth and help pay for deep deficits.

Morneau said the Liberals have approved about 1,300 projects with a total value of about $6 billion — and more are being reviewed.

“When we get criticized for not making the investments quickly enough, I listen and I think we have to make sure we do get at it quickly,” Morneau said during an interview with Huffington Post Canada broadcast live on Facebook.

“But I will tell you that we would get criticized a whole lot more if we made the investments too fast and wasted money, so we’re not going to do that.”

Wednesday’s budget showed between 50 and 75 per cent of the infrastructure money was on track to be spent this fiscal year, which ends next week.

The lack of federal spending doesn’t mean money isn’t being spent on projects.

The federal government only reimburses cities and provinces for work once receipts are submitted, meaning there is usually a delay between construction and money flowing from the federal treasury. And money that isn’t spent in one year remains available for cities to spend in the future.

The Liberals predicted that their first tranche of infrastructure money along with a slew of other tax and spending measures would buy about half a percentage point of economic growth in the 2016-2017 fiscal year.

Morneau’s second budget says the economic impact will likely end up being four-tenths of a percentage point, owing to slower-than-expected infrastructure spending.

The 2017 budget provided more details about the second phase of the Liberal infrastructure plan, including how much of the tab the federal government will pick up.

In Quebec, the provincial government would like the federal government to give at least $1 billion to a planned electric rail network in Montreal that is being backed financially by the provincial pension investment fund.

The Quebec national assembly adopted a motion Thursday expressing the province’s “great disappointment” with the federal budget, in part because it provided no funding to the electric rail network.

Federal officials have been reviewing the project as a potential case for the soon-to-be-launched infrastructure bank, which would use federal dollars to leverage private investment for projects, such as public transit, that can provide a revenue stream to pay off private and public investment.

Federal sources say a business plan arrived just a few weeks ago and stressed that no decision has been made.

Nor can the federal government decide to fund part of the $6 billion project through the second phase of its infrastructure program because funding agreements have yet to be signed. Those negotiations haven’t yet started and could take a year to complete given the amount of money involved, approximately $82 billion, and the length of time, 11 years.

Speaking at a robotics lab near Montreal, Prime Minister Justin Trudeau said Friday that Quebec would receive billions in the coming years to build needed projects.

“The fact is we understand very clearly it is not up to Ottawa to make the determinations of what a community needs and what is the best transit project for a given region,” Trudeau said.

“It’s up to the experts, the members of municipal councils, provinces. We’re there to be partners with the provinces and municipalities on the investments we need to grow the economy.”

— Follow @jpress on Twitter.

Jordan Press, The Canadian Press

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