Budget stokes two-year construction spree
Infrastructure spending to upgrade transit, repair roads and city services and improve conditions in First Nations communities
January 27, 2009
RICHARD J. BRENNAN
OTTAWA BUREAU
OTTAWA - Toronto’s historic Union Station will get a long-awaited multi-million-dollar facelift as part of the federal government’s two-year, $12-billion infrastructure spending pledge announced in today’s recession-fighting budget.
"Since Sir John A. Macdonald laid a railway across a continent, infrastructure has been both an immediate response to an urgent need and hopeful act of nation building," Finance Minister Jim Flaherty told Parliament.
The City of Toronto, which owns Union Station, has long asked for federal funding to modernize and preserve the train station, which serves tens of thousands of Via Rail and Go Train passengers daily.
With its 2009-10 budget, the Conservative government is hoping to build its way out of a recession, as long as the provinces and cash-strapped municipalities can afford to play along. Canada is reported to have an infrastructure deficit of more than $100 billion.
"We are launching one of the largest building projects in Canada’s history," Flaherty said in his 24-page budget speech.
"In the next few months, we will start construction of roads, bridges, public transit, broadband Internet access, schools and social housing in every region of the country. We will create jobs for Canadians now, while providing infrastructure Canada needs," he said.
"When chosen carefully, infrastructure projects can provide a much needed, short term stimulus to our economy."
The finance minister emphasized that much of the new funding will only be available for the next two years "when our need for economic stimulus is greatest."
Flaherty said the "landmark Union Station will, at last, be revitalized" as part of an overall effort to improve travel along the Toronto-Montreal corridor.
"We will add a third rail track at key locations between Montreal and Toronto, will allow more express trains and make the express trip shorter by 30 minutes," he said. A Toronto-Montreal trip currently takes four and a half hours.
Railway stations in Hamilton, Windsor and Belleville will also be improved.
The $258 billion budget concentrates heavily on infrastructure, offering in some cases to pay up to 50 per for municipal projects that are ready to go.
It also includes up to $2 billion over two years in direct low-cost loans to municipalities to repair sewers and water lines and for neighbourhood improvement projects. It remains to be seen whether this will help municipalities, which say they can’t afford to borrow any more money, regardless of the interest rate.
The breakdown for investment in provincial, territorial and municipal infrastructure includes:
* $4-billion infrastructure stimulus fund to renew existing services, such as water, sewer, roads and bridges.
* $1 billion over five years for a green infrastructure fund to support sustainable energy projects.
* $500 million over two years to build and renew recreational facilities, many of them built in 1967 to celebrate Canada’s centennial.
* Accelerating up to $1 billion in payments over two years under the Provincial-Territorial Base Funding Initiative for "ready-to-go" infrastructure projects.
* Up to $500 million over two years for infrastructure projects in small towns.
"The new investments we are announcing today will be focused on projects ready to start construction," Flaherty said, noting these projects will create new jobs in construction, engineering, science and technology and manufacturing.
The Federation of Canadian Municipalities has long complained that by requiring municipalities to put up 25 per cent or more of the cost of a particular project, Ottawa is making it impossible for cash-strapped communities to participate.
The FCM has lobbied Ottawa to instead make infrastructure funding a transfer similar to the gas tax.
Today’s budget also provides for up to $2 billion for repairs and expansions at colleges and universities. Universities will get the lion’s share at 70 per cent, with colleges getting the remainder. In the case of universities, preference will be given to projects that can improve the quality of research and development.
Responding to intense criticism from native communities and opposition parties, especially the New Democrats, Ottawa is providing $515 million over two years for First Nations ready-to-go projects in priority areas, including schools, water and critical care services.
Dozens of native communities across Canada are without potable water and many have schools that have been condemned or are in desperate need of repair.
Some $135 million will go towards the construction and renovation of health services for native communities, including health care clinics and nurses’ residences. It is expected that 40 new projects and about 230 remedial projects will be completed during the next two years, according to the budget.
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