Proceedings of the Standing Senate Committee on
National Finance
Issue No. 7 - Evidence - May 4, 2016
OTTAWA, Wednesday, May 4, 2016
The Standing Senate Committee on National Finance met this day at 6:49 p.m. to study the federal government's multi-billion dollar infrastructure funding program.
Senator Larry W. Smith (Chair) in the chair.
[English]
The Chair: Good evening, everyone, and welcome to the Standing Senate Committee on National Finance. My name is Larry Smith, senator from Quebec, and I chair the committee.
Thank you, minister, for your presence here tonight.
Let me introduce the other members of our committee for the minister. Starting on my right, from the province of British Columbia, Senator Richard Neufeld.
[Translation]
Next to him, we have our star from New Brunswick, Senator Percy Mockler.
[English]
Next is Senator Nicole Eaton from Toronto, followed by the lady who ran The Rock as the Auditor General for many years, Senator Beth Marshall.
[Translation]
On my left, a distinguished journalist who is now a member of the Senate of Canada, Senator André Pratte.
For our viewers, this committee's terms of reference are to examine the federal government's estimates and government finance in general.
[English]
The committee asked for and received a specific mandate from the Senate to study the design and delivery of the federal government's multi-billion dollar infrastructure funding program. This evening, to launch our series of hearings on this special study, we welcome the Minister of Infrastructure and Communities, the Honourable Amarjeet Sohi. Welcome, minister.
[Translation]
To provide the minister with support and help him answer our questions, if necessary, we also have representatives of Infrastructure Canada with us this evening.
[English]
We also welcome officials from Infrastructure Canada: Jean-François Tremblay, Deputy Minister; Yazmine Laroche, Associate Deputy Minister; Jeff Moore, Assistant Deputy Minister, Policy and Communications; Marc Fortin, Assistant Deputy Minister, Program Operations; and Darlene Boileau, Assistant Deputy Minister, Corporate Services. Welcome to all of you.
[Translation]
Senators, we already know that the minister has other commitments this evening and will have to leave us in one hour.
[English]
However, after the minister leaves, around 7:45, we will continue our questions with some of his able officials, who will remain with us. Minister, the floor is yours.
Hon. Amarjeet Sohi, P.C., M.P., Minister of Infrastructure and Communities: Good evening, everyone. Thank you so much for allowing me the opportunity to be here and for accommodating the very unusual schedule that we have experienced today. I appreciate having this opportunity.
Before I go into my remarks, I also want to say a few words. As you know, my home province is going through a very difficult time. The fires in Fort McMurray are taking a toll on all of Alberta and all of Canada, I would say. The outpouring of support that my province has received from across Canada is greatly appreciated. It shows the strength of our nation when we come together to stand with each other in a time of need. I want to convey that through you to all Canadians and to the people in my province. We are thinking of them and our heart aches with them. We are here to support them in our capacity in the fullest way possible. Thank you.
The Chair: Very well said, sir. Thank you.
Mr. Sohi: You have been asked to examine and report on the design and delivery of the federal government's multi- billion dollar infrastructure funding program. That examination includes, in part, looking at how infrastructure projects are funded; the criteria that applicants need to meet to be eligible for funding; the type of projects that receive funding; and how to ensure that project funding is timely, efficient and economical.
I would like to briefly highlight some of the work my department is doing as we begin to implement phase one of our infrastructure plan and engage and develop phase two, which I believe will be of great interest to you for your study.
Everyone in this room knows that there are significant benefits to infrastructure investments, both in the short and the long term. Well-planned investments in infrastructure generate economic growth, create jobs and leave a lasting legacy for Canadians. Infrastructure is the foundation that shapes our communities, and infrastructure is not an end in itself. It is the means with which we build a more prosperous, inclusive and sustainable country.
Our government's new approach to infrastructure will be designed in collaboration with our partners. By working together, we will provide the long-term, dedicated and predictable funding that will help build communities for the 21st century.
Let me talk about our plan. We are committed to doubling federal investments in public infrastructure over the coming decade. This will equal $60 billion of new investment over the next 10 years that will focus on public transit, green infrastructure and social infrastructure.
Most recently, we announced through Budget 2016 that phase one of our infrastructure plan will provide $11.9 billion over five years, including $3.4 billion to upgrade and improve public transit systems; $5 billion for investment in water, wastewater and green infrastructure; and $3.4 billion for social infrastructure, including affordable housing, early learning and child care, cultural and recreational infrastructure, and community health care facilities on reserve.
On April 22, one month after Budget 2016 was tabled, I wrote to my provincial and territorial counterparts to continue the conversation that will lead to the signing of our bilateral agreements. These agreements will allow funding to be transferred to the provinces and territories under new programming.
Under the new programs, my department is looking to encourage a focus on projects that promote innovation, optimization and rehabilitation of existing assets. As we begin to invest in infrastructure, we propose to make investments that can enhance municipal planning, asset management and data collection capacity. This will help all orders of government to make evidence-based decisions and put us on a more sustainable path. By providing targeted investments in social, green and public transit projects and accelerating funding under the New Building Canada Fund, we will be able to address the real needs of Canadian communities.
For phase two, we are also engaging with the provinces, territories, municipalities, indigenous leaders and other partners and stakeholders on the design of future federal infrastructure funding programs. I am very interested in your study. The feedback you receive could contribute to our development of phase two. I understand your study will be completed by December, but any preliminary results that you can share by September would be welcomed. In addition, my department is happy to provide support as needed towards the study.
As you undertake your work, I invite you to consider the future of federal investments in infrastructure along with the following questions:
What should the federal role in infrastructure investments be? Are there other policy tools, such as legislation or regulations, that could be used to support the same desired outcomes, whether environmental, economic or social? Are there ways to create incentives for greater private sector involvement to support the long-term sustainability of our infrastructure assets? How can we ensure that we have the data and evidence needed to make timely investment decisions? How do you best balance national versus local infrastructure needs? What is the most effective way to deal with key issues related to greenhouse gas emission reductions and congestion, particularly in larger cities?
These types of questions will not only benefit your study but will also help Canadians receive the quality infrastructure they deserve.
Finally, I want to speak about my department's commitment to transparency and openness. We have posted the signed project agreements for the work being done on the new Champlain Bridge. We have posted the letters to the provinces and territories I mentioned earlier that provide details of the new programs related to public transit, water and wastewater infrastructure, as well as the details of the improvements that we have been made to the New Building Canada Fund.
Infrastructure Canada has also published more detailed program data and information on its projects through the Open Government website. This information will be updated regularly on an ongoing basis.
By creating and implementing a long-term infrastructure plan, we will be working to improve the future of our communities and our country. By focusing on the repairs of existing infrastructure, we can fix what we have now instead of delaying and paying more to fix it later. By providing open and easy access to the department's work, we are providing Canadians with the information they need and want about public infrastructure benefits for them and their communities.
Our government has an ambitious plan to build communities that are sustainable and inclusive, communities that every Canadian can be proud to call home. Our budget plan is showing how some of that plan looks, and the letters we sent to provinces and territories provide even more.
Thank you for your time, and I look forward to answering any of your questions you may have. Thank you for having me.
The Chair: Thank you, Mr. Minister. We have two senators who would like to start off the questioning.
Maybe I could take a minute to position some of the thoughts that we've had as a group, because you fed back to us in your presentation some of the questions that we were asking. One of the things that we're thinking about when we look at the whole infrastructure issue is the importance that the government has put on what the infrastructure program is going to do for Canadians.
When we think of that and what we'd like to see, we started in 2007 with a $33 million commitment, if I understand correctly, and in 2013-14 we had another phase two program, and this goes back in time, for $53 million. In 2016, we have the new program coming out.
The simple questions are where have we been, how much have we spent, how many projects have been completed, and what does the report card say? I'm sure you probably have some of this in plans and priorities and in the history. What we'd like to be able to take away is where we have been, where we are going to go and how we are going to get there. We'd like to have a war room so that we can understand and look at Canada and look at what are the national priorities, what are the provincial priorities, what are the big-city priorities, the medium-sized city priorities and the smaller city priorities.
Maybe it's not a realistic expectation, but if we could have a plan that would support the importance of prioritizing, focus, return and the multiplier effect — because the multiplier effect, if you look at the budget, was one of the major ingredients that infrastructure was going to deliver. To sort of position the minds of all of the players in this room and the people listening to us out in the audience, these are some of the things that we thought about.
With that in mind, maybe I can go to our colleagues to start the questioning.
Senator Eaton: Welcome, minister. I am appalled too about what's happening in Alberta. Those were terrible, terrible scenes this morning.
Mr. Sohi: Thank you, senator.
Senator Eaton: As an Ontarian, I feel very frustrated. I see my premier talking about how by 2050 she doesn't want any more gas-guzzling cars on the streets, she wants buildings retrofitted, she wants this and she wants that. This conversation of green energy projects in Ontario has been going on for a decade, yet we have not built any real mileage of subways. I don't think our subways are as good as Montreal's. There hasn't been a major extension to the subways in Ontario since I moved there in 1974, and you know how big the city is.
How can you, with something like the gas tax, or with your $3.4 billion that you put aside for roads or public transportation —
Mr. Sohi: Transportation, yes.
Senator Eaton: The Liberal government has a strong green energy program, a climate change program. How do you marry that with infrastructure that makes real sense? Yes, windmills are great, but we still pay huge hydro rates in Toronto. It's very expensive. We have businesses moving out of southern Ontario because of the high hydro rates. How do you marry this infrastructure with climate change but providing real tangible benefits like good public transportation?
Mr. Sohi: Thank you, senator. I don't know if you know that my background is municipal. I was a city councillor for eight years before being elected into this position, so I understand the challenges municipalities face when they have to plan for the long term.
I can highlight some of those challenges. One of those challenges is not having a long-term plan at the federal level where municipalities can tie their plan to the provincial plan and to the federal plan. Whenever you have ad hoc funding available to municipalities, they can't really plan for the long term, so we hope that our 10-year plan will allow them to look ahead 10 years and say this is how much money they're going to get and this is how much will get built with federal support.
The second part that we are doing differently than the previous way of doing things is allowing municipalities some capacity to invest in planning and long-term planning. With the first phase of $3.4 billion, we will allow them to use some of their money to do some of the detailed engineering and planning work so they're ready to take on the opportunities when the second phase is rolled in within next year.
I think that is where the bottleneck has been in the past, and I hope that our long-term focus and emphasis on sustainable, predictable funding will allow municipalities to plan for the long term as well as give them certainty about the funding.
On your comments related to provincial decision-making, from my experience over the last six months, I am very optimistic about the willingness and the desire of the provinces to actually work with us and to move forward on these big transformative projects that you were talking about, senator — building subway, LRT and public transportation. I have had very good conversations with the Province of Ontario as well as with mayors. I'm optimistic that, with long- term planning, we'll be able to move forward.
Senator Eaton: When you allocate the money, are there strings attached? Are you saying to them, "Here's the money, and this is what we expect you to do with it?'' Or are you giving them the money and hoping that's what they're going to do with it?
Mr. Sohi: For phase one, our focus is to repair what we have and optimize what we have. I'll give you a couple of examples how lack of investments into fixing or rehabilitating what we have is hurting our communities.
I took a tour of social housing in my own community. I took a tour with Mayor John Tory of the Regent Park redevelopment where they're putting a lot of emphasis on fixing what they have. There is housing stock and conditions where it's not livable. You can't live in those conditions, and you can't put people to live in those conditions.
If we invest into rehabilitation of the existing stock of infrastructure that we have, we can extend the life of that infrastructure.
Senator Eaton: I don't argue with that.
Mr. Sohi: We can save with the repairs in the long term, so that is why our focus for phase one is to do that kind of foundational, fundamental work.
Senator Eaton: But when you give them the money, they won't put it, in other words, into general revenue?
Mr. Sohi: No, they won't.
Senator Eaton: They will have to direct it towards what they say they're going to direct it to?
Mr. Sohi: That's right. There are three areas we're focusing on — public transit, social infrastructure and green infrastructure — and the money has to be matched by provinces, and it has to be an incremental investment on what they already have been investing. It is focused on those areas, and they cannot shift their money into their own general revenue or to projects where they wish to spend their money. The money has to go within those three buckets. I hope that answers the question.
Senator Eaton: Yes, thank you very much.
Senator Marshall: Thank you, minister, for being here.
In your opening remarks, you indicated you had written to the provincial and territorial counterparts. I understand how that works and that the projects usually are routed through various provincial governments, but I did notice in the budget book that there's a significant amount of money that's going directly to the Federation of Canadian Municipalities. My question relates to that.
I think there are three pots of money. How is that money channelled to them? Do you write a cheque for the $125 million and wish them all the best? What is the role of the department and how is the money going to be distributed? Do you know, or do you leave it to the federation?
Mr. Sohi: There are three areas where we are providing support to the FCM. One of them is the Green Infrastructure Fund, their municipal green infrastructure fund, and that was started about half a decade ago. It has been very successful in supporting municipal infrastructure. It's a rolling fund and some grant money and some low- cost interest or loans that they provide. The value of half a billion that was given to FCM about half a decade ago has been eroding; so we are topping it up to retain the value of that fund.
There are two other areas where we are providing support to FCM. One is asset management. It is so critical for us to understand, first of all, what assets we own. A lot of municipalities don't have the capacity to know that. If we don't know what we own, we can't fix it. That is so fundamental to build the capacity. That would be managed by FCM and money will flow from us, and there will be accountability measures built into that when we design the delivery.
The third one is about supporting municipalities for projects that are challenging for municipalities, but really innovative and cutting-edge to reduce greenhouse gas emissions. Municipalities sometimes don't have the capacity to take the risk that is required to test those ideas. That's why we feel that if we flow funds through the FCM and that money goes directly to the municipalities, it's a quicker way of supporting municipalities to take on some of the challenges related to greenhouse gas.
Senator Marshall: Who decides which municipalities receive funding? Is that through the federation? What is the department's role?
Mr. Sohi: It will be a decision made by the Federation of Canadian Municipalities. They have a committee that has been working on the Green Municipal Fund, and when you look at the outcomes of that funding and the vetting that has been done by our department, it's a very successful way of delivering that money.
Senator Marshall: Are there any parameters put on that such that so much has to go to each province and territory per capita? Is it possible that all the money could end up going to Ontario and Alberta? How do you make sure that everybody gets a cut of the pie?
Mr. Sohi: It's project-based funding; so they look at the project and determine the value of the project and whether it fits into the criteria. Deputy Minister Tremblay can talk about the history of the fund and how money has been distributed. My experience is that the money has gone to all provinces.
Senator Marshall: Does everybody have to submit their request by, say, March 31?
Jean-François Tremblay, Deputy Minister, Infrastructure Canada: It's too early to say at the moment. We have to negotiate the contribution agreements with them. We've got the general parameters in terms of policy objectives, as the minister established and announced. The next step for us is to negotiate the contribution agreements with them, like we do in general. In these contribution agreements, the issue of how they will do that, will they have intakes, as you mentioned, with the specific dates and how it would be fair for all regions of the countries would be addressed.
Senator Neufeld: You've been quoted as saying that shovel-ready is not enough; it has to be shovel-worthy. I listened to what you said about providing help for planning to communities. Will you explain to me how you're going to determine whether it's shovel-worthy?
Mr. Sohi: Thank you for that question. It is very important for us to know that the investments we will make will help us achieve the results that we want to achieve.
I apply three broad lenses when I talk about outcomes. Yes, we have to measure it. We have to have a more detailed plan in order to show the effectiveness.
One of the lenses is that we definitely want to grow the economy. We want to make our economy more productive and efficient by reducing gridlock and improving the productivity of workers so they are not stuck in traffic or making the movement of goods more efficient.
The second is, are our investments helping us reduce the impact on the environment, a reduction in greenhouse gas emissions? That's the second lens we will apply to our investments.
The third one is about social inclusion. Are our projects moving us toward creating a community and a country where people who feel marginalized or don't have access to services or access to infrastructure are actually using that infrastructure — so accessibility to buildings and inclusion of workers who may feel marginalized through community benefit plans.
Those are the three broad lenses that we want to apply. When I say "shovel-worthy,'' that's what I mean. Every investment we make should help us move towards those three broader goals of achieving what government set out to do.
Senator Neufeld: But if municipalities are to decide what is important to them, how do you marry that? Give me some examples, because it might be totally different from some of the three things you've been talking about.
Mr. Sohi: Municipalities have their ways of funding the projects they need to fund, and we fund projects that fit into our criteria. We don't always fund all municipal projects. If a municipality has a priority where they want to invest into areas that may not fit into our three broad areas of outcome, we probably won't provide support to that project, but the municipalities are free to do it on their own. For federal funding, they have to meet the criteria.
I'll give you the example of public transit. It is an area where we want to invest, but public transit should also be accessible for people with disabilities. The transit centres should be accessible, or they should be close to housing, which ties into the affordability aspect, so those are the areas that we will invest in. If municipalities want to invest in something else, they can, but if they want to rely on federal support, these are the areas we will support.
Senator Neufeld: If a municipality has a project that they want to do and has gone to the expense of deciding this is where they want to go, you as a federal department will go in and review what that municipality has decided to do, and then you will fund the money?
Mr. Sohi: What we would like to do is make it very clear upfront to our partners. That's why our engagement with big city mayors, our engagement with the Federation of Canadian Municipalities, our engagement with the provinces and territories and other associations is to listen to them and understand what their needs are, and then design our plan accordingly, but also to communicate to them what our expectations are and what kind of projects we will fund under our infrastructure plan. That communication is very open.
With that kind of flow of information, municipalities will not be investing a lot of the money into designing a project that they would know will not qualify for funding from the federal government. We want to make the criteria very open, transparent, understandable and easily communicable. Those are the things we want to do upfront in our phase one as well as our phase two.
Senator Neufeld: Is the Canadian infrastructure bank, which we read about a lot, still being looked at? Is that still something that your government is going to create?
Mr. Sohi: Yes. As you may remember, it is part of the mandate letter from the Prime Minister to me. Our goal, and the reason behind the creation of the infrastructure bank is, first of all, to tap into private-sector expertise, the pension funds, as well as provide low-cost loans to municipalities where their borrowing cost is much higher than the federal government's borrowing cost. That's the second objective. The third one is where the private sector is unwilling to invest, do we have a role? That's what we want to explore.
It is very high level. We are having discussions with experts on this, but we haven't landed on the framework yet. It is something that we are exploring at this stage.
Senator Pratte: I'm new here, so I'm still very naive and idealistic, I suppose. In my mind, the main role for the federal government in infrastructure is really to, first, finance projects that are beyond the means of local and provincial governments.
I know there's a specific program for national infrastructure, but it seems to me that, over the years, with each infrastructure program brought in by government of any colour, the definition of infrastructure has widened and become elastic. Now we have green infrastructure and social infrastructure.
I'm a bit worried, even though the intentions are all good, that we're sort of losing the sense of what infrastructure — and you used the words "lasting legacy'' — is supposed to be and what the role of the national government in building infrastructure is supposed to be, and whether we're not simply trying to maybe satisfy the needs of many local and provincial governments.
Again, if you look at each project individually, they might all be very good projects, but are they all really projects where the federal government needs to be? I'm not that sure. It's a general question and feeling.
Mr. Sohi: That's a very good question, senator, because we hear this. Our understanding of infrastructure, and maybe our communities' and societies' understanding, is evolving. Yes, we talk about hard infrastructure — bridges, public transit, water, pipelines and roads. We talk about that infrastructure, which we support; the New Building Canada Fund is focused on that kind of infrastructure.
But infrastructure, as I said earlier, is not just an end itself. Infrastructure should help us build strong, inclusive, welcoming places. When we don't invest in social housing, who loses? As a society, we lose, and not only the potential of the individual who needs that place to stay but also the economic potential because that person is not able to fully contribute to society.
When we don't build infrastructure that provides shelter for women fleeing domestic violence, who loses? We lose. It is the same with green infrastructure. If we don't upgrade our water and wastewater, and if we don't invest in flood mitigation, the costs related to climate change are going to catch up with us later on. So we have to pay it that way.
That is why we have been very deliberate in designing the new monies into three buckets. We want to make it very clear to Canadians where we are investing: public transit, green infrastructure and social infrastructure.
I feel very comfortable that the projects we will invest in will help us not only grow our economy and create opportunities and jobs, but they will also unlock the potential of Canadians to make our economy grow faster and build their lives where they're unable to build those lives because they face challenges related to lack of infrastructure.
Social infrastructure is very important to our new government, and so is green infrastructure. We can debate about whether it's the right type of infrastructure, but it is about the objectives we want to achieve — which I described earlier — in the three areas of investments we want to make.
Senator Pratte: Do you have a clear idea of what the buckets will look like for phase two?
Mr. Sohi: Yes. We committed $20 billion for public transit; $20 billion for social infrastructure, which includes affordable housing, social housing, shelters for women facing domestic violence, early learning and childcare facilities and seniors care facilities; and then we have green infrastructure, which includes water and wastewater, flood mitigation and also provides alternative fueling infrastructure, such as electrification of vehicles. That is lacking. Those are the areas that we want, as well as the energy retrofit. That's where the green infrastructure comes in — where we want to invest in making old buildings more energy efficient, as well as assisting provinces to build their electrical transmission infrastructure so they are actually utilizing the opportunities of collaboration.
The Chair: To follow up, you have three buckets. You have determined already the amounts that are going into each bucket?
Mr. Sohi: That was determined as part of the campaign commitment.
The Chair: So we're talking about $20 billion in each bucket? Is that approximately right?
Mr. Sohi: Yes.
The Chair: When I read your article of April 18 in The Hill Times:
. . . my priority in phase one is to deliver the resources that we are committed to, to fix up the existing set of infrastructure, the rehabilitation, the recapitalization, the modernization and optimization of the existing infrastructure.
So that's the $3.9 billion, or $3.4 billion?
Mr. Sohi: That's $3.4 billion for public transit, $5 billion for green infrastructure and $3.4 billion for social infrastructure. That money is coming out of the $60 billion overall envelope.
The Chair: That's in phase one?
Mr. Sohi: Yes.
The Chair: Have those agreements been put into place? One of the things you talked about in your article was that if we don't get going, we're going to miss the season. Where are you with your bilateral relationships?
I really hope our group will be able to learn from you or your staff. We heard in the Quebec caucus today that there are a lot of infrastructure projects that never even got done because Quebec never submitted anything to Ottawa. Where are we in terms of what we started with 2007 and 2013?
Mr. Sohi: Let me make one distinction now. Let me focus on new money first — the $60 billion.
We went to Treasury Board a week before last, and we got approval to move ahead. The next day, we sent out letters to all provinces and territories. They got the letters. We sent them a template framework around the bilateral agreements we want to sign.
So we are ready for the new money to be getting into the communities as quickly as the provinces are ready to sign the bilateral agreements, and I am hopeful that within the next month we will be able to sign, if not all of them, the majority of the bilateral agreements.
The other money you are referring to, senator, related to the old money, which is the New Building Canada Fund that was started in 2014. That is where we are facing some challenges because of the way that plan is designed. It's very cumbersome for the application process and business case analysis. Municipalities do their analysis, then the provinces do their analysis, and then we ask for further analysis to be done. There are many layers, so that has been a challenge.
I want to give credit to my staff. They have been working very hard for the last four or five months in making modifications to the New Building Canada Fund and also working on the new money.
The Chair: How much is in that bucket of money?
Mr. Sohi: About $9 billion. That's unspent. In the case of Quebec, their allocation was $1.7 billion, and none of that has been invested.
The Chair: Right.
Mr. Sohi: If a province is raising concerns, their concerns are very legitimate. We want to deal with that. We want to streamline some of the process. We made some changes already that were approved by the Treasury Board, and we are hopeful they will be able to get that money flowing as quickly as possible too.
Senator Mockler: Minister, thank you for coming to the committee. You're saying that you want to make sure that that money will be flowing out to the municipalities and our partners. Explain that to us. What do you mean by it has to flow more easily and faster?
Mr. Sohi: For the new money, the bilateral agreements that we would sign for public transit and water and wastewater, we will design it in a way that the analysis is done by the municipality and the province. Once that analysis is done, we will look at the project and see if those projects fit into our overall area that we will design in consultation with the municipalities and provinces. In that way, we will not be asking the project proponents to do extensive analysis on behalf of the federal government.
This is shared responsibility. We are only providing 50 per cent of the funding even under the new program. Fifty per cent of the funding comes from the province and the municipality, so they have skin in the game. They will not be wasting money on unnecessary projects.
The message we are trying to convey to them is that we want to build trust with them. We will trust them to prioritize their projects. We will do the analysis, we will do the accountability measurements that we have to do, and we will make sure that they fit into our objectives. However, we will not require them to do extensive analysis on behalf of our requirements.
We feel that, in that way, we'll be able to do the work. It's also more practical when you are focusing on the repairs and rehabilitation. We will be looking at hundreds and hundreds of projects coming our way. Some will be small; some will be larger.
Senator Mockler: Now, when we distribute funds across Canada —
[Translation]
— it is based on the percentage of our population.
[English]
So if that's the case, in Atlantic Canada, we don't have those big cities. When I look at the Canadian municipality association, the only city at that table is Halifax. Saint John is not there. St. John's, Newfoundland; and Saint John, New Brunswick are not there. Saint-Léonard, where I live, is not there. How can you guarantee that these people will have their fair share?
Mr. Sohi: Thank you. We have had very extensive consultations with all provinces — smaller, larger, territories. We have designed our plan in a way that when you look at the transit money and the water and wastewater money combined together, each province will have its fair share.
For transit, we are allocating money for the first phase based on the ridership of the transit systems. There are about 105 transit systems in Canada. Each system is going to get money based on the size of their ridership. Under our plan, more cities are going to receive money than they have received under the previous plans.
For water and wastewater, recognizing the realities that you are talking about, senator, of the population of smaller provinces, we have a base-level funding whereby each province is going to get $50 million for water and wastewater. This is per year as a total, $50 million over two years.
The Chair: Per year?
Mr. Sohi: For phase one, for two years, so $50 million all together. Then they will have population-based funding. In that way, each province will get enough money for the money to be actually meaningful, on the water and wastewater.
Senator Mockler: On the percentage of our population.
Mr. Sohi: Plus base level. Every province will receive $50 million, regardless of the population.
Senator Mockler: This brings me to the next question. I know the former minister sitting to my left, Senator Neufeld, won the first Canadian award in the history of Canada for PPPs as a success story. If that's the case, I'm coming to a question on infrastructure, minister.
Infrastructure has removed the P3 screening from the New Building Canada Fund projects. Infrastructure Canada has also adjusted the cost-sharing arrangements. I know that in the province of New Brunswick, we would not have had the Trans-Canada Highway built — and I could give you other infrastructure — between the province of New Brunswick and Prince Edward Island bridge. Now the share will be up to one third or 50 per cent, depending on the category.
Lastly, Infrastructure Canada will align eligible costs for P3 projects with the P3 Canada Fund in order to eliminate administrative confusion. We understand that.
My question is this: Why did Infrastructure Canada decide to remove the P3 screening, and how will it be better and of most benefit to the applicants?
Mr. Sohi: The condition of P3 screening applied to any project that was more than $100 million. We heard from provinces and municipalities that it takes about one year to eighteen months to do the analysis of whether a project over that value is funded to P3. In some cases, once they have done their analysis and they've found out that P3 is not the vehicle in which they want to build that infrastructure, that project is already delayed by 18 months.
What we are saying is that we are neither pro P3 nor against P3. We are leaving it to the project proponents to make that decision. If they want to fund their project through P3, they should be able to do so, and we should not create disincentives for them to do so. If they want to build in a more traditional procurement way, they should be able to do so. Respecting the local autonomy to make their own local decision is one fundamental reason for change.
The other reason for change is that actually the conditions around P3 created disincentives for municipalities because the funding was capped at 25 per cent. If you build a project the traditional way, you get one third of the support from the federal government, but if you build it the P3 way, you only get 25 per cent.
We were not providing the kind of support that we needed to provide. That's why we are saying that if you want to go P3, go P3 and it's your decision, but we will not hold your funding to 25 per cent. We will give you the same amount of funding that you would have received under any other procurement method.
So this is an incentive. We are actually building an incentive for them to explore, on their own, without imposing that upon them.
The Chair: We have hopefully about six or seven minutes left with you, minister, and we have three senators who are anxiously awaiting to be able to talk to you again, Senator Eaton, Senator Marshall and Senator Neufeld, and then once we go through those three, we'll hang on with your remaining players here. You can see how anxious we are about asking questions because of the importance of this subject.
Senator Eaton: Minister, you have $3.4 billion for social infrastructure on reserve, I gather, and a lot of that will be —
The Chair: Hold on. There's a question in the mind, I think, of the minister.
Mr. Sohi: No, this $3.4 billion is for social infrastructure. This is for non-reserve infrastructure.
Senator Eaton: Oh, I'm sorry.
Mr. Sohi: This is not indigenous infrastructure. A component of that is for health care facilities, but the rest of the money for indigenous infrastructure will come out of the $8.4 billion, the additional money.
Senator Eaton: Thank you. Then I don't have my question.
The Chair: But just as a supplementary to Senator Eaton, is it $8.4 billion solely towards the indigenous peoples?
Mr. Sohi: Yeah, that's the indigenous infrastructure. That is for housing, education —
Senator Eaton: I think that goes through Indigenous Affairs, does it not?
Mr. Sohi: Yes.
Mr. Tremblay: Most of it.
Senator Eaton: Most of it. In this committee last year it came up that we were spending $400 million last year on Aboriginal housing, but they admitted that they didn't know whether it was built to code because they could not send inspectors onto reserve. I was going to ask you whether you have come across that challenge and what you were going to do about it so that the housing on reserve would be built to code and to the climate it's going to be built in.
Mr. Tremblay: That would be more a question for Indigenous and Northern Affairs.
Senator Eaton: You're very happy, aren't you? Thank you.
Mr. Tremblay: I worked there for years.
The Chair: CMHC said to us when Senator Eaton asked the question — we were shocked — "We give the money to the band council and the band council can do anything they want.'' I said, "Well, geez, when I got my mortgage, I was told by the bank and through CMHC exactly what I had to do.'' Why would it be different? Why wouldn't there be accountability? It's a question we're going to ask you again as we continue on in this process to make sure that everyone is treated equally.
Senator Eaton: Well, it's for their own protection.
The Chair: Absolutely.
Senator Marshall: I'm still on the area of the Federation of Canadian Municipalities. In your opening remarks, you referred to evidence-based decisions, and it's also in the budget book. What exactly do you mean by evidence-based decision-making? You're a new government, so you don't have any evidence, unless you look at the evidence under the previous government. Can you just explain what that means?
Mr. Sohi: I'll use the example of asset management plans. We don't have good evidence, first of all, to know what kind of infrastructure each municipality owns and what condition that infrastructure is in. What is the scope of the infrastructure deficit that our communities are facing? Numbers range from $60 billion to about $500 billion. When we are sitting around this table trying to make decisions and trying to understand the scope of the problem, we don't have good data to base our decisions on, so that's what we mean by not having proper data.
We want to build the capacity of the municipalities who own almost 60 per cent of the public infrastructure to do that analysis and then also make their own decisions based on that information and enable us to make our decision on that information.
Senator Marshall: But really you're saying that's the direction you're going in, but you really don't have a whole lot yet. You've sort of got to build that.
Mr. Sohi: That is why we are creating this fund under the FCM where municipalities can access that funding to do their asset management plan.
Senator Marshall: There has to be some kind of system or process put in place, so that must be something that the department is working on. I've looked at some evaluations — not for your department, but other departments — and I've found them to be very poor evaluations. Are you going to put a structure in place so you'll get some decent information?
Mr. Tremblay: We're looking at different options. We're working, of course, with Statistics Canada and looking at how we can do that. As the minister said, we don't own most of that infrastructure. We have to work with the partners and then see how we can improve the capacity and the knowledge in terms of infrastructure in this country and being able to do more prioritization in the future based on evidence-based, as the minister said.
Senator Marshall: So decisions now are being made, but in some cases it's not on really good evidence.
Mr. Tremblay: We trust that municipalities and provinces have a good sense of what's going on on the ground, and I think they do, but we want to perfect this system.
Senator Marshall: With the hard data.
Mr. Tremblay: Working with them with hard data.
Mr. Sohi: I think that also goes into our decision to design our plan in two phases, phase one being fixing what we have and phase two being ready to build new infrastructure. I think this allows us to gather some of the data for the long-term plan.
Senator Marshall: I just find that to build the evidence is going to be a big initiative.
Mr. Sohi: Yes.
Senator Marshall: Thank you.
Senator Neufeld: In the green infrastructure portion that you talked about, you talked about electrification for electric cars to be able to plug in and those kinds of things. Is there some portion of that money that's going to go to fixing up publicly owned buildings by the federal government? As I understand from my questioning around here, there's an awful lot of old stock around. I'm not talking about just social housing. I'm talking about a whole array of buildings and whatnot that you have across Canada. Will some of it go to start actually fixing them up so they meet some standard and start reducing the greenhouse gas emissions? Instead of just telling everybody else we have to look at reducing greenhouse gas, maybe the federal government ought to look at what they have in their backyard and start fixing that up. Is there a certain part of this fund that's actually going to that?
Mr. Sohi: The infrastructure that my department is responsible for supporting is community-based, municipal infrastructure. My department is not responsible for federal infrastructure. However, having said that, in this budget, they are focused on fixing our own federal infrastructure. There's about $3.3 billion in Budget 2016 to actually do the kind of work, senator, that you're talking about, making our buildings more energy efficient and dealing with some of the code violations or not meeting current standards. That's where the $3.6 billion will be focused.
Senator Neufeld: I have one more quick question on public housing. You spoke earlier about Toronto, I think it was, and you said you went to some public housing that was not livable.
Mr. Sohi: Yes.
Senator Neufeld: I think you said that we need to fix that up. We need to rebuild it so it lasts longer. My experience in the world is that when you have something that's unlivable, you actually tear it down and build something new, so I was a little shocked when you said, "Well, we're going to fix it up. It's not livable but we'll fix it up.'' Did you mean that you will actually have a look at some of this public housing and make the decision whether to tear it down and start new?
Mr. Sohi: I was speaking in the broader sense that we need to maintain what we have. We also need to fix. Whenever you make investments in rehabilitating infrastructure that is able to be rehabilitated, you extend the life of that. If it's at a state of condition where you have to demolish it, communities will make those decisions. We don't impose upon communities saying they must rehabilitate this housing or that housing. We allow them to make those decisions, and they have the better information to make those decisions. But the message that I want to convey is that it is a responsible approach for us to invest into extending the life of our current infrastructure and optimizing the use of our current infrastructure.
If housing is not accessible for people with disabilities, that means that housing may not be as usable by the people who need it. Those are the kind of ideas I was talking about.
Senator Neufeld: So your department will still have the final say? The communities will obviously have their choice of what to do, but I think you told me earlier in a question on the first round that the department will still come in and review whether that is the correct thing to do or not. Is that correct?
Mr. Sohi: For housing, the evaluation and the review will be done through the Canada Mortgage and Housing Corporation. That's the organization that has the expertise to do that kind of analysis, and that organization falls under Minister Duclos' portfolio.
The overall narrative that we want to convey related to our first-phase infrastructure investments is about rehabilitation, repairs, modernization and optimization of existing infrastructure.
Senator Neufeld: Thank you.
The Chair: Last quick question, sir: You mentioned that another department is going to manage government properties?
Mr. Sohi: Yes.
The Chair: Is that Public Works? Who does that? So we can understand who has what control over what element, how many horizontal relationships will exist in this portrait? I think it's a good question to ask, because managing horizontal relationships is another part of management. It complicates the picture because then you have more players with your outside partners. You have your inside partners and your outside partners, so it builds up the portrait. Could you tell me how many horizontal relationships will exist?
Mr. Sohi: Senator Smith, you have identified an issue that we have to tackle. How do we make sure that the different areas where investments are being made are actually working together and connecting together, and how do we communicate that information? We have some ideas that we are exploring, and we will be happy to share that with you and the committee. Maybe next time I come I'll be more prepared to give you those answers. You touched on something that we are keenly aware of here — how everything connects with each other.
The Chair: Sir, thank you very much for coming and speaking with us. If you get any message from what you've gone through tonight with us, it is that we're extremely keen to help move this massive project forward. Someone asked me what we needed to do, and I said in a few words, "We've got to get it done right, from start to finish.''
This is so important for us. We have questions that we're going to continue to ask the rest of the folks who stay with us, such as multiplier effects. Where you're going to get the biggest multiplier effects is going to be from social housing. What's the balance? There are all sorts of issues.
We really appreciate the fact that you took the time to meet with us. If there is anything we can do to assist you, we'd be more than pleased to have an ongoing relationship, even on a day-to-day basis. For us, this is one of the most important projects that this government is moving forward with. It ties into whether there is an economic model that's being pushed by the government. This is the model, the infrastructure.
Mr. Sohi: Thank you so much for having me. It has been an honour to be in front of you.
The Chair: We certainly appreciate your time, sir.
[Translation]
Thank you all for your patience. I am delighted to see that some witnesses are staying with us to the end. We are going to continue with a question period. I hope these discussions will be useful to you. The good news is that we have worked closely with Ms. Laroche and Ms. Boileau for many years and we have an excellent working relationship. I would like to thank you again for being here and for your professional attitude.
[English]
We will start with Senator Marshall.
Senator Marshall: I wanted to talk about one thing in particular, and that's the money for social infrastructure. There's an amount there for early learning and child care, $400 million. What is that? Is that for actual facilities?
Yazmine Laroche, Associate Deputy Minister, Infrastructure Canada: That's a really good question. It is primarily for physical infrastructure. With that said, Infrastructure Canada — getting back to the chair's comments — is not the delivery vehicle for that. That's through our colleagues in the department of ESDC.
Senator Marshall: That was going to be my next question.
Ms. Laroche: So it's not Infrastructure Canada because it's tied to early childhood learning. It's tied to more of that department's mandate.
Senator Marshall: Okay. So there must be other funding that falls under infrastructure that's going to be delivered through other departments, isn't there? There's that one, the early childhood one, but there must be others too.
Ms. Laroche: If you think about the social infrastructure pot, because I think that's the one that has the greatest number of categories, that is being delivered through different mechanisms.
Just picking up on what was in this year's budget, we're talking about phase one infrastructure. Because the intent was also to flow the funds as quickly as possible, wherever possible the government decided to use existing programming. That's why CMHC, with respect to social housing, is the delivery vehicle, because they already have agreements with provinces and territories to deliver it.
Similarly, with respect to some of the cultural infrastructure programs, that will be delivered through the Department of Canadian Heritage, because they already have programs in place. It's much easier to do a top-up to existing programs than it is to go through the whole process of designing a new program, which we are doing at Infrastructure Canada for the public transit component and for the water and wastewater component. Again, if you're trying to flow money quickly, it's always easier to use existing programming.
Senator Marshall: I think it goes back to something that the chair was saying earlier. It seems like the money is almost everywhere. You are talking about a program, and there's money here and there. Not only that, but when you talk about early learning, I think some of the provinces probably provide subsidies. It's really a big program, and there's money flowing from different federal and provincial departments. Who coordinates it all, or is there no coordination or just some coordination?
Ms. Laroche: I would say that that's an area that we're going to have to work on because it's not the way it's been in the past. In the past, it's been very discrete: this department is responsible for these kinds of programs, and they develop relationships with the provinces and territories; and this department over here has a different mandate and different programs, and they develop their own relationships.
It's interesting, as somebody who has been working at Infrastructure Canada, that when we deal with the provinces and territories, we have the same challenge. For some of our programs, we will deal, perhaps, with the Department of Transportation, but for some of our other programs it will be the departments responsible for municipal affairs. So we have the same problem too. I can imagine how complicated it is from the reverse side. We ask provinces, "Could you please just designate one principal contact for us to make it easy?''
Senator Marshall: There are several arms.
Ms. Laroche: It's the same thing coming in to us. Maybe it's because, as our minister said, Infrastructure serves so many different purposes, and we have multiple departments with different areas of responsibility.
Senator Marshall: Transport has been in. They have been talking about contaminated sites. Atomic Energy of Canada Limited came in, and they talked about contaminated sites. I'm looking through infrastructure, environment, contaminated sites. Now I'm looking through yours, Infrastructure, and I see "contaminated sites.'' So what contaminated sites are those? I'm trying to find out now exactly where I saw that. It would be in there somewhere.
Is that something that's delivered to Transport? Page 89 of the budget book talks about $3.4 billion. This is social infrastructure. It's under the social infrastructure. It says: "This funding will also support the cleanup of contaminated sites across the country.'' It seems like everybody is involved in cleaning up contaminated sites. Is that something that's delivered directly by your department, or is this something we have to go and find the department?
Ms. Laroche: We can help you find the department, but it's not us. We can get back to you on that.
Senator Eaton: My question follows on your early learning and childcare. Isn't education a provincial jurisdiction?
Ms. Laroche: Yes, it is.
Senator Eaton: Every province seems to be very particular about their own. Who do you filter the money through federally?
Ms. Laroche: That early childhood learning is being flowed through Minister Duclos' department.
Senator Eaton: Ministry of what?
Ms. Laroche: ESDC is the department whose name is always changing. Employment and Social Development Canada.
Senator Eaton: I know which one you mean. Diane Finley used to be the minister.
Ms. Laroche: Correct. It's their department. I can't speak to the details. I imagine if it's a typical program it flows through an agreement with the provinces and territories, and they determine where the priorities are. The investments would then flow from that department to the provinces.
Senator Eaton: I'm sure you can't comment, but isn't that a strange thing for the federal government to be spending money on, early learning and childcare?
Ms. Laroche: I can't comment on policy decisions that the government has taken. It was a policy priority of this government. It was part of their platform commitment, and so the budget announced what they intended to do. Those are policy decisions.
Senator Eaton: Why would they give you the money and not just give it to Minister Duclos directly?
Ms. Laroche: It is to Minister Duclos. It's not coming through Infrastructure Canada.
The Chair: To follow up on the thought process that we started just a bit earlier on horizontal allocations of money, you could really help us to try to understand what we're doing. You've got a pot of money. There's going to be X number of players who have that pot of money divided amongst them. So that we can actually contribute something that's meaningful, we need to know who your horizontal partners are. If there's $120 billion, how is that pot being allocated amongst your horizontal players, including yourselves?
We also need to know, from the original New Building Canada Fund that started in 2007 and then was renewed in 2013, how much of that money still exists. The minister said there was about $9 billion, but I would be surprised if there is only $9 billion left of whatever it was, because it was 33 and then another shot at 53. It was a substantial amount of money.
Could you help us by listing the horizontal players, who is going to get what of the new pot and then what's left of the old pot so that we can understand where it's going?
In his article of April 18, he said:
. . . to deliver the resources that we are committed to, to fix up the existing set of infrastructure, the rehabilitation, the recapitalization, the modernization and optimization of the existing infrastructure.
I'm not sure that all we talked about was existing infrastructure in the first phase one, because when he talked about phase two, he said phase two is going to be the bigger projects, the more capital-intensive projects, but when does that start? When do you start building the subways? It sounds like there's $3.9 billion that could be going into subways now.
We need to understand the alignment, who the players are and how much they get so that we can actually take that next step.
Senator Eaton: Mr. Chair, what's confusing is on this letterhead we have "Infrastructure Canada,'' and then it says $3.4 billion for social infrastructure, affordable housing and early learning and child care. You said, "Ah, yes, it's here, but the money is really going in through Minister Duclos' ministry.'' Why is it here?
Ms. Laroche: This is just to give you a snapshot of what was in the budget, so what is being addressed through phase one of infrastructure. I totally agree with you. It is confusing, even for us.
Senator Eaton: Why isn't it Minister Duclos' budget, or will it appear in Minister's Duclos' budget?
Ms. Laroche: Yes, the money will show up in his department.
Senator Eaton: So it's the same money?
Ms. Laroche: Yes.
The Chair: What's allocated is going to be his. That's why we need to have the horizontal departments lined up. Infrastructure is going to have the total amount, but it's going to be divided amongst the players, and the players will be the executioners, if I understand correctly. That's why we need your help.
Senator Eaton: It would be interesting to see Environment, for instance, and all of their money and what ministries —
The Chair: We're not going to understand anything until we see where the pots of money are and what's left from the original pot of money so that we can get a true picture.
One of the other questions that we'll be asked as we go forward is about the multiplier effect being one of the major platforms that the government is selling in terms of economic development. We all know that there are different multiplier effects, depending on the type of projects, so one of the questions that we're going to ask is what does social spending deliver.
If you've got X billion in social spending, how much is that going to deliver? How much is this new subway going to deliver? How much are the new roadways going to deliver? How much are the new projects with the Caisse de dépot and some of the big pension players, like the Ontario Teachers' fund, when they get together, how much of those programs are they going to deliver in terms of not only percentage but multipliers so we can actually see what the economic development is going to be?
Senator Eaton: They're not going to do them all.
The Chair: No. Are you going to give us the information?
Ms. Laroche: I'm going to do my best. What I'd like to do, senator, if I may, is we'd like to follow up in writing.
The Chair: Absolutely.
Ms. Laroche: For me to go through the list tonight I think would add to the confusion.
The Chair: This is a written request.
Senator Marshall: Could I summarize to make sure I get the information I'm looking for?
The Chair: Absolutely. Sorry to get so excited, but it is kind of important.
Senator Marshall: It is important.
Contaminated sites. As I was saying, there are some under infrastructure; there were some under Atomic Energy of Canada; there were some under Transport; and there's also some under Environment, the 217 million there. I don't know if there might be some elsewhere, too, but we'd be interested in knowing exactly where it is.
Senator Eaton: And it's the same money.
Senator Marshall: It might not be.
Senator Eaton: You mean you think environment was one pot and then atomic has another?
Senator Marshall: It's possible.
Senator Marshall: I think atomic energy has its own pot. I think. Is my time up for my questions?
The Chair: We're going to have a little bit of time. We're going to keep these folks because the last time these two ladies were with us, they stayed till nine o'clock, and they were so excited at the end of it.
Ms. Laroche: And you hadn't even fed us, and we stayed.
The Chair: One of the things that we did in Internal Economy, because of the Auditor General, was to cut any food that we had. We're just like everybody else. We're starving, too.
[Translation]
Senator Pratte: I am going to come back to the point raised by Senator Smith and other senators, and add it to the point I raised in my previous question to the minister, because it is all somewhat related, in my opinion.
I find it very frustrating. It seems to me that, at some point, we should have access to a giant table that would show us all the expenditures starting with this year, including the previous envelopes that have not yet been spent and the ones that will be spent starting this year, the new funds, by category and by department, and where the money is coming from. Otherwise, it gets too confusing.
In my opinion, in spite of everything that is said about them, some of these expenditures that are now being assigned to "infrastructure'' should be called "expenses now styled as infrastructure,'' because that is really what is happening.
Senator Mockler: The term you are using is a new one.
Senator Eaton: It is part of modernization.
Senator Pratte: It is part of modernization. In my view, a program to combat homelessness is not infrastructure. These are good programs, I agree. The same thing applies to housing subsidies; in my opinion, they are not infrastructure.
[English]
Everything has become an infrastructure program.
[Translation]
Regardless, it creates horrendous confusion, in my opinion. We no longer have any idea of where we stand. I think this situation will end up hurting the government's cause and the cause of people who want the budgets allocated to infrastructure to be spent wisely, because it will give the impression that the government is losing control of what it wants to do.
On the question of the committee's terms of reference, it seems to me — as you said at the outset — to be absolutely essential to have an accurate picture of how these phenomenal sums of money will be spent.
[English]
The Chair: We want to build a war room where we'll have all of this on a wall and put it on a computer, because this is old school. Sorry, I'm part of the baby boomer generation. A strategic war room has the existing situation, the history, the players and who gets what. We think if we were able to do that — I'm not sure if you have that right now, but maybe you do — we could then make a major contribution to try to help you in terms of your execution. One of the challenges that may occur is that the weight of having multiple departments with multiple decision-makers making decisions can affect, as Senator Pratte said — as well as Senator Marshall, Senator Eaton and Senator Neufeld — the effectiveness and the efficiency of your implementation.
We're not trying to say you're not doing it right. That's not what we're out to do. What we're trying to do is say: What can we do from a strategic position that may be able to help you? You have all the people that you need, maybe a few other people who come from a different environment, somebody who has run La Presse, or somebody who has run a major flour milling company and maybe a football league; maybe someone who has been a minister; maybe someone has been an outstanding university professor; maybe somebody who has worked with volunteers for many years in doing a lot of community work. We just want to be able to provide a perspective.
So the question is: Can you help us by giving us who your horizontal players are and how much they have in the pot? Senator Pratte's point is valid because we would hope that you'll be analyzing the returns of the investments that are made. What's important is that you have the balance of economic gain with social gain. The minister was very clear on that.
Ms. Laroche: And environmental gain, if I may.
The Chair: The third pot, the environmental gain.
Ms. Laroche: We are going to do our very best. I think it's a bit of a heroic task — I'll be very candid with you — because it is like a hydra-headed beast. There are so many tentacles and so many different departments.
[Translation]
To come back to what Senator Pratte was saying, it depends on how infrastructure is described, and when we talk about public infrastructure, it includes hospitals and universities. We are not involved in funding hospitals, so I agree completely. I think we have a big challenge ahead of us.
[English]
I find the analogy of a war room a very interesting one to be using. We will do our very best, Mr. Chair, to help you. We will reach out to our colleagues to see what we can do. I don't think we have ever done a full-cale map of everything that could possibly be considered infrastructure and mapped it right across the federal government.
The Chair: Just so we understand the starting point, which I think is a reasonable one, what we are asking for is if you have 12 departments who have part of the pie, you can divide the pie amongst the 12. We're not asking you to determine what qualifies as infrastructure versus social spending, because you may have $3 billion that you put into what you call "social infrastructure'' in two or three departments. All we need to know who is who are the players and how much do they get.
Ms. Laroche: Absolutely.
The Chair: Otherwise you're stretching yourself to a point where you're saying, "Well, we're making value judgments on something that is unfolding in front of our eyes.''
Ms. Laroche: We took a first stab at that right after the federal budget of this year, and we actually went through the budget books to try and identify everything that was infrastructure. I think that would be a good starting point. That's for the new money.
We can go back as well. You'll have to let us know how far back you want us to go, because different departments have accelerated or gotten out of infrastructure funding over the last few years. Social housing is a really good example. There have not been federal investments in social housing for a number of years. It's just starting up again now in this budget.
The Chair: Senator Pratte, do you have a suggestion?
Senator Pratte: How about money that is still to be spent?
The Chair: And who is going to spend it. As an example, if you had 33 billion and 53 billion, you had 90 or $100 billion, and you had $50 billion or $40 billion that's not spent, but it was going to be allocated to certain departments, just reallocate the money to the departments that are going to spend that money. I think that's going to be the simplest way of doing it. Otherwise, you're guessing. You would have known at the time — or somebody would have known at the at the time, and I'm sure you still have employees left that were part of that program — where the money was going in terms of that horizontal mix.
If you can give us what's left in the pot and tell us where it was supposed to go, then boom, and we go from there.
Ms. Laroche: The funding from 2007 is primarily Infrastructure Canada. That will be easy to do, as is 2013-14. Again, that's primarily Infrastructure Canada. This budget has introduced more infrastructure spending across more categories, and that's where you're getting into the horizontality. If you want to focus on the programs from 2007 and 2014, that's relatively easy for us to do.
The Chair: Perfect. That addresses Senator Pratte's question of this flow of money that is being put into various areas and the new definitions of what infrastructure spending is. There may be a new measurement of money going into different areas of what infrastructure is. It's going to go to another question we're going to ask about prioritizing and, in our war room, asking, "Where are your national projects?'' We know the Champlain Bridge is one. Right?
Ms. Laroche: Yes.
The Chair: Where are your other key projects? Then we get into your provincial and major city projects and then, as Senator Neufeld said, we ask about the smaller cities of 30,000 to 40,000. What are we going to do to build Fort McMurray up? There's going to be some money that maybe can be put into their hands to rebuild that community where we've lost 1,600 homes in the last 24 to 48 hours.
Senator Eaton: That would give us templates, too, for other ministries when they come before us: Aboriginal, Defence.
The Chair: That's what I'm hoping.
Senator Eaton: We have pockets. What you will provide is a template. We can ask other ministries to come back to us.
Ms. Laroche: We'll give you what we have, and then you can tell us if you need more and we can figure it out from there. We're happy to help.
Senator Eaton: Thank you.
[Translation]
Ms. Laroche: Can I come back to Senator Pratte's question, just to explain a little about what we call —
[English]
I think we've shared this with the committee before. This is a chart that shows all of our programs since 2002 at Infrastructure Canada. We're happy to provide extra copies for the senators. It does give you a sense of the sheer complexity in the number of programs, in one department, to deal with infrastructure. I think you're going to have a very colourful and interesting war room by the time you're done.
The Chair: How up to date is that?
Ms. Laroche: This is up-to-date for us. This includes our branding —
The Chair: Does it show you where the residual or the balance is?
Ms. Laroche: It shows you the projected flow of the programs as they were created. As you know, when the infrastructure programs are announced, they are usually expected to flow over eight to ten years, and sometimes it goes a little bit further because there are always unanticipated delays when you're dealing with infrastructure.
It gives you a sense of the flow of these programs and when we're expecting them to close. We can also get back to you with the details on the funding that remains.
The Chair: That would be outstanding.
Senator Eaton: Can you show us re-profiling too? That's a new word we've learnt on this committee.
Ms. Laroche: We would be happy to. It might get a bit messy, but we'll do our best.
The Chair: One of our retired senators — Senator Irving Gerstein — asked a question. We were taught about reprofiling with tanks and ships, and how, suddenly, we had people saying, "We had to reprofile X billion dollars because we're not going to build those for another 10 years.'' We didn't understand what reprofiling was, and then we got into frozen, and we were all very cold when we felt that.
Sorry, let's move on.
Senator Marshall: I'd like to go back to the housing. Your infrastructure programs are being delivered through the provinces and municipalities. Is social housing delivered through the housing corporations or housing agencies in each of the respected provinces and territories? Or is it something delivered directly by the federal government?
Ms. Laroche: No, it's delivered in partnership. I shouldn't be speaking to this because it's really not ours. The Canadian Mortgage and Housing Corporation is the delivery agent, and they have partnership agreements across the country. In some cases it would be the housing authorities, but in others it might be the province.
Senator Marshall: I understand.
I want to talk about the infrastructure bank that doesn't exist yet. My understanding is the municipalities can use their gas tax for their 30 or 50 per cent, or whatever, but where else can they go for their portion of funding? Does the department provide guarantees?
Ms. Laroche: We do not currently have a vehicle to provide loan guarantees, no.
Senator Marshall: You don't have the infrastructure bank, and you don't give guarantees, so they have to finance their 30 or 50 per cent?
Ms. Laroche: They'll do that using their existing sources of revenue. It's most often property taxes. But also, a number of provinces — I think it's seven right now — have instituted their own municipal borrowing authorities, where the province also makes available its credit rating to offer support.
There are different funding vehicles that are available. Of course, as you pointed out, senator, because every municipality knows what they're going to get from the gas tax fund, they can bank it and borrow against it because it's a known source of long-term revenue.
Senator Marshall: Federal government loan guarantees have increased significantly in recent years. I was wondering if it was because they are guaranteeing the 30 per cent. It's not that?
Ms. Laroche: It's not that. It's a really good question in terms of one of the things that we're looking at, because the government's commitment to look at a Canadian infrastructure bank is exactly that: What other sources of revenue are needed? What other models for financing would help to build more and better infrastructure and bring more private sector money? That's part of the phase two discussions that are starting to happen now.
Senator Marshall: The only concern I would have is a lot of the municipalities are already significantly in debt, so to have an infrastructure bank is just adding to the problem.
Ms. Laroche: That's been raised, senator, by some municipalities as well.
The Chair: Are there any other questions?
If we're going to summarize where we are in terms of our discussion, I'd like to hear from our witnesses. Where do you think we are with our discussion, and where can you help us?
Ms. Laroche: I have a couple of suggestions. One of the things is that — and I think the minister mentioned this in his opening comments — we would be happy to organize some more technical briefings for you. We could answer in greater detail questions that you might have about infrastructure and about the evolution of the federal role, for example, in terms of our funding of public infrastructure. We'd be delighted to have our officials come back if you want a less formal, more technical briefing. We'd be happy to do that.
We'll provide you with the information that we can to address some of the questions that you've raised with respect to the 2007 and 2014 infrastructure programs. We'll try and get a little bit more into about how the reprofiling has worked over the last few years as well, to give you a better sense of that, and also to start to try and enumerate for you all of the different departments we work with.
The Chair: That would be very helpful. We think that if we had a war room where we could put all of that up on a board and see it and understand the complexity of it, then that would be a hell of a tool, if you folks don't necessarily have all of that. I'm not saying we're the brightest people in the world, but it would seem logical from a business perspective. That knowledge could really enhance your ability to prioritize and focus on areas, and maybe reprofile at a certain point in time when you see how your results are coming in.
You can set your measurements up: in social housing, I want this type of return; What's the multiplier effect for a major bridge? What's the multiplier effect if we get the Caisse in and we get the Teachers in doing a major project in Ontario with the subways? Then you're able to track the results as you go forward. Maybe you already have it. You were kind of looking at me, shaking your head. Have you already started to do this type of thing?
Mr. Fortin: I will start tonight, senator.
The Chair: We will follow up with you. I think some technical debriefings would be most appreciated. We need to know what your availability is and try to get our group together in terms of our availability.
Colleagues, are you satisfied with what we've done tonight?
Senator Eaton: It's been very interesting.
The Chair: Good. Well, I thank you. We will follow up with you through our clerk. Any time you want to have contact with any of us, please feel free. We will follow up formally through the channels so that we respect the channels of authority. We thank you very much for coming.
(The committee continued in camera.)