Federal Government Offers Cities Money They Were Going to Get Anyway

In his daily press briefing from Rideau Cottage Monday morning, Prime Minister Justin Trudeau announced that Canada’s municipalities will be getting $2.2 billion in infrastructure money this month in a one-time payment. Cities, and the organizations that represent them, have been begging the Federal government for financial help, but this is probably not what they were thinking of exactly.

“From coast to coast to coast, Canadians are feeling the economic impacts of COVID-19, while they do what they can to protect the health and safety of their families and communities,” said Trudeau in a statement. “That is why we are taking action to restart the economy, get Canadians back to work, and come out of this stronger. This funding will help communities address their immediate needs, while also planning the infrastructure they need for the future.”

While this may be the case, the money is actually this year’s infrastructure funding from the Federal gas tax. Usually submitted to provinces in two increments, the entire $2.2 billion in funding offered in today’s announcement, is the same amount the government posted in the gas tax allocation table for the 2020/21 fiscal year.

As pointed out by Guelph Mayor Cam Guthrie, who is also the chair of the Large Urban Mayors’ Caucus of Ontario, the money, while appreciated, does nothing to help the short-term operating deficits that cities are facing.

“The advance on gas tax funding announced today by the Federal government is a first step that will help some municipalities in the short-term, but it does nothing to address our operating loses,” Guthrie said in a statement. “This announcement falls short of a meaningful, sustainable plan to support COVID-19 recovery in our cities.”

In April, the Federation of Canadian Municipalities put out a call for $10 billion in emergency funding for Canadian cities with $2.5 billion specifically earmarked to help transit services.

“Municipalities are on the front lines of this pandemic—and we still face $10-15 billion in non-recoverable losses,” said Bill Karsten, the President of the Federation of Canadian Municipalities in a statement. “That’s why we have appealed for emergency operating funding—to keep frontline services going strong, and to be ready to drive Canada’s recovery.

“This modest, preliminary measure may help some municipalities with immediate liquidity issues. But to be clear: this is not new money. This money has already been accounted for in municipal budgets and does not address our crisis of non-recoverable losses—or the stark choices cities and communities now face,” Karsten added.

While municipalities do have to spend the money on infrastructure, the Federal government is, at least, offering cities the whole allotment of their share of the gas tax revenue in one transfer, while offering flexibility in the way those funds can be spent. The City of Guelph received nearly $8 million from the Federal gas tax in last year’s allocation.

Meanwhile, Guelph is predicting a potential deficit at the end of the year of between $4 and $8 million. Infrastructure spending is part of the City’s plan for economic recovery, and staff are currently vetting projects for appropriate size, scale, budget, and the ability of workers to be safe in the midst of the pandemic.

The next COVID-19 update meeting of Guelph city council is on June 17 at 2 pm.

One thought on “Federal Government Offers Cities Money They Were Going to Get Anyway

  1. Often people complain about government spending, but even business should not complain when money is being spent on the three crucial parts of society, becuase they directly benefit!

    Education: Workers that are smarter work smarter you think google hires high school drop outs. No they do not and they are a billion dollar company. education benefits business big time! Most business want workers ready to go in any job. This is not easy or free!

    Healthcare: if workers get sick and are then properly cared for by a effective healthcare system workers can return to work quicker. Our current situation shows how bsuiness is effected by a poor healthcare system.
    THIS IN NO WAY SAYS ANYTHING ABOUT NURSES OR DOCTORS They work hard but the system has failed them!

    Infrastructure: Ironically Canada is one of the few countries (inlcuing the G6) where our infrastructure SUCKS. One need one take a trip across the Trans Canada Goat Trail to really know how little our governments invests in infrastructure! In the U.S. they have the Interstate highway system and continue to expand it. We don’t even have 1 four lane highway across the country. Roads allow business to prosper. one only needs to look at business in the GTA area who bitch at their losses because of pure roads and highways! It takes far too long to get product to customers why because our roads suck!
    By the way if you think spending on infrastructure and running a deficit is stupid check out a leading Global economist Mark Blyth. He predicated Trump – Ugh!


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