Federal Budget Benefits Municipalities

A couple of days ago, Finance Minister Jim Flaherty released his third budget. This is something unheard of for a minority government being able to have this many budgets without being defeated. In many cases, they’re doing a good job and while most Canadians don’t want an election, they seem comfortable with our MP’s in this minority situation.

Some of the big highlights for towns and cities are as follows:

• Strengthening Public Transit

  Public transit plays an important role in easing traffic congestion in urban areas and contributing to cleaner air and lower greenhouse gas emissions. In Budget 2006, the Government set aside $1.3 billion in support of public transit infrastructure and introduced a new tax credit for public transit passes.

  Budget 2008 sets aside up to $500 million in 2007–08 to be paid into a third-party trust, allocated on a provincial-territorial per capita basis, for public transit infrastructure. Funding will be paid into the trust, once legislation has been passed, for only those beneficiaries that have made public commitments before March 31, 2008 to undertake investments in public transit. The beneficiaries of the trust will have the flexibility to draw down the funding as they require over the next two years. They are encouraged to report publicly on the expenditures financed and outcomes achieved.

  The trust will be used for specific projects of capital infrastructure such as rapid transit, rail, transit buses, and high occupancy vehicle and bicycle lanes.

This means more federal money will be available to municipalities to invest in public transit improvements. What the GTA desperately needs is a seemless transit system that will allow a Milton resident who works in Brampton or Hamilton to be able to take a bus from here to there with minimal difficulty. As it stands right now, that person would have to drive.

• Permanent Gas Tax Fund

  The Government recognizes the need for long-term funding for infrastructure to help drive economic growth and productivity, to achieve our environmental goals, and to build strong, competitive communities.

  To this end, in Budget 2007 the Government announced the historic seven-year $33-billion Building Canada Plan. More than half of this investment under the plan will flow to municipalities. For example, municipalities can access the $8.8-billion Building Canada Fund and benefit from the increase from 57.14 per cent to 100 per cent in the rebate of the Goods and Services Tax they pay.

  The largest component of the Building Canada plan is the Gas Tax Fund, which provides municipalities with funding for priorities such as public transit, water and wastewater infrastructure, and local roads. Under the plan, the Gas Tax Fund will grow and reach $2 billion by 2009–10 and stay at that level through 2013–14.

  In response to ongoing requests for stable, long-term funding, the Government announces that the Gas Tax Fund will be extended at $2 billion per year beyond 2013–14 and become a permanent measure. This will allow all municipalities, both large and small, to better plan and finance their long-term infrastructure needs. A permanent $2-billion-per-year Gas Tax Fund will help put in place the world-class infrastructure Canada needs.

With Milton being the fastest growing municipality in Canada, this should benefit us as we wait patiently (or impatiently as it may be) for our roads to be developed to accommodate its growing numbers. The town of Milton is now over 70,000 and counting and we need the Region of Halton to keep up with the growth and ensure minimal delays while widening roads in the area like this summers plan for Derry Road to Trafalgar. The Region of Halton and the Town of Milton cannot keep relying on Mattamy Homes to bail them out.

These are just a couple of items that I pulled from the budget. All in all, it is a pretty sound plan for the coming years. Using a good portion of the surplus to pay down the national debt, make these kinds of investments and reductions in taxes like the GST cut, it looks like Canada can weather some of the impact of the US economy with minimal effects.

Thanks for reading and feel free to comment here or send me an email at mike@mikecluett.ca