The document discusses infrastructure in Canada, covering the basics, funding mechanisms like gas tax and the Build Canada Fund, and capital budgeting for projects. It highlights the importance of infrastructure for economic development and the challenges municipalities face, including funding delays and the need for agreements with the federal government. Additionally, it outlines strategies for maximizing funding and the current status of infrastructure agreements across provinces.

1. Government Policies –
Infrastructure - Canada
By: Paul Young, CPA, CGA

2. Agenda
• What is infrastructure
• Images of Infrastructure
• How is infrastructure funding?
• Infrastructure Funding – Gas Tax
• Infrastructure Funding – Build Canada Fund
• Analyzing capital budgeting decisions
• How to provinces qualified for federal infrastructure funding
• Infrastructure gaps
• Trends
• Issues facing Infrastructure Funding

3. What is infrastructure
• is the basic physical systems of a business or nation; transportation,
communication, sewage, water and electric systems are all examples of
infrastructure. These systems tend to be high-cost investments; however,
they are vital to a country's economic development and prosperity. Projects
related to infrastructure improvements may be funded publicly, privately or
through public-private partnerships. Source -
http://www.investopedia.com/terms/i/infrastructure.asp

4. Images of Infrastructure

5. How is infrastructure funded
• 100% by public sector
• P3 (Private Public Partner Ship)
• Private Sector

6. Infrastructure Funding – Gas Tax Funding
the federal GTF provides $2 billion annually, and is legislated as a
permanent source of federal infrastructure funding for municipalities. As
announced in Economic Action Plan 2013, the renewed federal GTF is
being indexed at two per cent per year, to be applied in $100 million
increments, which means that it will grow by $1.8 billion over the next
decade.
Funding is provided up front, twice-a-year, to provinces and territories,
who in turn flow this funding to their municipalities to support local
infrastructure priorities. Municipalities can pool, bank and borrow against
this funding, providing significant financial flexibility.
Communities are able to use the renewed GTF towards a wide range of
projects, which means they have more flexibility than ever in the types of
projects they fund. Communities are able to use the federal GTF towards
Source: Government of Canada

7. Infrastructure Funding – Build Canada Fund

8. How are Capital evaluated
• In Finance the following things are undertaken when it comes to capital budgeting
• Value of the project – Cash Outlay
• Inflows
• Revenue – Tolls/Fees
• GDP Growth/Retail Sales (i.e. consumer spending, exports)
• Operational savings
• Maintenance costs
• Opportunity Costs

9. How do Provinces qualified for funding?
• The New Building Canada Fund was officially launched on March 28, 2014. The
Minister of Infrastructure, Communities, and Intergovernmental Affairs has also
provided provinces and territories with the information required to start identifying
priority projects and apply for funding — including detailed program guides, which
are available below.
• The National Infrastructure Component and the Provincial-Territorial
Infrastructure Component have different processes.
• Source - http://www.infrastructure.gc.ca/plan/apply-application-eng.html

10. What is infrastructure gap?

11. Government and infrastructure gap

12. Spending on Infrastructure

13. Municipal government revenue

14. Issues facing municipalities
• Arbitration
• Pension Funding
• Lower development fees (scarcity of land)
• Downloading of services (provincial)

15. Example / City of Mississauga

16. Analysis of Infrastructure

17. How do you maximize infrastructure funding
• Involving Pensions Funds as part of investing in profitable infrastructure
projects (Transits and Toll Roads)
• Fixing the arbitration process as well as costing issues (OPP)
• Open and transparent procurement process
• More P3
• Speeding up environmental assessment process for infrastructure projects

18. Government / Comments
• Quotes “he federal government has yet to sign infrastructure funding agreements with five provinces and two
territories—agreements that are a key step before any federal cash can flow to projects underway across the country.
Ontario, Saskatchewan, Alberta, Nova Scotia, New Brunswick, Nunavut and Northwest Territories have yet to sign
funding deals. Federal officials had expected to have agreements signed before the midway point of the summer
construction season, but it has taken larger provinces longer than first thought to finalize the list of projects eligible for
federal cash and negotiate the fine print of the plan, including timelines for when projects need to be completed. For
Saskatchewan, the deadline of finishing new construction or expansion projects by March 2018 has raised concerns that
municipalities may rush the due diligence needed to prepare funding proposals, or may not be able to complete projects
on time, said Jay Teneycke, a spokesman for Saskatchewan Government Relations Minister Jim Reiter. The delays in
signing deals hasn’t had a major effect on the pace of projects in provinces like Alberta, but municipal officials say there is
anecdotal evidence of delays for some work while cities wait to make sure that their projects will land federal cash. Federal
officials expect deals to be done the end of the month. Six agreements have been signed so far, including with British
Columbia and Quebec, two of the most lucrative.
• Source http://www.canadianmanufacturing.com/regulation/billions-dollars-infrastructure-spending-yet-start-flowing-
173930/

19. Additional information
• For additional information contact:
• Paul Young, CPA, CGA
• Paul_Young_CGA@Hotmail.com