A Critical Conversation: Building Municipal Infrastructure - - PowerPoint PPT Presentation

A Critical Conversation: “Building Municipal Infrastructure”

Thursday, February 25th 2010 Carleton University, Ottawa, Ontario

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Welcome!

CURE conducts multi-disciplinary research on:

• Community governance
• Municipal government
• Citizen engagement
• Infrastructure
• Multi-level governance

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Introduction

“There is a need to foster a stronger, more multi-disciplinary community of researchers interested in infrastructure and communities issues and willing and able to generate policy-relevant research”

INFC Performance Report 2005-06, p.12

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The Big Picture

Situating Our Research

The Big Picture:

• Place matters (again!)
• Multi–level governance

 New deal-GTF/urban and infrastructure renewal (ISF)  Integrated Community Sustainability Plans (ICSPs)

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• Democratic renewal
• Responsive, enabling

government

Influencing Local Outcomes*

International Agencies & Agreements Federal, Provincial, Municipal Government Sustainable Cities & Communities

*Source: Tindal & Tindal 2008, p.166

Multi-Level Governance

• Federal/ provincial transfers:

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Unpredictable Strategic investments or redistributive politics? Who decides priorities? Who‟s accountable?

Pressures for Urban Renewal

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 Globalization, immigration, and urbanization  Downloaded responsibility for public services  Declining investment in public infrastructure

% of GDP

Source: Department of Finance Canada

 Crumbling Infrastructure

Average Age of Asset Types (Age in Years)

Source: Statistics Canada. Investment & Capital Stock Division

Local Government's Fiscal Crisis

• Current tri-level arrangements

for managing the cities are increasingly seen as anachronistic and dysfunctional, a product of „hourglass federalism‟

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50 42 8

Government's Share of Every Tax Dollar (in cents) Federal Provincial Municipal Federal Government with resources

Provinces

Municipalities with many problems and few resources

• In 2007, the fiscal

infrastructure deficit was estimated at $123 billion, and is believe that is growing by over $2 billion annually

Municipalities Fiscally Challenged

Federal (%) Provincial (%) Municipal (%) Share of Total Taxes Raised 50 42 8 Share of assets held 10 40 50 Expenditure per capita 1988-2005 +0.9 +0.6

• 0.9

Revenue per capita 1988-2005

• 0.2

+0.8 +0.6

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*Source: Tindal & Tindal 2008

...and Investment

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Sustainable Construction...

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Bruntland...22 years ago

...local governments have not been given the political power, decision making capacity, and access to revenues needed to carry out their functions. This leads to frustration, to continuing criticism of local governments for insufficient and ineffective services, and to a downward spiral of weakness feeding on frustration …To become key agents

• f

development, city governments need enhanced political, institutional, and financial capacity, notably access to more of the wealth generated in the city. Only in this way can cities adapt and deploy some of the vast array of tools available to address urban problems.

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Agenda 21…. „local matters‟

• Because so many of the problems and solutions being

addressed by Agenda 21 have their roots in local activities, the participation and cooperation of local authorities will be a determining factor in fulfilling its

• bjectives. Local authorities construct, operate and

maintain economic, social and environmental infrastructure, oversee planning processes, establish local environmental policies and regulations, and assist in implementing national and subnational environmental

• policies. As the level of governance closest to the

people, they play a vital role in educating, mobilizing and responding to the public to promote sustainable development …Each local authority should enter into a dialogue with its citizens, local organizations, and private enterprises and adopt a local Agenda 21.

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• Constitutional amendment
• Creating city charters
• Governance reform
• Public funding of councilors

Options for Municipal Reform

• Increased fiscal space for local taxes
• Model federal grants on GTF not ISF
• Change incentives that produce sprawl
• Meaningful „upfront‟ public engagement
• Creation of „urban agenda‟ at the national level

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The Gas Tax Fund (GTF)

A Conditional Non-matching Close-ended Transfer

Erika Adams

Intergovernmental Fiscal Transfers

• Transfers of monetary assets to another level of

government for which the government making the transfer does not:

• receive any goods or services directly in return;
• expect to be repaid in the future; or
• expect a direct financial return.

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Transfers Conditional Matching Open-Ended Close-Ended Non-Matching Unconditional

Transfers in Canada

• Historically a dominant feature of the

highly decentralized Canadian fiscal framework.

• In 2006-2007 transfers amounted to

$125 billion dollars $1.8 billion was allocated to Infrastructure Canada $590 million represented the Gas Tax Fund.

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The Policy Problem

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• Mid 1990s
• Local Government‟s Fiscal Crisis
• Pressures for Urban Renewal

The Policy Community

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Creation of a very strong and vocal policy community The Policy Problem Elimination of federal deficits Emergence of large surpluses

Which started to exert considerable pressure on the federal government for new recognition, respect, and resources

Promising government actions

• Budget 2000 – $2 billion Canada Infrastructure Fund.
• Opportunity for All, the 2000 Liberal party platform -

recognized the challenges facing cities.

• Budget 2001 - $2 billion Strategic Infrastructure Fund.
• Caucus Task Force on Urban Issues, chaired by Judy Sgro.
• 2002, Martin, as Finance Minister, talks about the New Deal.

Implementation delayed by political uncertainty

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BUT

Urban Policy back on the Agenda

• In February 2004, the

Speech from the Throne introduced the New Deal for Cities and Communities

• In July, Minister

Godfrey was appointed Minister of State for Infrastructure and Communities.

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Infrastructure Policy Problem New Ministry New Urban Policy Framework

Requirements of the Solution:

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• Avoid fights
• ver the

issue of jurisdiction

• Discourage

them from clawing back their current level of support

Provinces

• Ensuring that they

received the funds and were able to pool, bank, and borrow against the funding

• Meet the needs of any

size municipality by allowing them to choose the projects

• Have a strong

accountability framework

Municipalities

• Address the

fiscal gap

• Responsive

to the New Deal‟s political imperatives

• Further its

policy goals

Federal G.

Federal‟s Government Response: The Gas Tax Transfer

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Conditional

• Designed to incentivize municipalities to invest in

environmentally sustainable infrastructure investments

• Conditionality clause: list of eligible projects and

expenditures Non- Matching

• Understanding the fiscal position of the municipalities

the government chose not to require a matching contribution. Close-ended

• When first announced the GTF was a $5 billion program

delivered over 5 years.

A Hybrid Transfer

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Contributions

Complex Accountability Framework, i.e. an annual expenditure report, an

• utcomes report, and an

audit report

Grants

Funding given up-front Federal government not involved in the selection of projects

• The GTF disburses funds based on a

formula, and it has characteristics of:

A Transfer with Ambitions Objectives

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An overarching vision of where Canadian cities and communities of all sizes should be in 30 years Transfer Goals: Improvement of the quality, efficiency, effectiveness and sustainability of environmental municipal infrastructure Transfer Expected Outcomes: Cleaner air, cleaner water and the reduction of green house gas emissions Elements of the New Deal The Gas Tax Fund Money Using an urban lens Viable, politically appealing, option to address the need for stable, predictable, long-term funding for municipalities The focus on hard infrastructure reflects the needs expressed by municipal leaders Build new relationships with provinces, municipalities & territories Created purposeful partnerships and emphasized flexibility based on the belief that municipalities know what is better for them and will use the money accordingly

An Allocation-driven, Predictable, Long-term Transfer

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• In 2005, the government started sharing with

municipalities (based on their population) 1.5 ct. per litre, or $600 million in revenues.

• For 2009-2010, this amount increased to 5 cents

per litre, or $2 billion annually

• In 2007, the Harper Conservatives, extended the

funding from 2010 to 2014 at $2 billion per year.

• Then, the 2008 Budget announced that the GTF

would be extended at $2 billion per year beyond 2014 becoming a permanent measure

A Precedent Setting Transfer?

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• This approach involves negotiating contracts with the provinces

individually to fund a program of mutual interest.

• This opens the possibility that each one could be substantially

different in order to meet specific needs

The modified contribution agreement model may prove an attractive option for future federal- provincial fiscal arrangements

• Some evidence of this is:
• The fact that Toronto is a direct signatory
• The involvement of AMO and UBCM as administrators
• The successful pre-deal consultations between Minister

Godfrey, city mayors, and other and municipal officials.

Some believe this initiative has established a basis for future direct relationships between the federal government and municipalities

A Precedent Setting Transfer?

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• In BC, UBCM is in charge of disbursing the funds, and in the

case of Ontario is AMO.

• These agencies are not NGOs in the usual sense because they

are associations of municipal governments, and allowing them to have this central delivery role is an interesting development.

Use of non-governmental organizations as delivery vehicles for the distribution of funds and the accountability for the use of those funds

Why does it matter?

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The design and implementation of intergovernmental transfer payments, as Shah has argued, create incentives that can have “strong implications for national, regional, and local fiscal management; macroeconomic stability; distributional equity; allocative efficiency; and public services delivery.”1

1 Shah, A. (2006, October). A Practitioner‟s Guide to Intergovernmental Fiscal Transfers. World Bank Policy Research Working Paper 4039 .

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The Gas Tax Fund

Our Research Project

Map of Transfers of Federal Gas Tax

UBCM AMO

Agreements: Between Canada & the Province or Territory Between Canada, British Columbia & UBCM Between Canada, Ontario, AMO & the City of Toronto

Our Research

• Conducted over the past three years
• Focused on:

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Strategic Capacity Administration Accountability Framework Communications Governance

Methodology

Province Municipality Number of interviewees Ontario Ottawa 7 Toronto 10 British Columbia Vancouver 4 Kelowna 2 Victoria 1 Alberta Calgary 12

• Ft. McMurray

4 Edmonton 4 Nova Scotia Halifax 5 Quebec Gatineau

• Montreal
• 34

35

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Our Case Studies

The Findings

Tamara Krawchenko

Allocation of Funds 2005-2010

Allocation of Funds, percentage out of total for years 2005-2010

12.7% 9.5% 3.0% 3.3% 37.3% 23.0% 2.3% 2.9% 0.8% 1.3% 0.8% 0.8% 0.8% 1.6%

British Columbia Alberta Saskatchewan Manitoba Ontario Québec New Brunswick Nova Scotia Prince Edward Island Newfoundland & Labrador Yukon Northwest Territories Nunavut First Nations

QB

BC

ON AB

British Columbia

• Partnership of GOC, Province, UBCM and

Municipalities

• UBCM administers the program
• Three delivery mechanisms:

 Community Works (CWF), Strategic Priorities (SPF), and Innovations (IF)

• Municipalities divided into three tiers

Applicable Area of BC CWF SPF Tier 1 All areas of British Columbia except those areas in Tier 2 and Tier 3 75% 25% Tier 2* Regional District (RD) of Okanagan-Similkameen, RD of Central Okanagan, RD of North Okanagan, Capital RD, Cowichan Valley RD, RD of Nanaimo, Fraser Valley RD, Squamish Lillooet RD. 50% 50% Tier 3 Greater Vancouver Regional District (GVRD)

• 100%

Vancouver Kelowna

“Translink can‟t meet demand; we are so overcapacity that we‟re struggling. The money allows us to start getting the services out immediately, and the GTF means that we do not have to jump through hoops anymore to get the money. It takes 2 years to order a bus, so this money allows us to plan in advance, and to take full advantage of large orders to get a better price. The stability of the funding is absolutely critical

(GT-Interviewee 37, 2008, Vancouver).”

“The sustainability movement in BC has caught on all by itself”

(GT-Interviewee 35, 2008).

“The big thing is to keep [the GTF] in place, keep it going; now is not the time to pull back”

(GT-Interviewee 37, 2008, Vancouver).

Ribbon-cutting ceremonies, are just “background noise” for the tax payers

(GT-Interviewee 35, 2008)

“The management committee overrules the UBCM‟s staff recommendations two or three percent of the time, but in most cases their analysis is very appropriate” (GT-Interviewee 35, 2008).

Alberta

• Funds allocated to municipalities through the

Ministry of Infrastructure and Transportation, without administrative or overhead charges

• AB receives $476.9 million over the 2005-2010

period.

Calgary

• Ft. McMurray

“Here it‟s a „hand off‟ approach”

(GT-Interviewee 24, 2008, Provincial).

“The federal government is a partner in terms

• f infrastructure requirements because of

their collection of gas tax and in terms of the income tax - I think they have a responsibility

• f reinvesting that tax”

(GT-Interviewee 20, 2008, Municipal).

“We don‟t treat the federal government as being a major player at all [with regards to infrastructure funding]. Neither the process nor the commitment to get money – we are having to front end a lot of costs which impacts our cash flow and it impacts and delays a lot of

• ur projects; it affects

project and processes”

(GT-Interviewee 28, 2008, Municipal).

“[The ineligible costs] become really challenging when we can‟t contract third parties to do the work. And using the money to buy land would be helpful as well – and this is a long-standing condition that has not been addressed by the federal government or the province”

(GT-Interviewee 18, 2008).

“Municipalities are front and center in terms of identifying priorities and determining how the money is spent”

(GT-Interviewee 22, 2008, Provincial).

Ontario

• Toronto signed bilateral agreement with

federal government

• Funds for all other Ontario municipalities

administered through AMO

• GOC contributes $1,865.50 million over the
• riginal 5 years of funding

Toronto Ottawa

Toronto‟s relationship with GOC “night and day now compared to what it was” and “getting exponentially better with time”

(GT-Interviewee 02, 2009)

The process is “as smooth as anything we have seen with any of the other programs,” especially when compared to the “bureaucratic nature of the Building Canada Fund which always holds things up”

(GT-Interviewee 02, 2009)

“Equity is not equal when you are figuring out how to address funding in municipalities; a set of conditions that works for Toronto will not work for Markham” (GT-Interviewee 08, 2009)

“It would not really make sense to ask municipalities to go and undertake an entirely separate exercise for sustainability planning”

(GT-Interviewee 16, 2009)

“If you want our big cities to be competitive you have got to get a decent transit system, especially in the largest cities in Canada that represent 11% of the country‟s GDP

(GT-Interviewee 02, 2009)

Nova Scotia

• GOC contributes $145.2 million over the 2005-2010
• Administration overseen through the Canada-Nova

Scotia Infrastructure Secretariat

• Policy support by Gas Tax Oversight Partnership

Committee

• Funds allocated basis of formula recommended by

the UNSM to the Minister of Service Nova Scotia and Municipal Relations

• HRM receives 42-44% of the Gas Tax funding,

depending year

Halifax

“We are positioned better than any other municipality [to meet sustainability goals]”

(GT-Interviewee 30, 2009, Municipal).

“On a go forward basis, if we design compact transit friendly communities, financially, there are lower operating costs and you can save capital expenditures related to widening of different corridors. But this requires initial investment in transit and central pipe services. The Gas Tax came along and it fit really well with these priorities”

(GT-Interviewee 30, 2009, Municipal).

“I see [the GTF planning requirements] as a very positive thing.”

(GT-Interviewee 30, 2009).

“It would be better to have a funding commitment that matched the ICPS time frames, or the latest amendments around water and wastewater. So, better information would be provided to enable long term planning

(GT-Interviewee 32, 2009).

As the CNSIP, MRIF and transit agreements expire, “the GTF will become

• ur only sustainable

funding source”

(GT-Interviewee 32, 2009).

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Conclusions

Issues To Reflect on

Funding Options

External Revenue Sources

New Federal/ Provincial Transfers Borrowing Existing Federal/ Provincial Transfers

Internal Revenue Sources

New Fiscal Instruments (e.g. new taxing powers) Existing Fiscal Instruments (e.g. User Fees, General Operating Revenue, Property Taxes) 51 Available Resources (in the case of transfers) Laws/ Regulations Accountability/ Transparency Municipality's size, economic standing Economic Efficiency Things to Consider

Legitimising the Process

Community Engagement

Promote Sustainability Promote Capacity Building Enhance Public Participation

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Federal requirement for the development

• f ICSPs by

municipalities City of Ottawa‟s Neighbourhood Planning Initiative

Examples

Two Fundamental Questions

• 1. What is the degree of local autonomy

that the GTF extends to municipalities?

• 2. What are the opportunities that the GTF

provides for citizen participation?

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Degree of Local Autonomy Opportunities for Participation Legitimacy of the program

Panel 1- Discussion:

The Gas Tax Program - Implications

• f the Findings for Federal Funding of

Municipal Infrastructure

• Moderator: Susan Phillips
• Speakers:
• Robert Hilton, Carleton University
• Christopher Leo, University of Winnipeg
• Michael Buda, Federation of Canadian Municipalities
• Claude Blanchette, Federal Government of Canada

Panel 2- Discussion:

The Impact of the Gas Tax on the Infrastructure Deficit and an Assessment of Alternative Sources of Municipal Funding

• Moderator: Chris Stoney
• Speakers:
• Harry Kitchen, Trent University
• Enid Slack, University of Toronto
• Robert Hatton, City of Toronto

Integrated Community Sustainability Plans:

Implications of the Gas Tax for Social Infrastructure, Community Engagement and Sustainable Development

• Moderator: Susan Phillips
• ICSPs Overview: Teresa Bellefontaine
• Speakers:
• Ann Dale, Royal Roads University
• Shawn Menard, Centretown Citizens Community Association
• Chris Stoney, Carleton University
• Paula Speevak Sladowski, Carleton University

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Integrated Community Sustainability Plans: Accountability through Community Engagement

Teresa Bellefontaine

tbellefo@connect.carleton.ca

ICSPs

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ICSP

Land use Transportation Capital Investments, Infrastructure Housing Environment – air, water, GHG Culture Social development Inter-municipal plans Economic development

“a long-term plan, developed in consultation with community members that provides direction for the community to realize sustainability objectives it has for the environmental, cultural, social and economic dimensions of its identity.”

Source: Kris Nanda Presentation -AMO Conference - August 20, 2007

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ICSPs: Risks to Program logic

• ICSPS require:

 Municipal commitment to the philosophical underpinnings of sustainability planning  Municipal capacity for a systems approach  Appropriate timelines and funding for community engagement  Public appetite and capacity for the process

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Integrated Community Sustainability Plans:

Implications of the Gas Tax for Social Infrastructure, Community Engagement and Sustainable Development

• Moderator: Susan Phillips
• ICSPs Overview: Teresa Bellefontaine
• Speakers:
• Ann Dale, Royal Roads University
• Shawn Menard, Centretown Citizens Community Association
• Chris Stoney, Carleton University
• Paula Speevak Sladowski, Carleton University

Local Decisions

Ottawa‟s 20-20 Vision and LRT - A Flawed Process with Bad Outcomes

Case 1: Lansdowne „live‟

Local Decisions

Ottawa‟s 20-20 Vision and LRT -

Case 2:NPI Process

Neighbourhood Planning Initiative (NPI)

• A more

inclusive and integrated approach to neighbourhood development

Framework

• Build on local

knowledge

• Reflect the needs,

priorities, and concerns of local citizens

• Increase

inter-departmental collaboration

Designed to

• Improved

physical and social quality

• f life for the

citizens of Ottawa

Outcome

NPI continued

• The extent to which the NPI improve both the decision

making process and the outcomes, such as more efficient and effective usage of city resources, and improved coordination of services

• Governance issues, such as the emphasis given to

community engagement

• Practical issues, such as the extent to which urban

planners feel helped or hindered by neighbourhood representation, and the mechanisms being used to engage the communities involved

Research Interests

Degrees of Engagement

Levels of Citizen Engagement: Queensland Government

Information

A one way relationship in which government delivers information to citizens

Consultation

A two-way relationship in which citizens provide feedback on issues defined by government

Active Participation

A collaboration in which citizens actively shape policy options, but where government retains the responsibility for final decisions

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CONCLUSIONS

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