Tag Archives: federal budget 2016

Federal Budget 2016 in depth: Infrastructure | Canadian Union of Public Employees

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Apr 18, 2016

Summary

As promised and expected, the 2016 federal budget focuses extensively on infrastructure. While the proposed spending falls short of the Liberals’ promise to provide an immediate injection of $5 billion into the economy, it does outline a substantial output of $11.9 billion over the next five years, much of which will be available immediately.

The infrastructure spending will come in two phases. The first phase begins in 2016 and comprises the $11.9 billion, allocated in three major areas:

  • infrastructure ($3.4 billion)
  • Water, wastewater, and green infrastructure ($5 billion)
  • Social infrastructure such as affordable housing and child care ($3.4 billion)

Phase one has been described as the “maintenance” phase, where existing infrastructure or already-planned infrastructure projects will receive a necessary influx of federal cash. To this end, a number of new funds, such as the Public Transit Infrastructure Fund, have been established to manage disbursement. The government will also leverage existing funds, such as the Gas Tax Fund, to target infrastructure priorities. Finally, the government plans to download some of the fund management to partners such as the Federation of Canadian Municipalities – which will deliver $250 million of new funding to its members for various infrastructure projects – and the Canada Mortgage and Housing Corporation – which will participate in the design of affordable housing strategies.

Phase two of the infrastructure funding will commence in two years, and will be focus on larger long-term goals such as transitioning to a clean and green economy, and facilitating a greater capacity for global trade.

The Good

There are a number of aspects of the federal budget’s infrastructure plan that appear positive. Generally speaking, the Liberal government has halted the previous government’s trend of reduced social spending and austerity budgets. Increased infrastructure spending is the right move in a stagnant economic period, when borrowing costs are relatively low.

More specifically, we are pleased to see the government:

  • Remove the public-private partnership (P3) screen on large infrastructure projects, and the P3 requirement on transit projects.
  • Commit to funding up to 50 per cent of most infrastructure projects, rather than maintain the previous 1/3 ratio. Many communities would have been unable to meet the previous financial threshold, so this is a welcome change.
  • Focus on the importance of water-related infrastructure, particularly on First Nation reserves.
  • Focus on affordable housing, including housing for seniors, for the homeless, and for those fleeing domestic violence.
  • Commit to green infrastructure, including the integration of climate resiliency into building standards. In particular, we applaud the commitment to environmentally-conscious repairs and retrofits for federal infrastructure, which includes an exploration of alternative energy sources.

The Bad

While this budget reverses the previous government’s move to shackle public infrastructure spending to the private sector, the current government’s infrastructure plan establishes an open and fertile ecosystem for privatization. Indeed, the budget specifically mentions that the government will “examine new innovative financing instruments” and “engage public pension plans and other innovative sources of funding” to get projects moving. It also states the government’s interest in so-called “asset recycling” – one of the newest terms used for the privatization of public assets to for-profit interests.

Most of the evidence suggests that when public services and public assets are privatized, costs are higher and quality suffers. The private ownership of infrastructure – even if that owner is a workers’ pension plan – represents a real diminishment in value for Canadians. It is both ironic and unfortunate that the loosening of P3 requirements by the Liberals may result in a proliferation of privatization fights over infrastructure.

In addition to its gestures toward privatization, the amounts allocated in the budget are not sufficient to close the infrastructure gap in Canada. Furthermore, we note that a financial commitment and a capacity to carry out that commitment are very different things. Already, for example, Engineers Canada has speculated publicly about the shortage of engineers prepared to carry out this work, and the Federation of Canadian Municipalities has pointed out that detailed spending requirements have not yet been established.

The Fix

While the federal budget displays an important commitment to infrastructure spending, we call on the government to bolster this commitment – in policy and/or in subsequent budgets – with the following:

  • Implement strict rules around transparency and accountability for public-private partnerships.
  • Eliminate PPP Canada Inc. and redirect the $1.25 billion P3 Canada Fund to public infrastructure projects.
  • Ensure that federal money only goes to projects with clear ethical procurement policies.
  • Maintain basic oversight over projects that receive infrastructure funding to ensure shovels in the ground as quickly as possible.

CUPE will continue to encourage our members, and other labour organizations, to:

  • Speak out against the privatization of infrastructure in your communities.
  • Resist moves by municipalities to enter into P3 arrangements for infrastructure and public services.
  • Challenge the administrators and trustees of pension plans to move away from investment in P3s for infrastructure, and support investments that renew and strengthen public ownership and control.

Source: Federal Budget 2016 in depth: Infrastructure | Canadian Union of Public Employees

Minister Morneau’s First Budget Restores Hope for the Middle Class – Budget 2016

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March 22, 2016 – Ottawa, Ontario – Department of Finance

The Minister of Finance, Bill Morneau, today tabled the new Government of Canada’s first federal budget, Growing the Middle Class, a plan that takes important steps to revitalize the Canadian economy, and delivers real change for the middle class and those working hard to join it.

A strong economy starts with a strong middle class. That is why building an economy that works for Canadians and their families is the top priority of this government.

Budget 2016 offers immediate help to those who need it most, and lays the groundwork for long-term economic growth. Most importantly, it focuses squarely on people and the things that matter most to them—things like strengthening the middle class, creating jobs, and growing the economy.

As of January 1st, the government’s Middle Class Tax Cut ensures roughly 9 million Canadians receive a bigger paycheque every payday.

Today, Minister Morneau builds on this progress with the introduction of the new Canada Child Benefit—a simpler, tax-free, more generous, targeted benefit that helps those who need it most: the middle class. Starting in July of 2016, nine out of ten families will receive more money than they did under the previous government.

Budget 2016 signals a new approach that will create jobs and improve the quality of life for Canadians, today and in the future. This includes historic new investments in infrastructure that total more than $120 billion over the next decade.

As an immediate first step, the government will invest $11.9 billion in modern and reliable public transit, water and wastewater systems, affordable housing, and in retrofits and repairs to protect existing projects from the effects of climate change.

Additional longer-term investments will help Canada become a low carbon economy, and create more vibrant cities, digitally connected rural areas, and safe, healthy, thriving communities.

Budget 2016 also provides significant new investments to support both students and post-secondary institutions, so that the next generation of Canadians is well-equipped to tackle the challenges of the future. In addition, the government will promote research, accelerate business growth, and support clean technology to better position Canada in the rapidly shifting global economy.

Recognizing that protecting the environment and growing the economy go hand in hand, the government will invest in clean technologies that address climate change, air quality, clean water, and clean soil. Budget 2016 also reiterates the government’s intention to establish a $2 billion Low Carbon Economy Fund.

To ensure that this growth is shared by all Canadians, Budget 2016 takes renewed steps to give all Canadians the same opportunities to succeed, no matter who they are, or where they come from. This includes unprecedented investments in First Nations, Inuit Peoples, and the Métis Nation—totalling $8.4 billion over five years—in areas that include education, infrastructure, and skills training. The government will ensure access to clean drinking water for every child, including those who live on reserves.

Investments in a more inclusive and fair Canada include efforts to: provide federal leadership in health care; help seniors realize the promise of a dignified and secure retirement; renew a commitment to enhance the Canada Pension Plan; and fulfill our sacred obligation to Canada’s veterans.

Budget 2016 also takes action to renew Canada’s place on the world stage. The government will provide international assistance for the most vulnerable, and welcome as many as 300,000 permanent residents in 2016 to foster sustainable growth and grow the middle class.

Growing the Middle Class comes at a time when the Government of Canada has both the capacity and the willingness to act. Budget 2016 takes action to revitalize the economy and create opportunity for all Canadians, by focusing on the middle class and those working hard to join it.

Quote

“Our plan will recapture the hope and optimism for the future that existed in previous generations, and put it to work for the next. Real change is not just about today or tomorrow. It is about revitalizing the economy in the years and decades to come, so that it works for the middle class and helps those working hard to join it.”

– Bill Morneau, Minister of Finance

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Source: Budget 2016