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July 23, 2019, 11:50 am

Local Governments Seek permanent Doubling of Core Infrastructure Funding Tool

Federation of Canadian Municipalities

OTTAWA - Three months from the next federal election, the Federation of Canadian Municipalities (FCM) is calling on every party to commit to doubling the value of a core funding tool that empowers municipalities of all sizes to build better lives for Canadians: the annual federal Gas Tax Fund (GTF) transfer.

“As the order of government closest to people’s daily challenges, municipalities make the most of the tools available to build solutions that work. Growing the proven and reliable GTF transfer is the most straightforward next step the next federal government can take to build better lives across the country,” said FCM President Bill Karsten.

Municipalities collect just 10 cents of each Canadian tax dollar, yet they are responsible for nearly 60 percent of the public infrastructure that supports Canada’s economy and quality of life. That includes everything from roads and bridges to water, waste and transit systems. Each year, the GTF supports the renewal of this core infrastructure by flowing predictable funds to cities and communities of all sizes. De-linked from gas taxes in 2011, this direct and reliable transfer empowers local leaders to identify local priorities and plan long-term solutions.

Currently, however, the GTF accounts for only two percent of municipal revenues while the list of unfunded infrastructure projects continues to grow. Budget 2019 doubled GTF transfers this year, triggering a surge of renewal work from coast to coast to coast. To seize more of that potential to build better lives, FCM is calling for a permanent doubling of the GTF transfer. And to maintain its effectiveness into the future, the GTF’s annual growth index needs a boost—from 2 to 3.5 percent—to better reflect economic growth and rising construction costs.

"This election should build on what’s working, and all parties agree this tool is working. We engaged federal governments of various stripes to launch it in 2005, to make it permanent in 2011, and to index it in 2014,” said Karsten. “Budget 2019 was a game-changer, doubling the GTF for one year to move more projects forward. Canadians already see that happening, and this election is our opportunity to keep this quality-of-life progress going well into the future.”

Ahead of Election 2015, FCM secured commitments from all parties that led to unprecedented progress over the last four years—in particular on affordable housing and transformational infrastructure build-outs. This election, FCM is calling for a deeper modernization of the federal-municipal partnership to build better lives for Canadians. Modernizing the municipal funding toolbox with an expanded Gas Tax Fund transfer is a centrepiece for the recommendations FCM will bring forward in the weeks to come.

For more information: FCM Media Relations, (613) 907-6395, media@fcm.ca

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