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Newly signed bilateral agreements signal next phase of transit investment

Following the signing of a bilateral agreement with the Northwest Territories on March 7, the federal government signed bilateral agreements with the Province of Ontario on March 14 and New Brunswick on March 15, signalling the start of the next phase of the Investing in Canada Infrastructure Plan that will see $180 billion invested in Canadian transit, green, social, rural and northern infrastructure. Over the next 10 years, $20.1 billion of this investment will go towards improving the capacity, quality, safety of, and access to, public transit infrastructure through what is being called the Public Transit Stream. All projects under this funding stream are expected to be completed by October 31, 2027 and the Government of Canada is expecting to make the final payments on the program by March 31, 2028.

In many ways this new Public Transit Stream in the Investing in Canada program will be similar to the Public Transit Infrastructure Fund, though there will be increased reporting requirements, a focus on capital and expansion projects as well as new stated targets and objectives for the funding. Most importantly, the program’s funding is about six times bigger, and it will run about three times longer, than the first phase of investment. Program parameters for this funding will vary slightly from province to province based on the bilateral negotiation process.

From what’s been outlined in the first two bilateral agreements, projects in the Public Transit Stream will be eligible for the following federal cost share:

  • 40% of Total Project Cost (TPC) for municipal and not-for-profit projects in the provinces;

  • 50% of TPC for rehabilitation projects

  • 50% of TPC for provincial projects (without a municipality);

  • 75% of TPC for projects in the territories and for projects with Indigenous partners;

  • 25% of TPC for for-profit private sector projects working in collaboration with an approved public entity

Though not all bilateral agreements are official, it’s expected that provincial cost share in this program will be set at a minimum of 33% of TPC. A national 15% cap of all funds from the Public Transit Stream can be spent on repair and rehabilitation.

Distribution of these funds to transit systems/municipalities within a province/territory will be based solely on system ridership, though the agreements suggest that an alternate model of distribution could be recommended by the provincial/territorial government, should distribution on ridership alone not be desirable or should there be any issues with ridership figures.

Projects not eligible for funding under this program include inter-city bus, rail, port or ferry infrastructure that are not part of a public transit system. Also ineligible are; prior costs to project approval (except climate lens assessments), cancelled projects, land acquisition, overhead costs, financing charges, legal fees, interest payments, donations, PST, HST, regularly scheduled maintenance work, and operating expenses. Ontario’s agreement allows the province to combine the ridership of multiple systems into a single allocation to facilitate integration of the systems.

Central to this new fund is the concept of Infrastructure Plans, which province/territories will need to submit to the federal government by September 30, 2018. Infrastructure Plans will be updated annually by province/territories and will serve as the province/territory’s project pipeline for the next three years, at a minimum. This means municipalities will need to plan their projects well in advance and ensure that they are included in the province/territory’s Infrastructure Plan. Projects captured in a province/territory’s plan are not automatically approved for funding, but it will be a key tool to plan and budget for investments within the province/territory. These plans will also include a narrative section that will describe how the investments are work towards meeting the province/territory’s targets and outcomes stated in the bilateral agreement.

Interestingly, language can be found in the Northwest Territories agreement (but not in the Ontario agreement) which states that if by March 31, 2021, the Northwest Territories feel their funding for transit exceeds their transit investment needs, they will be able to transfer funding from the Public Transit Stream of the infrastructure plan to the Climate Change Mitigation sub-stream of the larger Green Infrastructure stream and/or Rural and Northern Communities Infrastructure stream. For this transfer to be approved, municipalities and transit authorities in the province/territory would need to attest that the transferred federal funding for transit would not be required for the remainder of the term of the agreement and it would also need approval from the minister of infrastructure. It remains to be seen if this clause will be unique to the Northwest Territories on account of its single transit system in Yellowknife, or if other bilateral agreements will have similar language.

With regards to reporting requirements and targets, this program will be much more comprehensive than any previous transit infrastructure program from the federal government. Targets will be set for each province regarding increasing the modal share of transit and active transportation (Ontario: at least a 25% increase, NWT: a 15-30% increase), increasing system coverage (Ontario: 95% population coverage in service area, NWT: 98% population coverage in service area) and contributing to a national 10 mega-tonne GHG emission reduction.

The Ontario agreement states that the modal shift target could be reviewed and adjusted by Canada, Ontario and CUTA, if necessary.

Reports on the progress of the fund will be made through a new Infrastructure Recipient Information System (IRIS) twice a year. These reports will include a number of metrics including; construction start and end dates (forecasted/actual); a progress tracker (e.g. percent completed) and other details. It would appear that the vast majority of reported project information in these agreements will be made public by the government.

Projects with over $10 million in federal funding will have increased reporting requirements. This includes a Climate Lens Assessment that looks at GHG emissions and climate resiliency, as well as the Community Employment Benefits for federal target groups (apprentices - from traditionally disadvantaged communities, Indigenous peoples, women, persons with disabilities, veterans, youth, new Canadians, or small-medium-sized enterprises and social enterprises). It is possible to apply for an exemption from these reporting requirements.

All projects under the fund are expected to meet the highest published, applicable accessibility standard in their respective jurisdiction as well as meet or exceed energy efficiency standards laid out in the Pan Canadian Framework. Projects are also expected to be consistent with land-use/transportation plans or strategies and consistent with the approved plans of regional transportation bodies.

CUTA will remain engaged with Infrastructure Canada and the Canadian Government on this new program. More details of the fund, as well as analysis from CUTA, will be provided to members as it is available. Anyone with questions regarding the fund are encouraged to contact Jeff Mackey at mackey@cutaactu.ca.

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