Canada - Mayors fear fed cash drying up as infrastructure deficit rises to $100 billion

Big city mayors say Canadian communities desperately need as much as $100 billion to rebuild aging infrastructure, but they fear plans to limit the federal spending power could leave them out in the cold.

Meeting Thursday to plot strategy before next week's throne speech, the mayors said most municipal infrastructure is rapidly reaching the end of its service life and the cost to replace it has ballooned.

Previous estimates pegged the so-called infrastructure deficit at $60 billion. Regina Mayor Pat Fiacco said a new study, commissioned by the Federation of Canadian Municipalities and to be released next month, suggests the real deficit is as much as $100 billion.

Finance Minister Jim Flaherty set aside $33 billion in the last budget to parcelled out over seven years for infrastructure. But Fiacco said only $3 billion to $4 billion of that is earmarked specifically for municipalities and much more needs to be done.

Fiacco urged Prime Minister Stephen Harper to promise dedicated, long-term, predictable infrastructure funding in Tuesday's throne speech, which will outline the government's agenda for the upcoming session of Parliament.

The mayors want one cent from every dollar raised by the GST to be dedicated to municipal infrastructure. They also want the gas tax fund, worth $11 billion over seven years, to be made permanent.

"Cities are making do with just eight cents of every tax dollar collected in Canada while the federal, provincial and territorial governments take in 92 cents between them," Toronto Mayor David Miller said in a statement.

Miller said the $14.8-billion federal surplus posted in the 2006-07 fiscal year "underlines Ottawa's refusal to acknowledge that we (cities) face a critical funding crisis and that it's time to share some of its enormous surplus with us."

However, the mayors' hopes for more infrastructure cash could run up against Harper's promise to constrain the federal government's power to spend money in areas of exclusive provincial jurisdiction.

Gord Steeves, president of the Federation of Canadian Municipalities, said mayors don't have any clear idea how Harper intends to limit the federal spending power. But, since municipalities fall under exclusive provincial jurisdiction, they are concerned that Harper's plan could mean that federal infrastructure cash will dry up.

"It could cause concern depending on what exactly is meant by that," Steeves said.

"If what is being said . . . is that in some way the federal government would not have some connection to or some obligation to or some willingness to support infrastructure in municipalities, then this (big city mayors) caucus and FCM as an organization would not be supportive of that."

Although municipalities are creatures of the provinces, Steeves said the federation has always maintained "there still needs to be that connection and that nexus between the federal government and municipalities so that municipalities can build and create the infrastructure necessary to sustain their economies."