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Small Canadian Cities Tackle Big Infrastructure Issues

Written by on Monday, 25 August 2014 11:25 am
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"I'm reminded of a meeting I had with a group of mayors not long ago," Ontario Premier Kathleen Wynne recently told a meeting of the Association of Municipalities Ontario (AMO). "One of them gave a fairly long presentation about how their community needed an investment in infrastructure -- then in the very next breath said, ‘But you've got to balance the budget faster.'"

And that's been the problem for years -- repairs and upgrades to aging infrastructure are needed, but politicians are leery about raising taxes to pay for it.

"After decades of under investment, Canada is only just beginning to confront its ‘infrastructure deficit', a backlog of delayed repairs and construction that hurts every Canadian family and business," says the Federation of Canadian Municipalities (FCM).

"For 25 years, Canadians have watched the symptoms of the infrastructure deficit grow: rusting bridges, crumbling roads, crowded buses and subways and thousands of drinking water warnings."

The FCM says municipalities own more than 60 per cent of the country's infrastructure but get just eight cents of every tax dollar paid in Canada, with the provincial and federal governments pocketing the rest.

"All governments -- federal, provincial, territorial and municipal -- must work together and with the private sector to make immediate infrastructure repairs to protect public health and safety," says the FCM.

Wynne agrees that everyone must work together, and to that end she announced the new Ontario Community Infrastructure Fund will provide $100 million per year in funding for communities of less than 100,000 people. It is also working with the federal government to provide $272 million each through the Small Communities Fund.

The federal government has similar deals with other provinces and it offers other funding opportunities for municipalities. In February 2014, it announced the new Building Canada Plan, promising an investment of $47 billion.

Still, for Canadian municipalities it's a challenge to catch up. At the AMO meeting, association president Russ Power said that even as the provincial government gives money, it also takes some away. Changes in the way municipalities are billed for police services, increased wages for personal care workers, a cut to funds for local dams and soaring insurance costs are some of the new problems facing municipalities, he said.

"Unfortunately, it's been the perfect storm. A lot of our infrastructure was built just after the war and we've let it go too far," says Neil Ellis, mayor of Belleville, Ont.

Belleville (population 49,454) faced the same challenges as many Canadian communities -- at the same time that bridges, pipes and roads needed replacing, the downtown area was suffering. A mall and big-box stores in the suburbs, along with new residential development, pulled retail business and people away from downtown, resulting in empty buildings and fewer taxes being paid. There was little incentive for new businesses to locate there.

"The challenge is there are so many projects and only so much money," says Ellis. "We had bridges that were actually falling down." The first bridge repair cost $18 million. City council's task was then to convince residents that redeveloping the downtown area should take priority over other projects.

The city conducted an economic impact analysis, which says that taking advantage of short-term "low-hanging fruit" redevelopment opportunities could create up to 1,280 new homes and more than 400,000 additional square feet of commercial/employment downtown.

A $21-million revitalization project, which will include all below-ground services and ground street renewal, has now begun. The goal is to spur new residential and commercial development downtown and it appears to be working, with several new residential projects on the go and new stores and restaurants opening in the area.

Ellis says that while most municipalities pay for capital improvements on a "pay as you go" basis, it makes more sense for Belleville to borrow needed funds because interest rates are so low. Through the provincial government's Infrastructure Ontario corporation, the interest rates are locked at a guaranteed low rate for 20 years.

The neighbouring municipality of Quinte West, which includes the former municipalities of Trenton, Sidney, Murray and Franklin, is working with Belleville to promote the area for economic development and tourism, but has also embarked on its own downtown redevelopment project.

The community has about 43,000 people, of which 60 per cent live in rural areas. In the former town of Trenton, a new $12-million marina project is taking shape.

"It's a huge investment for us," says Quinte West Mayor John Williams. "Some residents get upset because they say it's just for people who have boats, but that's not what this is about." He says in other communities along the north shore of Lake Ontario "where they have done this right, they have been able to get people to come and bring their money…and the money spills out to downtown, encouraging more stores and different types of stores."

Williams says there have been tentative plans for residential development in the area for years and he believes the 380-slip marina project will get these projects underway. The marina will include a 6,000 s.f. building, docks, a boardwalk, new walking trails and a park. "We think it's going to be a real attraction," says Williams.

Quinte West also has a downtown revitalization program in place, cleaning up one street every year and offering stores a funding package so they can freshen up storefronts and add new signage.

Quite West is home to 8 Wing Trenton, the largest Royal Canadian Air Force Base in the country. A 400-acre expansion that will include a new training and administration campus is underway at the base, which will add to the 3,200 regular force, 600 reserve force and 500 civilians who already work at the base.

The municipality benefits from having the base because of the federal government's Payment in Lieu of Taxes program. Government properties don't have to pay local property taxes, but the program gives funds back to the municipality.

"That's a lot of money that comes back to us and it allows us to do these projects without raising taxes," says Williams. "It makes a huge difference for us."

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  About the author, Jim Adair

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.