February 23, 2004

New $1-billion fund will enhance support for green infrastructure in small communities

The federal government is embarking on negotiations with each province and territory on new agreements to improve public infrastructure, particularly in smaller Canadian communities. Agreements under the $1-billion federal Municipal Rural Infrastructure Fund (MRIF) will allow communities-particularly smaller ones-to seek senior-level government funding for important public infrastructure improvements.

Andy Scott, Minister of State for Infrastructure, noted that "the fund will also support other federal objectives for sustainable development, the environment and climate change. To this end," he stated, "we have raised to 60% the minimum of MRIF funding that targets 'green infrastructure'. This includes water, wastewater, solid waste, municipal energy improvements, and public transit."

Negotiations will be concluded as rapidly as possible, and the first projects should be announced four to six months following the signing of an agreement with each province or territory. The selection of any project will be guided by federal objectives on climate change, water quality, urban life and innovation.

The $1-billion MRIF is part of the federal government's latest contribution of $3 billion toward renewing Canada's public infrastructure. It is designed address the public infrastructure needs of Canada's municipalities and rural and remote areas, and First Nations communities. The additional $2 billion will double the existing Canada Strategic Infrastructure Fund (CSIF), which focuses primarily on large-scale strategic infrastructure in urban areas.

The MRIF will provide each province and territory and First Nations communities a base allocation of $15 million, with the remaining funds allocated on a per-capita basis. This formula will ensure that provinces, territories and First Nations will have an appropriate amount of base funding to address pressing public infrastructure needs. The component of the fund targeted to First Nations will concentrate on investments that improve water quality, wastewater treatment and local roads. In order to achieve a balance between the infrastructure needs of urban and rural parts of the country, at least 80% of funding under the MRIF will be dedicated to municipalities with a population of less than 250,000.

The MRIF funds will be allocated as follows: British Columbia, $111 million (The federal and BC governments have already agreed to use $60 million of the province's allocation under the MRIF for the Richmond Airport-Vancouver rapid transit project); Alberta, $88 million; Yukon, $16 million; Saskatchewan, $38 million; Northwest Territories, $16 million; Manitoba, $41 million; Nunavut, $16 million; Ontario, $298 million; Quebec, $195 million; New Brunswick, $33 million; Nova Scotia, $37 million; Prince Edward Island, $18 million; and Newfoundland and Labrador, $28 million. The First Nations component of the fund is $25 million.

The remaining $40 million will be shared by the federal departments and/or agencies that will administer the program: Industry Canada (Ontario); Canada Economic Development for Quebec Regions (Quebec); Atlantic Canada Opportunities Agency (Atlantic); Western Economic Diversification (West); and Indian and Northern Affairs Canada (First Nations and the Territories).

In total across Canada, a minimum of 60% of funding under the MRIF, with a minimum of 40% per jurisdiction, will target "green infrastructure" which provides a better quality of life and benefit through sustainable development. This includes investments in water, wastewater, solid waste, municipal energy improvements, and public transit. The new fund will also invest in cultural, tourism and recreational infrastructure, local roads and broadband connectivity.

Federal contributions will make up, on average, one-third of total project eligible costs, with provinces, municipalities, non-governmental organizations and other potential partners providing the remainder. In the territories and in First Nations areas, where many communities have no tax base, the federal government may contribute more than one-third. Federal funding for each project will be conditional upon meeting the requirements of all applicable environmental legislation, including those of the Canadian Environmental Assessment Act (CEAA) and its regulations.

"The MRIF provides a balanced response to locally-defined infrastructure needs, especially in rural Canada. It provides predictable long-term funding," Scott said, adding that "it will also ensure that all Canadians, whether they live in large, small or remote communities can share in the benefits of infrastructure investments."

The fund's design has taken into account views of provinces, territories, and municipal associations in order to make it flexible and capable of addressing a broad range of municipal priorities. Project selection for the MRIF will be guided by joint federal-provincial/territorial management committees. A role for municipal associations will be defined during the negotiations with the provinces and territories, as will a schedule for accepting applications. In order to streamline the application process, it is proposed that a joint application form to be available on Infrastructure Canada's web site be used for the MRIF.

More information is available on the Infrastructure Canada Web site, www.infrastructure.gc.ca.

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