Federal Support for Sustainable Municipal Infrastructure

Opening Statement to the Senate Standing Committee on National Finance

Federal Support for Sustainable Municipal Infrastructure

(Report 1—2016 Spring Reports of the Commissioner of the Environment and Sustainable Development)

5 October 2016

Julie Gelfand
Commissioner of the Environment and Sustainable Development

Mr. Chair, I am pleased to be here today to discuss our 2016 spring report on federal support for sustainable municipal infrastructure. The report was tabled in the House of Commons on 31 May 2016. I am accompanied by Kimberley Leach, who led the audit.

When planning infrastructure today, it is critical to think beyond the here and now to consider what the country will look like in 2040, in 2050, and beyond. Canada must build resilient buildings, roads, bridges, water and sewage facilities, and transportation networks so that we can move around, work, keep the economy going, and live in vibrant and healthy communities. And this infrastructure must be built to also meet the needs of future generations. When resiliency is built into infrastructure, it is also built into communities as they are then better equipped to recover more quickly when disasters strike.

Our audit looked at federal infrastructure programs intended to support the sustainability of Canadian communities. We assessed whether the objectives of the Gas Tax Fund and the Green Municipal Fund were being achieved. We also examined whether Infrastructure Canada, working in collaboration with others, adequately coordinated the federal programs under its responsibility, including the New Building Canada Fund. We selected those programs that funded municipal infrastructure and that were intended, among other objectives, to improve the environmental performance and sustainability of Canadian communities.

The audit did not include the infrastructure funding announced in Budget 2016; however, I believe our findings and recommendations can inform the design and delivery of the new programs under phase two of the new government’s infrastructure plan.

Overall, our audit found that after a decade of federal funding programs costing billions of dollars, it is unclear to what extent these programs have produced the environmental benefits they were supposed to bring. We also found that Infrastructure Canada was missing some critical information and tools to support strategic and coordinated funding decisions addressing the long-term infrastructure challenges of municipalities.

For example, Infrastructure Canada did not have sufficient information available to it on the state of infrastructure, funding needs, and sustainability challenges. Inadequate information limits the ability of the federal government to design its programs to meet the current and future needs of communities. We recommended that the Department work with Statistics Canada to build a source of standardized, reliable, and regularly updated information on the inventory and condition of core public infrastructure.

We found that when it comes to considering infrastructure projects for funding, Infrastructure Canada had not adequately identified or managed environmental risks. The Department expected proposals for major projects to include information on environmental risks, but it did not use this information to analyze the risks of climate change, for example. When environmental risks are not considered, projects may not be designed to minimize environmental effects or withstand the impacts of future weather events. This means that municipalities could be left facing significant unexpected costs down the road.

We found that Infrastructure Canada did not have final indicators, targets, or timelines to measure environmental performance and report on project or program results. In particular, the Department did not assess to what extent money spent on projects under the Gas Tax Fund had produced, as intended, cleaner air, cleaner water, and reduced greenhouse gas emissions. By contrast, the much smaller Green Municipal Fund, which is managed by the Federation of Canadian Municipalities, did track and report the environmental benefits of the projects it funded.

In addition, the federal funding programs we examined did not actively encourage the use of innovative approaches to mitigate environmental risks. Innovation is critical to addressing the future needs of Canadian municipalities, especially given the pressure on available financial resources and emerging risks such as climate change. Infrastructure Canada informed us at the time of the audit that it had not been given a mandate to encourage innovative infrastructure projects through its project selection. This means that there is a risk that “greener” innovative approaches may not replace older technologies.

In light of our findings, our final recommendation included that Infrastructure Canada, in collaboration with its federal, provincial, territorial, and municipal partners, should provide a long-term vision outlining federal infrastructure priorities. The vision should be based on reliable information about the condition of infrastructure and include clear objectives, performance measures, and accountability. With a long-term federal vision, Canadians would know what results to expect from the billions of dollars spent on infrastructure through federal programs and how well federal infrastructure programs are working to make communities more sustainable for future generations.

Infrastructure Canada agreed with this and the other recommendations in the report. Budget 2016 also reflects the government’s commitment to act on elements of the recommendations. I would also like to point out that following my appearance before the House of Commons Standing Committee on Environment and Sustainable Development on 2 June 2016, Infrastructure Canada officials were asked to return to the Committee in a year to report on progress against the recommendations.

The federal government has committed to making significant future investments in infrastructure and to develop a long-term infrastructure plan based on engagement with partners and stakeholders. It is important for the government to set objectives for the funds, and for the government to be able to measure whether those objectives are being met. It is also critically important that the infrastructure being built is resilient to climate change and will meet the needs of future generations.

Mr. Chair, this concludes my opening statement. We would be pleased to answer your questions.