Canadian Construction Association

Canadian Construction Association
The Road and Infrastructure Program of Canada (TRIP Canada)

The Road and Infrastructure Program of Canada (TRIP Canada)

February 02, 2005 12:52 ET

TRIP Canada Welcomes Details on Gas Tax Sharing; Warns of Potential Pitfalls


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: THE ROAD AND INFRASTRUCTURE PROGRAM OF CANADA (TRIP CANADA)

FEBRUARY 2, 2005 - 12:52 ET

TRIP Canada Welcomes Details on Gas Tax Sharing; Warns
of Potential Pitfalls

OTTAWA, ONTARIO--(CCNMatthews - Feb. 2, 2005) - The Road and
Infrastructure Program of Canada (TRIP Canada), today welcomed the
Government of Canada's announcement that it has agreed on the framework
for the gas tax sharing arrangement to invest in municipal
infrastructure. Yesterday's announcement by Infrastructure Canada
contained a number of details of how the gas tax sharing arrangement
would be implemented, including 5-year projected funding amounts.

The announcement confirmed that money to implement the gas tax
arrangement will be allocated in the 2005 federal budget. It also
announced that funds from the gas tax will be directed at
"environmentally sustainable municipal infrastructure", which includes
mass transit, water and sewer systems, rehabilitation of roads and
bridges, and solid waste management. More specific kinds of
infrastructure that may be eligible for funding would be identified in
bilateral federal-provincial agreements that are currently under
negotiation.

However, TRIP Canada today identified two shortcomings in the
announcement. These include:

- The announcement confirms that the amount of gas tax funds to be
transferred will equal five cents within five years - but the years
leading up to Year 5 will be much lower amounts. As stated by
Infrastructure Minister John Godfrey, the first two years of the
arrangement will be "skinny" years. Given a forecast surplus of $9
billion in FY 2005, and given that the government consistently
underestimates the size of its surplus, TRIP Canada is calling on the
government to ramp up to 5 cents over a shorter timeframe.

- The announcement makes no mention of whether or how existing bilateral
infrastructure programs will be replenished. Initiatives such as the
Strategic Highways Infrastructure Program, the Border Infrastructure
Program, the Canada Works Infrastructure Program, etc. will have soon
exhausted their funding allocations. Given that the federal government
is demanding that municipalities ensure that gas tax money is
incremental to their capital works budgets, it is only logical that
incrementality start with the federal government. As such, TRIP Canada
is calling on the government to provide stable, long-term funding to
these programs - in addition to the gas tax.

TRIP Canada can provide more detailed analysis of this announcement
following the release of the 2005 federal budget. A copy of yesterday's
announcement can be obtained at the following website:
http://www.infrastructure.gc.ca/ndcc/publication/newsreleases/2005/20050201ottawa_e.shtml


TRIP Canada is a Special Committee of the Canadian Construction
Association. It is comprised of ten provincial roadbuilding and heavy
construction associations, as well as the Ontario Sewer and Watermain
Construction Association.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    The Road and Infrastructure Program of Canada (TRIP Canada)
    Jeff Morrison
    Executive Director
    (613) 236-9455
    jeff@cca-acc.com