Canada's Economic Action Plan

Canada's Economic Action Plan

November 14, 2013 10:43 ET

Canada's Gas Tax Fund Helping Prince Edward Island Communities

Second installment of annual GTF transfer available for municipal infrastructure

CHARLOTTETOWN, PRINCE EDWARD ISLAND--(Marketwired - Nov. 14, 2013) - The Honourable Gail Shea, Minister of Fisheries and Oceans and Regional Minister for Prince Edward Island, announced today that the Government of Canada is making available the second installment of its annual $2-billion federal Gas Tax Fund allocation for municipal infrastructure, bringing Prince Edward Island's total allocation this year to close to $15 million.

"Investments through the federal Gas Tax Fund are helping Prince Edward Island's communities address their local infrastructure priorities," said Minister Shea. "Our Government is proud to support infrastructure projects that create jobs, promote productivity and support economic growth."

Canada's Gas Tax Fund provides predictable, long-term funding for Canadian municipalities to help them build and revitalize their local infrastructure while creating jobs and long-term prosperity. Funding is provided up front, twice a year to the Government of Prince Edward Island which delivers this funding within Prince Edward Island. Projects are chosen locally and prioritized according to the infrastructure needs of each community. Municipalities can pool, bank and borrow against this funding, providing significant financial flexibility. To date, close to $97.5 million has been made available to Prince Edward Island under the current Gas Tax Fund.

The Gas Tax Fund has funded numerous initiatives across Prince Edward Island that support water and wastewater infrastructure, local roads, public transit, solid waste, community energy systems, active transportation and capacity building.

"Our government is committed to growing our economy and improving the quality of life for all Islanders. We're pleased to work with the federal government, municipalities and community partners to deliver services that strengthen Island communities," said Prince Edward Island Transportation and Infrastructure Renewal Minister Robert Vessey.

The Government of Canada has extended, doubled, indexed and made permanent the Gas Tax Fund. These improvements will see Canada's Gas Tax Fund grow from its current $2 billion per year while providing provinces and municipalities with predictable funding to deliver on local infrastructure priorities.

To read more about the Gas Tax Fund in Prince Edward Island, please see the attached backgrounder and visit:

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The federal Gas Tax Fund makes capital investments in important community infrastructure. Eligible investments currently include water, wastewater and solid waste infrastructure, public transit, community energy systems, local roads and bridges, and capacity building. It provides predictable, stable funding, allowing municipalities to choose and plan the infrastructure priorities in their community.

Through the Gas Tax Fund, municipalities across Prince Edward Island have benefited from close to $97.5 million in predictable and flexible funding for local priorities since the program began. The Government of Prince Edward Island administers the program on behalf of its municipalities.

Results for Prince Edward Island

The Gas Tax Fund is providing Islanders with stable funding that will have a tangible impact on their quality of life and the long-term sustainability of their communities. The Gas Tax Fund has provided funding towards various projects, including:

  • The replacement of the Cardigan River Bridge in Cardigan, with a longer 25-metre span infrastructure that includes a sidewalk, has increased pedestrian safety and reduced water stagnation, and is improving water quality in the estuary.

  • A new wheelchair-accessible bus equipped with a bike rack in Cornwall that allowed the region to expand its public transit system to complement the existing City of Charlottetown and Town of Stratford systems.

  • In Wellington, replacing the Wellington Bridge. The new bridge features a longer concrete span, replacing the steel structure that was in place.

How the Gas Tax Fund Works

Canada's Gas Tax Fund has provided $13 billion to Canadian communities to date. The funding allocation is based on population for most jurisdictions. In recognition of their population size, Prince Edward Island, Yukon, Northwest Territories and Nunavut receive amounts equal to 0.75 percent of the total annual national allocation, allowing them to also make meaningful investments in infrastructure. Funding is provided up front, twice a year to provincial and territorial governments or to the municipal associations which deliver this funding within a province, as well as to the City of Toronto. Projects are chosen locally and prioritized according to the infrastructure needs of each community. Municipalities can pool, bank and borrow against this funding, providing significant financial flexibility.

In Prince Edward Island, approximately $4.8 million of Canada's Gas Tax Fund has been allocated to the establishment of the Community and Capacity Building Funds since the program began. The Capacity Building Fund assists communities and enhances their capacity to achieve and maintain long-term sustainability, while the Community Fund supports hard cost projects within small communities, such as wastewater treatment, community energy systems, public transit infrastructure, solid waste, local roads and bridges.

On April 1, 2009, Gas Tax Fund payments doubled to $2 billion annually. In 2011, legislation was passed to make funding under the Gas Tax Fund permanent at $2-billion per year.

As announced in Economic Action Plan 2013, the eligible categories for the Gas Tax Fund will be expanded and the Fund will be indexed at 2 per cent a year in $100-million increments, starting in 2014, allowing municipalities even more flexibility to focus on their infrastructure priorities. The expanded categories include:

  • projects supporting culture, tourism, sport and recreation;

  • disaster mitigation;

  • broadband communication systems;

  • highways;

  • short-line rail;

  • short-sea shipping;

  • brownfield redevelopment; and

  • local and regional airports.

Over the 10-year life of the New Building Canada Plan from 2014 to 2024, the Gas Tax Fund will provide close to $22 billion in funding for municipalities.

The Government of Canada is working with its provincial and territorial partners to ensure a seamless transition to the new funding.

Contact Information

  • Marie-Josee Paquette, Press Secretary
    Office of the Minister of Infrastructure, Communities
    and Intergovernmental Affairs, and Minister of the Economic
    Development Agency of Canada for the Regions of Quebec

    Brad Chatfield
    Prince Edward Island Department of Transportation
    and Infrastructure Renewal

    Infrastructure Canada
    Toll free: 1-877-250-7154