Renewed Gas Tax Fund gives towns more project options

Published on July 9, 2014

The federal and provincial governments agreed on a renewed Gas Tax Fund today, which will see communities in Newfoundland and Labrador receive $325 million over the next decade.

The fund, set up in 2006, provides stable, long-term federal funding for public infrastructure in Canadian communities. Based on their needs and priorities, municipalities can choose which projects they use the funding to support.

One of the most significant changes to the Gas Tax Fund is the expanded number of projects for which it can be used. Whereas previously the funding was restricted to projects contributing to cleaner air and water and reduced greenhouse gas emissions, the fund can now be used for public transit, roads, disaster mitigation, broadband connectivity, culture, tourism and recreation projects, among others.

“Municipalities have argued that they were too restricted, so this gives them more flexibility. And who better to know the need of the local community than those who serve on the local community councils,” said Municipal Affairs Minister Clyde Jackman.

St. John’s Mayor Dennis O’Keefe says he is excited about the many ways the capital city can use this money.

“There are, believe me, a whole list of projects that we have in mind for this money,” he said. “It’s not going to be difficult spending it, and spending it wisely.”

O’Keefe’s priorities include converting the waste water treatment plant from primary to secondary treatment by 2021, which will likely cost more than $150 million. He also said investing in public transport is extremely important and noted the “dire need” for a recreational facility in the west end.  

Other projects O’Keefe hopes to facilitate with the fund include investing in streets and sidewalks, developing infrastructure in neighbourhoods and tourism initiatives.

Jackman signed the agreement this morning with MP Rob Moore, the federal government’s regional minister for Newfoundland and Labrador.

“This is an important day for Newfoundland and Labrador and for the communities and municipalities,” Moore said.

“What this means is stable, predictable funding over 10 years so that they can plan for their infrastructure needs.”

The renewed Gas Tax Fund is worth $2 billion annually. It has also been legislated as a permanent source of funding and indexed at two per cent per year to ensure it will grow by $1.8 billion over the next decade.

The Gas Tax Fund is the largest part of the New Building Canada Plan, which provides $53 billion in federal funding to Canadian communities over the next 10 years.