Introducing the Renewed Federal Gas Tax Agreement In British Columbia

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1 Introducing the Renewed Federal Gas Tax Agreement In British Columbia A Resource for Local Governments, Prepared by the Union of BC Municipalities, May 2014

2 This resource provides a description in brief of the Administrative Agreement on the federal Gas Tax Agreement in British Columbia (GTA) that sets out the terms and conditions for the administration of the federal Gas Tax Fund (GTF). For a complete statement of definitions, roles and requirements, please consult the full text of the GTA available at ubcm.ca. 1. Overview What s new in the renewed Gas Tax Agreement in British Columbia? The renewed program will deliver $1.3 billion over the first five years of the agreement Expanded eligible project categories The funding will indexed at 2% annually in increments of $100 million All local governments are now eligible to receive allocated Community Works Funds An additional $8 million in interest from the first GTA in British Columbia will be delivered through the funding programs of the renewed agreement over the next two years. Program delivery has been streamlined with a single application- based program (the Strategic Priorities Fund) and a greater portion of funding delivered through allocations (the Community Works Fund) Greater Vancouver Regional District has an enhanced role in the selection of projects funded through the Greater Vancouver Regional Fund Ultimate Recipients (local governments and other entities eligible to receive Gas Tax funding) are required to work to strengthen asset management during the term of the agreement The program aims to achieve three national objectives: productivity and economic growth; a clean environment; and strong cities and communities. Outcomes reporting will focus on demonstrating progress with regard to three program benefits: a) Beneficial impacts on communities of completed eligible projects; b) Enhanced impact of GTF as a predictable source of funding including incremental spending; and c) Progress made on improving local government Asset Management. What aspects of the renewed GTA are the same as the previous GTA? There are no changes in scope to the eligible project categories from the first Gas Tax Agreement. For instance, it is understood that repaving of roads owned by a local government are eligible within the category of Local Roads and Bridges. Operational costs and routine maintenance and repair remain ineligible. 2

3 The definition for entities that are eligible to receive Gas Tax funding (the Ultimate Recipient ) is unchanged. 2. Governance What is the governance model for the Gas Tax Agreement in BC? The Gas Tax Agreement sets up two governance committees, to which specific responsibilities are assigned. The Partnership Committee (PC) is responsible for monitoring the strategic implementation of the GTA, and will serve as the principal forum to address and resolve issues arising from the implementation of this Agreement. The Management Committee (MC) is responsible for approving funding under the Strategic Priorities Fund, approving any significant changes in the scope of those projects, and approve requests by Ultimate Recipients for significant changes in the scope for any projects approved by the MC under the First Agreement. Terms of Reference and membership information for both committees will be made available shortly. The Union of BC Municipalities will continue to administer the program in British Columbia. 3. Funding Delivery What is the funding mechanism for the Gas Tax Fund in British Columbia? Funding is delivered through three programs: the Community Works Fund, the Strategic Priorities Fund and the Greater Vancouver Regional Fund. Community Works Fund (CWF) What is the Community Works Fund? The Community Works Fund (CWF) provides allocated funding twice annually to all local governments in British Columbia for eligible expenditures of eligible projects as set out in the GTA. In order to receive CWF funding, local governments must sign a new Community Works funding agreement with UBCM. 3

4 How much funding will the CWF deliver over the first five years of the agreement? The CWF will deliver $519.3 million over the first five years of the agreement. When will my community receive a Community Works Fund agreement? A new Community Works Fund agreement will be sent out to each local government in May Funding will be delivered to Local Governments with executed agreements in two payments per year, with the first payment anticipated in July of Where can I find the Community Works Fund allocation for my Local Government? The projected allocation table for the Community Works Fund can be found on ubcm.ca or more directly here. This allocation table is subject to change due to new incorporations or boundary adjustments or changes to Canada Census population data. How are the allocations for each local government determined? Allocations will be based on a funding formula similar to the funding years and will consist of a $50,000 funding floor plus a per- capita amount for each Local Government. Why is my 2014 Community Works Fund allocation greater/less than last year s allocation? There are a number of reasons why a 2014 CWF allocation is greater or less than last year s allocation. The last CWF allocation was based on the 2006 Canada Census populations as adjusted by new incorporations and boundary adjustments, plus a $50,000 funding floor. The new CWF allocation will be based on the 2011 Canada Census population and will be adjusted by new incorporations and boundary adjustments, plus a $50,000 funding floor. This allocation and funding floor is expected to increase in year 3 and in year 5 due to an increase in the federal Gas Tax Fund transfer resulting from indexing. 4

5 Variance in CWF allocation from last year to 2014 is related to changes in local government population between the 2006 and 2011 Canada Census. In addition, Local Governments that were eligible to receive funding through the Regionally Significant Projects Fund program will now receive a per- capita portion of these funds through the CWF. When will the next Community Works Fund payment arrive? Provided your Local Government has entered into a new Community Works Fund Agreement with UBCM and has met transition requirements, payments will be delivered twice per year shortly after UBCM receive funding from Canada. The first payment is expected to occur in the summer of 2014 and the second in the fall of UBCM will confirm the date of future payments once Canada has confirmed the date funds will be transferred to UBCM in 2015 and beyond. Strategic Priorities Fund (SPF) What is the Strategic Priorities Fund? The Strategic Priorities Fund (SPF) provides an opportunity for local governments outside the Greater Vancouver Regional District to access pooled application based funding. The SPF provides funding for eligible expenditures of eligible projects that are in alignment with the requirements of the GTA and are larger in scale, or regional in impact, or innovative. When will a call for applications to the SPF be issued? Information on the date for a call for applications to the SPF will be made available later in How much funding will be delivered through the SPF over the first five years of the renewed agreement? The SPF will deliver approximately $145.2 million in funding over the first five years of the renewed agreement. 5

6 Greater Vancouver Regional Fund (GVRF) What is the Greater Vancouver Regional Fund? The Greater Vancouver Regional Fund pools 95% of Greater Vancouver Regional District and its member municipalities per- capita allocation. In keeping with the Greater Vancouver Regional District request, this funding must be used towards eligible expenditures of eligible regional transportation projects. What is the process for GVRF funding decisions? The South Coast British Columbia Transportation Authority (TransLink) will propose projects for funding to the GVRD Board. The GVRD must notify UBCM of the eligible projects that it has approved for funding, after which UBCM may provide funding to TransLink for those Eligible Projects. How much funding will be delivered through the GVRF through the first five years of the renewed GTA? The GVRF will deliver approximately $652.4 million over 5 years 4. Eligible Project Categories Are there changes to the scope of projects that were eligible under the first Gas Tax Agreement? No What kinds of projects are eligible for Gas Tax funding? Local roads, bridges roads, bridges and active transportation infrastructure (active transportation refers to investments that support active methods of travel. This can include: cycling lanes and paths, sidewalks, hiking and walking trails). Highways highway infrastructure. Short- sea shipping infrastructure related to the movement of cargo and passengers around the coast and on inland waterways, without directly crossing an ocean. Short- line rail railway related infrastructure for carriage of passengers or freight. Regional and local airports airport- related infrastructure (excludes the National Airport System). 6

7 Broadband connectivity infrastructure that provides internet access to residents, businesses, and/or institutions in Canadian communities. Public transit infrastructure that supports a shared passenger transport system that is available for public use. Drinking water infrastructure that supports drinking water conservation, collection, treatment and distribution systems. Wastewater infrastructure that supports wastewater and storm water collection, treatment and management systems. Solid waste infrastructure that supports solid waste management systems including the collection, diversion and disposal of recyclables, compostable materials and garbage. Community energy systems infrastructure that generates or increases the efficient usage of energy. Brownfield Redevelopment remediation or decontamination and redevelopment of a brownfield site within Local Governments boundaries, where the redevelopment includes: the construction of public infrastructure as identified in the context of any other eligible project category under the GTF, and/or; the construction of Local Government public parks and publicly- owned social housing. Sport Infrastructure amateur sport infrastructure (excludes facilities, including arenas, which would be used as the home of professional sports teams or major junior hockey teams (e.g. Western Hockey League)). Recreational infrastructure recreational facilities or networks. Cultural infrastructure infrastructure that supports arts, humanities, and heritage. Tourism infrastructure infrastructure that attract travelers for recreation, leisure, business or other purposes. Disaster mitigation infrastructure that reduces or eliminates long- term impacts and risks associated with natural disasters. Capacity building includes investments related to strengthening the ability of Local Governments to develop long- term planning practices. I am not sure if my project would be considered eligible under this expanded category list. Is there any further information? Guidance materials to clarifying the types of projects eligible under the new project categories are in development. In the meantime, if you have any questions, please contact UBCM Gas Tax Program Services at

8 4. Program Transition My Local Government has unspent Community Works funds from the last Agreement. What happens to these unspent funds? Any unspent funds and interest earned remaining with a Local Government from Community Works Funds after the 2013 reporting year can continue to be used towards eligible costs of eligible projects under the following conditions: Before April 1, 2014 Local Governments can use Community Works Funds towards eligible costs in the following categories: Local Roads and Bridges; Active Transportation; Public Transit; Community Energy Systems; Solid Waste; Water; Wastewater; Capacity Building and Integrated Community Sustainability Planning As of April 1, 2014, Local Governments can use Community Works Funds towards eligible costs in the following categories: Local Roads and Bridges (including active transportation); Highways; Short- Sea Shipping; Short- Line Rail; Regional and Local Airports; Broadband Connectivity; Public Transit; Drinking Water; Wastewater; Solid Waste; Community Energy Systems; Brownfield Redevelopment; Sport Infrastructure; Recreational Infrastructure; Cultural Infrastructure; Tourism Infrastructure; Disaster Mitigation; Capacity Building. For any further questions on the Renewed Gas Tax Agreement, please contact Program staff by e- mail at gastax@ubcm.ca or by phone at

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