Municipal Infrastructure Funding A Provincial Perspective Dino Radocchia OMAFRA Northwestern Ontario Regional Conference October 2, 2009
Today s opportunity for infrastructure Investment Ontario has made a remarkable commitment to infrastructure investment. $32.5 billion over the next two years roughly double recent levels. Billions of these dollars will directly benefit Ontario s municipalities. Guided by the22 goals including supporting job creation, economic development and securing a higher quality of life across Ontario. A sustained capital investment strategy has led to a stronger understanding of the nature and the extent of Ontario s infrastructure investment needs. Changing regulatory standards, aging asset inventories and demographic trends are adding urgency to the need to invest in our infrastructure. Though we need to work quickly, our role as stewards of taxpayers dollars demands that we also work accountably. The provincial government is not acting alone our investments are being made in partnership with the municipal and federal orders or government. 2
Ontario s Public Infrastructure Municipalities are responsible for almost half of the public infrastructure in Ontario. Share of Ontario Public Infrastructure, 2007 Pecentage Share 50 45.3 45 40 35 30 25 18.8 20 14.4 15 13.0 10 8.5 5 0 Education Health Federal Provincial Municipal 2007 Notes: Provincial Sector includes provincial highways and buildings Municipal Sector includes municipal roads, buildings, transit and water and sewer facilities Federal Sector includes federal buildings and national defense facilities Source: Statistics Canada, 2007 Stocks and Flows, Current $, straight line depreciation end year net stock 3
Guiding Principles Acknowledge that most funding programs will continue to be oversubscribed. Programs should be designed to account for the diversity of Ontario s municipalities. Continue to balance competing program design priorities. Ensure that good public policy informs project evaluation criteria. Communicate clearly about program design features and timelines. Maintain appropriate reporting and accountability standards. 4
A Range of Needs Demands a Range of Solutions Investments in provincial assets that support Ontario s communities. Entitlement funding. Last year, the Investing in Ontario Act provided over $1.1 billion in provincial funding for municipal infrastructure, benefiting every municipality in Ontario. Borrowing supports through the Infrastructure Ontario loan program. Targeted investment programs to meet specific needs. $321 million for public transit in 89 municipalities this year through the provincial gas tax program. Provincial grant funding programs. In 2008 the Municipal Infrastructure Investment Initiative (MIII) provided $450 million in grant funding to 243 municipalities. An array of cost-shared investment programs, including federal-provincialmunicipal programs such as the Building Canada Plan. Capital spending under Green Energy Act over next 3 years - $2.3 billion 5
Federal Infrastructure Programs Notional Allocations and the Basis for Provincial Share Building Canada Plan Building Canada Fund (Communities Component and Major Infrastructure Component) ($8.8B) Provincial Territorial Base Funding ($2.275B) Gateways & Border Crossing Fund ($2.1B) Public-Private Partnership (P3) Fund ($1.26B) New Federal Programs Federal Economic Stimulus Funds Longer-Term Funds Building Canada Fund Communities Component Bonus ($500M) Infrastructure Stimulus Fund ($4B) Recreational Fund ($500M) Social Housing Renovations ($1B) Low-income Seniors ($400M) Disabilities ($75M) Colleges & Universities Deferred Maintenance ($2B) Extension of Affordable Housing Initiative ($625M) Green Infrastructure Fund ($1B) Broadband Infrastructure Fund ($225M) Canada Foundation For Innovation ($750M) Economic Stimulus Funds must be spent over two years (2009-10 and 2010-11) 6
Programs Administered by OMAFRA Infrastructure Stimulus Fund (ISF) Federal and provincial infrastructure funding focused on short term objectives for economic stimulus. Municipalities under 100,000, maximum 3 applications. Municipalities over 100,000, unlimited number of applications. Successful projects announced June 5, 2009 Criteria for funding: 1. Shovel ready, begin quickly 2. Project can be completed by March 31, 2011 Over 2700 applications received from 425 different municipalities, $6B total ask 1187 projects approved $1.85B investment from federal and provincial government, total infrastructure investment of ~$2.77B. 7
Programs Administered by OMAFRA Projects approved on June 5, 2009 Infrastructure Stimulus Fund Sector # of Projects Federal Funding Provincial Funding Airport Infrastructure 8 $12,359,140 $12,359,139 Brownfield Redevelopment Infrastructure 2 $650,000 $650,000 Cultural Infrastructure 25 $27,184,990 $27,184,989 Disaster Mitigation Infrastructure 3 $8,843,333 $8,843,333 Local Road Infrastructure 586 $287,845,679 $287,848,824 Municipal buildings 216 $183,193,733 $183,183,628 Parks and Trails 121 $47,372,220 $47,372,218 Public Transit Infrastructure 26 $68,512,829 $68,512,832 Solid Waste Management Infrastructure 12 $7,628,586 $7,628,586 Wastewater Infrastructure 71 $144,390,308 $144,390,304 Water Infrastructure 117 $137,022,566 $137,022,565 TOTAL 1187 $925,003,383 $924,996,418 8
Programs Administered by OMAFRA Infrastructure Stimulus Fund (ISF) Number of Projects by Region North, 153, 13% West, 264, 22% Central, 520, 44% East, 249, 21% 9
Programs Administered by OMAFRA Infrastructure Stimulus Fund (ISF) Provincial Funding by Region West $238,382,311 26% North $75,784,986 8% Central $393,594,689 43% East $217,035,866 23% 10
Programs Administered by OMAFRA Infrastructure Stimulus Fund (ISF) Approved Projects by Type (North Only) Airport Cultural Municipal Buildings Solid Waste Management Water Brownfield Redevelopment Local Road Parks and Trails Wastewater 11
Programs Administered by OMAFRA Infrastructure Stimulus Fund (ISF) Provincial Funding by Type (North Only) Airport Cultural Municipal Buildings Solid Waste Management Water Brownfield Redevelopment Local Road Parks and Trails Wastewater 12
1. Major Infrastructure Component (BCF-MIC) Programs Administered by OMAFRA Building Canada Fund (BCF) BCF-MIC projects are applied for and approved on a case-by-case basis. HELP Clean Water Lake Huron Water Supply Systems. Broadband: EOWC and the new Connecting Rural Canadians programs 2. Communities Component (BCF-CC) Intake 1 projects announced February 13, 2009 340 applications with total project costs of more than $1.5 billion were received. Federal/provincial funding of $685 million for 290 projects (~85% of applications approved). Combined with municipal investment, total infrastructure investment is over $1 billion. The Secretariat provided the first level of due diligence, including technical reviews such as engineering, environmental, public policy. The Oversight Committee reviewed the assessment results against program criteria, and recommend projects for approval. Project readiness a significant criteria for consideration. 13
Programs Administered by OMAFRA Building Canada Fund - Intake One Approved Applications by Region 290 Projects West 88 30% Central 26 9% East 72 25% North 104 36% 14
Programs Administered by OMAFRA Building Canada Fund Intake One Approved Application Costs by Region $343.44M Central $39,030,583 11% West $144,485,166 43% East $97,798,912 28% North $62,122,668 18% 15
Programs Administered by OMAFRA BCF-CC Intake 2 announced June 5, 2009 In the 2009 federal budget, the government announced a BCF-CC top-up of $500 million available nationwide to municipalities for projects that could be started and completed by March 31, 2011. The Province has set aside matching funds for Ontario s portion of the top-up funding in the 2009 Ontario Budget. The second intake of BCF-CC was launched April 14 th, 2009, and closed on May 1, 2009 at 11:59 p.m. The program received more than 420 applications with total project costs of more than $1 billion. 183 projects approved, federal and provincial funding of over $408M. Criteria for funding: 1. Shovel ready, begin quickly 2. Project can be completed by March 31, 2011 16
Programs Administered by OMAFRA Projects approved on June 5, 2009 Building Canada Fund Intake 2 Sector # of projects Federal Funding Provincial Funding Brownfield Remediation and Redevelopment Infrastructure 1 316,667 316,667 Culture Infrastructure 14 24,049,255 24,049,255 Disaster Mitigation Infrastructure 1 462,550 462,550 Green Energy Infrastructure 2 561,967 561,967 Local Road Infrastructure 78 39,942,577 39,942,577 Recreation Infrastructure 38 87,289,072 87,289,072 Regional and Local Airports 1 16,210 16,210 Solid Waste Management Infrastructure 1 69,259 69,259 Tourism Infrastructure 3 1,248,850 1,248,850 Waste Water Infrastructure 22 31,660,131 31,660,131 Water Infrastructure 22 18,429,695 18,429,695 TOTAL 183 $204,046,233 $204,046,233 17
Programs Administered by OMAFRA Canada-Ontario Municipal Rural Infrastructure Fund (COMRIF) COMRIF was launched on November 15, 2004. The federal and provincial governments each committed $298 million to improving rural infrastructure over five years. 280 Projects funded bridges and roads, solid waste management, water and wastewater infrastructure. A $2.98 million sub-component of the program assists 421 municipalities to improve knowledge, skills and expertise in the management of infrastructure assets (Asset Management Program). For those projects that did not request an extension, COMRIF sunsets on October 31, 2009, with construction completed by March 31, 2009. For those that requested and received an extension, COMRIF now sunsets on March 31, 2011 and project construction must be completed by October 31, 2010. 18
Programs Administered by OMAFRA Canada-Ontario Municipal Rural Infrastructure Fund (COMRIF) Percentage of 280 Approved Projects by Region East 80 (28.6%) North 77 (27.5%) West 65 (23.2%) Central 58 (20.7%) 19
Programs Administered by OMAFRA Canada-Ontario Municipal Rural Infrastructure Fund (COMRIF) Allocation of Funding by Region ($288.9M 1/3 Share) East $83.34 (28.9%) North $71.16 (24.6%) Central $35.17 (12.2%) West $99.24 (34.3%) 20
Infrastructure Projects 21
Understanding Sr. Government Infrastructure Funding Programs #1 Not all programs are created equal! Read the guidelines, each program is different and will have different guidelines. BCF-CC ISF COMRIF OSTAR RInC/REC. Determine what potential projects could fit under the program. Review websites related to program. #2 Use all resources available Use all federal/provincial contacts available. Provincial/federal policy statements how do we contribute to greater good. Refer to your resources often, they can be updated during length of intake. 22
Understanding Sr. Government Infrastructure Funding Programs #3 The online application process is your friend Standard for most funding programs. Get a login/password from administrator. Familiarize yourself with the site and questions. Compose your answers on word processing program. Don t wait until last day to try going online. Call administrator to find if out if it has been submitted. #4 Past approvals do not indicate the future Each intake/program does not take into account what project was approved before from the same municipality. Looking for success from previous programs does not give you an advantage in future programs and visa versa. 23
Understanding Sr. Government Infrastructure Funding Programs #5 Less is more Be concise, extra points not given for weight of application. Character limits in online application fields, stay within them. Be thorough, we can t read what you don t write. 24
General Guidelines on Information in Applications 1. Make sure your project fits the category in the program. 2. Business Case separate or within body of application Objective- problem statement Proposed activities scope, location, meeting goals, objectives of the funding program Who will benefit and how? Why does this work over another option? Job Creation? Short and long term Support of public? 3. Project Rationale what s going on now, what will happen if not funded. 4. Expected benefits does it meet the benefits desired by the program? 5. Timelines and milestones 1 st quarter, 2 nd quarter, etc. 25
General Guidelines on Information in Applications 6. Performance and Progress Measures beyond the length of the construction. 7. Project Risks what are identified risks and mitigation strategies. 8. Any supplementary info requested council resolutions, financial/technical schedules. 9. Project budget expected budget, breakdown by category, cash flow projections WHAT NOT TO INCLUDE: Operating and maintenance costs Staff pay/benefits Legal costs GST 26
Infrastructure Ontario Loan Program Infrastructure Ontario s Loan Program is a public sector lending vehicle that provides efficient access to capital market financing. Leverages the strength of the Infrastructure Ontario s good credit rating and passes those savings along to public sector borrowers. Flexible terms - short-term floating monthly construction rate and longterm debentures from 5- to 40-years. Pooled financing model provides value in tight credit conditions. Well positioned to support public infrastructure programs. Advanced over $2.1 billion in loans and over 266 public sector clients involving over 1100 projects. Northwest: 17clients 70 projects; Northeast: 38 clients 78 projects. 27
Canada Mortgage and Housing Corporation Municipal Infrastructure Lending Program Announced in April 2009, this program will provide up to 2 billion dollars in low-cost loans to municipalities over two years, for housingrelated infrastructure projects. Eligibe projects include: water, wastewater, solid waste, local transportation. Supporting the federal stimulus funding, this program will help accelerate infrastructure projects, as municipalities can use the money towards their contribution for cost-shared federal infrastructure projects. Website: http://www.cmhc.ca/housingactionplan/ 28
For more information Ontario Ministry of Agriculture, Food and Rural Affairs Website: www.omafra.gov.on.ca Canada-Ontario Infrastructure Funding Website: www.bcfontario.ca Infrastructure Ontario Website: www.infrastructureontario.ca Infrastructure Canada s Building Canada Plan web site: http://www.buildingcanada-chantierscanada.gc.ca/index-eng.html Infrastructure Canada web site: http://www.infc.gc.ca/tic/index-eng.html 29