Public Transit Agreement

Canada - Alberta

Agreement On The Transfer Of Funds For Public Transit

2006-2010

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This Agreement made as of March 30, 2006,

BETWEEN:

HER MAJESTY IN RIGHT OF CANADA, ("Canada") represented by the Minister of State (Infrastructure and Communities) ("Federal Minister") and the Deputy Prime Minister and Minister of Public Safety and Emergency Preparedness.

AND:

HER MAJESTY IN RIGHT OF THE PROVINCE OF ALBERTA ("Province") represented by the Minister of Infrastructure and Transportation ("Provincial Minister"), the Minister of International and Intergovernmental Relations and the Minister of Municipal Affairs.

PREAMBLE

WHEREAS Canada and Alberta have agreed to enhance the sustainability of Alberta's municipalities.

WHEREAS Canada and Alberta recognize the need for Alberta's municipalities to develop and enhance infrastructure, including public transit, to aid in their economic, social, environmental and cultural development.

WHEREAS Canada and Alberta wish to co-operate in addressing the need for sustainable public transit systems to assist in achieving the desired outcomes of cleaner air and the reduction of greenhouse gas emissions.

WHEREAS Alberta wishes to facilitate the transfer of funds from Canada to selected Alberta municipalities.

AND WHEREAS Alberta provides financial assistance to municipalities, through both annual allocation based grants and one-time special grants for capital and rehabilitation of municipal public transit systems.

PRINCIPLES

The Government of Canada and the Government of Alberta acknowledge that this Agreement has been negotiated with regard to the following principles:

Principle 1 - Respect for jurisdiction: Canada recognizes Alberta's jurisdictional responsibility for municipalities. Furthermore, the Parties recognize the opportunities created through stable and predictable funding for municipal infrastructure, including public transit, as well as the merits of co-operation across all orders of government to support municipal infrastructure.

Principle 2 - A flexible approach: Given that needs, challenges and priorities often vary according to the size of a municipality, Canada and Alberta understand the need to adopt a flexible approach regarding both the allocation of Public Transit Funds to municipalities and the scope of Eligible Projects.

Principle 3 - Equity between provinces and territories: Ensuring that the federal allocation among the provinces is based largely on a per capita basis


Principle 4 - Long-term solutions: Canada is committed to assist Alberta in implementing its long-term vision for Alberta cities and communities.

Principle 5 - Transparency: Canada and Alberta commit to put in place an open and transparent governance process for the purposes of implementing this agreement and selecting projects for funding. Further, Canada and Alberta will work together to develop indicators to enable effective reporting to Albertans and all Canadians on the outcomes of public transit Funds in Alberta.

Principle 6 - Regular reporting to Canadians: Canada will use federal mechanisms to report on outcomes. Alberta will employ its own mechanism for reporting within its jurisdiction.

NOW THEREFORE, in accordance with the principles set out above, Canada and Alberta hereby agree as follows.

1. INTERPRETATION

1.1 Definitions

A capitalized term has the meaning given to it in this section unless the context clearly dictates otherwise.

'Agreement' means this Canada - Alberta agreement on the transfer of Public Transit Funds.

'Annual Expenditure Report' means the annual report to be prepared and delivered by Alberta to Canada, more particularly described in Schedule D.

'Audit Report' means an attestation prepared, at Alberta's cost, by the Alberta auditor general or other Alberta licensed auditor, more particularly described in Schedule D.

'Base Amount' means the average of spending by Alberta and Eligible Recipients on Public Transit Infrastructure for the five years preceding the Agreement (March 2000 - April 2005).

'CUTA' means the Canadian Urban Transit Association.

'Eligible Costs' means those costs described in Schedule B, incurred in respect of Eligible Projects.

'Eligible Projects' means Public Transit Infrastructure projects.

'Eligible Recipient' means a municipality that has a public transit system that is recognized by the Canadian Urban Transit Association, identified in Section 7.1.

'Eligible Recipient Requirements' means those requirements described in Schedule C hereto.

'Federal Gas Tax Revenues' means the funds transferred to Alberta from Canada in accordance with The Canada-Alberta Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities 2005-2015.

'Fiscal year' means the period beginning April 1 of a year and ending March 31 of the following year.

'Funding Agreement' means an agreement made between Alberta and an Eligible Recipient pursuant to which Funds are paid to the Eligible Recipient and ensures that the terms and conditions of this Agreement are met.

'Funds' means the funds made available pursuant to this Agreement and includes any interest earned on the said Funds.

'Infrastructure Programs' means Canada's infrastructure programs in existence at the time of the execution of this Agreement, including the Canada Strategic Infrastructure Fund, the Border Infrastructure Fund, the Municipal Rural Infrastructure Fund and the Infrastructure Canada Program.

'Local Government' means those municipalities identified as Eligible Recipients under this Agreement

'Ministers' means the Federal Minister and the Provincial Minister.

'Outcomes Report' means the report to be delivered by Alberta to Canada, and made available to the public, that reports on the outputs and outcomes of the use of the Funds, using the indicators set out in Schedule E.

'Parties' means Canada and Alberta.

'Public Transit Infrastructure' means tangible capital assets located or situated in Alberta primarily for public use or benefit owned by an Eligible Recipient that:

1. improve the quality of the environment and contribute to reduced greenhouse gas emissions or cleaner air; and
2. fall within the category of projects described in Schedule A hereto.

'Third Party' means any person other than a party to this Agreement that participates in the implementation of an Eligible Project.

'Transit Strategy' means a plan that provides strategic direction for future development of transit services and could include descriptions of initiatives to address both conventional and specialized transit, establish performance measures to allow the municipality to assess how it is meeting its transit objectives, and outline capital and operating initiatives for meeting its objectives.

'Transportation Demand Management' means programs, services, tools and policies that enhance, promote and encourage commuter options and reduce traffic congestion, such as increased marketing efforts to position transit as an attractive, convenient and economic mode of transportation; and improved convenience, safety, accessibility and service for transit users, etc.

1.2 Entire Agreement

This Agreement supersedes and invalidates all other commitments, representations and warranties relating to the subject matter hereof which the Parties may have made either orally or in writing prior to the date hereof, and all of which will become null and void from the date this Agreement is signed.

1.3 Schedules

The following schedules are attached to form part of this Agreement:

Schedule A- Eligible Project Categories

Schedule B - Eligible And Ineligible Costs

Schedule C - Eligible Recipient Requirements

Schedule D - Reporting and Audits

Schedule E - Outcome Indicators

Schedule F - Communications Protocol

1.4 Precedence

In the event of a conflict, the part of this Agreement that precedes the signatures of the Parties will take precedence over the Schedules.

1.5 Accounting Principles

All accounting terms not otherwise defined herein have the meanings assigned to them; all calculations will be made, and all financial data to be submitted will be prepared, in accordance with the generally accepted accounting principles (GAAP) in effect in Canada and in Alberta. GAAP will include, without limitation, those principles approved or recommended from time to time by the Canadian Institute of Chartered Accountants, or any successor institute, applied on a consistent basis.

2. PURPOSE

The purpose of this Agreement is to provide a joint framework for the transfer of $40,090,902 million from Canada to Alberta for investment in Public Transit Infrastructure.

3. OUTCOMES

Federal public transit funding will support the environmental objectives of reducing GHG emissions and reducing smog-forming air emissions through increased public transit ridership and reduced energy use.

4. RESPONSIBILITIES

4.1 Government of Canada Responsibilities

4.1.1 Canada will commit to flowing $40,090,902 in accordance with this Agreement.

4.1.2 Provided there is no default under the terms of Section 9.2 of this Agreement, Canada's contribution will be paid in one payment to Alberta, once the Agreement has been signed.

4.1.3 Canada will ensure that the funding under this Agreement provides additional revenues for Eligible Recipients rather than displacing other federal infrastructure funding.

4.2 Government of Alberta Responsibilities

Alberta agrees that it will:

1. ensure that, over the period of May 18, 2005, to March 31, 2010, its average annual capital spending on Public Transit Infrastructure, and that of Eligible Recipients within Alberta, will not be less than the Base Amount. Funding for provincial programs is subject to legislated appropriations;
   
   
2. not reduce, eliminate or clawback any Public Transit Infrastructure funding which is currently being made available to Eligible Recipients by Alberta;
   
   
3. ensure that each Eligible Recipient complete a Transit Strategy that, where relevant, includes Transportation Demand Management measures and make them available to the public by November 1, 2006;
   
   
4. include the Eligible Recipient Requirements in any Funding Agreement and enforce all terms and conditions of Funding Agreements in a diligent and timely manner and seek remedies from non-compliant Eligible Recipients;
   
   
5. ensure that in the case that a Local Government wishes to utilize these funds for investments to enhance the security of its transit infrastructure, the Local Government must provide evidence that these Eligible Projects satisfy the applicable conditions and requirements imposed by Transport Canada for such federally funded security projects -including cost sharing, staking and limits to federal participation - and including those established under Transport Canada's Passenger Rail and Mass Transit Security Contribution Program;
   
   
6. accept the transfer of Public Transit Funds from Canada into its General Revenues;
   
   
7. allocate funds to Eligible Recipients through Alberta's Department of Infrastructure and Transportation;
   
   
8. carry out its administrative responsibility utilizing existing resources with no administrative or overhead charges against the Funds transferred to Alberta under this agreement; and,
   
   
9. pay Funds to Eligible Recipients solely for Eligible Projects identified in Schedule A and solely in respect of Eligible Costs identified in Schedule B.

5. OVERSIGHT COMMITTEE

The Oversight Committee, as established under the Canada - Alberta Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities, signed on May 14, 2005, shall monitor the overall strategic implementation of this Agreement in accordance with the Terms of Reference, as approved by the Oversight Committee on January 16, 2006, under the Gas Tax Revenue Agreement.

6. CONTRIBUTION PROVISIONS

6.1 Appropriations

A payment due by Canada hereunder is conditional on a legislated appropriation for the Public Transit Funds and the Funds for the Fiscal Year in which the payment is due.

6.2 Limit on Canada's Financial Commitments

1. Eligible Recipients may use Funds to pay up to 100% of Eligible Costs of an Eligible Project. However, to the extent an Eligible Recipient is receiving money under an Infrastructure Program in respect of an Eligible Project to which the Eligible Recipient wishes to apply Funds, the maximum federal contribution limitation set out in any Infrastructure Program contribution agreement made in respect of that Eligible Project shall continue to apply.
   
   
2. Without prior written approval of Canada, Alberta may not use the payment of Funds by Alberta, once received from Canada, to an Eligible Recipient, as the provincial contribution under contribution agreements under existing Infrastructure Programs.

6.3 Disposal of Eligible Projects

To the extent that Alberta receives a repayment of all or a portion of a contribution pursuant to the operation of Paragraph 11 of Schedule C, Alberta shall immediately pay the said amount to Canada.

6.4 Contracting

Alberta agrees that all contracts for the supply of services or materials to Eligible Projects will be awarded in accordance with Alberta policies and procedures and in a way that is transparent, competitive and consistent with value-for-money principles.

7. ALLOCATION TO ELIGIBLE RECIPIENTS AND DELIVERY MECHANISM

7.1 Allocation to Eligible Recipients

Alberta will allocate the Funds to the following Eligible Recipients that currently operate public transit systems. The allocation to each Eligible Recipient will include a set amount of $500,000 plus an additional amount proportional to public transit ridership as reported by the Canadian Urban Transit Association.

	Transit Ridership CUTA 2004	ALLOCATION
AIRDRIE	34,678	$508,824
CALGARY	79,510,800	$20,731,761
EDMONTON	47,485,316	$12,582,781
GRANDE PRAIRIE	556,404	$641,579
LETHBRIDGE	2,726,872	$1,193,861
MEDICINE HAT	952,100	$742,264
RED DEER	2,746,224	$1,198,785
ST. ALBERT	1,008,956	$756,732
STRATHCONA COUNTY	1,777,128	$952,195
Regional Municipality of Wood Buffalo (Ft MacMurray)	1,108,734	$782,120
Total	137,907,212	$40,090,902

Alberta agrees that if Funds advanced by Alberta to an Eligible Recipients are not paid by the Eligible Recipient in respect of Eligible Costs by March 31, 2010, Alberta shall, unless otherwise agreed in writing in advance with Canada, recover the unspent Funds and reimburse Canada when requested.

7.2 Delivery Mechanism

A signed Funding Agreement between Alberta and an Eligible Recipient will act as the trigger for the Province to transfer to the Eligible Recipient, its share of the Funds.

The Funding Agreement will:

1. respect the allocation formula set out in 7.1 above;
   
   
2. mirror the definitions of Eligible Projects and Eligible Costs set out in this Agreement and confirm that Funds may only be used for Eligible Projects and solely in respect of Eligible Costs;
   
   
3. incorporate the Eligible Recipient Requirements set out in Schedule C;
   
   
4. deal with the mechanics of the flow of Funds and confirm that interest earned may only be applied to Eligible Costs of an Eligible Project or the administration costs related to the implementation of the Funding Agreements;
   
   
5. identify the manner by which Alberta will monitor the build-up of unexpended monies in the hands of Eligible Recipients and set out how Alberta will satisfy itself regarding the appropriateness of any accumulation.

8. REPORTING, AUDITS AND EVALUATION

8.1 Reporting

8.1.1 Alberta will, at its cost, include this Agreement as part of its reporting requirements under the Canada - Alberta Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities, signed on May 14, 2005. Alberta will include reporting on transit funding under this Agreement in the Annual Expenditure Report and the Outcomes Report required under the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities.

8.1.2 Canada may incorporate all or any part or parts of the said reports into any report that Canada may prepare for its own purposes, including any reports that may be made public.

8.2 Audits

8.2.1 Alberta agrees to ensure that proper and accurate accounts and records, including invoices, statements, receipts and vouchers in respect of all Eligible Projects that receive Funds, are kept until the later of March 31, 2010, or for three years following completion of an Eligible Project, and will, upon reasonable notice, make them available or cause the Eligible Recipient to make them available to Canada for inspection or audit.

8.2.2 Canada may request and Alberta agrees to complete, at its cost, and provide to Canada an audit of any one or more individual Eligible Projects.

8.2.3 Alberta will share with Canada the results of any compliance or performance audit that they may carry out beyond the Audit Report, which examines the use of Funds to a specific extent.

8.2.4 Alberta will undertake to ensure that all Eligible Project sites, equipment and records to be funded under this Agreement be open to inspection at any time by Alberta or a designated representative of Alberta.

8.3 Evaluation

8.3.1 The Parties agree that the evaluation of this Agreement will be conducted as part of the evaluation agreed to under the Canada - Alberta Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities signed on May 14, 2005. The Parties shall seek the input of Eligible Recipients or representatives thereof as the Parties deem appropriate.

8.3.2 At a minimum, the evaluation will address the issues related to achievement of the objectives of this Agreement, the use of funding, the effectiveness of the funding approach described in Section 7 of this Agreement, and the effectiveness of the communications protocol described in Schedule F.

8.3.3 The Parties agree to cooperate with respect to the above noted evaluation, the costs of which will be shared equally by the Parties. The Parties will cooperate and agree on the design of the evaluation framework.

8.3.4 In addition to the foregoing, the Parties agree that the evaluation of this Agreement will be included in the national evaluation as agreed to under the Canada - Alberta Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities, signed on May 14, 2005.

9. DISPUTE RESOLUTION, DEFAULT, REMEDIES AND INDEMNITY

9.1 Dispute Resolution

For any matter relative to this Agreement requiring formal communication between Canada and Alberta, such communication shall be between Ministers. The Parties agree to keep each other informed of any disagreement or contentious issue through the Oversight Committee. Disagreements or contentious issues that cannot be resolved by the Oversight Committee will be submitted to Ministers for resolution.

9.2 Events of Default

9.2.1 Canada may declare that an event of default has occurred if Alberta has:

1. not complied with any condition, undertaking or material term in the Agreement; or
   
   
2. failed to deliver an Annual Expenditure Report, Audit Report or Outcomes Report when required by either Alberta under this Agreement or an Eligible Recipient; or
   
   
3. delivered an Annual Expenditure Report or Audit Report that disclosed non-compliance by either Alberta or an Eligible Recipient; or
   
   
4. defaulted under the Canada - Alberta Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities, signed on May 14, 2005.

Canada will not declare that an event of default has occurred unless it has consulted with Alberta and given notice to it of the occurrence which, in Canada's opinion, constitutes an event of default.

Alberta, within 30 days of receipt of the notice, shall either correct the condition or event, or demonstrate to the satisfaction of Canada that it has taken such steps as are necessary to correct the condition.

9.2.2 Alberta may declare an event of default has occurred if Canada has:

1. not complied with any condition, undertaking or material term in the Agreement;
   
   
2. failed to deliver Public Transit Funds to Alberta, as specified in Section 4.1 of this Agreement.

Alberta will not declare that an event of default has occurred unless it has consulted with Canada and given notice to Canada of the occurrence which, in Alberta's opinion, constitutes an event of default. Canada will, within 30 days of receipt of the notice, either correct the condition or event, or demonstrate to the satisfaction of Alberta that it has taken such steps as necessary to correct the condition.

9.3 Remedies

1. If Canada declares that an event of default has occurred, after 30 days of declaration, it may immediately exercise one or more of the following remedies: In the case of a default under subsection 9.2 a) or d) confirm above, terminate or suspend its obligation to pay funds. If Canada suspends payment it may pay suspended funds if Canada is satisfied that the default has been cured.
   
   
2. In the case of any other default, suspend its obligation to pay Funds pending Canada's satisfaction that the default has been cured.

If Alberta declares that an event of default has occurred, after 30 days of declaration, it may suspend or terminate its obligations under the terms of this Agreement, and if suspended, Alberta may resume its obligations when satisfied the default has been cured.

9.4 Indemnity

Alberta agrees at all times to indemnify and save harmless Canada, its officers, servants, employees or agents from and against all claims and demands, losses, costs, damages, actions, suits or other proceedings by whomsoever brought or prosecuted in any manner based upon, or occasioned by any injury to persons, damage to or loss or destruction of property, economic loss or infringement of rights caused by or arising directly or indirectly from:

1. all Eligible Projects;
   
   
2. the performance of this Agreement or the breach of any term or condition of this Agreement by Alberta, its officers, employees and agents, or by a Third Party, its officers, employees or agents;
   
   
3. the performance of a Funding Agreement or the breach of any term or condition of a Funding Agreement by an Eligible Recipient, its officers, employees and agents, or by a Third Party, its officers, employees or agents;
   
   
4. the design, construction, operation, maintenance and repair of any part of an Eligible Project;
   
   
5. any omission or other wilful or negligent act of Alberta, an Eligible Recipient or Third Party and their respective employees, officers or agents;

except to the extent to which such claims and demands, losses, costs, damages, actions, suits or other proceedings relate to the act or negligence of an officer, employee or agent of Canada in the performance of his or her duties.

10. TERM OF AGREEMENT

This agreement shall commence on March 30, 2006, and shall expire on March 31, 2010.

11. COMMUNICATIONS

The Parties hereby agree to follow the terms of the Communications protocol set out in Schedule F hereto.

12. MISCELLANEOUS

12.1 Binding Obligations

Each Party declares to the other that the signing and execution of this Agreement was duly and validly authorized, and that each has incurred a legal and valid obligation in accordance with the terms and conditions of the Agreement.

12.2 Survival

The Parties' rights and obligations set out in Sections 2, 6.2, 6.3, 7.1.1, 8, 9 and 11 will survive the expiry or early termination of this Agreement, and any other Section or Schedule which is required to give effect to the termination or to its consequences shall survive the termination or early termination of this Agreement.

12.3 Governing law

This Agreement is governed by the laws applicable in Alberta.

12.4 Debts Due to Canada

Any amount owed to Canada under this Agreement will constitute a debt due to Canada, which Alberta will reimburse forthwith, on demand, to Canada.

12.5 No Benefit

No member of the House of Commons or of the Senate of Canada will be admitted to any share or part of any Contract made pursuant to this Agreement or to any benefit arising therefrom.

12.6 No Agency

It is understood, recognized and agreed that no provision of this Agreement and no action by the Parties will establish or be deemed to establish a partnership, joint venture, principal-agent relationship or employer-employee relationship in any way or for any purpose whatsoever between Canada and Alberta, or between Canada, Alberta and a Third Party.

12.7 No Authority to Represent

Nothing in this Agreement is to be construed as authorizing one Party to contract for or to incur any obligation on behalf of the other or to act as agent for the other. Nothing in this Agreement is to be construed as authorizing any Recipient or any Third Party to contract for or to incur any obligation on behalf of either Party or to act as agent for either Party, and Alberta will take reasonable steps to ensure that all Funding Agreements contain provisions to that effect.

12.8 Counterpart Signature

This Agreement may be signed in counterpart, and the signed copies will, when attached, constitute an original Agreement.

12.9 Values and Ethics Code

No person governed by the post-employment, ethics and conflict of interest guidelines of Canada will derive a direct benefit from this Agreement unless that person complies with the applicable provisions.

12.10 Severability

If, for any reason, a provision of this Agreement that is not a fundamental term is found to be or becomes invalid or unenforceable, in whole or in part, it will be deemed to be severable and will be deleted from this Agreement, but all the other terms and conditions of this Agreement will continue to be valid and enforceable.

12.11 Waiver

A Party may waive any right under this Agreement only in writing; and any tolerance or indulgence demonstrated by that Party will not constitute waiver of such right. Unless a waiver is executed in writing, that Party will be entitled to seek any remedy that it may have under this Agreement or under the law.

12.12 Lobbyists and Agent Fees

Alberta warrants that any person who lobbies or has lobbied on its behalf to obtain funding or any benefit under this Agreement, and who is subject to the Lobbyists Registration Act (Canada), is registered accordingly. Furthermore, Alberta warrants that no remuneration based on a percentage of Canada's contribution will be paid to a lobbyist.

12.13 Amendments to the Agreement

If Canada concludes an agreement for similar purposes with any other province or territory of Canada, and that agreement, taken as a whole, is materially different from this Agreement, Alberta may ask Canada to agree to amend this Agreement so that, taken as a whole, it affords similar treatment to Alberta as the other agreement affords to the other province or territory.

Additionally, this Agreement may be amended from time to time on written agreement of the Ministers.

12.14 Notice

Any notice, information or document provided for under this Agreement will be effectively given if delivered or sent by letter, postage or other charges prepaid, or by facsimile or email. Any notice that is delivered will have been received on delivery; and any notice mailed will be deemed to have been received eight (8) calendar days after being mailed.

Any notice to Canada must be sent to:

Assistant Deputy Minister, Cities and Communities
Office of Infrastructure Canada
90 Sparks Street
Ottawa (Ontario)
K1P 5B4
Fax: 613-952-4978
Email: laroche.yazmine@infc.gc.ca

Any notice to Alberta will be addressed to:

Deputy Minister
Alberta Infrastructure and Transportation
2nd Floor, Twin Atria Building
4999-98th Avenue
Edmonton, Alberta
T6B 2X3

Each Party may change the address that it has stipulated by notifying in writing the other Party of the new address.

SIGNATURES

This Agreement has been executed on behalf of Canada by the Minister of Transportation, Infrastructure and Communities, and on behalf of Alberta by the Minister of Infrastructure and Transportation.

SCHEDULE A - Eligible Project Categories

Public Transit Infrastructure capital investments include the following, e.g.:

1. Rapid Transit Infrastructure light rail, heavy rail additions, subways, transit stations, park and ride facilities, grade separated bus lanes and rail lines;
   
   
2. Rolling Stock: buses (including hybrids, diesel, natural gas, and fuel cell buses), light and heavy rail cars, trolleys, ferries;
   
   
3. Intelligent Transport System (ITS): fare collection, passenger information, maintenance, propulsion and communications technologies, transit priority signalling, passenger and traffic information, and transit operation systems, including technology that enhances safety and security of operations;
   
   
4. Related Capital Infrastructure: transit queue-jumpers and High Occupancy Vehicle (HOV) lanes, storage and maintenance facilities, terminals;
   
   
5. Active transportation infrastructure: and
   
   
6. Para transit: rolling stock, fixed capital assets and systems.
   

SCHEDULE B - Eligible And Ineligible Costs

Eligible Costs

Project Costs

Eligible costs, as specified in each contribution agreement, will be all direct costs which are, in Canada's opinion, properly and reasonably incurred and paid by an Eligible Recipient under a contract for goods and services necessary for the implementation of an Eligible Project. Eligible costs may include only the following:

1. the capital costs of acquiring, constructing or renovating a tangible capital asset and any debt financing charges related thereto;
   
   
2. the fees paid to professionals, technical personnel, consultants and contractors specifically engaged to undertake the surveying, design, engineering, manufacturing or construction of a project infrastructure asset and related facilities and structures; and,
   
   
3. the costs of environmental assessments, monitoring and follow-up programs as required by the Canadian Environmental Assessment Act, or a provincial equivalent.

Ineligible Costs

Costs related to the following items are ineligible costs:

1. Eligible Project costs incurred before May 18, 2005;
2. services or works that, in the opinion of Alberta, are normally provided by the Eligible Recipient or a related party;
3. salaries and other employment benefits of any employees of the Eligible Recipient;
4. an Eligible Recipient's overhead costs, its direct or indirect operating or administrative costs, and, more specifically, its costs related to planning, engineering, architecture, supervision, management and other activities normally carried out by its applicant's staff;
5. costs of feasibility and planning studies for individual Eligible Projects;
6. taxes for which the Eligible Recipient is eligible for a tax rebate and all other costs eligible for rebates;
7. costs of land or any interest therein, and related costs;
8. cost of leasing of equipment by the Eligible Recipient;
9. routine repair and maintenance costs;
10. legal fees;
11. administrative costs incurred as a result of implementing this Agreement; and
12. audit and evaluation costs.

SCHEDULE C - Eligible Recipient Requirements

Eligible Recipient shall:

1. complete a Transit Strategy that includes Transportation Demand Management measures, where relevant, and make them available to the public by November 1, 2006.
   
   
2. prior to March 31, 2010, adopt and use the accounting rules of the Public Sector Accounting Board.
   
   
3. ensure that the Public Transit Funds will result in a net incremental capital spending increase on Public Transit Infrastructure.
   
   
4. permit Canada reasonable access to all records relating to all Eligible Projects that have received Funds.
   
   
5. be responsible for the complete, diligent and timely implementation and completion of the Eligible Project.
   
   
6. acknowledge that Alberta may holdback Public Transit Funds if the Eligible Recipient is in default under the Funding Agreement.
   
   
7. comply, as necessary, with the Communications Protocol set out in Schedule F.
   
   
8. comply with all legislated environmental assessment requirements and agree that no funds will be committed to an Eligible Project until all required environmental assessment requirements have been satisfied.
   
   
9. implement all mitigation measures identified in any environmental assessment of the Eligible Project.
   
   
10. if Public Transit Funds are paid by Alberta to the Eligible Recipient in advance of the Eligible Recipient incurring and paying Eligible Costs, invest such Funds in accordance with applicable Alberta legislation and /or regulations. Further, the Eligible Recipient agrees to spend all Funds received from Alberta by March 31, 2010. Unless otherwise agreed in writing in advance with Alberta, any Funds which have not been spent on Eligible Costs by March 31, 2010 shall be deemed to constitute a debt to Alberta and Alberta shall take steps to recover the unspent Funds.
    
    
11. (a) Retain title to, and ownership of, the Public Transit Infrastructure resulting from the Eligible Project for at least ten (10) years after Project completion.
    
    (b) If, at any time within ten (10) years from the date of completion of the Eligible Project, the Eligible Recipient sells, leases, encumbers or otherwise disposes of, directly or indirectly, any asset constructed, rehabilitated or improved, in whole or in part, with funds contributed by Canada under the terms of this Agreement, other than to Canada, Alberta, a Local Government or a Crown corporation of Alberta that is the latter's agent for the purpose of implementing this agreement, the Eligible Recipient shall repay Alberta, on demand, a proportionate amount of the funds contributed by Canada, as follows:
    
    

    Where Eligible Project asset is sold, leased, encumbered or disposed of:	Repayment of contribution (in current dollars)
    Within 2 Years after Eligible Project completion	100%
    Between 2 and 5 Years after Eligible Project completion	55%
    Between 5 and 10 Years after Eligible Project completion	10%

    
    
12. a) award and manage all contracts for the supply of services and/or material to the Eligible Project ('Contracts') in accordance with Alberta's relevant policies and procedures, a copy of which will be provided to Alberta in advance of Alberta making any payments to the Eligible Recipient;
    
    
    b) award contracts in a manner that is transparent, competitive and consistent with value-for-money principles.
    
    
13. acknowledge that it may use Funds to pay up to 100% of Eligible Costs of an Eligible Project, provided that to the extent it is receiving money under an Infrastructure Program in respect of an Eligible Project to which the Eligible Recipient wishes to apply Funds, the maximum federal contribution limitation set out in any Infrastructure Program contribution agreement made in respect of that Eligible Project shall continue to apply, and Funds paid to the Eligible Recipient shall be deemed to be a federal contribution under the said contribution agreement.
    
    
14. indemnify and save harmless Canada and Alberta, their officers, servants, employees or agents from and against all claims and demands, losses, costs, damages, actions, suits or other proceedings by whomsoever brought or prosecuted in any manner based upon, or occasioned by any injury to persons, damage to or loss or destruction of property, economic loss or infringement of rights caused by or arising directly or indirectly from:
    
    i) all Eligible Projects;
    
    ii) the performance of this Agreement or the breach of any term or condition of this Agreement by the Parties, their officers, employees and agents, or by a Third Party and any of its officer, employees, servants or agents;
    
    iii) the performance of a Funding Agreement or the breach of any term or condition of the Funding Agreement by the Parties, their officers, employees and agents, or by a Third Party and any of its officer, employees, servants or agents;
    
    iv) the design, construction, operation, maintenance and repair of any part of an Eligible Project; and
    
    v) any omission or other wilful or negligent act of the Parties, and Eligible Recipient or a Third Party and their respective employees, officers, servants or agents.
    
    
15. In the case where a Local Government wishes to utilize these funds for investments to enhance the security of its infrastructure, the Local Government must provide evidence that these investments satisfy the applicable conditions and requirements imposed by Transport Canada for such federally funded security projects, including those established under Transport Canada's Passenger Rail and Mass Transit Security Contribution Program.
    
    
16. Where projects result in emissions reductions that can earn offset credits (as per the Offsets System being proposed by the Government of Canada), the Local Government shall attribute the appropriate share of the ownership to Canada (based on Canada's contribution to the total project funding).

SCHEDULE D - Reporting and Audits

1. Reporting

1.1 Annual Expenditure Report

1.1.1 The Annual Expenditure Report will report on:

• the amounts received from Canada under this Agreement;
• the amounts paid to Eligible Recipients;
• the amounts received from Canada for future payments to Eligible Recipients;
• amounts paid by Eligible Recipients in aggregate for Eligible Projects;
• amounts held at year end by Eligible Recipients in aggregate to be paid for Eligible Projects.

1.1.2 The Annual Expenditure Report will also indicate in a narrative the progress that Alberta has made in meeting its commitments and contributions, according to Sections 4, 7 and 8.

1.1.3 The Annual Expenditure Report will also include the following information:

a listing of all Eligible Projects that have been approved for funding, indicating the location, investment category, amount and identity of all sources of funding, nature of the investment and expected outcomes, as identified in Schedule E.

1.1.4 In the case of Eligible Recipients with a year end other than March 31, and with the prior approval of the Alberta, the Annual Report may include information in respect of Eligible Projects related to that Eligible Recipient to the year end of that Eligible Recipient.

1.2 Outcomes Report

The Outcomes Report will report on the cumulative investments made, including information on the degree to which these investments have actually contributed to the objectives of cleaner air and reduced GHG emissions, and will be part of the summative evaluation that will take place under the gas tax agreements.

2. Audit Report

The Audit Report, which includes the results of financial and compliance audits, will provide an opinion as to whether all of the information contained in the Annual Expenditure Report is complete and accurate, and whether Alberta has complied with all material provisions of this Agreement.

The template reporting format for funding flows will be determined as a result of the implementation of the provisions of the Canada - Alberta Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal For Cities And Communities, signed May 14, 2005. The Oversight Committee will approve the template format.

SCHEDULE E - Outcome Indicators

The impact of the use of the Funds will be measured through a set of core indicators linked to the following outcomes and outputs:

Outcomes:

1. Cleaner Air:
2. Lower GHGs:

Outputs:

Public Transit Infrastructure:

The Oversight Committee will ensure the Indicators are developed for each of the outcomes and outputs listed above in conjunction with those for that have been developed for public transit projects undertaken within the provisions of the Canada - Alberta Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal For Cities And Communities, signed on May 14, 2005.

SCHEDULE F - Communications Protocol

Canada and Alberta agree that Canadians have a right to transparency and public accountability, which is best served by full information about the benefits of the Public Transit Fund Program.

This communications protocol establishes the principles and practices that will guide all announcements and events related to this Agreement and the funding to Eligible Recipients under this Agreement. Communications activities may include, without limitation, major public events or announcements, or communications products such as speeches, press releases, websites, advertising, promotional material or signage.

The Parties agree that:

1. a public event will mark the signing of this Agreement. This event will be developed by communications officials from Canada and Alberta, and will provide for municipal involvement and media participation.
   
   
2. in addition to joint communications activities, Canada and Alberta may include messaging in their own communications products and activities around other initiatives and investments in cities and communities.

The Government of Canada agrees that:

1. it will make periodic announcements, through public events, press releases and/or other mechanisms, of the transfer of federal Public Transit Funds to Alberta for allocation to municipalities within its jurisdiction.
   
   
2. it will make regular announcements on a city, community or regional basis, of projects that have benefited from federal Public Transit Funds. Key milestones may be marked by public events, press releases and/or other mechanisms.
   
   
3. it will report regularly to the public on the outcomes of the investments entered into under this Agreement, including through the Treasury Board Secretariat Canada's Annual Performance Report, and through the National Evaluation described in Section 8 of this Agreement.

Alberta agrees that:

1. all communications referring to projects funded under this Agreement will clearly acknowledge the contributions made by Canada.
   
   
2. all communications materials referring to the sharing of federal Public Transit Funds with Eligible Recipients will recognize that this initiative forms part of the Public Transit Funds Agreement through the use of the Canada wordmark and of a tagline.
   
   
3. Alberta's Funding Agreements will include the provisions included in this Protocol, particularly that:
   1. all communications by the Eligible Recipient referring to projects funded under this Agreement will clearly recognize Canada's investments;
   2. Eligible Recipients will ensure permanent signage at the location of projects receiving investments under this Agreement, prominently identifying the Government of Canada's investment and including the Canada wordmark. Where there is no fixed location for signage, such as a transit vehicle, a prominent marker will recognize the Government of Canada's contribution. All signage/plaques will be located in such a way as to be clearly visible to users, visitors and/or passersby.

General

1. The timing of public events shall be sufficient to allow for all orders of government to plan their involvement. Either Party shall provide a minimum of 21 days notice of an event or announcement.
   
   
2. The Parties agree that they and Eligible Recipients will each receive appropriate recognition in joint communications materials.
   
   
3. Joint communications material and signage will reflect Government of Canada communications policy, including the Official Languages Act, and federal-provincial identity graphics guidelines.

Assessment

Communication results will be assessed as part of the evaluation process set out in Section 8.3.2 of the Agreement.