Government of Canada announces new $1 billion Municipal Rural Infrastructure Fund

• Backgrounder

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North bay, Ontario, August 20, 2003 - Prime Minister Jean Chrétien, together with Allan Rock, Minister of Industry and Minister responsible for Infrastructure, and Andy Mitchell, Secretary of State for Rural Development and Federal Economic Development Initiative for Northern Ontario today outlined how communities across Canada will be able to benefit from the new $1 billion Municipal Rural Infrastructure Fund.

"Government of Canada infrastructure initiatives provide an opportunity for all levels of government to work effectively together for the benefit of Canadians across the country," said Prime Minister Chrétien. "This new Fund will also allow the Government of Canada to address other policy objectives such as improving the health of Canadians and meeting Canada's climate change objectives."

"This new Fund demonstrates, once again, that the Government of Canada is committed to help improve the quality of life in all Canadian communities, both rural and urban," said Minister Rock. "Long term infrastructure commitments are key to ensuring that communities, large and small, are competitive and healthy centres for economic growth, innovation and the well-being of all Canadians. Since 1994 the Government of Canada has contributed $12 billion in infrastructure funding to Canadian communities. The Government of Canada has demonstrated today that it continues to build on this impeccable record."

The $1 billion Municipal Rural Infrastructure Fund was announced in Budget 2003 as part of the Government of Canada's latest contribution of $3 billion toward renewing Canada's public infrastructure. The other $2 billion tops-up the existing Canada Strategic Infrastructure Fund (CSIF). While this latter fund focuses primarily on large-scale strategic infrastructure in urban areas, the Municipal Rural Infrastructure Fund has been structured to respond to the specific needs of Canada's municipalities and rural and remote areas.

"The Government of Canada understands that the needs of small and rural municipalities are unique and is committed to working with these communities to address their infrastructure priorities," said Secretary of State Mitchell. "The Municipal Rural Infrastructure Fund has been designed, in consultation with provinces, territories, and municipal associations, to be flexible and capable of addressing a broad range of municipal priorities."

With a Fund component targeted to First Nations' infrastructure needs, the Government of Canada further demonstrates its commitment to fostering economic development opportunities and improving quality of life of Aboriginal people who live on-reserve. The Fund will do this by focusing investments on improving water quality, wastewater treatment and local roads.

Federal objectives on climate change, water quality, urban life, and innovation, will continue to guide project eligibility so that Canadians obtain maximum benefits from infrastructure funding. The green infrastructure focus will address projects such as water and wastewater treatment infrastructure, municipal environmental energy improvements, public transit infrastructure and solid waste treatment infrastructure. Other eligible categories under this fund are cultural, tourism and recreational infrastructure, local roads and connectivity.

For further information contact:

PMO Press Office
(613) 957-5555

Infrastructure Canada
(613) 948-1148

Christine Aquino
Office of Secretary of State Mitchell
(613) 759-1107

Mylène Dupéré
Office of Minister Rock
(613) 943-7003

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Backgrounder

Building sustainable and competitive canadian communities the new municipal rural infrastructure fund

Government of Canada's Infrastructure Investments

Budget 2003 affirmed the Government of Canada's ten-year commitment to infrastructure by providing an additional $3 billion investment in Canada's public infrastructure. Of this allocation, $2 billion will top-up the Canada Strategic Infrastructure Fund (CSIF), and $1 billion will establish the Municipal Rural Infrastructure Fund (MRIF). While the CSIF will continue to focus on large-scale infrastructure pressures in Canada's largest cities, the MRIF will focus on local infrastructure priorities in smaller municipalities, including those specific to rural and remote communities.

The Government of Canada recognizes that a modern, inclusive and environmentally sustainable public infrastructure is key to the prosperity of our cities, the health of our communities and the competitiveness of our economy. The CSIF and the MRIF are designed to jointly meet local, regional and national infrastructure priorities consistent with the Government of Canada's economic, social and environmental objectives and aim at developing a modern national infrastructure that will help ensure the well-being of all Canadians and the prosperity of our country.

These complementary programs will ensure that all Canadians benefit from infrastructure investments that are vital to sustaining economic growth and supporting an enhanced quality of life in their communities, making Canada a better, more competitive country in which to live, work, invest and do business. With this latest investment, the Government of Canada's contribution of $12 billion over the past decade has leveraged $30 billion amongst partners in a wide range of infrastructure investments that benefit Canadians.

Municipal Rural Infrastructure Fund

The $1 billion program has been structured to provide a balanced response to local infrastructure needs in urban and rural Canada, and will ensure that all Canadians, whether they live in large, small or remote communities will share in the benefits of infrastructure investments. It will build on past successes in partnership infrastructure funding of over 3000 projects that have directly benefited Canadians.

Funding allocation

To ensure an equitable balance in the MRIF between provinces, territories and the First Nations component, each jurisdiction will receive a base allocation of $15 million, with the remaining funds allocated on a per capita basis. This formula will ensure that all jurisdictions have a meaningful amount of funding to address their most pressing infrastructure needs.

The federal government also wants to achieve a balance between the infrastructure needs of urban and rural Canada. So, 80 per cent of funding under the MRIF will be dedicated to municipalities with a population of less than 250,000. In addition, at least 20 per cent of investments under the CSIF - $400 million - will be allocated to these smaller communities. In total, $1.2 billion from Budget 2003 will directly support infrastructure priorities in smaller communities across the country.

Partnerships

Through the MRIF, the Government of Canada will continue to work in productive partnerships with provinces, territories, and municipalities, as well as First Nations and the private sector, to invest in local infrastructure projects. These projects will be vital to sustaining economic growth and supporting an enhanced quality of life in Canadian communities.

The new fund will be cost-shared, with the Government of Canada contributing, on average, one-third of total project eligible costs. Provinces, territories, municipalities will contribute the other two-thirds. In recognition of the unique circumstances of the first nations and the Territories, where many communities have no tax-base, the Government of Canada may contribute more than one-third through additional contributions from other federal sources such as Indian and Northern Affairs Canada.

The MRIF will be administered through a joint federal-provincial/territorial Management Committee in each province and territory and will be delivered federally through five regional agencies: Industry Canada (Ontario), Canada Economic Development of Québec (Québec), Atlantic Canada Opportunities Agency (Atlantic provinces), Western Economic Development (Western provinces), and Indian and Northern Affairs (First Nations and the three territories).

Project selection for the MRIF will be guided by joint federal-provincial/territorial Management Committees and will involve a key role for municipal associations.

Supporting wider Government of Canada objectives

Government of Canada objectives on climate change, water quality, urban life, and innovation will continue to guide project eligibility so that Canadians obtain maximum benefits from infrastructure funding.

On average across Canada, 50 per cent of funding under the Municipal Rural Infrastructure Fund will target green infrastructure that provide essential health benefits to Canadians and improve the quality of the environment. These projects will include water and wastewater infrastructure, municipal environmental energy improvements, public transit infrastructure and solid waste treatment infrastructure. The new fund will also invest in cultural, tourism and recreational infrastructure, local roads and connectivity.

Federal funding for each project will be conditional upon meeting the requirements of all applicable environmental legislation, including those of the Canadian Environmental Assessment Act (CEAA) and its regulations.

To ensure maximum benefits to Canadians from infrastructure investments, where possible, projects will be complemented by supportive policies that contribute to the Government of Canada's national objectives of climate change and innovation.

First Nations Component

The public infrastructure priorities of Aboriginal people living on reserve will be addressed through a separate component of the MRIF, administered by Indian and Northern Affairs Canada.

Budget 2003 provided $600 million in new funding targeted towards improving the quality of water and waste water treatment in First Nations communities. The Government of Canada also announced a seven-part First Nations Water Management Strategy aimed at improving the safety of water supplies in First Nations communities. To be implemented over the next 5 years, the Strategy provides for the coherent and structured management of water quality on reserves consistent with the multi-barrier (source to tap) approach.

Consultations and Negotiations

The Minister of Industry and Minister responsible for Infrastructure has met with the Federation of Canadian Municipalities and Mayors from many of Canada's largest cities. Further meetings have taken place with a number of provincial and territorial Premiers and Ministers. Further consultations will be held with the provinces, territories and other stakeholders. Pursuant to these consultations, new agreements will be negotiated with each province and territory, which will set out the formal MRIF application process.