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What is the New Deal for Cities and Communities?
The New Deal for Cities and Communities is a key priority for the Government of Canada. The Government has confirmed its intent to work with the provinces and municipalities, to give municipalities a voice in decisions that affect them, to assist municipalities in securing stable predictable and long-term funding and to look at opportunities for place-specific agreements.
Significant progress has been made by the Government, such as:
- Providing municipalities with a rebate on the Goods and Services Tax, (worth $7 billion over 10 years),
- $300 million provided to enrich the Green Municipal Funds
- Establishing the Prime Minister’s External Advisory Committee on Cities and Communities that will provide a long-term vision for cities and communities,
- Outlining to the provinces and territories the details of how the New Deal for Cities and Communities will be negotiated with each jurisdiction. This includes each province and territory’s share of $5 billion in federal gas tax funding over five years, which will be made available to municipalities starting in 2005 (A New Deal for Canada’s Communities).
Most importantly, the New Deal is an opportunity to pursue sustainability - improve competitiveness, environmental quality, social inclusion and cultural vibrancy.
What are the elements of a New Deal?
The New Deal is about all orders of government working collaboratively and in harmony in four priority areas of sustainability: environmental, economic, social and cultural.
There are four elements to the New Deal:
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Vision: The New Deal is an opportunity for the citizens of Canada to rethink the way that Canada and its cities and communities are shaped, to ensure that Canada will be a world leader in developing vibrant, creative, inclusive, prosperous and sustainable cities and communities.
- Relationships: The greatest transformative element in the New Deal will be the new relationships developed with the provinces, territories, cities and communities, the private and the not-for-profit sector for the benefit of citizens who live in urban and rural municipalities. The Government of Canada will encourage new partnerships that complement municipal, provincial and territorial efforts. These new relationships will be open and transparent and will respect provincial and territorial jurisdiction.
- Money: The New Deal recognizes that municipalities need new reliable, predictable and long-term sources of funding.
- Cities and Communities Lens: This means looking at all the relevant resources of all orders of government and ensuring that all work together towards a common vision of sustainability. The "cities and communities lens" means being smart and efficient within existing and future federal programs which directly affect municipalities, while taking into account the unique needs, identities, and goals of individual communities.
Why should the Government of Canada focus on cities and communities?
- Place matters! Canadian cities and communities face specific challenges that have a significant impact on the country's overall quality of life and competitiveness.
- More and more, our cities drive regional and national economies and compete globally. As such, we know that what happens in our cities and our communities can significantly influence national outcomes.
- No one order of Government has the means to address these challenges alone. Since the policies and programs of the Government of Canada have direct and indirect impacts in cities and communities, we need to work together with other orders of government, the private and not-for-profit sectors to ensure that our efforts are complementary, responsive to local needs and consistent with shared objectives.
Now that you’ve delivered the gas tax, what’s next?
- We have started delivering on the next major element of the New Deal – $5 billion in gas tax funding over the next five years. We still have some work to do – including completing the bilateral negotiations currently underway. We hope to start signing agreements soon, so that funding can flow to municipalities.
- And there are certainly other elements of the New Deal that we are looking forward to tackling. In the last Throne Speech, we committed to address key issues – such as urban renewal, immigrant integration and the challenges facing off-reserve Aboriginal Canadians – by expanding the partnership approach used to develop the Vancouver and Winnipeg Agreements.
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And there is important work underway with the Prime Minister’s External Advisory Committee on Cities and Communities. They are developing a long-term vision relating to the role that cities and communities should play in sustaining Canada’s prosperity.
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Ultimately, we look forward to working with the provinces, territories, municipalities and municipal associations to help ensure the future sustainability of our cities and communities, and the quality of life of Canadians.
What is the Government doing to meet its commitment to share federal gas tax funding with cities and communities?
- Over the past year, we have been talking about the New Deal for Cities and Communities and our commitment to share a portion of the gas tax for the benefit of municipalities, large and small.
- The Government has committed $5 billion over five years. We have also committed to ramp up to $2 billion annually as of the fifth year, and to continue this level of funding indefinitely.
- Funds from the gas tax will be directed at environmentally sustainable municipal infrastructure, such as public transit, water and wastewater systems, community energy systems, solid waste management, rehabilitation of roads and bridges, and capacity building.
- Negotiations are underway with the provinces and territories. We expect to begin signing bilateral agreements soon to allow funds from the gas tax to flow to municipalities. And the flowing of gas tax funds will allow us to move into the next phase of the New Deal.
- All provinces and territories now know how much they can expect over those five years for their municipalities, and can plan their infrastructure investments accordingly. (Budget 2005: A New Deal for Canada's Communities)
- This allocation formula - and the bilateral agreements that we will soon be signing with each province and territory - will clear the way for funds from the gas tax to begin flowing to municipalities in Budget 2005, as promised.
How will the money flow?
- The Government of Canada committed $5 billion in gas tax funding over five years, including a full $600 million to municipalities this year. The gas tax rebate will rise to $2 billion in year 5, and continue thereafter indefinitely.
- The mechanism for flowing money to municipalities forms part of the negotiations currently underway with the provinces and territories.
Why does this money have to flow through provinces and territories? Why can't it go directly to municipalities?
- Flowing the gas tax funds through the provinces and territories fully respects jurisdiction and allows for flexibility in addressing local conditions.
- It also recognizes that the New Deal is very much a multi-partner effort - the federal government, provinces, territories, municipalities and associated stakeholders like the Federation of Canadian Municipalities working together. The issues confronting municipalities cannot be solved by any one level of government but rather are best addressed when all orders of government work together.
Is it a share of the gas tax or a share of the fuel tax?
- It is a gas tax and not a fuel tax - which would include diesel fuel.
What is the status of the bilateral negotiations with the provinces and territories? When will agreements be signed? When will money flow to municipalities?
- Our officials are in the field working with their provincial and territorial counterparts on bilateral agreements, which will lay out the mechanisms to flow money to municipalities, big and small, as soon as possible.
- A number of the provinces and territories have signalled their readiness to move ahead quickly to conclude the negotiations.
Will all municipalities receive gas tax funding? When will municipalities know how much gas tax funding they will receive?
- Provinces and territories will allocate funding to municipalities - large and small - that are within their jurisdictions. The allocation within a province or territory will be spelled out in the bilateral agreements we are currently negotiating.
- The Government of Canada will work with provinces and territories to ensure that funding to municipalities is allocated in a way that meets certain federal principles:
- Equity - all municipalities must be eligible to benefit. Regional groupings and/or pooling of funding will be encouraged where appropriate.
- Transparency - allocation decisions must be easily understood and clearly communicated.
- Data reliability - so that the focus can be on achieving outcomes rather than on debating data validity.
- The proposed allocation within a province or territory must meet these principles for the agreement to be signed and funds to flow.
What types of initiatives will be funded through the sharing of federal gas tax revenues?
- Federal gas tax funding - worth $5 billion over five years - will support environmentally sustainable municipal infrastructure.
- Within the framework of environmental sustainability, the bilateral agreement between the Government and a province or territory will specify the categories of investment that are eligible for funding within that jurisdiction.
- Initiatives funded by the gas tax will promote improvements to our environment, such as cleaner air, cleaner water or lower greenhouse gas emissions.
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