Infrastructure Spotlight: Canada's Small and Rural Communities

Supporting the infrastructure needs of small communities

Residents of smaller communities expect their public infrastructure to provide the same benefits as in larger Canadian centres, such as safe and efficient roads and bridges, clean water and community facilities.

Providing modern, public infrastructure in communities with smaller and more dispersed populations, and sometimes limited financial resources, can be especially challenging. To succeed, innovative and tailored infrastructure solutions are necessary, developed by local leaders and supported through collaboration among all orders of government.

The Building Canada Plan provides great flexibility to smaller communities to address their unique infrastructure needs. The range of eligible categories of investment is very broad, in order to respond to the variety of pressures faced by communities, both large and small. Communities can choose to direct federal infrastructure funding to a wide range of assets, including for example local roads, water and wastewater systems, and cultural and recreational facilities. In addition, within each category, there is additional flexibility to address the particular needs of smaller communities. For example:

• under the public transit category, while larger communities may choose to focus federal funding on rail rapid transit projects, smaller communities could choose to prioritize investments in their bus services; and,
• under the wastewater category, larger communities may use federal funding towards the construction of a major new treatment facility, while a smaller community could decide to construct or expand lagoon treatment or even construct a wastewater collection system to connect households that are on private septic systems.

In addition, the federal government streamlined federal approval processes through Canada's Economic Action Plan to reduce the administrative burden on project proponents, measures that had particular significance for smaller communities. The government made changes to the federal regulatory framework to drive efficiencies in assessing infrastructure projects. These changes lessened the administrative burden on project proponents and shortened the time needed to provide federal approvals for major projects, allowing construction to begin more quickly. Key changes included:

• the federal review and due diligence process for projects under the Building Canada Fund was simplified and streamlined in order to reduce the number of mandatory conditions and requirements placed on potential proponents, and instead focus on key federal accountabilities;
• amendments were made to the Navigable Waters Protection Act, reflecting the June 2008 recommendations of a parliamentary standing committee that carried out an exhaustive review of the Act;
• under the Canadian Environmental Assessment Act, new regulations were put in place to enable federal environmental assessment processes to be replaced by a single provincial assessment that includes the federal requirements set out in the regulations; and,
• the government also implemented administrative changes to streamline the application of the Fisheries Act.

Federal funding is also being directed toward larger connective infrastructure projects, in the areas of transportation and telecommunications. Developing regional transportation and broadband networks helps connect remote and rural communities to nearby economic centres as well as to the rest of Canada and the world. This critical support provides opportunities for economic and social development in these communities.

Since 2007, through initiatives such as the Building Canada Plan and Canada's Economic Action Plan, the Government of Canada has supported the infrastructure needs of small communities across the country, with investments of over $5.3 billion towards more than 4,000 projects located within small municipalities and communities.^{Read footnote [4]} In addition, through the $2 billion-annually Gas Tax Fund, the Government of Canada delivers stable, flexible infrastructure funding in all of Canada's communities, large and small.

For Canadians living in small and rural communities, funding support to local infrastructure projects helps to sustain both competitiveness and quality of life. Efficient transportation networks help people get where they need to go quickly and safely, and help local businesses get their products to market. Modern water treatment plants mean that citizens can trust that the water they use every day is clean. Community and recreation centres provide a place where residents can gather, exercise and connect with each other.

Unique needs of remote communities in the North

Through Canada's Northern Strategy: Our North, Our Heritage, Our Future^{Read footnote [5]}, released in 2009, the Government of Canada supports a vision of a new North that realizes its full social and economic potential and secures its future, for the benefit of all Canadians. The Northern Strategy, like Building Canada, emphasises the role of infrastructure in promoting a stronger economy, cleaner environment, and safer and stronger communities.

Many factors affect infrastructure development in northern communities, such as low population and a limited tax base, remote locations and limited accessibility, labour shortages, a harsh climate and a shorter construction season. As such, closing the gap in core public infrastructure between northern communities and communities in southern Canada represents a significant challenge for the federal, territorial and municipal governments in Northern Canada.

The Government of Canada has taken action to address this challenge. In addition to targeted infrastructure project investments made under programs such as the Building Canada Fund, it has delivered flexible infrastructure funding to the three territories through programs like the Provincial- Territorial Base Fund and the Gas Tax Fund. Furthermore, the North receives funding under these programs as a fixed amount instead of an allocation based on population. This simple but important difference means that less populated jurisdictions receive sufficient funds for significant infrastructure investments.

Between 2007 and 2014, under the Provincial-Territorial Base Fund, each of the territories will receive over $180 million in federal funding in support of their core infrastructure priorities. To access funding, territories must submit a capital plan containing a list of initiatives for federal cost-sharing – which can go up to 75 percent of eligible costs for territories, while it is limited 50 percent for provinces.

Since the Gas Tax Fund began, Yukon, the Northwest Territories and Nunavut have received $52.5 million each from the Gas Tax Fund for municipal infrastructure that contributes to cleaner air, cleaner water and reduced greenhouse gas emissions. Through legislation passed in 2011, the Gas Tax Fund became a permanent source of federal infrastructure support for Canadian municipalities. This ongoing funding will support local infrastructure priorities for the benefit of Canadians for years to come.

Looking Forward

In Budget 2011 and Canada's Economic Action Plan 2012, the Government of Canada committed to working with provinces, territories, the Federation of Canadian Municipalities and other stakeholders to develop a long-term plan for public infrastructure that extends beyond the expiry of the Building Canada Plan in 2014. In November 2011, the Minister of Transport, Infrastructure and Communities launched an engagement process for the development of the new plan. The continued need for supporting the economic and social development of Canada's small and rural communities through infrastructure improvement will be considered in this context.

Additional information on the Government of Canada's Engagement Process for the development of a Long-Term Infrastructure Plan can be found on the Infrastructure Canada website.

^[1]Government of Canada, Community Information Database, "Rural Facts." (Retrieved on March 12, 2012).

^[2] Ibid. (Based on Industry Canada's Trade Data, 2011.)

^[3] Statistics Canada, 2012, "Population and dwelling counts, for Canada and census subdivisions (municipalities), 2011 and 2006 censuses."

^[4] This amount includes funding under the Building Canada Fund (Major Infrastructure Component and Communities Component), the Infrastructure Stimulus Fund and the Green Infrastructure Fund provided to municipalities with less than 100,000 inhabitants.

^[5] Government of Canada's Northern Strategy.