Final Report - Evaluation of the Gas Tax Fund

Continuing need for the program

Finding 1: Provincial, Territorial and Municipal stakeholders indicated that there is an on-going need for funding to support infrastructure investments due to the age and condition of Canada's municipal infrastructure. Research suggests that investments in public municipal infrastructure supports to economic growth and prosperity.

The literature review shows that municipalities have infrastructure needs to be addressed. For example, the 2012 Canadian Infrastructure Report Card indicates the replacement cost for drinking water systems, wastewater and storm management networks and municipal roads is $171.1 billion, nationally. The report card stresses the importance of having an asset management system in place in order to establish practices that will increase the longevity of assets and optimize investments in maintenance and rehabilitation. It also identifies a critical need to support additional capacity (staff resources and time) at the municipal level.

Interviewees from all categories agreed that there are significant infrastructure needs to be addressed. Interviewees indicated that there is a continued need for predictable and long-term base funding to support municipal infrastructure needs. The next section on federal roles and responsibilities highlights federal involvement in a program of this nature is viewed as important. For example, survey respondents noted that it was very important for the Federal government to be involved in the GTF (average rating of 9.4 out of 10- 10 being very important). Survey respondents also indicated that the Federal governments' involvement was particularly important because the fiscal capacity of their municipality was insufficient to address their infrastructure needs and that funding available through other levels of government was also insufficient.

In addition for the need to address infrastructure challenges, research conducted by the Canada West Foundation on the level of infrastructure investments in other countries identifies the link between investment in public infrastructure and competitive economic advantage. The report argues that inadequate public infrastructure is a threat to long-term economic growth.

Finding 2: The range of project categories within the GTF program is very important to addressing the core infrastructure needs of Canadian municipalities.

The survey results show that, in general, the GTF meets the current infrastructure needs of municipalities with regard to:

• reliable, predictable funding (average of 8.0 out of 10- 10 being fully);
• funding that enhances the quality of life in communities (7.4);
• funding that enhances the local environment (7.3);
• funding to support the infrastructure needs of communities (7.0); and
• funding that enhances the local economy (6.9).

Since the inception of the GTF, a total of 15,202 projects have been undertaken through the program (based on INFC data). These projects were distributed as per Table 6. The table also summarizes the importance of the eligible project categories to municipalities across Canada, based on survey responses.

The table shows that the largest number of projects completed pertain to local roads and bridges, water and wastewater (these three categories alone represent more than 70 percent of the projects). However, these projects represent a relatively smaller financial value (less than 50 percent) whereby public transit infrastructure projects account for close to 41 percent of the financial value. This is not unwarranted given that smaller communities have smaller GTF allocations and can generally only undertake smaller projects. Additionally, larger municipalities (with larger GTF allocations) are more likely than smaller communities to have public transit infrastructure. It is also noteworthy that the relative importance of different types of infrastructure varied within the jurisdictions. Based on the value of GTF investments, local roads and bridges were primarily important in six provinces; water was the top priority for Quebec and the Northwest Territories, wastewater in Nova Scotia and Nunavut, and public transit for Ontario, Alberta and British Columbia.

The table also shows that all eligible project categories are important to municipalities. While public transit is the least important eligible project category, a relatively limited number of municipalities in Canada have public transit systems and thus, there are infrastructure needs in this regard. When examining only those municipalities who had undertaken a public transit project, the average importance rating for public transit increases significantly to an average of 7.6 out of 10 (versus 3.8 for all surveyed municipalities). Therefore, all eligible project categories are important.

The initial recipients and municipal associations interviewed also indicated that the range of eligible project categories were well suited to the majority of key infrastructure needs of municipalities. However, interviewees noted that they were pleased that the number of eligible projects categories has been expanded under the new agreement but noted that the funding amounts are still insufficient to fully address the infrastructure needs of Canadian municipalities. Some interviewees were also concerned with some ineligible categories (e.g. police and fire services) as well as ineligible costs (e.g. use of own employees to complete projects, feasibility studies and engineering design work).

Alignment with government priorities and federal roles and responsibilities

Finding 3: The GTF objectives for stable and predictable funding for environmentally sustainable infrastructure that contribute to cleaner air, cleaner water and reduced GHG emissions are aligned with government priorities and departmental objectives.

Although the fundamental elements of the GTF program have remained consistent, the program has shifted its emphasis as federal government priorities have changed. The GTF was introduced in 2005 as a New Deal for Cities and Communities. The Federal government set broad criteria for eligible projects that focused on environmentally sustainable municipal infrastructure, with cleaner air, cleaner water and reduction of greenhouse gas (GHG) emissions as specific outcomes. In 2007, the GTF was re-branded under the Building Canada initiative and funding was extended from 2010-2014. The 2009 National Summative Evaluation of the GTF and PTF² concluded that the GTF program objectives were relevant in that they aligned with federal, provincial, territorial, and municipal investment priorities. More recently, the 2011 Budget announced that the GTF would be extended at $2 billion per year beyond 2014 becoming a permanent measure; thereby confirming a long-term federal commitment to provide predictable funding to municipalities.

The GTF objectives were aligned with the INFC Program Alignment Architecture (PAA) Strategic Outcome 1: INFC provides federal transfers to provincial, territorial and municipal governments for their infrastructure priorities to help maintain a high level of quality core public infrastructure across the country. In 2013-14, the PAA was modified. INFC now supports a single strategic outcome: Public infrastructure for a more prosperous Canada. The GTF is aligned to the Permanent and Flexible Public Infrastructure Funding program that supports this strategic outcome.

Finding 4: The federal role in providing infrastructure funding is appropriate.

The initial recipients and municipal associations interviewed agreed that the federal government has a legitimate and appropriate role in the provision of stable and predictable infrastructure funding given the age and state of infrastructure in Canada. Some interviewees stressed that federal involvement and financial support recognizes the importance of municipalities and their contribution to Canada's economic and environmental health.

As per the 2013-2014 Departmental Report on Plans and Priorities, the Federal government provides municipalities with predictable long-term funding to enable local decision-making in the building and rehabilitation of core public infrastructure. Program documentation details that GTF is designed with clear roles and responsibilities for the Federal government that respects the jurisdiction of provinces and territories, and the responsibilities of municipalities. The Federal government sets national objectives, and negotiates terms and conditions through provincial and territorial agreements, distributes funds and manages overall program direction, and provides national reports on program outcomes. The provinces and territories administer the program through funding agreements with municipalities, ensure municipal compliance with terms and conditions, and report on results. Municipalities make project selection decisions and manage detailed project implementation, and report to provinces and territories. The program's flexibility and predictability are critical features of the GTF program design, even though the program serves national objectives, each jurisdiction has the flexibility to tailor the program to its own unique circumstances.  Through the GTF, the federal government strikes the right balance between setting broad parameters for how the money is spent by municipalities, while still maintaining an appropriate level of accountability and oversight through a reasonably straightforward reporting process that said, while the reporting from recipient is straightforward, the federal role is reporting to Parliamentarians and Canadians is evolving over time, which may have an impact on recipients reporting requirement and the need for information consolidation.

The program comparison showed that the GTF complements rather than duplicates programs in other Canadian jurisdictions. While the GTF, Building Manitoba Fund (BMF) and Alberta Municipal Infrastructure Program (AMIP) address similar needs, each program also differs. For example, the BMF allows for operating costs to be covered through its program and AMIP allows for use of funds for emergency service facilities and vehicles as well as municipal buildings.

Finally, the survey results highlight the importance of the involvement of the federal government in a program like the GTF. Overall, survey respondents noted that it was very important for the federal government to be involved in the GTF (average rating of 9.4 out of 10- 10 being very important).

Performance – Achievement of Expected Outcomes

This section presents the detailed findings related to the effectiveness of the GTF. The evaluation examined to what extent the GTF has achieved its immediate, intermediate and final outcomes as of March 31, 2014.

As identified earlier under the Limitations section, the document and data issues were largely found and confirmed when addressing the evaluation questions related to the program's achievement of expected outcomes.  The reporting issues found to impact results analysis, but not conclusions.

The findings in this section were determined using the most recent data available and, where possible, is aggregated to the program level.

This section is organized by program outcome as identified in the GTF logic model in Figure 1.

Figure 1: GTF Logic model outcomes

Immediate Outcomes

Incremental infrastructure spending

The 2012-13 Performance Measurement and Evaluation Strategy (PMES) for the GTF specifies that incremental infrastructure spending will be measured through the number of Annual Expenditure Reports (AER) or activity report from the Société de financement des infrastructures locales du Québec (SOFIL) attesting to incrementality. The evaluation also examined the extent to which ultimate recipients indicate that GTF funding is incremental and the change in municipal infrastructure spending over time.

The Contribution Agreements define incrementality and these definitions differ across jurisdictions (see Annex B). While the definition varies there are two elements to incremental spending: incremental funding at the jurisdictional level (i.e. provincial and territorial governments, at a minimum, do not reduce the funding available to local governments for municipal infrastructure) and incremental funding at the municipal level (i.e. municipal governments maintain their capital spending on municipal infrastructure and GTF funds are additional to existing capital spending).

Finding 5: The GTF has resulted in incremental spending on municipal infrastructure from provincial/territorial governments. Provincial and territorial governments have increased the funds available to local governments for municipal infrastructure.

The AERs use different elements to report progress on incremental provincial/territorial infrastructure spending. Six of 13 jurisdictions provided evidence of provincial/territorial incremental infrastructure spending in their AERs/SOFIL report. Some examples of incremental investments reported are as follows:

• Prince Edward Island: Total provincial expenditures on municipal infrastructure of $81,731,940 from 2005-06 to 2009-10 versus $70,723,464 from 2000-01 and 2004-05 (base amount). This represents an increase of just a little over $11 million (or 15.5 percent from the base amount).
• Nova Scotia: The provincial base amount is $9.3 million; in 2012-13, Nova Scotia contributed $22.4 million to municipal infrastructure, an increase of $13.1 million from the base amount (or a 140.9 percent increase).
• Nunavut: Actual expenditures in 2012-13 were reported at $20.6 million which is $4.6 million over the $16 million base amount (representing an increase of 28.8 percent).

The initial recipients interviewed also confirmed that GTF funding has been incremental in that it has not replaced or reduced the level of provincial/territorial infrastructure spending.

Finding 6: The GTF has resulted incremental spending on municipal infrastructure from municipal governments. Municipalities have increased their capital spending. In addition, without GTF funding, a significant number of GTF-funded and other projects could not have occurred.

The AERs use different elements to report progress on incremental municipal infrastructure spending. Nine of 13 jurisdictions provided evidence of municipal incremental infrastructure spending in their AERs/SOFIL report. Some examples of incremental investments reported are as follows:

• Prince Edward Island: Total municipal expenditures on municipal infrastructure of $20,503,310 from 2005-06 to 2009-10 versus $17,476,416 from 2000-01 and 2004-05 (base amount). This represents an increase of just a little over $3 million (or 17.3 percent from the base amount).
• Nova Scotia: The provincial base amount is $33.3 million. In 2010-11, municipal contributions totaled $102.06 million, an increase of $68.76 million from the base amount (or a 206.5 percent increase).
• Ontario: Reports leveraging as incremental investments. For every GTF dollar used since 2005, municipalities have invested an additional $2.05 from all other sources.
• British Columbia: The determination of incrementality compliance is achieved by comparing the cumulative spending of ultimate recipients over a five-year period to thresholds that were established based on historic spending levels. The five-year incremental spending requirement was achieve in four years.

The initial recipients interviewed also confirmed that GTF funding has been incremental in that it has not replaced or reduced the level of municipal infrastructure spending. This is confirmed in Statistics Canada data that shows that, in 2004-05, estimates for local government expenditures on fixed capital totaled $57.9 billion. In 2013-14, these estimates total $98.1 billion, an increase of 69.5 percent.

In addition, 44 percent of survey respondents (municipalities) noted that, without GTF funding, they would not have been able to proceed with their GTF projects and another 14 percent would have had to cancel other projects in order to be able to undertake the GTF projects. Other survey respondents noted other effects of the absence of funding such as delaying the projects, budgetary impacts and a range of other negative impacts. Case study interviewees noted similar results.

Finally, some of the case studies provide specific evidence in incremental expenditures on fixed capital:

Collaboration and planning

The focus of the "collaboration and planning" outcome in the PMES is on the existence of Integrated Community Sustainability Plans (ICSP) or equivalent planning documents. The evaluation, therefore, focused on planning results. Evidence is based on the AERs, interviews and survey of municipalities.

Finding 7: Municipalities across Canada have made progress in developing plans for capital investments, including Integrated Community Sustainability Plans. Much of this progress is directly attributable to the GTF program as a result of specific requirements in the Contribution Agreements as well as funding for capacity building projects which have resulted in planning documents.

Ten initial recipients attested to the existence of ICSPs, Capital Investment Plans (CIP) or Infrastructure Investment Plans (IIP) in the 2012-13 AERs. Some progress reported is as follows:

• Newfoundland: 272 out of 277 municipalities had an ICSP as of March 2013.
• Nova Scotia: The Province has received and reviewed ICSP from all municipal units.
• Ontario: Municipalities completed reporting on CIPs in 2010.
• Saskatchewan: A total of 2,204 IIPs were approved from August 23, 2005 (program inception) to March 31, 2013, representing 772 municipalities and municipal associations.
• Yukon: all 8 Yukon municipalities and 14 First Nations have developed ICSP. Several were in the process of renewing these living documents.
• Northwest Territories: Under the terms of the GTF Agreement, NWT community governments were required to submit a CIP by March 31, 2007. As of March 31, 2009 all thirty-three communities have complied with this requirement.

Interviewees stressed the importance of infrastructure planning and many attributed the GTF with advances that have been made within the municipal sector. Interviewees indicated that Federal involvement and the long-term nature of the GTF have encouraged municipal decision makers to think more strategically about their infrastructure needs and investments.

Survey respondents also reported progress with regard to infrastructure planning. This includes:

• An increase of 23 percent in the number of municipalities with an ICSP or equivalent planning document (from 24 percent before the program to 47 percent at the time of the survey);
• Of those who undertook a GTF-funded capacity building project (38 percent), a total of 59 percent reported the development of an ICSP or equivalent document as a result of the project (see intermediate outcome on capacity building for further benefits).

Asset completion funding

The outcome refers to the access of funds by municipalities to undertake GTF projects. The PMES identifies the flow of funds to municipalities as the indicator that progress is being made in this regard. Therefore, the evaluation relied on data available in the AERs.

Finding 8: The GTF has facilitated access to funding for the completion of infrastructure projects by municipalities across Canada. To date, the great majority of the funds have flowed from PTs to municipalities.

Based on cumulative data provided in the AERs, as of March 31, 2013, provinces and territories had received close to $10.3 billion from Canada. Of that, $10.0 billion (97.2 percent) had been transferred to ultimate recipients. This data shows that municipalities have access to most of the funds available to complete assets.

Intermediate Outcomes

Sustainable infrastructure investments

Based on the PMES, this outcome refers to the amount spent and banked by municipalities. The evaluation also examined data on the types of projects funded as well as the benefits of those projects. The key sources of evidence were program data, the survey of municipalities and the case studies as well as, to a more limited extent, the interviews.

Finding 9: There are differences across jurisdictions regarding the amount of funds transferred to municipalities which have been spent on projects so far. Nevertheless, across Canada, the large proportion of funds has been expended on projects, thereby demonstrating that municipalities are investing in sustainable infrastructure.

Between 2005-06 and 2012-13, municipalities across Canada (excluding Quebec) have spent a total of $6.4 billion on projects or 82 percent of the funds received by the municipalities from Initial recipients. As of 2012-13, municipalities had $1.4 billion in unspent funds which represents 18 percent of the funds received by municipalities. These are distributed as follows by province and territory.

Data source: Excel spreadsheet based on AERs/SOFIL reports

Finding 10: Funds are being used by municipalities to invest in a range of eligible infrastructure projects. The largest proportion of funds is used for public transit and local roads and bridges investments.

As shown in Table 9, a significant proportion of projects undertaken by municipalities pertain to local roads and bridges, followed by water and wastewater infrastructure projects. However, a significant proportion of funds have been used for public transit infrastructure projects, followed by local roads and bridges projects. This reflects the fact that public transit projects are significantly larger and thus, more costly than project in any other eligible project category. (The average public transit infrastructure project is valued at $4.8 million whereas the next highest average project value is solid waste management at $0.6 million.)

Data source: Program database to March 31, 2013.

Finding 11: The interest earned by municipalities has provided municipalities with an additional $133 million for sustainable infrastructure investments.

Municipalities can use the interest earned from GTF funds to increase the funds available for projects and for administrative costs. The data shows that, between 2009-10 and 2013-14, municipalities earned $143.1 million in interest and reported only $9.8 million in administration costs. This means that an additional $133.3 million was available for municipalities to invest in sustainable infrastructure.

Finding 12: Municipalities have benefited from investments in sustainable infrastructure projects. Project results include environmental, community and economic benefits.

Survey respondents were asked to identify the types of projects they had undertaken with GTF funds and the resulting benefits of those projects. The GTF was not designed to include a detailed framework identifying specific benefits per category. The related categories used in the survey are based on those from the 2007 Building Canada Fund. The nature of the benefits (environment, community, economic) was extrapolated from the list of specific benefits. As shown in Table 10, a significant proportion of the resulting benefits pertain to environmentally sustainable infrastructure. There were also community and economic benefits reported by respondents. Table 11 shows similar benefits resulting from the projects examined in the case studies, based on the unprompted responses from case study interviewees.

Capacity building

In addition to projects resulting in sustainable investments in infrastructure, the GTF also provides funding in support of municipal capacity building. The PMES specifies that capacity building outcomes will be demonstrated by the amount spent on capacity building projects. The evaluation also examined the resulting benefits of those projects. Sources of evidences include data analysis, the survey, interviews and case studies.

Finding 13: Approximately one-third of municipalities participating in the GTF program have undertaken a capacity building project. The projects help municipalities develop the tools they need to improve their decision-making capacity regarding municipal infrastructure priorities.

A total of 1,757 capacity building projects had been undertaken in 1,175 municipalities through the GTF as at 2012-13. This represents 12 percent of all GTF projects and approximately one-third of all participating municipalities. Funding for those projects totaled $92.9 million or just a little more than one percent of all GTF contribution expenditures.

Based on the survey, the key benefits resulting from capacity building projects are: enhanced knowledge of infrastructure assets (noted by 64 percent of those who undertook a capacity building project), development of an ICSP or equivalent document (59 percent), and improved capacity of municipality to implement modern and innovative life-cycle management plans for their infrastructure assets (48 percent). A range of other benefits were noted by survey respondents. The reported benefits all support improved decision-making regarding municipal infrastructure priorities.

Only two case studies examined capacity building projects. In the District of Barriere, an ICSP was developed. The City of Saint John is in the process of developing an Asset Inventory Valuation and Management System.

Interviewees noted that funding for capacity building within the GTF program has been very beneficial for municipalities. They nonetheless noted that, in some jurisdictions, capacity building continues to be an issue for smaller communities thereby supporting the ongoing need to support capacity building projects through the GTF.

Final Outcome

Stable and predictable funding for environmentally sustainable municipal infrastructure contributing to cleaner air, cleaner water and reduced GHG emissions

The PMES identifies that the program's final outcome will be measured by the total federal funding flowed towards projects categorized under this ultimate outcome, that is the amount of funding for cleaner air projects, cleaner water projects and projects contributing to reduced GHG emissions. The evaluation also examined the benefits of these different types of projects. Program data and the case studies were therefore the principal lines of evidence for this outcome.

Finding 14: The GTF program has made significant financial contributions for sustainable municipal infrastructure projects that contribute to cleaner air, cleaner water and reduced GHG emissions.

Based on the limited outcomes reports available, initial recipients used different eligible project categories to demonstrate the contribution of projects to the cleaner air outcome. Based on how they reported, the following eligible project categories were included in cleaner air outcomes:

• local roads and bridges;
• public transit; and
• community energy systems.

Clean water projects include:

• water;
• wastewater; and
• solid waste projects.

Projects contributing to reduced GHG emissions include:

• local roads and bridges;
• community energy systems;
• public transit; and
• solid waste.

Table 12 shows the number of projects that were funded within each outcome and the expenditures as of March 31, 2013.

Data sources: Program database between April 1, 2005 and March 31, 2013.

The case studies examined the impacts of GTF funding on the selected municipalities. Investments in public transit by large metropolitan centres such as Toronto and Calgary have contributed to cleaner air and reduced GHG emissions by increasing the use of public transit and reducing age of the fleet and investments in other environmentally friendly technologies. Contributions to cleaner water have been achieved primarily through investments in water distribution systems, wastewater treatment, and storm water management systems.

Performance – Demonstration of Efficiency and Economy

The evaluation obtained examples of measures taken to improve program administration and efficiency from the document review and interviews. Efficiency was also assessed by examining contribution expenditures and determining the cost to deliver one dollar of contribution funding.

Finding 15: The GTF program is viewed as one of the most efficient infrastructure program of the federal government.

Interviewees were very positive with respect to the administration of the GTF program. It was described as a very simple and cost-effective program to administer. Interviewees noted a range of factors that contributed to the program's efficiency including, for example:

• the minimal overhead costs for administering the program;
• the efficient flow of funds from the Government of Canada to initial recipients and from initial recipients to municipalities;
• an effective governance structure;
• clear roles and responsibilities with no evidence of overlap or duplication; and
• jurisdictional flexibility for program administration.

Several interviewees noted that the GTF was the most efficient program they had experienced.

Finding 16: The 5-year average federal cost to deliver one dollar of GTF contribution funding is less than one cent.

The 5-year average federal cost to deliver one dollar of GTF contribution funding is $0.0005. This ratio refers to the total federal program administration cost as a percentage of the federal contributions paid in a given year and was calculated with the data in Table 13 and using the following cost-based efficiency formula:

Sources: INFC Financial Data

Finding 17: External stakeholders had few recommendations for improving the GTF program except to increase its funding and eligible categories.

Interviewees described the GTF as an excellent program and several suggested that it should be the model used for the administration of other federal programs.

Survey respondents also had few suggestions for improving the GTF program. Those noted most frequently by respondents were the need to increase the funding that is available through the program as well as broader eligible project categories (and more eligible expenses within existing categories).

Case study respondents expressed a very high level of satisfaction with the GTF program and had no significant suggestions for improving the program.

Conclusions

Relevance

An infrastructure funding program for all communities in Canada remains relevant. The objectives of the GTF are aligned to the current departmental objectives and support federal priorities. The federal roles and responsibilities within the GTF are appropriate and legitimate, but the Federal governments' national reporting requirement has evolved over time and could be better defined.

The GTF is responsive to the needs of municipalities across Canada. The range of eligible categories was in line with the priorities of communities and evolved to better meet the needs of communities. In particular, the expanded categories under the renewed program are appreciated by municipalities as well as PT governments and will help them better address their needs. However, initial and final recipients indicated that the infrastructure needs of communities extend well beyond their municipal fiscal capacity and the funding available.  The provision of predictable and long-term base funding was found to be important to municipalities.

Performance - Achievement of Expected Outcomes

The program is making progress towards its intended outcomes. Municipalities benefit from funding to support their infrastructure needs and would not have been able to undertake infrastructure projects without the GTF funding. Although it represents a relatively small portion of the overall investment, funding for capacity building has been very beneficial to municipalities by improving their planning capacity and management of infrastructure assets.

The program objectives were focused on environmental benefits and the program has been successful in this regard. Municipalities have benefited from stable and predictable funding which has contributed to cleaner air, cleaner water and reduced GHG emissions. The program has also resulted in a range of economic and community benefits. The renewed program has been expanded in its objectives (as well as eligible project categories) to recognize these benefits. This is viewed positively by external stakeholders.

The study limitations related to the inconsistency and consolidation of data identified before the start of the evaluation did not take away from concluding that the transfer payment program is meeting its outcomes. Specific concerns include:

• There were inconsistencies in the format, and nature and completeness of the content for reports provided by initial recipients (e.g. Annual Expenditures Reports (AER), Outcome Reports);
• Inconsistency in the information provided in various program-supplied tracking documents; and
• Internal project tracking list limitations related to completeness.

In the absences of aggregate data across jurisdictions, internal tools were developed such as the internal project list and the AER Financials Spreadsheet. It is important to note that these tools are not a requirement for the monitoring of the program and that the limitations associated with these tools are neither reflective of the quality of the information received from the PTs, nor of poor program management. These tools were extremely helpful during the evaluation but because they were not a requirement of the program, they were not error-free. The availability of consolidated data is useful to help report on program performance at the program level.

Performance - Demonstration of Efficiency and Economy

The GTF program is viewed by external stakeholders as one of the best infrastructure programs from an efficiency and economy perspectives and they consequently had few recommendations for improving the program except to increase its funding and eligible categories.

Overall, the program demonstrated efficiencies. The five-year average federal cost to deliver one dollar of GTF funding contribution is less than one cent. From the perspective of the recipients, further economies were found in that, as a result of the interest earned, municipalities have increased the funds available for sustainable infrastructure investments by $133 million.

Recommendations and Management Action Plan

As of April 1, 2014, the renewed GTF is in place and agreements have already been signed with the initial recipients. The renewed GTF also addressed some of the concerns raised by stakeholders during the evaluation. Some limitations associated with data consistency were uncovered during the evaluation. The following recommendation can be implemented within the structure of the renewed program and its agreements.

INFC should review the federal role with respect to national reporting, and ensure increased consistency in data received from initial recipients, as required, to improve data quality for on-going program monitoring and reporting of national GTF program outcomes.

List of Terms and Abbreviations

AANDC

Aboriginal Affairs and Northern Development Canada

AER

Annual Expenditure Report

AMIP

Alberta Municipal Infrastructure Program

AMO

Association of Municipalities of Ontario

BCP

Building Canada Plan

BMF

Building Manitoba Fund

CIP

Capital Investment Plan

EAP

Economic Action Plan

FNIF

First Nations Infrastructure Fund

GHG

Greenhouse gas

GTF

Gas Tax Fund

ICSP

Integrated Community Sustainability Plan

IIP

Infrastructure Investment Plan

INFC

Infrastructure Canada

PAA

Program Alignment Architecture

PMES

Performance Measurement and Evaluation Strategy

PT

Province and Territory

RLCIP

Regional and Local Community Infrastructure Program (Australia)

SOFIL

Société de financement des infrastructures locales du Québec

TBS

Treasury Board of Canada Secretariat

Ts&Cs

Terms and Conditions

UBCM

Union of British Columbia Municipalities

References

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Annex A: Case Study Overview and Results

Case Study 1: City of Toronto, ON

Population: 2.8 million
Federal investment:  $626 million (2009 to 2012). Note: the total GTF investment between 2005 and 2013 is $1.024 billion.
Number of Projects Completed: 16 (2009 to 2012)

Toronto is Canada's largest city, the fourth largest in North America, and home to a diverse population of about 2.8 million people. The City of Toronto is a direct signatory to the GTF Agreement in Ontario.

This case study focuses on the benefits from the GTF for the period 2009 to 2012. During this timeframe, the City of Toronto has benefited from $626.0 million in GTF funds. The GTF has provided funding for essential public transportation infrastructure based on the City of Toronto's Capital Plan, which includes the Capital Program of the Toronto Transit Commission (TTC).  In particular, the GTF has led to the purchase of new and improved accessible Toronto Rocket subway cars, clean-diesel buses, Wheel Trans buses and light rail vehicles (streetcars). Funds have also been used for infrastructure projects including modifications to the Wilson Car House, the Leslie Barns Streetcar Maintenance and Storage Facility, power distribution and Easier Access Program (accessibility).

Benefits reported are related to Cleaner Air and Reduced GHG Emissions through the following project category:

Public Transit Infrastructure

• Increased ridership on the TTC has increased by 24.4 percent since 2005. Nearly 85 per cent of all local transit trips in the Greater Toronto Area are made on the TTC. With more than 1.6 million customers on an average weekday, the TTC maintains a cost-recovery rate of more than 70 per cent from the fare box – one of the highest in the continent. The TTC has the third largest ridership in North America, after Mexico City and New York City – cities with populations greater than eight million people.
• Increased size and decreased age of the TTC fleet. The average age of the bus fleet has decreased from 10.8 years in 2005 to 6.7 years in 2012.
• Reduced emissions. The TTC has been able to move ahead with its capital plan to replace aging buses with state-of-the-art, fully accessible vehicles that generate fewer emissions. On average, a passenger trip on the TTC is twice as fuel-efficient and produces less than half the emissions of an equivalent car trip.
• Reduced congestion and improved travel times. The TTC had 28 new Toronto Rocket subway trains in service in 2012. These trains will replace the TTC's oldest subway cars, most of which date from the 1970s and will ultimately allow the TTC to improve subway train headways (time between trains) up to 90 seconds, as well as carry more people. During the morning rush hour, one TTC subway train removes approximately 900 cars from the street, while one bus removes approximately 45 cars from the street.
• Improved access to transit. Delivery of all 204 low-floor, wheelchair accessible streetcars is scheduled for completion in 2019. The next-generation fleet will replace the aging existing fleet, be fully accessible, and provide for ridership growth and congestion relief efforts. In addition, Wheel-Trans, a division of the TTC, provides door-to-door accessible transit service for people with physical functional mobility limitations who have the most difficulty using conventional transit services. In 2012, there were 2,882,197 Wheel-Trans passenger trips, an increase of 171,914 from 2011.
• Supports Official Plan and sustainable communities objectives

Case Study 2: District of Barriere, BC

Population: 1,773
Federal investment: $446,951 (Note: An additional $6.7 million in GTF funding was awarded through the Innovation Fund administered by the Union of British Columbia Municipalities.)
Number of Projects Completed: 11

Located in central British Columbia, Barriere is a district municipality with a population of 1,773 (2011 Census). The community voted to become an incorporated municipality in 2007. Barriere completed 11 GTF projects within five different project categories: Community Energy Systems (3); Capacity Building (3); Public Transit (1) in collaboration with other communities; Wastewater infrastructure (1); and Water Infrastructure (3). In addition, Barriere applied for GTF funding to support a wastewater treatment system through the Innovation Fund administered by Union of British Columbia Municipalities (UBCM). This $6.7 million infrastructure project is currently under construction and as such benefits are not included in the case study.

The project outputs included: feasibility studies for recreational pathways and wastewater infrastructure, improved pathways, purchase of improved lighting systems for the community park bandshell, Sustainability / Official Community Plan, new zoning by-laws, new water main, hydrants, installation of a water metering system, and dam inspection.

Benefits reported are related to Cleaner Water, Cleaner Air and Reduced GHG Emissions through the following project categories:

Water Infrastructure

• Increased number of households provided with access to safe drinking water – 26 new residential connections
• Increased service reliability of water distribution facilities through 800 meters of new water main and 3 new fire hydrants
• Increased the size of water pipes and looped lines for improved fire protection that has also led to reductions in insurance premiums
• Increased water pressure for users
• 100 percent of users (households, businesses, public facilities) are equipped with water meters
• Replacement of flat rate user fees for water consumption with a metered system has led to improved conservation practices
• Water meters provide critical data on usage and leakage for the municipalities and homeowners
• Increased knowledge on water system leakage (quantity and problem locations) informs asset management planning by identifying water infrastructure maintenance, repair and upgrade requirements
• Inspection of dam complies with provincial requirements and provides information on steps required to prevent dam failure (flooding could be catastrophic)

Wastewater Infrastructure

• A feasibility study was conducted to assess future wastewater management requirements. Findings from this study were used to support Barriere's application to UBCM Innovation Fund (GTF funds).

Community Energy Systems

• Increased access to recreational pathways
• Increased use of community park and bandshell for cultural and recreational activities

Public Transit

• Improved access to public transit as residents have access to round-trip transportation to Kamloops (60 km away) twice per week

Municipal Capacity Building

• Fulfilled provincial requirement for the development of Integrated Sustainability / Official Community Plan
• Engagement of community members and youth in determining priorities for community sustainability and environmental initiatives
• Development of new zoning by-law that reduced the number of zones from 36 to 17 for more focused land use planning and increased density and redevelopment potential in the downtown core for properties once they are connected to municipal water and sewer systems

Case Study 3: City of Belleville, ON

Population: 49,454
Federal investment:  $3.2 million
Number of Projects Completed: 1 (Note: a second project within the Local Roads and Bridges category was conducted but is not included in the case study. This represents an additional $6 million in federal investment).

Belleville is a city located at the mouth of the Moira River on the Bay of Quinte in Southeastern Ontario, along the Quebec City-Windsor Corridor. According to the 2011 census, the population of Belleville is 49,454.

Under the GTF, Belleville has only undertaken one project under the community energy systems/environmental energy improvements category. This project is related to the last strategic objective noted above; it involved the installation of a solar panel system. Through this project, 2,132 photo voltaic panels were installed on the roofs of the Wally Dever Arena (910 panels) and the Yardmen Arena (1,222 panels). These panels are attached to one 250 kilowatt and two 100 kilowatt inverters.

Benefits reported are related to Cleaner Air and Reduced GHG Emissions through the following project category:

Community Energy Systems

• Alternative energy source that generates revenue ($400,000 per year)
• Increased awareness of the benefits solar energy by other municipalities
• Increased experience of in solar energy projects

Case Study 4: City of Saint John, NB

Population: 70,063
Federal investment:  $28.175 million
Number of Projects Completed: 26

Saint John is the largest city New Brunswick with a population of 70,063 (in 2011). It is known as the Fundy City due to its location on the north shore of the Bay of Fundy at the mouth of the St. John River, as well as being the only city on the bay. In 1785, Saint John became the first incorporated city in Canada.

Since the inception of the GTF, the City of Saint John has undertaken a total of 26 projects with GTF funding. These have included 4 water infrastructure projects, 16 wastewater infrastructure projects, 5 local roads and bridges projects and 1 municipal capacity building project. While this case study focuses on the projects undertaken since 2009, the impacts of projects completed before that period are also discussed.

Benefits reported are related to Cleaner Water and Reduced GHG Emissions through the following project categories:

Water Infrastructure

• Improvements to drinking water quality as a result of water main cleaning and lining (17 km) and upgrades to water pumping station

Waste Water Infrastructure

• Improvements to stormwater management piping and structures for separation from the sanitary sewer have reduced risks of flooding as a result of storms and potential negative consequences averted (e.g., damage to property, economic hardship, evacuation of homes and businesses, etc.)

Local Roads Infrastructure

• Improved road conditions through construction and reconstruction of several roads
• Construction of Retail Drive resulted in more efficient traffic movement and reduction in traveling distances. The travel distance savings of approximately 2.7 km for an average annual daily traffic of 16,400 vehicles per day accessing this commercial area is expected to eliminate approximately 6,500 tonnes of GHG emissions from the environment.

Municipal Capacity Building

• Established a tangible asset inventory valuation and management system for the purpose of PSAB implementation

Case Study 5: City of Calgary, AB

Population: 1.1 million
Federal investment:  $353.3 million
Number of Projects Completed: 27

Located in the province of Alberta, Calgary is situated at the confluence of the Bow River and the Elbow River in the south of the province, in an area of foothills and prairie, approximately 80 km east of the front ranges of the Canadian Rockies. At the 2011 Census, the City of Calgary had a population of 1,096,833 and a metropolitan population of 1,214,839, making it the largest city in Alberta, and the third-largest municipality and fifth-largest census metropolitan area (CMA) in Canada. Between 2001 and 2006, Calgary's population grew by 12.4 percent. During the same time period, the population of Alberta increased by 10.6 percent, while that of Canada grew by 5.4 percent.

The City of Calgary has invested $353.3 million in GTF funding through 27 projects for the period 2005 to 2013. During this timeframe 70 percent of project spending was related to mobility through investments in new buses, the expansion of Calgary's Light Rail Transit (LRT) network, and increased cycling infrastructure. The objective for focusing on mobility is to provide a balanced and coordinated long-term plan that provides for pedestrians, cyclists, transit customers, and the movement of goods and vehicles throughout the CMA. The remaining 30 percent of the GTF allocation supported environmental projects such as stormwater management facilities and solid waste management at landfills.

Benefits reported are related to Cleaner Water, Cleaner Air and Reduced GHG Emissions through the following project categories:

Public Transit Infrastructure

• Increased geographic coverage of LRT service (extensions to Calgary's far northeast communities carry 11,000 passengers per day and support the growing demand of both business and residential communities)
• Increased parking facilities to encourage use of LRT (The station in the northeast is supported with a facility of 950 parking stalls and another 1100 stalls at a new LRT station located in the northwest area)
• Increased size and decreased age of the public transit fleet (20 buses per year are refurbished)
• Increased customer service for transit users through a sophisticated advance traveler information system that provides passengers with real-time, pre- and onboard route and schedule information
• Improved accessibility and safety of train platforms that have been refurbished and extended to accommodate four car trains in the future
• Refurbished LRT tracks and switches have extended the lifespan of LRT tracks and ensures aging assets do not compromise public safety
• Wind-powered CTrain leads to reduced GHG emissions. The CTrain runs off of a renewable energy source and is the only LRT system in North America that uses wind-generated electricity to power the CTrain system.
• Improved access to transit. Six aging vehicle in Calgary's Handi-Bus fleet were replaced providing an essential service for those individuals with mobility challenges. Eighty-eight percent of vehicles are now accessible.
• Supports integrated sustainability planning objectives of Calgary's 2020 Sustainability Directions
• Increase transportation mode choice through the addition of 15 KMs of cycling network

Waste Management Infrastructure

• Improved storm water management infrastructure at all three City of Calgary landfills, which included drainage conveyance systems, retention ponds and engineered wetlands. These systems allow for proper collection and storage of stormwater and ensure that The City of Calgary landfills maintain compliance with provincial environmental legislation.
• Reduction of GHG emissions from City of Calgary landfills. GTF funding permitted The City to undertake efforts to reduce its environmental footprint with the construction of landfill gas recovery and utilization systems at two sites. Through operation of these systems, GHG emissions from the two landfills were reduced by close to 152,000 tonnes carbon dioxide equivalents (CO2e) and about 3.3 million KWh of power were generated and returned to the grid.
• Improved traffic safety and operational efficiencies of facilities through redesign and upgrades to access roads, scalehouses and new residential drop-off areas at three landfill sites.
• Remediation of landfill site. In the inner city, the Nose Creek Landfill remediation project has allowed the former landfill to be repurposed into a functional public playground. This valuable piece of land is within walking distance of LRT and the Calgary Zoo making it an ideal property for repurposing for community benefit.
• Supports multi-year management plan to provide effective leachate collection and treatment to ensure regulatory compliance and to protect the environment. Leachate collection feasibility and functional design studies for Calgary's three operating landfills were completed as well as retrofits to the existing leachate collection system at the Spyhill Landfill and fabrication and installation of the leachate pre-treatment pilot plant at East Calgary landfill.

Annex B: Definition of Incremental Spending by Jurisdiction

Footnotes

^[1] Averages are based on a scale of 1 to 10, one being not at all important and 10 being very important.

^[2] Infrastructure Canada. 2009 National Summative Evaluation of the Gas Tax Fund and Public Transit Fund. 2009.

^[3] Quebec data is only available to 2009-10 and is therefore not included in the totals.

^[4] $ and % spent and unspent do not necessarily total 100% due to interest earned and administration costs.

^[5] Totals include projects from the province of Quebec; they do not match the totals in Table 8 which excludes the province of Quebec.

^[6] Percentages are based on those reporting that they undertook a project within the eligible project category.

^[7] This indicates the percentage of respondents who indicated that they had completed a project within this category.

^[8] Totals may not add up due to rounding.