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Case Study

Ontario Infrastructure Funding & Legislation: What Municipalities Need to Know
PSD RESEARCH

Ontario's municipalities have long advocated for more support and funding from senior levels of government in order to maintain aging infrastructure, and build new infrastructure to meet the needs of growing communities. The current provincial and federal governments have answered their call with unprecedented investments in public infrastructure. Now, Ontario's municipalities are faced with a new challenge: municipal staff must stay abreast of new and altered infrastructure programs and legislative requirements, or risk losing significant grant funding.

With new grant funding formulas, cost-sharing arrangements, eligibility requirements, and application procedures and deadlines, municipalities must be diligent in their infrastructure project prioritization, a process that is enabled by improved municipal asset management planning. The Ontario Government in particular has taken significant steps to advance the asset management capacity of its municipal governments, providing assistance through grant funding and the dissemination of training and resources. With progress achieved across the province, the Ontario Government is now introducing asset management planning requirements into its infrastructure funding programs - mirroring the federal requirements for asset management planning tied to the Federal Gas Tax Fund (each province and territory has negotiated specific timelines and deliverables related to asset management planning requirements for Federal Gas Tax Funding).  

With a clear and up-to-date understanding of the grant funding available to local governments for infrastructure projects and the unique requirements and application processes for each program, Ontario's municipalities can take full advantage of the badly needed infrastructure dollars flowing from federal and provincial coffers.

PSD's research group has prepared the following briefing to assist Ontario's municipalities with their grant funding project planning and application completion. Please contact us if you have further questions or if you are looking for further assistance in reviewing or completing your infrastructure grant funding applications.

"With progress achieved across the province, the Ontario Government is now introducing asset management planning requirements into its infrastructure funding programs."

 

INFRASTRUCTURE GRANT FUNDING FOR ONTARIO COMMUNITIES 

 

1) FEDERAL GAS TAX FUND

 

The Federal Gas Tax Fund agreement, renewed in 2014 and administered by the Association of Municipalities of Ontario (AMO), stipulates that Ontario’s municipalities must complete another Asset Management Plan (AMP) by December 31, 2016. Ontario's communities were required to complete an AMP in 2013 that included their core infrastructure assets - roads, bridges, water and wastewater. In 2016, municipalities must include all eligible Gas Tax spending categories in their AMP, regardless of how the municipality plans to spend its Gas Tax money. A more comprehensive AMP will allow municipalities to better plan for optimal infrastructure maintenance and rehabilitation across all asset categories, while also providing the province with a clearer picture of the value, condition, and replacement cost of all municipally-owned assets. 

As the deadline approaches for 2016 AMPs, AMO has provided clarification on the expected deliverable for Ontario's municipalities. AMO has indicated that it will not withhold Gas Tax funds as long as municipalities are able to demonstrate their progress towards an improved plan that includes all asset categories. 

AMO has also provided the one additional indicator that municipalities will have to report on regarding their 2016 Gas Tax expenditures: "percentage of tangible capital assets owned that are part of the asset management plan.” Other asset management outcome indicators for reporting years 2017 and beyond will be introduced after the province implements the new Bill 6 Regulation (see details below). 

Source: Administrative Agreement on the Federal Gas Tax Fund - Ontario

 

2) ONTARIO COMMUNITY INFRASTRUCTURE FUND (OCIF)

 

The Ontario Community Infrastructure Fund (OCIF) was launched to provide Ontario's small and rural communities with access to targeted funding for critical infrastructure projects. OCIF originally consisted of two streams of funding:

  • Formula-based funding, automatically allocated to Ontario's small, rural, and northern communities to build asset management capacity or fund a critical infrastructure project (the formula is based on a number of factors including the average household income of a community and the value of the community's infrastructure assets)
  • Application-based funding, providing successful applicants with funding for critical infrastructure projects that address a health or safety issue (all small, rural, and northern communities were eligible to submit an Expression of Interest (EOI), followed by a full application for those successful with their EOI)

 

In 2016, the province introduced changes to the eligibility and funding streams for OCIF. The new streams for OCIF are as follows:

  • Formula-based funding, automatically allocated to Ontario's small, rural, and northern communities to build asset management capacity or fund a critical infrastructure project 
  • Top-up funding, providing successful applicants with additional support to fund critical infrastructure projects that address a health or safety issue (communities that are receiving more than $2 million over the next two years in formula-based funding are ineligible to apply, as well as those that received second intake application funding under OCIF) 

 

Those communities that receive top-up funding next year (after applying this fall), will be ineligible to apply next year. All small, rural, and northern municipalities should have received their allocation notices indicating the amount of formula-based funding they will receive over the next three years, as well as whether they are eligible to apply for OCIF top-up funding. 

The deadline to submit applications for OCIF Top-up Funding is October 21st 2016 at 5pm ET.  

                 Source: Ontario Government                 

 

3) CONNECTING LINKS 

 

The Connecting Links program provides funding to municipalities to assist with the repair of roadways and bridges that connect two ends of a provincial highway through a community or to a border crossing. 77 municipalities with connecting links are eligible to apply for up to 90 percent of total eligible project costs. The deadline for applications is October 21st, 2016 at 5pm ET, with funding flowing in the spring of 2017. 
 
A full list of eligible communities and the application can be found here
 

4) CLEAN WATER & WASTEWATER FUND (CWWF) 

 

In September, the federal and Ontario governments reached an agreement to launch the Clean Water & Wastewater Fund (CWWF) as part of Phase 1 of the Canadian government's 10-year Investing in Canada plan.  Through the CWWF, the federal government will provide funding to cover up to 50% of eligible costs associated with the rehabilitation of community water/wastewater systems, with the province cost-matching recipient contributions up to a maximum of 25% of total eligible costs. 

41 projects have already been approved for funding. Municipalities in Ontario that own water or wastewater assets can still apply for funding by providing the province with a project list by October 31st, 2016 at 5 pm ET. All eligible municipalities should have already received an allocation notice indicating the maximum funding request value. It is estimated that successful projects will be identified by January 2017. 

Full application details and program guidelines can be found here

 

CHANGES TO LEGISLATION & REGULATIONS

 

1) Infrastructure for Jobs and Prosperity Act, 2015 

 

This summer, the Ontario Government hosted consultation sessions with municipalities across the province to review the prototype regulation for the Infrastructure for Jobs and Prosperity Act 2015 (Bill 6 achieved Royal Assent in 2015 and is therefore now an Act). The province is now working on completing an amended draft of the proposed regulation for further review, with the goal of adopting the regulation in 2017. This regulation will outline new requirements for Ontario's municipalities in terms of the completion of future AMPs, Asset Management Policies, and reporting requirements. 

The main components of the proposed regulation are as follows:

a)      Municipalities will be required to complete a strategic asset management policy - the deadline for the completion and council approval of policies is tentatively set for January 1, 2018 (subject to amendments and final approval of the draft regulation)

b)      Municipalities will be required to prepare a new Asset Management Plan with expanded lifecycle management strategies, financial strategies, and proposed levels of service

 

Contact us if you have any questions about the above programs or legislative changes, and for assistance in completing grant funding applications.