Every day I hear from municipal leaders who must balance the need to renew existing infrastructure assets with the construction of new assets. Population growth, the need to increase housing supply and additional pressures such as climate change and natural disasters have brought new stresses on public infrastructure. Through FCM’s federally funded suite of programming like the Municipal Asset Management Program, Municipalities for Climate Innovation Program, and of course the Green Municipal Fund, we’ve been able to support the development of ambitious climate plans and feasibility studies in pursuit of innovative solutions.
The asset classes that tend to be more conducive for private finance are in sectors like electricity, telecom (broadband), trade infrastructure, public transit and, to some extent, water infrastructure where there are user fees already associated with the asset. The CIB could help by continuing to explore new financing models for infrastructure renewal that create new value and a return on private investment.
And where private finance is showing promise, like we are seeing with zero-emission public transit buses and energy retrofits for large buildings, the CIB can help municipalities by partnering to support them through the project development phase and by exploring new ways to bundle smaller projects together to get them to investment scale.
We need to evolve our approach to how infrastructure is built in Canada, and municipalities need to be part of those discussions from the start.
EC: Carole, the FCM is doing some great work, but we know the need for infrastructure investments in Canada is so big. How can governments at all levels, the CIB and the private sector collaborate and use alternatives to advance the development of impactful infrastructure?
CS: It’s true that the need for investment in public infrastructure is massive. No one order of government can do it alone. Partnerships are essential, and we need to continuously find new ways of delivering the infrastructure that Canadians expect and that will position Canada for success over the long-term.
Municipalities are making the most of the limited revenue tools they have available to them, namely property taxes, user fees and transfers from other orders of government. In that fiscal context, and while the need for significant public investment remains, private finance is also an option that municipalities are exploring, including in partnership with the CIB.
We’re also seeing through FCM’s Green Municipal Fund, that we can be thoughtful about how programs are designed, and the financing gap can be filled to catalyze private sector investment in infrastructure. The fund has helped drive private investment in ambitious projects like the Zibi Net Zero Waterfront development (in Ottawa-Gatineau), which brought together two cities, Hydro Ottawa, the developer in a partnership to reuse industrial heat waste, generate hydro power, and cool buildings in the summer with a fully net zero heating and cooling district energy system.
We have real success stories to build on and a big opportunity for governments to do more, through the CIB and other partners, to leverage investment toward the scale of investment our country needs. To be clear, it will never displace the need for public investment, but we can and must be smart about the outcomes we should expect from that investment, and I’d argue maximizing its catalytic potential must be one.
Investing in infrastructure is essential to Canada’s long-term economic prosperity, to our quality of life, to combating climate change and to increasing social and economic inclusion. The CIB’s investment priorities align with a number of key municipal priorities, including clean water, broadband connectivity, public transit and building retrofits. Long-term federal investment in these areas, where appropriately leveraged by private finance, could have a real impact in the lives of all Canadians.
EC: We shared the stage at the GLOBE Forum last spring where we discussed the importance of municipalities addressing resiliency and adaptation. How are municipalities thinking about and addressing climate adaptation? What types of investment are needed, and how are municipalities approaching these?
CS: There’s a reason that every local broadcast about a devastating flood or storm event will feature the mayor. Local governments are located at the front lines of the damage from increasingly extreme climate and weather events. From wildfires to coastal surges, local leaders are responding as new climate extremes force families from their homes and cost our economy billions each year in property damage and lost productivity.
There are some important tools, like the Disaster Mitigation and Adaptation Fund, that are helping communities work ahead and stay prepared for the effects of a changing climate. But that fund desperately needs to be scaled up to meet the scope of the climate problem and we need to build the capacity of municipalities to adapt their infrastructure. And there’s more to do, particularly about natural infrastructure. If we invest wisely, we can better stabilize landscapes and mitigate climate hazards, and we can enable municipalities to purchase forests, wetlands, and green spaces to create or expand parks and protected areas – supporting local conservation, urban biodiversity, low-carbon resiliency and access to nature.
Municipalities are approaching this, as they do with most things: pragmatically, doggedly, and with the interest of their community members foremost. As the order of government closest to Canadians they can’t afford to wait until other orders act. So, they need real partners and need to be fully included as such. Both because of their local expertise and because it’s what Canadians need and so rightfully expect.
