Fed infrastructure money requires provincial spending

The federal government promised nearly $12 billion for infrastructure in the 2009 budget tabled Tuesday, but there's a catch: the government is expecting other parties to come up with $11.8 billion more before it loosens the purse strings.

The requirement that provinces, territories and municipalities find matching funds has some of the potential recipients worried, although others are confident they can find the money to tap into the federal cash.

"Strict cost-sharing requirements would be a roadblock to getting work started on many worthwhile projects, particularly now that municipalities have approved their 2009 capital budgets," said Jean Perrault, president of the Federation of Canadian Municipalities.

Some jurisdictions that need infrastructure money are worried that the federal government's red tape means thefunds will dribble out slowly. That has been the experience with theConservative's 2007 infrastruture plan, Building Canada, they say.

Opposition Leader Michael Ignatieff said Wednesday the Liberals will support the budget, but the government has to make the money flow. "We've put down a very clear marker; this government has to get the money out the door," he said.

The budget said the government willstreamline federal approvals so projects can start in the upcoming construction season.

Ontario Premier Dalton McGuinty said he liked the infrastructure plans, even though he'll have to come up withbillions in matching funds.

The budget said that among theinfrastructure proposals:

• The $4-billion Infrastructure Stimulus Fund to rehabilitate provincial, territorial and municipal infrastructure rehabilitation requires other governments to cover at least half the costs.
• The$2 billion to pay formaintenance and repair projects at universities and colleges requires "other partners" to fund at least half the costs.
• Projects under the speeded up Building Canada base payments to provinces and territories, up to $1 billion, will be cost-shared.
• The $500 million for new community recreational facilities and upgrades to existing facilities will require provincial and municipal governments, community organizations and the private sector to come up with at least half the money.
• Costs under projects done through the$500 million accelerated spending under thecommunities component of the Building Canada fund will be cost shared.
• The five-year, $1 billion Green Infrastructure Fund,will be cost-shared.

For the single biggest new spending proposal, the $4-billion Infrastructure Stimulus Fund, the federal government made it clear that the provinces must use it or lose it.

"Should agreements not be reached expeditiously with a province or territory, funding may be used to support the rehabilitation of federal or other infrastructure," the budget said.