Thank you for including the Association of Municipalities of Ontario in your study of Bill C-60.

I would like to address division 18 of the bill, which proposes the indexing of Canada's gas tax fund.

AMO administers the gas tax fund to all municipalities in Ontario, except Toronto. We distribute the fund twice a year on a per capita basis. Municipalities can count on this stable and predictable administration model and invest the fund where they need it the most. Our unique model has been proven to deliver.

Between 2005 and 2011, Ontario municipalities invested more than $2.1 billion gas tax dollars in over 3,800 projects. These projects have produced 3,900 kilometres of safer roads, 240 safer bridges, 230 additional transit buses added to municipal fleets, over 106,000 tonnes of waste diverted from Ontario landfills, and 136,000 metres of new and rehabilitated water, storm, and waste water pipes, among many other positive outcomes.

Canada's gas tax fund improves the lives of Ontarians by making our communities safer, more efficient, and prosperous. The fund has helped communities keep construction-related jobs in the face of economic uncertainty. In response, Ontario municipalities are transparent in reporting where they invest the fund and in sharing project benefits with the community. The way the fund is administered in Ontario has proven to be effective, efficient, and accountable. A number of third party evaluations have confirmed this fact.

Despite the direct benefits of Canada's gas tax fund, it is no secret that Ontario's infrastructure is under pressure. Much of it was first built in the 1950s and 1960s, and needs to be upgraded or replaced. In some Ontario communities, population growth is increasing the burden on local infrastructure and fuelling demand for new investments. Other municipalities have a lot of assets to maintain but a shrinking population base and declining tax revenues.

In 2008, the joint provincial-municipal fiscal and service delivery review determined that Ontario municipalities face a $60 billion infrastructure gap that will take 10 years to close. That means every community in Ontario needs $6 billion per year every year for 10 years. This is a gap in our core critical infrastructure, such as transit, water, waste water, storm water, solid waste, and roads and bridges. It does not include other key areas of municipal infrastructure, such as recreation, culture, and in Ontario, social housing. The infrastructure gap exists in all Ontario municipalities, no matter the size or location.

While working to address this need, we are very pleased that Parliament made the gas tax fund permanent in 2011. We are also pleased that budget 2013 committed to expanding the list of eligible project categories and to indexing the fund starting in 2014-15. Expanding the list of project categories makes the fund even more flexible and allows municipalities to address the needs that are unique to their communities.

Division 18 of Bill C-60 seeks to implement indexing, and we applaud this. Indexing is absolutely essential so that the fund grows over time to meet inflation and the rise in construction costs. Indexing ensures municipalities can rely on Canada's gas tax fund as a stable, predictable, and long-term source of funding to address the infrastructure gap felt in all communities.

However, based on our understanding of the formula proposed in the bill, municipalities will have to wait before they experience the positive outcomes of indexation. The need for investment is now, not only because of the infrastructure gap but because investment drives the economy of the future. Municipal infrastructure provides the support to the social, cultural, and commercial activity that leads to a dynamic and prosperous Canadian economy.

If we are correct and the formula is not changed, we ask that the government tell us how much in gas tax funds will be transferred now and in future years, so that municipalities can plan for the long term. Predictability is one of the most important and welcome features of the gas tax fund. It is especially important in Ontario, since municipalities are now working on long-term asset management plans.

The plans consider how much it will cost to rehabilitate and replace infrastructure in order to meet desired service levels. Predictability is the key to implementing these plans since it ensures that funding will be there when it is needed the most. We hope that the federal government considers the immediate need for safe, efficient, and sustainable communities when it implements the gas tax fund indexing in division 18 of Bill C-60.

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