Per capita funding means North gets short-changed on infrastructure: report
Aboriginal business advisory board recommends standalone northern infrastructure development fund
The $188.6 million Canadian High Arctic Research Station, under construction last September in Cambridge Bay, one of the biggest single infrastructure projects the federal government has undertaken in the Canadian Arctic in recent years. The National Aboriginal Economic Development Board estimates $46.7 million in sub-contracts related to the project went to Inuit firms. (FILE PHOTO)
Northern Canada’s small population means that northern regions like Nunavut often lose out when federal infrastructure money is distributed across the country, the National Aboriginal Economic Development Board said Jan. 20 in a report.
To that end, the board proposes the federal government create a dedicated northern infrastructure development fund that would focus on transportation, telecommunications and energy.
They say that would be a better way to meet the sometimes desperate needs of Canada’s northern regions than funding offered through programs like SINED (Strategic Investments in Northern Economic Development) and the NBCF (New Building Canada Fund).
Right now, each province and territory gets a $25 million base amount through Ottawa’s New Building Canada Fund, plus a per capita amount based on population.
That means northern regions do not get enough infrastructure funds relative to their needs and relative to the cost of construction in the North.
“Since the majority of infrastructure funding is based on a per capita formula, it puts the North at a disadvantage compared to the South due to a substantially lower population,” the report said.
Right now, Nunavut is slated to receive about $256 million over 10 years — about $25.6 million a year — through the last version of the New Building Canada Fund, as announced by the now-defeated Conservative government.
On top of that, the Conservatives promised Nunavut would get $163 million over 10 years from the gas tax fund: for a total of $419 million over 10 years in basic federal infrastructure contributions.
Nationally, the Conservatives planned to spend about $65 billion on infrastructure over 10 years, mostly on a cost-shared basis with provinces, territories and municipalities
But in the last election campaign, Justin Trudeau’s Liberals promised to double that amount to $120 billion over 10 years.
They’re expected to keep that promise in Finance Minister Bill Morneau’s budget this spring — but they haven’t said how they will divide that money among provinces and territories.
The NAEDB report does not discuss the potential impact of the Liberal government’s future plans.
But they do say the federal government should look at new ways of figuring out how much infrastructure money to give northern regions.
And they even suggest a “per hectare” rather than a “per capita” method.
“As such, an alternate methodology, such as allocating funding on a per hectare basis in the North, should be considered to determine Northern infrastructure funding if the deficits are to be addressed,” the report said.
Since Nunavut holds about 20 per cent of Canada’s land base, that could produce a dramatic increase in infrastructure funding for the territory.
The report also says that, for northern Canada, the federal government should expand the definition of “public benefit” when applying its eligibility criteria for programs like the New Building Canada Fund.
That means the value of a piece of proposed infrastructure would be measured by its ability to lower cost of living, encourage more resource projects, stimulate the development of new businesses and improve the delivery of government services.
They also estimate that each dollar invested in northern infrastructure has the potential to generate $11 of economic benefits for individuals and $11 of fiscal benefits for government.
The report covers Nunavut, the Northwest Territories, Yukon, Nunavik, the Eeyou Istchee region of northern Quebec and Nunatsiavut.
In other sections of the report, they recommend the use of P3 deals to leverage infrastructure funds from the private sector and a bigger role for Aboriginal birthright development corporations.
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