Infrastructure money starts to trickle in
New money is a start, but still not enough to keep pace with housing growth
On Friday, Mayor Mark Sutcliffe gifted Premier Doug Ford a box of Maverick’s donuts, and in return received a giant cheque for $37,502,947.
It was a good trade. A few weeks ago in this newsletter I wrote about the City of Ottawa reaching 90% of its provincial housing target, making us eligible for infrastructure funding. Now we know exactly how much we’re getting.
The $37.5-million cheque is part of the Building Faster Fund (BFF) in recognition of 10,313 housing starts in Ottawa in 2023. We also learned through the new deal between Ottawa and the province that we will be eligible for another $80-million in 2024 and 2025 if we meet our targets. (There could be even more available too, thanks to a new Provincial program called the Municipal Housing Infrastructure Program that will provide $1-billion to Ontario cities over the next few years.)
Meanwhile, this week the Federal government announced a new $6-billion Canada Housing Infrastructure Fund “to accelerate the construction and upgrading of critical housing infrastructure”. There are some major conditions1 attached for provinces to qualify for money towards “water, wastewater, stormwater, and solid waste infrastructure”. Details to come.
This is all good! But not nearly enough!
Whenever there is a new development proposed in my community, the number one resident concern is “lack of infrastructure”, by which people generally mean roads, sidewalks, transit, rec centres, emergency services, schools and healthcare.2
I think most residents acknowledge that there is a housing crisis in Canada, but rightly call out governments at all levels who haven’t properly planned – or funded – everything that comes along with that growth.
For some perspective on how much this stuff costs:
In Stittsville, work is underway to build a 1.5-kilometre section of Robert Grant Avenue at a cost of $20.3-million.
Also in Stittsville, the cost to upgrade Carp Road from Hazeldean to the 417 is $35.6-million.3
The Baseline Bus Rapid Transit Corridor (from Baseline Station to Heron Station) is estimated at $270-million.4
The City’s draft Infrastructure Master Plan estimated the cost of water, wastewater and sewer infrastructure for new growth to be over $4-billion between now and 2046.
My council colleague Jeff Leiper says the city currently spends about $128-million per year from development charges to build growth-related infrastructure.5 Any money from the other levels of governments is certainly welcome, but we’ll need a lot more to continue expanding transit, roads, pipes and sewers at pace with new housing growth.
A note about transit funding
This week we’re expecting the Federal government to make an announcement about new transit infrastructure funding. I hope they include operational funding in this. Transit systems across Canada are struggling with lower ridership6 and higher operating costs.
The Ontario government used to fund about half of transit operating costs until 1998, and municipal transit budgets have suffered ever since. We get a small amount through gas taxes, but that’s it.
It was really disappointing that there was no money for transit operations in the Ottawa-Ontario deal7, especially when the Province has made some recent announcements for the Greater Toronto Area, including:
$330-million over three years for operations of the Eglinton Crosstown LRT and Finch West LRT
A one-time $300-million “Subway and Transit Safety, Recovery and Sustainable Operations Fund”.
The new “One Fare” program in the GTA to integrate fares between GO Trains and transit services like the TTC, estimated to cost $117-million per year.
That’s over a billion dollars in operating subsidies for the Toronto area in the next three years. Congrats Toronto transit riders.
We won’t solve our transportation and affordability challenges with roads and cars. We need provincial and federal support for operating buses and trains too!
Have a nice Sunday.
Conditions include:
Require municipalities to broadly adopt four units as-of-right and allow more “missing middle” homes, including duplexes, triplexes, townhouses, and other multi-unit apartments.
Implement a three-year freeze on increasing development charges from April 2, 2024, levels for municipalities with a population greater than 300,000.
Adopt forthcoming changes to the National Building Code to support more accessible, affordable, and climate-friendly housing options.
Require as-of-right construction for the government’s upcoming Housing Design Catalogue.
Implement measures from the Home Buyers’ Bill of Rights and Renters’ Bill of Rights.
Capital costs for schools and healthcare are provincial responsibilities, but the rest is paid for by cities.
This figure is from the City’s Development Charges Background Study published in March 2024, Page 277.
Also from the Development Charges Background Study, Page 108.
In Ontario, city infrastructure in new communities is funded primarily through Development Charges (DCs) added to every new home and apartment. A new single home in the suburbs gets a development charge of $51,376; a townhome $40,296; a two-bedroom apartment $27,615. This is the equivalent of nearly ten years of property taxes on the average home.
A report from Colliers last week notes: “Ottawa's return-to-office rate remains notably behind other major Canadian office markets. Currently, it operates at 54% of its pre-COVID occupancy levels. In comparison, Toronto has improved to 78%, Vancouver to 72%, and Montreal to 67%. Downtown Ottawa saw a peak in occupancy levels in Q2 2023, reaching 73%, following the federal government's directive for its employees to be in the office two to three days each week since January 2023. However, occupancy levels have since declined to its present rate of 43%.”
We did get a commitment of $80-million to fund capital costs of the construction of the Kanata North Transitway, contingent on the federal and municipal governments matching the contribution.