GENERAL COMMITEE

 

 

 

 

 

TO:

Mayor and Members of Council

 

 

 

 

FROM:

Andy Taylor, Commissioner of Corporate Services

Barb Cribbett, Treasurer

 

 

 

 

PREPARED BY:

Barb Cribbett, Treasurer

 

 

 

 

DATE OF MEETING:

2005-October-17

 

 

 

 

SUBJECT:

Federal Gas Tax Allocation – 2005 to 2009

 

 

 

 

 

RECOMMENDATION:

 

THAT staff report back to Council with the Town of Markham’s Municipal Funding Agreement when it becomes available;

 

THAT discussion regarding the allocation of the Federal Gas Tax be referred to the Budget Sub-Committee. 

 

 

PURPOSE:

 

The purpose of this report is to provide preliminary information regarding the Federal Gas Tax

 

BACKGROUND:

 

The Federal Gas Tax funding was announced in the 2005 Federal Budget and will result in approximately $1.9 billion (equivalent to 5 cents-per-litre) flowing to Ontario municipalities for environmentally sustainable infrastructure over the next five years.  Beginning in 2005/06 at $224 million, Federal funding will grow to $746 million by 2009/10.  These funds have been allocated to the municipalities of Ontario by AMO (attached as Appendix A).

 

 The Association of Municipalities of Ontario (AMO) will act as the fund administrator and is producing a Municipal Funding Agreement (MFA) that will implement the terms of the June 17th agreement between Canada, Ontario and AMO. The MFA’s are expected to be sent to each municipality in Ontario by the end of October 2005.  Municipal Council’s will be required to pass a by-law to authorize the signing of the MFA.

 

 

 

The Town of Markham has received the following allocation for the 2005 to 2009 period:

 

2005 - $2,033,930.01

2006 - $2,033,930.01

2007 - $2,711,603.87

2008 - $3,389,277.74

2009 - $6,778,555.48

 

Total funding over the 5 year period is $16,947,297.10. 

 

AMO recently provided a copy of the MFA between Canada, Ontario, AMO and the City of Toronto on the AMO website as an example of what all municipalities can expect to receive. Included in the agreement are details regarding eligible categories, eligible costs, eligible recipient requirements and outcome indicators. Copies of these schedules are attached as Appendix B. The AMO website also indicated that additional guidelines would be provided along with the MFA to Ontario municipalities.

 

DISCUSSION:

 

AMO has indicated that the 2005 Federal Gas Tax allocation ($2.033 million) will be received in November 2005, and the 2006 allocation ($2.033 million) will be received in 2 instalments, July and November of 2006.  Subsequent year’s allocations will also be received in July and November each year.

 

Highlights of the federal Gas Tax Program and Agreement

 

Eligible Categories:

A summary of the eligible categories, as set out in the attached Schedule A to the agreement, is as follows:

 

Ø      Public transit

Ø      Water

Ø      Wastewater

Ø      Solid Waste

Ø      Community Energy Systems

Ø      Local roads, bridges etc. (only for municipalities with population under 500,000)

Ø      Capacity Building

 

The Gas Tax funds can be used for any of the above categories for project costs incurred after April 1st, 2005, other than for road and bridge projects.  Municipalities wishing to expend the gas tax funding on road and bridge infrastructure will be required to submit a plan setting out the expected environmental benefits in advance of investing in roads and bridges.

 

 

 

 

Incremental Spending:

A fundamental principal of the Federal Gas Tax program is the expectation that the funding will be used for “incremental” spending, or a net increase in the total investment in municipal infrastructure over the life of the agreement. The incremental spending is intended to alleviate the municipal infrastructure gap, by accelerating investment to reduce the infrastructure deficit.

 

FINANCIAL CONSIDERATIONS:

The Town of Markham recently began the 2006 Budget discussions through the Budget Sub-Committee.  Specific discussions regarding the use of the Federal Gas Tax revenues has not yet occurred, as staff were waiting for more information on the eligibility requirements.

 

Staff recommends that further discussion of the allocation of the 2005 and 2006 Gas Tax revenues be referred to the Budget Sub-Committee for further discussion.

 

Attachments:

  • Appendix A – AMO Allocation of Federal Gas Tax Revenues
  • Appendix B – Sample Schedules to MFA

 

 

 

 

 

Barb Cribbett,

Treasurer

 

Andy Taylor,

Commissioner of Corporate Services