Governments of Canada, Nova Scotia Sign Gas Tax Agreement

Prime Minister Paul Martin and Premier John Hamm were in Sydney today, Sept. 23, for the signing of an agreement that will result in $145.2 million of federal gas tax revenues invested in communities across Nova Scotia.

Joining the prime minister and the premier at the signing ceremony were the federal Minister of State for Infrastructure and Communities, John Godfrey, federal Fisheries and Oceans Minister Geoff Regan, and Service Nova Scotia and Municipal Relations Minister Barry Barnet.

The signing was officially witnessed by the president of the Union of Nova Scotia Municipalities (UNSM), Charles Crosby, on behalf of Nova Scotia's 55 municipalities. The municipalities will receive $145.2 million over five years, for environmentally sustainable municipal infrastructure.

"Today's agreement will help ensure the long-term sustainability and vitality of cities and communities in Nova Scotia," said Prime Minister Martin. "We have made the New Deal a top priority, and these gas tax funds demonstrate our commitment to ongoing infrastructure improvement to meet Nova Scotia's priorities, while achieving national goals."

"This is good news for all Nova Scotia municipalities, both big and small," said Premier Hamm. "This agreement is a major investment in strong communities, in opportunities for Nova Scotians. It will help ensure better infrastructure for today and in the future. Together, we are helping Nova Scotia communities prepare for future development and prosperity."

"This is an important day for Nova Scotia cities and communities, large and small, urban and rural," Mr. Godfrey stated, "and is an example of the New Deal at work. I am proud to work with our partners to strengthen the economic, environmental, social and cultural base for all of Nova Scotia’s communities."

The New Deal is about building new relationships, including with the UNSM, which played a key role in reaching this agreement. Mr. Crosby commended the initiative, noting that, "the New Deal funding will benefit all communities throughout Nova Scotia. It will help ensure that we will have more efficient, effective and environmentally sustainable infrastructure."

Gas tax funds will be invested in environmentally sustainable municipal infrastructure. Eligible project categories include public transit, community energy systems, water, wastewater management, solid waste management, and roads and bridges, where it can be demonstrated that they will enhance environmental sustainability outcomes. Funding can also be used by municipalities to help them develop long-term plans for improving local quality of life.

These investments will result in significant environmental benefits, such as cleaner air, cleaner water and reduced greenhouse gas emissions. An Oversight Partnership Committee, with representatives from the federal and provincial governments and the municipal sector, will monitor the program and develop new directions and initiatives.

The provincial government will administer the distribution of the federal funds to municipalities and has committed to continuing to invest its own money into municipal infrastructure. Funds from municipalities will be allocated for eligible projects according to a formula based on population, the number of dwellings in the municipality and municipal expenditures. A municipality must enter into an agreement with the province and submit a capital budget before funds are released, and municipalities will be able to carry over gas tax funds to future fiscal years.

The New Deal promotes the economic, social, environmental, and cultural sustainability of Canada's cities and communities. It is focused on establishing a long-range vision for Canada's communities, building new relationships among all orders of government and other partners, strengthening the connections among federal programs that benefit cities and communities, as well as helping municipalities secure predictable and stable long-term funding.

Federal gas tax funding builds on other government of Canada infrastructure funding, including the Canada Strategic Infrastructure Fund (CSIF), the Border Infrastructure Fund (BIF), and the Infrastructure Canada Program (ICP). The federal budget 2004 gave municipalities the goods and services tax (GST) rebate worth $7 billion over 10 years for their areas of greatest need, and accelerated the $1-billion Municipal Rural Infrastructure Fund (MRIF). Budget 2005 provided $5 billion over five years in gas tax funds, ramping up to $2 billion in year five and indefinitely thereafter. In addition, budget 2005 committed up to $800 million over the next two years for transit funding, of which Nova Scotia's share is over $23.4 million. Budget 2005 also committed to the future renewal of CSIF, BIF and MRIF.

As of today, eight gas tax agreements have been signed, including British Columbia, Alberta, Yukon, Ontario, Quebec, Nunavut and Saskatchewan. The government of Canada expects to sign agreements with remaining jurisdictions in the coming weeks and months.