First, the federal government can go a long way in strengthening Canada's infrastructure by getting its own house in order. Both the nation's standard of living and security are closely tied to a smooth running Canada-U.S. border, which falls under federal jurisdiction. Yet, the infrastructure at the border crossings is inadequate, as evidenced by long queues and delays, which have been worsened since the September 11th, 2001 terrorist attacks. The $100 million in uncommitted money in the Border Infrastructure Fund will not go very far toward addressing the capital needs in this area. It could be used to widen and improve the highway route from the 401 to the Windsor Border Crossing - one of Canada's busiest border points. However, without funding for a tunnel or another bridge at Windsor, little would be done to cure the backlogs.
Many other federal government activities feed more indirectly into infrastructure, but are necessary nonetheless - and especially how they relate to boosting prosperity and relieving fiscal pressure in the nation's cash-strapped municipalities. To better understand why this is the case, consider how almost every federal policy change affects life in Canada's communities. Federal support of post-secondary institutions and research provides the skilled talent that largely goes to work in cities. Immigration policies are also vital. And, we should not forget the important role in supporting Canada's social safety net -including the Child Tax Benefit and the Guaranteed Income Supplement - which is critical in alleviating poverty and crime in the nation's communities.
There is still unfinished work to do in all of these areas. At the top of the list, the federal government needs to do a better job at matching immigration settlement funds to the areas where the costs are being incurred. The large increases in funding for research funding and assistance for students in recent federal budgets have been positive, but there remains a patchwork of programs across the federal and provincial levels that should be better integrated. And, while many of the government's enrichments of social programs in recent yeas have been paved with good intentions - for example, the 2004 budget announced significant financial assistance for low-income individuals to attend post-secondary education - they have also come with some unfortunate side-effects. Notably, in light of the rapid rate at which benefits are taxed back as income rises, marginal personal income tax rates often exceed 60 per cent for low and modest income individuals. This needs to be addressed.