Canada and Ontario agree on the need for high-quality, modern public infrastructure that contributes to long-term economic growth, a clean environment and strong communities. They also agree on the need for long-term planning to strategically address infrastructure needs in priority areas, including water, wastewater, public transit, the core National Highway System, green energy, as well as priorities that enhance Ontario's public infrastructure, such as infrastructure for small and northern communities.
Infrastructure was identified as one of the joint priorities of federal, provincial and territorial governments as part of restoring fiscal balance. Five key principles emerged from Canada's 2006 fiscal balance consultations with the provinces and territories:
• Accountability through clarity of roles and responsibilities;
• Fiscal responsibility and budget transparency;
• Predictable, long-term fiscal arrangements;
• A competitive and efficient economic union; and
• Effective collaborative management of the federation.
The Government of Canada established the new $33-billion Building Canada plan under Budget 2007 that is guided by these principles. The Building Canada plan includes a comprehensive and integrated suite of infrastructure initiatives, as follows:
• base funding in support of infrastructure for municipalities including the $11.8 billion Gas Tax Fund (extended to 2013-14) and an estimated $5.8 billion in Goods and Services Tax Rebate, which represents the benefit of raising the rebate from 57% to 100%;
• a $2.275 billion provincial and territorial Base Funding initiative ("Base Funding") to provide each jurisdiction with $25 million per year over seven years; and
• program funds, including the $8.8 billion Building Canada Fund, the $2.1 billion Gateways and Border Crossings Fund; a $1.25 billion Public-Private Partnerships Fund, and an additional $410 million for the Asia-Pacific Gateway and Corridor Initiative, bringing the total federal investment to $1 billion for that initiative.
Canada and Ontario will engage municipal leaders in the development and delivery of the Building Canada plan in Ontario. The Parties fully support the value of municipal participation, and will work with Ontario's municipalities as represented by the Association of Municipalities of Ontario and the City of Toronto to address infrastructure needs in Ontario.
Canada acknowledges the general principle that funding in the Building Canada plan will not be used to meet federal funding commitments for previous Canada-Ontario infrastructure programs.
The Parties recognize that the existing Canada-Ontario infrastructure agreements will stand on their own, specifically with their respective authorities and terms and conditions, and are not affected by this Agreement.