Today, June 1st, the federal government announced an advanced transfer of the 2020-21 Gas Tax Fund for municipalities. In the coming weeks, $2.2 billion will be distributed to municipalities in a single annual installment instead of two. The Minister of Infrastructure and Communities, Catherine McKenna, has already been in contact with her provincial and territorial counterparts to outline their strategy to deliver the accelerated transfers.
In today’s live update from Ottawa, Prime Minister Justin Trudeau stated that the accelerated transfer is intended to “keep Canadians safe and our communities strong, and it is support that will give businesses the confidence to reopen, getting hard-working Canadians back on the job.” He acknowledged that cities and towns have a need for money right away as they deal with the impacts of COVID-19, but this is just a start, as they know more needs to be done to support municipalities. The Gas Tax Fund transfer enables immediate investment in infrastructure to address the needs of municipalities and First Nations communities as they work to revive their local economies and improve the lives of Canadians.
Reporters pressed the Prime Minister with questions about further financial support for municipalities. Municipalities are struggling with liquidity as municipal revenue has dropped drastically and the advanced transfer is not providing any new funds for municipalities. FCM found that a minimum of $10 billion in emergency operating funding will be needed to fill the gap. In response to the demand for additional funding, Prime Minister Trudeau acknowledged that there is a need for more support, but he noted the provincial jurisdiction over municipalities.
Trudeau concluded with the following statement:
We respect the constitutional jurisdictions, but we are looking for ways to make direct contributions including through the Gas Tax transfer […] we need to do more and on that, we will continue to work with the provinces and encourage the provinces to step up in helping cities.
