What is the Gas Tax Fund?
Believe it or not, the Gas Tax Fund has nothing to do with carbon pricing or fuel taxes. It is a permanent, indexed fund provided directly to municipalities, flowing through provinces and territories to support strategic infrastructure investments. It provides over $2 billion annually for local priorities.
Last year approximately $2.1 billion was distributed to over 3,600 communities. It is allocated on a per-capita basis for provinces, territories and First Nations, but provides a base funding amount of 0.75 percent of total annual funding for Prince Edward Island and each territory.
In response to FCM’s call for an ongoing federal revenue-sharing arrangement, the federal government legislated a permanent annual investment of $2 billion in municipal infrastructure through the GTF in Budget 2011 and an annual increase of two percent was applied as an index to protect the Fund against inflation in 2014-15.
Budget 2019 included a one-time doubling of the GTF, transferring an additional $2.2 billion to communities.
In 2002, FCM called for more predictable funding for infrastructure. One proposal was to transfer a portion of the federal gas tax to municipalities. And when a five-year GTF was introduced in 2005, the name “Gas Tax Fund” stuck—even though it had nothing to do with the gas tax.
Montreal is putting the Gas Tax Fund to work rebuilding its Complexe Crémazie to improve flexibility and efficiency of services, and accommodate future expansion of hybrid and electric bus technologies. Not only will the new complex facilitate greener transit, but the building itself will feature a number of sustainability improvements, such as reflective white rooftops and green roof systems, water catchment and recycling, and an energy-efficient heat recovery system.
The Cariboo Regional District in BC used federal Gas Tax funding to renew its aquatic centre. The project resulted in the expansion its shallow water leisure pools; the replacement of the main lap pool tank; construction of a multi-purpose fitness centre; new change rooms; installation of upgraded mechanical and electrical systems; and the redesign and resurfacing of the parking lot. In addition to improved services for residents, the upgrades will also reduce municipal operating costs by $200,000 per year.
The Town of LaSalle, ON invested $2.2 million from the federal Gas Tax Fund into replacing 85 percent of its water meters that were not providing accurate readings. The new meters allow staff to identify abnormal water use patterns at any time, leading to early leak detection, less water usage and ultimately, lower water bills. The Town has also brought utility billing in-house to better serve residents. Water customers now have a one-stop shop for any service or billing requests and can also access their accounts online. This new system is more convenient for residents and allows for better customer service.
The Village of Granisle, BC used federal Gas Tax funding to expand its bioenergy capacity. The new biomass boiler system supplies heating to the Village office, ice arena, elementary school, curling rink, fire hall, public works office and tourist information centre. This project has assisted the Village of Granisle in achieving carbon neutral status by decreasing GHG emissions. A win for the environment and the bottom line.
The City of Terrebonne, QC is starting work now on a new multi-functional path that will create a safe environment for pedestrians and cyclists along a busy road, thanks to the long-term predictability created by the federal Gas Tax, and the ability to look ahead to GTF funding available in upcoming years.
The District of North Cowichan, BC replaced an aging bridge over the Chemainus River using Federal Gas Tax funding. The original single-lane bridge was a 58 year-old wood timber construction without pedestrian or cycling capacity. The bridge replacement combines a steel plate girder design with a concrete deck and is anticipated to have a serviceable life of at least 75 years.
Clearview Township, ON invested the federal Gas Tax Fund in launching a new municipal transit service. By launching a transit service now, the small community of 14,500 residents is meeting today’s needs while planning for growth that will happen in the future. With help from the federal Gas Tax Fund, Clearview has been able to implement an affordable, reliable transit system that gives residents options for getting around town. Bus stops are located so that all residents can access them within a 3-5 minute walk.
BC Transit used Federal Gas Tax funding to construct a compressed natural gas (CNG) fuelling station to service its low-emission bus fleet within the Regional District of Nanaimo. In comparison to conventional buses, use of CNG reduces fleet greenhouse gas emissions by 15 to 25 percent and costs 25 to 50 percent less than traditional diesel fuel. Compared to diesel, the CNG-powered buses boast significantly quieter engines and simplified emission systems. Riders say that quieter buses make for a more enjoyable ride.
The District of Lake Country, BC upgraded its wastewater treatment plant with Federal Gas Tax funding. The renewed facility doubled plant capacity to allow for the extension of sanitary sewer service to residences and provide capacity for future development. The new facility reduced operational energy consumption by 50 percent. It also protects of groundwater and surface waters through cleaner effluent and reduces the amount of hydrogen sulfide and methane released into the environment.
The Steve Kerr Memorial Complex in North Perth, ON gives residents a place to exercise, take part in local events and have fun. Home to the local hockey team, the 63,500 square foot facility features a large arena, an indoor track and community activity rooms. At a cost of $13.7 million, Steve Kerr Memorial was funded by the municipality of North Perth, local fundraising efforts, and the federal Gas Tax Fund.
The town of Oakville, Ontario is revitalizing its historic downtown core. Work includes streetscape improvements, reconstruction of the Lakeshore Road bridge, and, with support from the federal Gas Tax Fund, the conversion of one-way streets to two-way streets. The conversion will make it easier for motorists to explore Oakville's downtown core. Implementation of a dedicated cycling loop during the conversion will also give cyclists more flexibility when navigating downtown.
Over the past 10 years the Rural Municipality of Victoria, PEI, has made big strides in energy sustainability as a result of the federal Gas Tax Fund. This tight-knit community of less than 100 people felt it was important to determine ways to reduce energy consumption and provide for local energy needs using renewable power. The fund enabled the design and implementation of a sustainable energy strategy for the community, including retrofitting the local community centre and installing solar panels on the roof.
Airdrie’s Genesis Place Recreation Centre is now being powered by a solar rooftop, in part thanks to the federal Gas Tax fund. The $2.8 million, 1.55 megawatt system is now providing renewable energy to the fitness facility just north of Calgary. Power is generated by the sun's energy through 3,880 solar panels on the roof. Solar power will make up 30 percent of Genesis Place’s yearly electrical needs and will save the facility upwards of $80,000 per year. The second phase of the project will soon be completed when 240 more modules will be placed on a carport in the facility’s parking lot.
Saskatoon was recently able to use the Gas Tax Fund to purchase 20 new buses for their transit fleet. The new buses have air conditioning and meet accessibility standards, improving comfort and convenience for transit riders. The buses they replaced were some of the oldest in the system – 20 years old with more than 1.5 million kilometres on the odometer. The result is a safer, more reliable, and more environmentally-friendly transit system.