Municipal infrastructure is the backbone of the Canadian economy.
Canada’s economy is at a turning point. As Canadians face growing uncertainty, a strong intergovernmental partnership is essential to strengthen our economy for the long term and create the jobs our communities need.
Municipalities are ready to build the infrastructure that makes housing possible and moves people and goods from coast-to-coast-to-coast.
Together, we can turn readiness into results and unlock a better future for Canadians.
As the federal government looks to develop the next generation of infrastructure funding to build a stronger Canada, the Canada Community Building Fund is the most cost-effective and streamlined way to renew local infrastructure across Canada and meet housing targets.
Recommendations in full
- Infrastructure that supports jobs and our economy amid the trade war—and enables new homes to be built.
To enable new housing, deliver jobs and connect our economy, FCM is recommending the federal government:
- At least double the Canada Community-Building Fund: CCBF is the most cost-effective and streamlined way to renew local infrastructure across Canada. It should be at least doubled and indexed to GDP. The federal government should also secure matching dollars from the provinces and territories. Important lessons can be learnt from its streamlined design to reduce administrative costs.
- Replace the Investing in Canada Infrastructure Program (ICIP) with next generation infrastructure funding: To build strong and resilient communities across Canada, create a successor program to the 10-year $33 billion ICIP set to expire in 2028. This program should include a dedicated $1 billion per year water and wastewater fund as well as $500 million per year for community, culture and recreational infrastructure.
- Protect funding for public transit: Public transit is essential in reducing congestion, unlocking local economies and moving Canadians to where they need to be. To build a stronger Canada, maintain the committed $3 billion per year under the Canada Public Transit Fund set to begin flowing to municipalities in 2026/27.
- Support rural and northern infrastructure: Provide dedicated funding, consisting of at least $500M annually for rural infrastructure and targeted investments in the North and Arctic, to strengthen economic development and reinforce Canadian sovereignty.
- Invest in trade-enabling infrastructure: Support municipal projects through the Trade Diversification Corridors Fund and Nation-Building Project Fund to boost productivity, attract investment, and connect Canadian goods to global markets.
- Recognize municipal Infrastructure as nation-building infrastructure: Ensure federal programs prioritize municipally maintained assets as essential to the next generation of Canadian infrastructure, with equitable access for communities of all sizes.
- More affordable housing in urban and rural communities, so everyone has a place to live.
To help deliver 500,000 homes a year within a decade, FCM recommends the federal government:
- Accelerate affordable housing construction: The federal government should continue to partner with FCM to rapidly deliver non-profit and modular housing through Build Canada Homes, leveraging public lands, low-interest loans, and streamlined processes—while ensuring municipalities have the infrastructure funding to support 500,000 new homes annually.
- Strengthen infrastructure funding models: As the federal government explores the next generation of infrastructure funding with the Investing in Canada Infrastructure Program coming to an end, housing-enabling infrastructure can be scaled up via the Canada Community-Building Fund (CCBF) which should be increased as a direct, GDP-indexed transfer to municipalities—critical for unlocking housing and addressing the $240B infrastructure backlog.
- Protect municipal dollars for housing-enabling infrastructure: Municipalities must remain financially whole as the federal government looks to lower construction costs by reducing development charges. Federal measures to support housing-enabling infrastructure in lieu of development charges should address the scope of need and be equitably distributed so all communities can benefit.
- Expand support for vulnerable populations: Increase Reaching Home funding to $3.5B annually (indexed to inflation) to address chronic homelessness, and develop a comprehensive federal plan for refugee housing through IHAP and expanded settlement supports.
- Reverse in-year cuts to the Interim Housing Assistance Program (IHAP): The federal government should reverse in-year budget cuts to IHAP, compensate municipalities for costs that have already been incurred to support refugees and asylum seekers facing homelessness, and pause any further reductions to the program, including changes to the federal-municipal cost share. IHAP should also be extended beyond 2027.
- Safer communities through investment in RCMP and local policing, crisis resourcing and bail reform.
To ensure safer communities across the country, FCM is recommending the federal government:
- See through efforts to reform Canada's bail system: Ensure federal legislation to reduce repeat offending and improve community safety is backed up by expanded judicial capacity to address court backlogs and enhance bail compliance and enforcement.
- Strengthen RCMP Contract Policing: Increase federal investment in the RCMP to improve staffing and service levels, especially in rural and remote areas, and ensure municipalities are consulted before decisions that affect local policing costs.
- Support Community-Based Crisis Response: Expand federal funding for mental health, substance use services and crisis response partnerships to reduce pressure on police and better support individuals in crisis.
- Ensure Sustainable Public Safety Funding: Collaborate with municipalities and make transparent, financially sustainable policing decisions that respect local capacity while prioritizing critical public safety needs.
- Protecting Canadians from the impacts of climate change and extreme weather including storms and wildfires.
To protect Canadians, their homes, communities and businesses from the impact of climate change and extreme weather, FCM is recommending the federal government:
- Build climate-resilient communities: Commit $2B immediately and $1B annually for a decade to upgrade local infrastructure to withstand extreme weather: reducing economic disruption and enhancing public safety and well-being.
- Expand the successful Green Municipal Fund (GMF): Scale up investment in FCM’s proven GMF to accelerate local climate action, unlock private capital, and deliver measurable economic, environmental, and affordability benefits in communities nationwide.
- Supporting decentralized cooperation to expand Canada’s leadership abroad:
To advance trade, economic development, climate action and inclusive governance —both domestically and internationally, FCM is recommending the federal government:
- Invest in a new Global Affairs Canada (GAC)–FCM partnership: A new partnership would reinforce Canada’s global leadership and strategic positioning in an evolving geopolitical context—while advancing stability, inclusive governance, and economic resilience in partner countries.
FCM will continue to advocate for these priorities throughout the fall and winter and maintain our engagement with the federal government.