ACEC Supports Use of Fuel Tax for Infrastructure

ACEC believes that tackling the national infrastructure debt must be a government priority and supports in principle the dedication of a portion of the federal fuel excise tax to modernize Canada’s infrastructure. Given that the fuel tax comes from the use of roads and highways, the ACEC Board favours focusing on transportation infrastructure investments.

Canada is facing a massive infrastructure debt totaling an estimated $57 billion, $17 billion of which is for highways alone. Recently, however, cities have been buzzing about the potential for infrastructure funding through the federal gas tax. Liberal Leader Paul Martin vowed in a recent speech to commit a substantial percentage of the gas tax to cities for infrastructure, and the House of Commons passed a Canadian Alliance motion on October 7 to encourage the government to begin discussions with the provinces and territories to provide municipalities with a portion of that tax. These signs point to a movement toward increased infrastructure funding.

Although Mr. Martin said that he would commit a significant percentage of the tax to cities, he would not specify how much. Estimates place half the 10 cent per litre gas tax at $2.5 billion annually in revenue for the cities, falling just short of ACEC’s recommended $3 to $4 billion per year infrastructure investment.

In October, ACEC participated in a National Policy Symposium to explore the options that a dedicated fuel tax present. Organized by the Canadian Construction Association, the symposium included stakeholders such as the Federation of Canadian Municipalities, the Canadian Chamber of Commerce Association and the Canadian Urban Transit Association. The participants arrived at a number of consensual positions on the role of the various orders of government, project selection priorities, accountability, and leveraging capital. The groups also agreed to work together to promote these positions.

For further information on the ACEC position and the conclusion of the Policy Symposium, contact Laura Payton at lpayton@acec.ca.