‘Building Canada’ fund no match for recession, say opposition MLAs

The Yukon doesn't need an infusion of infrastructure money to cure the ills of a global recession, say local politicians, suggesting it could cause more bureaucratic chaos than economic stimulus. The long-awaited federal budget

The Yukon doesn’t need an infusion of infrastructure money to cure the ills of a global recession, say local politicians, suggesting it could cause more bureaucratic chaos than economic stimulus.

The long-awaited federal budget will be heavy on infrastructure money, said federal Minister John Baird after meeting with the Yukon’s Minister of Highways and Public Works Archie Lang last week.

Lang has not returned several phone calls and Baird, the infrastructure minister, refused to say where the money could be spent. The only hint is that it will come from the $175-million Building Canada fund promised by Ottawa in March.

But even that’s enough to draw fire from Yukon MP Larry Bagnell, who said the money must be directed by municipalities, First Nations and unincorporated communities in the territories if it wants to be effective.

“It shouldn’t be up to me or politicians in senior level government telling (municipalities and First Nations) what they have to do,” said Bagnell.

“They’re responsible for infrastructure and the buck stops with them,” he said.

Bagnell didn’t speculate on where the money would be spent, but instead offered criteria on how it should be doled out.

The advice comes at a critical time for the federal Conservatives because the budget’s failure to appease federal opposition parties could topple the government.

The original promise was for the Building Canada money to be spent over seven years, so the territory won’t actually be getting any new money, he said.

Accelerating the cash flow could destabilize local government agendas.

“Don’t force someone to do a project that they weren’t already going to do,” he said.

Municipal and First Nation governments already have well-thought-out plans about how to spend their money, he said. If they become overwhelmed with new projects, their original priorities will be left on the back burner.

“So let them proceed with those projects that were in planning,” he said. “Don’t force them into some criteria where they have to make-work a project that wasn’t on their priority list.”

Bagnell praised the municipal gas tax funding because it uses community plans to tap money from Ottawa.

The recession has a less severe effect in places like the Yukon and Ottawa because government is the biggest employer, he said, and the federal government should consider creative ways of stimulating the territorial economy.

“Over and above infrastructure, we should have stimulus for (the mining and tourism) sectors,” said Bagnell. “In tourism, it could be putting back that rebate they gave to tourists that has been cancelled, or it could be increasing funds for the Canadian Tourism Commission (which helps promote Canadian tourism overseas.)”

Ottawa could also promote tax credits for the mining industry and assure that credit is readily available for the junior exploration companies that have been badly hurt in the last few months.

“That’s the message I’ll be taking back to Ottawa,” he said.

The Conservatives have been more conciliatory since Finance Minister Jim Flaherty’s economic update caused the prorogation of Parliament in the fall, said Bagnell. Liberal finance critics Scott Brison and John McCallum have met with Flaherty to offer suggestions on how to steer the economy.

But once the money hits the Yukon, there will still be plenty of heat from NDP Leader Todd Hardy, who criticized the secrecy surrounding the Fentie government’s advice on where the money should be spent.

This is exactly why the Yukon needs an economic council to bring First Nations, communities and labour to the table, he said. The Building Canada fund includes clauses that any project over $50 million should be considered as a private-public partnership project, he said.

“They didn’t run on this as an election promise to start privatizing stuff and, frankly, they should just back off,” said Hardy.

The promise to use public-private partnerships is so broad that it “crosses into health, social and environmental” aspects of infrastructure, he said.

Contact James Munson at jamesm@yukon-news.com.

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