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Minister’s Message

As Canada’s Minister of Transport, Infrastructure and Communities, I am pleased to present Infrastructure Canada’s Departmental Performance Report for 2010-11.  Among many other achievements, it outlines how the department played a key role in helping the Government of Canada meet its commitments in the second year of Canada’s Economic Action Plan (EAP).  Canadians in every corner of the country enjoy a stronger economy, an improved quality of life, and a cleaner environment as a result of Infrastructure Canada’s many programs.

Infrastructure Canada has been the centre of remarkable activity since the Economic Action Plan was first announced in 2009, committing more than $10.6 billion to approximately 6,400 projects.  The EAP has helped to create and maintain jobs in communities across Canada.

In 2010-11, Infrastructure Canada delivered over $6.25 billion to projects across the country.  To put this in perspective, that figure represents nearly three times the funding that the department delivered in 2008-09.

At the same time, Infrastructure Canada demonstrated that it is an effective and respectful steward of taxpayers’ money, as recognized through the APEX 2010 Award received for the management of the Infrastructure Stimulus Fund.

In the last fiscal year, in order to provide additional flexibility to our funding partners, Prime Minister Harper announced a one-time extension of the completion deadline of EAP funds managed by the department: the Infrastructure Stimulus Fund and the Building Canada Fund Communities Component Top-Up.  Infrastructure Canada negotiated agreement extensions for those projects which needed extra time, from March 31, 2011 to October 31, 2011.  Today, as these EAP programs wind down, the department continues to work closely with its partners to process claims efficiently and ensure the timely completion of each project.

Looking to the future, the department will continue to deliver long-term funding under the Building Canada Plan.  It will also support efforts to work with our partners to develop a long-term plan for public infrastructure that extends beyond the expiry of the Building Canada Plan.  Finally, Infrastructure Canada will work with Finance Canada to enact the Gas Tax Fund in legislation.  This Government of Canada is committed to provide $2 billion annually on a permanent basis, towards the infrastructure needs of Canada’s municipalities.

The Honourable Denis Lebel, P.C., M.P.
Minister of Transport, Infrastructure and Communities and Minister of the Economic Development Agency of Canada for the Regions of Quebec

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Section I: Departmental Overview

1.1  Raison d’être

Modern, world-class public infrastructure is a key factor in achieving the Government of Canada’s priorities of a stronger economy, a cleaner environment, and more prosperous, safer communities. Infrastructure Canada leads the Government of Canada’s efforts in addressing Canada’s public infrastructure challenges.

1.2  Responsibilities

I. Overview

Infrastructure Canada is responsible for federal efforts to enhance Canada’s public infrastructure through investments in provincial, territorial and municipal assets, engagement in key partnerships, and the development and implementation of sound policies.  The department exists to help ensure that Canadians benefit from world-class public infrastructure from coast to coast to coast.

As shown in Figure 1, federal support for provincial, territorial and municipal core public infrastructure has increased in recent years.  Infrastructure Canada is the key contributor of federal support.

Figure 1: Federal Infrastructure Support for Provincial, Territorial and Municipal Infrastructure

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* Data for 2010-11 infrastructure investments by other federal departments is based on projections from Finance Canada.

 

Recent EAP investments:

Over the past two years, Infrastructure Canada has played a leading role in delivering the Government of Canada’s Economic Action Plan (EAP), rolling out unprecedented infrastructure investments through EAP spending, while maintaining prudent stewardship.  (See the department’s Summary of Performance in Section 1.6 for details).

The Economic Action Plan has contributed immensely to Canada’s economic recovery, shielding Canadians from most of the aftermath of the worst global recession since the 1930s.  Over 540,000 jobs^[1] have been created in Canada since June 2009, more than recouping all job losses incurred during the recession.  Canada’s employment growth has been the strongest of the G7, with more Canadians working today than before the downturn.  In addition, Canada is one of only two G7 countries (along with Germany) where output and private domestic demand now exceed their pre-recession levels.

Significant federal investments in infrastructure over the last decade, together with leveraged investments from our funding partners, have contributed to the ongoing renewal and improvement of the state of Canada’s core public infrastructure^[2].  The age of infrastructure is often used as an indication of the state of infrastructure.  As seen in Figure 2, the average age of Canada’s core public infrastructure peaked in 2001 at 17.0 years.  Between 2001 and 2010, this average age has fallen to 14.7 years, including a drop of a full year between 2008 and 2010.  The unprecedented infrastructure investments made as part of the EAP are likely to contribute to a further decline in the average age of Canada’s public infrastructure in the years to come.

Figure 2: Average Age of Infrastructure

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Longer term investments:

In addition to playing a key role in delivering the EAP, the department continued to deliver results for Canadians through the implementation of its long-term investment programs, including the $2 billion per year Gas Tax Fund, several funds under the $33 billion Building Canada Plan^[3], as well as through the ongoing management of a number of sunsetting programs.  A high proportion of federal investments made under these programs provide support for infrastructure projects that fall into the categories of drinking water, wastewater, green energy, the National Highway System, and public transit.  These investments provide important benefits to citizens and communities, as described below.

Looking ahead, Budget 2011 highlighted the Government of Canada’s intention to work with provinces, territories, the Federation of Canadian Municipalities as well as other stakeholders, to develop a long-term plan for public infrastructure beyond the life of current Infrastructure Canada programs.  More details will be available through Infrastructure Canada’s website: www.infrastructure.gc.ca.

Project Spotlights

Throughout this document, project spotlights are provided to showcase some of the many projects from across the country that receive funding from Infrastructure Canada.  For more information on these projects or any Infrastructure Canada Economic Action Plan project, please visit us online at www.creatingjobs.gc.ca.

Project Spotlight
Longer runway for Deer Lake Regional Airport

Deer Lake, NL

Thanks to $3 million from the Infrastructure Stimulus Fund, Deer Lake Regional Airport added another 2,000 feet of runway. This opens the airport to larger aircraft and helps to attract more business and tourism to the area, which boasts some of the best adventure tourism in the world. Federal contribution: $3 million under the Infrastructure Stimulus Fund.

 

II. Programs

Infrastructure Canada delivers a broad range of infrastructure programs, providing flexible and effective funding support for public infrastructure projects together with provincial, territorial, municipal, not-for-profit and private sector infrastructure partners.  The department’s funding activities are broadly grouped as follows:

1. Building Canada Plan: $33 billion in programs (announced in Budget 2007).
2. Economic Action Plan: $5.5 billion in programs (announced in Budget 2009).
3. Sunsetting programs: over $6 billion in programs that are winding down.

Infrastructure Canada’s Programs at a Glance

Building Canada Plan
Programs	Total Dollars	Description
Provincial-Territorial Infrastructure Base Fund (PT Base Fund)	$2.3 Billion	The PT Base Fund provides a total of $175 million in funding per jurisdiction (2007-08 to 2013-14).  In addition, over $26 million in per capita funding under the Building Canada Fund for the three territories is managed under this fund.  The PT Base Fund is for infrastructure priorities identified by jurisdictions in capital plans they submit for federal acceptance.  It was designed to contribute towards the restoration of fiscal balance, especially for smaller jurisdictions.  Under the Economic Action Plan, eight jurisdictions opted to accelerate all or part of their funds by March 31, 2011.
Gas Tax Fund (GTF)	$2 Billion annually	Through provincial and other agreements, the GTF provides municipalities with predictable, long-term funding coupled with local decision-making enabling municipalities to build and rehabilitate public infrastructure that achieves environmental outcomes.  The GTF was launched in 2005-06, and extended in Budget 2007 as part of the Building Canada Plan.  Through Budget 2011 the government committed to legislate the $2 billion per year under this program on a permanent basis.
Building Canada Fund-Communities Component (BCF-CC)	$1.3 Billion	The BCF-CC provides funding that focuses exclusively on infrastructure pressures facing smaller communities, targeting project investments in communities with populations of less than 100,000.  The fund leverages additional contributions from other partners by limiting the maximum federal share for funded projects to one-third, with matching contributions from both the provincial and municipal level (2008-09 to 2016-17). As a result of the 2010 Strategic Review, Infrastructure Canada is saving $5.4 million on administration by delivering the BCF-CC more efficiently. These funds will be removed from departmental reference levels and made available for other Government of Canada priorities. The funding for projects remains unchanged.
Building Canada Fund-Major Infrastructure Component (BCF-MIC)	$6.7 Billion	The BCF-MIC targets larger infrastructure projects of national or regional significance.  At least two-thirds of the funding is targeted to national priorities: water, wastewater, public transit, the core National Highway System and green energy.  By providing federal funding on a cost-shared basis, the BCF-MIC leverages additional contributions from other partners to promote increased investment in large infrastructure projects (2008-09 to 2016-17). As a result of the 2010 Strategic Review, Infrastructure Canada is saving $4.9 million on administration by delivering the BCF-MIC more efficiently. These funds will be removed from departmental reference levels and made available for other Government of Canada priorities.  The funding for projects remains unchanged.

Economic Action Plan
Programs	Total Dollars	Description
Green Infrastructure Fund (GIF)	$1 Billion	The GIF provides funding over five years for infrastructure projects that promote cleaner air, reduced greenhouse gas emissions, and cleaner water.  The GIF provides up to 50 percent of eligible project costs to promote increased investment in infrastructure to improve the quality of the environment and lead to a more sustainable economy (2009-10 to 2013-14). Of the $1 billion originally allocated to the GIF, $170 million has been transferred to other federal departments to support high priority initiatives. In addition, $45 million in unallocated funds from GIF is being removed from departmental reference levels, as per the 2010 Strategic Review process, and made available for other Government of Canada priorities.  No approved projects have been cancelled or otherwise affected as a result of this reallocation.
Infrastructure Stimulus Fund (ISF)	$4 Billion	The ISF is intended to accelerate and increase the number of provincial, territorial, municipal and some not-for-profit infrastructure projects.  It focuses on the rehabilitation of existing assets and new infrastructure that are construction-ready and can be substantially completed by October 31, 2011.  By providing up to 50 percent federal funding to projects, the ISF leverages funding from other partners, generating a much greater overall effect through infrastructure spending to the Canadian economy (2008-09 to 2011-12). Of the $4 billion originally allocated to the ISF, approximately $200 million has been transferred to other federal departments such as Parks Canada and the National Capital Commission to support infrastructure projects and high priority initiatives.
Building Canada Fund-Communities Component Top-Up (BCF-CC Top-Up)	$500 Million	The BCF-CC Top-Up provides additional funding in the amount of $500 million (added to the Building Canada Fund-Communities Component) to fund additional infrastructure projects in communities with populations of less than 100,000 (2008-09 to 2011-12).

Sunsetting Programs
Programs	Total Dollars	Description
Canada Strategic Infrastructure Fund (CSIF)	$4.3 Billion	The CSIF provides funding for larger infrastructure projects in areas that are vital to sustaining economic growth, providing for a cleaner environment and enhancing the quality of life of Canadians.  The fund leverages additional contributions from other partners by providing up to 50 percent funding for eligible projects (2003-04 to 2012-13). Of the $4.3 billion originally allocated to the CSIF, approximately $50 million has been transferred to Parks Canada to support a high priority infrastructure project.
Municipal Rural Infrastructure Fund (MRIF)	$1.2 Billion	The MRIF provides funding for small-scale municipal infrastructure projects designed to promote and improve quality of life in both urban and rural communities.  For most projects, the MRIF provides up to one-third federal funding for eligible projects (2003-04 to 2013-14). Under the 2010 Strategic Review process, $23 million in unallocated funds from MRIF is being removed from departmental reference levels and made available for other Government of Canada priorities.  No projects have been cancelled or otherwise affected as result of this reallocation.
Border Infrastructure Fund (BIF) [4]	$600 Million	The BIF provides funding for investments in physical infrastructure, transportation system infrastructure and improved analytical capacity at surface border crossings.  The fund provides up to 50 percent federal funding (2003-04 to 2013-14). Of the $600 million originally allocated to the BIF, approximately $18 million has been transferred to Canada Border Services Agency for border projects.  In addition, $10.4 million in unallocated funds from BIF is being removed from departmental reference levels, as per the 2010 Strategic Review process, and made available for other Government of Canada priorities.  No projects have been cancelled or otherwise affected as result of this reallocation.
Support for the G8 Summit (2010)	$50 Million	Provided funding for infrastructure projects that supported the hosting of the G8 Summit in June 2010 in Huntsville, Ontario, and provided a legacy to local communities and the region as a result of hosting the Summit. (2009-2010 to 2010-2011).

Note:    Funding, in most cases, represents original amounts committed to programs through previous Government of Canada Budgets.

 

III. Federal Delivery Partners

Infrastructure Canada is the lead federal department responsible for infrastructure policy development and program delivery.  In some instances, the department collaborates with other federal departments and agencies to promote efficient delivery of its programs.  These departments and agencies share their knowledge of local needs and priorities.  Infrastructure Canada’s Federal Delivery Partners are:

• Atlantic Canada Opportunities Agency (ACOA);
• Economic Development Agency of Canada for the Regions of Quebec;
• Canadian Northern Economic Development Agency (CanNor);
• Federal Economic Development Agency for Southern Ontario (FedDev Ontario);
• Aboriginal Affairs and Northern Development Canada (AANDC);
• Transport Canada (TC); and
• Western Economic Diversification (WED).

 

1.3  Strategic Outcomes and Program Activity Architecture (PAA)

Infrastructure Canada’s Program Activity Architecture (PAA) structure provides a framework for all departmental activities.  It organizes resource allocation (both human and financial) against activities and expected outcomes and provides a means to link activities to broader Government of Canada outcomes.

Infrastructure Canada’s PAA structure has the following three strategic outcomes and 13 program activities as detailed in Figure 3:

1) Provinces,territories and municipalities have federal financial support for their infrastructure priorities:  Provides federal transfers to provincial, territorial and municipal governments for their infrastructure priorities in order to help maintain a high level of quality core public infrastructure across the country.
2) Funding for quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a cleaner environment and liveable communities is provided:  Provides targeted project-specific investments to address federal/provincial priorities in both large and small communities as well as large strategic investments of national and regional benefit.
3) Construction-ready infrastructure projects are provided with federal funding support:  Provides timely, temporary and targeted funding to construction-ready projects to support short-term economic stimulus under the Economic Action Plan.

Infrastructure Canada’s Strategic Outcomes group the department’s flexible and innovative suite of programs into three major activity areas.  They speak to long-term infrastructure investments, which include stable and predictable funding programs, such as the Gas Tax Fund, as well as strategic and targeted programs, such as the Building Canada Fund.  They also speak to short-term, timely and targeted programs such as the significant funding being provided under the Economic Action Plan between 2009 and 2011.

Section II of this report discusses in detail the program activities, as well as the Internal Services program activity.

Figure 3:  Program Activity Architecture (PAA)

Note:    Activities associated with Internal Services, such as IM/IT or corporate finance, are discussed in detail in Section II of this report.

*  While there was no financial activity for National Trails in 2010-11, it is included in this report for comparative purposes related to spending in previous years.

Acronyms:

(PT Base) Provincial-Territorial Infrastructure Base Fund	(GIF) Green Infrastructure Fund
(GTF) Gas Tax Fund	(BIF) Border Infrastructure Fund
(CSIF) Canada Strategic Infrastructure Fund	(EAR) Economic Analysis and Research
(BCF-CC) Building Canada Fund-Communities Component	(ISF) Infrastructure Stimulus Fund
(MRIF) Municipal Rural Infrastructure Fund	(SO) Strategic Outcomes
(BCF-MIC) Building Canada Fund-Major Infrastructure Component	(BCF-CC Top-Up) Building Canada Fund-Communities Component Top-Up Support for the G8 Summit 2010

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1.4  Organizational Priorities

Infrastructure Canada’s priorities for 2010-11 included two operational priorities and four management priorities.

Operational Priorities:

• Effective and efficient stewardship and monitoring of program expenditures;
• Expedite investments in provincial, territorial and municipal infrastructure projects.

Management Priorities:

• Respond to opportunities for improvement identified in the Management Accountability Framework (MAF) assessments;
• Support Public Service Renewal and improve People Management;
• Develop a Performance Measurement Framework (PMF) to support the department’s Program Activity Architecture (PAA);
• Enhance departmental capacity for financial monitoring and analysis.

 

Priority Status Legend:

 

Contribution of Priorities to Strategic Outcomes:

Operational Priorities	Type[5]	Status	Linkages to Strategic Outcome (s)
1. Ensure effective and efficient stewardship and monitoring of program expenditures.	Previously committed to	Status: Met In 2010-11, despite high and unprecedented external pressures on Infrastructure Canada to quickly deliver infrastructure stimulus funding and accelerate existing funding programs, the department ensured that program management control frameworks, documentation, monitoring and reporting tools, and internal audit regimes were in place and working effectively for the continued sound stewardship of all program expenditures.  Indeed, the good performance of the department in this area has been recognized and highlighted by external bodies (e.g. 2010 APEX Award won for management of the ISF, as well as the satisfactory review by the Auditor General of Canada on the launch of the EAP).	Strategic Outcome 1, 2 and 3.
2. Expedite investments in provincial, territorial and municipal infrastructure projects.	Previously committed to	Status: Met In partnership with provincial, territorial and municipal governments, Infrastructure Canada continued, in 2010-11, to implement measures aimed at reducing duplication, streamlining federal processes, fast tracking project approvals and accelerating funding under the Building Canada Plan and the infrastructure funds announced in Budget 2009.  In fact, 2010-11 has been another record year for the department in terms of overall infrastructure spending, with an unprecedented $6.25 billion in total investments.  Since Budget 2009, Infrastructure Canada has committed more than $10.6 billion towards approximately 6,400 infrastructure projects.	Strategic Outcome 1, 2 and 3.
Management Priorities	Type[5]	Status	Linkages to Strategic Outcome (s)
1. Respond to opportunities for improvement identified in the Management Accountability Framework (MAF) assessments.	Ongoing	Status: Mostly Met In Round VIII (2010-11) of the Management Accountability Framework (MAF) assessment, the department received significant improvements in its MAF ratings.  Two areas of management  were upgraded to Acceptable.  In addition, two areas of management (Risk Management and Effectiveness of Internal Audit Function) which were identified as Acceptable, were upgraded to Strong.  One non-core area of management (Managing for Results), originally identified as Acceptable, was rated as Opportunity for Improvement, while all other areas of management remained status quo, at Acceptable.	Strategic Outcome 1, 2 and 3.
2. Support Public Service Renewal and improve People Management.	Ongoing	Status: Met In 2010-11, Infrastructure Canada developed and implemented a vision for people management, and revised its three-year (2010-13) Integrated Business and Human Resources Plan (IBHRP) to transform this vision into action and to develop measurable indicators.  In 2010-11, the department implemented the IBHRP, which includes Public Service Renewal priorities.  The Plan’s strategies and related activities support a flexible and adaptable workforce, employee development and growth, as well as employee engagement.	Strategic Outcome 1, 2 and 3.
3. Develop a Performance Measurement Framework (PMF) to support the department’s new Program Activity Architecture (PAA).	Previously committed to	Status: Met The department developed a Performance Measurement Framework (PMF) for the department’s current Program Activity Architecture (PAA) structure, in compliance with the Treasury Board Secretariat’s Management, Resources and Results Structures (MRRS) Policy.  A PMF was completed and will be further refined in 2011-12	Strategic Outcome 1, 2 and 3.
4. Enhance departmental capacity for financial monitoring and analysis.	New	Status: Met In 2010-11, significant results and improvements were achieved in the area of financial management including: Configuration of the new Salary Resource Management System for implementation in 2011-12 which will provide more timely and accurate salary and staff strength reports for better decision-making on human resources capacity and requirements to deliver programs and services; Ensuring quality, timely and accurate financial statements, expenditure forecasts and management reports; Strengthening internal financial management capacity through training, staffing vacant positions, engaging consultants, and implementing new internal controls; Developing new financial policies and procedures for account verification and the treatment of capital assets, and renewing the department’s financial signing authority processes, documentation and instruments of delegation; and Assessing and documenting the department’s controls in compliance with the new Treasury Board Policy on Internal Control.	Strategic Outcome 1, 2 and 3.

 

1.5  Risk Analysis

1.5.1 Risk Analysis Approach

Infrastructure Canada applies a comprehensive approach to actively identify, assess, and manage risks at four distinct levels: strategic, operations, program and project.  The department conducts regular environmental scans and strategic branch consultations to update the departmental list of risks and to identify internal and external risk factors.  These risks are then analyzed by the executive management team to determine their probability and potential impact on the department, and mitigation strategies are developed.  All of this effort is captured in the department’s Corporate Risk Profile report and semi-annual Report on Risk Responses and Re-Assessment of Critical Risk Placements.  The department also performs specific risk analyses for its larger programs, such as the Infrastructure Stimulus Fund and the Building Canada Fund-Major Infrastructure Component.

1.5.2 Programs Related to the Economic Action Plan

Within the last few years, the Canadian economy faced extraordinary challenges.  Since the announcement of the new programs under the Government of Canada’s Economic Action Plan (EAP) in February 2009 (Budget 2009), Infrastructure Canada has played a key role in the delivery of the new programs, rolling out an unprecedented amount of infrastructure investment, while maintaining an environment of prudent stewardship.  (Detailed information on EAP programs is provided in sections 1.6 and 2.4.)

In 2009-2010, Infrastructure Canada’s focus was to move quickly to reduce duplication and streamline federal processes in order to accelerate federal funding for public infrastructure.  In partnership with provincial, territorial, and municipal governments, the department committed funds for thousands of projects through new programs and accelerated funding under existing programs.  Funding criteria stipulated that jurisdictions identify projects that could be completed by March 31, 2011.  However, this deadline was extended to October 31, 2011, thereby providing the extra time and opportunity to ensure project completion and invoice submissions to the department for final processing that will meet the new deadline.  Moreover, as the program has rolled out, risks have diminished proportionately and risk mitigation strategies have been fully developed and implemented.

1.5.3 Key Critical Risks

1.5.3.1 Human Resources Capacity and Capability

Since 2009, the Corporate Risk Profile identified human resources challenges as one of the most significant risks to the department’s ability to deliver on its mandate.  In addressing this risk during 2010-11, the department worked to complete its Integrated Business and Human Resources Plan, recruit skilled individuals and decrease staff turnover rate.  This included aggressively putting in place staffing strategies, conducting orientation sessions for its new employees, and developing business models and work tools to support employees.  Due to these continuing efforts, this risk is now rated as “Acceptable” in the Corporate Risk Profile.

1.5.3.2 Information Management and Technology

In 2010-11, Infrastructure Canada’s information management technology was identified as a new risk and as needing to be sufficiently flexible, in order to respond to the management of its infrastructure programs delivery and to reporting requirements on a timely basis.  The department responded by developing a new Shared Information Management System for Infrastructure (SIMSI) governance framework and initiating development of a long-term strategic plan to align organizational and business needs, set priorities and focus departmental efforts on a more flexible and cost-effective system.  A new system, Financial Planning and Analysis Application, was created to assist the department in tracking financial commitments at program and project levels.  As well, a departmental initiative on data quality was launched in 2010-11 to continue to strengthen SIMSI data quality, including supporting horizontal reporting across programs.  In addition, the department has specifically assigned staff to address information management technology challenges for the programs under the Economic Action Plan, to identify best practices and replicate past successes and achievements.

1.5.3.3 Oversight of Infrastructure Projects

After fast-tracking thousands of project approvals and accelerating infrastructure funding in partnership with provincial, territorial and municipal governments, ensuring oversight and the delivery of these projects presented an important challenge, and was assessed as a high risk to Infrastructure Canada achieving its mandate.  Thanks to robust risk responses, such as establishing accountability mechanisms, creating oversight and management committees, and more rigorous project application and reporting systems, including the use of program risk management tools, the likelihood and potential impact of this risk was reduced, although it still remains an extremely important priority for Infrastructure Canada.

In 2010-11 the focus shifted from project approval to monitoring and closing out projects and providing proper stewardship and oversight for the processing and payment of thousands of claims for projects under the Economic Action Plan.  The deadline extension of the EAP to October 31, 2011 has allowed additional time for the completion of some projects, and the department has been managing the effective close-out of the Infrastructure Stimulus Fund and the Building Canada Fund - Communities Component Top-Up.  At the same time, the department continues to work closely with its partners to continue the implementation of programs under the long-term $33 billion Building Canada Plan. 

1.5.3.4 Managing Transition

Finally, as Infrastructure Canada moved to the completion of the 2010-11 fiscal year, the department has identified transition and change management as two important considerations, and is putting in place strategies and tools to address these priorities.  In the current context, with EAP programs in their final sunsetting phase, the emphasis has moved to closing out projects, finalizing claims and payments, and maintaining staff with the right set of skills to address the mid to long-term strategic objectives of Infrastructure Canada.

 

1.6 Summary of Performance

The last two years have been the most successful in Infrastructure Canada’s short history, as the department played an instrumental and leading role in the delivery of Canada’s Economic Action Plan (EAP).  Overall, since the announcement of the EAP on January 27, 2009 (Budget 2009), Infrastructure Canada has committed more than $10.6 billion towards approximately 6,400 infrastructure projects, helping to create and maintain jobs and make a difference to Canadians in communities across the country.

During 2010-11, the second year of the EAP implementation, Infrastructure Canada shifted primary efforts from reviewing and approving projects and committing funds, to focusing on oversight and delivery of project funding.  The department dedicated significant resources to ensure that all financial claims received from proponents were processed efficiently and reimbursed quickly.  Although the deadline for infrastructure stimulus projects was extended from March 31, 2011 to October 31, 2011, it is noteworthy that almost 80 percent of the stimulus project costs were incurred by the original March 31, 2011 deadline.

In addition to stimulus programs, in 2010-11 Infrastructure Canada continued to accelerate the roll-out of the existing $33 billion Building Canada Plan announced in Budget 2007.  The department engaged its partners and enabled them to receive financial support more quickly, taking advantage of previous legislative and regulatory changes, as well as administrative actions that have streamlined project review processes while still protecting the environment.  From January 2009 up to the end of March 2011, in total, more than $6 billion was committed under the Provincial-Territorial Infrastructure Base Fund, the Major Infrastructure Component of the Building Canada Fund, and the Communities Component of the Building Canada Fund.  These actions increased investment when support for the economy was needed most, expediting thousands of smaller-scale and major infrastructure projects.

Indeed, 2010-11 represented another record year for the department in terms of overall infrastructure spending, with an unprecedented $6.25 billion in infrastructure funding delivered to our partners, up from the previous record of $4.2 billion achieved in 2009-10, and nearly triple the $2.3 billion in 2008-09; all while ensuring proper due diligence for Canadians.

The table below provides a summary of Infrastructure Canada’s performance targets, as set out in the 2010-11 Report on Plans and Priorities.  Infrastructure Canada works in partnership with provinces, territories and municipalities in order to meet these annual performance targets.  As such, annual results are impacted by both the performance of Infrastructure Canada, and its provincial, territorial and municipal partners.

 

2010-11 Summary of Performance Status by Program

Program	Indicator	Target	Results achieved	Percentage	Status
PT Base Fund	Amount of federal funding to be committed.	$300 million	$375 million	125%	Exceeded
	Dollars leveraged	$250 million	$424 million	170%	Exceeded
Gas Tax Fund	Amount of federal funding received by municipalities	$1.9 billion	$1.75 billion	92%	Met
	Number of municipal recipients receiving Gas Tax funding	3,640 recipients	3,276 recipients	90%	Met
BCF-CC	Amount of federal funding committed	$260 million in spending	$223.5 million	86%	Mostly Met
	Amount of funding leveraged from partners	$520 million	$447 million	86%	Mostly Met
BCF-MIC	Amount of federal funding to be committed	$1.7 billion	$863 million	51%	Not Met
	Dollars leveraged (total cost)	$4.4 billion	$3.5 billion	80%	Mostly Met
GIF	Amount of federal funding to be committed.	$350 million	$286 million	81%	Mostly Met
	Dollars leveraged (total cost)	$700 million	$740 million	106%	Exceeded
CSIF	Amount of federal funding committed	$522 million in spending	$335.3 million	64%	Somewhat Met
	Amount of funding leveraged from partners	$500 million	$335.3 million	64%	Somewhat Met
MRIF	Amount of federal funding committed	$122 million in spending	$146.1 million	120%	Exceeded
	Amount of funding leveraged from partners	$240 million	$292.2 million	122%	Exceeded
BIF	Amount of federal funding committed	$50 million in spending	$67.8 million	136%	Exceeded
	Amount of funding leveraged from partners	$100 million	$135.6 million	136%	Exceeded
ISF	Amount of federal funding committed	$2.9 billion in spending	$2.7 billion>	93%	Met
	Amount of funding leveraged from partners	$3.8 billion	$3.8 billion	100%	Met
BCF-CC Top-Up	Amount of federal funding committed	$385 million in spending	$303.5 million	79%	Mostly Met
	Amount of funding leveraged from partners	$770 million	$607 million	79%	Mostly Met

 

Based on these indicators, many programs either met or exceeded targets in 2010-11.  Only one program, BCF-MIC, did not meet one of its targets.  The nature of the projects funded by BCF-MIC is a key factor explaining the challenges that were experienced in meeting this target: proponents often take longer to plan and prepare a funding proposal for the large and complex projects that are funded under this program.  This in turn delays the point at which federal funding commitments can be made.  On balance, Infrastructure Canada successfully met its performance expectations for 2010-11.  More details on these, and other, performance indicators are provided in Section II.

All of the above achievements demonstrate that the department met the significant challenge of providing stimulus funding to the Canadian economy quickly, while at the same time maintaining strong and prudent stewardship.  In fact, Infrastructure Canada’s success and good performance in this area was recognized through the APEX 2010 Award for Leadership in Service Innovation, which was received for the rapid and innovative delivery and sound management of the Infrastructure Stimulus Fund.

Infrastructure Canada also received a satisfactory review by the Auditor General of Canada regarding the launch and roll-out of the EAP and infrastructure stimulus programs.  The Report of the Auditor General of Canada to the House of Commons (Fall 2010) recognized the significant steps that were taken by the department to speed up the design and launch of its EAP programs.  The Auditor General also found that Infrastructure Canada had put in place reasonable management controls and risk management strategies.

In 2010-11, while focusing on the second year of the EAP, Infrastructure Canada continued to work closely with its partners to make key infrastructure investments across Canada through the management and implementation of longer term programs such as the ongoing Gas Tax Fund, as well as other funding programs under the seven-year, $33 billion Building Canada Plan.

For example, under the Building Canada Fund – Major Infrastructure Component (BCF-MIC), more than $863 million in federal funding was committed in 2010-11 for 21 major projects, leveraging funding commitments from other levels of government of over $2.6 billion during that same period.  Funding under that program is now almost completely committed in six of the ten provinces, and at least 70 percent of every province’s allocation is committed.  As well, under the Building Canada Fund – Communities Component (BCF-CC), Infrastructure Canada approved 14 new infrastructure projects that address the needs of smaller communities (with populations of fewer than 100,000 people).  Since the inception of this program in 2007, more than $1.03 billion has been committed by the department, leveraging an additional $2.1 billion in infrastructure investment towards 883 small-scale projects.

Additionally, the department continued the management of a number of infrastructure programs launched prior to the Building Canada Plan, which have been fully committed and are in the process of winding down.

Since Budget 2009, Infrastructure Canada’s programs, combined with funds leveraged from all levels of government, have resulted in approximately $30 billion in infrastructure investment.  These recent and significant investments in public infrastructure are resulting in lasting benefits to Canadians through renewed, modernized and greener infrastructure, thus helping to advance the Government of Canada’s priorities of a stronger economy, a cleaner environment, and more prosperous, safer communities.

While each project and initiative funded by Infrastructure Canada delivers important benefits to Canadians, there are cases where strategically targeting funding towards several projects in the same region can deliver benefits that are greater than the sum of their parts. One good example is the series of Infrastructure Canada-funded projects taking place in the Great Lakes Basin (see below).

 

1.6.1  Financial and Human Resources

Infrastructure Canada’s financial and human resources information over the reporting period are summarized in the two tables that follow.

Table 1:  2010-11 Financial Resources (in $ thousands)

Planned Spending	Total Authorities	Actual Spending
9,510,195	9,223,184	6,251,791

 

Table 2:  2010-11 Human Resources (FTEs)

Planned	Actual	Difference
428	352	76

The difference between planned and actual spending for 2010-11 reflects in part the flexibility shown by the Government of Canada with the extension of the Economic Action Plan (EAP) from March 31, 2011 to October 31, 2011, allowing our funding recipients an additional season to complete their projects.  Unspent 2010-11 authorities of infrastructure stimulus programs will be re-profiled to 2011-12 through Supplementary Estimates to better match the needs of our partners.  In addition, as explained in greater detail in Section 1.7, it is important to note that in most cases, the department’s cash flow lags behind the actual rate of construction of projects since recipients are reimbursed once their eligible expenses have been incurred and claims submitted.

For comparison purposes, the financial and human resources information for 2009-10 is presented in the tables below:

Table 3:  2009-10 Financial Resources (in $ thousands)

Planned Spending	Total Authorities	Actual Spending
7,134,885	5,470,649	4,218,060

 

Table 4:  2009-10 Human Resources (FTEs)

Planned	Actual	Difference
256	298	(42)

The department’s FTEs are managed in a holistic fashion and resource levels reported against individual programs are based on best available estimates.  FTEs are readily re-allocated on an as-needed basis during the year to reflect specific requirements of funding programs and other government priorities.  Furthermore, many operational resources are not limited to one specific program and may be re-allocated during the year to meet operational priorities.  A similarly estimated and proportional amount of operating funding is also allocated to the administration of individual programs.  This flexibility allowed the department to adjust quickly and successfully to implement and manage new programs arising from the Government of Canada’s Economic Action Plan.

 

1.6.2  Program Activities by Strategic Outcome and Actual Spending

Table 5 summarizes the achieved results of the program activities, the actual spending under each activity, as well as the alignment of these activities to the Government of Canada outcomes.  Internal Services are also presented in this table, which underpin and support the entire department in meeting Government of Canada outcomes.

Table 5:  Performance Summary (Program Activities by Strategic Outcome)^[6]

Strategic Outcome 1:   Provinces, territories and municipalities have federal financial support for their infrastructure priorities.
Performance Indicators		Targets					2010-11 Performance
Amount of funding provided for eligible categories of infrastructure investments.		Funding will flow expeditiously to program recipients in accordance with program authorities.					Faced with the enormous challenge of delivering infrastructure investments under the EAP in record time, the department successfully accelerated funding under the PT Base Fund to those eight provinces and territories who opted for it, delivering over $437 million in payments to provinces and territories. The department also continued to successfully implement the ongoing Gas Tax Fund.  Indeed, to support the EAP, the department accelerated the delivery of $869.4 million to GTF signatories for the second year in a row.  Over $1.75 billion was delivered to municipalities in 2010-11, representing 92 percent of the target.  The amounts not transferred were related to jurisdictions with outstanding Annual Expenditure Reports, which are required under the conditions set out in the GTF Agreements.

(in $ thousands)

Program Activity	2009-10 Actual Spending		2010-11[6]										Alignment to Government of Canada Outcomes
			Main Estimates		Planned Spending[7a]			Total Authorities			Actual Spending
Provincial-Territorial Infrastructure Base Fund	672,032		590,526		665,585			508,635			437,548		Strong Economic Growth
Gas Tax Fund	1,873,874		2,003,984		2,106,180			2,106,589			1,752,697,		Strong Economic Growth
Sub-Total:	2,545,906		2,594,510		2,771,765			2,615,224			2,190,245

 

Strategic Outcome 2:  Funding for quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a cleaner environment and liveable communities is provided.
Performance Indicators		Targets					2010-11 Performance
Amount of funding provided for eligible categories of infrastructure investments.		Funding will flow expeditiously to program recipients in accordance with program authorities.					While significant funding was delivered to partners under Strategic Outcome 2, funding flow does not fully reflect the magnitude of funding support provided by Infrasructure Canada to its partners. (See Section II for details on funding committed and leveraged). In addition, by working with partners to effectively and efficiently accelerate funding under the Building Canada Fund, Infrastructure Canada has delivered on its significant EAP commitments.  Since January 2009 up until the end of March 2011, in total, more than $4.6 billion has been commited or spent from BCF-MIC and BCF-CC.

(in $ thousands)

Program Activity	2009-10 Actual Spending		2010-11[6]										Alignment to Government of Canada Outcomes
			Main Estimates		Planned Spending[7a]			Total Authorities			Actual Spending
Building Canada Fund-Communities Component	101,065		265,064		329,889			330,718			225,825		Strong Economic Growth
Building Canada Fund-Major Infrastructure Component	196,876		959,100		1,120,824			1,165,402			407,499		Strong Economic Growth
Green Infrastructure Fund	5,760		388,183		370,316			235,387			35,430		Clean and Healthy Environment
Canada Strategic Infrastructure Fund	420,202		503,433		690,187			694,100			336,451		Strong Economic Growth
Municipal Rural Infrastructure Fund	221,766		123,657		307,412			307,845			146,646		Strong Economic Growth
Border Infrastructure Fund	80,863		50,504		69,364			69,727			67,881		Strong Economic Growth
Economic Analysis and Research	4,142		15,498		11,767			15,600			1,750		Innovative and Knowledge-Based Economy
Sub-Total:	1,030,674		2,305,439		2,899,759			2,818,779			1,221,482

 

Strategic Outcome 3:  Construction-ready infrastructure projects are provided with federal funding support.
Performance Indicators		Targets					2010-11 Performance
Amount of funding authority provided for eligible construction-ready infrastructure investments.		All funds are committed, project contribution agreements are signed, claims are received, reviewed and approved, funds are paid out and projects are completed.					Working with provinces, territories, municipalities and other partners, Infrastructure Canada moved from project approvals and funding commitments to oversight and delivery of project funding, making sure that all financial claims received from EAP proponents were processed efficiently and reimbursed quickly. The department also worked closely with partners to ensure timely completion of EAP projects, while the Government of Canada has shown flexibility by extending the deadline for infrastructure stimulus projects from March 31, 2011 to October 31, 2011, in order to ensure responsible project completion.  As such, unspent EAP infrastructure funding will be re-profiled to the 2011-12 period.

(in $ thousands)

Program Activity	2009-10 Actual Spending		2010-11[6]										Alignment to Government of Canada Outcomes
			Main Estimates		Planned Spending[7a]			Total Authorities			Actual Spending
Infrastructure Stimulus Fund	493,129		2,866,060		3,309,429			3,277,688			2,482,489		Strong Economic Growth
Building Canada Fund-Communities Component Top-Up	30,745		387,557		470,755			472,266			303,739		Strong Economic Growth
Support for the G8 Summit (2010)[7b]	40,669		See Footnote 8		9,531			9,430			4,571		Strong Economic Growth
National Trails Coalition[8]	25,100		See Footnote 8		See Footnote 8			See Footnote 8			See Footnote 8		Strong Economic Growth
Sub-Total:	589,643		3,253,617		3,789,715			3,759,384			2,790,799
Internal Services	51,837		29,092		48,956			29,797			49,265
Total:	4,218,060		8,182,658		9,510,195			9,223,184			6,251,791

 

1.7 Expenditure Profile

1.7.1 Spending Trends

In 2010-11, Infrastructure Canada spent a record of over $6.25 billion on infrastructure investments under its programs to meet the expected results of its program activities and contribute to its strategic outcomes.  This represents an increase of more than $2.0 billion over 2009-10, which was also a record year.  This increase was primarily due to the implementation of the programs under the Economic Action Plan (EAP) in Budget 2009.

Figure 4 represents the department’s forecast and actual spending profile from 2008-09 to 2010-11.  Spending related to the EAP started in 2009-10, and is planned to continue until 2011-12 (except for the Green Infrastructure Fund, which is planned to continue until 2013-14).

Figure 4:  Departmental Spending Trend and the Economic Action Plan (EAP)

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Statutory funding authority for the measures under the Economic Action Plan was provided in the Budget Implementation Act.  They include: the Infrastructure Stimulus Fund (ISF), the accelerated funding under the Provincial-Territorial Infrastructure Base Fund, the Green Infrastructure Fund and the Building Canada Fund-Communities Component Top-Up (BCF-CC Top-Up).  (Note that more details on all spending related to EAP are provided in Section 2.4.4 of this document).  The ISF and BCF-CC Top-Up funds are expected to be completed by October 31, 2011, while the Green Infrastructure Fund is planned to continue until 2013-14.  While available funding under the Provincial-Territorial Infrastructure Base Fund was accelerated in fiscal years 2009-10 and 2010-11, the program continues to operate and provide funding for provincial and territorial priorities until 2013-14.

1.7.2 Variations in Program Spending Trends

Through a suite of transfer payment programs, the department supports quality public infrastructure investments across Canada.

Program design recognizes the provincial, territorial and municipal responsibility for a majority of public infrastructure, and Infrastructure Canada's participation as a funding partner.  The department is not responsible for the management of infrastructure projects, but rather for the reimbursement of eligible expenses submitted by recipient project managers.  In the case of other transfer payment programs, the department provides stable base funding to provinces, territories and municipalities under the terms of signed agreements.

It is important to note that the department’s cash flows almost always lag behind the actual rate of construction of projects.  Work begins upon project approval: contracts are put in place, plans drawn up, materials are ordered and construction starts.  While the department commits funds upon project approval, federal funding does not actually flow to recipients until they have submitted claims for actual costs incurred.  This is a key risk-management approach for the department, one that ensures that it only pays for work that has already been undertaken.  In many cases, recipients choose to wait until completion of the project before submitting a claim.  Upon receiving completed claims, the department pays in 30 days.  The department works continually with its partners to ensure that forecasts are as accurate as possible, and to re-profile Infrastructure Canada’s funding to meet the needs of its partners.  (Details on Infrastructure Canada’s typical program close-out and claims process can be found after Section 1.7.3).

As such, the $2.9 billion of unspent 2010-11 authorities will be re-profiled to future years to better match the funding profile needs of our partners.

1.7.3  Estimates by Vote

For information on our organizational votes and/or statutory expenditures, please see the 2010-11 Main Estimates publication.  An electronic version of the Main Estimates is available at http://publiservice.tbs-sct.gc.ca/est-pre/20102011/me-bpd/toc-tdm-eng.asp.

Typical Claims Process:

Below is a glimpse of a typical claim process for a municipal project being funded under a provincial or territorial agreement.

It is important to note that, for contribution programs, Infrastructure Canada is not responsible for the management of infrastructure projects.  Specifically, under Strategic Outcomes 2 and 3, Infrastructure Canada reimburses eligible expense claims submitted by the recipients – the project managers.  As such, the department’s spending lags behind the actual rate of construction.  In many cases, recipients choose to submit claims only when all construction is completed.  Upon receiving completed claims, the department pays in 30 days.

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