2016 Federal Budget Highlights

The Honourable Bill Morneau, Minister of Finance, introduced the federal budget on Tuesday, March 22, 2016. The budget, Growing the Middle Class, makes new investments in local government infrastructure, along with increased spending for First Nations communities, families, and seniors. Budget 2016 also includes a $29.4 billion deficit for 2016-17, and a projected deficit of $17.1 billion in 2019-20.

The federal budget references several initiatives of interest to local governments, including:

Local Government Infrastructure

$11.9 billion over five years for housing, transit, and green infrastructure in Phase 1 of the federal government’s 10-year long term infrastructure plan.

Public Transit

  • $3.4 billion in new dedicated funding over three years, as part of a first phase to upgrade and improve transit systems.
  • Phase one funding will be allocated to local governments based on ridership.
  • Federal share of up to 50 per cent of eligible costs including repair and refurbishment of existing systems and planning for expansion projects.

Green Infrastructure

  • $2 billion four-year dedicated Clean Water and Wastewater Fund for immediate improvements to water distribution and treatment, including upgrades required to meet federal wastewater regulations.
  • Federal share of up to 50 per cent eligible costs for projects under the Clean Water and Wastewater Fund.
  • $125 million over the next two years for the FCM Green Municipal Fund.
  • $75 million to FCM to deliver climate change mitigation and adaptation programming for local governments.
  • $212 million for Metro Vancouver’s Lions Gate wastewater upgrade.

Affordable Housing

  • $1.41 billion over the next two years for affordable housing initiatives including:
    • $504 million for capital repair and new construction through the existing Affordable Housing program;
    • $200 million over two years for seniors’ affordable housing; and
    • $574 million for energy and water efficiency retrofits of existing social housing units.
  • $111.8 million over two years for the Homelessness Partnering Strategy.
  • $89.9 million over two years for construction and renovation of shelters and transition houses for victims of family violence.
  • $208 million over five years for rental incentives through a new Affordable Rental Housing Innovation Fund.

Recreation & Cultural Infrastructure

  • $168.2 million two-year Canada Cultural Spaces Fund for renovation and construction of arts and heritage facilities.
  • $150 million to Regional Development Agencies over two years, cost-shared with local governments, community organizations, and non-profits to support improvements to existing community and cultural infrastructure.

Asset Management

$50 million delivered through FCM to support capacity building for local government asset management.


  • $2.9 billion over five years to address climate change and air pollution issues, which includes:
    • $2 billion two-year Low Carbon Economy Fund that will support provincial actions to reduce greenhouse gas emissions; and
    • $345 million over five years to Environment and Climate Change Canada, Health Canada and the National Research Council to take action to address air pollution.
  • $142 million over five years to add new national parks.
  • $129 million over five years to Natural Resources Canada to deliver energy efficiency policies and programs.
  • $129.5 million over five years for climate adaptation initiatives.


  • $1 billion over four years to develop clean technology to address climate change, air quality, clean water, and clean soil in the resource, energy, fishing, and agriculture sectors.
  • $130 million over five years to support clean technology research, development and demonstration activities.
  • $500 million over five years towards high-speed broadband in rural and small communities
  • $800 million over four years to support innovation networks and clusters, including initiatives under the Industrial Research Assistance Program.

First Nations

  • $8.4 billion over 5 years for First Nations education, infrastructure, and skills training.
  • $40 million over two years for the National Inquiry into Missing and Murdered Indigenous Women and Girls.

Community Safety

  • $60 million over five years for a new Surrey-based RCMP forensic laboratory.
  • $24 million to re-open the Kitsilano Coast Guard facility.
  • $15.5 million over five years for heavy urban search and rescue forces.
  • $143 million over three years to support new and existing measures to strengthen oversight and enforcement of railway safety, and enhance prevention and response capabilities related to rail safety and the transportation of dangerous goods.

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