Legislation aims at doubling federal Gas Tax fund

The Government of Canada has stated its intention to top-up the federal Gas Tax Fund allocation provided to BC and other provinces and territories for 2021. Contingent upon the passing of Bill C-25, local governments would see funding allocations effectively double for the current year. The proposed funding would deliver $2.2 billion across Canada to address short-term infrastructure priorities in local government and First Nation communities. 

“UBCM has long maintained that the federal Gas Tax Fund is the best means for transferring federal funds to local infrastructure,” said president Brian Frenkel. “The program allows for 100% funding, it provides local choice around project selection and timing, and the program administration is efficient. I want to extend my appreciation to the government for introducing Bill C-25 and will watch closely as it moves through the legislative process.”

The Government of Canada has also committed to renaming the program the “Canada Community-Building Fund.” The federal Gas Tax Fund is not reliant on federal gas tax revenues, and the name has been a source of confusion in some quarters. Bill C-25 will also provide an additional $4 billion through the Canada Health Transfer to address immediate health care pressures and $1 billion to support the COVID-19 vaccine rollout.

In total, it is expected that the 2021/22 allocation plus the top up will provide $573 million for BC local governments. The top up funds are subject to the same terms and conditions as apply to the current federal Gas Tax Fund. UBCM is seeking further details on the timing of the additional payment pending legislative approval.

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