Overview of the Renewed Federal Gas Tax Fund
Updated on August 22, 2017
WHAT IS THE RENEWED FEDERAL GAS TAX FUND?
Nova Scotia and Canada entered into a new federal Gas Tax Fund (GTF) Administrative Agreement as part of the New Building Canada Plan on July 3, 2014. The renewed GTF provides predictable, long-term funding for Nova Scotia municipalities for a 10-year term (2014-2024), representing an estimated investment of $580 million. The purpose of the funding is to help Nova Scotia municipalities address local infrastructure priorities, while supporting the national objectives of growing the economy, sustaining a healthy environment and building viable communities.
HOW CAN GTF BE USED?
Municipalities can use the GTF to support local infrastructure and capacity building priorities that fall under the eligible investment categories (more information on these categories is included below). Municipal Funding Agreements (MFA), which all municipalities signed last year, set out GTF project guidelines. However, municipalities have flexibility in the initiatives they undertake, based on local priorities.
The Government of Canada has made a number of important changes to improve the GTF. Most notably, it has enshrined GTF in legislation to make it a permanent source of infrastructure funding, and indexed it by two percent per year to keep pace with inflation.
Eligible Investment Categories Added
To provide more flexibility, the eligible GTF investment categories have been expanded. The original seven eligible categories remain: drinking water, wastewater, solid waste, public transit, local roads and bridges, community energy and capacity building. The following 11 categories have been added:
- disaster mitigation
- broadband connectivity
- short-line rail
- short-sea shipping
- brownfield redevelopment
- regional and local airports
- cultural infrastructure
- tourism infrastructure
- sport infrastructure
- recreational infrastructure
Refined Criteria for the Community Energy Category
In December 2015, Infrastructure Canada released a schedule revising the criteria for the Community Energy Systems category as it relates to new building construction and municipal building retrofits. The new schedule provides further detail.
Under the Community Energy Systems category, energy-efficient components of new building construction and building retrofits may be eligible projects, if they meet the following criteria:
New building construction:
- An energy audit is NOT required if the energy efficiency gained from the new building components can be measured by the number of kilowatt hours or litres of fuel saved.
- Only the cost differences of those energy efficient building components that exceed National Building Code of Canada (NBCC) standards are eligible for GTF. Municipalities are required to maintain documentation of these components.
Municipal building retrofit:
- An energy audit IS required to show the number of kilowatt hours or litres of fuel saved from the new energy efficient upgrades.
- Only the cost differences of those energy efficient upgrades that exceed NBCC standards are eligible for GTF. Municipalities are required to maintain documentation of these components.
- The cost for an energy audit is GTF-eligible.
It is recommended that municipalities contact the Province to confirm eligibility before beginning any new building construction or building retrofit project for which they intend to use GTF. For further clarification on this revision or to discuss project eligibility, please contact Hardy Stuckless, Manager of Infrastructure Programs, Department of Municipal Affairs at Hardy.Stuckless@novascotia or 902 424-2770.
Asset Management Requirement
The renewed GTF places a greater emphasis on long-term capital planning and asset management. As a result, municipalities are required to participate in the development of asset management plans. In the MFA, an asset management plan is defined as a document that “support(s) integrated lifecycle approaches to effective stewardship of infrastructure assets in order to maximize benefits and manage risks”.
At a minimum, municipalities are required to include an inventory and condition of municipal infrastructure assets in their asset management plans. Currently, the Province is consulting with municipalities and relevant stakeholder groups to develop and implement a province-wide asset management initiative to support municipalities in meeting this requirement.
Annual Expenditure Report Audit Requirement
With the new GTF Administrative Agreement, the requirement for municipalities to have Annual Expenditure Reports (AERs) audited has been removed. Instead, AERs have to be signed-off for accuracy and compliance by municipal directors of finance. The Province will engage an auditing firm to perform a GTF program audit. This contract will include a sampling of audits performed on municipalities, with the size and makeup of the sampling determined by implementing a risk-based approach. Final AERs are due July 31 annually.
Capital Investment Plan Requirement
Capital Investment Plans (CIP) are due to the Province by September 1 of each year and must include a list of planned capital projects along with required project-specific information over a minimum five-year period. GTF-eligible projects are to be identified and additional funding sources indicated for each project. Municipal councils must approve any GTF project proposed in year 1 of the CIP.
Signage Reporting Requirements
In February 2017, Infrastructure Canada (INFC) announced a new framework for the mandatory installation of signage for GTF projects. Municipalities are required to provide and install temporary signage for all projects receiving federal gas tax funds. Visit INFC’s website for signage information, including frequently asked questions and signage templates.
The new signage protocols require that signs display both a municipal and provincial logo. For a copy of the provincial logo, please contact Debbie Nielsen, Infrastructure & Sustainability Officer, UNSM at or 902 423-8312.
For any other inquiries about the new signage protocols, please contact Infrastructure Canada directly at:
WHAT IS UNSM’S ROLE IN SUPPORTING THE ADMINISTRATION OF THE GTF?
As of April 2015, UNSM has been providing support to the Department of Municipal Affairs to administer the 2014-24 GTF agreement, focusing its efforts on requirements for communications, signage and asset management. Some of UNSM’s tasks include, collecting information for the pre-construction and signage reports, developing project spotlights to highlight best practices and innovation in Nova Scotia, creating communication and training resources, participating in the development of asset management resources, conducting project site visits, and assisting municipalities to undertake sustainability initiatives that support the new federal GTF pillars. Through this work, UNSM aims to help municipalities meet the requirements of the program, by providing support and resources to assist them in making the most of GTF. UNSM intends to work with municipalities to raise the profile of local GTF initiatives, making a strong case for continued (and possibly enhanced) federal support.
FEDERAL GAS TAX FUND FREQUENTLY ASKED QUESTIONS (FAQS)
This FAQs document is meant to be a living resource and information will be added as required. Any questions about this document can be directed to Rene Frigault, Planning & Development Officer, Department of Municipal Affairs (DMA) at or (902) 424-2088.
TEMPLATE LETTER FOR TRANSFERRING GAS TAX FUNDS TO A 3RD PARTY OR NON-MUNICIPAL ENTITY
The Department of Municipal Affairs prepared a template letter that municipalities can use when entering into an agreement with a 3rd party (non-municipal) entity to transfer gas tax funds for eligible projects. As detailed in the 2014-24 Municipal Funding Agreements (MFA), a municipality can decide to support a non-municipal entity (a not-for-profit, for profit or non-governmental organization) to undertake a project that is for “public use or benefit in Nova Scotia”. The following is Section 2.6 of the MFA, which provides details on the process for funding a non-municipal entity:
2.6 Transfer of Funds to a Non-Municipal Entity. A Municipality can choose to support an Eligible Project using GTF Funds that is to be undertaken by a Non-Municipal Entity provided that the project is for public use or benefit in Nova Scotia and is subject to the following:
- The provision of such support shall be authorized by a formal resolution of Council. The resolution is to be submitted to Nova Scotia as soon as practicable thereafter. The resolution of Council shall identify the Eligible Project, the Non-Municipal Entity, and the amount of Funds they are to receive for that Eligible Project.
- The Municipality shall continue to be bound by all of the provisions of this MFA notwithstanding any such transfer.
- No transfer of Funds pursuant to this Section 2.6 shall be in effect unless and until the Non-Municipal Entity receiving the Funds has executed and delivered to Nova Scotia a written undertaking to abide by the Municipality’s obligations under this MFA with respect to the Funds transferred, in a form satisfactory to Nova Scotia.
If you have any questions about the eligibility of a non-municipal entity project or the process for transferring gas tax funds, please contact: