Federal Gas Tax Program

On August 23, 2005, Saskatchewan Government Relations, now the Saskatchewan Ministry of Municipal Affairs ("Saskatchewan") and Infrastructure and Communities Canada ("Canada") executed the Canada-Saskatchewan Agreement on the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities 2005 - 2015 (GTF Agreement). The GTF Agreement provides a joint framework for the transfer of funds from Canada to Saskatchewan for administration and subsequent allocation to municipalities. All Saskatchewan municipalities are eligible to receive funding on a per capita basis for environmentally sustainable municipal infrastructure projects and for projects that increase the capacities of communities in areas such as long term planning. 

The total federal funding to Saskatchewan over the first nine years of the program is $372 million, with Saskatchewan's total allocation over the first five years at $147.7 million. In 2008, Saskatchewan signed an extension to the bilateral agreement with the federal government. Saskatchewan's four year total funding for years six to nine is $224 million based on the 2006 Census figures. Municipalities will receive their funds based on 2006 Census figures for years six and seven, and then on 2011 Census figures for years eight and nine.

At the time of the extension funding being announced, the federal government also committed to making the program permanent, although no further details were provided. In the 2011 budget, the federal government announced the Gas Tax Fund would be made permanent through legislation. In October, 2011 The Honourable Jim Flaherty, Minister of Finance, introduced the Keeping Canada's Economy & Jobs Growing Act. The legislation includes key elements of the Next Phase of Canada's Economic Action Plan including the permanent annual investment of $2 billion in the Gas Tax Fund to provide predicable, long-term infrastructure funding for municipalities. This legislation was passed in the House of Commons in December, 2011.

The GTF is an outcomes-based program which requires projects to contribute to the national outcomes of cleaner water, cleaner air and reduced greenhouse gases (GHG). The federal government's emphasis on environmental sustainability requires municipalities to demonstrate how environmental outcome criteria are met. Municipalities are also required to demonstrate how twenty percent of spending satisfies criteria to provide regional benefits and cooperation.

In order to access funding, municipalities were required to submit an Infrastructure Investment Plan (IIP) by March 31, 2008, to ensure projects are eligible. A total of 762 municipalities (96.6%) met that March 31, 2008 deadline. Municipalities that chose not to participate in the first five years of the program have another opportunity to participate in the program under the extension funding (2010/11 - 2013/14).

An IIP is required for each project a municipality intends to undertake using GTF. Once the IIP is approved, the province and the municipality entered into a Funding Agreement. Municipalities are also required to submit additional IIPs for any other projects they would like to use their GTF allocation towards.

The Secretariat estimates that approximately 3,000 IIPs will be approved and 13,000 payments will be made over the first nine years. As of December 31, 2009, just over 750 projects were completed, representing approximately $50 million of Saskatchewan's portion of the GTF.

For further information, contact:

New Deal Secretariat
410 - 1855 Victoria Avenue
Regina, SK S4P 3T2
Telephone: (306) 787-8912
Fax: (306) 787-3641
E-mail: gastaxprogram@gov.sk.ca