Monday, July 05, 2010

Harper, Wall govts flouting infrastructure agreement requirements; Mendel renovation was 4th on city’s priority list, Destination Centre 7th


When Prime Minister Stephen Harper announced on January 16, 2009, an action plan to accelerate infrastructure spending by reducing duplication, streamlining regulatory processes, and fast-tracking federal review and approval processes to get Building Canada projects started sooner, who knew that it would be at the expense of such important things as governance, accountability and long term planning?

On April 11, 2008, federal Agriculture Minister and Saskatchewan MP Gerry Ritz joined provincial Municipal Affairs Minister Bill Hutchinson in Regina to announce the signing of a framework agreement between the two governments. The agreement provides approximately $635 million through Building Canada, the Government of Canada’s $33 billion long-term infrastructure plan.

The funding is in addition to funding from the Gas Tax Fund and Municipal Rural Infrastructure Fund already being provided to Saskatchewan. The Government of Canada will provide more than $755 million in funding, between 2007 and 2014, for infrastructure projects in Saskatchewan under the Building Canada plan.

Under the agreement, the Government of Canada will provide more than $236 million from the Building Canada Fund (BCF), a centrepiece of the overall plan, toward infrastructure initiatives in Saskatchewan.

The program will operate through two components: the Major Infrastructure Component (MIC) and the Communities Component.

The Building Canada website states the MIC will target larger, strategic projects of national and regional significance. Projects under the MIC will be selected through federal-provincial discussions to establish priority investments, and with municipalities and the private sector, where appropriate. All projects will be subject to due diligence review to evaluate the extent to which they meet economic and environmental criteria.

The Communities Component is focused on projects in communities with populations of less than 100,000. Projects will be selected through an application-based process and, like projects under the MIC, will be evaluated on the extent to which they meet environmental, economic and quality of life objectives.

According to a federal government news release, the Canada-Saskatchewan Framework Agreement outlines how the Building Canada Plan will operate in the province. It also establishes a governance framework through which the two governments will work together to identify and address infrastructure priorities.

In a letter to Infrastructure Canada’s assistant deputy minister of policy and communications, John Forster, dated May 8, 2008, which was obtained through an access to information request, Saskatchewan Ministry of Intergovernmental Affairs official Dylan Jones indicated that Highways and Infrastructure would be implementing the agreement on behalf of the Government of Saskatchewan. George Stamatinos, assistant deputy minister, policy and programs, would be the lead on the file.

It’s important to note as well that no changes appear to have been made to the framework agreement since it was signed. Section 10.3 provides for amendments, but the Wall government says there have been none. In response to a query, the deputy minister of highways and infrastructure, Rob Penny, advised in a letter dated May 12, 2010, that, “there have been no amendments to the agreement to date.”

One of the seven stated objectives of the agreement is the establishment of an Infrastructure Framework Committee (IFC).

According to the agreement, the IFC is meant “to facilitate improved cooperation and coordination between the Parties regarding Public Infrastructure initiatives in Saskatchewan.”

Section 7.2 describes the structure of the committee: “Each Party will, within 60 days of the date of this Agreement, appoint one person to be a co-chair of the IFC. The Co-Chairs will be the only voting members of the IFC and a quorum for a meeting of the IFC shall exist only when both Co-Chairs are present. The Co-Chairs may jointly agree to invite representatives of other federal, provincial or municipal entities to participate in meetings of the IFC as observers. If a Co-chair is absent, he or she may designate an individual, in writing, to substitute for him or her and as such, this designate will fully represent the Co-chair.”

The co-chairs are identified in a letter dated September 2, 2008, from the then federal minister of transport, infrastructure and communities, Lawrence Cannon, to Saskatchewan’s minister responsible for intergovernmental affairs, Bill Boyd.

“Thank you for your letter of May 13, 2008, in which you indicated that Mr. John Law, Deputy Minister of Highways and Infrastructure for the Government of Saskatchewan, would be the provincial co-chair to the Infrastructure Framework Committee,” Cannon wrote. “In turn, I would like to inform you that as per section 7.2 of the Canada-Saskatchewan Infrastructure Framework Agreement, I am appointing Mr. John Forster, Assistant Deputy Minister, Policy and Communications, Infrastructure Canada, as federal co-chair of the Infrastructure Framework Committee (INC).

“The Government of Canada is committed to implementing the Building Canada plan in Saskatchewan as quickly as possible. To that end, my officials have begun discussions with officials in your department to conclude the Provincial-Territorial Base Funding Agreement.”

‘As quickly as possible,’ are words worth remembering.

The role and mandate of the IFC, as outlined in Section 7.3, is that it “will act as the forum where the Parties can bring forward their infrastructure priorities and issues generally, reflecting the integrated views of their respective governments, and as they relate to the BCF and Base Funding. The IFC will assist in ensuring that there is collaborative and meaningful discussion between Canada and Saskatchewan about infrastructure issues related to federal and/or cost-shared programming.”

As part of its mandate, the IFC is expected to act “as the principal forum to discuss and coordinate issues and priorities relating to federal funding of public infrastructure in Saskatchewan.” It will oversee “the progress and status of infrastructure programs under the Building Canada Plan” and review “changes to the Saskatchewan Infrastructure Plan, pursuant to Schedule B.”

The IFC will review priorities and discuss “projects of interest to be funded under the Major Infrastructure Component.” It will also establish sub-committees as needed.

Section 7.4 states that any decisions of the committee “must be unanimous and recorded in writing.”

As for meetings and administrative matters (Section 7.5), the IFC will “meet at least once each calendar year. No more than twelve (12) months shall pass between IFC meetings. Additional meetings shall be held upon the request of either co-chair.”

The IFC must “keep minutes of meetings, which shall be approved and signed as a true record at the following IFC meeting,” as well as “establish rules and procedures with respect to its meetings and those of its sub-committees, including rules for the conduct of meetings and the making of decisions.”

The Harper and Wall governments have violated this part of the framework agreement on at least one major front. That being the committee has never met.

An access to information request dated April 1, 2010, was submitted to Infrastructure Canada for copies of any records regarding the IFC, including the minutes to any meetings, from April 11, 2008, to September 30, 2009.

In an informal email response on April 17, 2010, Hank Schriel, the Infrastructure Canada access to information advisor handling the file, advised: “We do have a few relatively minor administrative records about the formation of this committee (letters nominating members to the committee) but I wonder if that is what you had in mind? This committee has never met so there are no substantive records at all (no agendae, minutes or records of decisions).”

That the IFC has never met was reaffirmed in the department’s official response on April 29, 2010.

“The reason we have no other relevant records is that to date this Committee has not had a formal meeting,” Schriel said in a letter signed on behalf of Infrastructure Canada access to information coordinator Sylvie Plourde.

Infrastructure Canada had just 3 records responsive to the request, the aforementioned letters from Dylan Jones to John Forster and Lawrence Cannon to Bill Boyd; and an August 12, 2008, memorandum (for decision and signature) to Cannon recommending that Forster be appointed the IFC co-chair in six jurisdictions: Alberta, Saskatchewan, Ontario, Nunavut, Northwest Territories and Yukon.

The IFC is an integral part of the agreement’s governance framework, and yet there is virtually no records concerning it. Nothing to explain why it is inactive and not being allowed to fulfill its role and mandate as the “principal forum” for the two senior levels of government to bring forward, for review, discussion and coordination, their infrastructure priorities and issues generally as they relate to the Building Canada Fund and Base Funding.

In deciding not to meet as required, the Harper and Wall governments are sidestepping an important part of the accountability that is built in to the agreement – the paper trail, the signed and approved meeting minutes and written record of decisions.

Through the Building Canada Plan, Saskatchewan will receive $175 million in base funding for core infrastructure priorities.

Like the MIC projects, the IFC acts as the “principal forum” where base funding priorities are brought forward for review and discussion. But again, the committee has never met.

The lack of IFC meetings would also appear to affect the Communities Component of the Building Canada Fund, too.

The Government of Canada’s contribution under the Communities Component is pursuant to a Communities Funding Agreement to be negotiated between Canada and Saskatchewan. Section 3.4.4 of the agreement, which pertains to governance, states that the funding agreement “will be overseen by a subcommittee of the IFC to be appointed from the Parties’ senior officials and which may also include representatives from or in consultation with provincial municipal associations.”

Presumably, the sub-committee would report to the main committee, which in turn would be recorded in the meeting minutes. With no functioning committee to report to accountability is once again thwarted.

The Harper and Wall governments blatant flouting of the framework agreement doe not end there.

Under Section 6.2 of the agreement “Saskatchewan agrees to develop a Saskatchewan Infrastructure Plan in accordance with the guideline in Schedule B and to provide this plan, and any updates, to Canada, in a format satisfactory to the Federal Minister, within one year of the date of this Agreement. This plan will help the Parties better understand and situate infrastructure priorities in Saskatchewan. Should Saskatchewan update its Infrastructure Plan, this update would be discussed by the IFC.”

Schedule B indicates that the plan is “a long-term, 5-10 year.”

“The Parties agree on the importance of long-term planning to better address public infrastructure priorities,” Section 6.1 states. “Planning plays a vital role in the sound and effective management of our public infrastructure, given the long-term nature of infrastructure investments, the challenges of managing assets throughout their life cycle and constructing new infrastructure in response to continued growth. Long-term plans can serve as a critical tool to identify priorities as well as develop integrated strategies that address competing pressures in a predictable and manageable way.”

So important is the long-term infrastructure plan that the Wall government has decided not to develop one.

On June 22 and 23, 2010, emails were sent to the following highways and infrastructure officials inquiring about the status of the Saskatchewan Infrastructure Plan: Josh Safronetz, executive director, major projects; George Stamatinos, assistant deputy minister, policy and programs division; and, Doug Wakabayashi, communications director. None responded. It was only after contacting Highways and Infrastructure Minister Jim Reiter and deputy minister Rob Penny on June 24, 2010, that the query was taken seriously.

In a letter dated June 28, 2010, highways and infrastructure deputy minister Rob Penny wrote: “You are correct in identifying the Canada-Saskatchewan Infrastructure Framework Agreement requires the province develop an infrastructure plan. The Ministry of Highways and Infrastructure is tasked with the preparation of the required plan; to date the ministry has not completed nor looked to implement a Saskatchewan Infrastructure Plan.”

Penny did not explain why.

The news that there will be no long-term infrastructure plan is surprising given that the Wall government told the people of Saskatchewan there would be one.

In its 2008-09 annual report, Highways and Infrastructure had this to say: “The Ministry initiated the development of the Saskatchewan Infrastructure Plan that is a signature document establishing a comprehensive infrastructure plan for Saskatchewan.”

However, there is no mention of the initiative in the ministry’s plan for 2009-10. What happened to it is a mystery.

Provincial government records show that the Ministry of Municipal Affairs is involved in this issue as well. According to its 2009-10 plan, the ministry’s key priorities last year included:

▪ Implement a new provincial-municipal Saskatchewan infrastructure plan in partnership with the Ministry of Highways and Infrastructure, which is leading the plan’s development, to meet Saskatchewan’s requirements under the Building Canada Plan.

▪ Provide details to the Ministry of Highways and Infrastructure to inform the development of a new provincial-municipal Saskatchewan infrastructure plan, which is required to meet Saskatchewan’s requirements under the Building Canada Plan.

The ministry plan for 2010-11, however, is silent on the Saskatchewan Infrastructure Plan. It seems to have vanished into thin air.

Highways and Infrastructure Minister Jim Reiter and former Municipal Affairs Minister Bill Hutchinson appear to have some explaining to do, as does Infrastructure Canada who would surely know what’s going on as well.

The Harper and Wall governments’ flagrant breach of the framework agreement calls into question the legitimacy of the project review and approvals process as it relates to Building Canada Fund – Major Infrastructure Component and Base Funding projects across Saskatchewan.

Section 3.3.4 of the agreement describes the role the IFC co-chairs play in the project approvals process for MIC projects:

“The IFC Co-chairs will present and discuss priorities for infrastructure funding under the Major Infrastructure Component. The Co-chairs will endeavour to present an integrated and consolidated view of the Parties’ priorities for funding under this Component. Priorities presented by the Provincial Co-chair for consideration will be consistent with Saskatchewan’s Infrastructure Plan, while Canada’s review of funding priorities will be guided by its intention to further the Building Canada Fund program objectives and to focus two-thirds of overall funding under this component on National Priority Categories. Each Co-chair will recommend projects to be considered as a priority for funding to his or her respective Minister. The Federal Minister will approve funding provided by Canada for projects to be funded under the Major Infrastructure Component of the Building Canada Fund. Prior to approval of funding, each Party may conduct its own due diligence review of the project and the Parties agree to cooperate in any project review, including the sharing of relevant studies, information and data.”

The Wall government’s decision not to develop and implement a Saskatchewan Infrastructure Plan seriously impacts this part of the agreement. Any priorities for infrastructure funding presented by the co-chairs for consideration must “be consistent” with such a plan. With no plan in place how can projects qualify?

Furthermore, the opening sentence of Section 3.3.4 notes that IFC co-chairs “will present and discuss priorities.” Section 7.3 clearly states that the IFC is the “principal forum” where such discussions are to occur, but the Harper and Wall governments have chosen not to convene the committee. With no meetings, where minutes are taken and decisions recorded, how can the co-chairs fulfill their obligations and recommend projects for funding to his or her respective Minister?

Not having a Saskatchewan Infrastructure Plan also impacts the Base Funding portion of the framework agreement. Under Section 4.3 – Eligible Initiatives and Eligible Recipients, “Saskatchewan agrees that funded initiatives will be consistent with the Saskatchewan Infrastructure Plan.” But there is no plan.

On September 23, 2009, the federal government announced funding commitments for three MIC projects in Saskatoon: Flood Control Project, Water Reservoir Project, and the Destination Centre. Given that no IFC meetings have occurred or a Saskatchewan Infrastructure Plan implemented, as required, it seems reasonable to conclude that these projects should not have qualified or been approved for funding.

Especially brutal is the case of the Destination Centre.

Shortly after the framework agreement was signed, Highways and Infrastructure requested from the City of Saskatoon a list of projects for funding under the Building Canada Program.

Subsequently, in a letter dated July 21, 2008, Murray Totland, the city’s then general manager of infrastructure services, submitted an “initial list of candidate projects” to highways and infrastructure assistant deputy minister George Stamatinos.

“Further to our recent telephone discussion on the allocation of the Building Canada Funds – Major Component, I am taking your advice and presenting you with a list of projects that the City of Saskatoon is interested in submitting for funding under this program,” Totland wrote. “I am also submitting a similar list for the Base Funding component of the Program. Both lists are on the attachment and provide tentative project start dates, as well as our current estimated cost. The lists are also is our current order of project priority. You will note that our list of candidate projects certainly exceeds the amount of available funding, the reason being that we wanted you to see our full list so that we have options as we work through our discussions.”

Fourth on the city’s priority list was the Mendel Art Gallery expansion and renovation project, just behind the expansion and rehabilitation of the city’s water reservoirs, the Confederation Park flood protection project, and the 25th Street extension. Coming in a distant seventh was the Destination Complex at River Landing. The city considered the rehabilitation of the Traffic Bridge (5th) and upgrades to Gordie Howe Bowl (6th) more important.

At the city council meeting held October 14, 2008, city administration reported that it had “just begun discussions with the Ministry of Highways and Infrastructure” on the “specific program requirements and the criteria for both the Major Infrastructure Component and the Base Funding program,” and that a “list of candidate projects which should meet the program funding criteria” was being developed.

The city’s 2009 capital budget (approved December 15, 2008) shows that the Mendel project, as well as the Destination Complex (or Centre), were still being considered for Building Canada Funds.

On January 5, 2009, the Globe and Mail reported that the City of Saskatoon had “submitted a list of half a dozen projects a few months ago, including the expansion and renovation of the Mendel Art Gallery” for Building Canada Funds, but had not yet received a go-ahead from the federal government. [Tories say building money ‘is flowing’ (The Globe and Mail, January 5, 2009)]

On January 8, 2009, Mayor Don Atchison and Mendel board chair Art Knight sent a letter to then Tourism, Parks, Culture, and Sport Minister Christine Tell seeking a one-year deadline extension of the Building Communities Program Agreement covering the contribution by the province of $4.09-million for the expansion and renovation of the Mendel, which they told the minister was a “worthy and important project” that “will be successful.” The pair also said the delay in moving forward with the project was due in part to “finalizing a formal request for funding from the Building Canada Program.”

However, something happened after that because on April 3, 2009, Atchison and Knight suddenly announced that the Mendel would be moving into the proposed Destination Centre to be located at River Landing. The Mendel name would be stripped from the building and replaced with the Art Gallery of Saskatchewan. That the new building would cost $58-million versus $24-million to renovate the Mendel didn’t seem to bother anyone.

The Mendel project is shovel-ready and could have gone to tender in March 2009. The Destination Centre, on the other hand, is still in the design stage. According to the city’s 2010 capital budget, construction on the underground parkade was anticipated to begin in 2011. Work on the actual centre itself would start in 2012.

But that’s not the case anymore.

“The best estimate we have now is that the underground parkade will likely start in 2012. During the 2011 Capital Budget cycle all information, including anticipated construction dates, will be updated,” said Linda Andal, a financial policy and strategy analyst with the City of Saskatoon, in an email on July 6, 2010.

The decision to move the Mendel was the result of secret discussions and backroom deals by the three levels of government. “With our partners in the City, Provincial and Federal governments, we have come to the conclusion a new building is the best fit for Saskatoon’s expanding future and our city’s amazing new urban riverfront,” the Mendel board said in a glossy brochure released at the press conference to announce the move.

Saskatoon citizens and the Mendel family were kept in the dark until the last minute.

Adding insult to injury is River Landing itself which has become a financial albatross for taxpayers tripling in cost from $42.1 million in 2004 to at least $135.6 million today. The main reasons given for moving the Mendel is the availability of Building Canada funds and River Landing’s desperate need for an attraction.

On April 9, 2009, the city submitted its final list of capital projects that required funding from both the Major Infrastructure Component and the Base Funding Component under the Building Canada Fund to Highways and Infrastructure. The Mendel was not included.

In all, the city submitted just three projects for MIC funding: Water Reservoirs, Flood Control, and Art Gallery of Saskatchewan.

In June 2009, Infrastructure Canada received a project proposal from the City of Saskatoon for the Destination Centre. Less than three months later it was approved for funding.

The lack of transparency and accountability surrounding this issue is appalling.

To date, no details on the closed-door discussions between the City of Saskatoon, provincial and federal governments to move the Mendel have been made public. In fact, there appears to be little in the way of a paper trail.

According to a January 12, 2010, email from the city clerk, at the time of the 2009 capital budget in December 2008, city administrative staff and federal officials were discussing “project eligibility” for the Building Canada Fund.

In February 2010, a freedom of information request was submitted to Infrastructure Canada for copies of any records from November 1, 2008, to December 31, 2008, regarding or relating to the Mendel Art Gallery. This covered the time period the city said discussions were taking place. And yet, on February 25, 2010, Infrastructure Canada advised that it had no records responsive to the request.

In a letter dated March 19, 2010, responding to a freedom of information request, the city clerk noted “that prior to the City’s formal submission of April 9, 2009, there was only informal dialogue between officials of the City and the Province as to the eligibility of the many potential projects that were being considered.” There “was no formal correspondence, merely emails between officials” that the city did not keep copies of.

And this is only one project. How many other questionable Building Canada-related projects are out there?

[Note: This post was updated on July 6, 2010, to include new information from the City of Saskatoon on the start-up date for construction of the Destination Centre parkade.]