OTTAWA - Cities should be given more time to spend stimulus cash so that the money is used wisely as the Harper government rushes billions of dollars out the door, Parliament's budget watchdog says.
With so much infrastructure money being released at once, there's a chance the rush to build could prompt hasty decisions or cause local prices to soar, Kevin Page warned in an email interview.
"Parliamentarians may wish to reconsider the time frames associated with the Infrastructure Stimulus Fund," he wrote.
"Cities need to be given the time they need to make sure the money is used effectively."
"It is important that the municipalities have the flexibility they need to ensure the money goes to quality/priority projects and are managed in an effective manner."
The federal government has been adamant that the $4-billion stimulus fund be spent by the end of the 2010-2011 fiscal year in March 2011. The deadline is a key part of the government's plan to control and eventually eliminate the deficit.
Page said it's taking municipalities "many months" to get the infrastructure work up and running. That means most of the building activity will take place in 2010 -- causing a rush to complete the projects before the deadline.
The rush could easily cause a run on local resources, prompting prices to escalate, he warned.
"Given the tight timelines for the ISF program ... there is a serious risk that we could get bubble-like price pressures," Page wrote.
"This creates a risk that a substantive use of taxpayer money will go to generate high prices rather than incremental real activities that will support economic growth."
Municipalities in Quebec have been arguing that the two-year window for completion of work is not realistic. Project approvals are just trickling down to the municipal level now, and the construction season for this year is essentially over, said Bernard Genereux, president of the Federation of Quebec Municipalities.
"We're almost in November, and we're going to have to wait till next year (to start work)," he said. "I'm worried about the two-year envelope."
He added that he's getting no indication the federal government would be willing to bend on its deadline.
Page has been struggling to assess the federal government's stimulus spending for months now. On Thursday, Transport Minister John Baird answered part of his request for more information by giving him three crates full of paper -- 4,476 pages in all.
Page can't make the contents public, because the pages are all marked "protected."
"It's an old lawyer trick," complained NDP finance critic Thomas Mulcair. "When you want to bury your opponent, you simply provide them with so much written information, they can't do anything with it."
Baird defended himself in the House of Commons on Friday, saying he had given the parliamentary budget officer the information requested.
"We have run a very open and transparent infrastructure program," he said, and every project is announced publicly and posted on a government website.
Page said he'll make the most of his new source of data: "This will give us a start on our assessment of the potential impact ... of this stimulus spending on the Canadian economy."
As for it being in paper form rather than in a searchable database, an admittedly frustrated Page said he was reminded of an old religious joke:
"`In the beginning, there was nothing; And then God created light. There was still nothing, but at least you can see it."'
