There’s the Money! What The Federal Budget Means For City Building

Full Panel
Transcript

Note to readers: This video session was transcribed using auto-transcribing software.  Questions or concerns with the transcription can be directed to communications@canurb.org with “transcription” in the subject line.

Mary W. Rowe I’m Mary Rowe from CUI, and here we are, budget, 48 hours later. Let’s see what we really try to understand about what the significance is of this transformative generational budget, particularly on cities and places across the country. We’re Really pleased to have four folks joining us who know more about this than any of us and that they would take time to enlighten us about what their particular perspective is,  what expectations have been met, what have been disappointed. And I think also, just for those of us that have been around a while, we know that a budget gets announced, but now the real work begins. And the federal bureaucracy, I know there’ll be many, many, many of them on the call with us listening today with great interest, they are now challenged with how to make any of this all happen, what the government wants to have happen, they have to design it and program it. And we’re all here to provide best policy advice and program advice on how they can best do that. So … I was just saying in the green room that I think this is almost our 300th CityTalk, which is kind of fabulous that so many folks have gathered for so many conversations from the early days of the pandemic, and here we still are, having a talk about places and cities and how things actually land on the ground. And so thank you for all of you that are super CityTalkers who have been on almost all of them. There are a handful of you that are so loyal, we appreciate that. And then we pick up others who attend. And then as you all know, we tape these sessions and then they get rebroadcast and picked up on in your university curriculums and I hope in high school curriculums too. Because it’s interesting to me how much, even if you go back to 2020, 2021 and see some of the topics and folks that have come on CityTalk to talk about these issues, it’s all still pretty current folks. None of these challenges are quick fixes and we need to always be reminding ourselves that we learn most from each other and that we, what’s that expression? We learn faster, fail faster, and then innovate faster as well. And that’s the business CUIs in is the connective tissue business. I happen to be in Toronto today, which is the traditional territory of Inuit, Métis, and First Nations peoples, and specifically the Treaty 13 community, including the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee, Wendat peoples, and we continue to look, and I’m sure that will be what we talk about today is the extent to which the budget addresses and continues to advance what reconciliation looks like with Indigenous peoples working and living in communities across the country. So thanks for joining us, and I am going to ask the gang of four to put their cameras on. And we’ll start with a bit of an opening comment about what you saw and what you read or what you’re hearing. Also, I know that there’s always lots of post-budget churn too. So we learn a lot after the fact. And as I say, it ain’t over till it’s over. And this year sure as hell isn’t over, just saying. So let’s start … Gordon, you’re a newcomer to CityTalk and so is Sean, so I’m going to let you two watch as a model CityTalker demonstrates how an opening salvo is offered. So let’s go to Carolyn Whitzman, who has been on several CityTalks, knows the drill, and has a very particular perspective, I know, about housing and where this budget has gone. But also, Carolyn, just remind people where you happen to be today, and then give us a little bit of an overview about, you know, our adage at CUI is what’s working, what’s not, what’s next. Why don’t we say that for the budget? What do you think is good? What do think wasn’t so good? And what do we need to focus on going forward? To you, Carolyn. Welcome again to CityTalk.

Carolyn Whitzman It’s lovely to be here, Mary. So what works? I think the direction of Build Canada Homes is a great one, using public land for public good, talking about financing for deeply affordable non-market and supportive housing. Yay. Talking about industrial construction, absolutely overdue. We seem to be doing a bit of nostalgia with Gang of Four, which was a great Canadian band. I’m now going to talk about, just saying, the old ad, “where’s the beef?” I was looking at the budget and I was going, where’s the zeros? Because the target of 4,000 homes over five years will not be making a dent on the federal desire to double home building to about 480,000, nor will it have an impact on the numbers I’ve calculated for the federal housing advocate of the need for 200,000 new non-market homes a year, about a third of them deeply affordable, if we want to actually end homelessness and housing need in a generation.

Mary W. Rowe Okay, there you go. Yeah. Yeah, did you like that? Where’s the money? Here’s the money. There’s the money. Like that was kind of what we were getting at. But I, you know, it’s sort of a line … I don’t want to mix too many metaphors, but it’s a line in the sand, I guess, or, you know, they’re putting a flag up saying here are intentions and I think this is our job as civil society and all the different roles we play to kind of hold them accountable. Well, how, how, how can you do it? Can you do it? Carole, you’ve been on CityTalk too. So I’m going to get the two gals who know the platform well, and then we’ll go to Gordon and Sean. So Carole, what’s your particular perspective? Although I did do a quiz beforehand, I checked how many times “municipalities” is in the budget. And I also checked how much time “cities” is in budget. Not very many times. Just saying. 

Carole Saab Well thanks Mary for having me on. Congrats on this being the close to 300th CityTalk. Fabulous, it’s fabulous. It’s a great conversation and we need to be having more of them so thank you for the work you do to put this platform out there into the world. Listen I agree in large part with a lot of what Carolyn said and I think what she said as it relates to housing was really our takeaway on a grander scale as well. Agreed on the point of housing … But more broadly, you know, my feeling when I was looking at it, and I was joking in the green room before is saying, you know, we felt like we saw a lot of light in the room and unfortunately not yet large enough numbers to back up that level of ambition. And that’s a real implementation challenge that they’re going to have to address down the road. We were really pleased and you’re like, what’s working, what’s not, where do we go from here? We’re really pleased to see some of the language around the recognition of the role of local infrastructure in economic strength, productivity, trade, housing delivery, like the folks who are listening and your regulars and the people who orbit our world mostly Mary know that right? That’s a given. We know the role of cities in driving the economy forward. But it’s not always been a given at a federal level and it was good to see those kinds of markers down, at least ambition-wise and recognition-wise. The challenge is the level of investment in that local infrastructure did not match the scale of the ambition, you know, certainly wasn’t generational, certainly not going to be transformational. And I want to say, yet, in all of that, because I think it is important that there was some recognition around those pieces. We were pleased to see some of the core anchor funds, like the Canada Community Building Fund retained and going forward for a very long time. That is a great model of how to fund local infrastructure moving forward. We’re pleased to see the public transit fund moving forward, although some of those dollars have been repurposed. So we should come back to that at some point. But, you know, for the hay of the 51 billion dollar Build Community Strong Fund, much of that is repurposed money. And the net new dollars is really quite low. And as we already know, you know, cities are already sort of stretched to the max on what’s possible. And so when you layer on what I think is necessary ambition around home building, around economic productivity, around resilience as a country. There’s just no way we’re going to get there absent a truly generational investment in long-term infrastructure. And so we hope that this is the start of a conversation about now a long- term infrastructure plan that will come and match the level of ambition. But if I’m being really honest with you without it, those objectives, that ambition is really at risk.

Mary W. Rowe This is sort of a theme the two of you have just set up and it is kind of like, “where’s the money?” And whether or not these ambitious targets are doable. I guess that’s the rubber hits the road argument. How are we going to get there? All right, for their CityTalk debut, we’ve got Gordon and then Sean. Gordon, why don’t you go first? We’ll mute so that we don’t get an echo. And Gordon, just fill people in on where you are and a little bit about where you come from, where your perspective has come from.

Gordon More Okay, that sounds great and this is such a positive, energetic group. Thank you for having us on. So I’m the Executive Director of the Southeast Techhub. We are Canada’s only truly rural tech hub. So we do tech incubation, we do community development, and we do economic development in the energy sector in technology. I’m located in Estevan, Saskatchewan, just to give you … so everyone understands when I say things where I’m coming from. We are a coal town. We have the world’s only carbon capture coal plant. We’re oil and gas. We also are deep earth. We have geothermal. We, also, are pumping lithium carbonate from underground. We are turning our coal to graphite for EV batteries, and that’s well on its way. We are the sunniest place in Canada. If you’ve ever been to rural Saskatchewan, you’ll understand the winds are pretty powerful here. So we’ve got lots of winds here as well. We are also going to be the home of two GE Hitachi BWRX small modular reactors. So we’re in all these wonderful sectors. So with that in mind, just something I think a lot of people should reflect on is where are you watching it? Where is the power, where is the energy coming from for you to watch this, right? If you follow those electrons or the molecules of energy, it’s all coming from rural Canada and then when you look at the budget they also … so they’re talking about let’s make Canada an energy superpower, let’s get into critical minerals … Okay where are all critical minerals coming from? Rural Canada.  And then on top of that, if you also add on the piece … Is that there’s a serious digital divide between rural Canada and urban Canada. I’m originally from Vancouver, came through here and walking through that lived experience, it’s shocking. So, for example, if you take all of southern Saskatchewan, there is … up until last summer, there was no place an adult could take computer science. So, what I was hoping in all of this, putting all that together, that there would be money that would be earmarked just for rural Canada. It could be in the labour development piece, 50,000 new spots, great. Something in that though, the SMRs that they’re going to build here, that’s 5,000 people. Right? So do 10 of those, we’re done. Also on that point is when you’re going to drop in this massive workforce into a community, so 5,000 people into a community of 10,000, people, and yet you have no money for rural economic development, how are we going to handle the police, the fire, the medical, the housing, right? Do we even have the skill set in our communities to handle that? Because it’s not just Estevan, it’s everywhere. So disappointed, but I understand where it’s coming from. No one ever has put money into rural economic development, like forced it in. And the other kind of piece is on the labour force is that if you think about in Canada, where do you go to get your trades training? It’s almost always in an urban setting. And if you read the papers, the peer-reviewed papers, the literature, if you want to have successful deployment or development or building of a new major project, you have to have that labour force developed within 100 kilometers of that site or else you’re going to just develop all these people who are going to probably leave our country or go elsewhere. So disappointed on that. But the overall direction pointing towards critical minerals, energy development. That’s great for our community.

Mary W. Rowe The reason I … You can see why I wanted to make sure Gordon came on the session, because … and Carole and I live with this all the time … The balance of urban-rural and is it one against the other, and is it a zero-sum game, or in fact are we interdependent? And at the Urban Institute, we define urban very broadly as being anybody that lives in a community of, oh, here’s my version, “if you can step outside of your back door and yell and someone hears you, then you’re urban”, and if you’ve got a good voice like me, that’s rural, they can hear you. But it’s place-based and I think this is the piece that’s unique and it’s the challenge we all have is that we have a – and we can come back to this and I’m sure Carole will have lots to say about it … we have government structure that doesn’t really see place and it’s highly vertical when we really know that we need to have horizontal and stuff on the ground so we’ll come back to that Gordon but that’s why I wanted to have you is to put the rural piece forward but also the  whole emphasis around critical minerals and where the economy is being driven by and then how do we create that narrative? So Sean we’re going to go to you last – you’re the big picture person and I’m sure you’re going to have a perspective on all the points that you’ve just hear the three prior to you touch on so give us your perspective and also just tell people a little bit about who you are.

Sean Speer It’s great to join you. Thanks for the invitation and congratulations as Carole says on the success of the CityTalk seminars. My name is Sean Speer. In a previous life I worked as a senior advisor to former Prime Minister Stephen Harper. Today, professionally, my principal focus is a public policy and political commentary site called “The Hub” where we publish opinion commentary, standard reporting, we have a series of podcasts on issues of interest to policy makers. My opening reflection on the budget is that it is making a bet about Canada’s macroeconomic conditions in a way that distinguishes it from budgets from the federal government and provincial governments across the country for some time. People here will know that we’re living in a small P populist moment. That has caused policymakers to spend a lot of scarce resources and attention on what you might characterize as microeconomic issues, pocketbook issues, if I can put it that way. And the way to respond to those types of issues involve policy levers that most of us are familiar with, grant programs, income transfers, tax credits, and so on. The Carney government, to its credit, has recognized that notwithstanding people’s real concerns about affordability and so on, that the secular challenges facing the country are macroeconomic. Our economy is growing too slowly uh… We’re not productive enough, our living standards are flat or declining, and so they’ve outlined an agenda to try to get at those underlying macroeconomic issues and hopefully in such a way that it produces broad-based outcomes that then translate to people such that it addresses those issues that they are articulating about their being squeezed and pricing and cost of living and all the rest. I think it’s admirable that the government has taken this macroeconomic lens to the issues facing the country, as I say. Successive governments in Ottawa and in the provinces have instead chosen to address directly what people are articulating. The big question, of course, is one of execution and delivery. Having articulated this big macroeconomic theory of the case, if I can put it that way, that the way to boost economic output and improve productivity and in turn wages and living standards is through a combination of major public investments in infrastructure and then using different policy instruments, including tax expenditures in order to catalyze private investment involves drawing on public administration muscles that haven’t been used for some time, that Ottawa has become very good at transferring funds to other orders of government or transferring funds to households in order to sustain incomes, it hasn’t done the type of execution and delivery that this budget is calling on it. And so I think as important as the direction is and the extent to which, as I say, it distinguishes its understanding or prescription, its diagnosis of the problem rather is solid. The big question looms over its execution and delivery – does Ottawa have the state capacity to carry out what amounts to a macroeconomic agenda?

Mary W. Rowe Yeah, that pretty much sizes up the dilemma, the scale dilemma. You just absolutely gave voice onto the dilemma we’ve got, which is your … Can I ask the producers to put all of us on the screen and we’ll open our mics and just have a group chat because what you just did is lay out the macroeconomic view and we’re all, well, we’re not all, but we’re very focused on the particular. We’re focused on subsidiarity and how do we get resources into communities to benefit communities that our belief would be strengthens the whole, that we do it from the ground up. And I think this is always a challenge with federal government that tends to come from the top down. So please, folks, put some questions into the chats, but I’m going to go right to, I guess I’ll start with you, Carole. You know, I didn’t, I mean, I didn’t see a lot of … We continue to see reinforcements of transfers to municipalities. And you know there are 16 references to municipalities in the document, five references to cities, and better than I thought, actually, I thought there’d be none, but they’re are 16. But when you read them, it’s mostly about transfers, existing transfers. And here we are in a crisis in our country that is being experienced by people on the ground, in their local neighborhoods. And for the first time, at least we have housing being raised and it is something that hits people at home. How do you at FCM reconcile this, when, in fact, you’ve got to talk to the federal government all the time about something beyond the trickle down model? How do we get to something different?

Carole Saab Yeah and this is I think the fundamental question that they’re going to need to get to an answer to pretty quickly so that we can stick a landing on delivery to Sean’s point. [Mary: mI was going to say we’re the deliverers right?] Yeah exactly exactly, and so I think you know Sean, a lot of what you said resonated for me, very much so, including the fact that I would agree the you know, encouraging diagnoses of the problem right? That that’s come forward. The gap, the gap that still exists right now. And I have to tell you, I’m going to name this pretty directly as a gap and speak to what I think the problematic elements are. And I want to premise it by saying, like I’m optimistic we’ll get there because there’s been open recognition of what the source of the challenge is. And so … but the gap is – how then are we going to deliver and what was in this budget was – from an investment perspective and some of the necessary foundations to delivery and across the country and the various contexts that exist across the country isn’t quite there yet, you know, and Mary, the point you’re asking on the models of delivery, I’ll tell you, you know, it’s a bit of a mixed bag in there. And so we were very encouraged, as I said, to see some of anchor transfers that have worked very effectively retained. Right? So the Canada Community Building Fund, formerly Gas Tax Fund, you know, direct delivery to cities and communities across the country, leveraged extensively, cities can plan for it, you know bank against it, like very very helpful to actually deliver infrastructure across the country. The challenge is – some of the … Like where there is some new dollars, those have been put into these streams of funding that – we are going back to a model of delivered through provinces and territories and one of the eligible categories in each of those models is also provincial priorities and provincial experience and you know it’s certainly my experience, I’ve been at this uh for too long but a very long time um, and our experience with application-based infrastructure programs that are inter-jurisdictional, that require provincial and territorial bodies to prioritize projects and approve municipal applications is that one, they’re overly complex. They take forever to actually move the dollars. And ultimately the envelope of what actually lands at a community level ends up being quite small because a lot of the dollars get siphoned into provincial infrastructure, other priorities. And so it is alarming to see us needing to relearn this lesson. I’m glad that it’s the smaller parts of the portfolio that are in those streams. But I do think it is, you know, the fundamental question about how we deliver on growth across the board remains unanswered. And our position at FCM is to double down on the streams that are working, you know, the direct delivery model works. We’ve seen it succeed. We know it can be scaled. It can be scaled quite easily. So let’s … And we need to move fast. We need to more faster than inter-jurisdictional conversations ever move. And so we’re going to be pressing for an infrastructure plan that matches the scale of the ambition, that levers the direct delivery models on transit through the CCBF in other ways. And I’ll also say just because on the encouraging side, it is, you know, we also share the view that the private sector has a larger role to play. It is encouraging to see them putting some thought and emphasis behind how to engage private sector leavers in local infrastructure more. We need to see more of that. And from our perspective, we think there are great levers to pull on, on how to come at it from an innovative financing perspective as well. So we’re appreciative that that’s early days conversation but happy to see that there as well

Mary W. Rowe I think, I mean, I’m going to come to you next, Carolyn, because what you’re just describing, Carole, is this dilemma about the way federalism is organized. And Sean, I am sure you have a view on this. As federalism’s organized, all those layers, you know, when you think on the housing discourse, how much we hear complaining about bureaucracy, delays in approvals, all the things that they lard on and complain about municipal government. But when you have something that has to go through the labyrinth of a provincial or territorial government, and then by the time it actually trickles down, literally … So here we are saying … And I think the previous government was doing quite a lot of this, the Housing Accelerator Fund did a leapfrog, Rapid Housing leapfrogged. We’re talking about it more in immigration, that they leapfrog and deal directly with the local order of government. Carolyn, what is your particular perspective on this? Have we, are we taking a step forward or are we taken some steps back? And then Sean, I’d be interested to hear from your point of view, from the 30,000 … Go ahead, Carolyn.

Carolyn Whitzman While I’d follow up on what Sean and what Carole said, directionally, I think the budget’s talking about some really good, really profound things. And one of those things that the federal government has been moving in the direction of, and which I applaud, is a new sense of localism. Absolutely, provinces and territories pretty much have a stroke every time there’s a direct transfer to municipalities or regions.  That doesn’t mean that local government isn’t the best delivery system for locally-based programs. It is. I think it’s really important, whether you’re dealing with housing, which is my area of expertise, or health care or child care and education, to start off with a set of principles, a set of targets, and then the kind of mechanisms that will build those targets. So with housing I’m always saying, who needs what housing, where and at what cost. And the federal government was talking, the current federal government during the election campaign said, yeah, we’re going to more than double housing to 500,000 per year from about 220 per year. By the way, we don’t know because the federal doesn’t even track completions in non-metropolitan areas, which is horrible. But in any case, great.

Mary W. Rowe You had to just get that in there, Carolyn, I know.

Carolyn Whitzman Oh, I just like … The data sucks. Okay. But you have these targets – is 4000 homes on six sites going to get you there in terms of industrial development? I would argue no. So if you’re going … We absolutely need more home built industrial construction in order to build a factory, to get the private sector investment in a new home factory, in order to hire people for regular jobs, and you will get a more diverse and younger workforce and happier workforce if they’re working in a factory as opposed to entirely on site. That is necessary to scale up homes. Is a 4,000 target at all realistic in terms of being able to create that new set of industries? No, it is not. So I think I’m going to be very terse today, partly because I don’t like being a black cloud. I like being an optimistic person. But I just, I look at the budget and I go, great concepts. Where the heck is the delivery going to be and without some really hefty bilateral agreements that are backed up by targets, not just aggregate supply targets but non-market supply targets, supportive housing targets to end, like targets to end homelessness. It’s meaningless to talk about a directional shift. It needs numbers behind it.

Mary W. Rowe Wasn’t deliverology part of the mandate of the previous government? I mean, I think we’re all just starting to focus on this. How can we get things to deliver? I guess that is the challenge. We’re all working in very particular circumstances in communities across the country of different sizes. And we need things to deliver to Canadians and people that live in communities, they may not be a Canadian yet specifically. So, Sean, how do you square that circle as a macro guy?

Mary W. Rowe How do we, I mean, and let me just say, I appreciate all of us, that a lot of the post-budget narrative is often a lot of gotchas. Oh, they said this, they didn’t … It wasn’t transformative, it wasn’t that … I really appreciate that we’re not doing that. We’re actually trying to talk about the future of the country and how is our money being organized and how’s our governance going to make communities better for people? So Sean, what’s your perspective on that?

Sean Speer Yeah, just a couple of quick points. People here know, at least as well as I do, but no doubt better that Canada is the most decentralized system of federalism in the world. So we have … Ottawa collects a lot of revenue because it’s the most efficient way of collecting revenue. And then we have a system of interacting with other orders of government in order to deliver on different public priorities. And that obviously is not going to change. And so everything that the government has articulated here is ultimately, or a large share of it is going to ultimately require arrangements and partnerships with other orders of government just by the structure of our federalism. Which kind of comes to my second point. If something is unsustainable, it won’t be sustained. I think that’s a pretty useful political axiom. Our system of fiscal federalism is unsustainable. I can’t tell you how it’s going to solve itself, I can’t tell you when, but if something can’t keep going, it won’t. And so at a time when provinces are spending 50 cents of every program dollar on healthcare, and that’s likely to grow, when municipalities are feeling squeezed and being chastised for the growing use of development fees to try to solve for their budget woes. When Ottawa itself is running deficits outside of an economic downturn in part because of growing demands on defense and security issues, you just get the sense that something has to change. Part of that is Canadians themselves reckoning with how much government they want and how much they’re prepared to pay for and then trying to bring that into some kind of equilibrium. And then of course the relationship between the different orders of government having to be reset. We’ve not done that systematically since the Rowell-Sorois Commission of the 1930s. An exercise of course that comes out of a period of significant transformation, and I would argue that we find ourselves in one that is somewhat analogous, changing demographics, a changing economic structure, obviously evolving geopolitical context, growing demands and expectations on lower orders of government to be the tip of the spear when it comes to delivering core programs and services. So as I say, I don’t know precisely how it’s going to happen. I don’t know when it’s going to happen, but one gets the sense that this conversation five, 10 years from now is not going to be about the design and the quantum of federal transfers to municipalities on individual infrastructure streams. It’s going to be about what’s the relationship between Ottawa, the provinces and municipalities, who does what and what financing powers are devolved so that different orders of government can discharge the responsibilities that they’re given.

Mary W. Rowe Well, you heard it here first, folks, from a former advisor to Prime Minister Harper, who actually, I think, fundamentally believed in subsidiarity. I think it was actually part of his approach to governance. And then we’ve had a number of different phases of this. But Sean, thank you for suggesting that. Carole, you’re going to hang around for 10 years because you’ve had a fiscal framework document at FCM circulating for some time. You’re young, you can still be here.

Mary W. Rowe If it takes this long, I don’t know. It’s … the thing is we’re back though to – in the short term, we have to get some stuff done.

Carole Saab Can I jump in on that, Mary? Here’s the thing. So first of all, here, here to what Sean just said and agreed and actually, Sean, like I hope you’re right that something that isn’t sustainable won’t sustain itself, because we’ve been learning this lesson in painful ways as a country for too long in my perspective. You know, it was interesting, I had a chance to talk to the Prime Minister very shortly after he was elected and, um, refreshingly, one of the earlier questions he asked was, you know, what’s working? What isn’t working? What’s scalable? You know, and essentially I found myself almost surprisingly so making the argument that – you know what let’s not have the conversation that feels too big and weighty and philosophical and you know we need to get some things done so let’s just prove the model and get at it right? And so at a really pragmatic level, you know, when you look at our housing objectives when you look at our economic productivity objectives – you know there is nothing unconstitutional or inappropriate about having the kind of conversation that Sean just described you know where we sit around a table and say okay let’s agree on the objective, who holds what levers, and are they resourced to deliver right? Are they resourced to get it done right? And you know I honestly … it’s not hyperbole to say I would think for a strong majority of the fundamental initiatives that we’re trying to put forward as a country, the answer to that is that it’s NOT aligned right now – in sort of jarring ways really. And what is chronically misaligned is the execution and delivery, and so you know we’re not going to find our way out of being … this cycle … Without some real ambition. But I think it can be really quite pragmatically based to say, okay, let’s pick housing. Obviously there’s a dire need to address the housing crisis in this country. Let’s have a conversation between orders of government, across sectors, if we want to be even more ambitious and I think we need to be, and saying, who holds what levers? What are we doing and are they adequately funded? And how do we take the collective public dollar, leverage it as much as we can, and also make sure that it’s being deployed as efficiently as possible. I mean, I think it’s what Canadians expect, well, maybe not expect, hope, government would do. And we’ve got to find a way to having those conversations. It can be on as pragmatic a base as possible to make some progress. Otherwise, we really are not going to move against what are some very necessary objectives. I think the moment of time we’re in from – all of the stressors that we’re facing as a country, geopolitical, the rate of tech change, social change, climate, which we haven’t even talked about yet. Like even from a defense perspective, I mean, there is a real necessity to have a generational conversation about getting delivery right. And it’s actually less complex than we fear it is. And I think there are easy ways out of the gate, starting, you know … It’s going to sound very biased coming from me and maybe it is, but I actually believe getting funding local infrastructure right is going to start solving for a lot of things very quickly, including housing. Mary, I wanted to ground it really quickly in some examples of why this matters so much. I’ve got this bird’s eye view of things across the country that are waiting to go … You know, Saskatoon, a thousand homes ready to go waiting for a wastewater plant, you know, small towns, like go to Antigonish, right? 50 homes, amazing setting around a hospital, desperately needed in that community, they cannot fund a public road. Like that’s the obstacle, right? And so like, how do we start connecting these very place-based realities on the ground with the national ambition that we’re trying to achieve and make progress against, and that’s the link we need to figure out.

Mary W. Rowe You know, one of the little adages I use, and I’m going to ask staff to put into the chat the climate ready infrastructure service that CUI runs with government, because it’s doing exactly what you’re suggesting, Carole. It’s making money smaller. And this is one of challenges we have is that it’s often a very, it’s a very… Listen, it not … it’s a lot of dough, but the large entities are used to several zeros behind a check. And in fact, a community might need only a few zeros to actually make it happen. And how do we get the money through, active, quickly? Gordon, if… You know, those of us who’ve been at this for a little while, you know, housing used to not be talked about federally. It was always kicked aside that it was a provincial jurisdiction. It was not thought about. Then it became a crisis, and suddenly now the federal government is playing this catalytic role, we hope, and pulling its people along with it. Gordon, the piece that you’re mentioning about equitable economic development, but also a recognition that rural, that critical minerals, I think you said to me when I first called you, you said, “There’s not a piece of energy that can be developed in Canada that doesn’t touch rural.” So we are linked and we have a housing crisis in rural Canada too.

Gordon More Absolutely. And also just a little bit … I’m originally from Vancouver, and my wife’s a doctor. We left Vancouver because Vancouver has failed on two fronts, housing and roads and travels. It no longer provided us a cost of living and a way of life that we wanted. So we moved to rural. So there’s a problem with that. But yeah, I know with rural, it is quite a problem. So if you are trying to get health care to rural … How do you bring in housing such that you can have doctors and nurses show up and stay there and it’s a quality that they want? Right now, when we first moved here, we had to rent a condo, which we thought was funny. We moved from Vancouver to rural, but the only spot that was available to us was a condo. But the other thing is a lot of these infrastructure projects that the Liberal government are pointing to, to your point, are going to happen in rural … And I saw some questions regarding data centers as well. Data centers they’re going to be built in rural mainly because almost all data center failures is because of the grid fail so you’re going put your data center besides your energy source so guess what’s going to happen in rural right? And then that brings up a conversation about water – well you know on the prairies water is so important to our agriculture industry and they are going through different scarcity spots of where water is falling. Then there’s the whole climate change thing. So, for example, like Saskatchewan, we have no choice right now. If you look at where the technology readiness levels are at, we have to continue on with coal. Yeah, the carbon industrial tax still hasn’t exempted our utility from that. And so that is our biggest expenditure, you know, is through our electricity. Well bring that down to municipal level. Your cost of power is higher. But the other side of the coin is we do have a pathway forward and that’s through nuclear. And again, this affects my community because we’re going to get two nuclears. Ontario, I’m sorry to be a Western guy, but it’s true…

Mary W. Rowe I know, don’t apologize for God’s sake, of course …

Gordon More Ontario just got all this money to build nuclear power. Great, hi, my hand’s up. Can you help us out? That’s the chosen pathway of our provincial government considering we don’t have hydro, right? And we want to get cleaner because that will bring in more investment. But yeah, help us out here. So lots of things to talk about.

Carole Saab Mary, can I pick up a point on …

Mary W. Rowe Yeah, and then Carolyn’s trying to get in. Go ahead Carole. Okay, don’t be shy. Get your elbows sharp here okay, because you got to fight these folks …

Carole Saab Well, and I think I might be teaming up Sean, so let’s … Carolyn, you go in before Sean hits the ball from my team. The question about rural, like, you know, our rural members and, you know heavy, you, know, I sit with rural communities from across the country. And I think it makes the exact point. What our rural members are talking about is trade. They’re talking about energy corridors. They’re talking about critical minerals and like the infrastructure that needs to enable that. They’re talk about how to move energy across this country, right? And so like to have a conversation absent the context of enabling the rural communities in which all of these essential nation building conversations sit is really short-sighted. And so I just, I needed to come in here because I think there’s a tendency when we talk about rural Canada to think about you know, these are communities that are struggling to survive and they’re talking about small projects and they are talking about this. It’s like, no, no they’re not. They’re talking about how we make advancements in trade. What’s going to happen to the canola industry? They’re taking about the energy sector. You know, this is the conversation about rural Canada and it’s the energy that we need to harness to get it right.

Carolyn Whitzman I’m going to jump in with my elbows here.

Mary W. Rowe Don’t be shy, go ahead Carolyn.

Carolyn Whitzman I think I want to introduce two phrases that are really important to the conversation we’re having. One is regionalism, and I mean that in a very straightforward sense. I just came from a really inspiring workshop with the region of Muskoka, north of Toronto, where folks are struggling to have a home to live in the face of other folks’ second and third homes. But what is exciting about Muskoka is that they really are thinking about a region, they’re thinking about a portfolio of government land in Huntsville and Bracebridge and Gravenhurst et cetera, et cetera. And taken as a whole, the region of Muskoka has a greater population than PEI or all of the territories, but when we’re talking about rapid housing initiatives or we’re talking about infrastructure projects we don’t talk about the importance of having regions sort things out. And I think that’s going to become increasingly popular or increasingly important, I should say.

Mary W. Rowe And Carolyn, just to clarify, that can be done without government. It doesn’t have to be formalized in regional government. It can be done.

Carolyn Whitzman It can be done entirely through partnerships and I really want … and you know we’re talking about portfolio approach that’s great, but that is a … well Don Iveson frequent friend of the program, talks a lot about that and I think it’s really important to have a regional approach. The other phrase I wanted to introduce into the conversation is “spending power” and that’s the power of the federal government that gets the most tax dollars. It has been able, I mean, it’s a mixed legacy with the Canada Health Act to go, here’s some minimum standards, here is funding conditional on … One of the things when we’re talking about housing, and I think it’s coming up a bit in the chat, is absolutely great to have ambitious and necessary building plans. In the meantime, we’re putting water in a bathtub that doesn’t have a plug in it yet. And when you’re talking about preventing homelessness, the provinces and territories are not doing a great job at all, whether it’s social assistance or renter protection or health and social supports. There needs to be really good bilateral agreements as part of this infrastructure, as part of these targets, which, as I say, I don’t see in the budget in relation to housing. And if provinces and territories aren’t doing it, then the transfers need to be directly to municipalities and regions to get the job done.

Sean Speer Yeah, for what it’s worth, I’m afraid I disagree, and in fact that is why I think the real solution here is to solve for the arrangement of fiscal federalism more fundamentally. If people don’t like provincial policy, then we have mechanisms for people to challenge provincial policy. They’re called elections. And so I’m afraid, there’s a lot of things provincial governments don’t do, or do, that I don’t’ like. It seems to me that there’s a great tension with our system of federalism that instead of trying to address those issues, we go over them and use the federal spending power to effectively engineer our own political preferences. So now the way to solve for that, of course, as I say, is to address more fundamentally the system of fiscal federalism such that provinces or municipalities have the resources to do what they want and people can then advocate for change at their respective order of government. But in the meantime, the notion that Ottawa is in a place to make judgments about the right policies for different parts of the country, given regionalism and given the extent to which we have different political preferences and values and so on it across different regions in the country or different parts our country, yeah, I’m afraid I disagree with that

Mary W. Rowe Sean, what happens though, if you have a bucket of dough and you create some conditionality around that? So for instance, if we take density and as-of-right zoning, which was the hot button for a lot of urbanists over the last several years, there have been efforts to make the federal funding conditional to be able to pave the way so that a municipal government or a municipal council won’t be able refute it because the staff, who know what the right thing to do is, can say to their councils, if you turn this density proposal down, we will not receive federal funding. You can see the chat is blowing up. Good. That’s the trade-off, right? Just a … a frequent visitor to CityTalk is our colleague, Bruce Katz, in the U.S., and Bruce is saying that the Trump administration is basically spurring on the largest de-federalizing, de-centralizing of resources in the US history, because local governments and states are having to just hunker down and do what they want to do. And I’m interested if you think that there is a workaround. Or do we have to actually push the conversation that you’re suggesting we should?

Sean Speer For what it’s worth, I recognize that my voice here is probably a minority one.

Mary W. Rowe Oh, no, there’s lots of people on the chat who are coming in supporting you.

Sean Speer Yeah, I have apprehensions about using the federal spending power to essentially nationalize areas of policy that are constitutionally devolved to different orders of government. And so I recognize it happens. I recognize all governments do it. I was part of the Harper government. We did it, too. So this is not a partisan critique, it is more of a philosophical one about how we carry out our system of federalism. I would much prefer one that you would characterize as watertight compartments, but then making sure that the different order of governments have the resources that they need to carry out their responsibilities in a way that reflects the preferences and values and priorities of their respective jurisdictions.

Carolyn Whitzman And I’m just going to jump in with the other perspective because I got to get it out there. There aren’t 13 different versions of what universal human rights are. So starting November 17th, Ideas is running the Massey lectures, Alex Neve, I had the privilege of being at his last Massey lecture. But we have the right to housing and we have federal legislation about the right to housing, and we cannot use federalism, especially given that housing isn’t even mentioned in the BNA Act. It’s just, you know, kind of, nobody knows in terms of constitutionalism. Federalism can’t be a barrier to the right to housing, and whether it’s encampments or whether it is tenant protections.

Mary W. Rowe But is it working? Is it working in your favour, Carolyn?

Carolyn Whitzman I’m not quite sure what you’re asking there, but there is…

Mary W. Rowe When you say it can’t be a barrier, is it actually advancing it?

Carolyn Whitzman I think when you look at countries, including let’s say France, which has three tiers of government, that’s been successful in reducing homelessness and housing need, you see the federal government coming in with some really clear directions for regions and municipalities. Let’s put it that way

Carole Saab I think part of the, again, like coming in as pragmatically as possible in this element, like I think we have to solve for … If then, you know, in the system of federalism, obviously different orders of government are responsible for different things, how do you solve for an order of government that is chronically, you know, abandoning its area of responsibility in a certain section and one that is critical to advancing national objectives, right? Certainly I take the point on … there are elections to solve for that, but it’s a lot to … and that’s true, right? And I think it’s easy to sort of … it’s a lot to ask of Canadians to understand where the money is being held up necessarily in each of these solutions, right. And I, I think we have to do both things. We have to advance a conversation about modernizing the system of fiscal federalism, which could not have foreseen the challenges and realities that we are experiencing now collectively across orders of government, and we have to figure out a way to get past some of these obstacles, you know, we’ve just lived this … and a great example, the safe restart agreements in the pandemic, right? You know money was transferred over for very acute reasons and not spent that way, right by provincial and territorial governments – broadly speaking. And so there is, there is inevitably a challenge, right? You can build all the houses you want that are deeply affordable without wraparound supports, we’re not going to be able to move the needle.

Mary W. Rowe So that’s a perfect example … where you create the units and then the province doesn’t necessarily come through. Can I just change the tact slightly and Gordon I’m going to come to you first. One of the things that this budget is laying out and it’s a departure, new, is a significant investment in defense and I’m interested what people’s perspective is on how that investment stream can be used in a way to improve the quality of life and the quality of the built environment in places and in cities. Have you given some thought to that, Gordon? I’m assuming you’re …

Gordon More Absolutely. I’m going to come out at a different angle because through the chat, I think that from now on we need to include AI and data centers within that conversation. A good example is – I was on a panel discussion with the Canadian Nuclear Association West Conference last week and I brought up the fact that we’re going to be using AI to make things more productive, including say, nuclear power plants, hydroelectric plants, all the supply chain for all that. And if we continue on the path that we are currently on – the data centers and the data that’s going to power that, will be stored in the United States. The United States does not have a federal law protecting your data. Imagine now it’s 10 years or Donald Trump is in power and making the 51st state comment and all our power grid, all that power system, is all being run by an AI, run in the United States, we’re in trouble. So, the 700 million that they allocated last year for data centers … um, great ,,, and now they’re saying it’s going to be 900, they added 120, it’s not enough. And why does that matter to rural? Why does that matter to the municipal conversation? Again, these data centers are going to be built in rural communities, most likely even when they’re on the east coast or the west coast, where there’s hydro. But the other part is this is an opportunity to solve the digital divide. Carole mentioned about how Western Canada, rural, we’re all about trade corridors. We are 100% all about trading corridors. We’re all about trade. Here’s an example – we’re going to get the nuclear power plants. This is just an example, SASK-Poly announced in Saskatoon two weeks ago, they’re going to do all the nuclear training. My community, when they come in and talk about the nuclear power plant, they say, please don’t have the red plates build it. Alberta. What that context is, is because we have such a rural digital divide in education, the rural communities, the people, I’m worried that the people that are unemployed now are still going to be unemployed. When we have all this new infrastructure here. And again, what does that mean to municipal? You can imagine. So you can see where I’m coming from – these big pictures and bringing it down. Yeah, we want trade, but we want to be in the trade. Another part on this conversation, you guys were talking about, policy. So right now we have the federal government and the provincial government having a discussion and debate about the clean electricity bill, right? That they’re forcing so much onto Saskatchewan without stopping and thinking – What did that mean to a municipal level? My town, Estevan, could be a ghost town because people who are in Ottawa have never visited us, didn’t understand – what does that actually mean to the municipal level when you make these decisions. And we’re coming up with our own solutions, like we’re doing coal to graphite, coal to hydrogen, all this stuff. So anyways, that was a whole …

Mary W. Rowe I’m just going to step in. We’ve only got a few minutes left and I can appreciate we’re kind of just scratching the surface. This is often what happens with CityTalk is it’s not the end of a conversation. It’s just the beginning. People in the chat saying, hey, I don’t really want to talk about fiscal federalism. I want to know whether or not we’re building housing for kids. Okay, fair enough. That’s the yin and yang of our life, everybody. We have to work at the ground and we have to look at the 30,000 feet as well. Just – as we think about the next six months, I mean, assuming the budget gets passed, who knows? But assuming it does, assuming this government pursues this set of priorities, what is your call to the assembled multitude here about what we need to double down on and focus on? You first, Carolyn.

Carolyn Whitzman Look, someone in the chat said, quite rightly, we shouldn’t be using France as an example of anything right now. But what I will say about France is whether it’s a right-wing government, a left-wing government or complete chaos, it has the same targets and it has same financing system and it has the same industrial approach to housing. That’s what I want to see. Whoever is in power, the damn thing gets built. So

I think that we’re on the right path and I can’t iterate enough that we need a few more zeros at the end of some of those numbers in order to make that path happen.

Mary W. Rowe Carole, what should we be focusing on next four or five months?

Carole Saab Yeah I mean I think as a country we really need to focus on making sure we are good at the core competencies. You know when you think about the world of risk that we are sitting in from all different flanks of stressors on the country, making sure that we can do the fundamental things and deliver them well, as efficiently as possible, and as quickly as possible, has got to be a core priority, unfortunately for lots of folks for whom this conversation is uncomfortable, it means challenging some of the fundamental assumptions about fiscal federalism. And so this is the conversation we need to have. How do we get good at what we need to deliver and we need do that fast.

Mary W. Rowe So the delivery piece is really critical. How do you deliver money? And they have created Build Canada Homes and they have a created a strong, what is it? Build Communities, strong communities. They’ve put some buckets in the, what’s that expression? They’ve created some buckets. They got some things in the window. Anyway, they are trying- Now we need to fill them. Now we to fill them, where’s the money? Gordon and then Sean, last word to you. Go ahead, Gordon.

Gordon More I agree with the zeros, more zeros, but at the same time, like our deficit’s pretty big and I’m tired of paying so many taxes. I miss the days when we had surplus. So I would say how you implement it is the next step. So like come out, talk to people in all these different groups. I know I’m a broken record, I am sorry, but remember to bring in the rural voice because that’s where you’re going to be successful.

Mary W. Rowe The interdependency and the regional collaboration that you’ve all been speaking of, we’ve got to get serious about that. I always worry we can’t just wait. We can’t wait for someone to do that. We’ve got to actually initiate that ourselves. Last word to you, Sean.

Sean Speer I would say that the people in this room have a multiplier effect in terms of bringing to bear these issues and challenges to the world of public policy, but also to Canadians themselves. My message would be twofold. First of all, deliver, deliver, deliver, head down, focus on delivering on the budget, as Carolyn and others have said. But then secondly… Trying to create the room or the space for that bigger conversation so that we’re not having the same ones uh… Five or ten years from now where Carolyn or members are coming to Ottawa trying to persuade the government to give them incremental dollars … that’s not how a proud and important part of our system of federalism should have to be able to finance the basic responsibilities they’re responsible for delivering on behalf of their residents and citizens

Mary W. Rowe Here, here. Thank you, Sean. Just a reminder, when he said “come to Ottawa”, come to Ottawa, folks. We’ve got the CUI Summit On The State Of Canada’s Cities and Places – December 3, 4, we’ll be in Carole’s town for that. And also we’ve got other podcasts that have just dropped – one on the Downtown East Side, one with the mayor of Barrie about encampments, very complex set of issues, and we’ll continue to create programming like that. Thanks for joining us on CityTalk. Welcome to Gordon and Sean. It won’t be your last visit, just saying. And happy always to see Carole and Carolyn back with us to start to just have the beginning of a conversation about what moment are we in with the federal budget at two days old. Thanks for joining us, everybody.