Provinces and municipalities now have an extra construction season in which to spend the remnants of a multibillion-dollar effort to stimulate the Canadian economy with new roads, sewers and hockey rinks.
Prime Minister Stephen Harper on Thursday extended the deadline for the work to be completed to Oct. 31, 2011. Acknowledging that about 10 per cent of the 23,000 infrastructure projects across the country will likely miss the original deadline of March 31, 2011, he said pulling back some of the $16-billion in promised federal funds simply wouldn't make sense.
"We remind ourselves of what our objective was," he said at an event in Mississauga to highlight the work created by the spending. "It was to bring forward the necessary investments to stabilize the Canadian economy at a difficult time. Therefore there is neither merit nor justice in requiring a rigid interpretation of the contracts."
The Prime Minister's announcement breaks from the government's repeated resistance to calls from provinces and the opposition for extra time. Just last month, Finance Minister Jim Flaherty argued against extending the deadline for projects that are well behind schedule.
"We don't want to be unfair to those who play by the rules, and most have played by the rules," Mr. Flaherty said on Nov. 23. The minister insisted on Thursday that the government's extension is consistent with his previous promise that Ottawa would be "flexible" on the deadline.
The new "one-time extension" will apply to all projects rather than on a case-by-case basis. To qualify, work must have begun on a project before March 31, 2011.
The news was welcomed by those who had been advocating additional time, including the Ontario government and opposition parties in Ottawa.
Liberal MP John McCallum, who had proposed a motion calling for a six-month extension, said the move should have come months earlier.
"We can't quarrel with the action, but we do quarrel with the timing," he said, adding that the rush to meet an artificial deadline forced millions in additional costs on municipalities.
Mr. Harper announced the extension just hours after a new report from Parliamentary Budget Officer Kevin Page predicted a quarter of all infrastructure projects will miss the original deadline.
Mr. Page's latest report came a day after releasing another report that concluded, based on a survey of those who manage infrastructure projects, that a $4-billion Infrastructure Stimulus Fund failed to create many jobs .
Mr. Harper rejected Mr. Page's conclusion that the spending was not successful.
"The various stakeholders, the Federation of Canadian Municipalities, construction associations, others whose views are purported to be represented by the report have made it very clear they do not agree with the conclusions of that report," he said. "So that report clearly lacks credibility."
Mr. McCallum, the Liberal infrastructure critic, called that "a ridiculous thing to say" given the PBO's track record.
"If you look at all of the budget forecasts of the past, Kevin Page has been right. This government has been wrong. And so this government is clearly embarrassed by that situation," he said. "The Prime Minister attacks anyone in the public service who doesn't agree with him or doesn't support what he says."