Who Pays for What: The Big Picture of Infrastructure Investment

Infrastructure is top of mind for many of us, and one of the greatest economic considerations for all Canadians today. Across the country, brand new infrastructure is needed, and we need to fix or replace aging infrastructure.  Funding growth and maintenance has become a chronic problem and a very expensive one.

Much of the cost of infrastructure is covered by our tax dollars, distributed by the federal, provincial and municipal governments.  Over time, the burden has fallen more and more on the city and tax payer’s shoulders.  Regina’s share of the capital investment has grown.  Over 5 years, City of Regina has $1 billion slotted for general and utility capital renewal and development which includes $750 million targeted to close the infrastructure gap.

In the 2019 City Budget the City budgeted $127 million for infrastructure to renew and maintain roads, bridges and facilities. This includes a $12 million investment in the Residential Roads Improvement Program through a dedicated 1% mill rate increase, a $17 million investment to renew and maintain Regina’s major streets, with an additional $1.5 million to enhance Victoria Avenue between Albert and Broad Streets, and $4.4 million in bridge renewal. View the 2019 General Budget Highlights here.

This is partly achieved by an increased tax rate to the residents which is to assist with the ongoing residential road renewal program and ensuring effective water and sewer systems. While the City has dedicated money and focus on maintaining infrastructure, the Developers and the building industry has taken on the lion’s share of the NEW growth expenses.

The City seeks ways to fund the constant investment we need for the construction and maintenance of our infrastructure. Although it’s an intricate puzzle, hard to unravel, it’s one we should all understand.  It’s our city, and we should all know what’s “under the hood”.

Who Foots the Bill?

It depends where you’re digging.

Outside a new residential area, cities invest in making the connection to existing infrastructure using off-site levies from Developers, grants and other funding sources.

Inside a community, Developers cover 100% of the cost of new growth. And where redevelopment takes place, it can be either the City or the Builder who pays for upgrades. This includes streets and sidewalks, local water, wastewater and sewer systems, phone and cable systems, streetlights, public spaces, recreation facilities, landscaping, fencing, etc.

Show Me The Money: Finding Funds to Keep Regina Livable.

There are only a few places that the City can turn to for revenue – property tax from residents and businesses, Developer levies and fees in new communities and developed communities, monthly utility payments from property owners, user fees, and federal and provincial government grants.  Which one covers what costs?

1. Levies and User Fees
   • Currently, Developers pay levies of $442,000 per hectare for Residential and Commercial greenfield development; and $147,333 per hectare for Industrial-zoned greenfield development to the City of Regina for all growth-related infrastructure expenses inside new communities; they also dedicate land for parks and utilities. View the City of Regina World of Servicing Agreement Fees video here and their Servicing Agreement Fees and Development Levy Policies here.
   • Builders/Developers pay to upgrade local infrastructure for redevelopment projects.
   • Regina residents pay user fees to supplement the cost of things like recreation centres, public transit, water and recycling.
2. Utilities Rates
   • We all pay monthly rates to cover the cost of utilities.
   • The cost of the delivery of electricity, water and sewer is completely covered by home and business owners.
   • Our monthly bills reflect both the fluctuating cost of electricity actually delivered to our homes as well as the local access fees.
3. Property Tax
   • Property tax is one of the main sources of City revenue. It pays for essential services and programs.
   • Part of our property taxes help Regina with operating expenses for infrastructure, including roads and parks.
4. Government Grants
   • Federal and provincial governments contribute to limited capital projects. The funds come from programs like the GST refund to cities, or the gas tax. However, when the Provincial or Federal Governments reduce their funding – like what appended in the 2017 Provincial Budget – it puts increased pressure on the City (and therefore, taxpayer) in order to maintain the same level of capital project development and services.