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90 Municipalities Eligible For Low-Cost, Longer Term Loans; List of
Eligible Projects To Be Expanded For Second Round of Program
TORONTO, Aug. 20 /CNW/ - The McGuinty government is helping
90 municipalities renew Ontario's neglected public infrastructure by giving
them low-cost loans, Ontario Minister of Finance Greg Sorbara and Public
Infrastructure Renewal Minister David Caplan announced today.
"The loans we're announcing today will help improve life in communities
all over Ontario," said Sorbara. "This first round of loans will help create
strong communities by financing the renewal of clean water infrastructure,
sewage treatment facilities, municipal roads and bridges, public transit and
waste management facilities."
Up to $965 million in low-cost, longer term loans will be provided by the
Ontario Strategic Infrastructure Financing Authority (OSIFA), announced in the
2004 Ontario Budget to finance investments in critical public infrastructure.
OSIFA will raise the money for these loans by selling Infrastructure Renewal
Bonds. The first issue of Infrastructure Renewal Bonds will be available later
this year. The government also announced that the next round of OSIFA loan
applications will include renewal of municipal social housing and municipal
long-term care facilities, in addition to the priority areas of the first
round.
"OSIFA is one of several public infrastructure investment tools that
we've highlighted in our new Infrastructure Planning, Financing and
Procurement Framework," said Caplan. "These loans show that we are meeting our
commitment to work cooperatively with municipalities to help them improve the
delivery of public services through infrastructure renewal."
Years of neglect have left much of Ontario's infrastructure in a state of
decline. OSIFA's low-cost, longer term financing approach is part of the
government's evolving 10-year strategy to restore Ontario's public
infrastructure and ensure future economic prosperity.
"There is a long way to go to make infrastructure renewal affordable and
sustainable" said Ann Mulvale, President of the Association of Municipalities
of Ontario. "This loan program that the province is facilitating, is a good
start."
In the 2004 Budget, Sorbara invited the federal government to participate
in OSIFA. "Once again, we invite the federal government to affirm its
commitment to infrastructure renewal by joining Ontario in this important
initiative."
"OSIFA is an important tool that will help build the foundation for a new
generation of economic growth in Ontario," said Public Infrastructure Renewal
Minister Caplan. "OSIFA may be just the tool to help with investment and
financing for municipal water and wastewater systems, once our expert panel
provides its advice on how to best manage them. It's all part of building
strong communities and a prosperous economy."
Backgrounder
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ONTARIO STRATEGIC INFRASTRUCTURE FINANCING AUTHORITY
In the 2004 Ontario Budget, the government established the Ontario
Strategic Infrastructure Financing Authority (OSIFA) as an innovative
financing tool that can be used by municipalities to renew and build critical
public infrastructure assets. OSIFA also provides the federal government with
an opportunity to partner with Ontario in renewing critical public
infrastructure.
Renewing Ontario's public infrastructure improves the quality of public
services and helps build a strong and prosperous economy. OSIFA's low-cost,
longer term loans will provide municipalities with much needed access to debt
financing under better conditions.
OSIFA Infrastructure Renewal Loan Program
OSIFA's infrastructure renewal loan program provides low-cost, longer
term financing to meet critical municipal infrastructure priorities. OSIFA is
based on a proven "pooled financing" concept that combines the infrastructure
investment needs of many borrowers into one borrowing pool.
OSIFA provides access to infrastructure capital that would not otherwise
be available to smaller borrowers. Larger borrowers receive a longer term on
their loans than they could obtain in the financial markets, and can also
benefit from significant savings on transaction costs such as legal costs and
underwriting commissions. Under the OSIFA approach, all borrowers receive the
same low interest rate. OSIFA will enter into a financing agreement with each
municipality subject to technical and credit reviews, for a loan up to the
maximum amount of the loan request.
OSIFA is one of several sources of infrastructure investment tools
available to municipalities. Others include traditional capital allocations
from the Ontario budget, federal/provincial/municipal cost sharing programs,
public and private sector partnerships as well as local user fees. OSIFA's
financing is a tool that can help municipal borrowers finance their share of a
capital project.
Municipalities are OSIFA's initial focus
Earlier this summer, municipalities began working with OSIFA staff to
complete their applications for OSIFA's 2004-05 infrastructure renewal loan
program. This first round of OSIFA's approved municipal infrastructure renewal
loans will help create strong, livable communities by financing the priority
areas of clean water infrastructure, sewage treatment facilities, municipal
roads and bridges, public transit and waste management facilities.
The government also announced that the next round of OSIFA loan
applications will include renewal of municipal social housing and municipal
long-term care facilities, in addition to the priority areas of the first
round.
All 445 incorporated Ontario municipalities are eligible to apply for an
OSIFA loan. Municipalities apply through an interactive, user-friendly online
application at www.osifa.on.ca.
Public Infrastructure Renewal and OSIFA
The Ministry of Public Infrastructure Renewal is developing a
comprehensive 10-year plan to deal with Ontario's public infrastructure
deficit and guide the development of public infrastructure in this province
for the next generation. Recently, this ministry introduced a new framework to
guide the way the government plans, finances, builds and manages new
infrastructure projects. The ministry also set up an expert panel to help
establish a long-term strategy that will ensure everyone in Ontario continues
to have access to clean, safe water at affordable rates. OSIFA will be an
important tool that will be available for government partners to address their
infrastructure needs.
Invitation to the Government of Canada to work with OSIFA
In the 2004 Ontario Budget the Minister of Finance invited the Government
of Canada to affirm its commitment to infrastructure renewal by joining
Ontario in this new initiative. OSIFA officials have had general discussions
with federal officials regarding the financing of infrastructure and
infrastructure renewal.
There are a number of ways that the federal government could participate
in OSIFA's public infrastructure financing. This could include funding an
interest rate subsidy on loans provided to public borrowers through OSIFA. The
Ontario Ministries of Finance and Public Infrastructure Renewal would work
with the Government of Canada to coordinate federal participation in the OSIFA
program.
Infrastructure Renewal Bonds
OSIFA will offer a financial instrument called Infrastructure Renewal
Bonds (IRBs) to institutional and individual investors. OSIFA will use the
proceeds from the sale of IRBs to fund its infrastructure renewal loan
program.
Everybody wins with IRBs. They will be attractive to large institutional
investors such as pension funds and insurance companies. These bonds will
offer an investment that is backed by the credit strength of municipal
borrowers. IRBs will also give local investors a new way to put their money to
work, earning a competitive rate of interest while improving life in
communities all over Ontario. The first issue of IRBs will take place later
this year.
Fact sheet
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COMMUNITIES APPROVED FOR LOW-COST, LONGER TERM LOANS FOR THE FIRST
ROUND OF OSIFA's 2004-05 INFRASTRUCTURE RENEWAL LOAN PROGRAM
The following communities have been approved for low-cost, longer term
loans aimed at improving clean water infrastructure, sewage treatment
facilities, municipal roads and bridges, public transit and waste management
infrastructure. OSIFA will enter into a financing agreement with each
municipality, subject to technical, legal and credit reviews, for a loan up to
the maximum amount of the loan request.
<<
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Community Benefiting Residents Maximum Loan
Approval Amount ($)
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NORTHERN
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Black River-Matheson 2,918 2,050,000
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Cobalt 1,218 289,811
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Hornepayne Township 1,265 1,873,521
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Ryerson 588 225,000
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Thessalon 1,326 750,000
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WESTERN
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Greenstone 5,216 3,055,000
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Haldimand 13,190 3,700,000
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Lambton Shores 10,565 4,300,000
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Northern Bruce Peninsula 3,436 2,155,753
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Saugeen Shores 11,095 11,817,000
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St. Clair 14,796 5,695,504
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Thames Centre 11,880 1,750,000
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CENTRAL
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Bradford-West Gwillimbury 23,000 28,500,000
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Dufferin 44,761 6,700,000
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Mulmur 2,774 448,889
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Muskoka District 159,078 19,834,000
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EASTERN
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Bancroft 3,571 300,000
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Deseronto 1,500 345,000
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Kingston 114,195 8,240,000
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Renfrew, Town of 7,942 1,200,000
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Smiths Falls 9,140 8,966,667
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South Dundas 10,159 15,000,000
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The following communities have applied and are eligible for a low-cost,
longer term loans pending the fulfillment of all legal requirements, technical
and credit reviews.
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NORTHERN WESTERN CENTRAL EASTERN
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Armstrong Adelaide-Metcalfe Barrie Addington
Highlands
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Blind River Amherstburg Clearview Brighton
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Central Central Elgin Essa Brockville
Manitoulin
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Chamberlain Centre City of Kawartha Lakes
Wellington Hamilton
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Chapleau Grey Highlands Hamilton Killaloe, Hagarty
Township and Richards
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Chisholm Huron-Kinloss Midland Lanark County
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Greater Sudbury Kingsville Mono Lanark Highlands
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Ignace Lakeshore Orangeville Loyalist
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Killarney Leamington Penetanguishene North Glengarry
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Kirkland Lake Meaford Ramara Port Hope
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Larder Lake North Perth Severn Township Quinte West
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Latchford Owen Sound Toronto The Nation
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Machin Oxford York-Georgina Whitewater
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Michipicoten Perth East York-King
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North Bay South Huron
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Shuniah Southwest
Township Middlesex
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Sioux Lookout Southwold
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Thunder Bay St. Marys
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Timmins Stratford
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White River Tecumseh
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The Blue Mountains
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The first round of OSIFA's 2004-05 infrastructure renewal loan program
focused on municipal priorities of clean water infrastructure, sewage
treatment facilities, municipal roads and bridges, public transit and waste
management infrastructure. The following outlines the percentage and estimated
dollar value of the first round of loan requests in each priority area.
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Priority Percentage of Total Total Value
Loan Program ($ millions)
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Clean Water Infrastructure 28% 270.8
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Sewage Treatment Facilities 33% 316.7
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Municipal Roads and Bridges 29% 279.7
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Public Transit 7% 64.2
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Waste Management Infrastructure 3% 33.6
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Disponible en français.
www.osifa.on.ca
>>
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For further information: John MacMillan, Ontario Strategic Infrastructure Financing Authority, (416) 212-6856; Diane Flanagan, Minister Sorbara's Office, Office: (416) 212-0634, Cell phone: (416) 697-0848; Jim McPeak, Ministry of Public Infrastructure Renewal, (416) 212-7499; Ross Parry, Minister Caplan's Office, (416) 325-1657
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