Roger Melanson applauds new infrastructure cash in federal budget

The Trudeau government's decision to spend billions on infrastructure projects will help rev up New Brunswick's stalled economy, according to Finance Minister Roger Melanson.

The federal budget has earmarked $12 billion in the next five years on so-called "shovel-ready" projects. The additional infrastructure cash is intended to put Canadians to work, according to the federal government.

• Families, low-income seniors big winners in federal budget 
• Federal budget 2016: Highlights of Bill Morneau's first budget 
• Ottawa forecasts $29.4B deficit — with lots more red ink to come

Finance Minister Roger Melanson said on Wednesday that he believes the federal government has come up with a strategy that will help put more New Brunswickers back to work.

"The Justin Trudeau government recognized that the Canadian economy and certainly the New Brunswick economy needed to get some investment, it needed some investment to see growth," he said on Information Morning Fredericton.

"The Canadian economy is going through some challenges and certainly in New Brunswick, the same thing."

New Brunswick's economy is continuing to lose jobs and in February the province's unemployment rate ticked up to 9.9 per cent.

The federal funding will go toward projects, such as public transit, affordable housing, water and wastewater management, climate change mitigation technology and other projects.

Information Morning - Fredericton15:15Finance Minister: Roger Melanson

Finance Minister Roger Melanson assessing the impact of the federal budget here in the province.Under previous agreements, these projects would be cost shared between the federal, provincial and municipal governments with each level paying one-third of the total cost.

Now, Melanson said the federal government will cover 50 per cent of the total bill, with the other levels picking up the remaining share.

"By changing the funding formula for some of these projects by the federal government, it is going to help us to do more projects and more work because most of the costs will be covered by the federal government," Melanson said.

When federal Infrastructure Minister Amarjeet Sohi was in Saint Andrews earlier this year for a cabinet meeting, he said many municipalities were facing a "capacity gap." The gap would mean, even if Ottawa set aside more infrastructure funding, the municipalities wouldn't have enough money to pay their share so the projects would not move forward.

Even with the new rules, it is too early to say how much more federal infrastructure money will be flowing into New Brunswick, Melanson said.

But the provincial government is ready for the extra money. The finance minister said he set aside between $100 million and $150 million over the next three years in his budget to spend on infrastructure projects.

Before projects can be approved, municipalities send a business plan to the provincial government and once they are evaluated, the province decides what options to send to Ottawa.

Economy needs money spent quickly

Melanson said the provincial government would like to see money spent swiftly on traditional infrastructure projects, as well as social housing projects.

"We need to see projects that are shovel ready, we can see some concrete work [happening] quickly because the economy needs it," he said.

"When it comes to more significant projects, we will work with federal government and municipalities to see how we can get these dollars in the province."

The federal government's commitment to pump billions into the economy in the hopes of stimulating the economy is causing significant pressure on the deficit.

The Liberals had campaigned in the 2015 federal election on keeping the budget deficit to $10 billion. But Finance Minister Bill Morneau announced on Wednesday that figure would balloon to $29.4 billion.

In New Brunswick, Melanson said he believes those investments will pay off over the long term.

"When the economy struggles or it has got challenges, the government has got a role to play," Melanson said.

"There is going to be investments in the Canadian economy and New Brunswick is going to have some benefits out of it."