The legal framework of Canada's infrastructure fund

Towering buildings, long modern highways, and sprawling social spaces—none of these would be possible without infrastructure funds. Mainly funded by the Canadian government, there are a lot of programs that allow funding to proposed infrastructure projects. 

In this article, we’ll discuss these programs and the institutions that handle them. As best practice, consulting with an infrastructure lawyer on any aspect of these projects is crucial. 

What is a Canadian infrastructure fund? 

Most of the infrastructure projects in Canada are funded by the Housing, Infrastructure and Communities Canada (HICC; previously Infrastructure Canada). Other projects may also be backed by the Canada Infrastructure Bank (CIB) and other Canadian infrastructure funds of the federal government. 

Usually, provincial, territorial, or municipal governments, and other public and private sector entities seek these funds for their own infrastructure projects. While there are a lot of ways to access these Canadian infrastructure funds, eligibility for each fund is primarily based on different criteria. 

What are examples of infrastructure funds in Canada?  

Here are some examples of infrastructure funds in Canada: 

1. Investing in Canada Plan (IICP) 
2. Canada Community-Building Fund (CCBF) 
3. Canada Infrastructure Bank (CIB) 
4. Canada Public Transit Fund (CPTF) 
5. Clean Energy for Rural and Remote Communities (CERRC) 
6. Disaster Mitigation and Adaptation Fund (DMAF) 

These can either be the program created by the federal government or by institutions that fund infrastructure and construction projects in the country. However, some of these projects may be gutted once their funding has all been spent, when their deadlines come, or when the overall policy of the government shifts. New investment funds may also sprout from time to time. 

We’ll discuss these infrastructure funds below; you can also use the table of contents above to directly skip to a particular fund. 

Investing in Canada Plan (ICP) 

Through the ICP, the federal government provides infrastructure funds for eligible projects proposed by the provincial, territorial, or municipal governments. Projects to be funded may be for public transportation, communications, energy sources, and recreation spaces. 

As the country’s long-term infrastructure plan, the ICP will be releasing the amount of $187 billion in a span of 12 years, starting from when it was established in 2016. The ICP is primarily administered by the HICC. 

To know more about this infrastructure fund, watch this video: 

Consult the best infrastructure lawyers in Canada as ranked by Lexpert if you want to learn more about the other active investment funds. 

Investment streams under the ICP 

Under the ICP, there are five investment streams, which help the HICC determine which projects should be funded: 

• Public Transit: aside from building and modernizing the urban and rural transit networks, this stream aims to provide more transport options for Canadians, while also reducing carbon emissions and pollution 

• Green Infrastructure: contributes to Canada’s goal of transitioning into a green or low-carbon economy through a shift to renewable technologies, by establishing water, wastewater, and solid waste treatment infrastructure and other disaster mitigation and adaptation projects 

• Social Infrastructure: for affordable housing, early learning or childcare facilities, community infrastructure, recreational facilities, and cultural spaces that are appropriate and for the benefit of Indigenous Peoples and Aboriginals 

• Trade and Transportation: this investment stream focuses on developing infrastructure that support the freight movements within Canada, including projects that facilitate trade to or from the country’s international markets 

• Rural and Northern Communities: to create efficient and reliable energy sources, build community infrastructure, and establish improved connectivity among the rural and northern communities 

These investment streams manifest the view that new infrastructure projects, especially those government-funded, are part of the answer to the socioeconomic problems of the country. As these projects boom, there’s also the heightened need for infrastructure lawyers, especially when these projects come into some pitfalls. 

Projects under the ICP 

Through the ICP, proponents can ask the federal government to fund their own infrastructure programs. Eligible proponents under the ICP include:  

• municipal or regional governments 
• private sector bodies owned by the any level of the government 
• local Crown corporations 
• public or not-for-profit institutions (subject to certain conditions) 
• band councils (according to Section 2 of the Indian Act) 
• First Nation, Inuit, or Métis governments or authorities 

A portion of the total fund cost must be shouldered by the proposing government or institution. Other conditions also apply, which may increase the allocated funding from the federal government. 

Investing in Canada Infrastructure Program (ICIP) 

Part of the ICP is the infrastructure-specific program called the ICIP. Like the funding streams of the ICP, the ICIP delivers around $33 billion worth of infrastructure funds to the provinces and territories under these streams: 

• public transit 
• green infrastructure 
• community, cultural and recreational infrastructure 
• rural and northern communities 

To access the ICIP funds, provincial and territorial governments can enter into bilateral agreements with the federal government and the HICC. 

Canada Community-Building Fund (CCBF) 

In this infrastructure era, the government is looking at infrastructure to build up the economy and meet social goals of the country. One of these goals is to ensure that local communities have the essential infrastructures, for which the CCBF can be of great help. 

This infrastructure fund is among the many funds administered by the HICC. Previously called the Gas Tax Fund, the CCBF annually funds municipalities, through their provinces and territories, for their local infrastructure priorities. 

How the CCBF works 

One feature of CCBF is that municipalities can pool their resources into this fund, aside from being able to borrow from the fund. As a transfer-based program, this Canadian infrastructure fund prioritizes projects that: 

• contribute to Canada’s goal of reducing greenhouse gas emissions 

• provide cleaner water and air to local communities in these municipalities 

Because of the direct relationship between the project owners supported by the CCBF funding, they’re held accountable to report to the federal government. This responsibility includes assessing the benefits that were achieved by these projects’ implementation. 

Projects under the CCBF 

The CCBF continues to allocate infrastructure funds to the provinces and territories every year. At most, it releases almost $2.4 billion every year to fund different communities across the country. 

Communities from these municipalities can choose from the many project categories that the CCBF supports, such as: 

• community energy systems 
• drinking water 
• local roads and bridges 
• public transit 
• solid waste management 
• tourism 

Canada Infrastructure Bank (CIB) 

The CIB is a federal government-owned bank and is one of the sources of Canada’s infrastructure funds. The Bank was established through the enactment of the Canadian Infrastructure Bank Act (CIBA). This Act defines the Bank’s primary functions, governance structure, and powers. 

Aside from providing investment funds for infrastructure projects, it assists stakeholders through advisory, research, and data support on these projects. When asked, the CIB can also advise these stakeholders on the implementation and monitoring of their own projects. 

Here’s a video that highlights the infrastructure projects of the CIB in 2024: 

Bookmark our Special Edition on Infrastructure Law for the latest updates on this practice area, such as the existing infrastructure funds. 

Infrastructure Partnerships with the CIB 

Infrastructure Partnerships through public-private partnerships (PPPs) may be structured between parties in a construction or infrastructure project. These include possible investors, the CIB, the interested governments (municipal, territorial, or provincial), and local communities.  

Infrastructure Partnerships under the CIB focus on these five sectors:  

• green infrastructure  
• clean power  
• public transit  
• trade and transportation  
• broadband infrastructure  

Each project undergoes the CIB’s review and assessment process, which continues until the project’s lifecycle through their several project parameters. 

Canada Public Transit Fund (CPTF) 

Announced in 2024, the CPTF is an infrastructure fund specifically for public transit and active transportation infrastructure projects. This fund is still administered by the HICC, which will annually fund around $3 billion worth of projects, starting 2026 until 2027. 

Eligible applicants can use any of these three streams from which these funds are delivered: 

• Metro-Region Agreements (MRA) 
• Baseline Funding 
• Targeted Funding 

While the Baseline Funding stream is now closed, the HICC still accepts applications for the MRA and the Targeted Funding streams. 

Participating organizations that seek to develop and maintain public transit infrastructures can apply through the MRA by submitting an Integrated Regional Plan. They must also apply alongside their provincial government.  

On the other hand, the Targeted Funding stream have three funding programs: 

• Rural Transit Solutions Fund 
• Zero Emission Transit Fund 
• Active Transportation Fund 

All levels of the government (except the federal government), not-for-profit organizations, and Indigenous corporations can all apply for the Targeted Funding stream. However, private sector entities are prohibited from applying. 

Clean Energy for Rural and Remote Communities (CERRC) 

As Canada invests more in clean energy technology and infrastructure, bodies that want to engage in such projects can find a lot of infrastructure funds. One of these funds is the CERRC, which is administered by the Natural Resources Canada (NRCan). 

The CERRC is a federal program that provides Indigenous, rural, and remote communities with appropriate funding for their proposed clean energy projects. These may include projects that are Indigenous-owned or led projects that can be related to any of the following:  

• establishing renewable energy sources 

• implementing capacity building programs for sustainable energy 

• other renewable energy initiatives from rural Indigenous communities 

While CERRC has no deadline for accepting applications, its approval is still subject to its available funds. Applicants can be Indigenous organizations, for-profit and not-for-profit organizations, and local governments. 

Disaster Mitigation and Adaptation Fund (DMAF) 

The DMAF is another infrastructure fund for structural and natural infrastructure projects proposed by Canadian provinces and territories. What differentiates this fund from the others is that it focuses on projects that increase the resilience of local communities against natural calamities or those that mitigate the risks brought by these disasters. 

Structural and natural infrastructure projects that may be funded under the DMAF include: 

• construction of new public infrastructure 

• modification or reinforcement of existing public infrastructure 

While the DMAF is scheduled to end in 2033, the HICC says that the application period for the DMAF intake is now closed. Projects that have been or will be approved through the DMAF must be completed by December 31, 2032. 

Infrastructure funds in Canada: building the country’s best 

As government policies and priorities evolve, so do the construction and infrastructure projects that come along for accomplishment. For these, funds from different sources and for various stakeholders can be used. In all stages of an infrastructure project, such as in securing the funds, the counsel of infrastructure lawyers is important—both to prevent and to address any disputes on these projects. 

If we miss out on a specific construction or infrastructure fund you’re looking for, reach out to the experts in these areas, such as the Lexpert-ranked best infrastructure law firms in Canada.