How Municipalities Got The Federal Gas Tax Fund

Municipal Affairs
Apr 20
2 min read

For communities across Canada, reliable infrastructure isn’t just a priority—it’s essential.

And for more than two decades, one federal program has quietly helped make that possible.

The federal Gas Tax Fund—now known as the Canada Community-Building Fund—delivers over $2 billion every year to more than 3,600 municipalities, supporting roughly 4,000 infrastructure projects annually. From public transit and roads to clean water and community spaces, it provides predictable, long-term funding that communities can count on.

What makes this fund unique is its flexibility. Municipalities can pool, bank, and even borrow against it—empowering local governments to plan ahead and invest in the priorities that matter most to their residents.

Originally launched in 2005 as a five-year, $5 billion initiative, the program has since grown into a permanent and indexed funding stream, delivering more than $26 billion between 2014 and 2024 alone. It’s become the backbone of federal infrastructure support for communities of all sizes.

But how did it all begin?

How did a task force under former Prime Minister Jean Chrétien evolve into one of the most impactful municipal funding models in the country? And how did municipalities secure a program they now describe as a turning point in how the federal government engages with the local level?

With just over a month until delegates gather in Edmonton for the Federation of Canadian Municipalities Annual Conference, we’re taking a closer look at the origins of this transformative fund—and the people behind it.

To help answer those questions, we’re honoured to welcome someone who played a pivotal role in its creation: the Honourable Judy Sgro.

Earlier in her career, as Chair of the Prime Minister’s Task Force on Urban Issues, she helped shape the policy that led to the national gas tax rebate—laying the groundwork for what would become today’s Community-Building Fund.

Before entering federal politics in 1999, she served on the first amalgamated council of Toronto, and previously as a councillor for the City of North York and at the metropolitan level—bringing decades of municipal experience to the national stage.

Today, we sit down with her to explore how it all came together—and what it means for the future of communities across Canada. ------

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