1. CANADA - BC - UBCM AGREEMENT IN PRINCIPLE Transfer of Federal Gas Tax Revenues New Deal for Cities and Communities

2. Agreement in Principle  To be signed today  Tripartite: Canada, BC and UBCM  Largest ever Agreement in Principle (AIP) to involve local government  First gas tax agreement in Canada

3. AIP is not a Final Agreement  Needed time for federal government to get Cabinet/Treasury Board approvals  New federal budget approvals to flow funds

4. OVERVIEW OF THE AGREEMENT IN PRINCIPLE

5. Contents of the AIP  13 Parts plus Preamble and Principles  5 Appendices

6. Parts of the AIP  Preamble  Principles 1. Interpretation 2. Purpose 3. Areas of Further Collaboration 4. Gas Tax Purposes/Outcomes 5. Commitments of Parties 6. Contribution Provision

7. Parts of the AIP continued 7. Allocation to Local Governments, Delivery Mechanism and Use of Funds 8. Governance 9. Reporting, Audits and Evaluation 10. Dispute Avoidance and Resolution 11. Communications 12. Amendments to the Agreement 13. Review and Renewal

8. Appendices of the AIP  Schedule A: Eligible Investment Categories and Subcategories by Community Tier  Schedule B: Eligible Costs  Schedule C: BC Allocation Formula, Delivery Mechanism and Accountability Framework  Schedule D: Reporting and Audits  Schedule E: Communications Protocol

9. Parties  Canada, British Columbia, UBCM  UBCM is a party and a major part of this agreement  This is a first

10. Funds and Flow of Funds Two complementary Component Programs and a Special Priorities Fund: Community Works Fund  allocated based on % of per capita share  Disbursed directly to LGs for their priorities  Funding floor starts at $25,000 Strategic Priorities Fund  Pooled fund from per capita calculation  Tier 1 - 25% pooled  Tier 2 - 50% pooled  Tier 3 (GVRD) - up to 100% pooled

11. Confirms the Annual BC Allocations Fiscal yearCanada’s Contribution 2005-2006$76.3 million 2006-2007$76.3 million 2007-2008$101.7 million 2008-2009$127.1 million 2009-2010$254.2 million TOTAL$635.6 million

12. Funds will flow to UBCM from Federal Government  Not to BC first and then to local government  This is a major change  $635.6 million could flow to UBCM over the next five years

13. Delivery Mechanisms New Deal Funding Entitlement/Strategic Priority $ / $$$ GVRD $$ / $$ East Coast Vancouver Island Okanagan $$$ / $ All Other Areas Per Capita Allocation to i.e. Local / Regional funds

14. Governance  Parties  Partnership Committee  Management Committee (UBCM Chairs)

15. Eligible Investments Tier 1 - All areas of BC except those in Tier 2 and Tier 3:  Public Transit, Community Energy Systems, Water and Wastewater, Solid Waste Management, Capacity Building Tier 2 - RDOS, CORD, NORD, Capital RD, CVRD, RDN, FVRD, SLRD:  Same as above list with more limited subcategories Tier 3 - GVRD  Public Transit, Water and Waste Water Systems

16. Eligible Costs  Capital cost of acquiring, constructing or renovating a capital asset  Fees paid to professionals, contractors, etc.  Costs related to:  environmental assessments, monitoring and follow-up programs required by legislation  public announcements  development of integrated sustainability plans  LG employees or equipment under conditions  Capacity building activities related to sustainability planning

17. Other Important Features of AIP  “Most favoured province” clause:  Where Canada concludes a New Deal agreement elsewhere and taken as a whole it is materially different from our Agreement, BC can require to Canada to amend this agreement to provide similar treatment to BC

18. Questions and Answers