The boost would bring federal funding to $5.75 billion annually, an amount the Federation of Canadian Municipalities said should be matched by the province and municipalities themselves to provide $13.25 billion a year for municipal infrastructure.
Of that, $1 billion from each level of government should be dedicated to fighting traffic gridlock that costs the Canadian economy $10 billion a year in lost productivity, the federation said at a news conference in Vancouver on Tuesday.
"It's time we started planning in decades, not just years," Karen Leibovici, federation president, told reporters. "That is the surest way to end the short-term thinking that allowed our infrastructure deficit to grow in the first place."
The current Building Canada fund ends in 2014, and Infrastructure Minister Denis Lebel is wrapping up six months of consultations with stakeholders across the country as the Conservative government works on a new plan.
Leibovici lauded the Conservatives for changes they've made to municipal funding in the past six years, including making the federal Gas Tax Fund a permanent fixture in the municipal funding mix.
The federation called on the government to tie the Gas Tax Fund to a cost-of-living index, and create a new Core Economic Infrastructure Fund, in addition to continuing the Building Canada Fund.
A 20-year plan would give cities the stability to plan for repairs and replacement of crumbling infrastructure built half a century ago, officials said.
"We had decades of falling behind on this, where it was not a priority of successive governments and that's why we're behind the eight-ball now. Now we've got infrastructure that's falling apart, now we've got congestion that's totally unacceptable and undermining our economy," Vancouver Mayor Gregor Robertson told reporters.
The federation pointed out that municipal governments collect just eight cents out of every tax dollar but are responsible for 60 per cent of public infrastructure, which includes everything from public transit, to roads and sewage systems.
In addition to the aging state of infrastructure, there are more extreme weather events putting pressure on those systems, the federation said.
For 30 years, both the federal and provincial governments have been offloading responsibility for infrastructure to cities without the necessary funds, said Adrien Byrne, of the Vancouver-based Urban Development Institute, which represents the development industry.
"The issue for municipalities is they can only raise property taxes so much to pay for new growth," Byrne said.
"The federal and provincial governments need to take greater interest in the growth and infrastructure of our major cities across Canada, and find a way to finance that infrastructure that just doesn't fall to new development and municipalities, given that municipalities are already stretched and the development industry pays its fair share already."
In fact, Canada needs an overall National Housing and Infrastructure Strategy, Byrne said.
Municipal leaders said they remain hopeful, despite Finance Minister Jim Flaherty's announcement Tuesday that Canada's deficit this year will reach $26 billion — $5 billion more than projected.
"We've seen a promising sign from this federal government over the last couple of years realizing that investment in cities and communities ... will drive economic growth. It's been one of the strategies to keep Canada ahead of other countries," Robertson said.
The federal infrastructure minister was not available for an interview. A spokeswoman said the federation recommendations will be considered along with input received in consultations across the country.
"Our new plan will recognize the need for investments in infrastructure while ensuring affordability and respecting taxpayers’ ability to pay," Geneviève Sicard said in an email.