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“I’m pleased to see significant transit funding identified in today’s budget,” the mayor told reporters, crediting the investment on the FCM’s and big city mayors’ lobbying efforts over the last several years.

The city will officially apply for Phase 2 funding this summer, said Watson, to make it clear what Ottawa is looking for in terms of provincial and federal investments.

And there are a few reasons to believe that this new fund may work to Ottawa’s advantage.

First, the fund will favour projects that are financially structured as public-private partnerships, or P3s. The budget document describes the City of Edmonton’s decision to employ “a public-private partnership to design, build, finance, operate and maintain a 13.2-kilometre new light rail transit line over a 30-year contract” as innovative.

Sound familiar? Phase 1 of Ottawa’s LRT, which is currently under construction, almost exactly matches the Edmonton example glowingly referred to in the budget. There are certainly some cities in Canada that don’t want to go the P3 route – critics argue that taxpayers pay too much over time for the protection offered by private partners – but Ottawa is already a P3 proponent.

Although the details of the fund’s program parameters won’t be announced until later this year, there’s no reason to believe that Phase 2 won’t meet the requirements.

Secondly, the budget calls for eking out the funds over 20 or 30 years instead of paying in a few lump sums upfront. That could be cause for some concern. Would payments spread out over decades cause the city to have to borrow more upfront than planned? Would the investment decrease in value over the years due to inflation, or would the funds be indexed? It’s too early to know.