FCM President Karen Leibovici told a news conference one in four wastewater plants need significant repairs while the situation for roads and highways was more dire.
"Investments in infrastructure over the last few years have helped, but without long-term action we are still headed for a crisis," she said.
The federation used input from more than 120 communities in which 60 percent of Canada's 34 million residents live.
Its summary said more than half of municipal roads are crumbling and one in four roads is over capacity, transporting far more people and goods than they were designed to handle.
"Without immediate improvement and ongoing maintenance, the cost of fixing or replacing the assets studied will explode over the next decade," the report said.
Last week, an entire car was swallowed by a sinkhole on an Ottawa highway, caused by a large, rotting sewer pipe beneath the road. In Toronto in recent weeks, large chunks of concrete have been falling from the elevated Gardiner Expressway while various elevated roads in and around Montreal have sent huge chunks of concrete and steel rebar crashing onto roads.