Province converts $176M Valley Line LRT loan from 2014 into a capital grant
The province’s move to forgive a $176-million loan for construction on the first phase of the southeast Valley Line LRT will help correct an “over-contribution” of municipal funds pledged for the project while allowing the city more flexibility in the LRT’s design down the line, Mayor Don Iveson says.
“This project went ahead ... on the basis of what I thought at the time was an over-contribution from municipal government, but it was a way of getting the project started, securing competitive pricing and taking advantage of federal funding that was available at the time,” Iveson told a news conference Friday at a construction site near 75 Street and Whitemud Drive.
“We took some risk to go ahead with this project,” Iveson said, “and today, this provincial government is assisting us with moving forward and restoring a funding balance on this project which I think is more equitable and more appropriate.”
Transportation and Infrastructure Minister Brian Mason, NDP MLA for Edmonton-Highlands-Norwood, announced the province would be converting a $176-million interest-free loan taken by the City of Edmonton to pay for part of the project in 2014 to a capital grant, effectively erasing that debt.
This brings the province’s total contribution to the project to $600 million.
“We’re doing it because I think it’s the right thing to do, and we’re doing it because we are able to thanks to our Climate Leadership Plan,” Mason said. “The $176 million for the Valley Line grant is a direct result of this plan and the carbon levy.”
Mason said he understands municipal budgets are limited to what property taxpayers can afford, with Iveson crediting this capital grant with, “lessening the burden on property taxpayers to build this transformative infrastructure.”
A more appropriate source of funding for these projects, Mason said, is the province’s carbon levy.
“It would be very difficult for the province in the current financial situation we find ourselves in, with lower royalty revenues and reduced taxes, to fund these projects without the carbon levy,” Mason said. “It is a stable, ongoing source of funding that is designed precisely for this kind of project.”
Iveson said the $176 million that would have had to be repaid to the province can now be rolled into the second phase of the Valley Line LRT project, allowing the city more flexibility to “build it right.”
For example, it could be used to elevate LRT lines over heavy volume intersections along the west extension, specifically at 178 Street and 87 Avenue or 149 Street and Stony Plain Road.
Mayor Don Iveson said Friday that, by forgiving a $176-million loan for LRT, the province has made the funding balance for the project more equitable.