GREEN LINE NEEDS HELP

City council has grandiose plans of building the 46-kilometre Green Line LRT, but the cost of servicing the debt for its construction is giving politicians pause. Mayor Naheed Nenshi says the Green Line payments are “considerably larger than most people in the room imagined.”

The city — which snapped up an ongoing provincial government tax break in 2013 — has committed $52 million annually over 30 years to the project. There’s a discussion now about directing a further $23.7-million annual provincial tax break to the Green Line after council agreed this week to return it to Calgarians for just one year.

“The issue here has to do with the fact the city’s money is over 30 years. So the annual interest on that alone is in the tens of millions of dollars a year,” says the mayor.

One city report calculates interest payments on a $4.5-billion Green Line could amount to $1.6 billion over three decades.

It doesn’t reflect well on the city that politicians appear taken aback by the cost of the interest payments. Surely, such expenses must have been obvious when contemplating a megaproject. It should not have been a surprise that prompted one councillor to suggest the Green Line is in jeopardy, after Calgarians were told years ago that this is precisely how it would move forward.

Other councillors are talking about building the project in phases — a suggestion that would make a necessary expansion of our city’s transit system less viable.

Frankly, the city needs more financial assistance from senior levels of government. The project is too ambitious to be funded by chunks of money council finds left on the table. The federal government has promised $1.15 billion, plus a further $450 million — which mirrors the city’s portion — but it will be paid out over 11 years, raising the spectre of more onerous interest payments.

The Rachel Notley government is the only partner that has failed to commit to the project. There’s a strong precedent for the NDP making a fulsome contribution. The previous Tory administration invested $1.3 billion into the Calgary West LRT, which was 95 per cent of the total cost of the line.

Given the condition of today’s public finances, it’s a certainty that much of the cost of the Green Line will be borrowed, whether it’s at the civic, provincial or federal level.

The city needs to do a better job of leveraging the rhetoric of Notley and Prime Minister Justin Trudeau about green transportation and infrastructure investments into a solution for the Green Line’s money troubles.