$308M earmarked to help increase in services
Province expects Ottawa to pony up same amount for Caisse-led project
The Quebec government is investing $1.3 billion in a proposed electric train project for the Montreal region and expects Ottawa to throw in the same amount.
“I am confident that we will get our money back,” Finance Minister Carlos Leitão told reporters Tuesday.
“This project is being led by the Caisse (de dépôt et placement du Québec) and they have the expertise and the capacity to make it work. So I’m not concerned about our equity investment in the project, I’m not concerned about its safety.”
Leitão’s 2017 budget included new details about the electric train, known as the Réseau électrique métropolitaine (REM), as well as commitments to extend the Métro’s Blue Line and help finance a bus-rapid-transit system in Quebec City/Lévis.
For all three projects, Quebec urged the federal government to “rapidly find new opportunities to send a clear signal as to its participation in the funding of these promising projects for Quebec.”
Quebec complained bitterly after Prime Minister Justin Trudeau’s government did not announce funding for the projects in last week’s federal budget.
The 67-kilometre electric-train system will cost $6 billion, according to the latest estimate. The network will connect downtown Montreal with the South Shore, Deux-Montagnes, the West Island and Trudeau airport.
Quebec and the federal government would each own 24.5 per cent of the 67-kilometre transit system, according to Quebec budget documents. The Caisse — Quebec’s pension fund — will own the remaining 51 per cent.
Under a “dividend allocation proposal” included in the budget, the Caisse would be the first to receive any dividends from the REM.
Because the Caisse is assuming “the construction, operation and ridership risk as co-ordinator and manager of the project,” it would “receive an eight per cent priority return on its investment.”
Governments would only receive dividends after that threshold is reached.
Leitão’s budget also included $221 million to fund REM-related work that it will be responsible for, including bus terminals and the redevelopment of highway ramps along the REM’s route.
Another $171 million will be paid by Quebec to move public utilities and to decontaminate land for the REM project.
Work on the REM is to begin in the fall, with completion due by the end of 2020.
Parti Québécois finance critic Nicolas Marceau said the details revealed in the budget show that the REM is a misguided project.
He said the budget includes too many taxpayer “gifts” for the Caisse, including $295 million that Hydro-Québec will provide for the REM project. And Marceau said there is no indication whether taxpayers would be on the hook if the project ends up over-budget.
In the budget, Quebec also added two projects to its 2017-27 Infrastructure Plan, a document that lists proposed and in-progress projects.
They are the extension of the Montreal Métro’s Blue Line and the BRT system for Quebec City/ Lévis. But they are only listed as “under study,” with no financial details provided, and inclusion on the list does not guarantee the projects will go ahead.
Last year, the price tag for the 5.5-kilometre extension from StMichel to Anjou was estimated to be $2.9 billion.
The 43-kilometre BRT would include transportation hubs and dedicated lanes. A 2015 estimate suggested the project would cost between $900 million and $1.4 billion.
For both the Blue Line extension and the BRT, Quebec said it expects federal infrastructure funding to help finance the projects.
Leitão’s budget also includes an additional $308 million to subsidize increases in transit services over five years, and $15 million more over five years to boost adapted transit.
Michel Leblanc, president of the Board of Trade of Metropolitan Montreal, praised the transit cash.
Regarding the Blue Line, he said the government is moving toward an “incremental development of the métro network,” station by station, rather than announcing big extensions that will end up delayed and over budget.
The increase in operating subsidies will help transit agencies boost service, said Union des municipalités du Québec vice-president Alexandre Cusson.
The increase in funding for adapted transit is “a good start,” but the Union had asked for an increase of $20 million per year, said Cusson, mayor of Drummondville.