Ottawa promises $2.3B to Alberta in gas tax

Alberta and Ottawa have signed an expanded deal to deliver $2.3 billion in gas tax funds to help municipalities build infrastructure.

EDMONTON — Alberta and Ottawa have signed an expanded deal to deliver $2.3 billion in gas tax funds to help municipalities build infrastructure.

But federal Employment Minister Jason Kenney emphasized the federal government would frown on that money being used to bankroll new arenas for NHL teams.

“We’ve been clear that in terms of federal infrastructure dollars we’re not interested in supporting professional sports venues,” Kenney told a news conference Monday.

“We would encourage (municipalities) to spend those funds on community-based initiatives.”

Kenney made the comments after he and federal Health Minister Rona Ambrose joined Alberta Municipal Affairs Minister Diana McQueen to announce the Federal Gas Tax Fund will be renewed for the next 10 years.

The fund, created in 2006, delivers funds to municipalities to spend as they see fit on infrastructure. The renewed deal allows for a wider range of spending, including sports facilities.

It can also be used for water and wastewater plants, public transit, roads, bridges, airports, disaster mitigation, broadband connectivity, and culture and tourism projects.

The deal will deliver $208 million to Alberta this year and $2.3 billion by 2024. The funds will be linked to inflation.

“Initially this (program) was done on an annual basis, and municipalities didn’t know whether the money would be there from year to year,” said Kenney.

“If you’re going to make investments in infrastructure, you need to be able to plan over a long horizon.”

The issue of using public funds to pay for an NHL arena has roiled for years in Edmonton.

The city is on the hook to build a $600 million downtown arena for the NHL Oilers.

A deal struck last year between the city and the Oilers will see the team pay $6 million a year in lease payments, run the building, and keep the profits.

The smoldering debate to build a new arena for the NHL Flames in Calgary sparked this past summer when Brian Burke, the team’s president of hockey operations, derided the 30-year-old Saddledome as outdated and inefficient.

The gas tax has already supported a number of projects in Alberta, including wastewater or storm water operations in Calgary, St. Albert, Manning and Strathcona County.

McQueen said the money has also funded rapid transit in Edmonton and recycling initiatives in Calgary.

“Under the previous GTF program we were able to support over 2,000 projects in Alberta,” said McQueen.

She said the money can’t be used to build new schools, an infrastructure priority announced last month by Premier Jim Prentice.

Kenney and McQueen said the money is not earmarked to go to mitigation projects to prevent a repeat of last year’s catastrophic floods in Calgary and southern Alberta.

Kenney said that money is part of separate, dedicated disaster mitigation fund but added “if municipalities want to pay for berms and other mitigation under this gas tax transfer they can do so under the enlarged criteria.”

Helen Rice, president of the Alberta Urban Municipalities Association, said her members have told her there is no shortage of priorities in the rapidly growing province.

“The needs are immense and they’re very diverse,” said Rice, who attended the announcement.

“The most exciting part for me is that it has flexibility that gives municipalities the respect to make their own decisions regarding the selection of infrastructure projects.”

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