EDITORIAL – The ‘must be approved and funded’ rule for big projects is dumb

An editorial by Mel Rothenburger.

‘APPROVED AND FUNDED.’ Those words are heard whenever the question is asked, “Will any senior-government grants be available for this project?”

The answer is that until a project is “approved and funded,” applications for grants can’t be made.

This is a strange rule. Major municipal infrastructure, such as arenas or theatres or police buildings, are generally funded from a combination of three sources: donations, local debt gradually repaid through taxation, and grants from federal and/or provincial governments.

Under the “approved and funded” rule, a municipality must take a (hopefully) educated guess at how much money might be available through grants. For example, the performing arts theatre will be funded with a maximum of $140 million in local borrowing. That was approved through a controversial alternative approval process, without knowing how much, if any, federal or provincial funding would be available, even though the total budget is estimated at $211 million.

Last week, the City learned that the project will receive $7 million in federal funding, the maximum allowable in the program for which the City applied. It might have been less, or nothing at all.

An APP next year will seek approval of up to $160 million in funding for a new police building. Will senior government grants be available to help defray the cost to local taxpayers? Don’t know. The project has to be “approved and funded” first.

The problem with this rule is that local taxpayers don’t know how much they’re in for. If they approve the borrowing ask, they have to hope there will be other sources of funding that come forward to help out. It’s a bit of a pig in a poke.

If donations and senior government grants don’t fill the void, the municipality must either cut corners on the project or go back to the taxpayers and ask for more money.

There’s nothing City councils can do about it but it’s a dumb system.

Mel Rothenburger is a former regular contributor to CFJC-TV and CBC radio, publishes the ArmchairMayor.ca opinion website, writes for the Kamloops Chronicle and is a recipient of the Jack Webster Foundation Lifetime Achievement Award, and was a Webster Foundation Commentator of the Year finalist. He has served as mayor of Kamloops, school board chair and TNRD director, and is a retired daily newspaper editor.  He can be reached at mrothenburger@armchairmayor.ca.