Feds rule out changing gas-tax formula to build Quebec City arena

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MONTREAL - The federal government has shut the door on the idea of using proceeds from the gasoline tax to build sports facilities like the proposed NHL-style arena in Quebec City.

That announcement comes just two days after the Conservatives were floating the idea of broadening the gas-tax program, whose use is currently limited to more critical infrastructure needs like roads.

The idea was cast, earlier this week, as a compromise that would get Quebec City its arena money, without showing any favouritism to that city above all those seeking new sports facilities.

But then three successive developments occurred: the idea was slammed from various quarters, Quebec City said it wasn't interested, and backers of the arena project announced they would build without federal help.

The idea now appears dead.

A key federal cabinet minister responded in no uncertain terms Friday when asked about the prospect of changing the federal gas-tax rules to help Quebec build its arena.

"We have no plans to change that criteria," Infrastructure Minister Chuck Strahl told reporters in Montreal.

"(The program is) quite flexible. It's not infinitely flexible," he added.

The proposal, which was initially put forward by Conservative MP Rick Dykstra, received a cold shoulder from many municipalities, including Quebec City.

Even Regina and Edmonton, which are seeking federal funds for a new football stadium and hockey rink respectively, expressed little enthusiasm for the idea.

Municipal leaders complained that the proposal offered no new money, and would simply have eaten into existing funds allocated for critical infrastructure needs.

Canadian cities receive about $2 billion annually from the federal gas tax, which helps pay for infrastructure such as roads, bridges and water-treatment plants.

"We want it to be used for city needs, and they can set it aside," Strahl said.

That doesn't mean Ottawa is completely slamming the door on funding the Quebec arena through some other mechanism. A PMO spokesman explained that Strahl's comments on Friday applied only to the gas tax—not to the possibility of funding an arena.

But the remarks do foreclose what some initially viewed as a promising option for Ottawa to get involved in the Quebec City arena project, while avoiding much of the political risk.

The Conservatives are treading carefully on an issue which has potentially significant electoral implications; most of their 11 Quebec seats are around the provincial capital, where the arena project has dominated headlines for months.

Hints of the political risk became increasingly obvious Friday.

Even within Quebec, there was growing controversy one day after Premier Jean Charest announced his government would increase its stake in the project to fill the void left by Ottawa.

The head of the Action democratique du Quebec issued a scathing statement against the decision to build the arena—whose price tag is estimated at $400 million—entirely with public money.

Gerard Deltell, who represents a Quebec City riding in the provincial legislature, accused his fellow politicians of "living in a dream."

"I am not ready to brush off the involvement of the private sector in the construction," he said.

Meanwhile, there were suggestions in the Quebec media that other municipalities might also start demanding money for their own arena projects.

There was also some extremely negative commentary from letter-writers to Montreal's La Presse newspaper Friday, along with a scornful editorial cartoon and an editorial titled, "$200 million (in provincial money) badly spent."


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