Gas tax trial balloon for Quebec arena takes flak from cities across Canada

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The Hockey News

The Hockey News

OTTAWA - The Conservatives are floating what they see as a politically bullet-proof trial balloon designed to download sports arena funding decisions onto local governments.

The elegant solution—giving municipalities more freedom on how they spend an existing $2 billion-per-year federal gas tax fund—immediately drew cross-country flak from cash-strapped cities and provinces who suggest the concept amounts to robbing Peter to pay Paul.

The idea of new federal funds for a potential NHL rink in Quebec City has become a major political headache for Prime Minister Stephen Harper, with most of his Quebec MPs pushing the idea and the rest of his team recoiling in horror.

But the gas tax scheme involves no new federal money. It simply allows municipalities to reallocate existing funds—and to wear the political fall-out from their decisions.

Rick Dykstra, the hockey-playing MP from St. Catharines, Ont., took the gas tax proposal to the Conservative caucus Wednesday, where sources say it was well received.

"It's just an idea that I put forward that I thought might be helpful and see where it goes," Dykstra told reporters after question period.

"You know what, municipalities have indicated on a very clear and consistent basis that they are the people closest to the folks on the ground, grassroots. They have to make some tough decisions. These are decisions in terms of priorities that they are going to need to make."

The weekly Conservative party caucus meeting is usually sealed tighter than a nuclear reactor. Leaks are forbidden.

That Dykstra was talking openly of a proposal he'd just floated, and that sources were characterizing other MPs' reactions, is a clear signal the Harper government wants this idea in the public domain.

No cabinet ministers, however, endorsed the notion. A press conference has been called for Thursday in Quebec City.

"Our position has not changed. Professional sports are first and foremost the responsibility of the private sector," said Nina Chiarelli, a spokeswoman for Infrastructure Minister Chuck Strahl.

"If the federal government were to play a role in this project, it would have to be fair to all regions of the country, and affordable as we are entering a period of fiscal restraint."

A senior government source told The Canadian Press the concept is on the desks of Harper, Finance Minister Jim Flaherty and Wayne Wouters, the powerful clerk of the Privy Council. The decision will be made by those three alone.

Under existing rules, the transfer of $2 billion annually in gas-tax revenues cannot be used to build arenas or other sports facilities.

Rather, the fund is designed to pay for municipal infrastructure such as roads, bridges and water-treatment plants, or for greenhouse-gas reduction and waste-management projects.

Dykstra's concept was received with either puzzlement or outright hostility Wednesday by some municipal and provincial leaders who are looking for help with arena funding.

Paul-Christian Nolin, a spokesman for Quebec City Mayor Regis Labeaume, said the proposal is not an option because it would not provide any additional funds

"On the eve of a news conference, this smells of improvisation," Nolin told The Canadian Press.

"It doesn't give anything extra to the project. On the contrary, Quebec City would be asked to reduce the financing for public transit and to sacrifice the work it's done to improve infrastructure."

Regina also is looking a funding for a new home for the Saskatchewan Roughriders of the CFL. But Ken Cheveldayoff, the provincial minister responsible for a proposed multi-purpose entertainment facility, says the gas-tax cash is already allocated.

He said changing the rules could cause problems.

"That's the concern, that if they've got it dedicated for other things right now, then it makes it very, very difficult."

A spokesman for the city of Edmonton, which is looking for a new home for the NHL's Edmonton Oilers, said the city has dedicated its gas-tax share to servicing the debt on a new light rail transit system.

"That's expected to be ongoing for many years," said Robert Moyles.

"Because it's a trial balloon, there remains a lot of unanswered questions (about the federal idea). One of the biggest, from our perspective, is what about the municipalities that have fully committed all the funds they've got?"

Hans Cunningham, president of the Federation of Canadian Municipalities, said now that stimulus spending is winding down, the gas-tax fund is "the only significant, remaining source of federal infrastructure funding."

"What matters most now is what comes next: In Budget 2011 the federal government must commit to take stock of recent investments, examine its entire suite of funding programs, and develop a long-term framework that meets the country’s future infrastructure priorities."

The proposal did get one enthusiastic response: from NDP Leader Jack Layton.

"We've always taken the view that local municipalities should be the ones to decide how the infrastructure funds are used," Layton said.

Liberal Leader Michael Ignatieff dismissed the concept as "improvising," while Gilles Duceppe of the Bloc Quebecois refused to even react to what he called "rumours."

Dykstra, the de facto face of the Conservative proposal, has made the case that St. Catharines needs to replace the 75-year-old home of the city's Junior A hockey club.

That allows the government to divorce the funding from the politically toxic optics of giving tax dollars to professional athletes and millionaire team owners.

A recent poll suggested a majority of Canadians don't want the federal government using tax dollars to pay for arenas or stadiums for professional sports teams.

The Canadian Press Harris-Decima survey found 55 per cent of respondents opposed federal funding for such facilities.

Forty-one per cent were supportive.

"I don't think this has anything to do with the issue of NHL players," said Dykstra.

"I think it has everything to do with what priorities municipalities put to the infrastructure work they want to do in their municipalities."



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