Province threatens Green Line funding in letter to Calgary mayor

Alberta’s government is looking to add conditions to funding it committed to Calgary’s Green Line LRT project, according to the province’s transportation minister.

In a letter obtained by Global News, Minster Devin Dreeshen told Calgary’s mayor the province’s $1.53-billion share of the funding is contingent on the Green Line’s final design “fully integrating” with the province’s rail master plan, which is set to be released next year.

Design work on the Green Line is currently underway, with officials expecting two thirds of the line’s design to be complete by this summer.

“The province wants to make absolutely certain taxpayer dollars are used in the most responsible and efficient way possible,” Dreeshen said in his letter, dated Wednesday.

Calgary Mayor Jyoti Gondek said the situation is “concerning,” given shovels are in the ground for preliminary work for the line and it will be a year before the province’s “yet unrealized” rail plan is complete.

“You can tinker with toy trains on your table all day long and try to come up with a plan, but we’ve got construction underway on the Green Line,” Gondek told reporters. “Green Line having to comply with a fictitious plan is going to mean opening up that contract.”

The letter follows a meeting and technical briefing between provincial officials and Green Line top brass on Monday, in which Dreeshan said they learned about efforts to “mitigate challenges faced by the Green Line.”

Dreeshen acknowledged “cost pressures” faced by the Green Line and other major projects in Alberta and across North America.

Get daily National news

Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day.

Sign up for daily National newsletter Sign Up

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

However, the minister said the province won’t be providing any additional funding for cost overruns, which would be the city’s responsibility.

“We strongly encourage the city to carefully assess whether there are mitigating scope adjustments that can be made to the Green Line plan, including the potential raising of downtown stations from underground to above ground in order to avoid unnecessary costs,” Dreeshen said in his letter.

It’s a sentiment Premier Danielle Smith echoed Thursday, who said she felt the city “made a mistake” by proposing a tunnel under the downtown core.

“If it needs to be rescoped so they can do it within their budget, then we would expect them to do that,” Smith said. “We’re not giving any additional dollars.”

The project’s budget is $5.5 billion to build the first phase of the Green Line, which is 18 kilometres from Shepard in the city’s southeast to a tunnel under the downtown core to Eau Claire.

The funding agreement is split evenly between the City of Calgary, government of Alberta and federal government.

In its most recent update to city council, Green Line officials noted elevated concerns over costs.

In a statement to Global News, the Green Line project team said officials are evaluating “all financial and technical options, and delivery strategies” to address cost pressures.

“Like every other major infrastructure project across North America, the Green Line LRT project is impacted by inflation, supply chain disruptions, market conditions, and key labour and skills shortages,” the statement read.

However, Ward 9 Coun. Gian-Carlo Carra said a two-year provincial pause on the project for a review also contributed to the higher than expected costs.

“When we started the Green Line it was the largest and only significant fixed rail project in North America, and right now we’re competing internationally with 18 to 20 projects of the same size,” Carra said.

“When we hear that the provincial government is unwilling to fund cost overruns, we have these cost overruns because of this government.”

Carra said he supports regional rail, and all parties should be working together to develop an integration plan.

Ward 10 Coun. Andre Chabot said the Green Line is “moving ahead one way or another,” and waiting for the provincial rail master plan will add costs to the already delayed project.

“Obviously we’re going to keep trying to work with them to find solutions, financially, and find out what it is that they want out of this plan that will ultimately add costs to the program,” Chabot told reporters. “Hopefully they’re going to come to the table and be willing partners and help finance that additional cost.”

City council is expected to get an update from Green Line officials next month, including recommendations and detailed costs based on 60 per cent design.