Quebec City will have to play up potential Olympic bid to get NHL arena

OTTAWA -Using federal tax money to bankroll an arena built with the primary goal of housing a professional hockey team would go against the objectives of the federal government’s flagship infrastructure fund, newly released documents show.

Sports facilities funded under the $8.8-billion Building Canada Fund must be designed either for community use or major athletic events, according to documents obtained by Postmedia News under the Access to Information Act.

The documents suggest Quebec City will have to play up a potential bid for the Winter Olympics to secure federal funding for its proposed 18,000-seat arena, which the city hopes will lure a National Hockey League team back to the city.

The documents echo the contents of a Department of Finance memo on the same matter obtained last month by Postmedia News.

Quebec City Mayor Regis Labeaume has been lobbying the Harper government to pick up part of the tab for the arena, expected to reach $400-million. The city, which has committed $50 million, wants the federal government to match the $175-million promised by the province.

It increasingly appears the federal government will provide financial support for the project, despite warnings such a move could set off a stampede for funding in other parts of the country. Federal intergovernmental affairs minister Josee Verner recently encouraged the city to seek more private-sector investment before applying to the federal government.

Of the arenas that host Canada’s six current NHL teams, only Scotiabank Place, home to the Ottawa Senators, received any federal funding to support construction. The federal government provided $6 million to help build the arena, which was known as the Palladium when it opened in 1996.

The Building Canada Fund is part of the $33 billion the federal Conservatives set aside in 2007 to fund infrastructure projects over seven years. According to a presentation prepared by Infrastructure Canada, which oversees the fund, two-thirds of the Building Canada Fund must go to projects in the following priority categories: "core" national highways, water and waste water infrastructure, public transit and green energy. The rest can be distributed to other areas, including sports and recreation.

Infrastructure Canada looks for projects that will raise the proportion of Canadians "from all segments of society" who participate in sports, according to the presentation, dated March 2010. Projects are also supposed to support the "development of Canadian athletes," and be "designed to attract hosting opportunities for regional, national or international sporting events."

Quebec City has pitched the proposed arena as a "multi-functional" venue for amateur hockey and concerts, in addition to pro hockey. Labeaume has said the city will also use the arena to mount a bid to host the Winter Olympics.

But the city has already failed twice in its bid for the Winter Games, and NHL Commissioner Gary Bettman recently cautioned that the league has no current plans to relocate existing franchises or to expand the number of member teams.

Federal support for a Quebec City arena could implicate the government in the same kind of drawn-out negotiations that have characterized the Greater Toronto Area’s preparations to host the 2015 Pan-Am Games. The federal government has committed up to $500 million to help build and upgrade facilities for the Games.

But the City of Hamilton, west of Toronto, has been butting heads with the Canadian Football League’s Hamilton Tiger-Cats over the location and size of a stadium that would be used for soccer during the Games and eventually, to host the Ticats.

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