Calgary can’t afford Green Line LRT project after province pulls funding: Gondek

The province has pulled more than a billion dollars in funding for Calgary’s Green Line LRT, prompting the mayor to say the city can no longer afford the project.

Following a special council meeting on Wednesday, the city is now considering transferring the transit project and its risks to the province.

“The risks that we have taken on from day one….they are big and they are heavy,” said Mayor Jyoti Gondek. “We are the smallest partner at the table. We are the partner at the table with the least amount of tools to fund and finance this.”

“We are the partner at the table that cannot run a deficit, and dare I say, we are the partner at the table that does not have a multi-billion dollar surplus.”

In a letter to Gondek dated Tuesday, Minister of Transportation and Economic Corridors, Devin Dreeshen, said his department has “serious concerns” with updates to the project made at the end of July.

“As the provincial government, we have an obligation to ensure taxpayer dollars for infrastructure are allocated efficiently and in a manner that will benefit the largest amount of Albertans possible,” the minister wrote. “The Green Line is fast becoming a multi-billion dollar boondoggle that will serve very few Calgarians.

“This is unacceptable and our Government is unable to support or provide funding for this revised Green Line Stage 1 scope as presented in the city’s most recent business case.”

WATCH: Calgarians react to pulled Green Line LRT funding

This decision by the province means the project isn’t currently viable, according to Gondek.

“As a result of that scope change we are no longer, as a city, able to afford the cost of this project,” she said. “It’s now in the hands the province to understand how they will deliver it, and we will see what they come back with.”

The mayor will be contacting Premier Danielle Smith with details on how much it will cost to wind down the project now that the province has pulled their $1.53 billion share in funding.

A final decision on the Green Line’s future is set to happen at the next council meeting on Sep. 17.

Council approved scaled down Green Line earlier this year

On July 30, after hours of closed-door conversations, Calgary City Council said another $705 million was being invested in the Green Line while simultaneously cutting down the overall projected budget.

City Chief Financial Officer Carla Male said at the time the projected financing costs were reduced from $640 million to $451 million, bringing the total capital budget for the Green Line to $6.248 billion.

The province had committed $1.53 billion for the project, refusing to loosen the purse strings even as costs ballooned higher and higher.

Dreeshen also expressed concern with changes to the route, also approved in July.

One of the approved changes is building the core of the project from Eau Claire in downtown Calgary to Lynwood/Millican in the southeast. The line would connect with Calgary Transit’s Red and Blue lines in downtown Calgary and would include a new maintenance and storage facility at Highfield.

Previous plans had the first phase of the project going all the way south to Shepherd with five more stations in southeast. The board has said the other stations could still be built when more funding is approved.

The recommendations also included deferring building a Centre Street Station in the Beltline and moving a station at 4 Street SE to above ground.

Shortly after the news broke of changes to the Green Line plans, Dreeshan expressed sympathy for Calgary’s current government saying its downfall wasn’t their fault because the project was doomed from the start.

He reiterated this position Tuesday, taking a shot at former Calgary Mayor and current NDP Leader Naheed Nenshi.

“We recognize your and the current Council’s efforts to try and salvage the untenable position you’ve been placed in by the former Mayor and his utter failure to competently oversee the planning, design, and implementation of a cost-effective transit plan that could have served thousands of Calgarians in the City’s southern and northern communities,” Dreeshan said.

More than $1.2 billion has already been spent on the first phase of the project, including the demolition of buildings along the route and design work.

Gondek says she continues to have faith in the project.

“I have fought hard for this project and I continue to believe in it,” she said.

Province moving to secure contract with third party

The province says it is now moving to secure a contract with a qualified and independent third party to give Calgary, and Alberta, alternative costed proposals for the alignment of the Green Line that integrate the existing Red and Blue lines along 7 Avenue and run to the future Grand Central Station at the new Arena Entertainment District and continue to, at least, the community of Shepard.

Dreeshan says the hope is this can all be done using the current budget.

“We have an obligation to ensure taxpayer dollars for infrastructure are allocated efficiently and in a manner that will benefit the largest number of Albertans possible,” said Dreeshen in a statement to CityNews.

He says the report will also look at a potential extension of an above-ground or elevated rail line from 7 Avenue to Eau Claire to ensure some cost certainty for that portion of the line if it is ultimately pursued.

The province says it has been told by the City there may be legal exposure with respect to the proposed Eau Claire portion of the Green Line, which may have previously impacted alignment decisions.

It is asking the city’s legal counsel to work with provincial legal counsel to better understand the legal implications and address how to address the situation in the best interests of Calgarians.

The minister says once the third party analysis is complete, the province will work with the city in determining next steps for the project.

The city previously said phase one of the project would be finished in 2027.