Funding 'reset' if sewage plant's site changed, CRD warned

Eliminating McLoughlin Point as a site for a regional sewage treatment plant is like “pushing the reset button and starting over” on $253 million in federal funding, Capital Regional District directors were told Wednesday.

The federal and provincial governments have agreed to provide a combined $500 million — about two-thirds the cost — of the $783-million project.

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But the agreements are predicated on the CRD’s approved Liquid Waste Management Plan, which identifies McLoughlin Point as the treatment plant’s site. And a condition of the provincial funding is that the project be managed by the independent Seaterra commission, said Massimo Bergamini, of InterChange Public Affairs. Bergamini was director of policy, advocacy and communications for the Federation of Canadian Municipalities when the federal Building Canada Plan program was developed.

From the outset, federal officials indicated that a funding proponent could not go forward without a firm site decision, he said.

A substantial change to the project — such as change of location — could be made, but it would require development of a new business case, a technical review by officials, and approval by the minister of infrastructure and the Treasury Board, he said.

“Moreover, it is possible that pending such a review, the federal funds currently set aside for the project would have to be released … Essentially, it would mean pressing the reset button and starting over,” Bergamini said.

If that happened, the federal government would have to determine whether the project still constituted a provincial priority — a process that would likely have to take place prior to any federal business case review.

There is also a question whether a new project would be eligible for the current 33 per cent federal funding or for the new maximum of 25 per cent federal funding, he said.

“I can’t say for certain where the money and under which program that a new project would be assessed — likely under the terms of the old program, but these are the kinds of questions and kinds of uncertainty that would need to be addressed,” he said.

Bergamini said the bottom line is that no federal funding will be available “until a contribution agreement is actually signed and that, realistically, cannot and will not happen until there is a final project, be it this one or something else that the federal government can assess.”

The CRD sewage treatment project has stalled since Esquimalt refused to rezone McLoughlin Point for the plant and the province subsequently refused to intervene and overturn the local government decision.

Esquimalt Mayor Barb Desjardins noted that funding agreements were always predicated on zoning.

“It’s unfortunate that we’re continuing to look backward and not forward,” Desjardins said. “All those things you’ve told us now I understand, but we are in a different place and we need to move forward.”

Victoria Coun. Geoff Young, who chairs the Core Area Liquid Waste Management Committee, said there’s no question the senior government funding is at risk now that McLoughlin has been eliminated.

“He was pretty clear that there’s some element of risk when you change the plan,” Young said.

“The hope is, I think, that new systems would do the same jobs so that … approval would be not difficult to obtain because essentially we’re achieving the same objectives.”

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