ST. JOHN'S, N.L. — The Government of Newfoundland and Labrador has joined the City of St. John’s, the City of Mount Pearl and the Town of Paradise in asking the federal government to cover half the cost of required upgrades to the Riverhead Wastewater Treatment Facility.
The upgrade is currently estimated at $255 million (capital cost).
The facility on Southside Road in St. John’s serves the three municipalities. It must be upgraded to comply with federal law, based on the Wastewater Systems Effluent Regulations under the Fisheries Act.
In mid-July, the mayors of all three municipalities held a joint news conference at the plant. They said they face an impossible deadline for the upgrade, and have learned their share of the final bill for the project is much more than originally expected.
The province is backing the municipalities on that point, saying the federal government needs to contribute more.
The federal government has offered just under $112 million for the project — 50 per cent of an early cost estimate. However, it’s 43.85 per cent (44 per cent rounded) of the current estimate.
Instead of a funding arrangement with the federal government covering about 50 per cent of the cost, the province 25 per cent and the municipalities 25 per cent, the standing split is about 44 per cent federal, 23 per cent provincial and 33 per cent municipal.
In a letter to federal Infrastructure Minister Francois-Philippe Champagne, provincial Environment Minister Lisa Dempster says the ongoing commitments from the federal government to infrastructure are appreciated, but when it comes to the city wastewater facility, it’s not enough.
“The province supports measures to improve environmental protection, but also is cognizant of the financial impacts to municipalities and citizens,” Dempster wrote.
Her letter, dated July 22, does not mention the province’s improved position under the new cost split.
It does say the Government of Canada made a commitment to fund half the cost of the project during talks for the $556-million Investing in Canada Infrastructure Program (ICIP) bilateral agreement — an overarching provincial-federal agreement announced in 2018 covering 10 years of infrastructure funding. The province did not want the expensive, city wastewater project falling under that agreement.
“The city and the province expect that the Government of Canada will honour their commitment to funding 50 per cent of this project,” Dempster wrote.
“With respect to this shortfall we kindly ask you to reconsider the current funding cap and approve funding of $127,323,965, which represents the full 50 per cent of the estimated cost of the project as committed during our ICIP negotiations.”
There is no reference to where the side agreement on the Riverhead project might be found in writing.
The Telegram asked to speak to Dempster, but received no response as of deadline.
According to St. John's Mayor Danny Breen, the municipalities are being told to bite off more than they can chew. He told The Telegram they can’t accept the cost share as it stands. The municipalities have sent their own letter to Champagne, dated July 25, saying the current financing is “completely unacceptable” and they will not proceed without a 50-25-25 split.
Operating costs are not in the project estimate. The new facility will cost more, including power costs. And cost overruns on construction will fall to the municipalities, Breen says.
“It’s no risk to them, the risk is all on the municipalities,” he said Monday.
Between the three municipalities, the City of St. John’s carries the bulk of the expense. The city has forecast a more than 25 per cent increase in water tax (about $150 per year) based on the cost-sharing arrangement as currently described.
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