Federal Conservatives are eyeing an unspent pot of more than $1-billion from the 2008 budget as a way of funding pro-sports venues without coughing up new cash.
The only problem with tapping into the P3 Canada Fund - managed by a Crown corporation and designed for projects with other governments and the private sector - is that the rules specifically forbid spending the money on facilities "primarily" used for pro sports.
As a result, Conservatives are now debating whether there's a way these rules could be interpreted differently to fit demands for sports facilities, including a new CFL stadium in Regina.
A senior federal official confirmed that the Saskatchewan project is a "test case" that will determine how the government deals with large sports infrastructure projects, including a politically charged proposal from Quebec City. The P3 program is deemed, at this point, to be the most likely source of federal funding for stadiums and hockey arenas.
The question is heating up again after Quebecor President Pierre Karl Péladeau said this week that he's willing to contribute "tens of millions of dollars" toward a new $400-million multipurpose arena in Quebec City that would be part of a bid for an NHL franchise.
The Conservatives' political minister for Quebec, Christian Paradis called Mr. Péladeau's news encouraging. He also told reporters there would be eventually be federal participation in the arena bid if the private sector made "major" investments.
Watching this closely is Saskatchewan, where the province is seeking $100-million in federal cash from the P3 fund toward a new, $430-million domed stadium that would be home to the CFL's Saskatchewan Roughriders.
"I don't see any other program that could deal with these types of projects," the senior federal official said.
The $1.25-billion P3 Canada Fund was created in the 2008 budget but has so far only approved two projects - a $25-million road extension in Winnipeg and a $50-million project in the Maritimes to expand emergency radio services. A spokesperson for the fund could not confirm whether Quebec City or the Quebec government submitted applications.
The fund is under the responsibility of Finance Minister Jim Flaherty, who has largely been cool to the idea of federal funding for pro-sports facilities. However during a stop in Regina last week, the minister specifically mentioned the public-private partnership fund - which is managed by a Crown Corporation called PPP Canada Inc.- when asked about the Regina stadium bid.
"P3 Canada Inc. is reviewing the application of Saskatchewan with respect to the proposed stadium and I look forward to seeing what they have to say on the subject," he said.
Tory officials in Quebec said the P3 agency represents one of several possible sources of funding, and that the government is prepared to be "very creative" in finding a solution.
Conservatives in Quebec believe there are considerable political stakes tied to the arena project, which explains the internal push from federal cabinet ministers from the province - particularly Intergovernmental Affairs Minister Josée Verner and junior regional economic development minister Denis Lebel - for a resolution.
The rules governing the P3 fund allow proposals for "sports infrastructure," but go on to exclude "facilities used primarily by professional athletes."
Tom Lukiwski, a Regina-area Conservative MP who urged the Saskatchewan government to apply to the P3 Fund, says the province is talking up the other potential uses for the facility in the hope of making the case that it won't be used "primarily" by the CFL. However he said no one has received a clear interpretation of the rule from the managers of the fund.
"Does that mean literally 50-per-cent-plus usage?" he asked. "Or is it less than that?"
When asked whether the rules could allow funding for a pro-sports venue that is primarily used by others, Olivia MacAngus, a director with the fund, said no.
"We don't interpret it that way, at this stage," she said.
However, she said the fund is preparing to make a new request for bids in mid-2011 - which suggests a window is available for the rules to be revised before then.
Negotiations in Quebec are continuing over the amounts that private partners - Mr. Péladeau chief among them - will invest in the project, and a Quebec Tory close to the talks said there's no firm "ask" of the federal government, although it's abundantly clear Quebec City will not seek anything close to the 45-per-cent share the provincial government has already agreed to provide.
Quebec City has pledged $50-million and could increase its contribution. Though the original estimates were that the arena could cost $400-million, there are indications the project's costs could be scaled back to $350-or $360-million.
Quebec City Mayor Régis Labeaume, an outspoken booster of the project, has receded from the public spotlight as the negotiations have advanced, and couldn't be reached for comment on Tuesday.