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Fans of the Quebec Nordiques hold signs outside the location where an NHL hockey game between the New York Islanders and the Atlanta Thrashers is being held in Uniondale December 11, 2010. The fans had gathered to show that their city Quebec should have an NHL team of their own. The Quebec Nordiques last played in the NHL 15 years ago. REUTERS/Chip East (CHIP EAST)
Fans of the Quebec Nordiques hold signs outside the location where an NHL hockey game between the New York Islanders and the Atlanta Thrashers is being held in Uniondale December 11, 2010. The fans had gathered to show that their city Quebec should have an NHL team of their own. The Quebec Nordiques last played in the NHL 15 years ago. REUTERS/Chip East (CHIP EAST)

Ottawa welcomes Quebecor's commitment to arena in Quebec City Add to ...

The possibility of a taxpayer-funded hockey arena in Quebec City appears to have moved a step closer to reality with the federal government welcoming an announced injection of private cash from media giant Quebecor.

Quebecor's president and CEO Pierre-Karl Peladeau, in his first public pledge to pony up his own money for the project, says he has offered “tens of millions of dollars” to help build the estimated $400-million facility.

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Mr. Peladeau told reporters Sunday evening in Quebec City that negotiations are ongoing to come up with an agreement to build the rink, with the eventual goal of bringing the defunct Nordiques back to the provincial capital.

Ottawa has stressed that private-sector money would be a necessary condition for any federal investment in the project. The government applauded the latest development.

Christian Paradis, Prime Minister Stephen Harper's political lieutenant for Quebec, said Sunday the interest from Quebecor is promising.

“Certainly it's encouraging, because we've always said there would eventually be participation from the federal government if the private sector made major investments,” Mr. Paradis told The Canadian Press.

“It's going in the right direction. Remember that at the beginning it was supposed to be 100-per-cent financed with public money - and that was unacceptable. Now we see a new element, and that's good.”

In September, Quebec City Conservative MPs illustrated their own eagerness by wearing the Nordiques' old blue-and-white jersey to a public event.

Detractors have warned Ottawa to steer clear of committing public money to a project that benefits private enterprise — particularly at a time of enormous federal deficits.

The proposed facility, which has already received financial backing from the provincial and municipal governments, is considered a prerequisite for the potential return of NHL hockey.

While it might prove popular locally and help the Conservatives make inroads in the province, any federal funding would carry obvious political risks.

The demand for federal cash for sports teams could quickly spread across the country and create regional grievances in areas that don't receive it.

Edmonton, Calgary, Winnipeg, Regina and Hamilton have all expressed interest in new sports venues or upgrades to existing ones.

A report by Equipe-Quebec — a group working to attract the Winter Olympics in 2022 — recommends building an arena. But it also concedes the building would run a deficit unless it attracted an NHL tenant.

According to a study conducted by Ernst & Young, a new arena would bring in $8.4 million a year with an NHL tenant and $7.8 million without a professional club.

The cost of financing and maintaining an arena could be far higher. According to Claude Rousseau, president of Equipe-Quebec, the expenses would be between $36 million and $41 million annually, rendering the building unprofitable for a private business.

But over the longer term, the project would generate $500-$600 million over 40 years and governments would reap the benefits.

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