With a Dec. 21 deadline fast approaching, the Harper government is struggling to figure out how it can help finance a new hockey arena in Quebec City without enraging Western supporters and fiscally conservative voters everywhere.
Sources within the Conservative government were emphatic on Wednesday: unless Quebec City Mayor Régis Labeaume can guarantee "substantial" private-sector funds for the arena, Ottawa will not provide support.
But a way remains open that would involve the private sector roughly matching the federal contribution, thus providing the necessary political cover.
And there is the harsh political reality that refusing to provide any federal funds for the arena could doom the 11 Conservative MPs in the region to defeat in the next election.
"The Conservative Party is gambling on its future in Quebec City," Marc Simoneau, a city councillor in Quebec who is part of Mr. Labeaume's municipal party, said in a radio interview. "… It would be the end of the Conservatives in the Quebec region. It's clear they would be cleaned out in the next election. This is a political file above all else."
Mr. Labeaume has set Dec. 21 as the date to finalize the financing for the new arena, which could serve as the home for a possible NHL hockey team and the centrepiece of the city's bid for the 2022 Winter Olympic Games.
Jean Charest's provincial government is already committed to paying 40 per cent of the cost of the arena, and the provincial and city governments are asking for a similar commitment from Ottawa, which could be up to $180-million.
They aren't likely to get it. The Conservatives are placing a heavy emphasis on reducing federal spending to balance the budget in the medium term. Earlier this week, Heritage Minister James Moore announced, to Edmonton's dismay, that the government would not finance the city's proposal to hold an exposition in 2017 to mark the 150th anniversary of Confederation. The federal contribution was expected to be as high as $1-billion.
To douse the Edmonton proposal while pouring money into a Quebec City arena would not only anger the party's Western base, it would undermine the credibility of the Conservatives' claims of fiscal prudence in every region of the country.
That is why numerous commentators inside and outside of Quebec have pronounced the deal dead. But it is not dead yet.
Quebec City estimates that the arena would cost in the neighbourhood of $360-million. Le Journal de Montreal and other media in Quebec have pointed out that if the private sector contributes about $60-million, then only $70-million dollars would need to be raised, after the provincial and city contributions are factored in.
Selling the naming rights and other concessions might well bring in that much private capital. Media mogul Pierre Karl Peladeau, who is widely touted as the likely owner of any new NHL franchise in Quebec City, has suggested "we are not closed to any creative proposal," that would get the facility built.
If the federal contribution to an arena in Quebec matched the private-sector contribution - and if it came from unspent funds in existing accounts, rather than from new money - then the pitch might be sellable, especially if the principle was applied to similar requests for federal assistance for sports facilities that have arrived or are expected from Edmonton, Calgary, Regina and elsewhere.
Finance Minister Jim Flaherty said earlier this week that a national policy on federal assistance to sports franchises is needed.
"The only way one can do this is to have a national policy, not a policy of one-offs," he told reporters.
In the end, Mr. Harper might simply decide that his government can't be seen funding sports centres while pushing to eliminate the federal deficit. In that case, Mr. Labeaume has suggested he might replace the federal funding with local taxes.
In which case, Conservative MPs in the region will have their work cut out for them in the next election.
With a report from Sean Gordon in Montreal