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Alberta Premier Rachel Notley waits before making an announcement regarding work to speed the cleanup of Alberta’s old energy infrastructure near Carstairs, Alta., on May 18, 2017.Jeff McIntosh/The Canadian Press

Alberta plans to spend $1.53-billion in provincial carbon tax money to help bankroll a major Calgary transit project known as the Green Line.

Premier Rachel Notley said the light rail transit expansion would create thousands of jobs, reduce pollution and improve the quality of life of Calgary residents by easing traffic congestion.

She said the provincial carbon tax is a key factor in the project.

"Every cent of it in terms of the provincial government's contribution is coming from the Climate Leadership Fund which is funded by the carbon levy and it absolutely would not have been possible without it," Notley said Thursday.

Notley made the announcement at an LRT station with Mayor Naheed Nenshi and members of her NDP caucus as the city prepares to celebrate the Calgary Stampede.

The federal and Calgary governments have previously announced plans to fund the other two-thirds of the Green Line's cost.

Alberta's share of the money will flow over eight years. The province is calling it the single biggest infrastructure spending announcement in Alberta history.

The first stage of the transit line is to run from just north of Calgary's downtown to neighbourhoods in the southeast of the city. When complete in 2026, it is expected to serve more than 60,000 riders each day.

Nenshi said the LRT expansion will transform Calgary by spurring business and community development along the transit corridor.

"We are going to build something so special — we are going to build something that is going to make such a difference in people's lives every single day," Nenshi said. "I could not be more proud."

The city estimates the Green Line will reduce greenhouse gas emissions in Calgary by 30,000 tonnes each year, the equivalent of taking 6,000 cars off the road.

The opposition Progressive Conservatives said they support the province's funding pledge despite being highly critical of government spending.

Ric McIver, who is the PC leader in the legislature, said the Green Line is badly needed and called Notley's announcement "very good news."

McIver's Calgary riding is at the southern end of the planned transit expansion project.

"It is a long, slow, painful commute for tens of thousands of people every single day," said McIver, a former Calgary city councillor. "This is a good investment."

Wildrose member Prasad Panda said the party supports the project, but would use other money for it rather than carbon tax funding if the NDP is defeated in the next election.

"I have concerns about the recent cost increases for the project and believe that needs to be carefully monitored," he said in an email.

"We are committed to maintaining support for this project, while repealing the carbon tax."

Last month, the government announced it ended the last fiscal year with a $10.8-billion deficit and an accumulated debt of $33.3-billion.

Calgary is expected to be a key battleground in the 2019 provincial election.

The NDP currently hold 16 of the city's 25 seats. The PC's have six and the Wildrose, Liberals and Alberta parties have one each.

Alberta Progressive Conservative and Wildrose parties have reached an agreement in principle to form a consolidated party. PC Leader Jason Kenney says he and Wildrose Leader Brian Jean will 'park' their egos in the leadership race.

The Canadian Press