INNISFAIL – Town council has formally agreed to pay back the federal government nearly $800,000 in grant money it owed for moving ahead with the redevelopment of the new Southwest Industrial Park before a five-year mutually agreed timeline.
At council’s regular meeting on July 11, Erica Vickers, the town’s corporate services director, brought forward a report outlining the history of the matter that began in 2015 with the town’s connection to the Red Deer Regional Wastewater System, a project that would render the town’s sewage lagoons obsolete.
The town moved ahead with the decommissioning and remediation of the sewage lagoon lands by securing a $9 million New Building Canada Fund (SCF) grant; a three-way partnership between the federal government, province and the town.
However, council was reminded there were conditions in the grant agreement, including the town had to wait five years after the remediation project was complete before selling or leasing the remediated lands.
The remediation project is only considered complete now in the summer of 2022 and the town was contractually required to wait until 2027 before making any moves on the land.
If the town moved ahead before 2027 the conditions in the SCF agreement state the grant recipient “may be required” to reimburse funds.
For at least the past two years the town had been targeting the newly reclaimed lands in the southwest area of town for industrial development.
For the past year, the 46 acres of reclaimed sewage treatment plant and lagoon lands south of 37th Street have been a key component of the town’s long-term vision of the Innisfail Economic Development Strategy & Tactical Plan, also known as Power of Place.
Vickers report noted town council members began directly approaching senior provincial government officials last year about the adverse economic consequences the grant agreement conditions were having on the town.
In March of this year the town announced the province had agreed it would help the town get out of the grant agreement by repaying half of any funds the federal government deemed necessary to fulfill SCF agreement requirements.
However, the development and sale of remediated land using SCF funding will result in the town no longer being in compliance with the terms of the SCF agreement.
To resolve this, the federal funding paid to the town related to the land remediation must be refunded by the province, said Ric McIver, provincial minister of municipal affairs in a letter to Innisfail mayor Jean Barclay on June 24.
McIver’s letter went on to say the federal government gave the town $1,594,294 in SCF grant money for the remediation project.
He said the town and province would “share the burden” of refunding the federal government equally with each repaying $797,147.
The minister added the town had to make its payment through the province within 30 days of receiving notice.
“The only question I have is that through this entire process did we ever see any glimmer of hope from the federal government that they would understand?” asked Coun. Gavin Bates following Vickers’ report. “I am just wondering if anybody through the last four years has even said that our request made sense.”
“I believe they (federal government) have said no,” replied Vickers.
Council then unanimously passed a motion that authorized the repayment of its half of the SCF grant monies owed to the federal government in the amount of $797,147. The money will come from the town’s Stabilization Reserve.
“The project will be signed off, and so the grant dollars are now concluded, they’re complete,” said Todd Becker, the town’s chief administrative officer, last week to the Albertan. “The project is considered done.”
