The Strathcona Regional District has to give $3.4 million back to the provincial government.
The grant money was awarded to the regional district through the Build Canada Fund for the northern Area D sewer project, but the deadline to use the funds is rapidly approaching and the project was shot down last year by Area D residents.
Brenda Leigh, regional director for Area D, said she met with the B.C. minister of Community Development and her staff on Sept. 26 at the Union of B.C. Municipalities convention to ask about the possibility of keeping the grant for a different project.
“I made enquiries whether the Building Canada allocation would be transferrable to another infrastructure project within Area D – a water reservoir located in the southern end of the Area D water system,” Leigh said. “It was an information-gathering session to find out what would be required in an application and whether funds might be transferable.”
A letter from the ministry to the regional district which was before the board at its Feb. 11 meeting, confirmed the funds could not be applied to the reservoir project.
“It was determined that a scope change cannot be granted under the existing circumstances,” wrote Jay Schlossar, assistant deputy minister.
“The BCF-CC program cannot approve a complete project scope change of this scale. The original intention of the project (wastewater) would no longer be achieved and the new project (drinking water) would not result in the same level of ranking as the original.
“Other factors included in the decision were the amount of time remaining in the program, the inability to move the existing project forward, and the increased risk of being unable to complete a new project within program deadlines, even if an extension was possible,” Schlossar added. “As a result of your request for a scope change being denied, the ministry is withdrawing the funding.”
The original deadline to use the grant was March 31 of this year but the city was expected to ask for an extension had the project gone ahead.
The city had proposed extending its sewer service into northern Area D under the condition that affected residents agree to join the City of Campbell River – a requirement struck down by electors in a June 2014 referendum.
The $3.4 million grant from the federal and provincial governments was given to the Strathcona Regional District in 2006 to bring sewer service to Area D. That grant was to be transferred to the city if the project had come to fruition, but an overwhelming 84.3 per cent ‘no’ vote on joining the city took the sewer project off the table and left the grant money up in the air.
Leigh said the government’s verdict on the funding is unfortunate but not surprising.
“The assistant deputy minister’s recent letter basically confirms what I learned back in September (at UBCM) – that the Build Canada Fund is not transferable to another project,” Leigh said.
