Iqaluit seeks to limit cost of new aquatic centre

The City of Iqaluit’s recreation department hopes to reduce interest costs on the money it needs to borrow for construction of its new aquatic facility through a loan and grant from the Canadian Federation of Municipalities.

The City of Iqaluit’s recreation department hopes to cut back on the cost of the city’s $40 million aquatic centre through a low-interest loan and grant from the Canadian Federation of Municipalities.

City council gave the go-ahead Aug. 27 for a joint loan and grant application that could save the city up to $1 million on the project, to be covered by a grant from the federation, as well as secure a “below-market interest rate” on a loan of up to $10 million for the centre’s construction.

“This will help the city and keep the cost down,” said Amy Elgersma, Iqaluit’s director of recreation, in a presentation to city council.

The Canadian Federation of Municipalities offers the grant and loan through its Green Municipal Fund, according to the city’s administration.

Iqaluit will apply under a category that covers projects with “energy savings components.”

Asked about the city’s funding plans for the facility, John Hussey, Iqaluit’s chief administrative officer, said the facility’s $40 million cost could be covered “from multiple sources.”

If successful, the $10 million loan from the federation would mean the balance of $30 million would “come from another institution,” he said.

Interest rates on the loan would be lower than rates charged by banks and other financial institutions, Hussey said, although he could not specify how much less.

“The value of this is that we’ve got the opportunity to get $1 million free,” said Hussey, referring to the grant. In addition, the low-interest loan promises to reduce “the compounding effect of interest,” he said.

“The idea in principal is to try to reduce the interest expenses going forward on this loan,” Hussey explained.

“By making this application, we can get a million-dollar grant and get a reduced interest rate. That’s what we’re aiming for here, in the interest of taxpayers.”

Councillors Kenny Bell and Terry Dobbin raised several questions about financing plans for the facility and the city’s ability to cover the $40 million.

Councillors Mark Morrissey and Joanasie Akumalik reminded them that ratepayers supported the project in a referendum in October 2012, and spoke in support of the application.

They agreed that the city should take every opportunity to limit the costs of building the centre as the project proceeds.