St. Albert will not contribute additional funds to a regional effort to support the Edmonton International Airport, council decided on Tuesday.
Back in June of last year, council responded to a regional ask for 14 municipalities to raise $15 million toward an Air Service Fund to attract international flights back to Edmonton after the industry took a hit due to COVID-19. St. Albert was slated to contribute $719,000 over three years, with city council voting unanimously in June to kick in $145,154 as its first contribution.
Managed by Edmonton Global — an economic development organization for the Edmonton Metropolitan Region — the fund is designed to reduce risks for airlines to re-establish direct international flights to and from the Edmonton region. Edmonton Global has requested municipalities decide on a second year of funding by March 2022.
While the fund has already virtually reached its goal of $15 million, with a total of $14,996,273, Malcolm Bruce, CEO of Edmonton Global, said during a presentation at the beginning of Tuesday's council meeting that any additional funding would be used to enhance the ability to attract additional flights, with any residual cash at the end of the fund's life in June of 2024 to be redistributed to contributing municipalities.
Bruce said that as a landlocked region, the Edmonton International Airport is essential for moving goods and services in and out of the Greater Edmonton Area.
"I always highlight cargo import and export is very critical, and over 50 per cent of all imports for cargo are done in the belly of passenger planes," Bruce said. "The fact that we had 18 months where we did not have international passenger planes was really detrimental to a number of our businesses."
Use for funds still unclear
Mike Erickson, St. Albert’s director of economic development, said there have been a number of "notable disparities" between transparency and accountability commitments initially outlined by Edmonton Global and what has been made available to date, including reporting on outcomes from the investment. He noted, however, that Edmonton Global has committed to another update at its annual general meeting in April.
When approving the initial funding, councillors took issue with how Edmonton Global determined what each municipality would contribute to the fund — contributions were based each municipality’s assessment rate, rather than the economic benefit the community would receive.
Coun. Ken MacKay asked Erickson if he is aware of any efforts to develop a different funding model. Erickson said to his knowledge, no other funding formula has been explored.
Erickson noted one of the risks of pulling out of the fund include an appearance of St. Albert not being supportive of inter-municipal collaboration. Two municipalities of the five that only committed to the first year of funding have also decided to stop contributing to the Air Service Fund, Erickson said.
Coun. Wes Brodhead said he would "hate to abandon a regional economic activity."
"We haven't heard yet what the final outcomes are," Brodhead said. "St. Albert's a major player in the region, and if St. Albert pulls the plug on this we're saying something."
Coun. Mike Killick asked for some clarity on what the fund specifically contributes to.
"That's the challenge for us," Erickson said. "We don't know exactly ... what they're being used for, we just know that these funds have been allocated for that purpose."
Putting the motion forward, Coun. Natalie Joly noted the decision is "a challenging one," arguing Killick's question around specificity is an important one.
"I have to be able to explain that to St. Albert residents," Joly said of the fund's use. "I do wish the Edmonton International Airport the best as they continue to recover, because they are a core piece of the economic viability of the region."
Brodhead said he understands the reason for the motion, but said he doesn't feel ready to pull the plug on the initiative quite yet, noting the March deadline for the decision is premature and that he would like to hear updates resulting from Edmonton Global's April meeting.
"I'd like to encourage Edmonton Global to give us as much information as possible on this program," Brodhead said. "I wrestle with the idea of being able to go back to the citizens of our community and say that this money is well spent when we ask for accountability and it's hard to come by."
Coun. Sheena Hughes noted that Edmonton Global has chosen the timeline for the funding decision and the meeting dates, adding that there is always the option to return if St. Albert's requirements are met.
"We need to make a statement, which is that when we ask for something that's contingent upon something else, that we expect to have that delivered," Hughes said. "If not, don't ask us for the money until you do so."
The decision to refrain from giving additional funding passed 6-1, with Brodhead opposed.
