City gets $43M in low-interest loans for water projects

The Canada Infrastructure Bank is providing low-interest loans worth $140 million for Manitoba municipalities to complete water infrastructure projects, including $43 million for two major projects in the City of Brandon.

Today, the bank is set to announce loans for Brandon to continue upgrades at its water treatment plant and to facilitate the southwest lift station project. Ahead of that announcement, the bank provided the Sun with advance information and provided CEO Ehren Cory for an interview on Monday.

Mayor Jeff Fawcett said Monday that the money being lent to Brandon through the bank represents about half of the funds it will need to borrow for the projects.

Fawcett said the bank’s assistance will save Brandon around $1 million per year in repayment costs, regardless of current interest rates.

The rest of the funding is also going toward a new centralized wastewater treatment plant for communities in the Red-Seine-Rat Wastewater Co-operative (RSR) south of Winnipeg.

Unlike borrowing money from a traditional financial institution, Cory said the Crown corporation can lend at a more affordable rate.

“We share risk with the other parties in the project in a way that a typical bank couldn’t do,” Cory said.

“Big infrastructure projects are expenses, they take a while to build and they take a long time to pay themselves back, sometimes decades. That’s hard for a traditional bank sometimes to do, and that’s where we come in.”

In Brandon’s case, Cory said the projects are for long-lived assets that will enable the city to not just grow, but make housing more accessible through enabling development.

City staff have said the southwest lift station project, which will see the construction of two new lift stations and associated forcemains, is necessary because the current wastewater system in the area is close to capacity.

In December, city staff said the estimated price tag for the lift station project was in the neighbourhood of $31 million.

The project has been controversial because of a perception by some members of the public that it will benefit developers more than the city itself. The city is currently reviewing the development cost charges it levies on developers as a contribution toward municipal infrastructure they will benefit from.

Across both the RSR and Brandon projects, Cory said 78,000 homes will be provided with ongoing access to potable water, with added capacity for 15,000 new homes.

“This idea that infrastructure can unlock housing is, I think, a really important one for our country,” he said.

“Right now, there’s lots of challenges around meeting housing needs, and there’s not one solution to that by any stretch, but it is a part of the solution. In some places, I’ve talked to mayors who say they’ve stopped issuing building permits five years ago because they don’t have water.”

He said the bank is aligning its efforts with the federal government and Canada Mortgage and Housing Corporation’s attempts to boost the country’s housing supply.

Discussions are underway, he said, with municipalities in Alberta, Nova Scotia, Ontario and British Columbia for projects along similar lines.

In paying back the loans, Cory said the bank has a repayment plan set up with the municipalities based on their anticipated growth. If the municipalities grow faster than expected or slower than expected, the bank can be flexible on terms.

Cory also credited the Manitoba government for its work in helping facilitate the projects.

Fawcett said a lot of the credit for the deal coming together goes to former Brandon West PC MLA and cabinet minister Reg Helwer, who brought the idea to former mayor Rick Chrest in 2022.

“It’s a massive step, about a million dollars a year in savings” Fawcett said. “It’s a very important piece of trying to make sure our finances get into better shape.”

In December, the city released a report by accounting firm MNP suggesting the city would have to turn to much larger than normal property tax increases to remain sustainable. That led to council approving a 2024 budget with a 9.4 per cent tax increase early last month.

Fawcett said he believed the lift station project would go to tender soon, but that the city is still seeking additional financial assistance for it. He said the price tag is still estimated to be in the $30-million range.

“It allows us to continue to grow, that’s the main thing,” Fawcett said, thanking the bank for working with the city.

The mayor said he met with Manitoba’s federal Liberal caucus about two weeks ago to discuss a funding application for the southeast drainage project and is hoping to meet soon with provincial Infrastructure Minister Lisa Naylor to go over the state of 18th Street and other provincially run streets and roads within the city.

The city is also waiting for the federal government to officially announce Brandon’s funding through the Housing Accelerator Fund.

In a quote provided in a release from the bank, Naylor said Manitoba believes wastewater and water projects are critical assets for growing communities.

“Our government believes that everyone benefits when governments work together to meet community needs,” Naylor said. “Manitoba is an eager partner on infrastructure projects to ensure all Manitobans have safe, clean drinking water.”

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