North Rustico turns to P.E.I. government to help cover millions in rink debt

The Town of North Rustico is trying to get a loan of up to $3.5 million from the P.E.I. government to help pay off some of the debt associated with its rink, which was built to help host the Canada Games.

The centre was supposed to cost $10 million but that price tag has more than doubled to about $23 million.

During a special meeting Thursday morning, town councillors agreed to apply for the loan to service various debts, pay legal bills in a case a creditor brought against the town, and fund the rest of the construction needed to complete work on the Eliyahu Wellness Centre at Canada Games Place.

"I'm really sorry that this happened, but it did happen, and we're trying to deal with it, find a solution to it," said Mayor Heather McKenna. "They're working on it. I knowwe've been working on it for the last year and a half, trying to get it resolved."

The centre was used as a prominent venue during the Canada Winter Games in 2023, and now hosts a hockey school.

CBC News confirmed last year that $2.5 million in liens had been registered against the town for unpaid bills one for more than $1 million.

At that point, about $400,000 in work still needed to be done to install ventilation systems, complete the kitchen and canteen, address outside drainage concerns, and finish landscaping.

"It doubled because of COVID, labour, supply chain, prices went upit happened everywhere," said McKenna. "It's not like it didn't happen to any other town or communities or cities. We just happened to be the unlucky ones."

The town of about 650 people on P.E.I.'s North Shore has been working with the province and a private consultant to try and figure out what went wrong. Stephanie Moase, the town's chief administrative officer, said that work is getting somewhere.

"I feel that we are turning a corner," said Moase. "I feel more comfortable every day that we're getting a handlenot only [on] what happened during the project, but [on] where we are heading next."

North Rustico has already taken out a bank loan worth $3.4 million to fund construction of the wellness centre, part of about $5 million in debt the town is currently carrying.

'The town needs it to move forward'

Under P.E.I.'s Municipal Government Act, municipalities can't borrow money for capital construction if their debt would 10 per cent or more of their totalassessed property values.

For North Rustico, that cap kicks in at about $10 million. The new loan would take them up to $8.5 million, if it's approved by the province.

In talks with Finance P.E.I., the town hopes to negotiate to pay off the loan over the expected lifetime of the rink. A long amortization period like that"will assist us in being able to make these payments," said Moase.

In a statement, a spokesperson for the province said there's a due-diligence process to evaluate each proposalfor its risk and any projected return.

"Once proposals are reviewed and approved, applicants would enter into a lending agreement with Finance P.E.I."

Moase said the town hopes the process can be completed as soon as possible. "Our new sports season is underway in about three weeks, so the rink is going to be full and it's a lot harder to do construction."

McKenna said she believes the town can afford to take on the additional debt, but acknowledged that council hasn't ruled out a tax increase in order to be able to do that.

"The town needs it to move forward," she said.