Councillors voted eight to seven in favour of going ahead with the project, which proponents argued is needed because of expansion plans at the Calgary International Airport.
In the spring, the airport is set to start building a new 4,270-metre runway. That is forcing the closure of Barlow Trail between 48th Avenue and Airport Road N.E. on April 3.
The proposed tunnel would compensate for the loss of that route to the airport. It would extend Airport Trail (96th Avenue N.E.) eastward, underneath the new runway, linking up with 36th Street N.E. on the other side.
New runway by 2014
Mayor Naheed Nenshi said he's thrilled with council's decision and confident that negotiations with the Calgary Airport Authority will produce an agreement.
"I know that the airport authority wants to do what's best for all Calgarians, so the good news about the negotiations is we're starting in the same place. We're starting in a place where we want to get this done and we want to do what's right for Calgarians," Nenshi said.
'It's essential that the runway project maintain its schedule.' —Jody Moseley, Calgary Airport Authority
The airport authority wants to make sure the new runway is complete by mid-2014. The city hopes to finalize the tunnel deal with the authority in next few days, so it can be incorporated into runway construction.
"We're not going to get into specific details at this stage, but we will be discussing really quickly because it's essential that the runway project maintain its schedule," said airport authority spokeswoman Jody Moseley.
"The delay costs are something that's big for [the airport authority], because this is going to delay them somewhat," said Ward 3 Ald. Jim Stevenson. "They want to be compensated for that, and that's natural."
Without a tunnel, many area businesses have argued that they will be cut-off from airport traffic, while Deerfoot Trail — the other main route to the airport — will become too congested.
Opponents of the plan questioned the need to rush ahead with such an expensive project that will take funds away from other important infrastructure projects.
But after a lengthy debate — more than two hours behind closed doors, plus another three-and-a-half hours in chambers — most council members agreed with Nenshi that postponing the tunnel would end up being the more costly decision.
City will look at funding options
Stevenson said his northeast ward needs the tunnel.
"It will just be a matter of awarding the contract and getting at it, so there's no reason why there shouldn't be shovels in the ground within the next few months," he said.
The city will now study ways to cover costs and fund future expansions, including an LRT line through the tunnel.
"The administration was asked to look at things like a toll, acreage assessments, money from the federal government, money from the provincial government, money from the utilities that would run through this tunnel," said Stevenson.
Nenshi said he will continue to ask the provincial and federal governments for money towards the project.