City looks at tax hike for Yellowhead freeway project

A new report going to city council next week recommends the city borrow over half a billion dollars to turn the Yellowhead Trail into a freeway.

Paying for the debt could cost taxpayers 1.76 per cent more over 10 years

One of the many sets of lights along Yellowhead Trail which the City of Edmonton will eliminate when the busy truck route is upgraded to a freeway. (Travis McEwan/CBC)

A report going to city council next week recommends the city hike taxes by nearly two per cent to cover the costs of borrowing $500 million to transform Yellowhead Trail into a freeway.

The city's portion of a $1-billion, 10-year project to improve a 25-kilometre section of the Yellowhead is $510.8 million.

The rest will be covered by the provincial and federal governments, which have already committed their support.

The report going to council on Tuesday recommends a tax levy to cover borrowing costs on $510.8-million of tax-supported debt.

"This will require an increase in tax levy to pay for the servicing of this debt over the lifetime of the project," the report says.

"Overall, an estimated tax increase of 1.76 per cent is anticipated between the years 2017 to 2026 to fund debt servicing costs on the city's contribution."

Mayor Don Iveson said he's not worried taxpayers will be frustrated by the tax increase.

"I think the feedback we had from citizens is that the Yellowhead is a decades overdue investment, that there's no time like the present to get moving on it, and that the sooner we can do it, the sooner we'll be able to take advantage of a more competitive construction climate," Iveson said Thursday.

Traffic volume to double in 30 years

Within the city limits, the Yellowhead currently has 10 interchanges, eight intersections with signals, other intersections without signals, and access roads.

It is the highest-volume truck route in the city and traffic volume is expected to double in 30 years to more than 120,000 vehicles each day.

Making it into a free-flowing freeway would optimize traffic capacity and flow while improving safety, the city says.

Alberta and Ottawa will each contribute $241.6 million to the project. Another $8.7 million, for expenses ineligible for provincial or federal funding, would come from the city's 2019-'22 capital budget.

Construction is expected to start in 2021 and take six years.

The city will spend the next four years buying properties along Yellowhead Trail for expansion.

A big part of the city's budget for the project will be spent on property acquisition, Iveson said.

He compared the big loan to a mortgage for the city.

"It's just using a mortgage to fix a billion-dollar challenge," he said.

City council will debate the report and the funding proposal on Tuesday.

About the Author

Nola Keeler is an award-winning journalist who has worked with CBC in Whitehorse, Yukon and Edmonton since 2000. She has worked as a host, reporter, news reader and producer for CBC. Send story ideas to nola.keeler@cbc.ca.