Pandemic slows provincial loan forgiveness for Avenir Centre

The pandemic has affected how quickly forgivable loans the New Brunswick government issued for the construction of Moncton's Avenir Centre are being written off. 

The province issued loans worth almost $11 million with various benchmarks before the loan could essentially be turned into a grant to the city.

While half the loan was forgiven based on opening the 8,800-seat downtown arena in 2018, many of the other conditions have terms based on the operation of the arena, which have been impacted by COVID-19 restrictions. 

"If it wouldn't have been for COVID, our forgivable loan would be pretty close to being fully written off at this point," Jacques Doucet, the city's chief financial officer, said in a recent interview.

At the end of 2020, the balance of the forgivable loans was $3,527,888. The figure will be updated once 2021 is complete and data is received by the province.

The financing for the $113-million arena and adjacent plaza was complex. The city budgeted to spend $39 million. The city has said it received better interest rates than budgeted for its debt, resulting in lower overall costs for the centre. 

It also received $19.3 million from the federal government, planned to fundraise $5 million and redirect an annual policing subsidy from the federal government meant to offset the cost of the RCMP.

The province provided $10,994,646 in forgivable loans. Half was forgiven based on completing the building. The rest is based on a combination of:

Many of those components have been affected by pandemic restrictions or cancelled music and sporting events at the arena. 

"We haven't seen the same types of activities at the Avenir Center that we did in 2019, for example, which has impacted the forgivable loan," Doucet said. 

The Moncton Magic basketball team, which had been seeing ticket sales increase at the arena, announced in August the team was departing the National Basketball League of Canada. It hasn't resumed playing.

There's been no word on when or if it will return to the court. Several basketball teams have formed around the Maritimes, including in Saint John and Bathurst, as part of the new Eastern Canadian Basketball League.

The Moncton Wildcats home games this fall had an average attendance of about 3,500, well below the arena's capacity, according to figures on the Quebec Major Junior Hockey League website.

Despite the setbacks, Doucet said the city remains confident the terms will be met.