The Lloydminster Region Housing Group is counting on about $27 million in provincial and federal grants for its planned $44-million Pioneer Lodge rebuild. None of that money is confirmed.
The grants make up about 61 per cent of the project, by BorderPulse’s calculation from the group’s funding plan. The plan was presented to the Governance and Priorities Committee on Monday.
Municipal partners are being asked for about $5 million of the rest. Lloydminster city council will be asked next week to approve the city’s $3.5 million share.
Coun. Michael Diachuk and Coun. David Lopez fielded questions about the plan. The group’s chief administrative officer was not at the meeting.
Where the money would come from
The plan lists $14,955,302 from Alberta’s Affordable Housing Partnership Program and $11,854,620 from a combined federal and provincial grant. City Manager Dion Pollard said the group is applying and advocating for both.
The remaining $17.1 million comes from an $8,354,415 loan, the $5,037,240 municipal ask, $2,537,240 of the group’s own cash and land valued at $1,172,000.
Diachuk said partners must put money up to qualify.
“It’s a pay-to-play process in order to access the grants, and that’s why there’s a requisition from each of the owners,” said Diachuk.
He said the group presented to a provincial minister.
“What they’re trying to do is not say no to projects but rather when,” said Diachuk.
What could change the price
The $38.7 million construction estimate is a Class C estimate, which can be off by minus 20 to plus 30 per cent. The estimate already includes 14.5 per cent for allowances such as design changes, tariffs, inflation and change orders.
A 30 per cent overrun would add about $11.6 million, by BorderPulse’s calculation. That is more than double the $5 million municipal ask. No one at the meeting said who would cover an overrun.
Lopez said the project works out to more than $600,000 a door.
“When you look at this project and it’s over $600,000 a door, you go, what’s going wrong?” said Lopez.
He said a separate site might cost $400,000 a door but would mean staffing two locations. Coun. Justin Vance noted the project also covers kitchen, heating and roof upgrades.
Diachuk said the group asked its architect to consider a pitched roof instead of a flat one, and fewer exterior doors. He said each door costs $6,000 to $8,000.
“Even if it costs us a little more right now, the savings on not having a leaking roof on these flat roofs 10 years down the road makes more sense,” said Lopez.
The 50-year loan
The group’s $8.35 million loan carries 4.65 per cent interest over 50 years. Annual payments are $427,722, and projected net operating income is $469,169. That leaves a surplus of about $41,400.
No one at the meeting explained why the loan runs 50 years. A 30-year term at the same rate would cost roughly $90,000 more a year, by BorderPulse’s calculation. That would wipe out the surplus.
“Fifty years is an awful long time to pay for something,” said Mayor Gerald Aalbers.
Lopez said the thin margin worries people.
“One bad day or one bad month and that money is gone,” said Lopez.
He said the projection leaves out rent from the group’s own offices, worth $24,000 to $30,000 a year, plus internet, TV and laundry revenue.
Diachuk said the county already pays a yearly requisition to the Vermilion lodge, so it wants to avoid a second one.
How the city would pay
A city administration member outlined three options for the city’s $3.5 million share.
A one-time levy on all property taxpayers would mean about a 7 per cent tax increase. The administration member said that is “really not an option that I would recommend.”
Paying fully from reserves would affect the capital budget, which was about 72 per cent reserve-funded in 2026. The administration member called debt “likely the most feasible option.”
Pollard said payments would likely not reach the books until about 2028, so the 2027 budget would not be affected. Aalbers said council will face a second decision in 2028 on how to fund the share.
What happens next
Applications are due Nov. 1. Diachuk said the earliest approval would come in January or February 2027, and construction would likely start in 2028.
He said a new provincial Housing Act takes effect in January 2027, and its rules on municipal approval of funding are still unclear.
The group is also seeking charitable donee status so it can issue tax receipts for donations. Diachuk said the process takes a few months and costs a few thousand dollars. Donors want a confirmed project first, he said.
“There are seniors that are saying, tell us when we have money, we want to be part of the project,” said Diachuk.
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