News
Craig Norman/The Gauntlet

Expansion financing in jeopardy

Publication YearIssue Date 

MacEwan Hall expansion has hit another obstacle: unclear legislation preventing the Students' Union from signing a loan agreement with the Royal Bank.

Though the SU and Royal Bank signed a term sheet agreeing to finalize a $10 million loan in early December, the Bank will not sign a loan agreement due to provincial legislation it says prevents students' unions from borrowing money.

"The Royal Bank's lawyers say that when you look at the Universities Act, and then look at the Interpretations Act of the province, we cannot get a loan," said SU President Rob South. "Under the Universities Act, the University of Calgary is explicitly given the power to get a loan; SU's are not. And the Interpretations Act says that if two bodies are created under the same act and one of them is explicitly given a certain power and the other body is not, that other body does not have that power."

In a letter to the Alberta Ministry of Learning, the Royal Bank asked the ministry to clarify the legislation.

"Our support is forthcoming as long as we receive comfort from the provincial government that the lack of clarity in the legislation will be dealt with, that being amendment to the legislation to grant the powers of borrowing and pledging of security to the su," read the letter.

The Ministry of Learning, however, will not amend the Universities Act, saying they received an opinion from Alberta Justice in the summer stating the SU could legally borrow money.

According to Alberta Learning, section 16(a)(ii) of the Universities Act gives statutory corporations like the SU the authority to enter into agreements, including loan agreements.

"In our opinion the legislation is clear," said Ministry of Learning spokesperson Ed Greenberg. "We interpret it broadly saying the U of C SU can borrow money on its own. There is no need to amend the Universities Act."

South, however, says the SU cannot obtain a copy of Alberta Justice's opinion to see how it could feasibly get a loan.

"We've asked through the Ministry of Learning for a copy of this opinion, but they won't provide it to us, and it is not information we can acquire under the Freedom of Information and Privacy Act," said South. "We don't know how Alberta Justice came up with their opinion, and we know how the Royal Bank came up with theirs."
South added that this does not affect the redevelopment projects currently happening in MacEwan Student Centre, for which financing is secured. However, future projects are in jeopardy.

"Until we get a loan, we can't start expansion and we can't do much more redevelopment because we don't have the money for it," he said.

If a loan cannot be secured, the status of expansion will be left to the incoming Students' Legislative Council, whose terms begin May 1.

"If we don't have anything by April, we're going to start looking around," said SU President-elect Toby White. "If we can't find anyone to finance, I want to have a referendum in the fall to ask students what they want to do about it."

South is not optimistic about the circumstances.

"It really depends on the Alberta Government," he said. "The situation looks bad."

Section: 

Issue: