10/27/2011 12:38 EDT | Updated 12/27/2011 05:12 EST

Federal minister says she shocked that Alberta museum has been put on hold

EDMONTON - There is a good deal of finger pointing going on in Alberta's capital after plans to build a new Royal Alberta Museum crumbled because of a $92-million hole in the funding scheme.

The province is blaming the federal government for construction being put on hold, saying Ottawa backed away from verbal commitments that the money would be forthcoming.

But federal Public Works Minister Rona Ambrose, who is an MP from the Edmonton area, is blaming the province.

She says Ottawa was only ever down to cover $30 million of the $340-million facility.

"I am not sure why the provincial government has decided to take a step back from this project," Ambrose said Thursday.

"To hold a press conference and talk about a commitment being pulled by the federal government without actually speaking to the federal government is shocking to me."

Construction of the new museum to replace the cramped existing facility was announced amid great fanfare in April by outgoing premier Ed Stelmach. Design proposals were solicited and public opinion was sought.

Last month the province announced that Ledcor Design-Build would do the work. Earlier this month Alison Redford replaced Stelmach as premier.

The deal fell through on Wednesday evening at a news conference hastily arranged by the province to say the federal government had backed away.

"In these economic times, we understand governments have to make difficult decisions as we are going through budget deliberations right now," said Alberta Infrastructure Minister Jeff Johnson.

A news release from the original April announcement did note that the federal government was chipping in $30 million to the overall cost.

But provincial officials say that money was committed years ago when it was first thought the current Royal Alberta Museum would be renovated rather than replaced.

The province says it was really counting on getting $92 million from Ottawa through the Building Canada fund. Officials say there were "strong assurances" that money would come through, but on Wednesday they were told it hadn't.

The whole situation left Edmonton's mayor trying to control his temper with reporters late Wednesday night. Stephen Mandel is calling the federal government's decision "an incredible blow to the citizens of Edmonton."

Federal funding for city projects is a touchy subject for Mandel. He was steamed last year when Ottawa refused to back Edmonton's $2-billion bid to host Expo 2017. The city claimed it was the federal government that first encouraged Edmonton to apply and the province was on board.

The museum plans fell apart on the same day that Edmonton city council approved a plan to build a new hockey rink for the Edmonton Oilers just down the street from the museum site. The city hopes to get $100 million from the province so that the $450-million plan can go ahead.

Of that coincidence, Alberta opposition NDP Leader Brian Mason says "something smells."

Mason says he's suspicious that Redford's government was quick to pull the plug on the museum in favour of the hockey rink, while using the feds as a scapegoat.

"There's still a lot of pressure to fund that hockey arena," says Mason, adding that lack of clarity is the fundamental problem, he says.

"We're back in the position where we're guessing at the motivations of the government," he says.

Laurie Blakeman of the Alberta Liberals says it appears the Tories under Redford have priorities other than the museum, but wouldn't be straight with voters.

"I looked back at the current premier's leadership (campaign) comments and there is a point where she and several other candidates comment on the spending that then-premier Stelmach was making," Blakeman says.

"But even at that time she said they shouldn't be spending any money on unallocated projects. This was an allocated project. That money's been in the budget for more than a year.

"I think they just didn't want to build it. I think they're looking to find money to shift around and pay for some of their other priorities and they just pulled it off off this."

The province has indicated it still hopes the museum can be built.

Johnson says it will be up to caucus to determine the province's next move. (CHED, The Canadian Press)