The province is providing a $21-million forgivable loan to the City of Moncton for its proposed Moncton downtown centre project.

The province announced Thursday a $21 million forgiveable loan for the downtown entertainment centre. (CBC) Health Minister Victor Boudreau, who is also responsible for the Regional Development Corp., made the announcement Thursday morning flanked by Moncton Mayor George LeBlanc.

The project, to be situated on the site of the former Highfield Square property, has an estimated total cost of $107 million and has been the subject of heated debate in Moncton.

It would be the home of the Irving-owned Moncton Wildcats, the Quebec Major Junior Hockey League team.

"Our government's commitment to this strategic recreational infrastructure project will yield a significant return on investment by spurring economic activity in greater Moncton and creating jobs," said Boudreau in a news release.

The loan will be on the condition the city provide a business plan, demonstrate that the project is sustainable without continued government assistance, provide success indicators and measurable economic benefit, and leverage funding from federal, local or private sources.

The loan will allow the city to convert $14 million of the forgivable loan to provincial grants providing the city secures matching funds from other public and private-sector partners, said the release.

The Regional Development Corp. says the project will generate 700 jobs and $9.8 million in provincial income tax during construction, and an expected $192,000 annually in income tax and 49 jobs once in operation.

The city has set a deadline of June 20 for the provincial and federal governments to make funding commitments toward the project.

The province and Ottawa have been in a war of words over the centre for weeks, with local Conservative MP Robert Goguen insisting the federal government was ready to fund the project if New Brunswick came through.

Boudreau called the discussions "a moving target" and said he hopes the provincial commitment will persuade other partners to ante up for the city.

"It needs to know which direction it can move in and what are its next steps, so we felt it's important for the province to give a clear indication that we are there," Boudreau said.

LeBlanc said the proposal has been "a long winding road" over recent years. He says he's confident he can now negotiate a deal with the federal government through Goguen for a matching amount of federal money.

He says the city has a plan to finance the project and that it will not affect the city's debt ratio.

Coun. Brian Hicks said he is not convinced the federal money is new funding, but merely the amount Moncton would normally receive being repackaged under a new name.

"That's what we have to see and have to see from MP Robert Goguen whether he has new money, [or] if this is money that would normally come to Moncton under the build Canada Fund or the gas tax. Even the mayor a year ago was quoted as saying this has to be new money. If it's not, it's going to be a big drain for Moncton tax payers," said Hicks.