The provincial government's decision to give Calgary $1.5 billion for the Green Line LRT over just eight years will cut the city's financing costs in half, prompting one city councillor to push for an expansion of the recently approved mega-project.

Instead of estimated interest charges of $52 million per year, city council heard on Monday the charges will now be $25 million per year thanks to the reduced borrowing needs brought on by the province's short funding timeline.

Coun. Shane Keating says that means more could be built in the first phase of the Green Line, and he'd like to see it extended farther south.

"It should go to McKenzie Towne where the residents will actually walk and get on the train," said the southeast Calgary councillor who has championed the project.

"Where it stops now, they actually have to drive or take the bus route, which is fine if they take the bus, but if they drive then we're somewhat defeating the purpose of the carbon reduction, so let's put it in such a manner where they can actually walk to it or take a very short bus trip."

Tax room

City council recently approved the entirety of the project, which will eventually stretch over 40 kilometres from Seton in the south to Stoney Trail in the north, but only the first 20 kilometre phase will be built at this point in time, ending just shy of McKenzie Towne.

"The scenario, I would say, is: we have a couple of streams already set aside for financing, so let's take some of that financing charges that we've built into things — one might be the tax room that comes up in the fall, the $23.7 million — and let's dedicate it to the Green Line to actually do extensions in phase 1," said Keating.

It's not the first time the councillor has pushed for an extension of the first phase, arguing council should allow companies bidding on the project to say what they could do for the given price, even if that meant a longer line.

The city hopes to start construction on the new LRT line in 2019 or 2020.