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“It’s the same as a cut”: municipalities say infrastructure funding in Alberta budget falls short

The association representing 85 per cent of Alberta’s population says the provincial budget falls short on infrastructure funding for municipalities.

Alberta Municipalities held a webinar on Friday to discuss the budget, where members shared concerns about the budget leading to higher municipal taxes and infrastructure problems.

Airdrie continues to be one of Canada’s fastest growing municipalities. The city’s mayor, Peter Brown, said it needs new and expanded water and waste water lines, lift stations, reservoirs, and recreation centres.

“As we continue to grow, waste water is going to be a significant issue in the next year and a half. We’re going to have to do something. It’s a great expense, but we’re going to need help (from) the province to support that,” Brown said in an interview with Global News on Sunday.

Airdrie has reached 80,000 people and Brown suspects the city could  see another three to four thousand people this year.

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“At the end of the day, we need help from the province and the federal government, to help our municipality meet the needs of the new residents and businesses who are coming to our communities,” Brown said.

Tyler Gandam is the president of Alberta Municipalities which represent 260 Alberta communities.

He said municipalities were hoping for $1.75 billion from the province this year, instead they received less than half, roughly $722 million.

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“What we would like from the provincial government is a plan. We would like a plan for that growth,” Gandam said, who also serves as the mayor of Wetaskiwin.

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“We would like a plan on healthcare and a plan on education. What are we going to do moving forward to make sure that the residents that call Alberta home are looked after, and we are able to take on that influx of new residents coming in,” Gandam said.

He said with municipalities facing a $30 billion infrastructure deficit, the money has to come from somewhere. Gandam suggested either the province or property taxes increases, or infrastructure will deteriorate.

“I would say the easiest one to see are roads so when a road or a sidewalk is failing, you see that right away,” Gandam said. “Concrete has gone up 130% over the last few years.”

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Members are wondering why the provincial investment in municipal infrastructure is not keeping pace with population growth and inflation.

“It’s the same as a cut. It’s not keeping up with inflation.”

The local government fiscal framework that looks after infrastructure is a great example of that, where there’s been steady cuts and it’s not keeping up with inflation. It just makes it that much harder for municipalities to be able to provide services without increasing taxes to our residents and business owners,” Gandham continued.

“We want to make sure we have an environment where I can start reducing personal income taxes, and to do that, we have to have a little bit of restraint so that we can all benefit,” said Alberta Premier Danielle Smith at a news conference in Calgary on Friday.

But municipalities are frustrated by the increase in the amount of education property taxes which the province will take from communities.

The province will maintain education tax rates from 2023-24 and because of the growth in property assessments in communities last year, the government will collect $229 million more from Albertans through property tax bills.

“We’re looking to get some clarification on that substantial increase and how we can better inform our residents and business owners that when we do collect that tax on behalf of the province, it has nothing to do with the municipality. We don’t have any control over that increase and where that money is going,” Gandam said

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Municipal Affairs minister Ric McIver said under the Local Government Fiscal Framework (LGFF) , Alberta’s municipalities and Metis Settlements will receive $722 million in LGFF funding for the 2024-25 fiscal year, which is equivalent to the average amount municipalities have received annually since Budget 2021 under the previous model.

He said the  2024 budget provides $2.4 billion over three years in LGFF funding to help fund local infrastructure priorities. This includes $2.2 million in top-up funding to ensure no municipality sees a funding reduction from their 2023 MSI allocation.

“The LGFF includes a revenue index factor that ties municipal funding 100 per cent to changes in provincial revenues from three years prior. Alberta communities asked for this kind of partnership because it gives them the ability to predict future funding and plan their projects accordingly. And because it is directly tied to provincial revenue changes, it is more sustainable for the provincial government,”  McIver said in a statement to Global News on Sunday.

He said Budget 2024  includes $60 million over three years for the Local Growth and Sustainability Grant, a new program to help relieve some of the pressure on local infrastructure in high-growth communities.

But in a news release issued on Friday, Alberta Municipalities says that funding doesn’t go far enough.

“Alberta Municipalities appreciates that Municipal Affairs Minister Ric McIver is in our corner and advocated for a new Local Growth and Sustainability Grant. Unfortunately, this extra $20 million dollars-a-year is dwarfed by the billion dollars needed to keep pace with growth and pay down the estimated $30-billion municipal infrastructure deficit.”

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