Leaders of Alberta municipalities are urging the provincial government to work with them to amend Bill 20.
City mayors, including Edmonton’s Don Iveson and Calgary’s Naheed Nenshi, believe funding for municipalities should be based on a one-to-one ratio tied to provincial revenue rather than the half rate the budget proposes.
Bill 20, the Fiscal Measures and Taxation Act, is part of the United Conservatives plan to implement its first provincial budget.
Second reading of the legislation was adjourned Oct. 30. If passed, Bill 20 will include getting rid of a number of dedicated funds and tax credits and create a new, long-term funding arrangement for municipal governments.
The UCP’s 2019 budget outlined how the new Local Government Fiscal Framework would replace the Municipal Sustainability Initiative (MSI), Municipal Transportation Grant and the City Charters Fiscal Framework Act.
The new funding framework starts at $860 million in 2022-23 ($271 million for Calgary and $184 million for Edmonton) and “will see those transfers grow at half the rate of provincial revenue growth,” the budget said.
A joint news release was sent out Monday from the mayors of Calgary, Edmonton, the Rural Municipalities of Alberta (RMA) and the Alberta Urban Municipalities Association (AUMA).
“We are concerned that funding will grow at only half the rate of provincial revenue each year and as a predictable funding program, it should reflect a full connection to provincial revenues,” the news release said.
It explained that, while they understand the UCP government has a mandate to be more fiscally responsible and that they expected reduced municipal funding in future years, municipalities must be full partners.
“We strongly urge the government of Alberta to amend Bill 20 to allow future municipal funding growth tied fully to provincial revenues at a one-to-one ratio which would allow municipalities to increase investment in needed infrastructure when revenue is positive, and make necessary adjustments during more challenging times. Without this complete indexing connection, from an inflationary perspective, municipalities will be left behind.
“We urge the government to take a longer term view of the role of municipalities. We encourage them to work with us to determine the appropriate formulas and solutions to help address the fiscal challenges while continuing to make our economy grow.”
Edmonton’s mayor drew a parallel to the province calling on the federal government for a “fair deal for Alberta.”
“Bill 20 effectively downgrades the role of municipalities just when partnership is needed more than ever,” Don Iveson said. “Just as the premier has repeatedly called on the federal government to issue Albertans a ‘fair deal’ to drive Canada’s prosperity, municipalities are asking for their ‘fair deal’ to be full partners in supporting economic recovery and growth.
“We share the same ambition with the provincial government for a strong and prosperous Alberta, which is why municipalities need to be treated as respected and equal partners.”
Calgary’s mayor and the RMA stressed investing in local infrastructure and community growth is crucial for success both at a city and provincial level.
READ MORE: Highlights from Alberta budget 2019
“AUMA is pleased that the provincial government, through the introduction of Bill 20 and the Local Government Fiscal Framework Act, recognizes the need for Alberta municipalities to have predictable and sustained infrastructure funding,” said Barry Morishita, president of the AUMA.
“At the same time, AUMA is also extremely disappointed that a UCP election promise was broken with the repeal of the City Charters Fiscal Framework Act.
“Alberta municipalities are united, requesting that the provincial government begin consultations to ensure that this legislated infrastructure funding is adequate and grows at the same rate as the Alberta economy. Adequate infrastructure funding drives economic growth, creates jobs for Albertans and enhances the Alberta advantage.”
The MacKinnon Panel, from which the province based a lot of its budget decisions, recommended the province adjust “its allocation formulas for grants to municipalities in line with the policy of bringing Alberta’s provincial and municipal per capita capital stock in line with the comparator provinces.”