Calgary faces massive funding gaps as Alberta municipalities rally for provincial help

Calgary city councillors are getting set to juggle how to afford a slew of recommended investments in this year’s budget, and an ongoing gap in funding; as the city’s mayor joins a call from other Alberta cities and towns for the provincial government to step up.

On Tuesday, city council heard that Calgary faces an average annual funding gap of $311 million; city officials said the figures date back to 2007 and can be attributed to the city “stepping in to fund provincial responsibilities.”

According to Mayor Jyoti Gondek, those responsibilities include housing, mental health and addictions supports as well as public safety.

“We’ve been able to demonstrate that over time, there are hundreds of millions of dollars that we’ve had to take up in our budgets,” Gondek told reporters. “We simply don’t have the capacity to do that.”

City councillors were also briefed Tuesday on a list of 30 new unfunded budget items that will be brought up for debate in November.

The list includes investments in transit upgrades, affordable housing, new infrastructure to accommodate growth, fire response, the multi-sport fieldhouse, and other administrative improvements.

If the list is approved in its entirety, it would add close to $102 million to the city’s base operating budget, as well as nearly $70 million in one-time spending; it also includes around $817 million in capital spending through to 2028.

However, city council won’t know how much of the list it can afford until early November, especially without help from other orders of government.

“We’ve got some pretty big decisions before us. These are big ticket items,” Gondek said. “We would love to do them in collaboration with other orders of government, but ultimately we’ve been left holding the bag on a lot of these things and this council is not going to walk away from helping people in dire situations by saying ‘that’s not our problem.'”

Some councillors are concerned with the situation as, without funding from the provincial and federal governments, the city is limited to using property taxes, user fees and reserves to fund them.

“We went shopping before we looked at what’s in the bank account,” Ward 1 Coun. Sonya Sharp said. “We’re going to have to figure out how to pay for all of this if we want to move forward with all those 30 items.”

It all comes as representatives from cities and towns across Alberta prepare to rally the provincial government to increase funding for municipalities.

One of the headline resolutions to be debated at the Alberta Municipalities conference in Edmonton this week calls for the province to address the growing gap in municipal funding amid soaring population growth.

“We are estimating that Alberta is looking at a $30 billion infrastructure deficit,” Alberta Municipalities president and St. Albert mayor Cathy Heron said Tuesday. “We all support the province’s campaign to have more people move to our province… but where are they going to live?”

According to data from Alberta Municipalities, municipal funding from the province is on the decline from $420 per capita in 2011 to $151 per capita this year.

Municipal funding from the province will be distributed through a new fund called the Local Government Fiscal Framework (LGFF) starting in 2024 with a base of $722 million.

Alberta Municipalities said the pool of funding is 36 per cent less than the previous funding for cities and towns across the province.

The call from Alberta Municipalities is to increase the LGFF funding pool to $1.75 billion.

It’s a resolution Gondek said Calgary plans to support, as municipalities grapple with maintaining current infrastructure and investing in new projects to accommodate growth.

“We need a lot of support and a lot of help and that’s why we’re going out in a manner that is simply requesting our fair share,” Gondek said. “Our residents are telling us we need to do more and we need your help.”

According to the province, the LGFF is being brought in to give municipalities “steady, and predictable revenue projections.”

“Alberta’s government has committed to an increase in funding through the Local Government Fiscal Framework,” a press secretary for the Ministry of Municipal Affairs said in a statement. “The increase is based on the fiscal performance three years prior to the budget.”

The province said Calgary’s share of the LGFF will increase by 14 per cent in 2025 to $255 million.

Calgary city administration said it will begin looking at long-term solutions to help close the funding gaps faced by the city, and collaborate with other levels of government following budget discussions in November.

“This is a situation we collectively find ourselves in,” Gondek said. “We have a population to serve. How do we get better at modernizing agreements between all three orders of government.”