Budget Surplus and Municipal Infrastructure Investment
IT IS THEREFORE RESOLVED THAT Alberta Municipalities advocate for the Government of Alberta to commit to creating a framework, used during provincial surpluses, to allocate a portion of the surplus to critical municipal infrastructure projects.
FURTHER BE IT RESOLVED THAT the framework prioritizes projects based on demonstrated need and readiness for construction, with funding distributed through a transparent application process, and in alignment with provincial and municipal strategic priorities.
WHEREAS municipalities across Alberta face critical infrastructure challenges including aging water and wastewater systems, deteriorating roads, bridges and community facilities, and insufficient capacity to accommodate population and economic growth, while operating with limited revenue tools and constrained capital budgets;
WHEREAS infrastructure project costs continue to rise due to inflation, further eroding municipal capital budgets and making it increasingly difficult for municipalities to address infrastructure needs through traditional funding mechanisms;
WHEREAS infrastructure is a shared responsibility between provincial and municipal governments, with municipalities owning and maintaining close to 60 per cent of Alberta's public infrastructure, including essential systems that support the province's economic prosperity and community sustainability;
WHEREAS water and wastewater infrastructure, roads, bridges, recreation and other community facilities require substantial capital investment to ensure public health, safety, economic development, and quality of life with many Alberta communities facing immediate needs for system upgrades, capacity expansion, and asset replacement;
WHEREAS the Government of Alberta has recorded a year-end surplus in 13 of the last 25 provincial budgets, creating opportunities for strategic one-time investments in municipal infrastructure without compromising ongoing program funding or fiscal sustainability; and
WHEREAS Alberta’s current Sustainable Fiscal Planning and Reporting Act legislates that 50 per cent of surpluses must be used towards debt repayment and allows for the remaining 50 percent to be applied to debt repayment, the Heritage Savings Trust Fund or to one-time initiatives, at the sole discretion of the province.
- ABmunis website (2026, April). Infrastructure. https://www.abmunis.ca/advocacy-resources/infrastructure
- Government of Alberta website (2026, April). Budget documents. https://www.alberta.ca/budget-documents
- Government of Alberta Open Data Resources (2026, April). Sustainable Fiscal Planning and Reporting Act. https://open.alberta.ca/publications/s29
BACKGROUND:
Infrastructure challenges affect municipalities of all sizes across Alberta, from major urban centers experiencing rapid population growth to smaller rural communities managing aging systems and facilities with limited tax bases. During budget surplus years, a commitment to additional funding for municipal infrastructure investment would mean more support for critical projects that may have otherwise been deferred. Since 2000, Alberta has recorded a year-end surplus in 13 provincial budgets2, demonstrating recurring opportunities to establish a pathway for one-time investments, in addition to the funding already provided to municipalities by the province.
A legislated portion of budget surplus addresses diverse needs by creating a funding mechanism that responds to provincial fiscal capacity while supporting both provincial and municipal infrastructure priorities in a meaningful way. With municipalities owning and maintaining almost 60 per cent of Alberta's public infrastructure, the need for sustainable capital funding is critical. Large urban centers face pressure to expand water and wastewater treatment capacity and build new roads to accommodate population increases. Medium-sized municipalities experience similar growth pressures while managing aging infrastructure that require replacement and adding new community amenities. Smaller rural communities struggle to maintain basic infrastructure systems and facilities with limited tax bases. Allocating a portion of budget surpluses to municipal infrastructure investment would ensure that periods of strong economic performance translate directly into improved public assets across all community types.
Even modest surpluses could generate substantial investment in one-time municipal infrastructure initiatives. For example, with a provincial budget surplus of $1 billion, a 25 per cent allocation would yield approximately $250 million for one-time infrastructure projects. Alberta's actual 2023–24 surplus of $4.3 billion, could have generated approximately $1.075 billion for infrastructure projects and the 2024–25 surplus of $8.3 billion, approximately $2.075 billion, using the same 25 per cent allocation. These amounts demonstrate meaningful contributions to addressing Alberta's growing infrastructure deficit, enabling municipalities to undertake major shovel-ready projects that could otherwise require decades of incremental funding accumulation.
A focus on one-time investments in near-term, municipal capital budget approved projects, in addition to existing funding programs, enables municipalities to address high priority capital needs. Quick allocation of funding to shovel-ready projects ensures economic stimulus benefits and timely infrastructure improvements. This resolution directly supports many of the Government of Alberta's objectives by ensuring that infrastructure capacity is well-maintained and keeps pace with growth and economic activity and the change could be easily incorporated within the current fiscal framework legislation.
The resolution also aligns with Alberta Municipalities' strategic priorities by advocating for sustainable infrastructure funding mechanisms that enable municipalities to maintain and expand essential services while reducing reliance on property taxation for major capital projects.
ABmunis is preparing correspondence to the appropriate ministry.