Expanded Grant Eligibility for Water Infrastructure
IT IS THEREFORE RESOLVED THAT Alberta Municipalities advocate for the expansion of eligibility criteria under the Water for Life funding framework, or successor water infrastructure programs, to include single municipalities that function as regional service hubs and provide services to populations that extend beyond their municipal tax base.
WHEREAS the costs associated with the construction, maintenance, and upgrading of municipal water systems in Alberta have risen significantly due to inflation, material costs, and labor shortages;
WHEREAS municipalities face limited fiscal capacity and a constrained property tax base, making it increasingly difficult to fund large-scale water projects without provincial and federal government support;
WHEREAS many municipalities function as regional hubs for essential services such as hospitals, schools, libraries, commercial amenities, and recreation, resulting in increased infrastructure demand beyond what is support by their local tax base;
WHEREAS growth pressures, including annexation and development of previously unserved areas, are further increasing demand for municipal water infrastructure and associated financial responsibilities;
WHEREAS municipalities are required to comply with evolving provincial and federal regulatory standards and are increasingly impacted by climate-related pressures, including drought, necessitating significant and ongoing investment in water supply, storage, and system resilience;
WHEREAS current water funding programs do not consistently reflect these cumulative pressures and may limit eligibility based on project structure rather than demonstrated regional service demand and opportunities to maximize return on investment; and
WHEREAS more predictable and inclusive eligibility for provincial water funding would support proactive, long-term infrastructure planning and reduce reliance on reactive or emergency investments.
BACKGROUND:
Municipalities across Alberta face ongoing challenges of securing sufficient funding to provide, maintain, and upgrade essential water services. Current challenges are being further impacted due to growing drought concerns, inflationary costs, increases demand and population. The current criteria of Water for Life funding risks limiting the impact by prioritizing projects based on technical eligibility rather than the broader project benefit and the ability to implement proactive infrastructure solutions before crisis occurs. A careful review of eligibility, allocation, and the criteria used to determine priorities is needed to ensure the existing water and wastewater funding truly support projects that maximize public value and benefit.
Impacts of Rising Costs
Due to rising inflation, local governments are constantly exploring ways to minimize the financial burden on tax payers, frequently relying on grant funding to help offset costs. From 2020 to 2025 the Town of Stettler saw a 25% increase in asphalting tenders and a 40% increase in 150mm watermain replacement tenders from 2021 to 2024. Stettler isn’t isolated in these figures, municipalities across Alberta are facing the same reality of steadily increasing demand for services alongside rapidly rising capital and operating costs. Inflation in construction material, utilities, and labour has significantly outpaced growth in municipal revenues, meaning the municipal tax dollar now delivers substantially less purchasing power than in previous years.
At the same time, Alberta’s accelerated population growth has not been matched by proportionate provincial funding. In 2009 municipalities were receiving approximately $635 in provincial funding per person, compared to about $327 per person (adjusting for inflation) in 2023.
Regional Hubs
The current structure of Water for Life funding, which requires multi-municipal partners or regional system participation, presents a barrier for municipalities that independently serve as a regional service hub. In Minster Dreeshen’s response to the Rural Municipalities of Alberta’s Resolution 9-25S he said that the Water for Life funding “reflects a strategic focus on sustaining Alberta’s regional water and wastewater systems, ensuring long term resiliency, and access to safe, reliable water services” and that the focus is to “allocate limited funding toward projects which provide the greatest return on investment for entire regions”. The structure of the program currently neglects to address communities that act as regional hubs, providing services for a population that far exceeds their municipal tax base.
While Stettler’s population during the 2021 federal census was 5,695 a growth study completed in 2007 establishes a market population of 42,000, stretching from Lacombe all the way to the Saskatchewan boarder. Further, in Stettler’s most recent Commercial Market Analysis, it was noted that while the Town of Stettler only accounts for 47.9% of the population in the immediate trade area, 80% of jobs are within the Town of Stettler municipal boarders and serviced by municipal water systems.
Risks of Disruption
Municipalities are working to act proactively rather than reactively but the available funding and programs offered by the Government of Alberta include strict eligibility criteria preventing funding for projects that would deliver the highest long-term value and return on investment for Albertans. This challenge is underscored by high-profile water main failures in the last 5 years in communities across Alberta including Calgary, Beiseker, Cochrane, and Three Hills.
Drought and water scarcity lead to further challenges for municipalities. While municipalities are expected to proactively protect their water systems, and prepare for droughts, the reality is that capital projects to address these challenges are often high-cost, high-risk, and time sensitive.
This is further compounded by the challenges municipalities face in bringing annexed lands up to full urban community standards. Where previously un-serviced areas are incorporated into municipal boundaries, significant investment is required to extend water infrastructure. This work is critical not only for equitable service delivery, but also for public safety, including reliable emergency response through hydrant access for fire protection.
Ensuring funding is accessible allows municipalities to implement critical projects when needed rather than deferring them due to budgetary constraints, protecting both the municipality and the border region they serve.
ABmunis is preparing correspondence to the appropriate ministry.