Provincial Funding for Growing Municipalities
IT IS THEREFORE RESOLVED THAT Alberta Municipalities advocate to the Government of Alberta to actively partner with municipalities absorbing the population growth required to support a vibrant, diverse and thriving provincial economy through the creation of a dedicated funding program to support the capital investment pressures of growth.
WHEREAS Alberta’s population increased by more than 347,000 people, or by 8.3%, since 2016;
WHEREAS the Province’s Alberta is Calling campaign encourages people to relocate to Alberta to build their futures;
WHEREAS Government of Alberta projections indicate that more than 91% of newcomers are settling in urban centres;
WHEREAS urban municipalities support the development of whole communities to house newcomers and provide crucial quality of life amenities and services;
WHEREAS the Government of Alberta’s transition from the Municipal Sustainability Initiative to the Local Government Fiscal Framework in 2024-25 will result in a 37% decrease in total dedicated capital funding to municipalities;
WHEREAS high growth rates require large infrastructure investments in transportation, recreation and cultural amenities, water/wastewater and in protective services to ensure that communities remain attractive and viable; and
WHEREAS municipalities are very limited in options, other than steep property tax increases, to raise necessary capital funds to support large infrastructure investments.
Alberta is one of Canada’s fastest growing provinces. The Alberta is Calling campaign actively encourages skilled workers to consider relocating to Alberta. Most newcomers are settling in urban centres.
According to the Government of Alberta’s Office of Statistics and Information population estimates 2016-2022 released in March of this year 61 Alberta municipalities recorded a growth rate of more than 10% over that time period. (1) In total these municipalities welcomed 326,068 newcomers, almost 94% of the entire population increase recorded over that seven-year period.
Alberta municipalities, as required by the Municipal Government Act (MGA,) must produce five-year capital plans outlining schedules to fund new and lifecycle capital projects. These capital plans include roads, bridges, pathways, water/wastewater infrastructure, community facilities like libraries, recreation, cultural and community amenities, parks and infrastructure for protective services. All of which are important in creating strong, vibrant, liveable communities.
Population growth pressures, coupled with high-cost escalations and a proposed 37% decrease in the amount of capital funding available to non-charter municipalities (all other than Calgary and Edmonton) is placing tremendous burden on those municipalities absorbing the population growth the Province is actively attracting.
As an example, the City of Airdrie will see a reduction in capital funding of approximately $3-4M from the Province when LGFF becomes effective in 2024. The LGFF Transition Fund introduced in Budget 2023-24 will help off-set the impact of the formula chosen to distribute funds but does nothing to address the impact of the overall decrease in the funding available to non-charter municipalities. The City’s 10-year capital plan 2023-2032 outlines more than $1B of capital projects. There are many other high growth urban municipalities that are facing similar pressures with very few options than to increase property taxes significantly.
In addition, three of the Government of Alberta’s funding programs that address municipal water/ wastewater and local infrastructure projects – Water for Life, the Alberta Municipal Water/Wastewater Partnership and the Strategic Transportation Infrastructure Program – exclude certain types and sizes of municipalities. The funding is not equally available to all municipalities to meet important infrastructure needs.
The three funding programs noted above need to be expanded to include all municipalities or the Government of Alberta needs to set aside dedicated funding, during times of high growth, to better partner with those municipalities absorbing the growth. Working better together we can make Alberta prosperous for all.
ABmunis is focused on advocating for a significant increase to the starting amount of the LGFF Capital to change from its current level of $722 million to be $1.75 billion to benefit all municipalities throughout Alberta. Our advocacy is based on the estimated municipal infrastructure deficit along with our analysis of the significant decade-long downward trend in provincial funding for municipal infrastructure, after accounting for Alberta’s increase in population and inflation. In addition, ABmunis has engaged members in taking a principle-based approach to the proposed allocation formula for LGFF based on each municipality’s scope of infrastructure and growth pressures while considering the differences in fiscal capacity between municipalities. ABmunis’ recommendations to Alberta Municipal Affairs for population to be a primary weighting in the LGFF Capital allocation formula is in part designed to support higher growth municipalities.