Westwind Weekly News
The mayors of Stirling and Magrath weighed in on the March 22 provincial budget, with both highlighting the relative instability of funding for the Municipal Sustainability Initiative.
A major revenue source for municipalities, MSI provides capital funding for various infrastructure projects, such as wastewater treatment, roads, parks and recreation facilities.
“The province has for a long time, even under the previous government, talked about a predictable funding model for municipalities,” said Stirling Mayor Trevor Lewington.
Currently, the province is operating under a year-by-year funding framework for MSI.
This year’s MSI includes a $150-million reduction, but its impact will be shared by the two biggest cities — Edmonton and Calgary.
“The government didn’t provide a solution, but they’ve reiterated that they’re committing to developing a predictable model that’s multiple years, just so that municipalities can plan in the long term,” Lewington said.
“Overall, we saw our MSI capital funding reduced somewhat, so that’s always a concern, because that’s the money that pays for capital projects and infrastructure.”
The budget provided an additional $800 million in MSI funding overall, but half of those funds are an advance on next year’s grant.
The fact that the government intends on replacing MSI in the near future is “good news,” he added.
“There’s a bit of uncertainty there. We don’t know what the long term looks like.”
Magrath Mayor Russ Barnett says “there’s nothing revolutionary” in the provincial budget.
“It’s sort of what we’re left to live with,” he said.
“Of course I don’t like it, because I want more MSI funding. We’re obviously in an infrastructure deficit all over the bloody province, trying to manage that and do something with that. We just don’t have the resources to do it.
“There’s never enough funding … That’s the way it goes every year.”
The Alberta Urban Municipality Association (AUMA), which includes the province’s cities, towns and villages, did an analysis of municipal funding opportunities in the 2018 budget.
“Although AUMA does not like to see cuts to grant programs, we recognize the province’s efforts to restructure and re-profile some of the core capital grant programs,” it said, adding that smaller communities, such as Stirling and Magrath are at a disadvantage under the separate competitive grant framework.
Lewington says he’s also concerned with the province’s consistent deficits without a hard plan to return the budget to balance anytime soon.
“It’s interesting that municipalities have debt limits and very clear rules in the Municipal Government Act … but that same logic isn’t applied at the provincial level,” he said.
The provincial deficit currently stands at $8.8 billion, with an estimated debt of $54 billion that’s expected to increase to $96 billion by 2023.
In last year’s budget, the debt was $33 billion.