Municipal Finances Position Statement

2026 - Volume 1

Municipal finances matter because residents and businesses are directly affected through their responsibility to pay property taxes. Rural municipalities rely on property taxes, and to a lesser extent, user fees and provincial or federal grants, to build and maintain infrastructure and provide services in a fiscally responsible way. Municipal financial decisions are influenced by many factors including economic conditions, service level expectations from residents and businesses, municipal goals, and a complex interplay of provincial, federal, and geopolitical factors. Rural municipalities are responsible fiscal managers with a focus on using funds to provide core infrastructure and services as efficiently as possible. Recently, rural municipalities have been forced to take on additional costs to fill provincial service gaps or downloads, straining their ability to fund core services and plan for future capital costs.

Municipal Finances in Context

Alberta’s rural municipalities spend about 50% of their total expenses on transportation, compared to 30% for all Alberta municipalities.
Canadian municipalities receive only eight to ten cents of each tax dollar collected in Canada but are responsible for services and infrastructure expenses that significantly exceed those revenue levels.
Non‑residential property assessments make up over 60% of the tax base in many rural municipalities, compared to less than 30% in urban centres.

What is RMA’s position on the importance of municipal finance?

A complete and accurate understanding of municipal finances must consider differences across municipalities in areas such as service types, service levels, and infrastructure responsibility.
Due to their large geographical areas, low population, and intensive industrial activity that is reliant on municipal roads and bridges, Alberta’s rural municipalities spend much more on transportation infrastructure compared to other municipalities in Alberta and across Canada.
Policy discussions on the intersection of municipal taxation and industry finances must occur through a municipal lens. Politically-driven changes to municipal assessment or tax policy to reduce industry costs will have broader impacts on municipal services, intermunicipal collaboration, and the property tax burden incurred by other property owners, and such decisions must be assessed based on these impacts.
Ongoing cuts to provincial grant funding and the downloading of responsibilities from the provincial government place increasing financial strain on municipalities, forcing them to balance rising costs with limited revenue tools and to make difficult decisions about service levels and infrastructure investment.
It is vital that the provincial and federal government support rural municipalities through long-term, predictable, and stable funding that reflects rural drivers of infrastructure investment. Without predictable and consistent revenues, it is difficult to plan capital projects, maintain and attract business and investment, and provide consistent levels of service to residents and businesses.

Why are municipal finance-related issues relevant to rural municipalities?

Rural municipalities rely heavily on property taxes as their primary own‑source revenue, making consistent and predictable property tax policy essential. Their tax base often differs from urban centres, with greater reliance on non‑residential assessments such as oil, gas, and industrial properties.
Industrial assessments such as oil, gas, forestry, mining, and agriculture make up a large share of rural tax bases, leaving municipalities vulnerable to market fluctuations, regulatory changes, and provincial policy decisions.
Councils must balance fiscal accountability with community expectations, ensuring transparent decision-making and prioritization of limited resources.
Rural municipalities must gather adequate revenue to fund the delivery of required services and infrastructure. When grants from other levels of government are reduced or eliminated, councils often have no choice but to increase tax rates to fill the resulting revenue gap.
Maintaining extensive road and bridge networks remains a major cost driver for rural municipalities. Maintaining core infrastructure is increasingly challenging as councils are required to respond to increasingly complex service expectations, financial pressures, and community priorities.

Who does RMA partner with to advance the rural perspective on municipal finance?

Government of Alberta: RMA engages directly with provincial ministries to advocate for legislation, funding, and policies that reflect rural financial realities.
Alberta Rural Municipal Administrators Association (ARMAA) and Local Government Administrators Association (LGAA): RMA works with administrative associations to ensure that government requirements related to municipal finances – including policy, legislation, and regulations – align with operational realities and administrative best practices.
Alberta Municipalities (ABmunis): RMA collaborates on shared advocacy and education initiatives to strengthen municipal financial sustainability across Alberta, primarily through the Elected Officials Education Program (EOEP).

What are RMA’s current priorities on municipal finance?

Municipal Grant Funding

Advocate for a Local Government Fiscal Framework (LGFF) that provides a fair share of provincial revenues to municipalities and reflects rural realities.
Seek flexibility in grant programs, including the Strategic Transportation Infrastructure Program (STIP), to allow municipalities to address local priorities.
Ensure funding formulas recognize cost-drivers unique to rural municipalities, including substantial infrastructure and transportation responsibilities and higher service delivery costs compared to urban counterparts.
Call for multi-year, predictable funding commitments to enable long-term capital planning.

Assessment Model Review

Advocate for a fair and stable regulated property assessment system that reflects rural realities, minimizes volatility for municipalities and property owners, and allows municipalities to reliably forecast revenues.
Modernize the current cost-based regulated assessment model to ensure assessments reflect current construction methods and real-world data in areas such as depreciation, regional cost differences, and other areas.
Ensure that changes to the assessment model align with principles agreed upon by the Government of Alberta and municipal and industry stakeholders, and that any significant tax impacts are addressed separate from the assessment methodology review.

Unpaid Taxes

Address the growing challenge of unpaid property taxes, particularly in the oil and gas sector, which undermines municipal financial sustainability and shifts burdens onto other taxpayers. While the recent release of the Property Tax Accountability Strategy represents progress, timely and meaningful implementation, developed with strong municipal and stakeholder involvement, is essential to fully protect municipalities from the impacts of non-payment.
Advocate for provincial action, through the implementation of the 17 recommendations in the PTAS report, to ensure companies meet their property tax obligations and prevent municipalities from bearing the financial consequences of industry non‑
Highlight the disproportionate impact of unpaid taxes on rural municipalities, where non‑residential assessments make up a significant share of the tax base.
Emphasize that property taxes are a shared obligation tied to the services and infrastructure municipalities provide. When some property owners fail to pay, the costs of maintaining infrastructure and providing essential services are unfairly transferred to other ratepayers.