+ RMA Rural Municipalities
of Alberta

Resolution 1-15F

Continued Provincial Funding Support for Municipalities

Date:
November 18, 2015
Expiry Date:
December 1, 2018
Active Status:
Expired
Sponsors:
Wheatland County
District:
2 - Central
Year:
2015
Convention:
Fall
Category:
Municipal Governance and Finances
Status:
Accepted in Principle
Vote Results:
Carried
Preamble:

WHEREAS municipalities are under the jurisdiction of provincial governments as outlined in the Constitution Act, 1867 and as such have a legitimate expectation for provincial financial support; and

WHEREAS municipalities and the economy benefit from long-term, stable financial commitments from other levels of government; and

WHEREAS municipalities receive approximately eight (8) cents of every dollar generated by all three levels of government; and

WHEREAS municipalities are limited in their ability to raise needed revenue other than through property taxes; and

WHEREAS the Government of Alberta has a history of revenue sharing with municipalities through programs like the current Municipal Sustainability Initiative; and

WHEREAS there has been no commitment to the continuation of the Municipal Sustainability Initiative beyond 2018;

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties advocate for continued financial support to municipalities through the continuation of the Municipal Sustainability Initiative or similar program beyond 2018.

Member Background:

Most municipalities rely on provincial and federal revenue sharing to address their infrastructure deficit. The Municipal Sustainability Initiative was a welcomed program that has been refined to allow municipalities to address their local infrastructure priorities. However, with the program set until 2017 and no indication of an extension or new program on the horizon for 2018 and beyond, it is necessary to keep this matter at the attention of the Government of Alberta as they examine their financial commitments and related financial responsibilities The Government of Alberta has been very supportive of municipalities in the past and we would like to see this continue into the future.

RMA Background:

1-09F: MSI Funding

THEREFORE BE IT RESOLVED that the AAMDC urge the Provincial Government to recognize the high priority on addressing municipal infrastructure needs for safety and economy for transportation of people and commodities by maintaining MSI funding levels set in its 10 year formula.

DEVELOPMENTS: Both the previous and current provincial governments made commitments to MSI in 2015 that exceeded what would have typically been expected including $30 million for MSI operating and $846.9 million in MSI Capital funding (which includes $349.8 million from the former Basic Municipal Transportation Grant (BMTG) program). While MSI funding has been lower in the previous years than originally anticipated, the provincial government has committed to distributing the full $11.3 billion, but over an extended time frame. The government has indicated that MSI will be available beyond the 2017 program end date though specific details are not available.

Government Response:

Municipal Affairs: The Government of Alberta (GOA) recognizes that the Municipal Sustainability Initiative (MSI), which was designed to provide $11.3 billion over 10 years, will not be fully allocated by 2016-17. We are examining ways to extend that support, including adjustments to the long-term agreements.

Working with municipalities to support priority infrastructure needs and long-term economic growth remains a key priority for the GOA. Our capital plan demonstrates that commitment, with MSI capital funding estimates from 2015-16 to 2019-20 totaling more than $5.7 billion (including the Basic Municipal Transportation Grant), in addition to an estimated $30 million annually in MSI operating.

The GOA recently worked with Ottawa to secure a 10 year extension to the Gas Tax Fund (GTF), which will mean an additional $2.3 billion for Alberta communities. The GTF Agreement with the federal government was signed in summer 2014, and is now supporting Alberta municipalities with over $200 million per year in critical infrastructure support.

Under the new Canada-Alberta Gas Tax Fund, all municipalities will be eligible for an annual per capita grant allocation during the 10 year term of the agreement from 2014 to 2024.

GTF allocations are directed by municipalities toward infrastructure projects that they consider priority, as long as the projects they identify meet the GTF funding criteria. To receive payment, municipalities must submit estimated project expenditures sufficient to use any GTF funds held from a previous year, in addition to the current year’s allocation.

The 2015 GTF allocations for all municipalities are now available online at http://municipalaffairs.alberta.ca/gastaxfund.cfm.

Treasury Board and Finance: The Budget 2015 Capital Plan provides almost $10 billion over five years in support for municipal infrastructure ($8.6 billion), water and wastewater management ($706 million) and community facilities ($454 million), with $750 million in new funding for programs and projects.

Increasing funding to the MSI (capital) by $100 million, for a total of $3.9 billion over five years, provides Alberta’s local governments with the flexibility to make decisions that meet their important local priorities and residents’ needs.

Development:

In the 2018 provincial budget, the Government of Alberta commits to maintaining a stable level of funding until the scheduled completion of the Municipal Sustainability Initiative (MSI) in the 2021-22 budget year. Additionally, the Government of Alberta has committed to replacing the MSI with permanent, legislated municipal funding upon the conclusion of MSI in the 2021-22 budget year based on sharing of provincial revenues. This new program will be developed collaboratively between the Government of Alberta, the RMA, the Alberta Urban Municipalities Association, and other partners. The RMA is hopeful that this funding program will ensure that municipalities receive a consistent portion of provincial revenues each year.

This resolution is assigned a status of Accepted in Principle, and will be re-evaluated as the work of planning for post-MSI municipal funding continues.

Provincial Ministries:
Municipal Affairs,
Treasury Board and Finance
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