WHEREAS the Municipal Sustainability Initiative (MSI) has allowed municipalities to undertake critical projects of benefit to all Albertans; and
WHEREAS MSI plays a major role in providing infrastructure renewal for communities throughout Alberta; and
WHEREAS municipalities across Alberta have come to rely on MSI funding to pay for critical infrastructure projects annually; and
WHEREAS the Government of Alberta has entered into an agreement with the Government of Canada to provide funding through the Investing in Canada Infrastructure Program (ICIP); and
WHEREAS the Government of Alberta has recently announced that municipalities must use MSI funds as the provincial share of the ICIP when applying for funds through the program;
THEREFORE, BE IT RESOLVED that RMA advocate to the Government of Alberta to provide additional funding to municipalities for the provincial contribution of Investing in Canada Infrastructure Program funding.
Under the Government of Canada’s Investing in Canada Infrastructure Plan (ICIP),
Alberta will receive $159.7 million for rural and northern community projects over the next 10 years.
Rural and remote communities with populations of 100,000 or fewer can apply for funding to support projects that improve food security, local road or air infrastructure, broadband connectivity, efficient and reliable energy sources, and improved education and/or health facilities.
The federal government will cost share for eligible projects up to the following:
50% for provincial projects; or for municipalities with populations more than 5,000 and not-for-profit partners
60% for municipalities with populations less than 5,000
Mackenzie County applied for funding for a $24 million project, of which ICIP funding would cover $9,200,000 or 40%. Mackenzie County is left with the remaining $6,134,100 or 27% as the municipal cost-share contribution as well as an expectation that Mackenzie County’s Municipal Sustainability Initiative (MSI) funding allocation cover the remaining $7,665,900 or 33% provincial contribution. Mackenzie County’s MSI allocation is needed to fund core operations such as roads, graders, etc. leaving Mackenzie County with 60% of total cost to address the potential ICIP project. This will create strain on the county’s daily necessary operations, further increasing the municipal infrastructure deficit. With additional funding, new infrastructure will be made possible in order to stimulate growth and industry in this area. As outlined on the Government of Alberta website:
The Municipal Sustainability Initiative (MSI) helps support local infrastructure priorities and build strong, safe and resilient communities. Municipal Affairs has allocated almost $9.6 billion to municipalities since the program launched in 2007. This has meant communities across Alberta have been able to build and rehabilitate their roadways and bridges, water and wastewater systems, public transit facilities, and recreation and sport facilities, and address other key local priorities.
RMA has no active resolutions directly related to this issue.
Given Alberta’s current fiscal situation and the finite resources available to support capital projects, new provincial funding to meet provincial cost share requirements are not feasible at this time. Existing grant programs are available to support municipalities, such as the Municipal Sustainability Initiative (MSI), the Alberta Community Resilience Program, and the Alberta Municipal Water/Wastewater Partnership. Given these funding options, the Government of Alberta (GoA) has made the decision to give municipalities the choice and flexibility to leverage these existing grant programs to meet the provincial cost share requirements of the Investing in Canada Infrastructure Program (ICIP).
The province has received a large volume of Expressions of Interest seeking ICIP funding, and the total requested amount far exceeds the province’s federal funding allocation. For example, the Community, Culture, and Recreation stream is currently oversubscribed by 540 per cent. As a result of this situation, the GoA will need to make difficult decisions to prioritize projects important to Alberta’s communities, taking into account available provincial and federal funding.
Alberta Municipal Affairs
The province requires that municipalities use MSI funding as the provincial matching contribution for municipal projects under the ICIP Community, Culture and Recreation stream. Given Alberta’s current fiscal situation, new spending to meet this provincial commitment is not feasible as Alberta has finite funding available to support capital projects. As a result, the only way for municipalities to access funding for the ICIP Community, Culture and Recreation stream is to allow the provincial funding commitment to be from municipal MSI allocations.
The Government of Alberta response indicates that due to fiscal restraints additional funding is not available to support municipalities in leveraging funding under the Investing in Canada Infrastructure Program (ICIP) beyond the use of existing provincial grants that support the same project types as those eligible under ICIP.
RMA appreciates the fiscal challenges facing the Government of Alberta and the challenges that federal cost-share requirements can have on provincial budgets. However, ICIP presents a unique opportunity to leverage federal funding to cover a significant portion of the costs of infrastructure projects that would otherwise be entirely a municipal or provincial (through grant funding) responsibility. Additionally, Municipal Sustainability Initiative (MSI) funding is intended to support long-term municipal capital planning and expecting municipalities to redirect that funding to apply to ICIP-supported projects contradicts the emphasis that the Government of Alberta has placed on long-term planning in recent years.
RMA appreciates that, as identified in Alberta Infrastructure’s response, ICIP’s Community, Culture, and Recreation stream, which is most likely to require municipalities to use funds to meet provincial cost-share requirements, is already significantly oversubscribed. However, this is not an indicator that the provincial cost-share contribution is meeting the needs of most municipalities in the province, but rather that many of Alberta’s municipalities are so in need of infrastructure funding that they are willing to divert previously planned MSI funding to pursue ICIP-supported projects.
This resolution is assigned a status of Intent Not Met, and RMA will advocate for the more strategic leveraging of provincial funding in future federal grant programs.