A More Equitable Funding Model for Municipalities (defeated)

WHEREAS municipalities benefit from long-term and stable financial commitments from the Government of Alberta; and

WHEREAS municipal costs have increased recently due to a higher demand for services, inflation, COVID-19 and increased downloading of service requirements by the provincial and federal governments; and

WHEREAS municipal revenues have decreased recently due to a widespread energy sector crisis (both lower activity and  energy sector non-payment of taxes) as well as decreased funding from the provincial and federal governments to municipalities; and

WHEREAS some municipalities are able to adapt to increased costs and lower revenues due to high assessment levels and limited infrastructure responsibilities; and

WHEREAS in 2001 the RMA Advisory Committee on Targeted Investment released its report recommending a funding model known as the Targeted Investment Program (TIP) which was based on need; and

WHEREAS funding through TIP was later replaced by the Municipal Sustainability Initiative (MSI); and

WHEREAS although MSI was intended to ensure municipalities remained sustainable, allocation of MSI funding relies on a formula based primarily on a municipality’s assessment and did not consider a municipality’s infrastructure costs; and

WHEREAS the MSI formula does not equitably distribute provincial funding based on need; and

WHEREAS municipalities that receive disproportionately lower funding for infrastructure and economic ventures have higher mill rates, which places their residents at a financial disadvantage while also reducing the likelihood of attracting industry; and

WHEREAS this inequity places an increased burden on the Government of Alberta and neighboring municipalities; and

WHEREAS the Local Government Fiscal Framework Act (LGFF) which is anticipated to take effect in 2024 or 2025 to replace MSI funding is expected to help address the disparity with a funding formula that takes into consideration both assessment and the kilometres of roads being maintained by a municipality; and

WHEREAS many of the rural municipalities in Alberta are desperately in need of a revised, more equitable funding formula and require immediate funding interventions prior to the anticipated LGFF introduction in 2024 or 2025; and

WHEREAS allocating funding more equitably does not increase the financial burden on the Government of Alberta, but would significantly improve the financial sustainability of the majority of rural municipalities;