+ RMA Rural Municipalities
of Alberta

Resolution 2-23S

Provincial Funding Stream for Non-Residential Infrastructure

February 23, 2023
Expiry Date:
March 1, 2026
Active Status:
Wheatland County
2 - Central
Industry and Resource Development
Sent to Government
Vote Results:

WHEREAS in recent years, municipalities have experienced challenges in obtaining funding to support investment in infrastructure to promote industrial economic development; and

WHEREAS long-term funding for capital infrastructure can create strong, dynamic, and inclusive communities; an

WHEREAS critical capital infrastructure in rural communities goes beyond public transit, and includes new roads, bridges, stormwater management, water and wastewater treatment facilities that provide opportunities for new industrial development; and

WHEREAS current legislated debt limits can create barriers for critical infrastructure investment in rural communities; and

WHEREAS industrial and commercial development can ensure Albertans have access to modern, reliable services that improve their quality of life; and

WHEREAS the Government of Alberta’s 2022 Capital Plan identifies a total three-year investment of $20.2 billion dollars, focused on attracting private sector investment and long-term economic growth;

Operative Clause:

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta advocate that the Government of Alberta establish a dedicated provincial funding model to enable long-term investment in capital infrastructure to support industrial economic development in rural Alberta.

Member Background:

Investment in critical infrastructure can help diversify local economies by providing the necessary infrastructure to support new industries and businesses. This can help to create new job opportunities and stimulate economic growth, which can have a positive impact on the overall health and prosperity of a community.

Investment in critical non-residential infrastructure also aligns with the Government of Alberta’s platform of job creation and diversification of the economy. By providing the necessary infrastructure to support new industries and businesses, these investments can help to create new job opportunities and stimulate economic growth across the province. This alignment can help to create a more resilient and robust economy.

Adding non-residential development to a rural municipality can also help to keep families in their home communities by providing local job opportunities. This can help to reduce the need for residents to seek employment in other areas, which can help to maintain the social and economic fabric of these communities.

Non-residential development can also help to diversify the assessment base in municipalities. Many municipalities experience erosion in their assessment base due to the treatment of linear assessment, which can make it difficult to maintain and improve critical infrastructure without significant tax increases to existing ratepayers. Non-residential development can help to offset this erosion by adding new sources of assessment to the municipality.

In January 2018, the Rural Municipalities of Alberta released a report titled The Economic Contribution of Rural Alberta, which highlighted the significant economic contributions of rural Alberta. Despite only comprising 18% of the provincial population, rural Alberta is home to 41% of public and private investment in the province and accounts for 26% of the provincial Gross Domestic Product (GDP).

There are currently some programs, such as the Alberta Municipal Water/Wastewater Partnership (AMWWP), that provide funding opportunities for critical infrastructure within eligible hamlets. However, country residential subdivisions, condominium associations, and private developments are not eligible for this funding in accordance with AMWWP requirements. To mitigate potential land use conflicts and limit disturbances to residents, rural municipalities often encourage the development of intensive industrial uses within other appropriate areas, rather than within hamlets populated with residents.

The Government of Alberta has allotted $722 million of funding for the first year of the Local Government Fiscal Framework, which will replace the Municipal Sustainability Initiative in 2024-25. This funding will be divided and distributed among all municipalities in the province and primarily used for repairs and replacements of infrastructure. A small percentage of this funding will be used to create new economic development opportunities in rural Alberta.

The upfront financial risk of investing in critical infrastructure can be a significant barrier for many municipalities. These investments can be expensive, and the financial burden is often shouldered solely by the municipality. This can be a particularly daunting prospect for smaller municipalities with limited resources.

Debt limits, which are defined in Alberta Regulation 255/00 as 1.5 times the revenue of the municipality, can also be a hindrance for municipalities seeking to invest in critical infrastructure. These limits can restrict the amount of debt that a municipality can take on, which can make it difficult for them to finance these types of projects. It can also lead to a municipality investing in small phases of infrastructure, which may be less efficient and more costly for the long term.

A provincial funding stream for critical infrastructure will help to alleviate these barriers by providing financial support to municipalities that are considering these investments. This can help to reduce the risk associated with investing in critical infrastructure, making it more feasible for municipalities to pursue these projects. It can also help to mitigate the impact of debt limits by providing an alternative source of funding.

A provincial funding stream can also help to ensure that critical infrastructure investments are made in a strategic and coordinated manner. This can help to ensure that these investments are aligned with the broader economic development goals of the province, and that they are distributed in a way that maximizes their impact on local economies.

A provincial funding stream for critical infrastructure can be an effective way to support the diversification of local economies, job creation, and the alignment with the Government of Alberta’s economic development goals. By providing financial support and helping to coordinate these investments, a provincial funding stream can help to create the necessary conditions for economic growth and prosperity in communities across the province.

RMA Background:

RMA has no active resolution directly related to this issue.

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