+ RMA Rural Municipalities
of Alberta

Resolution 27-04F

Rural Transportation Grant Review

January 1, 2004
Expiry Date:
December 1, 2007
Active Status:
Municipal Governance and Finances
Vote Results:

WHEREAS the AAMDC has requested Alberta Transportation to review the appropriateness of the current provincial transportation grants applicable to rural municipalities; AND WHEREAS the Rural Transportation Grant provides financial assistance to rural municipalities, Metis Settlements and Special Areas for transportation capital projects on the local road network based on kilometres of open road, population, equalized assessment and terrain; AND WHEREAS the Basic Capital Grant provides financial assistance for transportation capital projects to cities and urban services areas (excluding Edmonton and Calgary) based on an allocation of $60 per capita; AND WHEREAS there appears to be an inequitable allocation of provincial financial assistance, based on the funding formulas for the Rural Transportation Grant and the Basic Capital Grant, for similar transportation capital projects when comparing rural municipalities with small urban municipalities of comparable populations;AND WHEREAS this disparity was continued when the Rural Transportation Grant formula was used as the basis for allocation of federal funding through the Infrastructure Canada-Alberta Program entitlement;

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request the Government of Alberta to review the Rural Transportation Grant formula and to ensure equitable representation in this review from a wide range of municipal circumstances and perspectives.

Member Background:

The Rural Transportation Grant (RTG) is allocated based on a formula that incorporates length of open roads, population, equalized assessment, and terrain. Funding is provided for 100 per cent of eligible projects up to the municipalitys annual allocation.The Basic Capital Grant (BCG) provides financial assistance on a 75 per cent government/25 per cent city basis for capital-related projects which meet program eligibility criteria to 15 cities (excluding Calgary and Edmonton) and two urban service areas. Under the BCG, each jurisdiction is eligible to receive an annual grant of $60 per capita based on the previous year’s official population.Where the BCG is based on a straight-forward, per capita allocation applied to 17 urban municipalities, the RTG is based on a complex formula that is applied to 67 rural municipalities with a wide range of population, financial capabilities and infrastructure requirements.Demographics in rural municipalities located adjacent to major urban centres are changing in response to growth in urban centres. Transportation infrastructure in these rural municipalities is being impacted by increasing intermunicipal traffic on commuter routes other than provincial highways to and from regional employment centres. These rural municipalities also face increasing demands for expanding municipal water, wastewater and solid waste infrastructure. While rural municipalities struggle with similar growth issues as their urban neighbours, the current RTG does not provide the same relative response to growth as the $60 per capita BCG.The Infrastructure Canada-Alberta Program (ICAP) agreement was signed on October 10, 2000 and runs until March 31, 2006. Over the life of the program, ICAP will direct $508 million towards municipal water and wastewater systems, municipal roads, bridges and transit, affordable housing, solid waste disposal and recycling, tourism, cultural or recreation facilities, or projects to improve energy efficiencies of municipal buildings. Although the ICAP is meant to address a wide range of municipal infrastructure, with emphasis on ‘green’ projects, the entitlement portion of the program was distributed to all rural municipalities based on a transportation grant formula.

RMA Background:

The AAMDC has no resolutions currently in effect with respect to this issue.


At the Fall 2004 Convention, AAMDC members passed Resolution 27-04F, calling for a review of the RTG. Soon after the Spring 2005 Convention, the RTG Steering Committee expanded the scope of the review to include the Local Bridge Program (LBP) and the Resource Road Program (RRP). In 2005, the AAMDC retained Acton Consulting to assist with the project. The Rural Transportation Funding Options (RTFO) Report is the result of extensive research and member consultation through the summer and fall of 2005. The RTFO report has two aims: – To review the RTG, LBP, and RRP programs as it is currently administered.- To provide the Government of Alberta with recommendations and models on how to better structure these programs to ensure equitable representation from a wide range of municipal circumstances and perspectives.The report concludes that the present amount of funding for each program (RTG, LBP, and RRP) is insufficient to hold current infrastructure conditions. Further, because both local and resource roads are already under an acceptable level of use, the infrastructure debt of rural municipalities will only continue to increase. The report proposes for all three programs:- Clarification of goals for each program- Multi-year funding commitment from the Government of Alberta- Funding commitments index to the provincial budget- Use of own forces to guard against escalation- Predictable funding levels for each municipalityAs to the Rural Transportation Grant, the review specifically recommends a program based on system needs. Member grants should be calculated based on the higher of a per capita or per kilometre of road formula that has been equalized for assessment and terrain.Under the Local Bridge Program, the report recommends that the province increase funding to $27.5 million for the 2006-07 budget year. As well, the programs scope should be expanded to include all associated peripheral structures such as approaches and guardrails. Further, as with the proposed RTG changes, the LBP funds should be distributed according to need.Funding for the Resource Roads Program, it was recommended, should be increased to $87.2 million for the 2006-07 budget year. The programs scope should also be expanded to include light agriculture, tourism, gravel, and confined feeding operations. Finally, the purpose and funding criteria of the program should be clarified by the province, including the introduction of a standard application process.Since the board accepted the report, the implementation strategy has been initiated. This included providing the report to all PC Caucus members, industry stakeholders as well as making it a key topic for minister meetings. In late 2006 the AAMDC made a special presentation to the Standing Policy Committee on Agriculture and Municipal Affairs outlining the report and its recommendations.The AAMDC advocacy strategy led to an increase for 2007/08 of $34 million in resource road funding tripling the original allocation of $17 million to a total to $51 million. This increase, announced at the AAMDC Fall 2006 convention, reduced the annual infrastructure deficit from over $400 million to an estimated $381 million.

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