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Resolution 9-09F

Provincial Transitional Funding for Dissolving Municipalities

January 1, 2009
Expiry Date:
November 30, 2012
Active Status:
Smoky Lake County
5 - Edmonton East
Municipal Governance and Finances
Accepted in Principle
Vote Results:

WHEREAS the Ministry of Municipal Affairs has indicated that no further transitional funding will be given to municipalities that join as a result of dissolution; and

WHEREAS these transitional funding are important for MD’s and Counties that absorb dissolved urban municipalities and their corresponding ageing infrastructure and debts; and

WHEREAS without such transitional funds from the province there is little or no incentive for larger municipalities (MD’s/Counties) to discuss the absorption of these dissolving urban municipalities even when such dissolution seems imminent.

Operative Clause:

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the Provincial Government of Alberta to reinstate transitional funding for MD’s and Counties that absorb dissolved municipalities to help them deal with the burden of ageing infrastructure and debt.

Member Background:

The Municipal Restructuring Grant Program (MRGP), which was the intended to help municipalities offset certain costs incurred as a result of a dissolution or amalgamation was cancelled by the provincial government in 2009.
Although the program was still relatively new, its intent was noble and offered MDs and Counties some sense of what monies they would receive to assist with the absorption of a dissolved or amalgamated municipality. The stated principles of the MRGP were that:
“a) Assistance should be provided to reduce the disincentives to restructuring that relate to the cost issues, and
b) Municipalities involved in restructuring should have a degree of certainty in the amount of restructuring grant that can be expected”.

Since the program was cancelled, there has been little or no indication from the Ministry as to what assistance might be available for MDs or Counties that face the absorption of dissolving municipalities or for municipalities that might otherwise consider amalgamation.
Without such a program or guidance in place, there remains no incentive for muncipalities to consider dissolution or amalgamation in order to bolster the efficency and effectiveness of local governance.

RMA Background:

The AAMDC has no current resolutions directly related to this issue.

Government Response:

Municipal Affairs:
In 2009, in response to the challenging economic and budgetary circumstances, Alberta Municipal Affairs was required to identify spending reductions within the budget.  A number of difficult decisions needed to be made and the restructuring grant could no longer be maintained.
As the Minister of Municipal Affairs meets the mandate from Premier Stelmach to develop a municipal sustainability strategy, consideration of municipal restructuring processes will form one important element of the development of the strategy. 


The AAMDC has continued to stress the importance of transition funding in meetings with Municipal Affairs. At a March 2011 meeting with Minister Goudreau, the association was advised that under MSI, all municipalities get base funding ($60,000 annually for summer villages and $120,000 annually for other municipalities).  The Minister is prepared to maintain this funding to the receiving municipality for five years after dissolution to allow for appropriate funding without increases to Municpal Affairs budgets in this time of fiscal restraint.  The AAMDC accepts this in principle. 

Provincial Ministries:
Municipal Affairs
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