Alberta municipalities lament 'substantial' drop in infrastructure funding

The Town of Stony Plain and other municipalities across Alberta are wondering how to best approach a population influx alongside long-standing infrastructure deficits given annual funding from the province fell well short of their request.

The Alberta government in its annual budget, which was introduced last week, committed $722 million towards the new Local Government Fiscal Framework (LGFF) capital program. The LGFF replaces the Municipal Sustainability Initiative as the province's primary funding foundation for municipal infrastructure.

Stony Plain Mayor William Choy says the funding simply isn't enough for the Edmonton bedroom community of 18,000 as it addresses $28 million in infrastructure projects this year.

The town is receiving $2.1 million in provincial funding this year for infrastructure through the LGFF.

Choy says Stony Plain has allocated the LGFF funding to different projects such as road repaving, and sewer and water projects, but other plans such as a new $45-million recreation centre might be affected.

The town is waiting on the province to release the details of a recreational infrastructure grant announced in 2023, the mayor said, adding Stony Plain last opened a new recreation facility in 1967, back when the community was about a tenth of the size it is now.

"Without proper funding, I think municipalities will be going back to doing just the basics: maintaining roads, sewers and water, and that's it, so we will not be able to provide housing for residents or the quality of life residents depend on for activities, for sports, for leisure," Choy told CTV News Edmonton on Wednesday.

Alberta Minister of Municipal Affairs Ric McIver says it's no surprise to him that municipalities want more funding from the province as "no matter how little or how much money they get ... no one should be surprised that municipalities are asking for more money because it's right in their job description to do so."

"The other thing that's probably true about every order of government -- whether it's municipal, provincial or federal -- is that there will never be what anybody would ever describe as enough money, so no one should be surprised that they say it's not enough today," McIver told CTV News Edmonton on Tuesday.

The minister said he believes funding through the new LGFF, which is based on provincial revenues the previous three years and is allocated based on a formula, should give municipalities "a reason to be optimistic."

"As part of that, next year, it should go up by about four-to-14 per cent," McIver said. "In the year after that, it will probably go down by two or three per cent."

He said his ministry wants to work with municipalities to make the new funding framework "helpful and useful."

"(There are) two basic goals. One is to help some of those municipalities that are successful in bringing in new businesses and new people, if that is attached to additional infrastructure they might need, whether it's a road, water treatment, sewer treatment, parks, or whatever it happens to be," McIver said.

"The other element of it is for municipalities that perhaps run up against insurmountable infrastructure shortfalls, where we might be able to assist them partially or to some degree when that happens."

Still, the amount of infrastructure funding municipalities receive now from the province has dropped by more than half: about $420 per person under MSI, which started in 2007, to about $186 per person now, says Tyler Gandam, the president of Alberta Municipalities, which represents communities outside the major cities.

"I get that the budget and times are tough, for sure, but we can't continue to look after the growth that we're seeing in this province without more support from the province," Gandam, who's also the mayor of Wetaskiwin, told CTV News Edmonton.

For McIver, though, it comes down to how municipalities themselves will manage it.

"It's not easy; it's difficult," he said

"Certainly, provincial funding is an important part of their infrastructure program, but they also have taxing power, and they need to make the case to their citizens and their municipality on how they spend the money, so focusing on the most important things first, kind of like any household. Any government, including ours, also has those same responsibilities."

Gandam said he calls McIver's 'up to them' answer a fair one.

"It is up to us: We get to decide whether or not we're going to raise property taxes, or if we're going to lower levels of service, or change what we're doing," Gandam said.

"If we're not building a new rec centre or a field house, it's because we're looking after roads and sidewalks. Going from $420 per person in funding down to $186 is pretty substantial, so it's difficult for municipalities ... Everybody's got to tighten their belts."

With files from CTV News Edmonton's Jeremy Thompson