In a move that has been called more predictable and sustainable, Alberta has reached an agreement to give funding to Edmonton and Calgary in amounts proportional to provincial revenue.
If passed, the City Charter Fiscal Framework Act, or Bill 32, would replace the Municipal Sustainability Initiative when it expires in 2021-22, and tie the cities’ infrastructure dollars to the Alberta economy.
“No other province has a legislated revenue-sharing agreement with municipalities like this,” said Shaye Anderson, minister of municipal affairs.
In the first year, it would provide Alberta’s largest two cities with $500 million to share. In the following years, the amount would change depending on the province’s revenues.
“If the economy grows by two per cent, government revenues grow by two per cent, our grant grows by two per cent,” explained Mayor Don Iveson.
“What we’ve agreed to as partners—true partners—if things go the other direction, we’ll take a corresponding haircut.”
If passed, Bill 32 would also secure long-term transit funding from the carbon tax. This would be in addition to promised LRT funds: Starting in 2027, the agreement commits $400 million per year to transit, to be split evenly between Edmonton and Calgary.
All of the involved parties have pushed to make the agreement law.
Anderson said doing so would give Edmonton and Calgary certainty: “If there would be changes at any time in the future, it would have to go back in the house and it would be a complex process to do that.”
Bill 32 currently only defines a plan for funding for Edmonton and Calgary.
Officials said the provincial government has been in discussion with the Alberta Urban Municipalities Association and Rural Municipalities of Alberta for several weeks, but that details have yet to be settled.
The plan for the cities was moved forward because each took an MSI reduction of $152 million in Budget 2018, and agreed to sustain the reduction until MSI expired, with the expectation of a revenue-sharing program with Alberta.
However, AUMA President Barry Morishita was hopeful the municipalities would see a similar arrangement.
“We have been discussing it, so we’re very encouraged that we’re going to have the same certainty going forward that the cities were announced today,” he said.
As for tying funding to the provincial economy, he said the municipalities are “willing to be partners in that.”
“We’ll still know when it’s going to go up and down, and we won’t be at the whim of a government that says, you know, ‘whatever we can’t afford it.’”
With files from Nicole Weisberg
