Cities push province for deal on revenue sharing
While municipal leaders are growing impatient for a new revenuesharing program from the province, Premier Rachel Notley said Friday her NDP government must proceed cautiously as it looks to tighten its belt.
As the Alberta Urban Municipalities Association prepares for its annual convention next week in Calgary, one key issue is what will happen with the Municipal Sustainability Initiative, an infrastructure funding program started by the former Progressive Conservative government, intended to expire in 2017 but has instead been extended to 2021-22.
The NDP government has promised to replace MSI — slated to dole out $1.2 billion this budget year and the next three — but there is no timetable for a new program to be implemented.
“Municipalities are a little bit worried about when this will happen. They want it the sooner the better,” said Barry Morishita, the mayor of Brooks and the vicepresident of cities up to 500,000 population for the Alberta Urban Municipalities Association.
“Without that in place, it makes it really tough to plan for growth and for replacement costs. So we want it done, sooner than later.”
Morishita said there are a number of issues with MSI, including that funding levels have never reached the annual $1.4 billion originally promised. Funding amounts are also not set by legislation and are subject to change, with the NDP government most recently in 2016 reneging on a promise to boost the fund by $50 million.
With MSI allocation being extended over a longer period, that means municipalities that have borrowed against their upcoming payments face higher interest costs as the funding needed to repay the loans is stretched out over time.
Morishita said cities and towns want a predictable funding plan from the government.
As it unveiled its agreement on new city charters for Calgary and Edmonton last August, the NDP promised a new fiscal framework for municipalities that will include the development of a new infrastructure funding formula tied to provincial revenues.
Notley told reporters Friday that her government aims to provide predictability to municipalities and other stakeholders.
But she also echoed her message to the Alberta Association of Municipal Districts and Counties earlier this week, where she said the NDP would “carefully and compassionately tighten our belts.”
“As a government that is in the midst of trying to carefully bring our budget into balance over time in a strategic way, we have to look at a number of different issues, which is what we’re doing,” Notley said. “We’re having conversations with a number of different municipal representatives as we do that work.”
Calgary Mayor Naheed Nenshi said this week that the government had been seeking input on a new fiscal framework ahead of the fall municipal elections, but “that hasn’t really progressed very much because of the election.”
Nenshi says there will be some signal from the province on a new fiscal plan, even if he’s not expecting new dollars soon.
“I hope that we will have some news on that by the end of the year, of course keeping in mind the province’s financial constraints and the city’s financial constraints,” he said. “Our job has always been to develop the framework that makes sense, not necessarily prime it with money right away.”
The AUMA convention runs Wednesday to Friday next week. One resolution to be debated calls on the government to begin immediate consultations on developing a new revenue-sharing program.
Grande Prairie Mayor Bill Given, whose city is one of the sponsors of the resolution, said it’s important to begin talks well in advance of a new program being put in place.
“The underlying issue here is that the municipal system is based on property tax revenue, which is inadequate to provide for the kind of infrastructure demands that our communities need,” he said in a recent interview.