Cities, province reach new agreement
Alberta is overhauling the infrastructure funding model with Calgary and Edmonton, linking each city’s annual payout to provincial revenues and the carbon tax.
“We are riding the prosperity of Alberta,” said Edmonton Mayor Don Iveson Thursday. “If things are going the other direction, we’ll take a corresponding haircut.”
Under new legislation, Alberta’s two largest cities will split $500 million in 2022-23, after the expiration of the current revenue sharing plan. That agreement, inked in 2007, promised $11.3 billion for infrastructure projects. The commitment will be met by 2022, said the province.
Calgary is expected to get $289 million and Edmonton $211 million in the first year of the new deal. After that, there will be an increase or decrease depending on provincial revenues and fuel sales.
“It is a realistic and fair funding deal,” Iveson said, adding that the legislated predictability will take the guesswork out of budgeting.
‘NEW ERA OF PARTNERSHIP’
The province has had strained negotiations with city governments over the last several months.
In October, Finance Minister Joe Ceci said Alberta’s major cities needed to “come to the table” if they wanted to lock down a municipal funding agreement.
Edmonton council, which is debating a four-year capital budget, continued to raise concerns about the lack of certainty around provincial funding while trying to firm up numbers.
Iveson said he was “frustrated” with discussions.
Municipal Affairs Minister Shaye Anderson said Thursday it was a long road to reach the deal, which ushered in a “new era of partnership.”
“No other province has a legislated revenue sharing agreement like this,” he said.
$400 MILLION ANNUALLY FOR TRANSIT
Bill 32 also includes a transit investment plan starting in 2027-28. It promises $400 million in annual funding, evenly split between Edmonton and Calgary.
That’s on top of the $3 billion promised until 2026-27 to fund projects including the Green Line LRT in Calgary and the Valley Line West LRT in Edmonton.
The funding under the new framework is tied to the carbon tax through the province’s climate leadership plan. If the tax was scrapped — which UCP Leader Jason Kenney has said will happen should his party win the 2019 election — the province would need to find new revenue sources for the transit plan.
“What we have here is assurances from all parties that the projects that have been announced will be honoured,” Iveson said. “Regardless of what the source of funding is, what we have is legislated certainty that there will be ... an allocation of those dollars. If the policy or source changes over time, that’s a separate question.”
$50 MILLION FOR REGIONAL PROJECTS
The deal also sets aside $50 million in annual funding for regional projects spurring economic development, such as road upgrades. The criteria for what projects would be eligible for funding hasn’t been outlined.
But two-thirds will go to Calgary and Edmonton Metropolitan Region Boards. The other share could go to projects across Alberta such as regional airports.
The bill also enshrined new regulations for city charters, such as allowing councils to establish their own debt and debt servicing limits after holding a public hearing. Calgary and Edmonton are both well below the debt cap currently in place.
Other changes would allow councils to expand how off-site levies are used, to encompass projects such as recreation centres and fire stations. The bill also extends the timeframe for imposing and collecting local improvement taxes.