Iveson calls emergency meeting over infrastructure spending cuts
The United Conservative Party’s first provincial budget delivered significant cuts to funding for municipalities, leaving the City of Edmonton scrambling for solutions to finance already-approved projects.
Municipal grant cuts amounting to $236 million over the next three years followed a slew of recommendations from September’s Mackinnon Report to bring spending in line with the rest of the country, Finance Minister Travis Toews said in his address to the media Thursday. Alberta grants to municipalities are 20-per-cent higher than the national average.
“Given the province’s current fiscal capacity, the province can no longer afford to provide the level of funding that municipalities received in the past,” the budget reads. “We are ensuring the funds provided to municipalities are used in a way that aligns with provincial priorities.”
But Edmonton Mayor Don Iveson was left blindsided by a further step to scrap a funding framework the UCP had committed to during the provincial election.
Iveson, who was at the airport about to board a flight to the Netherlands when the provincial budget was tabled Thursday afternoon, is calling for an emergency city council meeting Friday morning.
“We had no sense that the city charters fiscal framework was going to be ripped up today, particularly since that was a promise in the UCP platform,” Iveson said at the Alberta legislature after cancelling his trip.
“We’re going to have a lot of work to determine which projects are going to have to be cancelled, that’ll be affected by this. That will have an economic impact in terms of jobs, in terms of consumer confidence and so I felt it was important for me to be here and to lead our city through the impact of these cuts and deal politically with this broken promise.”
The city charter deal, intended to come into effect in 2022, was going to split a base funding of $500 million annually between Calgary and Edmonton, with the provincial capital expected to receive $211 million.
But a new reduced-funding model introduced by Toews Thursday will give the city $27 million less in its first year, based on a $455-million base funding shared between Calgary and Edmonton. This amount will fluctuate up or down in future years based on provincial revenues. All other municipalities will split funding, starting at $405 million. Under the new model, Edmonton is expected to receive $184 million in the 2022-23 year.
This leaves the city searching for answers to those projects already scheduled, some of them hitting the books in this fiscal year, ending December 2019. City budgets were approved with the city charter framework and UCP platform commitment in mind, Iveson said.
The slashing of the carbon tax-funded Alberta Community Transit Fund is “most troubling” to Iveson, affecting seven city transit-oriented projects including the highly-sought Terwillegar Drive expansion, purchase of electric buses and the Stadium LRT Station redesign.
Before the new model comes into effect, the city will have to cope with a nine per cent reduction in provincial dollars over the next three years.
The budget also commits to $3 billion previously announced for LRT projects, with funding expected to rise after 2022-23. But until then, the city will need pay for much of the $1.47-billion Valley Line West LRT.
Another action by the UCP to find savings in municipal affairs is a significant reduction in the grants received from the province for property tax exemptions. It is being cut by 25 per cent this fiscal year followed by an additional 25 per cent the year following. With several provincial buildings in the city, Edmonton is taking the hardest hit and Iveson estimated a $7-million hit this year alone.
“That’s discourteous, really, that the Government of Alberta doesn’t want to pay its way,” said Iveson, noting the urgent need to fully understand the impacts at the special council meeting Friday morning. ”