Alberta municipalities to see $2 billion in funding

Budget 2023 is investing $2 billion over three years in municipal funding, which includes a change to make municipalities full partners.

Under the new Local Government Fiscal Framework (LGFF), baseline capital funding for municipalities is set at $722 million for the 2024-25 fiscal year. An update to the LGFF Revenue Index Factor from 50 per cent to 100 per cent will mean that annual capital funding for municipalities will rise or fall by the exact same percentage as provincial revenues from three years prior.

“The 50 per cent revenue index factor was meant to provide stability in municipal funding in a resource-based economy. However, municipalities said that they wanted full partnership – in good times and in bad – and we’ve listened. This will mean a 12.6 per cent increase in funding for the second year of the new formula,” explained Rebecca Schulz, Minister of Municipal Affairs

This change will mean that funding under the LGFF will increase to $813 million in 2025-26 – for a three-year total of $2 billion.

In addition to this, Budget 2023 doubled operating funding to $60 million provided to municipalities under the Municipal Sustainability Initiative (MSI), which supplements the $485 million in capital funding also provided under the MSI in 2023-24. This funding level will increase to $722 million when the LGFF is implemented next year.

Budget 2023 also committed to providing additional top-up funding to ensure no municipality will receive a year-over-year decrease in funding in the shift to this fiscal framework.

Budget 2023 secures Alberta’s future by transforming the health-care system to meet people’s needs, supporting Albertans with the high cost of living, keeping our communities safe and driving the economy with more jobs, quality education and continued diversification.

Quick facts

• Over the last three years (2021-22 to 202324), Alberta’s government has provided municipalities with an average of $722 million per year in MSI capital funding. MSI capital funding was front-loaded in 2021 to help municipalities plan for the future.

• LGFF baseline capital funding is set at $722 million for 2024-25, as legislated under the Local Government Fiscal Framework Act. $382 million is reserved for Calgary and Edmonton.

$340 million will be divided among the remaining municipalities, Metis Settlements and the Townsite of Redwood Meadows.