Making Sense of Alberta’s Desire to Block Federal Funding

Back when Jason Kenney was leading the United Conservative Party into its first election in 2019, there were few questions about the plans he held for Alberta. Even though the COVID-19 pandemic forced him to pivot temporarily on a number of issues, his party had crafted a platform that looked more like a checklist – making things much more simple to anticipate.

Fast forward to the 2023 provincial election.

Neither the Alberta NDP nor UCP put forward a similar looking platform. Rather, both opted to focus on a few key promises supplemented by general themes they intended to pursue. While there are strategic reasons for not outlining each and every item your party plans to action, more general platforms tends to lead to more speculation and guesswork as it is tricky to predict exactly what could come forward at any given time.

With the UCP under Premier Danielle Smith, one trend has arisen that helps politicos and watchers to better predict future initiatives her government will undertake:

If someone in Cabinet muses about an idea publicly, it is reasonably safe to assume that it will be coming forward in some way, shape or form.

Last weekend, Minister of Seniors, Community and Social Services Jason Nixon spoke with Rosemary Barton on CBC. On her show, Minister Nixon indicated that the province will be introducing legislation to prevent the federal government from stepping on provincial jurisdiction. At the time of writing, such a bill is not found on the Order Paper; however, it is reasonable to suspect that we could see legislation introduced before MLAs break for summer.

So, how did we get here?

Creating a List, Checking it Twice

While the origin of the tension between the province and municipal orders of government go well beyond the scope of this article, we want to focus solely on this particular issue.

At the start of 2024, Minister of Municipal Affairs Ric McIver sent a letter to every municipality in the province. In said letter, he requested that municipalities provide a detailed list on agreements they may have with the federal government, including:

• capital funding agreements.

• building lease agreements.

• maintenance agreements for federal properties.

• mutual aid agreements with First Nations.

• funding agreements for cultural events (i.e. Canada Day events or fireworks).

• community mailbox agreements with Canada Post.

• agreements municipal bodies hold with the federal government (defined as any organization that receives 50 per cent or more of its funding through the municipality). 

Last week, the province felt further aggressed by the conditions placed on $5 billion in new housing funding created by the federal government. Of the total $6 billion, only $1 billion is being made available immediately for shovel-ready projects. The remaining $5 billion is set aside for provinces and territories that meet certain requirements.

Among those conditions are permitting more multi-home projects (duplexes, triplexes, townhouses, etc) as well as a three-year freeze on development charges (only for municipalities with more than 300,000 residents).

In response, Ministers Nixon and McIver issued a joint statement.

“To date, the Government of Canada has not provided adequate or appropriate funding to Alberta for housing and are once again bypassing provincial jurisdiction by not consulting or even notifying provinces about the new program.”

Where We Find Ourselves Today

Minister Nixon spoke quite clearly about the government’s intentions on Barton’s program.

"The premier and I and the municipal affairs minister of the province have been clear that we will be taking steps to make sure we're in the same circumstance as Quebec shortly, and we will pass legislation to protect the people of our province."

In this quote, Minister Nixon is speaking of An Act Respecting the Ministère du conseil executif, legislation passed by the Assemblée nationale du Québec, in force in the province since December 1984.

Section 3.11 of said legislation reads as follows:

Except to the extent expressly provided for by law, no municipal body or school body may, without the prior authorization of the Government, enter into any agreement with another government in Canada or one of its departments or government agencies, or with a federal public agency.

The Government may attach such conditions as it determines to the authorization.

Any contravention of the provisions of the first paragraph or any failure to comply with the conditions referred to in the second paragraph entails the nullity of the agreement.

The Minister, concurrently with the minister responsible for or the minister who subsidizes the municipal or school body, shall see to the negotiation of the agreement.

Following sections outline how the minister responsible shall provide advisory opinions on draft agreements and attached conditions as they deem necessary.

Given the age of the legislation in Quebec, it is difficult to say if Alberta’s legislation will mirror the conditions or if our province will incorporate new measures or stipulations to make it more difficult to accept funding from the federal government.

The provincial government under the UCP believes very strongly in the idea of jurisdictional independence. Minister Nixon said "municipal governments are our jurisdiction and the federal government stepping into that area is something we will not accept. You don't see this taking place in the province of Quebec, as an example, and that's because Quebec has passed legislation to make sure the feds can't do that.”

Regardless of the design of the legislation or the outcome of this jurisdictional stand-off, the number one question that will persist is how will municipal finances be affected. As many of our readers are acutely aware, municipalities are forbidden by legislation from carrying deficits when it comes to tabling municipal budgets. There have already been significant changes in how provincial funding is executed since the transition from the MSI to LGFF (though LGFF funding totals have exceeded initial forecasts in the most recent budget).

With both municipal political parties and the 2025 election cycle around the corner, those in office (and hoping to be) will need to strategically craft a plan for how to navigate the seemingly unending changes to municipal funding.