Alberta Budget 2024: What’s in it for Municipalities?

The Alberta provincial budget for 2024 leaves municipalities feeling akin to eager pinata bashers at a birthday bash, hoping for a cascade of goodies, but winding up with just a few candies and a whole lot of confetti. As we know, there is a massive infrastructure deficit combined with record inflation, immigration, and new responsibilities passed onto municipal budgets. Municipalities need to increase taxes across the province to afford the various needs of residents. A significant revenue source for municipalities is provincial funding through the new Local Government Fiscal Framework (LGFF), which replaces MSI and other grant funding sources. While this new framework signals progress, it's evident that the distribution of funds across over 330 municipalities dilutes their impact.

This year marks the first for the LGFF, with a sizable increase over last year’s MSI at $784 million, $273 million more than last year. The LGFF also comes with a formula change, altering the share municipalities receive compared to MSI. The funding amount is tied to provincial revenues to allow for increases and decreases with the province.

New grants for municipalities included in the budget comprise the Local Growth and Sustainability Grant of $20 million per year for the next three years. This grant aims to support municipalities to address growth pressures, continue growing local economies, address critical health and safety risks, and enhance community resilience and core infrastructure. While this is a welcome program, the dollar value is a drop in the bucket when spread around Alberta’s over 330 municipalities.

Additionally, a new Community Recreation Centre Infrastructure Program will provide $10 million per year to support the development or renewal of small and mid-sized projects such as indoor and outdoor hockey arenas and rinks, community pools, indoor turf centers, pickleball courts, sports fields and courts, and other recreational facilities.

On the capital side, the government is investing $3.7 billion in Capital Maintenance and Renewal over three years which is an increase of $173 million over last year’s budgeted amount. This includes $1.7 billion for roads and bridges, $512 million for health facilities, $420 million for postsecondary facilities, $381 million for schools, and $121 million for seniors facilities and housing. There is a further $2.6 billion for new roads, bridges, water supply and treatment facilities, and wastewater treatment facilities.

The cash allocated for Grants in Place of Taxes is increasing this year and the property tax requisition  for education is staying at the same percentage as last year. The total dollar amount that the province is accounting for is increasing, but this is due to expected increases to property values and not due to an increase by the province.

The Community Facility Enhancement Program, or CFEP, remains the same this year at $50 million and the Strategic Transportation Infrastructure Program (STIP) sees a small increase to $43.5 million.

Other areas of investment include healthcare, wildfire management, drought mitigation, public safety, and support for vulnerable Albertans, all with direct and indirect impacts for municipalities.

Despite the incremental increases in funding and the introduction of new grant programs, municipalities continue to grapple with mounting challenges and uncertainties. The provincial budget for 2024, while making strides in acknowledging the needs of municipalities, falls short of providing a comprehensive solution to address the underlying infrastructure deficit and growing demands for essential services. Moreover, the reliance on property value increases to bolster funding allocations underscores the precarious nature of municipal finances, subject to fluctuating economic conditions beyond their control. In this context, municipal leaders are tasked with navigating a delicate balancing act, striving to meet the immediate needs of their communities while advocating for sustainable, long-term solutions to ensure resilience and prosperity in the face of evolving challenges. As they engage in budget deliberations and strategic planning, municipal leaders must stay diligent in their pursuit of equitable funding distribution and proactive investment in critical infrastructure and services to safeguard the well-being and prosperity of their residents for generations to come.

Ultimately, the province is increasing its contribution to municipalities, albeit at a rate much lower than would account for the infrastructure deficit across the province. Nevertheless, it is reassuring to see investments in community infrastructure and the recognition that municipalities are facing ever-increasing challenges.

As municipal leaders navigate the complexities of budget allocation and service provision, advocating for sustained investment is crucial. Only through robust collaboration and strategic resource allocation can municipalities thrive and meet the evolving needs of their residents.