ATHABASCA – With the release of Alberta’s 2021 Budget Feb. 25, the Town of Athabasca will soon be releasing its own financial plan for the year, and with years of projected deficits to come for the province, town council is trying to prepare for lean times to come.
At their March 2 regular meeting, councillors reviewed a letter from Municipal Affairs minister Ric McIver meant to give elected officials an overview of the 2021 budget and some of its implications for municipalities.
While a new fund to take the place of Municipal Sustainability Initiative (MSI) funding had initially been announced, the government decided to extend the program for three more years. This year, most municipalities will see funding at levels they are accustomed to, but that funding will fall significantly in the years following.
“MSI is going to be 25 per cent less over the next three years, but they're talking it up this year,” said mayor Colleen Powell. “I don't know the percentage of that, but it looks like we're getting more money this year, and the next two years we're going to be getting a fair bit less, so we have to be aware of that.”
Athabasca’s 2021 MSI allocation totals $868,671, including $658,183 in capital funding.
The minister’s letter said, “as a result of several factors, including falling revenues and the ongoing costs of the COVID-19 pandemic, we need to reduce government spending in Alberta. Our goal is to do this while also continuing to provide significant infrastructure funding in the near term to support our economic recovery and help municipalities adjust to new levels of funding in future years.”
MSI capital funding provincewide will average $722 million a year until 2024.
“To support continued economic recovery and stimulus efforts, more of that funding will be made available up front, and less in subsequent years,” McIver’s letter read. “To help you adjust to a reduced average funding level, $1.196 billion in MSI capital funding will be made available to municipalities and Métis Settlements in 2021, and $485 million in each of the next two years. Additionally, municipalities and Métis Settlements will continue to receive the full $30 million under the operating component of the MSI.
MSI funding has been the route via which the province distributes infrastructure dollars to municipalities since 2007. Municipalities determine which projects should be funded based on local priorities within the general criteria set out in the program guidelines and are encouraged to take a long-term approach to planning for capital projects.
Roads, bridges, public transit, emergency services, water and wastewater systems and solid waste management facilities and equipment are some of the eligible projects. Airports, municipal buildings and recreational facility are also eligible, as are libraries and cultural and community centres.
Powell urged those who may end up on the next council after the municipal elections in October, “to discuss how you're going to do capital funding over the three years … because this is going to have an impact, and it is going to have to probably fundamentally change a lot of the ways we do things.”
Coun. Dave Pacholok provided council with some of the other highlights he had picked out of the province’s budget. He noted FCSS and police funding were stable, but education tax would be going up from 29 per cent last year to 32 per cent in 2024. Personal income tax will increase, and corporate tax will fall, he said.
“With an $18 billion deficit coming up here, there's going to be difficulties, from every point of view for getting work done, so we're not the only ones that are going to be struggling,” said Pacholok.
“This isn't going to end in a year or two, it's going to go on for some time, so we have to learn to live with a new normal,” Powell said.
