WESTLOCK — The provincial government will keep Municipal Sustainability Initiative funding in place for another two years, but has reduced the amount that will be handed out to municipalities.
Bill 56, the Local Measures Act which passed March 11, delayed the Local Government Fiscal Framework Act’s implementation to 2024 instead of the original start date of 2022, and reduced the baseline funding for the first year to $722 million from $860 million.
While the MSI will continue until the Fiscal Framework is implemented in 2024, the funding pot has been reduced as well. This year, municipalities received $1.2 billion in funding, but the pot for 2022 and 2023 has been set at $485 million.
As for how much of a reduction this actually amounts to, it depends on which sets of numbers stakeholders compare. Municipal Affairs minister Ric McIver said it’s a 25 per cent reduction in funds for municipalities compared to 2019-2021.
Alberta Urban Municipalities Association, however, says that once the Fiscal Framework is implemented, municipalities will see a 36 per cent drop in funding per year compared to the 2011-2020 annual average of the MSI.
And yet again, comparing how much municipalities thought they were going to receive for 2022 ($860 million) versus how much they will actually get ($485 million), means a 45 per cent drop in funding for that year alone.
The Fiscal Framework was first announced in 2019 and passed in December of that year, and hasn’t yet received proclamation. The amendments to the Act will come into force April 1.
McIver said the amendments align the Fiscal Framework with “job creating and sustaining changes in Budget 2021,” and municipalities can spread out the money over multiple years.
The minister didn’t directly answer questions from reporters or a follow-up from the News about why the Fiscal Framework was delayed by two years, but reiterated that “we didn’t want municipalities caught … in the middle of capital projects” without being able to finish the work.
He asked municipalities to “live within their means” and “contain costs” while the province recovers from an $18.2 billion deficit in Budget 2021.
Town of Westlock CAO Simone Wiley said the major projects for 2021-2022 in that municipality are underway already.
“The MSI capital funding is integral to funding the Town’s capital plans and we appreciate the provincial government providing the future amounts which gives us time to work with our asset management plan and be strategic in planning future capital projects.”
Westlock County interim CAO Laurie Strutt didn’t directly answer questions regarding this drop in funding, but confirmed the county received $2.97 million in MSI money for 2021.
“Now that the allocation has been announced,” she wrote in a March 12 e-mail, “this information will be provided to Council in order for them to debate the use of the remaining amount.” About $2.3 million has already been set aside for gravel and shoulder pull programs.
“Municipalities understand that we have an $18.2 billion deficit and we need to address that,” McIver said. “I think municipalities are very sophisticated, I think they understand that.”
Once the Fiscal Framework is implemented in 2024, municipalities will have $722 million in capital funding, but money for future years “will rise or fall based on the province’s revenues,” McIver said.
The $30 million in operating funds will continue for the two remaining years of the MSI.
Bill 56 also includes amendments to the Emergency 911 Act that increase the wireless levy from $0.44 to $0.95 per month, introduce texting in emergency situations and extend legislation to all call and dispatch centres in the province.
Andreea Resmerita, TownandCountryToday.com
