City of Edmonton anticipates $400M gap in provincial infrastructure funding

· The Pulse

A new report suggests the City of Edmonton will receive $400 million less in provincial infrastructure funding than originally anticipated.

The Municipal Sustainability Initiative (MSI) launched in 2007 to provide municipalities in Alberta with capital infrastructure funding. From 2007 to 2024, the City of Edmonton expected to receive nearly $4.2 billion from the MSI and its replacement programs, but now anticipates it will receive $3.8 billion, a gap of $400.2 million.

The original MSI program, which was extended from 2016 until the end of 2021, accounts for $60.2 million of that gap. The replacement programs, first the City Charter Fiscal Framework (CCFF) and later the Local Government Fiscal Framework (LGFF), account for the remaining $340 million.

Projected MSI funding gap

The committed levels of funding under each program, including estimates based on the 10 year average of MSI, compared to Budget 2021.

The CCFF originally committed $500 million for Edmonton and Calgary but it was replaced in 2019 with the LGFF which reduced the funding available to Alberta's two largest cities to $455 million. In Budget 2021, the provincial government further reduced that amount to $382 million and deferred the start of the program by two years.

The city says that the latest reduction could result in cuts to the city's capital budget of about $30 million in 2021 and 2022, with further reductions of $120 million projected in 2023 and 2024. That could mean "up to 885 fewer jobs created through the City of Edmonton's capital plans."

The report also summarizes the impact of Budget 2021 on Edmonton's economy and post-secondary institutions, concluding that reduced funding "may have negative impacts to Edmonton’s economic recovery from the pandemic and medium to long-term growth prospects."