Budget falls short on infrastructure deficit, municipalities say

· The Pulse
By and

While Alberta's 2023 budget upped spending significantly, it leaves municipalities with a lingering infrastructure deficit that won't be erased by the incoming fiscal framework, says Alberta Municipalities.

The budget "clearly shows (the province) has taken the political temperature of Alberta" in prioritizing funds for healthcare, education, and public safety, ABMunis president Cathy Heron said at a briefing on March 1. "This is necessary and understandable. And Alberta Municipalities believes this spending will help."

But the budget falls short when it comes to addressing Alberta's growing infrastructure deficit, which ABMunis pegs at $30 billion, she said.

"While numerous infrastructure projects will receive funding in the 2023 provincial budget — things like hospitals, schools, roads, and bridges — these projects represent a small fraction of the infrastructure projects needed to build a province that attracts and retains talented people so that Alberta remains economically successful and prosperous," Heron said.

The Municipal Sustainability Initiative (MSI), which has funded billions of dollars in municipal infrastructure since its inception in 2007, will be replaced in 2024 by the Local Government Fiscal Framework (LGFF). On paper, it looks like municipalities will get an increase, as the budget puts MSI funding in 2023 at $485 million and LGFF funding in 2024 at $722 million.

However, the municipalities once had access to the Basic Municipal Transport Grant (BMTG), which is also to be replaced by the LGFF. The total number has gone up and down over the years, but ABMunis argues that the budgeted LGFF funding is far below the 12-year average of the previous two funding programs.

"We were hoping to see it bumped up to match what we were historically promised," Heron said.

While ABMunis didn't get the overall increase it wanted, it was happy to see the LGFF will be fully indexed, meaning dollars will increase and decrease as the provincial government's revenues fluctuate.

"In this respect, Alberta municipalities feel more like full partners, rather than a child of the province," Heron said.

A bar chart showing how capital funding to municipalities under the Local Government Fiscal Framework is less than the 12-year average of previous funding regimes

Alberta Municipalities says combined capital funding from the Municipal Sustainability Initiative (MSI) and Basic Municipal Transportation Grant (BMTG) has averaged around $1.1 billion per year over the past 12 years, which is much more than the $722 million promised in the first year of the Local Government Fiscal Framework (LGFF). (ABMunis)

The budget included funding for specific infrastructure projects in the region, including these:

  • $760 million over three years for Edmonton LRT projects;
  • $634.1 million over three years for the new Edmonton hospital;
  • $138.5 million over three years for the Yellowhead Trail freeway conversion project;
  • $92.3 million over three years for the Terwillegar Drive expansion project;
  • $60.6 million over three years for Highway 60 improvements over the CN railway near Acheson;
  • $22.2 million over two years to address safety concerns at the intersection of Highway 16A and Range Road 20 in Parkland County;
  • $3 million over three years to plan an expansion of the Strathcona Community Hospital;
  • $3 million in 2025–26 for the Ray Gibbon Drive upgrade project connecting St. Albert and Edmonton.

While major projects are important, that's not all there is to infrastructure, Heron said.

"We want to have good roads within our municipalities, not just connecting our municipalities," she said. "We want to not have potholes. We want to have good snow-clearing. So a lot of these things that drive the economy do fall to the municipal level."

Another disappointment for Heron was the budget's lack of support for regional cooperation between municipalities. The budget does not increase the $1 million the province allocates annually to the Edmonton Metropolitan Region Board (EMRB), a growth management board and forum for regional collaboration among the 13 municipalities surrounding and including Edmonton.

With municipal contributions remaining unchanged at about $1.9 million per year, the board is facing a deficit of $1.1 million in 2025.

As mayor of St. Albert, Heron sits on the board. She sees "huge value in these 13 mayors sitting around the table and discussing how we can do things better, instead of doing things in silos," citing projects such as climate-risk vulnerability assessments and a housing symposium.

"There are some projects that we're going to have to figure out how to fund differently," she said.