St. Albert Mayor Cathy Heron is welcoming the news that the federal Gas Tax Fund is getting a one-time $2.2-billion top-up, especially since the money goes directly to municipalities.
“I don’t know the exact dollars this bump-up will mean for St. Albert but I’m encouraged,” she said.
St. Albert typically gets $5 million from the fund, which is a source of money that comes straight to the city instead of requiring provincial approval.
Federal Finance Minister Bill Morneau announced the fund's top-up Tuesday when he tabled the federal budget. The gas tax is a permanent source of funding that’s provided twice each year and has provided more than $2 billion every year to 3,600 communities across the country.
The money can be used in a variety of ways, including on public transit, wastewater infrastructure, drinking water, highways and sports and recreation.
Normally, money from Ottawa moves through the province first before coming to municipalities, with the exception being the gas tax. Heron said for most provinces, that model works fine but in Alberta is gets a little complicated.
“The matching dollars the province is supposed to put into the program generally come from already existing infrastructure programs, meaning (the Municipal Sustainability Initiative),” she said. “Most municipalities, St. Albert included, generally have that MSI funding earmarked for other projects. Some municipalities have used it to buy something in the past and are using it to pay off the debt, so they can’t redirect it to matching dollars from the province for new programs.”
She noted the federal government has voiced some frustration over how slow it can be to get these dollars to municipalities. Heron said the tax gas is one of her favourite grants because of how predictable it is, which makes things easier from a governance perspective.
Right now, the city is facing a financial crunch as it continues to look for solutions to cover a $16.2-million capital shortfall for repair, maintenance and replacement of city assets, and closing a funding gap in the 10-year growth capital plan that amounts to tens of millions of dollars. Council recently trimmed $128 million from that plan, which originally faced a shorfall of more than $300 million.
Heron said every dollar helps, and the city should know soon how much extra it's receiving from the gas tax.
“It could be up to $5 million,” she said.
“We’ll get the number in the next couple of weeks. We could take a project that we’ve already earmarked to be paid out of the pay-as-you-go side of our capital budget, which is really tax dollars, and we could fund it with the gas tax now. We could then take those pay-as-you-go dollars and put them in reserve for the future.”
