St. Albert is holding over provincial grant funding to upkeep existing infrastructure in anticipation of a steep drop-off in the coming years.
In a press release sent out Nov. 10, the United Conservative Caucus announced St. Albert has allocated $10.6 million in Municipal Sustainability Initiative funding this year.
The Municipal Sustainability Initiative (MSI) is a program where the provincial government of Alberta transfers money to support the infrastructure needs of cities such as St. Albert. This funding goes to repair, maintain, and replace (RMR) infrastructure, including bridges and roads.
While St. Albert received $18.3 million in MSI funding for 2021, the city has three years to allocate the funding to specific RMR projects.
Cathy Heron, mayor of St. Albert, said it’s not unusual for a city to wait to allocate its MSI funding. For example, the city might hold off in anticipation of a bigger project.
However, while St. Albert would traditionally receive around $14 million each year in MSI dollars, Heron noted the city will only get $7.4 million each year in 2022 and 2023.
“It’s essentially half of what we used to get, so it’s a big drop,” Heron said. “In anticipation … we’re only spending $10.6 million this year, and we’re carrying over the rest for future years.”
The $10.6 million St. Albert has allocated from the MSI includes the following: $1.85 million for the rehabilitation of arterial roads, $2.04 million to repair roads and install pedestrian lights, $2.10 million toward the rehabilitation of local and collector roads including gutters and curbs, $1.5 million toward upgrades at St. Albert Place, and $3.16 toward the construction of Grey Nuns White Spruce Park.
Municipalities in Alberta saw a temporary spike in MSI funding in 2021, when the provincial government boosted the funding in an effort to protect the economy from job losses during the pandemic and recession.
Previously, Alberta announced the MSI grant program would be phased out by 2022 and replaced with a new one. However, when the province released its 2021-22 budget on Feb. 25, the budget showed the funding will live on two years longer than expected.
After this spike, however, total funding for the grant will drop significantly, and the grant program will be replaced by a new program called the Local Government Fiscal Framework (LGFF).
Though this program will allocate less funding to municipalities in Alberta overall, Heron said the way it gets distributed can make a difference.
“We’re starting at a place of reduction already,” Heron said. “What I’m hoping as we move forward is the money goes where it’s needed most.”
While Calgary and Edmonton receive grant funding based on litres of taxable road-use gasoline and diesel fuel sold in the province, remaining municipalities are evaluated for funding based on a combination of population and length of primary highways.
Heron noted rural and urban municipalities are faced with different challenges, arguing the MSI’s emphasis on primary highways doesn’t address the need for recreation centres, libraries, or transit.
“There’s just so many things urban [municipalities] deal with that rural ones don’t,” Heron said.
St. Albert is currently in the middle of its annual budget process. Heron noted this year feels different than those in the past, particularly because of a reduction in the city’s income from revenue streams such as government grants.
“Normally in the budget, my focus would be on what's new, what the city manager wants for new hires or new projects,” Heron said. “This year there’s no growth projects … so there’s nothing to take out to lower the budget and cut back.”
Council will begin its budget deliberation process Dec. 2. Heron noted most motions on the table are focused on adding back services city administration has proposed receive cuts.
“When we go into debate, it’s going to be a struggle,” Heron said. “Normally administration brings us a number and we are able to lower it, but this year that will be much more difficult.”
