The Province of Alberta recently released their 2020-23 fiscal plan outlining their priorities over the next three years. Budget 2020 is comprised of four main components: Getting services to people who need them, getting Alberta back to work, getting spending under control and getting a fair deal. The plan details several areas of support for municipalities and towards infrastructure specifically.
Major highlights include:
- $20.6 billion towards health services
- $8.3 billion for education
- $3.9 billion for community and social services
- $1.6 billion for children’s services
- $63 million for seniors’ benefits
- Job Creation Tax Cut-reducing the corporate tax rate from 12% to 10%
- $772 million in capital projects that will create approximately 3,000 jobs by 2022
The Ministry of Municipal Affairs has an operating budget of $241 million for 2020-21 to assist with municipal priorities and programs. Overall, the plan represents an investment of $19.3 billion over three years. Municipal support accounts for the largest portion of the Capital Plan at 32 per cent, followed by capital maintenance and renewal at 16 per cent, health care at 14 per cent and roads and bridges at 13 per cent.
Budget 2020 provides $5.6 billion in direct municipal support and supports a range of services and municipal infrastructure, including roads, sewers and public transit. Total funding to municipalities, which includes both provincial and federal funding, is forecast to average $2.2 billion a year from 2020-21 through to 2022-23. Total municipal funding begins at $493 per capita and drops to $476 per capita in 2022-23, remaining relatively stable over the next three years. Provincial per capita funding alone averages at $306 per capita over the next three years in comparison to the total average of $484 per capita after federal funding has been included.
The community revitalization (CRL) levy, which is an annual incremental education property tax revenue from the specific properties, given to the municipality as opposed to the province, will be a continued source of funding for municipalities throughout 2020-23. Typically, the CRL period is 20 years, but in January 2019 the government doubled the period for the 2008 Calgary Rivers CRL until 2047. There are four other current CRLs: Edmonton’s Belvedere, The Quarters and Capital City Downtown, and Cochrane’s South-Central. In 2020-21, the CRLs are estimated to provide $17.2 million in provincial property tax revenue to support municipal spending in CRL areas.
The Budget is supporting (in conjunction with the Federal government) several grant programs for municipalities, including: Alberta Community Resilience Program, Clean Water and Wastewater Fund, Federal Gas Tax Fund, First Nations Water Tie-In Program, Investing in Canada Infrastructure Program, Local Government Fiscal Framework, Municipal Sustainability Initiative, Municipal Water and Wastewater Program, Public Transit Infrastructure Fund and Transportation Infrastructure Program.
An important note for municipalities is that the Province will be conducting consultations up until March 31, 2020 on whether public bodies will need to obtain the approval of the provincial government before they can enter into agreements with the federal government. This could have implications for municipalities wanting to access federal funding.
Budget 2020 does concentrate on maintaining and building infrastructure with a focus on transportation, education, public safety, health care and connectivity. With this focus, the Province will be releasing several documents throughout 2020. A new Infrastructure Act in 2020, the 20-year strategic capital plan, and the Alberta Infrastructure Report will foster transparency, predictability, and accountability in capital planning processes. Further, the new legislation will establish principles that govern capital spending decisions.
To read the complete Budget 2020, visit Alberta’s website.