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A new funding agreement between the Alberta government and the two largest cities in the province links capital project funding to provincial revenue gains and declines.
Bill 32, introduced Thursday by Municipal Affairs Minister Shaye Anderson, also legislates on transit funding for Edmonton and Calgary after the end of current commitments in 2026-2027.
Anderson said that these measures constitute what he calls a historic agreement because it puts the commitments into effect.
"No other province has signed an income-sharing agreement with municipalities of this type," said Mr. Anderson. "And no other province is planning long-term funding for public transit, with the exception of Alberta – it's a big deal."
The revenue sharing plan replaces the Municipal Sustainability Initiative, or MSI, which ends at the end of the 2021-2022 fiscal year.
Bill 32 would put the funding formula in the legislation for the first time. By 2022-2023, the two cities would share $ 500 million, including $ 211 million in Edmonton and $ 289 million in Calgary.
Over the next few years, cities will win or lose funding based on revenue growth and fuel sales in the province.
If the provincial government earns more in one year, Edmonton and Calgary can expect an increase in funding three years later. A decline in income means a drop in what both cities will receive.
The three-year timeframe is to give cities planning security and also give them the opportunity to build projects in times of economic downturn.
Edmonton Mayor Don Iveson said the formula gives the city predictability even as incomes fall.
In the past, the MSI was suddenly reduced by 20%, in response to a 2% to 3% drop in government revenue, Iveson said.
"The legislation gives us the certainty that if the government changes policy, it must be done in public, and municipalities will have the opportunity to respond," he said. "Not in the fray of a tax update or a budget."
Bill 32 would also provide for predictable annual transit funding for Calgary and Edmonton, extending the planned funding of $ 3 billion for LRT until 2026-2027 and creating an annual commitment of $ 400 million. dollars, split evenly between the two cities in the next fiscal year.
Funding will come from carbon tax revenues, which will be explicitly described in the bill.
Iveson said the money allows cities to contact the federal government for matching funds and contributes to long-term planning. He added that Edmonton could have the extension of the Capital Line South Subway Bridge in anticipation of the opening of the new hospital planned for Ellerslie Road and 127th Street.
Financing source put in law
The decision to list the source of funding in legislation may be controversial. Jason Kenney, leader of the United Conservative Party of the Official Opposition, has pledged to abolish the carbon tax when he became prime minister in the spring election, which could affect income.
Should Bill 32 become law, a future PCU government should table amendments to the relevant sections of the law and debate changes in the Legislative Assembly.
Bill 32 also provides for a new $ 50 million annual program to be used by the regions for economic development projects such as the improvement of convention centers or regional airports. A third is allocated to the councils of the cities of Edmonton and Calgary, respectively, the remaining part being distributed among the rest of the province.
The government is currently negotiating with the Association of Urban Municipalities of Alberta (AUMA) and Rural Municipalities of Alberta (RMA) to replace the MSI program after it expires.
Just over half, 53% of all Albertans, live in Calgary and Edmonton.
The bill also amends eight areas of the city's charters for Calgary and Edmonton. In particular, they allow cities to set their own debt and debt service limits, which means cities should get their own credit rating.
Edmonton and Calgary city councils will be required to hold public hearings on these issues.
The bill also extends what cities can charge developers for off-site royalties. They are currently used to cover the costs of drainage, sewerage, water and roads in new neighborhoods. The bill extends what cities can cover with taxes, such as the costs of building recreation centers.
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