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Municipal leaders urge fiscal, taxation act amendments

Associations would like amendments
mvt mvc kemmere
Rural Municipalities of Alberta president Al Kemmere. Noel West/MVP Staff

Rural and urban municipal leaders are calling on the UPC government to amend the newly introduced Fiscal Measures and Taxation Act (Bill 20).

Al Kemmere, a Mountain View County councillor and president of the Rural Municipalities of Alberta Association (RMA) joined the mayors of Calgary and Edmonton, and the president of the Alberta Urban Municipalities Association (AUMA) in issuing a joint statement regarding the legislation last week.

The leaders are calling on the province to allow future municipal funding growth to be tied fully to provincial revenues at a one-to-one ratio, which they say will help municipalities to increase investment on infrastructure projects when provincial revenues are positive and make adjustments when they are negative.

“Municipalities are the level of government closest to the people and need to be partners with the provincial government in times of both fiscal prudence and prosperity to attain economic growth and autonomy, benefiting all Albertans,” said Kemmere.

“We look forward to working with our provincial partners to solidify sustainable and predictable municipal funding that builds resilient, efficient and strong communities moving forward.

“Annually adjusting transfers at the rate of revenue growth will go a long way in securing rural municipalities’ economic future.”

The RMA represents 69 rural municipalities, including Mountain View and Red Deer counties.

Bill 20 introduces the Local Government Fiscal Framework, which establishes part of the mechanism for post-Municipal
Sustainability Initiative (MSI) funding, used by municipalities for infrastructure and other projects.

The province has announced that it will be cutting MSI funding by $94 million in 2020-21 and $142 million in 2021-22.

Bill 20 also establishes formulas related to how annual funding amounts will be determined for municipalities based on 50 per cent growth in provincial revenues three years prior to the current year.

In the joint statement, the municipal leaders said that under the new framework they are concerned that funding “will grow at only half the rate of provincial revenue each year and as a predictable funding program, it should reflect a full connection to provincial revenues.

“We strongly urge the government of Alberta to amend Bill 20 to allow future municipal funding growth tied fully to provincial revenues at a one-to-one ratio which would allow municipalities to increase investment in needed infrastructure when revenue is positive, and make necessary adjustments during more challenging times.

“Without this complete indexing connection, from an inflationary perspective, municipalities will be left behind.”
The leaders are encouraging the government to “take a longer term view of the role of municipalities. We encourage them to work with us to determine the appropriate formulas and solutions to help address the fiscal challenges while continuing to make our economy grow.”

The AUMA represents urban municipalities, including Carstairs, Didsbury, Olds, Innisfail and Penhold.

“AUMA is pleased that the provincial government, through the introduction of Bill 20 and the Local Government Fiscal Framework Act, recognizes the need for Alberta municipalities to have predictable and sustained infrastructure funding,” said president Barry Morishita. “At the same time, AUMA is also extremely disappointed that a UCP election promise was broken with the repeal of the City Charters Fiscal Framework Act.

“Alberta municipalities are united, requesting that the provincial government begin consultations to ensure that this legislated infrastructure funding is adequate and grows at the same rate as the Alberta economy.

“Adequate infrastructure funding drives economic growth, creates jobs for Albertans and enhances the Alberta advantage.”

In response to the joint statement, Finance Minister Travis Toews reportedly said: “I think it will be incumbent on all levels of government to exercise spending restraint, to make a significant effort in prioritizing those expenditures that will really move the meter for Albertans.

“Certainly, that will be expected of this government and our municipal partners will have to work with us in that. We recognized as revenues improve for this government, municipalities can share in that as well.”

The government is not considering an amendment to Bill 20, he reportedly said.

 

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