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AUMA calls for change to the allocation of the 2019 Gas Tax Fund

May 8, 2019

Last month, AUMA communicated how we were looking into the impact of the federal government’s top-up of the 2019 Gas Tax Fund (GTF) on Alberta’s small municipalities. Following a review, AUMA has submitted a recommendation to Alberta Municipal Affairs that the GTF allocation formula be amended to ensure all municipalities equitably benefit from the 2019 doubling of GTF funding.

Current allocation of GTF

Currently, GTF is allocated to Alberta municipalities on a per capita basis except if a municipality’s per capita allocation is less than $50,000, then it will receive a minimum amount of $50,000. Allocations to summer villages are calculated as a base amount of $5,000 plus a per capita amount. AUMA’s review found that by maintaining the current formula in 2019, approximately one-third of Alberta’s municipalities, primarily smaller communities, would see zero or little change in their 2019 GTF. AUMA’s Board considers this an unreasonable outcome considering the Government of Canada’s intent with the 2019 top-up is to help communities to address their short-term priorities.

AUMA’s recommendation to Municipal Affairs

AUMA has submitted a letter to Municipal Affairs recommending that the GTF allocation formula be changed to increase the minimum allocation from $50,000 to $100,000 and the base amount for summer villages from $5,000 to $10,000. This request only applies to the 2019 funding year. AUMA estimates that this approach would ensure that all municipalities, both small and large, equitably benefit from the doubling of the 2019 GTF.

Impact on 2019 municipal budgets

The Government of Alberta will release its 2019-20 budget in fall 2019. As such, it is not clear as to when municipalities will learn of their 2019 GTF allocation or other funding from the province. Municipalities should also be aware that AUMA’s recommendation may require the Government of Alberta to amend its agreement with the Government of Canada for the allocation of GTF.

Moving forward, as AUMA develops its relationship with the new provincial government, we will continue to stress the importance that funding models like GTF must meet the needs of all municipalities. We will update you on Municipal Affairs’ response in a future issue of Digest.