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AUMA reviews municipal impacts of 2018 Provincial Budget

March 28, 2018

Message from the President

Provincial budget is a busy time for AUMA. In the weeks and days – and even hours – leading up to the release of the budget, we had many meetings, discussions, and conversations with the department and elected officials about the value of MSI and the importance of maintaining municipal infrastructure. 

As early as last November, we knew from the Premier and the Minister of Municipal Affairs there were going to be some cuts to the budget, and we had to mobilize our advocacy efforts for a predictable and stable revenue model.  Once Budget 2018 – A recovery built to last was released on March 22, 2018, the second phase of our work began, as AUMA staff spent hours scrutinizing the budget, the ministry business plans, and the Government Responses to AUMA’s 20 Questions to determine the impacts to our members.

The budget confirmed that, while there was going to be a $150 million cut to MSI, only the Cities of Edmonton and Calgary would be impacted, and MSI would remain unchanged for the next three years, giving our members some stability in capital planning.

We have already had questions regarding the MSI commitment as the Municipal Affairs Business plan (page 121) suggests a decrease to MSI. The information we received from government was there was $800 million advanced from 2017-18 operating to future MSI, which will be repaid as a deduction in 2018-19 and 2019-20. This does not impact the amount of MSI for our members:  for the next three years, MSI money is booked, committed and considered “out the door.”

As indicated in our news release, equally important was the commitment to work with AUMA and the Rural Municipalities of Alberta (formerly AAMDC) on a replacement program for MSI, one that is stable, predictable, and legislated. The plan is to have this program legislated this fall and in effect in 2021.  This is a big win for AUMA, as we have been advocating for stable predictable and adequate revenue-sharing on behalf of our members.  We look forward to working with the province and engaging our members in developing an appropriate program that meets the needs of Alberta municipalities.

Other cuts to the budget showed up in the grant programs. Although we don’t like to see cuts to programs that help offset the cost to build, upgrade, or replace important infrastructure, the province did indicate they were looking to restructure and re-profile some of the capital grant programs. We will push to be included in the discussions on these programs, with a focus on advocating for our smaller communities, who were often at a disadvantage when it comes to competitive and application-based grants.

We were disappointed there wasn’t anything in the budget with respect to cannabis and revenue-sharing as AUMA has been advocating for municipalities to receive a fair share of the cannabis excise tax. We appreciate revenues for the first year will be nominal, but the impacts to municipalities will be significant. The province had indicated they want to get a true sense of the costs to municipalities and determine the best way to provide support to municipalities. This will require AUMA working with our members and the province to determine specific criteria of municipal impacts so we can capture the costs of legalization and enforcement.

Although not part of the budget, the AUMA did receive good news regarding cannabis legalization and taxation and proposed changes to the assessment and taxation of cannabis production facilities including grow operations. Currently, cannabis grow operations fall under the category of farm buildings, which are exempt from municipal assessment. The province indicated that they will be revising this in the Municipal Government Act and we look forward to continuing to work with them to help inform the changes our members would like to see and pushing for implementation of these changes as soon as possible and before legalization takes place.

Despite some of the cuts and notable absences in the budget and ministry business plans, overall we are pleased with the budget. Given the pressure on the government to reduce the deficit, this budget shows commitment to municipalities and our role in providing the services that contribute to the quality of life for all Albertans.

More information on the impacts of the 2018 Budget is available in the AUMA 2018 Provincial Budget Analysis. All documents with respect to the budget can be found on the AUMA website.

Barry Morishita
AUMA President
Mayor, City of Brooks