The Right Deal At The Right Time

Today, after years of negotiation, I was pleased to attend the Government of Alberta’s announcement of a new long-term, legislated funding deal for Alberta’s two largest cities. The deal reflects the province’s economic reality now. It’s fair and in the best interest of taxpayers in their dual experience of paying city property taxes at the same time as they pay a wider array of provincial taxes.

For policy nerds like me, the details and finessing of this deal are noteworthy and significant. The deal includes a baseline of funding that can grow (and may contract) based on the Province’s actual revenues, which makes Edmonton a genuine benefitting partner in our combined efforts to grow employment, grow investment and help drive prosperity for Edmontonians and Albertans.

Today’s announcement also includes a historic long-term legislated commitment to transit funding for Edmonton and Calgary that will allow City Council to plan our next transit priorities out beyond the completion of Valley Line, using proceeds of the Climate Leadership Plan’s carbon levy. This $200 million per year ongoing commitment starting in 2027 is in addition to the generous $1.17 billion provincial support announced November first for West LRT and the Blatchford extension.

If the Federal government extends their historic 12-year transit commitments to permanent, as we hope they will next year, this new long-term provincial commitment allows us to imagine accelerating our conversion to electric buses and even fully building out our rapid transit system to all corners of our city and beyond into our region. Expanding our region’s rapid transit backbone as we grow towards two million people is how we will stay ahead of worsening traffic pressure and catalyze more transit-oriented walkable higher-density development near more stations.

There is also an important new $17M regional program to help incent regional collaboration on projects that support investment and economic growth; with this program, Edmonton Metro municipalities now have another incentive to to accelerate our collaboration. This new regional program recognizes the pivotal role Edmonton Metro region plays in growing the provincial economy and will help us move ahead with our Shared Investment for Shared Benefit efforts as a region.

Edmonton and Calgary were granted some additional policy tools like additional flexibility to apply offsite levies, new tools for inclusionary housing, further flexibility on municipal and school reserves and more autonomy over how we responsibly manage borrowing. Using any of these new tools requires extensive public consultation and before council could use any of these new tools. Taken all together, this is still more of a “charter lite” — as most Canadian City Charters are — but this is still a good day for municipal empowerment and for strengthening the capacity of Alberta’s big city democracies.

Securing a new funding deal with the Province was one part of my 5 point budget plan so I am very pleased we were able to secure this deal on the first day of our budget deliberations as it will allow us to confidently complete this infrastructure budget, but make better long-term infrastructure plans with the certainty afforded to us by a legislated revenue sharing arrangement.

Q&A’s

How good of a deal is this really (compared to the Municipal Sustainability Initiative [MSI] funding deal we had previously)?

It is anticipated that baseline funding under the fiscal framework will result in a decrease of baseline infrastructure funding for Edmonton and Calgary at a level that is 23% lower than the 5 year average before Edmonton and Calgary experienced the first cuts to MSI. Edmonton’s MSI capital funding was reduced by $61 million a year for a combined total of $242 million over the coming capital cycle.  Excluding the BMTG component of MSI, the new deal represents a 42% reduction in MSI from the 5 year average.

How is that a good deal?

It’s the right deal for right now. It includes transit and revenue sharing and regional economic development incentive money. Is it all that we wanted? No, but we understand the current fiscal realities for the Province. This is also why we tied some of our funding to growth in revenues/growth in the cities.

Aren’t you worried a new provincial government will erase this deal?

This was a tough negotiation. This is already a significant cut relative to what we had and there’s no way we would stand for any further of a reduction. We have made it abundantly clear to all members of the Legislature the critical role our City plays in the provincial economy and what our city needs are.

Edmonton is ⅓ of the Province’s economy as it is – we won’t let any government forget that.

This makes us a partner in growth which is a value that any government could agree with.