Municipalities are planning to reduce spending and focus on crucial projects with funding received from the Municipal Sustainability Initiative (MSI) prior to the 2015/2016 upcoming provincial budget, which is anticipated to include a $7-billion shortfall and will significantly impact future spending.
The provincial government allocated an extra $400 million dollars in third quarter capital funding, bringing the 2014 budget year’s total MSI funding allocation to $1.6 billion dollars. Since its implementation, the MSI program has invested nearly $6 billion in capital municipal projects.
But with the provincial budget due to reflect the fiscal reality of a province hit hard by the price of oil, this latest municipal funding will need to be used carefully by recipients. Beiseker Mayor Ray Courtman said reduced Provincial funding is likely to hit smaller municipalities hard.
“It’s going to be tough,” he said. “We already know that we’re going to have to tighten our belts and sharpen our pencils. We just have to figure out where we can cut and make as little impact as we can.”
Beiseker’s original 2014 MSI allotment was $240,831 and the Village will receive $62,706 as part of the additional third quarter capital funding. Courtman anticipated Beiseker’s 2015 provincial funding will be significantly reduced, posing problems for a village of only 785 people.
“(We have) less of a population and less of a tax base – of course cities have a much larger tax base and can usually survive these little bumps better than we can,” he said. “In my opinion, these smaller municipalities have been kind of ignored. We’d like to say, hey, a large chunk of Alberta’s population live in these communities.”
Courtman anticipates the Village will have to delay various capital projects as a result of budget cutbacks. The Village’s major MSI project, the rejuvenation of Main Street, will likely pause after completion of the first block.
The Town of Crossfield also has adjusted its plan for the year ahead, said Mayor Nathan Anderson. The Town received $679,321 in initial MSI funding and an additional $267,838 as part of the third quarter funding.
“It just means that we’re going to have to cut out certain things, and start making tougher decisions,” Anderson said. “I don’t envy (the provincial government’s) position when there’s not enough to go around.”
Anderson said that he expects the Town to have to prioritize infrastructure projects as they plan for the upcoming budget release.
In making the announcement in Red Deer on March 6, Minister of Municipal Affairs Diana McQueen said that this additional MSI funding was a “strategic investment” prior to what is expected to be “difficult” budget years ahead.
“We agree that strategic investments will not only ensure that Albertans keep working, it means that the infrastructure needed to support further economic growth – roads, water and sewer projects – will be there when we need it,” she said.
“This (MSI) funding is designed to help our partners meet their capital infrastructure commitments and position them well through the very tough budgets that we have ahead.”
The 2015/2016 provincial budget will be announced at the Provincial Legislature on March 26.
