Amending Agreements for the MSI

Last week, municipalities received an email from Municipal Affairs Minister Ric McIver about the extension of the Municipal Sustainability Initiative (MSI) and the need to amend your existing funding agreement. Since then, we have received a few questions from members asking what this means and wishing to clarify that the amendments were expected, based on announcements the Government of Alberta made in February and October 2021.

In February 2021, the province announced that MSI funding would be extended for an additional two years in 2022-23 and 2023-24 before the Local Government Fiscal Framework (LGFF) replaces it in 2024-25. Alberta’s 2021 Budget also communicated a three-year plan for MSI Capital funding with a significant portion of that funding front-loaded in 2021 ($1.196 billion) and then the 2022 and 2023 amounts will be reduced to $485 million annually.

Due to the significant reduction in funding in 2022 and 2023 and the related complexities of the allocation formulas, the province announced in October 2021 that the 2022 and 2023 funding will no longer be calculated using MSI allocation formulas. Instead, each municipality’s 2022 and 2023 MSI allocations are expected to be 40.6% of the 2021 MSI allocation so that all municipalities experience an equal reduction in funding. We reported this change in November 2021.

As a result, your agreement with the Government of Alberta is being amended to reflect these changes so you can continue to receive MSI in 2022 and 2023. The 2022 funding allocations will be confirmed when the province releases its 2022 Budget on February 24. In the meantime, you can view the future MSI allocation estimates on the Government of Alberta’s website.

Note: All references to MSI Capital in this article are in reference to the combination of funding from the MSI Capital component and the Basic Municipal Transportation Grant component.