Breaking down Alberta’s capital support for municipalities in 2024

At our recent Spring 2024 Municipal Leaders' Caucus, Premier Danielle Smith said that the Government of Alberta will invest $3.6 billion in municipalities in 2024. This is about $900 million more than what will be collected from municipalities through the provincial education property tax.

Several of our members have contacted us seeking clarity on the dollar figures presented by Premier Smith, which included: 

• $2.23 billion in municipal infrastructure support
• $577 million in capital maintenance and support
• $708 million in roads and bridges
• $95 million in additional projects.

Our Policy & Advocacy team took a close look at what these dollar figures represent. What follows is a summary of our analysts' findings.

$1.7 billion in provincial funding for municipal infrastructure

• $722 million (20%) of the quoted $3.6 billion is for the new Local Government Fiscal Framework Capital program, which is allocated to every municipality on a formula basis.
• $188 million (5%) is open to competitive application for most municipalities (e.g., Municipal Water Wastewater Partnership, the new Local Growth and Sustainability Grant, Strategic Transportation Infrastructure Program, and Water for Life).
• $819 million (23%) is not associated with a formal funding program but represents one-off investments in specific municipalities. Ninety-five per cent (95%) of this funding will be spent in Calgary and Edmonton on major thoroughfare roadways, the Calgary event centre, and light rail transit (LRT) expansion.

$764 million in federal funding for municipal infrastructure

About $764 million (21%) of the quoted $3.6 billion is funding from the Government of Canada that flows through the Government of Alberta for municipal governments (e.g., Canada Community Building Fund, Investing in Canada Infrastructure Program, and the federal portion of the Edmonton and Calgary LRT project).

$1.1 billion in provincial spending on provincial highways & bridges

About $1.12 billion (31%) of the quoted $3.6 billion represents investments in maintenance and upgrades of provincially-owned infrastructure such as provincial highways and bridges. Most of these projects are listed on page 115 of the Government of Alberta's 2024 Fiscal Plan.

Conclusions

We have analyzed funding in this way so we can easily compare year-to-year changes in provincial funding for municipalities without influence from funding changes at the federal level. While we appreciate the Government of Alberta's investments in provincial highways and bridges, we do not consider this to be a municipal support as local governments are not involved in the management or funding of provincial highway infrastructure.

If we exclude the federal funding and the amounts for provincial highways and bridges, then the total provincial capital funding for municipalities in 2024 will be $1.73 billion. This is actually $1 billion less than what the provincial government will take from municipalities through education property taxes this year.

This highlights the importance of the Government of Alberta’s work to “review the feasibility of amending the education property tax to assist municipalities with retaining more funding for local priorities” as outlined in the Premier’s August 2023 mandate letter to the Minister of Municipal Affairs. Alberta Municipalities looks forward to sitting down with representatives from the Government of Alberta to discuss potential changes to provincial education property taxes.