Doubling of the Gas Tax Fund to benefit all municipalities

AUMA is pleased with the Government of Canada’s decision to double the Gas Tax Fund (GTF) this year as a one-time increase in municipal infrastructure funding. The announcement represents an additional $2.2 billion for municipalities across Canada and $244 million for Alberta municipalities.

How is GTF normally allocated?

In Alberta, GTF is allocated to municipalities on a per capita basis except if a municipality’s per capita allocation is less than $50,000, then it will receive a minimum amount of $50,000, and allocations to summer villages are calculated as a base amount of $5,000 plus a per capita amount.

When the Gas Tax Fund doubled in 2019, AUMA raised concerns that approximately one-third of Alberta’s municipalities, primarily smaller communities, would see zero or little change in their funding due to the structure of the allocation formula. In response, the Government of Alberta treated the 2019 GTF increase as two separate payments, resulting in a doubling of funding for every municipality.

AUMA’s past advocacy to pay off for small communities

With this year’s GTF increase, AUMA proactively reached out to Alberta Municipal Affairs, who confirmed that they will once again treat the increase as two separate transfers. As a result, small municipalities that normally receive the $50,000 minimum allocation will receive $100,000, and all other municipalities will also see their funding double. Some municipalities may even see a slightly larger increase because the 2 per cent indexation of GTF saw Alberta’s 2021-22 GTF amount increase by $11 million over the 2020-21 year.

AUMA appreciates the increased investment from the Government of Canada as well as the support of Alberta Municipal Affairs to ensure funding formulas are adjusted when necessary, to meet the needs of all municipalities.