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Budget brings funding fears for rural communities

Lakeland municipalities cautious of budget plans.

LAKELAND - Last Thursday's unveiling of the proposed 2021 provincial budget will mean some continued discussions at municipal levels, says Lac La Biche County Mayor Omer Moghrabi.

The day after Alberta's Minister of Finance Travis Toews tabled the financial projections of not only the current year, but the next three, Moghrabi, local councillors and elected municipal leaders from across the province were meeting together to discuss the fine-points of the proposed document.

Moghrabi and the local council spend much of Friday in provincial meetings with the Rural Municipalities Association (RMA), the Alberta Urban Municipalities Association (AUMA), municipal legal associations specializing in inter-governmental affairs and on a telephone town hall meeting with the minister and premier. On Saturday, Moghrabi told the POST the reaction to the budget, which is predicting an $18.2 billion deficit with significant resources spent on healthcare, is varied, but some points of concern are shared across the province.

Municipal millions on the line

"A big concern is the MSI grant reductions," said the Mayor, referring to the province's plans to significantly reduce the annual Municipal Sustainability Initiative grants to communities over the next three years. 

What was a $900 million pool of funds for Alberta municipalities will drop to less than $500 million by the 2022-23 fiscal year. The funds are used by municipalities across the province for site-specific projects.

In past years, MSI grants have been used to fund the Bold Center in Lac La Biche, the planned Aerial Adventure Park at  Kinosoo Ridge and the Town of St. Paul's Inter municipal Recreation Project.

Across the Lakeland, the MD of Bonnyville will receive $4.6 million in MSI funding, with Elk Point and Glendon set to receive $373,000 and $190,000 respectively. The County of St. Paul will see $2.16 million in MSI funding this year and Lac La Biche County will receive $3.35 million. The Town of St. Paul will see a 2021 MSI allocation of $1.17 million.

"We should be fine for the coming year," says Moghrabi, whose council has socked away recent MSI funding for the municipalities part of a planned $17 million aquatic centre project. "It will drop after this."

According to the province's as-of-yet proclaimed Local Government Fiscal Framework Act, planned legislation that will replace the MSI system in the 2022 fiscal year, only $405 million in municipal funding will be available to all provincial municipalities outside of Edmonton and Calgary. Those two major cities will split a pool of $455 million. The funding allocations are set out in the preliminary plans for the document through a series of complex formulas that take into account provincial revenues from several years prior to the allocation request. The new funding formula also hints that it will be tied to the economic strength of the province at the time, as the document's opening description says municipalities will "share in the risks and returns of variability in provincial revenues."

Moghrabi says taking a temperature reading from municipalities at meetings held in the last few days, he thinks there will be some push-back — especially to the MSI plans — and especially from rural municipalities in the days leading to the official vote on the budget.

"In our counties and specialized municipalities we have 60 per cent of the roads in Alberta to take care of. We also produce in the northeast, 60 per cent of the resources our province and others rely on," said Moghrabi, hoping that more discussions will take place before the budget document is officially voted on by provincial legislators. 

Offloading, says Bonnyville mayor

Bonnyville Mayor Gene Sobolewski sees the MSI reductions as more offloading onto rural Albertans. He worries that the reductions in funding from the province will lead to further reductions in services for his community.

"I just think there’s a little more offloading that we’re seeing on the backs of municipalities again. It’s a budget, I understand the times that we’re  in — but I was hoping for a little more working with the province to try and alleviate some concerns because infrastructure concerns aren't going away," said the mayor, "and scaling back on the MSI and other grants that municipalities rely on is not a way to go."

Whether the funds come from the municipality, the province or the federal government, they all originate from residents, he continued, and it will be many of those residents who feel the pinch when provincial funds are cut. 

"We only have one tax payer and its very likely that we’re going to have to start looking at a reduction of services like that or increase of costs," he said.

Like other municipal leaders, Sobolewski, Moghrabi and their councils will continue to go over the aspects of the recent budget announcement in the coming days. And while both mayors say there have been some positives in the first look at the document — continued funding levels for Family and Community Support Services, increases to overall healthcare funding, continued funding of mental health supports in post-secondary schools and capital funding for some youth services facilities across the region — they carry a healthy overall caution.

“I’m still digesting and going through different parts of the budget," said Sobolewski, adding he's not optimistic his further examination will remove his initial sense of concern. "I'm not looking forward to next year for the town.”

Lac La Biche County council has the provincial budget discussion as part of its regular agenda for their upcoming meeting. Moghrabi says municipal leaders are in regular contact with the RMA and AUMA as more items from the budget come to light.

There is no date set for when provincial legislators will officially accept the budget. Provincial MLA are not sitting in the Legislature this coming week. They begin their next sitting on Monday, March 8.

Good news, bad news, according to St. Paul mayor

"From the municipal perspective this budget is a good news, bad news budget," says Town of St. Paul Mayor Maureen Miller.

"The good news is our MSI capital is a pleasant surprise as we were expecting a cut. In fact we got over a $250,000 increase," she explains, adding, "The bad news is that we will see a significant decrease over the next two years."

The town has been told to expect a 25 per cent decrease over the 2020 MSI Allocation going forward. 

"I expect our municipal budget deliberations will likely be how to manage the increase this year, and the decrease going forward," said Miller.

The $18.1 billion projected provincial deficit is concerning for the mayor, but the province is also projecting more than a 50 per cent decrease in that deficit over the next three years. 

"There is some reassurance in that, while acknowledging we all have to do our part."

The mayor says she was relieved to see Family and Community Support Services (FCSS) funding remain the same, although, the workload has increased for the department. 

"Our FCSS has picked up many of the support services that the province used to supply, but residents find hard to access with the provincial building still closed," said Miller. "High unemployment along with lagging economy are still impacting our community and we were hoping for a more dedicated program to address that."

All in all, the budget "could have been a lot worse" and the town is grateful for the increase in MSI this year.

*With files from Robynne Henry and Janice Huser