File Photo
Alberta municipalities, including Lloydminster, will welcome the quick end to an outdated capital funding program in 2024.
The Municipal Sustainability Initiative (MSI) will be replaced by the Local Government Fiscal Framework (LGFF) for the 2024-25 fiscal year starting April 1.
LGFF will allocate $722 million in capital funding to Alberta municipalities and Métis settlements for local roads, public transit, water and wastewater, and recreation infrastructure.
As municipalities had requested, the LGFF includes a revenue index factor that ties future funding levels to the percentage change in provincial revenues from three years prior.
As a result, the LGFF formula will increase municipal funding by 14 per cent for fiscal 2025-26 to a total of $820 million.
“Communities across Alberta have long asked for funding that is predictable and tied to provincial revenue changes,” said Minister of Municipal Affairs, Ric McIver in a statement.
“We have listened and we are delivering. The LGFF will provide infrastructure funding where it’s needed most and allow flexibility for communities to focus their funding on local priorities.”
As committed to in Budget 2023, top-up funding will be available in the first year of the LGFF.
This ensures that no local government experiences a year-over-year decrease from 2023’s MSI capital funding allocation. This one-time funding will ensure existing infrastructure projects are not disrupted.
Alberta’s government has allocated $3.8 billion to municipalities from 2023-24 through 2025-26 under its 2023 capital plan, which includes the amounts for the next two budget years.
Municipalities also receive funding from the federal government for capital projects, which is over and above the provincial funding amount.
Provincial funding is distributed through grants to municipalities under the MSI and LGFF and has been used for projects including light rail transit systems in Edmonton and Calgary, and water and wastewater support.
