Alberta towns, cities feel squeeze from plunging provincial grants


The mayor of Hanna, Alta., doesn’t mince words when asked to describe the impact of the UCP government’s funding cuts on Alberta’s towns and cities.

“It’s the arrogance of it,” said Mayor Chris Warwick.

“The biggest thing is that everyone has to pay their fair share.”

Warwick says his community of 2,600 people will lose $38,000 this year as a 50 percent cut in the amount the province pays in lieu of property taxes on provincial buildings.

That may not sound like much, but Hanna’s total operating budget is just $6 million. So a loss of about $40,000 would be felt.

The impact of the Cut in Grants in Place of Taxes (GiPOT) program increases to $30 million per year for approximately 170 communities. The cut was announced in the first budget of the UCP government in 2019. The reduction was done in a phased manner, but its full impact is being felt now.

Calgary alone lost $2.5 million this year – and another $900,000 next year.

Municipalities can’t run the deficit, so they have tough choices: cut services, increase taxes, or both.

In Hannah, about 200 kilometers northeast of Calgary, the municipality will postpone some maintenance and infrastructure projects for a few years.

“You really start to pick and choose the worst project… the infrastructure with the most breakage, and try to fix that stuff instead of actually fixing it,” Warwick said.

The payment is to cover the cost of services that municipalities provide to provincial buildings and facilities, which are exempt from property tax.

Alberta has approximately 6,600 Crown properties in 170 communities. Calgary is home to 107 of those facilities.

According to the Alberta Urban Municipality Association (AUMA), the UCP government cut funding by 24 percent in the first year and 32 percent in the 2020-21 fiscal year.

The association is concerned that property owners will be forced to subsidize the cost of providing essential services such as policing, fire, water and waste management for provincial properties.

‘Services must continue’

The mayor of Brooks, who is also president of AUMA, says the cuts represent an $80,000 hit to his community. He says that with the police fine revenue dwindling, Brooks is nearly $150,000 short and has made the difficult decision to fire one of his RCMP officers.

“The really dire effect is that it happens arbitrarily, and services have to continue. For example, we cannot stop snow removal in front of provincial courts or provincial facilities, we cannot stop providing protective services. Do,” said Barry Morishita.

“But even then they can arbitrarily determine that they are going to pay a total of $30 million for all of their assets this year for the entire province,” he said.

The City of High River recently voted to “write off” $54,000 of what is called a debt owed by the province – cutting the balance into the province. Last year, as a first round of cuts, the council voted to uphold the “tax” bill as opposed.

“A protest is only a protest if the other party really notices and cares even a little,” Conn. Bruce Masterman said during a debate in May.

“So I’m not going to mess anything up this time,” he said.

Nevertheless, Mayor Craig Snodgrass and another councilor voted against the “writeoff”.

The Town of Didsbury says it is losing $5,800 because of the 56 percent cut, according to Mayor Rhonda Hunter.

‘Tough Choice’

A spokesman for municipal affairs says all levels of government have been forced to make tough choices in response to the COVID-19 pandemic, plunging oil prices and a global recession.

Charlotte Tallon, press secretary to City Affairs Minister Rick MacIver, says the UCP government has funded $1.7 billion for transportation, water and wastewater projects. She says new programs have been introduced, including the Municipal Stimulus Program and the Municipal Operating Support Transfer Program. She says that since 2019, the government has provided about $2.9 billion through the Municipal Sustainability Initiative.

“The government of Alberta is committed to supporting our municipalities and will be there to support them in the future,” Tellin said in an email to the news.

“We applaud municipalities that have chosen to live within their means and have not burdened their residents with increased tax rates,” she said.

The government ‘didn’t talk to us’

Morishita says almost all programs are for capital construction projects and “come with strings attached.” They say they will not help municipalities cope with rising operating costs.

He says the statement shows that the UCP is not listening or talking to municipalities.

“It just goes to show you that he didn’t talk to us, he made that statement arbitrarily.”

In Hannah, Warwick says that the city council has discussed charging the province for half the cost of repairs to any infrastructure coming near the provincial building to express its dismay, but says it is yet to be done. There is no official policy till date.

“If a taxpayer is only paying half the amount, perhaps you should only work half the amount, or charge them half of the cost to get a broken pipe. [fixed] Or fix the road or sidewalk in front of the property,” he said.


Brian Labby is an enterprise reporter with Calgary. If you have a great story idea or suggestion, you can reach out to him at bryan.labby@.ca or on Twitter @Bryan.

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