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By rdnewsNOW staff

Alberta

Municipal infrastructure funding now tied to provincial revenues

Oct 8, 2024 | 6:09 PM

A new funding formula introduced in the 2024 provincial budget is expected to provide municipalities with more infrastructure funding for the 2025-26 fiscal year.

The Government of Alberta introduced the Local Government Fiscal Framework (LGFF) in Budget 2024 to replace the Municipal Sustainability Initiative (MSI) and provide a more predictable and legislated infrastructure-funding model that is 100 per cent tied to provincial revenues, as officials say municipalities requested.

This means that when provincial revenues increase, municipal funding increases at the same percentage. For 2025-26, municipalities are expected to receive more than $820 million, an increase of just over 13 per cent from Budget 2024.

“Our government recognizes the importance of infrastructure funding for communities across Alberta, and for that funding to be predictable,” said Minister of Municipal Affairs Ric McIver. “We agreed to tie capital infrastructure funding for municipalities to provincial revenues, and the Local Government Fiscal Framework delivers on that promise. LGFF funds are increasing in 2025 because of our shared commitment to sustainability.”

Officials said the LGFF provides funding for local infrastructure priorities in cities, towns, villages, summer villages, municipal districts and counties, and Métis Settlements across Alberta. Budget 2024 also included $60 million in LGFF operating funding for communities outside Calgary and Edmonton.

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Government representatives explained that through the Local Government Fiscal Framework Act, the LGFF includes a revenue index factor that ties future funding levels to the percentage change in provincial revenues from three years prior. Ergo, the boost in municipal infrastructure funding for Budget 2025 is the result of increased provincial revenues for the 2022-2023 fiscal year.