Provincial infrastructure cuts could affect property taxes, AUMA says

Municipal taxes may be on the rise after the provincial government cut municipal infrastructure grants, according to the Alberta Urban Municipalities Association.

The NDP government cut Municipal Sustainability Initiative (MSI) grants by $50 million in its budget on Thursday.

"When it comes to basic infrastructure, the core infrastructure needs that we have, MSI is the grant," said Lisa Holmes, AUMA president and mayor of Morinville.

"The fact that it is constantly fluctuating up and down each year is not sustainable for municipalities."

Municipalities use MSI funds to build core infrastructure such as roads, bridges and recreation centres.

Holmes said towns and cities need to know how much money they can count on to plan ahead. Property taxes are the only other means of income for municipalities, she said, and without stable grant funding they will likely have to raise taxes.

"They're downloading the burden of taxing onto municipalities in Alberta's communities, which is not fair," she said.

At the AUMA annual general meeting in March, Premier Rachel Notley spoke about the importance of predictable funding for municipalities.

She said the AUMA is keen to talk to the government about ways to find more stable revenue, including new taxation powers.

Edmonton Mayor Don Iveson said the cut to MSI is relatively small. But, he said, it's still disappointing to see the grants fluctuate.

"It's the principle that from year to year, our funding is up in the air," Iveson said.

He said Edmonton may have to apply some savings to cover core infrastructure needs as a result of the cut to MSI, or else look at cutting its own local budget as well.