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MSI funding a concern after budget announcement

Posted on March 9, 2021 by 40 Mile Commentator
Gordon Reynolds

By Justin Seward


The Alberta government announced its 2021 Budget on Feb. 25.
One area of impact on municipalities is a decline in their MSI (Municipal Sustainable Initiative) funding over the next three years.
“Over the next three years (2021 to 2023), municipalities will receive about 25 per cent less in Municipal Sustainable Initiative (MSI) capital funding as we live within our means. MSI capital funding will average $722 million over the next three years, said McKenzie Kibler, press secretary for the Minister of Transportation.
“MSI is being front-loaded to provide flexibility for municipalities to plan according to their needs. The $1.196 billion provided in 2021-22 will allow municipalities to sustain existing projects and can be spread out over a three-year period.”
The Town of Bow Island will receive $439,906 for 2021 and 2022.
“It’s a key source of project funding for us. It has been since 2007 when the program started,” said Bow Island Mayor Gordon Reynolds.
“This coming year we will actually see an increase of 16.2 per cent in funding from that program. However, following this year they’re predicting a 25 per cent reduction over each of the following two years—that’s given us some concern.”
With the grant being a up a little higher than the town expected, a couple extra projects may be completed this year, added Reynolds.
Reynolds said MSI is slated to be replaced by a new municipal framework that was in place by the previous government with no details.
“There was no negotiation on that with this government until just recently and now it’s been postponed until a couple more years,” said Reynolds.
“We just aren’t sure what we’re looking at for predictable infrastructure funding in the future.”
Reynolds anticipates that with the cuts those projects will be pushed back.
The County of Forty Mile’s MSI component for 2021 and 2022 is $1,684,552 before seeing cuts.
“It doesn’t make it a whole lot easier,” said Steve Wikkerink, county reeve.
“The biggest one is the MSI funding and an average of 25 per cent reduction, and that makes it a little bit tough because that’s the main fund we use for replacing our capital items. We have looked at some other options on those parts, but that’s going to make it a little bit tighter.”
Wikkerink says wtih the cuts it’s an ongoing process and more downloading from the government down on to municipalities more and more.
“We’re going to have to watch our budget very closely and make sure our operations continue to operate as feasible as they can,” he said.
Forty Mile may have light at the end of the tunnel in the sense that they will have some solar and wind energy taxation that will kick in before MSI runs out, added Wikkerink.
New irrigation money is coming as well and Wikkerink hopes those funds will also help in offsetting the MSI cuts.
Budget highlights
Other budget highlights that impact Bow Island in a positive light include fees for FCSS and the library remaining at last year’s levels.
“They often seem to be the victims of cuts when times are tough and then we have to fight to get that money back. But this year, they’re holding it,” said Reynolds.
Reynolds said there’s always good news and bad news with every provincial budget.
“Really, this one is no different with the good possibly outweighing the bad for our town this year,” he said.
“Our own capital budget will be approved later this month after we’ve got some more costing in, and now what we’ve seen,(is) what we’ll get out of MSI and some of the other programs.”
Reynolds also thought the freeze of the education tax to last year’s rates was good news.
Alberta is facing $18.2 billion in debt this year, which is $2 billion less than the 2020-2021 forecast.
The province will see an $11 billion deficit in 2022-2023 and $ 8 billion in 2023-2024.

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