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EDITORIAL: Reduced Municipal Sustainability Initiative funding unfortunate blow to Alberta municipalities

Alberta’s Budget 2021 is a document of debt and deficit.
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Alberta’s Budget 2021 is a document of debt and deficit.

The province faces an uncertain future due to both COVID-19 and the volatile energy market that hammered oil prices in early 2020— Together these crises have trounced Alberta's economic resiliency.

The finished budget is one of uncertainty and economic reckoning. It reflects the challenging path the province faces on the economic road to recovery.

With the economic fallout of COVID-19 and crashing oil prices, it was inevitable our way of life in Alberta was due to change— It was expected we would be asked to tighten our proverbial belts and buckle down on our spending.

The province is estimating a deficit of $20.2 billion for 2020-21 and an $18.2 billion deficit for the 2021-22 fiscal year.

The budget included no tax increase for Albertans, but taxpayer-supported debt is estimated to total $98 billion at the end of 2020-21 and $115.8 billion at the end of 2021-22. Consolidated debt servicing costs are estimated to be $2.8 billion in 2021-22, and debt servicing costs on taxpayer-supported debt are projected to be $2.3 billion in 2021-22.

It will take time and austere measures for the province to begin to financially recover from the fallout of COVID-19 and plummeting oil prices.

These cost-saving measures will be felt in municipalities.

One of the major reductions in the budget that will directly affect Cochrane is the 25 per cent cut to the Municipal Sustainability Initiative.

The Initiative is set to provide $1.2 billion to municipalities in 2021-22. The funding will be reduced to $485 million in 2022-23, $485 million in 2023-24 and $722 million in 2024-25. 

While these funds seem large in number, the Municipal Sustainability Initiative will face an overall 25 per cent reduction over the next three years.

The Municipal Sustainability Initiative plays a critical role in helping municipalities maintain infrastructure including roads, public transit and capital developments.

To put this in perspective The Cochrane Transit Hub and Innovation Centre will use $1.5 million in Municipal Sustainability Initiative funds, $700,000 in Municipal Sustainability Initiative funds was used in the construction on Railway Street and a portion of the Jack Tennant Memorial Bridge was funded using the Municipal Sustainability Initiative.

These are essential projects in Cochrane because it is a rapidly growing town and has two provincial highways running through its heart.

One of the silver linings of Budget 2021 is construction on the intersection of Highways 1A and 22 has been guaranteed.

However, these cuts to Municipal Sustainability Initiative may result in the loss or delay of other significant projects in town.

While it is good to see the funds have been front-loaded to ensure projects can take place in 2021, and in turn help to create jobs, the future remains uncertain.

The reductions to the Municipal Sustainability Initiative funding reflect a continued trend of the provincial government passing responsibilities onto municipalities.

The reduced funding for Cochrane and municipalities across the province in Budget 2021 is a consequential loss— Meaningful relationships between the province and municipalities will be one of the most significant factors in the economic recovery of Alberta.

These cuts threaten Cochrane and other municipalities and we can only hope a budget filled with deficit and debt has not left Albertans behind.