Wednesday, December 1, 2021 Vol. 44, No. 48
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Local municipalities to see 60 per cent drop in MSI capital funding next year Patricia Harcourt Editor
Local municipalities will have to do some financial wizardry in the New Year due to offset the lowering and eventual phasing out of Municipal Sustainability Initiative (MSI) funding. The government is planning a 60 per cent drop in (MSI) capital funding in 2022, while holding the line for the time being on operating funds. “As part of Budget 2021, our government had to make difficult decisions to keep spending under control while supporting local governments so they can continue to invest in important infrastructure,” stated Minister of Municipal Affairs Minister Ric McIver in October. Cuts from the province usually entail downloading onto municipalities already suffering from a drop in revenues and increased costs like having to fund enhanced policing services - another provin-
cial initiative. In a letter sent out to “elected officials,” McIver outlined the cuts each municipality will receive. In 2022 and 2023, the funding to municipalities and Metis Settlements will be just 40.6 per cent of what was received this year. McIver said the cuts are equal to the overall provincial drop in funding of $1.196 billion this year down to $485 million next year. The reduction “ensures the reduced budget will impact every local government equally,” he said. MSI operating funds will remain the same in 2022 and 2023 as they are this year. “Every municipality and Metis Settlement will receive the same amount of operating funding for the next two years as they received this year,” stated McIver. Although the changes are subject to legislative approvals in the next two provincial budgets, McIver said the funding allocations “are not expected to change.” “For the final two years of the
MSI program, allocations will not be recalculated with updated information such as population, education tax requisitions or road lengths,” he said. The MSI program began in 2007 and over the years has spent $14.1 billion for building and rehabilitation of infrastructure such as roadways and bridges, water and wastewater systems, public transit, recreation and sports facilities, and other local priorities. The province states that the program “is being extended until 2023-24, after which it will be replaced with the Local Government Fiscal Framework” program. Towns, villages, and summer villages receive funding based on population, and rural municipalities and Metis settlements are funded on a formula based on roads, population, equalized assessment, and terrain. For 2021, the Town of Viking received total funding of $421,666, breaking down into $284,038 in
capital MSI (plus $64,980 BMTG), and $72,648 operating funding. But in 2022, total funding drops to only $214,181, breaking down to $141,533 (including BMTG) in capital funding and $72,648 in operating funding. Beaver County’s 2021 allocation of $2.881 million (both capital and operating) drops to $1.290 million in 2022. The Village of Irma goes from a total of $221,598 in 2021 to $131,991 in 2022. And the Village of Holden drops from $184,912 total MSI in 2021 to $124,932 next year. The M.D. of Wainwright No. 61 funding falls from $2.966 million in 2021 to $1.287 million in 2022. Preparing budgets has now become an urgent matter for most municipalities as they try to reconfigure needs as opposed to wants for their citizens, and how to raise the funds as downloading of services continues to be the provincial order of the day.
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