Although Sundre’s mayor has concerns regarding the substantial deficit in the provincial government’s 2018 budget, he also sees room for optimism as Alberta’s economy is forecast to continue growing.
Playing a pivotal role in the town’s own budget planning process is the Alberta government’s allocation of Municipal Sustainability Initiative (MSI) funding, said Terry Leslie.
Recent changes to that program have led to a substantial funding increase this year with the trade-off of receiving less in future years, he said.
“I appreciate that they’ve made available some extra funds from the next two years to be used sooner,” he said about the provincial government, adding that MSI funding helps make major projects possible.
“That’s really good flexibility for municipalities.”
However, a big question that all municipalities in Alberta have in mind looms overhead regarding the as-of-now uncertain future of MSI in the province, he said, adding a general consensus from the government and the Opposition seems to indicate support to continue the program in some form.
Under the modernized Municipal Government Act (MGA), the province outlines requirements for multiple-year budget forecasts, he said, adding towns such as Sundre can only calculate remotely accurate estimates with predictable and stable sources of revenue.
“We need to know what kind of funding will be available. That’s the responsible way to move forward with planning.”
The provincial government has stated that consultations with the Alberta Urban Municipalities Association as well as the Rural Municipalities of Alberta are ongoing to discuss a sustainable and reliable formula so towns can plan for their futures, he said.
“We can’t do that in a vacuum of knowledge regarding future funding.”
MSI has in the past been a significant part of future planning, so without knowing what’s coming, the task becomes much more complicated, he said.
The MSI fund has been around for about 10 years, and is largely intended for capital expenses such as infrastructure projects, although a smaller portion is also allocated specifically for operational costs, said Chris Albert, Sundre’s finance manager.
The Town of Sundre has for several years consistently received about $32,000 annually for the operational component, while a little more than $600,000 a year has gone towards the capital portion. Changes to the MSI funding's structure means the municipality will receive more than $1 million this year for capital projects, but will only get about $400,000 in 2019 and 2020, he said.
“We have a five-year time frame to use those funds,” he said during a phone interview, adding the money will not necessarily be spent all at once but rather spread out over the coming years to accommodate multiple major capital projects.
Despite uncertainty about what MSI funding might resemble years from now, the mayor expressed optimism for the future of not only Sundre but Alberta as well, especially in light of economic forecasts that predict the province will lead Canada for growth throughout the coming year.
“I was very encouraged to hear what he was saying,” Leslie said referring to a recent ATB Financial speaker series that featured economist Todd Hirsch.
The economist said during the presentation that the province has emerged from several years of recession and is expected to continue improving, albeit at a slower rate than during past oil booms.
Further fuelling the mayor’s reasons for optimism was hearing from Hirsch that Sundre and the surrounding area are increasingly being talked about as an affordable region to invest in as well as move to.
The proposed multi-million-dollar Candre Cannabis development seems indicative of that trend, which brings along with it the opportunity for new jobs in the community that in turn can spur additional growth in the local housing market, he said.
But on a personal level, the mayor expressed a deep concern about the fourth consecutive provincial deficit that continues to grow Alberta’s debt. Municipalities like Sundre must find ways to maintain a balanced budget, which is always an ongoing struggle. So even if reducing the deficit means pulling back on contributions to communities in the form of, for example, MSI funding, Leslie said that would be “good news for my grandchildren.”
Additionally, there should be a greater focus on diligently reviewing every level of government to find efficiencies and improve services. However, problems from potholes to aging public institutions require substantial sums of taxpayer dollars, and they cannot all be remedied at the same time, he said.
“If we all decided to be a little more patient, we would give our levels of government the opportunity to do things in a more cost-effective manner.”
But to continue spending and accruing debt is simply not sustainable, he said.
“I can’t support that.”
Premier Rachel Notley’s governing NDP forecasts a return to balanced budgets by 2023-24.
Mike Beukeboom, past-president of the Sundre & District Chamber of Commerce, also expressed reservations about the ongoing accumulation of provincial red ink.
“What’s probably most disconcerting for myself is the massive amount of debt that we’re going to be looking at over the next half decade. That’s definitely a concern.”
While deficit spending to get through a recession is generally considered wise economic policy to prevent further financial seizures, Alberta has emerged from the major downturn following the 2015-16 crash in the oil and gas sector, he said.
“I would hope that we would start to rely on the private sector to keep the economy moving as opposed to chugging along with public sector spending.”
While he does not disagree with economists such as Hirsch who point out the province can manage a large debt load, Beukeboom wonders whether Albertans are getting the best possible bang for their buck.
“It takes time to pull yourself out of a hole, whether in business or personal finances or in government.”
So although the NDP has done some good things, including the modernization of the MGA and economic forecasts are encouraging, there remain some questions that must be considered, he said.
On a more local note, the community has to be asking what kind of diversification would be most beneficial, as well as how the municipality might be able to take advantage of new developments to create the strongest possible economic ripple effects for Sundre and the surrounding area.
