Alberta towns, cities feel squeeze from plunging provincial grants

The mayor of Hanna, Alta., doesn't mince words when asked to describe the impact of the UCP government's funding cuts on towns and cities across Alberta.

"It's the arrogance of it," said Mayor Chris Warwick. 

"The biggest thing is everybody needs to pay their fair share."

Warwick says his community of 2,600 people will lose $38,000 this year after the province's full 50 per cent cut to the amount of money it pays in lieu of property taxes on provincial buildings kicks in.

It may not sound like much, but Hanna's total operating budget is just $6 million. So losing nearly $40,000 will be felt.

The impact of the cuts to the Grants in Place of Taxes (GiPOT) program adds up to $30 million a year for approximately 170 communities. The cuts were announced in the UCP government's first budget, in 2019. The reduction was phased in, but the full impact is now being felt.

Calgary alone stands to lose $2.5 million this year — and another $900,000 next year.

Municipalities can't run deficits, so they face tough choices: cut services, increase taxes or both. 

In Hanna, about 200 kilometres northeast of Calgary, the municipality will defer some maintenance and infrastructure projects by a couple of years.

"You really start picking and choosing the worst project... the infrastructure with the most amount of wear and tear, and try to repair that stuff instead of actually fixing it the way it should be," Warwick said.

The payment is meant to cover the costs of services that municipalities provide to provincial buildings and facilities, which are exempt from property tax. 

There are approximately 6,600 Crown properties in 170 communities in Alberta. Calgary is home to 107 of those facilities.

The UCP government slashed funding in the first year by 24 per cent and another 32 per cent in the 2020-21 fiscal year, according to the Alberta Urban Municipalities Association (AUMA).

The association is concerned property owners will be forced to subsidize the cost of providing essential services, such as policing, fire, water and waste management for provincial properties.

'Services have to continue'

The mayor of Brooks, who is also the president of the AUMA, says the cut represents an $80,000 hit for his community. He says along with a reduction in policing fine revenue, Brooks is short approximately $150,000 and has made the difficult decision to lay off one of its RCMP officers.

"The really kind of terrible impact is, is the fact that it happens arbitrarily, and the services have to continue. We cannot, for instance, stop the snow removal in front of the provincial courthouse or the provincial facilities, we can't stop providing protective services," said Barry Morishita.

"But yet they can arbitrarily determine that they are only going to pay for a total of $30 million for the entire province this year for all their properties," he said.

The town of High River recently voted to "write off" $54,000 in what it called bad debt owed by the province — the remaining amount the province cut. Last year, as the first round of cuts took place, council voted to uphold the "tax" bill as a protest. 

"A protest is only a protest if the other party actually notices and cares even a little bit," Coun. Bruce Masterman said during a debate in May.

"So I'm not gonna do anything snotty this time," he said. 

Still, Mayor Craig Snodgrass and another councillor voted against the "writeoff."

The Town of Didsbury says it's losing $5,800 because of the 56 per cent cut, according to Mayor Rhonda Hunter.

'Tough choices'

A spokesperson for Municipal Affairs says all levels of government have been forced to make tough choices in responding to the COVID-19 pandemic, the crash in oil prices and a global recession.

Charlotte Taillon, the press secretary for Municipal Affairs Minister Ric McIver, says the UCP government has provided $1.7 billion in funding for transportation, water and wastewater projects. She says new programs have been brought in, including the Municipal Stimulus Program and the Municipal Operating Support Transfer Program. She says that since 2019, the government has provided nearly $2.9 billion through the Municipal Sustainability Initiative.

"Alberta's government remains committed to supporting our municipalities and will be there to support them in future," Taillon said in an email to CBC News.

"We commend those municipalities that have chosen to live within their means and not burden their residents with increasing tax rates," she said.

Government hasn't 'talked to us'

Morishita says almost all of those programs are for capital building projects and "come with strings attached." He says they won't help municipalities deal with rising operating costs.

He says the statement shows the UCP is not listening or talking to municipalities.

"That just goes to show you that they haven't talked to us, they've made that statement arbitrarily."

In Hanna, Warwick says town council has discussed charging the province for half the cost of any infrastructure repairs that come up near the provincial building to express their frustration, but he says it's not official policy yet.

"If a taxpayer is only paying half the amount of money, maybe you should only do half the amount of work, or charge them the other half of the cost to get a broken pipe [fixed] or fix the road or a sidewalk in front of the property," he said.

Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at [email protected] or on Twitter at @CBCBryan.