The provincial budget served up a nasty surprise for St. Albert’s capital finances.
St. Albert and other Alberta municipalities are facing cuts to the provincially funded Municipal Sustainability Initiative (MSI) program which helps pay for a variety of community capital projects. The provincial government announced on Thursday that it was clawing back a promised $50-million bump to its MSI capital program.
Mayor Nolan Crouse said it looks like about $1 million has been dropped from St. Albert’s expected MSI funds. He said it needs to be made clear if the drop in capital funding affects St. Albert’s overall total cash that it gets through that grant program.
“At this point the gut feel is we’re a million dollars short,” he said. With the mill rate to be set in early May, the mayor thinks it is not likely council will choose to increase the property tax rate to make up for it. Instead, capital funding may have to be shuffled and something – he’s not sure what yet – may need to face the axe.
Numbers show St. Albert will only get $11 million for capital projects through the MSI program, a $1 million cut from the previous year.
“I’m not surprised that we’re down 10 per cent in MSI. I think going from $12 million to $11 million is not a surprise simply knowing the climate,” Crouse said.
Overall, it wasn’t clear on Friday what the impacts of the 2016-17 budget would bring for St. Albert’s city operations. The Alberta Community Partnership grants were halved, and while there’s money for transit, affordable housing and regional economic development in the budget, Crouse isn’t sure what effect that could have here or for the Capital Region Board. The possible impact of the new carbon levy on St. Albert’s fuel costs will be addressed in the city’s 2017 budget.
St. Albert’s NDP MLAs were happy with their first impressions of the budget after listening to Finance Minister Joe Ceci’s budget address.
“I love the focus on jobs,” said St. Albert MLA Marie Renaud. She said she’s happy to see the small business tax reduction, which was reduced a percentage point to two per cent.
“I love the additional funds for incubators to stimulate job creation through small and medium business,” Renaud said.
She had just received her copy of the budget, and said she was anxious to look through. She’s curious about the possibilities for the $34-billion infrastructure plan for St. Albert projects, like the twinning of Ray Gibbon Drive.
“It’s a pretty aggressive infrastructure plan, so I’m hoping we’re part of the roads plan,” she said.
The budget documents included a list of projects that are currently unfunded but have met the criteria to be considered when more capital money is available. Projects of local interest included a new high school space solution for St. Albert Public Schools, a modernization for Sturgeon School Division’s Camilla School and an interchange at Cardiff Road and Highway 2 south of Morinville.
A big part of the budget is the government’s Climate Leadership Plan, which includes the new carbon levy that will greet consumers on Jan. 1, 2017 at the pumps, on their natural gas bills and when paying for other types of fuels.
Between the carbon levy and the charges paid by large final emitters, the government expects to raise $9.6 billion in gross revenue over five years. That money is supposed to be reinvested in the province, through $6.2 billion in investments for large scale renewable energy projects, green infrastructure like transit and Energy Efficiency Alberta, but also through carbon levy rebates that will be paid to qualifying households.
The budget promises 66 per cent Albertan families will benefit from the promised carbon rebates, with six out of 10 households eligible for the full rebate amounts. A couple with a household income under $95,000 can expect to get $300 in 2017 in rebates, plus $30 for each child.
A single person who makes under $47,500 will get $200.
But the rebate starts to phase out at those levels, and a couple with no kids making $100,000 or a single person making $51,250 will get no rebate at all.
According to the 2011 National Household Survey, the average family income in St. Albert is more than $100,000 and therefore higher than the cutoff.
Renaud said the reality is those who can pay will, and those who can’t will get rebates.
“As wealthy as St. Albert is, there are a lot of people still struggling there,” she said.
Spruce Grove-St. Albert MLA Trevor Horne said he knows there are lots of initiatives coming from the Climate Leadership Plan that will benefit everyone.
Horne said he though the budget speech was great.
“I’m glad to see that we’re implementing a lot of initiatives to create jobs,” he said, noting that many of the initiatives were requested by industry, like the small business tax cut.
Other job incentive initiatives include items such as a new Alberta Investor Tax Credit, Capital Investment Tax Credit and extra money for supporting and attracting new businesses, apprenticeship and training and regional economic development initiatives. The jobs, investment and diversification package is set at $250 million over two years, while the small business tax cut is being paid for out of the climate leadership revenues.
Asked what the best thing about the budget was, Horne noted the rough economic situation the province is facing, including the lowest non-renewable energy revenues in about 40 years, estimated at $1.4 billion.
“Given the economic circumstances, I think the budget is doing the best we can with what we have,” Horne said. He said the worst thing about the budget is the price of oil.
The budget, billed as the Alberta Jobs Plan, includes a $10.4-billion deficit for the 2016-17 fiscal year, with the deficit continuing to swell for the years to come.
Ceci said at a news conference on Thursday that right now, he’s aiming to balance the budget by 2024, but it could be sooner if oil prices rebound.
It’s also the first time since 1994 the province has had to borrow to pay for operating costs, Ceci said. More than half of the $10.4 billion deficit is dedicated to operating costs.
