On February 9, 2012 the Government of Alberta released Budget 2012: Investing in People. In reaction to the 2012 budget, President Bob Barss stated “AAMDC is pleased that the Province’s 2012 budget offers a positive direction for rural municipalities. The announcement of a substantial increase in the Municipal Sustainability Initiative (MSI) and continued support for crucial programs, such as the Local Road Bridge and Resource Road programs, is welcomed news for our member municipalities. We look forward to collaborating with the provincial government in the upcoming months.”

There is a projected deficit of $886 million in 2012; however, it is anticipated the government will return to a surplus position beginning next year.  To view the Government of Alberta’s budget documents and news releases, click here.

Member municipalities may be particularly interested in the following funding announcements:

• The Municipal Sustainability Initiative (MSI), including both capital and operating, is to be distributed on the following schedule:

AAMDC appreciates the continued commitment the government has demonstrated towards municipalities through this program.  And after this year, MSI funding is projected to be increased to $1 billion.  However, it is understood that MSI is a temporary funding solution and as such, it is unclear what the future holds for long-term, sustainable funding for municipalities. The AAMDC is encouraged that the Government of Alberta is considering making a three-year funding commitment that will add stability and predictability for municipalities.

§ Capital funding for the Alberta Municipal Water/Wastewater Partnership remains consistent at $50 million this year and is projected to continue as such for the next two years.  However, the overall funding to water/wastewater initiatives has decreased from 2011-12 with funding for the Water for Life Strategy decreasing to $145 million in the 2012 budget.

§ A total of $655 million is allocated in 2012 for transportation grants. However, the indication is that over the next three years, both provincial highway funding and municipal transportation funding totals will decrease and some projects will be delayed. Together, the Basic Municipal Transportation Grant and the Strategic Transportation Infrastructure Program will receive 7 per cent ($28 million) increase over the 2011-12 budget.  However, not all 2011-12 budgeted dollars were expended and thus this increase represents a 20 per cent increase over forecasted spending.

§ In this budget, the Local Road Bridge Program is funded at $26 million, the provincial highway maintenance grant at $1.4 million and the street improvement program is funded at $83 million.  Areas where funding remains the same as in the last budget year include the Resource Road Program at $31 million,  the Community Airport Program at $2 million and the Rural Transportation Grant at $34 million. The Federal Gas Tax money remains at its current funding level, just shy of $200 million and GreenTRIP dollars are budgeted at $93 million.   In 2011-12 the Resource Road Program paid out just over $14 million of its $31 million budget. The financial commitment of those unexpended funds remains over and above the new budget of $31 million.

§ It appears the government is taking on liability by adding a line item for the senior tax deferral program budgeted at $1.62 million.  The AAMDC will continue to monitor this issue and keep our members updated as the budget year progresses.

The attached backgrounder provides more budget highlights that may affect rural Alberta. The AAMDC will provide additional details through member bulletins as they become available. To view the complete budget and its supporting documents, please click here.

Enquiries may be directed to:

Backgrounder Attached

BACKGROUNDER: AAMDC Budget Highlights

PROVINCIAL REVENUES

• Bitumen royalties are projected to double from 2011-12 to 2014-15 and account for just over half of non-renewable resource revenue in this budget.

• Education property tax revenue is forecasted at $1.8 billion in 2012-13, an increase of 6.5%, and 2012 education property tax rates are being frozen at 2011 levels.  The residential/farm rate will be $2.70 per $1,000 of equalized assessment and the non-residential rates will be $3.97 per $1,000 of equalized assessment.

AGRICULTURE

• Agricultural income support including AgriStability and AgriRecovery sees a significant increase to $226 million.

• Irrigation Rehabilitation Grants provided by Alberta Agriculture and Rural Development remain steady at $24 million for 2012-13.

• Agricultural service board funding increased by $1 million while agricultural societies remained the same.

• Lending assistance funding will increase over 24 per cent this year, to just under $40 million, while crop, hail and livestock insurance remains steady at $421 million.

• Funding for wildlife compensation increased by 54.6 per cent to just under $9 million.

• Agriculture Income Support, encompassing both AgriStability and AgriRecovery, has increased in Budget 2012 by 48.6 per cent, bringing total funding for the programs to over $226 million.

ENERGY AND RESOURCES

• $7 million has been allocated for Regulatory Enhancement by Alberta Energy to implement the single regulator approach.

• Bioenergy Initiatives have been allocated a 13.7 per cent increase over last year, to a total of $66 million. With this increase, it is also noted that the Bioenergy Producer Credit Program will be revised to exclude stand-alone operations producing ethanol from cereal grains.

• Sustainable Resource Development has allotted $4 million for the continued monitoring of the mountain pine beetle infestation.

• Funding for Forest Industry Development by Alberta Sustainable Resource Development remains steady at $3.7 million.

• $6.8 million is budgeted this year for the Land Use Secretariat which is consistent with the previous budget.

MUNICIPAL AFFAIRS

• $5.6 billion in combined total support for municipal infrastructure over three years including $2.8 billion from MSI, $540 million from the GreenTRIP program and $2.3 billion in municipal transportation and water infrastructure grants.

• The Municipal Affairs business plan indicates the Municipal Sustainability Strategy will see implementation in 2012 as well as a comprehensive review of the MGA.

COMMUNITY ISSUES

• The Community Initiatives Program budget remains unchanged at $25.25 million.

• Alberta Tourism, Parks and Recreation has budgeted $42.9 million for parks operations, up from a budgeted $38.6 million last year.

• Family and Community Support Service funding has been maintained at $75 million.

• Library funding remains unchanged at $30.7 million. In previous years library funding increased by incremental amounts, keeping the per capita rate the same, but taking into consideration an increased number of people living in the province.

• Municipal Policing Assistance Grant (MPAG) increases by $37 million to $350 million.

• An investment in 90 new RCMP officers and 55 new sheriffs by 2013-14 was announced.

• Fish and wildlife, parks and commercial vehicle enforcement are now part of the Ministry of Solicitor General and Public Security.The budget for enforcement programs is $41 million in 2012-13, an increase of over $3 million or 8.5% from 2011-12.

EDUCATION

• The Small Schools by Necessity Grant has been maintained but with minimal increase.

• Student transportation services received a $14 million increase to $289 million.

• A goal is to identify strategies to expand the recruitment of post-secondary students in rural areas including Métis and First Nations communities.

HEALTH

• Continuing care initiatives continue to decrease from a budget in 2011-12 of $24 million to only $9 million in 2012-13.

• Alberta Health Services’ base operating grant will increase to $10.2 billion.

• $3.4 billion is budgeted for physician compensation and development representing a small increase; the fee agreement expired on March 31, 2011.

PROVINCIAL INFRASTRUCTURE INVESTMENTS

• The Alberta First Responders Radio Communication System (AFRRCS) is funded to $247 million over the next three years ($90 million in 2012). This technology will allow for municipalities from across Alberta to access the same radio network, and the AAMDC expects to hear many more details regarding the implementation of this network as the year progresses.

• Funding for the Final Mile Rural Broadband Initiative increased to $9.5 million to include the recent announcement of support for the provision of high-speed internet to unserved Albertans. For more details see our January 18, 2012 bulletin.

SENIORS

• The Alberta seniors’ benefit increases nearly by 6.6 per cent to $351 million.

• The seniors’ lodge assistance program remains unchanged.

• Affordable supportive living initiatives, aimed at continued development of new affordable living spaces across the province, saw a significant decrease of 66 per cent to $25 million.

Attachments:

02 10 12 Rural Perspectives on Budget 2012.pdf