Edmonton mayor Sohi critical of UCP surplus budget boast

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Maybe now that Alberta is running a $4.3-billion surplus, it will pay its back taxes.

After Thursday’s budget update from Finance Minister Nate Horner, that’s the hope of Edmonton Mayor Amarjeet Sohi, who keeps a running tally of another kind of deficit — the difference between what the provincial government used to pay the city, and what it does now.

“The Government of Alberta is running these surpluses on the backs of municipalities,” Sohi said in an interview Friday.

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“We have seen significant decline in infrastructure funding from the province, and we have seen significant downloading onto the municipality from the province, and we have seen a significant reduction in the grants and property taxes that we used to receive from the Government of Alberta.”

A private citizen or business who announced to the city’s tax collector that they were only going to pay 75 per cent of their property tax, soon followed by reducing it to 50 per cent of what was due, would get laughed out of City Hall — but that, Sohi said, is what the province is doing to municipalities.

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“The Government of Alberta also refuses to pay their fair share of property taxes like any other property owners in Edmonton,” Sohi said.

The UCP government changed things up in 2019, going from 75 per cent payment rate to 50 per cent in subsequent years.

So far, the Grant in Place of Tax program is an $80-million dollar loss for the city, and each year another $19 million goes out the window, Sohi said.

In contrast, Sohi says the federal government pays its share of taxes for services that they receive from the municipalities.

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“To my understanding, the decision was made based on the financial situation of the province,” Sohi said.

“So our argument is now the finances have improved … compensation should be made for the lost revenue for the city going back to 2019.”

Population growth a growing concern

The province is actively recruiting (even incentivizing) new residents — including those essential to attending to the growth, like doctors, nurses, trades and professionals.

Not the best timing for the reduced Municipal Sustainability Initiative funding (replaced in 2023 by Smith’s Local Government Fiscal Framework) municipalities are contending with, to pay for things like roads, bridges and transit in an inflationary era.

“When you look at the per capita grant funding that municipalities used to receive from the Government of Alberta, those grants have significantly decreased,” he said, calling on Smith to address “the growing infrastructure deficit occurring within municipalities and, at minimum, reinstate funding amounts to what was received per capita in 2011.”

Population growth is good, but municipalities pay for it in municipal services, Sohi said.

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The province and federal governments reap the benefit of new arrivals in additional income taxes, but the city has to wait for property taxes once newcomers buy property in the city.

“The cost of accommodating growth is inevitably much higher for municipalities that don’t get the corresponding revenue from that growth.

“In Edmonton’s case, we received $400 million less than what we would have received if the province of Alberta honored the commitment that they made to municipalities,” Sohi said.

“That has impacted municipalities significantly in maintaining the infrastructure or building the infrastructure.”

Sohi estimates that 60 per cent of Edmonton’s fire service calls are medical calls responding to overdoses.

“That is costing us $28 million each year that should be actually paid by the province, because health care is not a municipal responsibility,” he said.

A shigella outbreak prompted Alberta Health Services to require the municipality to set up hygiene hubs, but the provincial agency isn’t picking up the $2-million annual tab.

“The government’s running surpluses, but the municipal taxes are paying for some of the provincial responsibilities,” Sohi said.

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April letter to Smith

Sohi fired off a letter to UCP Premier Danielle Smith in April thanking her for an offer to help with specific requests.

He got specific.

In addition, he sought a review of the police funding model, reinstating funding for the DNA testing program — a $5-million annual price tag — full funding for Emergency Medical Services within Edmonton ($28 million annually), and the return of the municipal portion of fine revenue to 73.3 per cent, reducing pressure on the tax levy by $7 million to $8 million annually.

He also sought “equitable treatment between Edmonton and Calgary for maintenance of provincial highways within city boundaries” — a $17-million annual package.

“Provincial funding for local infrastructure dropped from about $424 per Albertan in 2011 to about $154 per Albertan today, all while demands for municipal infrastructure continue to grow,” he wrote.

“Edmonton’s geographical location and status as a service hub for a larger regional population and for northern Alberta (as well as northern British Columbia and the Northwest Territories) means we bear a disproportionate impact of these provincial policies or budgetary decisions,” he said.

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“Many of these decisions could be reconsidered or reinstated immediately, offering much-needed relief to the property tax burden that Edmontonians could be facing this year in the context of a global affordability crisis.”

Unavailable for comment Friday, the Edmonton Public School Board previously protested a rolling average school funding formula that addresses some growth in student population but not all, trails current enrolments, and fails to keep up with inflation, leaving the equivalent of schools full of students unfunded.

jcarmichael@postmedia.com

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