Developers are concerned that new funding legislation for Edmonton and Calgary could drive up lot prices. City of Red Deer also concerned that other communities still dont have funding certainty given big cities. Red Deer Advocate file photo

Developers are concerned that new funding legislation for Edmonton and Calgary could drive up lot prices. City of Red Deer also concerned that other communities still dont have funding certainty given big cities. Red Deer Advocate file photo

Red Deer still waiting for provincial funding certainty

Proposed legislation gives Edmonton and Calgary funding assurances that other municipalities lack

Edmonton and Calgary will get provincial funding certainty under new legislation while Red Deer and other Alberta cities remain in the dark.

Publicly unveiled on Thursday, the City Charters Fiscal Framework Act will provide Calgary and Edmonton with predictable infrastructure funding tied to provincial revenues as well as long-term transit funding.

“Obviously that provides Edmonton and Calgary with that certainty. However, that certainty has not been afforded to the remaining population of Alberta,” said Veer.

“Mid-sized cities are highly concerned that we have yet to see the government’s proposed funding formula for Albertans outside of Calgary and Edmonton,” said the province’s Mid-sized Mayor’s Caucus has been lobbying for a year for an answer.

The city fears that giving the powers that come with charters to only Edmonton and Calgary, will leave Red Deer “legislatively isolated,” said Veer. Funding would flow directly to Edmonton and Calgary leaving Alberta’s mid-sized cities uncertain whether they will have the grants to pay for future capital projects.

The Alberta government has told municipalities that their grant funding will eventually be enshrined in legislation, as is proposed for Edmonton and Calgary, but that has not happened yet.

Red Deer is estimating it will get more than $60 million less in provincial grant funding over its 10-year capital plan, but that is largely educated guess work based on numbers the city has now.

“That number may very well change. We’re in a vacuum because we haven’t been told the formula nor have we been consulted with respect to the terms of the formula, nor are we clear on when we can expect the terms of that formula to be made public,” she said.

Adding to the city’s frustration is that it is required under provincial law to have a long-term capital plan but the amount of long-term funding remains a question mark.

The new legislation, Bill 32, has generated concerns in development circles.

Home buyers will pay the price for the “unintended consequences” of the new legislation, says the Building, Industry and Land Development (BILD) Association of Alberta.

Bill 32 expands the use of off-site levies in new developments, a move that developers and home builders fear will drive up lot prices and make homes less affordable, said BILD chair Steve Bontje.

While the legislation is specific to Edmonton and Calgary, the development industry is concerned that all municipalities may call for the same power to add levies, said Bontje, a managing partner with Red Deer’s Laebon Homes.

Bontje said the new legislation will allow Calgary and Edmonton even more freedom to add levies if they choose, without the restrictions imposed under the older legislation.

“The reality is they now have the ability add lots of other things that weren’t there before,” he said. “The concern is that a municipality, in this case Calgary and Edmonton, can basically choose to add anything.”

“All these things that get added go into lot prices,” said Bontje.

BILD is also not happy at the lack of consultation with the home building and development industry before the legislation is announced.

“I think what is troubling for Central Alberta is that in this instance government has chosen to bring forward a fairly significant piece of legislation forward with virtually no consultation with industry, home builders, home buyers or the affected parties.”

Veer said the city is looking for more funding certainty from the province and not seeking new levies to raise money.

In fact, the opposite is happening. Given the still-recovering economy, the city plans to review whether the existing levies are sustainable or need to be adjusted.

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