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A New Relationship for Alberta's Cities

Alberta's Municipal Government Act sees municipalities as little more than providers of a few local services, and gives municipalities few tools to raise funds. This relationship doesn't work anymore; it's time to see municipalities in Alberta as important levels of government in their own right.

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Strong municipalities are essential to Alberta's future. More than 80% of Albertans live in urban areas. Our cities, towns, villages and hamlets are the levels of government closest to us, providing services that we use every day. Local governments are in the best position to lead Alberta into the future, by developing sustainable transportation systems, improving our land use and becoming environmental leaders.

Alberta's municipalities are facing increased demands. As our province has grown, more and more demands have been placed on municipalities. Our cities are now expected to provide a level of service that property tax revenue can't support.

Municipalities do not have access to sustainable revenue sources. Property taxes do not keep pace with growth or with inflation, and every increase in property tax is politically untenable. Grants from higher levels of government are usually conditional and they are usually targeted for capital projects, rarely supporting operating funds.

Bill 204: Levelling the Playing Field

Bill 204 is the beginning of changing the relationship between the province and municipalities. Bill 204 stipulates that:

Click here to download a copy of Bill 204

  • A Cabinet Minister will create a fund, the Provincial-Municipal Tax Sharing Account, consisting of 2.5% of personal and corporate income tax revenue.
  • This money will be distributed to municipalities unconditionally to support operating expenditures.
  • An all-party committee of the Legislature will review the amount in the fund after one year and evaluate whether the percentage of income tax is appropriate.

With 2.5% of income tax allocated to this fund, municipalities would have access to over $300 million to support their operating budgets.