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Downloading has put Town of Olds in tight bind, report finds

Council urges residents to read report, saying that would answer many of their questions regarding costs and spending
mvt Olds town office-1
File photo/MVP Staff

OLDS — Town council and administrative staff say the provincial government is downloading costs it used to cover onto municipalities without giving those municipalities extra revenue to cover those costs.

Council released a report detailing 20 ways downloading has negatively impacted Olds during its May 27 meeting.

For example, the report said grant funding from the province formerly called the Municipal Sustainability Initiative which averaged $2.1 million from 2014 to 2021, was cut thereafter, resulting in a $1.1 million impact in 2023 and 2022.

The amount of traffic fine revenue the town has been required to provide to the province rose from 26.6 per cent  to 40 per cent in April 2020. The financial hit last year was 49 per cent.

The report said there is no provincial funding to deal with homelessness, yet that’s becoming a greater and greater problem for municipalities, including Olds.

It said municipalities are being “enticed” by provincial and federal governments to encourage the development of affordable housing through various means.

“This produces both capacity and financial issues on local governments, who are being asked to combat an issue they had little to no hand in creating,” the report said.

It was also noted that the provincial government requires municipalities to create housing management bodies (HMBs), which are generally oversee housing facilities for seniors.

“Under this regulation, the province sets the maximum rent HMBs are allowed to charge and the method for determining this amount; however, it makes the local governments fund any shortfall via property taxes.

“There are additional issues around capital funding and the costs incurred to replace and repair capital assets,” the report said.

The report also said the provincial government is “leaning on” municipalities to provide firefighting resources to combat wildfires.

“While we are happy to support areas in need, these events are becoming commonplace, with multiple deployments each year,” the report said.

“Instead of the province investing in wildfire response (or restoring the cuts they have made over the last five years), they lean more on municipal fire services and volunteers to provide support. This taxes local resources and dilutes fire protection.”

Coun. Darren Wilson said according to Alberta Municipalities, the more than 300 municipalities in the province need $1.7 billion to help cover costs but collectively have only received $700 million from the provincial government.

“What’s the future of municipal finance and public finance going forward,” he asked chief administrative officer Brent Williams.

Wilson said the numbers likely don’t include the loss of tax revenue that occurred earlier when SNDL (formerly Sundial Growers) left town.

“We’re on the cusp – if not already right in the middle of a perfect storm. We’ve got service levels being reduced, we’ve got taxes going up. We’re getting hit right, left and centre.”

Williams said it is “not fair nor accurate” to blame the provincial government for all the financial issues the town is facing, but he indicated the province is a factor in many of those problems.

He noted that the current United Conservative Party government has been in power in Alberta since 2019.

“We’d be remiss and totally inaccurate if we didn’t point out the fact that this government has been not just downloading services, responsibilities onto local governments but also at the same time, cutting the funding that we’ve been afforded for decades now to take care of our infrastructure at the time when our infrastructure needs it the most,” Williams said.

For example, he said most of the sanitary water infrastructure in Olds and other municipalities across Alberta was built 50 to 70 years ago and has now reached the end of its life.

“The future’s bleak without any significant either revenue tools given to us, which we don’t have right now, or reinstatement of funding that was cut,” Williams said.

He cited several other impacts of provincial downloading; for example, the fact the town had to cover retroactive pay to RCMP officers back to 2017 despite not being at the table when that deal was negotiated. That cost the town $270,831in 2022.

He said the provincial government is also guilty of not paying “their own property taxes.”

“What the province is doing right now, I don’t know why, I wouldn’t speculate, but we haven’t seen the end of the pain this is going to cause,” Williams said.

"It’s significant and it’s going to – yeah, be the ruin of many municipalities if something doesn’t change.”

Coun. Harvey Walsh cited the federal government’s carbon tax.

The amount that tax is costing the town has steadily risen from $34,020 in 2020 to $90,532 in 2023.

Walsh said the local co-op has had to pay $6 million in carbon tax to the federal government “in the past few years.”

“That’s just one local organization that sends money to Ottawa through the carbon tax,” he said.

“When you combine carbon tax with what you see here, this is the majority of the reason we face financial issues at the moment,” Williams said during the discussion.

The report is timely Wilson said, noting council and administrative staff are about to start hammering out the town’s 2025 budget.

Coun. Wanda Blatz indicated that the impacts of downloading from the provincial government have forced the town to cut services and deal with rising costs.

She wondered if this information will be shared with local residents “so that they realize the challenges that we as a council and you as administration have had over the past few years,” for example in road maintenance.

Coun. Heather Ryan echoed that thought and suggested communicating the information in the report to Olds-Didsbury-Three Hills MLA Nathan Cooper “to show how much of an effect it is having on our community.”

Mayor Judy Dahl said a letter on the matter could be drafted if council so wishes. She urged residents to read the report, saying that would answer many questions councillors have received.

In the end, council voted to accept the report on provincial downloading for information.

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