Alberta uses all of Lethbridge’s Municipal Stimulus funding on 3 projects

Last week, the Alberta government announced funding for upgrades to the Lethbridge Airport.

Well, kind of.

There was no media release or anything posted anywhere on the provincial government’s website about the announcement. The only announcement I could find was a Facebook Live video posted by Nathan Neudorf, MLA for Lethbridge–East.

No one from the Municipal Affairs ministry was on hand for the announcement, not even Tracy Allard, the newly appointed minister.

According to the announcement, the province will provide over $11 million for upgrades to infrastructure at the Lethbridge Airport. Of that, $5 million will go towards rehabilitating pavement on the runways, and over $6 million will replace runway lighting systems, which are so old that it’s difficult to get replacement parts anymore.

It isn’t clear from the announcement where this money is coming from.

The project isn’t listed in the 2020–2021 budget released in February, or the fiscal updates to the budget released in March, August, and November. Nor is the project listed in the 2019–2020 budget.

Although Neudorf didn’t explicitly state that the money is coming from the newly created Municipal Stimulus Program, he did mention the programme several times during his presentation (as well as several other funding programmes).

Announced this past summer, the MSP will provide Alberta municipalities with a combined $500 million for infrastructure projects. Every municipality (other than summer villages) had been allocated a minimum of $50,000, with additional funding being distributed based on population.

Lethbridge was allocated $12,063,074. That means that these two rehabilitation projects will likely use up most—if not all—of the MSP funding that the province had set aside for us, assuming that is the funding source.

But again, it’s not clear that it is.

There’s some good indication that it is though. The City of Lethbridge conducted an in-camera meeting on 28 September 2020 regarding the municipal capital projects the city would request that the province fund with the MSP, which means the minutes and video recording are not publicly available.

However, on that same day, city council hosted the Community and Economic Recovery Committee meeting, which did have a list of potential “stimulus programmes” that had the potential to be funded by the MSP.

Two of the projects listed met all of the eligibility requirements to be funded by the MSP:

• Airport electrical upgrade
• Airport aprons & taxiways

However, the funding requirement for these two projects ($6 million and $8.4 million) exceeds the amount announced by Neudorf last week.

And when we consider that nearly $1 million was also approved for the Festival Square project in downtown, that brings the total to $15.3 million. Which means these 3 projects are still $3 million short.

One eligibility requirement for MSP is that projects cannot increase taxes. That means that either these Lethbridge projects must be scaled back in scope somehow to match the funding amounts or additional funding must come from somewhere else (such as cuts to the municipal budget).

This announcement is in addition to the $7.52 million that the City of Lethbridge announced earlier this year that it would be spending over 3 years on renovating the airport’s holding area, washrooms, parking, HVAC, and water service.

One final thing. In his Facebook Live video, Nathan Neudorf said the following:

Our plan also includes a historic $1.1 billion investment in our municipalities. This is above and beyond our support provided through the Municipal Sustainability Initiative and other streams. Our historic stimulus investment in municipalities includes support for operating expenses and public transit that will be matched by the federal government. It includes 500 million in new provincial dollars to support shovel-ready projects under our programme we’re calling our Municipal Stimulus Program.

Except that’s not quite true. That $500 million that Neudorf is referring to was budgeted back in February when the 2020–2021 budget was released.

Notice in the above image that capital grants showed a forecast of $1.8 billion for 2019–2020 and a $2.302 billion estimate for 2020–2021? That’s $502 million.

So, he’s right in that it’s $500 million more than was forecasted last year, but it’s not $500 million announced with the MSP, when it was announced in the summer. That was already budgeted, before the MSP was even created.

Also, notice that while it may be $502 million more than was forecasted for 2019–2020, the UCP capital funding forecast last year was $286 million less than what they had budgeted. So, really, it’s only $216 million more than the 2019–2020 budget.

To its credit, in the first quarter update this past August, the UCP government boosted capital grants spending by over $78 million to $2.38 billion:

But then last month, in the mid-year fiscal update, the UCP scaled the funding back again.

They dropped it from the projected $2.380 billion to $2.266 billion, a loss of $114 million. And not only is it over $100 million less in capital grant funding than they had forecasted in August, it also happens to be $36 million less than the actual budgeted amount.

In other words, despite saying that they’re spending $500 million more on capital projects, they’re not.

Oh, and they also underspent even more last year on capital funding. Even though they forecast spending $1.8 billion, which itself was less than the $2.086 billion they had budgeted, they ended up actually spending only $1.696 billion last year.

Which makes you wonder: if they underspent on on capital funding last year and are on track to underspend this year, how will that affect the Municipal Stimulus Program? Will it need to be scaled back? Will the province have to cut other capital projects to keep the MSP topped up?