Bill 20 introduces business friendly measures – but also creates uncertainty around innovation and infrastructure projects
November 7, 2019
Immediately after tabling Budget 2019, the Honourable Travis Toews, President of the Treasury Board and Minister of Finance for Alberta tabled Bill 20: Fiscal Measures and Taxation Act, 2019. The bill begins the process of implementing the necessary legal and regulatory changes required to implement the provincial budget.
While the budget takes steps to improve the province’s fiscal situation and global competitiveness, it also creates uncertainty and concerns for municipalities across Alberta. Here in Calgary, it has had the same effect around funding for the Green Line.
Bill 20 repeals the city charters agreement between the province and the cities of Calgary and Edmonton. It replaces the charters with the Local Government Fiscal Framework Act, which changes the way major infrastructure projects are funded beginning in 2020-2023. Overall, this change lowers the amount the two biggest cities in the province are entitled to from $500 million to $445 million, and subsequently gives other municipalities access to a $405 million fund. While it appears a more equitable distribution across municipalities, it does not take into account that Calgary and Edmonton have to provide more services to more people and therefore have higher operational costs.
To compound the issue, the cities will also lose $200 million in funding that was to come from the scrapped carbon levy, and their funding agreements for Light Rapid Transit (LRT) projects have been adjusted so no provincial funding will be provided before 2023.
For the Green Line, the province now reserves the right to pull all $1.53 billion in grants that have been promised to the City with just 90 days’ notice without cause. The uncertainty from this clause could disincentivize proponents to bid on the project, and cause concerns for potential investments made by the real estate industry, along the 46-kilometer corridor of the project.
The readjustment to the funding agreement also means that in the first four years of the project, the City will now receive only $75 million out of the $555 million that was agreed upon with the previous provincial government.
Budget 2019 and Bill 20 put the City of Calgary in a difficult situation when choosing to move forward with budgeting, and adds a large layer of difficulty in getting the Green Line built. With 20,000 jobs expected to be created through the Green Line investment, we must see better partnerships between the municipal and provincial governments to create investments and jobs in our city.