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The City of Red Deer will see minimal short-term impacts from Provincial budget, more information needed to understand community impact

February 26, 2021 3:41 PM
(Red Deer, Alberta)

Based on the Provincial budget released yesterday, The City is confident that there will be minimal short-term impacts to the approved City budgets.

“We recognize the continuing economic challenges Alberta is facing that have local consequences, which are exacerbated by the pandemic,” said Mayor Tara Veer. “We didn’t expect any new local capital projects from the Province, and we’re optimistic to see that our anticipated grant funding to The City of Red Deer remains stable for the next two years. However, we will need to manage expectations with respect to long term capital.”

The Municipal Sustainability Initiative (MSI) grants outlined in the Provincial budget that fund The City’s capital budgets align with the estimates, which means The City can continue with the projects approved. Starting in 2024, the funding will begin to decrease, which means The City will have to review the capital plan and make adjustments.

“We anticipate MSI being stable to fulfil our capital budgets for 2021 and 2022. There will be impacts to the capital plan based on the outlined reduction in MSI funding,” said City Manager, Allan Seabrooke. “Originally, the Province intended to eliminate MSI in 2023, however, given the current circumstances and economic uncertainty, they are extending MSI for two years to stabilize Provincial revenues before launching the Local Government Fiscal Framework in 2024-2025.”

As for the MSI operating grants, The City’s estimates in the approved budgets align with the Province’s funding for the next two years. This means that The City will not see any impact to the approved 2021 and 2022 operating budgets when it comes to that revenue stream.

The education requisition collected by The City on behalf of the Province will go up this year. The amount collected by municipalities is based on assessed property values and equalized throughout the province.

“Based on the Province’s formula, we are anticipating an approximate 2.7 per cent increase to the education requisition,” said Mayor Veer. “We are committed to a zero per cent municipal property tax increase and we’re concerned about the impact this provincial number could have on our local property tax bills.”

From a community perspective, the Province made commitments to several capital projects in the community and The City is confident in the continued funding for the therapeutic community, shelter and Justice Centre. As for the Red Deer Regional Hospital, there are concerns around the total funding being put forward by the Province.

“There are still some details that need to be sorted out when it comes to the hospital expansion funding, originally it was stated there would be $100 million but we’re only seeing $59 million over the next three years in the budget released yesterday,” said Veer. “We will be contacting the Minister’s office to go over the specifics around this critical project that ensures we can alleviate the strain on our local health system.”

Another area of concern for the community is the reduction in funding for post-secondary institutes and what that means for Red Deer College.

“”Red Deer College is one of the most important strategic economic diversification strategies in our community and our local economy,” said Mayor Veer. “We have significant questions about the status of our college and renew our call to the Province to release its post-secondary system review to fully understand the local impacts.”

The City will continue to review the budget released yesterday by the Province and work with Provincial counterparts to understand any further impacts to The City and the community.

For more information, please contact:

Corporate Communications
The City of Red Deer

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