There are three set of inter-governmental relations in Canada (excluding First Nations relations): federal-provincial; federal-municipal and provincial-municipal. Alberta scored an important victory earlier this year when a payment was made to the province for $253 million in recognition of a drop in the province’s tax revenue. This relatively obscure federal fiscal stabilization program was last tapped by Alberta during the 1980s.
One of the major developments in intergovernmental relations is the amendments to the Municipal Government Act (MGA). Municipalities are creatures of provincial legislative authority and therefore have no powers unless so granted. This paternal system rankles big city mayors who preside over large municipal administrations and frequently represent many more voters than one MLA.
A perennial problem facing municipal officials has been the Alberta government’s approach to funding infrastructure. Municipal governments rely heavily on a property tax which, in turn, is dependent on assessments of property values of businesses and homes. Recent changes do not give local governments any greater flexibility and as th article by Sue Bohaichuk, CEO of the Alberta Urban Municipalities Association, shows larger urban governments are getting tired of promises of stable funding from their provincial masters.
Bill 21, the Modernized Municipal Government Act was tabled in the spring sitting of the legislative assembly was a discussion draft of the MGA and will be re-introduced with amendments this fall. With pressure from lower assessment bases, municipal tax assessors and politicians will be pressed to be able to balance budgets in the near term. While 2019 seems the earliest that a harmonized sales tax could be introduced- that might be shared with municipalities, unless oil prices begin a progressive upward climb, look for rising tensions between local politicians and provincial cabinet ministers.