With billions of dollars on the line, all levels of government are trying to figure out a complicated cost-sharing agreement that will satisfy them all, and the public.
That agreement would spell out which government will take on what portion of funding in phase two of a $120-billion federal infrastructure program.
“I certainly get that cash is not sloshing around at the legislature these days,” said Edmonton Mayor Don Iveson.
Iveson said the city, unlike the province, has a limited capacity to generate tax revenue to cover future cost-sharing agreements.
Meeting in Edmonton for the first time, federal, provincial and municipal governments are in the early stages of hashing out details of what will form a long-term funding arrangement to build everything from housing to transportation corridors.
Federal Infrastructure Minister Amarjeet Sohi said Wednesday’s meeting was more about broad ideas without “drilling down on a particular formula.”
“Nimble enough and flexible enough”
But Sohi said he understands the “needs are diverse” and that the “capacity of the provinces and municipalities also differ.”
Sohi said the new formula must be “nimble enough and flexible enough so all provinces and territories are able to tap into the federal resources that will become available.”
Federal Infrastructure Minister Amarjeet Sohi meets with provincial counterparts in Edmonton . (CBC)
Phase one of the infrastructure plan had the federal government footing 50 per cent of the cost, with the province and municipalities each contributing 25 per cent.
But Alberta Infrastructure Minister Brian Mason said continuing that arrangement isn’t possible because of Alberta’s record $10.9 billion deficit.
“It’s already very difficult for us to come up with billions of dollars of additional spending money,” Mason said. “We’ve already increased it by four and a half billion dollars, that’s the increase we had already approved in the capital plan.”
Mason said recognition must be given to the money the provincial government has already committed to municipalities, which he said far exceeds contributions made by other provinces to municipal capital projects.
“This is where it gets dicey,” Iveson said.
The mayor said if the city is required to pay 25 per cent of the future funding agreement, the cost will be high.
“It would probably mean a couple of rec centres we don’t build, some interchanges would not get built. And so, realistically, council would have to look at the balance of that and start scaling back.”
Discussions are ongoing, and Sohi said he hopes to have a formula in place by the end of this year.