Deciding what to fix and what to build in Edmonton neighbourhoods will be a challenge unless the province replaces a key infrastructure funding program soon, Mayor Don Iveson says.
Edmonton faces a $3.8 billion funding gap for capital projects when the province’s Municipal Sustainability Initiative (MSI) runs out in 2021, according to a city report released Thursday.
In the spring budget, the province said it plans to replace MSI with a new infrastructure grant program based on revenue-sharing with municipalities.
“This uncertainty — not knowing what life after the Municipal Sustainability Initiative running out — is really, really bad for planning for us,” Iveson said. “We urgently need the province to deliver on that budget commitment.”
The city estimates it needs $18.8 billion between 2019 and 2028 for infrastructure projects, from building new recreation centres to repairing aging back alleys.
Without a tangible replacement for MSI, city council will have to figure out how to proceed without $3.8 billion.
Iveson said in the 1990s, the city delayed renewal projects that ended up costing the city more later.
It was a time of fiscal restraint, and city council responded with zero per cent tax increases, according to the capital investment outlook report.
“This meant that little investment was made in new and existing infrastructure and the use of debt financing was limited,” the report says.
New and renewal
Coun. Andrew Knack said the previous four–year capital budget was a good balance between growth and renewal and he’d like to see that continue.
“In the west end, we have growing new neighbourhoods that really are in desperate need of that larger scale rec centre and library.”
Knack said the Valley Line West LRT is a priority, as is revitalizing the city’s decrepit back alleys.
“I think it’s long overdue,” Knack said of the back alley renewal program. “I think two–thirds are rated in poor condition and it’s only going to get worse if we don’t start this program soon.”
Sarah Hamilton, a first-term councillor new to the city’s long-term capital budgeting process, agreed the back alley renewal program is a priority.
“I’ve driven some of those back alleys. I’d like to see them maintained.”
She also thinks council could face some difficult decisions in asking themselves “What’s the cost of deferring projects?”
Iveson hopes to hear from the province soon.
“I think the stakes are clear,” he said. “If they don’t deliver, there will be serious political angst from the mayor of Edmonton and the mayor of Calgary,” Iveson said.
Knack expects council will discuss at a meeting next Tuesday options of dealing with the gap in the interim. He said that could include changing the debt-management fiscal policy or deferring certain projects.