Province restores some municipal funding

Lakeland municipalities could see increased municipal funding in the future. 

For the 2024-25 fiscal year, baseline capital funding for municipalities is set at $722 million with the new Local Government Fiscal Framework (LGFF).

An update to the LGFF Revenue Index Factor from 50 per cent to 100 per cent will mean that annual capital funding for municipalities will rise or fall by the exact same percentage as provincial revenues from three years prior. 

Miller says this is a relief for St. Paul.

“We’re back now to getting funding that would be equivalent to about two or three years ago, which might ease some of those decision processes,” said Maureen Miller, Mayor of St. Paul. 

“As you know, we talked about our budget over and over and over. And now we might be able to massage some of those areas and confidently know we can be successful in executing.”

This change means that funding under the LGFF will increase to $813 million in 2025-26 – for a three-year total of $2 billion. 

The 2023 budget also committed to providing additional top-up funding to ensure no municipality will receive a year-over-year decrease in funding in the shift to this fiscal framework.

“The 50 per cent revenue index factor was meant to provide stability in municipal funding in a resource-based economy,” said Rebecca Schulz, Minister of Municipal Affairs, in a press release. 

“However, municipalities said that they wanted full partnership – in good times and in bad – and we’ve listened. This will mean a 12.6 per cent increase in funding for the second year of the new formula.”

In addition to this, the 2023 budget doubled operating funding to $60 million provided to municipalities under the Municipal Sustainability Initiative (MSI), which supplements the $485 million in capital funding also provided under the MSI in 2023-24. 

This funding level will increase to $722 million when the LGFF is implemented next year.

“We create a budget in order for us to continue to move forward. Knowing what our repairs have to contribute to that but it isn’t actually finalized until the provincial government is finalized. Then we know exactly what we’re getting and how we can allocate those funds. So, yeah, we’re all on this hinge post here until the budget is finally passed,” said Miller.

“We are always challenged. When there’s money coming into the province, we’re called, like, okay, there’s money coming. Where’s it coming. So now we’re looking at the new funding model that as the province wins, we win as well. And as the province loses, we all lose at the same time.”