Budget 2019: Province 'ripped up' deal with city, Edmonton mayor says

Mayor Don Iveson said Thursday's provincial budget is a “significant step backward for city-building in Alberta.”

Don Iveson cancels overseas trip, calls special council meeting for Friday

Mayor Don Iveson cancelled a business trip to Europe Thursday after hearing the provincial budget includes millions of dollars in cuts to Alberta cities. (Nathan Gross/CBC)

Thursday's provincial budget is a "significant step backward for city-building in Alberta" that will leave municipalities in the lurch, says Edmonton Mayor Don Iveson.

"Edmontonians now face the prospect of falling behind again on infrastructure as we did in the '90s, or paying more in municipal debt interest payments or, or both," Iveson said in a statement after the UCP government tabled its first budget.

The budget calls for the Municipal Sustainability Initiative, or MSI, to be reduced by $94 million in 2020-21 and $142 million in 2021-22.

The government also plans to repeal the city charters for Edmonton and Calgary, reducing their base spending by $45 million a year.

"We had no sense that the city charter fiscal framework was going to be ripped up today," Iveson said. 

The two cities had worked with the province for years on the charter deals to give them more power in how they spend money.

Iveson noted that the United Conservative Party's election campaign platform included keeping the charters in place. 

"That's very troubling," he said, calling it a "profound disappointment and a broken campaign promise." 

The mayor, who was about to board a plane for a business trip to the Netherlands on Thursday afternoon, reversed course from Edmonton International Airport and headed for the legislature.

He called a special council meeting for Friday. 

"We're going to have a lot of work to do to determine which projects are going to have to be cancelled that will be affected by this, that will have an economic impact in terms of jobs in terms of consumer confidence," Iveson said.

The budget also cancels the Alberta Community Transit Fund, affecting the city's ability to make improvements at Stadium LRT Station and upgrade Terwillegar Drive to an expressway.

Coun. Andrew Knack said the city was counting on amenities and infrastructure for a growing population. 

"it's a huge concern to see such a drop in funding," Knack said. "[It's] seemingly at odds with what I think they campaigned on, which is building the economy, creating jobs," Knack said. 

While the province is maintaining $3 billion for Edmonton and Calgary LRT projects, the money won't be flowing until 2022-23. That could mean a delay in building the Valley Line West LRT. 

Disconcerting projections

The city's chief economist, John Rose, said he's concerned the government's projections on economic growth and oil prices are on the high end. The budget forecasts the price of a barrel of West Texas Intermediate to range from $57 US this year to $63 by 2022-23.

"I don't know where they got that stuff from, quite honestly," Rose told CBC News. 

"My concern is that this is not going to be the first round," he said. "This is only going to be the beginning because they're not going to be able to hit their targets." 

Rose projected the next provincial budget, expected in March, will be just as difficult to deal with.