Cochrane Mayor and Mid-sized Cities Mayor's Caucus chair Jeff Genung’s reaction to Thursday’s provincial Budget: there’s good news, bad news and wait and see.
Genung’s take on the province’s approach is that he’s encouraged to see them listening to what the municipalities have been asking for, in terms of how local governments receive provincial funding.
It all circles around how something called the Local Government Fiscal Framework (LGFF) works.
“The good news there is the work we did as municipalities over the past few years in asking the Province to change to the LGFF is working, I guess,” he said.
“It’s population-based formula that is also tied to the revenues of the province, so the 13 per cent increase is due to the increase in revenues from the provincial budget three years ago. So we have predictable funding there.”
The LGFF program provides capital funding to municipalities to support projects that support local and provincial economic activities. Through the LGFF, municipalities across Alberta share in both increases and decreases in provincial revenues.
The LGFF, a grant shared by municipalities across Alberta, is set to increase by $96 million in 2025. Budget 2025 allocates nearly $2.5 billion over three years to the LGFF. The total amount for the LGFF in 2025 will be $820 million, an increase of $96 million from 2024, or a 13 per cent increase.
Cochrane already knew it was getting about a $600,000 increase from the previous year, and has already factored that funding into its budgetary talks last fall.
Another grant mechanism is called The Local Growth and Sustainability Grant (LGSG), which was introduced to support local governments by funding infrastructure that addresses growth pressures, attracts economic development opportunities and addresses unique or emergent needs in their communities.
“The not-so-good news is the LGSG grants – I’ve been calling it the fast growing community grant – Cochrane applied to it for the servicing and stripping and grading for the Horse Creek Sports Park and High School site, and they’re announcing the discontinuing of that program,” he said.
Exactly how, when, and how many dollars that will translate into is still up in the air, as Cochrane’s application is sitting on someone’s desk in Edmonton, so there may be some money coming before the program is shut down.
“They’re going to be notifying successful applicants by the end of March," Genung said. "I don’t want to jinx it, so hopefully, there’s some good news coming Cochrane’s way there.”
Another area of finance that has been a sore spot with the Town of Cochrane, along with other municipalities, is something called Grants in Place of Taxes (GPOT) – a provincially mandated approach to how municipalities were allowed to levy taxes against provincially-owned buildings, like the provincial building in downtown Cochrane.
The Province passed legislation saying the municipalities could only collect 50 per cent of the normal tax amount on provincially-owned buildings.
“That was something we’ve taken exception to,” Genung said, adding that the Province should be paying the same as everybody else.
Genung said a letter he received from Municipal Affairs Minister Ric McIver on Thursday highlighted the fact that that percentage was going up to 75 this year and 100 per cent in 2026-27.
Not a massive drain on the Cochrane budget, but in jurisdictions like Edmonton, it was a substantial drain.
On a broader scale, Genung said Albertans should see it as good news that the personal income tax rate drops from 10 per cent to eight on the first $60,000 of earnings.
“That’s a good thing for household budgets,” he said.
And, as promised, the bad news.
“The flip side is they’re increasing the education property tax," he said. "So landowners will be taxed more for the education property tax portion, which I think is a good thing as far as the Province understands the need for more schools, now they’ve got to fund it."
“This is one of the mechanisms they’re choosing to do that, and increase spending to hire more teachers, which is something Cochrane needs. It goes hand-in-hand with our fast growth – we’re hearing about classroom sizes and the need for more teachers, so it’s good,” he said.
But the Mayor isn’t suffering under any delusions about which level of government will feel the heat when taxpayers see the increase on their property tax bill, which comes on a Town of Cochrane letterhead.
“We collect the education portion on behalf of the Province, and we’re going to be taking the negative reactions, I’m sure.”
