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January 17, 2008
A special thank you to President Terri Lynn Bougie and Executive Director Todd Banks, as well as the Board and membership.
You have consistently provided me opportunities to keep you in the loop on the latest developments in the Capital Region.
Unfortunately what I have to tell you today is not good news.
On the basis of assurances provided by the Premier in June that his review would respect municipal autonomy and not create another level of government, Strathcona County has been working through the Alberta Capital Region Alliance and with the other counties and heartland partners over the last 6 months to develop workable proposals for effective regional cooperation on a number of issues.
Unfortunately, the provincial government has now chosen a completely different approach. They have chosen to dictate a new model largely based on the information and misinformation provided by Edmonton.
They set out to reform the Capital Region and develop a solution - to something - in a 6 month time frame but they never identified what the problem was.
The most generous interpretation I have heard is that the Government of Alberta was spooked by Edmonton's propaganda effort and took it to heart that investment in the region was in jeopardy unless inter municipal cooperation was somehow improved in the Capital Region.
While their aims may have been well intentioned, their absence of meaningful consultation and their failure to define the problem - has resulted in choice of a solution, that combined with other provincial government initiatives - like environmental restrictions and the royalty review - is already creating uncertainty that could diminish or postpone previously projected new investment.
Three fundamental concerns we have are the impacts on business in the region, the impacts on our residents in terms of both taxes and services and our limited ability for fair representation at the table.
Essentially, the Government of Alberta has decreed creation of a super board made of representatives from 25 municipalities that will oversee regional needs and priorities for core and social infrastructure. It would dictate to the municipalities on a range of subjects including planning and certain core services such as transit, fire, ambulance and policing - and it will have the power to requisition taxes.
Edmonton will have a de facto veto on every issue by virtue of its population. Beyond that all municipalities receive one vote regardless of size. Strathcona will have the same voting power as New Sarepta or Warburg. While Strathcona encompasses many communities as a specialized municipality of 83,000 people it will have one vote while the communities encompassed by Leduc county - with half our population - will have a total of eight votes.
How our needs will be addressed within this voting structure is not clear.
Further - The Radke Report states that an estimated $19.6 Billion is needed over the next ten years for core infrastructure within the Capital Region. Most of these costs are now within the provincial sphere of responsibility such as for major roads and highways.
The Radke Report puts forward a new cost-sharing model.
For the $19.6 billion of core infrastructure needs, the Government of Alberta would pay $4 billion, the municipalities would pay $7.4 billion and industry would be responsible for $8.25 billion. This works out to about 20% for the province, almost 40% for municipalities and over 40% for industry.
Radke?s funding proposal is not similar to any of the approaches we have historically seen.
Where do the revenues go and how are taxes currently divided among the orders of government?
Typically 7 percent goes to the municipality and 93 % to the province and the feds. On the upgraders it is estimated that of taxes generated, 57 % would go to the feds, 38% to the province and 5% to the municipalities.
Municipal revenue estimates we have from the new investment in the Capital Region indicate that by 2015, Strathcona County anticipates new revenues close to $70 million.
Radke?s projections for our revenue was at minimum $10 million higher and at maximum almost double. But this is the least of our worries - the discrepancy in the accuracy of those numbers pales in comparison with our share of the costs, based upon any of the proposed cost sharing models.
If we are requisitioned by the provincial government based on population we would pay for 8% of total infrastructure costs and if it based on non-residential assessment, this community would pay 20% of the regional municipalities? portion. Again, the municipal portion of the core infrastructure requirements is $7.4 BILLION.
Whether our share is 8% or 20%, Strathcona County could be asked to pay between $594 Million and $1.48 Billion respectively. No matter how the funds are requisitioned, we do not have revenues currently that will come any where close to these figures.
We will have no choice but to raise taxes while the other orders of government who will receive 95% of the revenue and are reporting records surpluses would have a reduced overall responsibility.
There is a further vicious irony at work here.
Strathcona's visionary creation of Alberta's Industrial Heartland in cooperation with the Counties of Sturgeon and Lamont and the City of Fort Saskatchewan attracted industry because Alberta was open to business and AIHA offered progressive planning and proximity to supply and pipelines. The cost of doing business was attractive and a good investment case could be made especially with the rising price and demand for secure oil supplies. Indeed it is pretty clear that the Heartland initiative is the basis for much of the current and anticipated prosperity in Alberta today.
Edmonton was invited to participate but chose not to.
Now Edmonton and twenty other municipalities who have had no direct involvement are being given the power to dictate to us and infrastructure costs that have traditionally been provincial are being downloaded; yet most new revenues will go to other levels of government.
Strathcona will have potentially 8 to 20% of the responsibility for funding new infrastructure with about 4% of the voting power on the new board. Our planning will be subject to the dictates of the board and our ability to respond to the needs of our own community will be diminished while our taxes will be increased.
Unlike most of the communities in the Capital Region, our new Municipal Development Plan will apparently not be grandfathered. So in spite of a multi year consultation process in developing a long range document that responds to and provides certainty for our residents and that was approved unanimously by the previous council, new uncertainties have been introduced that we are no longer in any position to address at this time.
As Gerry Gabinet pointed out yesterday, while we have much on the go and are generally in a very positive position as a municipality - and as a place to live and do business, - there are some storm clouds on the horizon.
I would be happy to take any questions that you may have and thank you for welcoming me once again.
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