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Calgary to reap the benefit of Alberta’s update to capital funding revenue index

Municipal capital funding is projected to jump by nearly $100 million in two years with the new formula.

Alberta municipalities – including Calgary – will see a bump in provincial capital funding with Alberta’s revised formula, the province said Tuesday.

The amount of funding available could jump provincially by almost $100 million in the next two years, after changes to the Local Government Fiscal Framework revenue index factor.  Previously, the factor was 50 per cent of the rise or fall of provincial revenues in the prior three years.

Now, that factor has been bumped up to 100 per cent. With baseline capital funding for municipalities at $722 million for 2024-2025, the projected increase for 2025-2026 is up to $813 million.

“The 50 per cent revenue index factor was meant to provide stability in municipal funding in a resource-based economy. However, municipalities said that they wanted full partnership – in good times and in bad – and we’ve listened,” said Alberta Minister of Municipal Affairs, Rebecca Schulz.  

“This will mean a 12.6 per cent increase in funding for the second year of the new formula.”

Of the $722 million in capital funding, $382 million is reserved for Calgary and Edmonton.

Back when the budget was delivered, Calgary Mayor Jyoti Gondek said that they haven’t had the advantage of the full index factor in the past.

“In bad years we have seen less money, so I don’t see this as a negative I see it as a positive if we’re indexed up so that we are benefiting from the growth that we see in the province,” the mayor said Feb. 28.  

“It is actually a good news story.”

Mayor Gondek said there’s been economic growth in many different Alberta sectors – particularly film and television.

“As the provincial government continues to benefit from that, I’m very happy to see that municipalities will benefit as well,” she said.