Municipal Affairs Minister Rick McIver says it is difficult to include Grande Prairie area municipalities' critical infrastructure in the province’s current funding model because they are “seeking to make a profit.” 

The response comes after the shareholders of Aquatera - City of Grande Prairie, County of Grande Prairie and the towns of Sexsmith and Wembley - wrote the minister requesting provincial funding to municipalities include municipally controlled corporations (MCC).

The shareholder municipalities of Aquatera believe that collectively they are missing about $700,000 from the province's current Local Government Funding Framework (LGFF), which funds municipal infrastructure. 

LGFF replaced the province’s Municipal Sustainability Initiative (MSI) this year. 

The new LGFF formula considers the value of infrastructure assets such as water, wastewater and solid waste infrastructure, but only those directly owned by the municipality.

“I think when this much money is on the table, we should be looking at if there are different ways to structure ownership or structure our books, and I'd like to have those conversations in council,” said Coun. Dylan Bressey. 

“I think it's unfortunate that the ministry is taking this, what I don't consider a sensible approach, and is going to force us to play those kinds of accounting games.”

In his letter, McIver said LGGF was designed to balance the needs of municipalities and that MCCs operate differently than if they were managed by a municipality “which also poses challenges for including them in the formula.”

“The LGFF capital funding formula has been set,” said McIver in the letter.

Still, he said a member of his department will meet with the city to discuss its concerns. 

“We do feel we have some options that we could present to the ministry, and we'll be working to see how open the ministry is to some of those options,” said Rory Tarant, city intergovernmental affairs director. 

It was noted that some provincial municipalities have redundant systems where pipes run next to each other for multiple systems, something the Aquatera partnership has avoided.

“There's a huge benefit of having a service like Aquatera; it's played a key role in promoting regional collaboration for economic growth, but it also made sure that municipalities don't have to provide their own duplicate of their own service of water/wastewater infrastructure,” city Mayor Jackie Clayton told the News in May.

The benefit also comes to smaller towns, which are also shareholders. As Sexsmith Mayor Kate Potter explained in May, “I think of our previous mayors who would lose sleep over whether or not water would be available or if there was an issue what they would do; I don't have those same concerns because I have a lot of confidence in the system in the MCC.”

Overall, local municipalities are also facing lower provincial funding.

According to ABmunis, in 2011 the province provided about $424 per capita for infrastructure; in 2023, it was $154 per capita.  

Cuts to infrastructure funding have left municipalities with few choices, such as raising local taxes or allowing critical infrastructure to deteriorate. 

“We're working with a lot less than we have historically, and when the cost is rising so much, that really ends up affecting our residents more than anything else,” said Potter.  

City council decided it would discuss its options at a future Council Committee of the Whole meeting.