Council received glimpse into NDP budget effect on municipal finances

Miriam Ostermann
Times Associate Editor

 

Local officials were left dismayed during last week’s regular council meeting, when information regarding the impact of the NDP budget on Strathmore’s financial affairs revealed mounting expenses and an increased financial burden over the next few years.
Town council was made aware of the growing monetary fallout from the 2016 provincial budget as a result of the surge in the education property tax and newly proposed carbon tax, which directly affects all of Alberta including Strathmore.
With fuel prices forecast to swell and natural gas expected rise, town staff estimated the town to dish out an additional $17,200 specifically for carbon tax costs.
“Now it doesn’t end there,” said Mel Tiede, director of corporate services. “We have no definite information on grant funding on infrastructure or on funding on operations from the province at this time. That would be on the revenue side, if the province was going to step up to the plate to give us some additional money. There’s not detail on that.”
According to Tiede, the town utilizes nearly 100,000 litres worth of fuel for town vehicles and equipment. Under the carbon tax, gas and diesel fuel will be exposed to climbing prices over the next two years. This includes an increase of 4.5 cents per litre by next year, and a 6.7 cents per litre increase the following year. Diesel fuel, in comparison, will see a rise of 5.4 cents per litre in 2017 and an eight-cent increase by 2018. Therefore, the town will spend an additional $4,600 next year, and $6,900 in 2018.
In addition, the carbon tax proposed a tax rate of $1.1 per gigajoule of natural gas in 2017. In turn, the town will spend $12,600, and with a tax rate of $1.52 in 2018 that number will rise to $19,000 for additional taxes.
Strathmore is among numerous other Alberta municipalities that are experiencing the pinch and are vexed about the situation.
“Mayor Nenshi was complaining about the same thing,” said Councillor Rocky Blokland. “He was told the cities, towns, and villages are not eligible for any rebates at all.”
The 2016 Alberta NDP budget excludes municipalities from being eligible for a rebate in regards to the carbon tax. The tax only provides rebates for those couples earning up to $100,000 and singles making an annual net income of $51,250.
Strathmore will also be affected in correlation to electricity consumption. While no direct tax on electricity is specified in the budget, the electricity is generated from natural gas generators, Tiede said. Although the town had previously purchased contracts fixing the price of electricity until 2020, the cost of natural gas will impact taxpayers without such exemptions.
Residents will also notice an eight per cent increase in the education property tax, amounting to approximately $371,000, which the town is required to collect for the province, to then be redirected to public education operational funding.
After being asked about changes to the Municipal Sustainability Initiative (MSI) funding, Tiede assured the council that no information about an increase to MSI funding had been released and no details have been provided regarding additional funding for infrastructure. The carbon tax and education property tax will come into effect early next year.