NEWS FILE PHOTO The sun glints though the windows at Medicine Hat City Hall.
cgallant@medicinehatnews.com@CollinGallant
A doubling of the Federal Gas Tax allocation this year would add $3.8 million to the city’s construction budget, and could be slotted in to add new projects in the short term, local officials say.
Ottawa announced Thursday it would provide a one-time boost of $2.2 billion across Canada to the fund cities use to pay for infrastructure projects.
It provided the same boost in 2020, and both increases were applauded by the Federation of Canadian Municipalities as a key recovery priority.
The gas tax is collected on sales of gas and diesel, and is distributed to municipalities through the provinces on a per capita formula for spending on roads, bridges, transportation projects as well as water and other types of public infrastructure.
“There’s some preliminary thoughts, but we have to complete some further analysis,” said Dennis Egert, the city’s managing director of corporate services.
“This is a one-time bump … to be used on high priority infrastructure projects. There are numerous types of work that would qualify, including water, waste water and roads.
“We will be reviewing and prioritizing our capital needs and will determine the best return on our spending. We understand there is flexibility on when the grant can be spent.”
FCM head Garth Frizzell applauded the announcement, and reiterated the city lobby group’s position that a three-year program of increases to gas tax allocations are required after COVID economic slowdown.
“By doubling down today on the most proven and reliable tool available to strengthen municipal infrastructure, the Government of Canada is taking an important step toward fostering the strong, community-rooted recovery Canadians deserve,” he said in a release.
Medicine Hat has already added more than $20 million in construction projects that take advantage of provincial and federal grant programs to bolster activity in the recovery from the COVID pandemic. Other levels of government pay most of the bill while council endorsed an administration plan last fall to cancel some other future projects to keep the overall city spending on capital construction at the same amount.
The original municipal capital program in the 2017-2021 plan called for a capital budget in the range of $25 million.
The boost to gas tax grants would add cash to the budgets of every municipality in Alberta, once the provincial government approves the program they administer.
Based on the most recent schedule of gas tax payments, Medicine Hat’s amount would total $3.75 million. Calgary’s share would be $77 million and Edmonton’s $58.2 million.
Smaller amounts would be granted to regional municipalities like Cypress County ($458,800), Redcliff ($335,300), Bow Island ($122,000), Oyen ($61,200), Empress ($50,000), Brooks ($865,000) and the County of Forty Mile ($214,400).
