Budget 2019: Province 'ripped up' deal with city, Edmonton mayor says

Thursday's provincial budget is a "significant step backward for city-building in Alberta" that will leave municipalities in the lurch, says Edmonton Mayor Don Iveson.

"Edmontonians now face the prospect of falling behind again on infrastructure as we did in the '90s, or paying more in municipal debt interest payments or, or both," Ivesonsaid in a statement after the UCP government tabled its first budget.

The budget calls for theMunicipal Sustainability Initiative, or MSI, to be reduced by $94 million in 2020-21 and $142 million in 2021-22.

The government also plans to repeal the city charters for Edmonton and Calgary, reducing their base spending by $45 million a year.

• Roofs and roads hinge on provincial dollars, Edmonton mayor says
• Edmonton's 4-year budget plan murky until province steps up

"We had no sense that the city charter fiscal framework was going to be ripped up today," Iveson said.

The two cities had worked with the province for years on the charter deals to give them more power in how they spend money.

Iveson noted that the United Conservative Party's electioncampaign platform included keeping the charters in place.

"That's very troubling," he said, calling it a "profound disappointment and a broken campaign promise."

• First phase of city charters for Edmonton, Calgary now complete
• Edmonton gets $90M boost from province for transit projects

The mayor, who was about to board a plane for a business trip to the Netherlands on Thursday afternoon, reversed course from Edmonton International Airport and headed for the legislature.

He called a special council meeting for Friday.

"We're going to have a lot of work to do to determine which projects are going to have to be cancelled that will be affected by this, that willhave an economic impact in terms of jobs in terms of consumer confidence," Iveson said.

The budget also cancels theAlberta Community Transit Fund, affecting the city's ability to make improvements at Stadium LRT Station and upgrade Terwillegar Drive to an expressway.

Coun. Andrew Knack said the city wascounting on amenities and infrastructure for a growing population.

"it's ahuge concern to see such a drop in funding," Knack said."[It's] seemingly at odds with what I think theycampaigned on, which is building the economy, creating jobs," Knack said.

While the provinceis maintaining $3 billion for Edmonton and Calgary LRT projects, the money won't be flowing until 2022-23. That could mean a delay in buildingthe Valley Line West LRT.

Disconcerting projections

The city's chief economist, John Rose, said he's concerned the government's projections on economic growth and oil prices are on the high end. The budget forecasts the price of a barrel of West Texas Intermediate to range from $57 US this year to $63 by 2022-23.

"I don't know where they got that stuff from, quite honestly," Rose told CBC News.

"My concern is that this is not going to be the first round," he said. "This is only going to be the beginning because they're not going to be able to hit their targets."

Rose projected the next provincial budget, expected in March, will be just as difficult to deal with.

• Budget 2019: Albertans to pay more as United Conservative government reins in spending
• Budget 2019:Alberta's post-secondary budget reduced, tuition freeze removed
• Budget 2019: Health care spending up one per cent