Decades-long provincial underfunding threatens rural infrastructure, municipalities say

Published on Sep 15, 2025 at 05:56

By George Lee, Local Journalism Initiative Reporter

A critical need for infrastructure spending persists in rural Alberta because of decades of provincial government neglect, says the president of the Rural Municipalities of Alberta.

Kara Westerlund, a councillor in central Alberta’s Brazeau County, said the unique needs of the countryside aren’t met in current funding levels and models.

Shortfalls isolate residents, limit development, degrade infrastructure and make the demands of industry difficult to meet, she said.

The UCP and its current government are not solely responsible, she emphasized. “This is an accumulation from governments over the last 20 to 30 years making cuts to infrastructure in rural Alberta, and it’s coming to a head,” Westerlund told The Macleod Gazette.

With the current legislative session resuming Oct. 23, the UCP is signaling that belt tightening lies ahead. The RMA, meanwhile, is getting set for its fall convention Nov 17-20 at the Edmonton Convention Centre. 

Representing 69 municipal jurisdictions that blanket more than 85 per cent of the province’s landmass, the RMA estimates that an infrastructure deficit affecting members has reached $17.25 billion. Given current funding trends, the deficit will grow to more than $40 billion by 2028, the association predicts.

The figures come from an RMA analysis of provincial and municipal road, bridge and utility infrastructure assets.

The current deficit for roads and bridges alone is about $14 billion, the RMA calculated.

Transportation and Economic Corridors Minister Devin Dreeshen said that provincial and municipal assets face funding pressure and decisions that lie ahead will be difficult.

An influx of new Albertans and a drop in resource revenue are responsible, Dreeshen said. Alberta’s population is around the five-million mark and the province’s budget deficit is forecast to hit $6.5 billion in 2025-26.

The province has about 5,400 of its own bridges and over 64,000 kilometres of its own pavement to look after, he said.

“We could obviously use more money for our provincial assets. And I know that municipalities could use more money for their assets as well,” said Dreeshen, the member for Innisfail-Sylvan Lake.

But saddling future generations with large provincial debt and high taxes is not the way to go. “The demand is always greater than the dollars that we have available,” the minister said.

Deciding infrastructure spending is “always a tough conversation to have around the Treasury Board table,” he added.

Major infrastructure bucks for municipalities arrive in several envelopes, including a three-year capital plan under Dreeshen’s ministry worth $8.5 billion in the last budget. The budget line was up nearly four per cent from 2024, and about $4 billion of it earmarks projects that, by the government’s reckoning, benefit rural communities.

The Local Government Fiscal Framework, meanwhile, increased its allocation to RMA members by about $20 million to $170.5 million in 2025-26, the RMA calculated. But there’s still been a reduction of more than 27 per cent in average annual funding between 2013 and 2023 through a program the LGFF replaced.

Accounting for inflation, the funding drop is closer to 40 per cent, the RMA contends, which leaves municipalities struggling to accommodate population growth and economic development. Also, the LGFF formula tilts towards urban capital and operational needs, the RMA says.

Municipal Affairs Minister Dan Williams said that for now the local framework will stay in its current form. Although he said he appreciates the RMA’s concerns, he noted that revenue is tight and municipalities received a bump in the last budget.

“I’m open to conversations, but I’m not interested in upending the formula every time we go through an election cycle,” he said.

Municipalities have asked to share the largesse of strong economic times, said Williams, the member for Peace River. “That means they also have to share when the formula reflects lower provincial revenue.”

A third provincial funding program is the Strategic Transportation and Infrastructure Program, or STIP, which an RMA position statement says also comes in with funding below historic levels.

STIP, which cost shares projects with rural and small urban municipalities, is forecast to provide RMA members $33 million in 2025-2026 and $35 million in 2026-2027, says the position statement. It puts money towards resource roads, bridges and culverts on municipal roads, community airports and special transportation initiatives like roads for parks.

“Given the growing infrastructure deficit, Alberta’s recent economic growth, and the role of rural roads and bridges in supporting resource industries, current STIP funding is wholly inadequate and must be increased to ensure municipalities can continue to care for the majority of Alberta’s infrastructure, without increasing the financial burden on rural areas,” the statement says.

Dreeshen pointed to $118 million in grants to municipalities for water and wastewater projects in the 2025-26 budget, some of which reflect the extra demands of the resource industry.

Some projects would take a decade or more to get off the ground without provincial support, he said. And the partnerships also connect smaller municipalities to provincial experience and expertise.

Dreeshen said the contribution of rural Alberta to the economy is not unnoticed. Through all funding programs, the goal is to be “strategic partners” with municipalities by hitting projects with the most need and impact.

Westerlund said funding shortfalls force some municipalities to close bridges and reduce road maintenance. Other services also suffer and property taxation is forced up.

Despite the programs Dreeshen mentioned, water and wastewater projects are particularly challenging. 

A wastewater treatment plant could easily cost a rural municipality $60 million. “You just can’t come up with that money overnight,” she said.

Demands of industry on rural Alberta are easily overlooked, Westerlund said.

“People need to realize that the oil and gas industry doesn’t come from downtown Edmonton or Calgary or Red Deer or Grande Prairie. It comes from the rural landscape,” she said.

Rural Alberta is also “feeding the world” and “you don’t see logging in the city.”