Council is debating next year’s operating budget, which comes in at $568 million, between Dec. 1 and 4. This is a nearly 21 per cent drop from the $718.3 million operating budget passed for Budget 2020 in November 2019, but 2.27 per cent smaller than an amended budget passed in May.
Even before Wood Buffalo entered its current economic crisis, council was expecting to debate a leaner budget for next year. The municipality has cut the tax class paid by oil companies by 26 per cent this year, continuing a trend that began in 2016.
The rural non-residential tax, which is what oilsands companies pay the municipality, is 7.78 times higher than what those in rural residential pay. During last year’s budget talks, it was 12.45 times higher and in 2016, it was 18 times higher. The province is requiring the municipality lower this difference down to a 5:1 ratio.
Shortly after council passed Budget 2020, an oil price war between Saudi Arabia and Russia flooded the world’s markets with cheap oil. Then COVID-19 brought global demand to a halt and crippled economies.
Locally, flooding in late April caused $522 million in damages, according to the Insurance Bureau of Canada. In May, council adjusted Budget 2020 to reflect a 20 per cent revenue drop from property taxes, meaning a $168 million loss from 2019.
While the proposed 2021 budget is smaller, Councillor Phil Meagher said some infrastructure projects that were already budgeted, such as finally bringing running water and sewage services to rural communities, are almost finished.
“I’m more concerned about the operating, keeping things going that we have, because there are some capital projects that are completed,” he said. “There are capital projects that are being redirected or prolonged to give us time to catch up to it because of what could happen.”
Meagher predicts hard decisions will have to be made when community groups compete heavily over limited grant funding. In Budget 2020, $30.2 million in grants went to local non-profit organizations and another $54 million went to 25 organizations under the Community Investment Program Capital Grants.
This included $20 million to the Regional Recreation Corporation, $15 million for the Fort McMurray Airport Authority, $4 million for the Wood Buffalo Economic Development Corporation, $2.2 million for LocalHERO.
A controversial $16.8 million from reserves for an art gallery at Keyano College was cancelled.
“I think people are going to be absolutely more concerned about their grants this year in order to keep their social profits going, or for-profits if they have grants they can apply for,” he said.
A full draft and breakdown of Budget 2021 will be published Friday on the municipality’s website. What is known is it will include funding for flood mitigation, support residents impacted by April’s flood, improve accessibility to police and bylaw services, open a new training area for Regional Emergency Services, and launch a drone program for emergency workers. Funding for downtown and waterfront revitalization is expected to be prioritized.
Anyone who wants to speak to council must register before the day of the meeting by emailing Legislative.Assistants@rmwb.ca or calling 780-743-7001.
Council will begin Budget 2021 talks with the Community Investment Program on Dec. 1 and the operating budget on Dec. 2. The capital budget and any continuing discussions on the operating budget will be discussed Dec. 3. If needed, there will be an extra day for meetings on Dec. 4.
All meetings will be held virtually and will begin at 9 a.m. The meetings will be streamed online and broadcasted on Shaw TV.
Correction: An earlier version of this article indicated that the provincial government had cut the property tax class paid by oil companies when it is in fact the municipality. The article also started that the lowest tax class is urban businesses when it is in fact the rural residential tax class. Funds for the Keyano project came from reserves, not a grant as previously stated. The article has been adjusted to reflect these and the Today apologizes for the errors.