Edmonton Sees Annexation as a Fiscal Solution?

Mayor Stephen Mandel in his State of the City focused in on his solutions to his City’s financial issues, at the expense of his neighbours.

Edmontonians and citizens from neighbouring municipalities heard Mandel say “When I see a growing regional partnership once again devolve into myopic self-interest, I worry that petty competition will block our true potential.”

There are indeed self interests at play in this region, as was seen at a February Capital Region Board meeting where Mandel vetoed Parkland's motion to develop Acheson industrial area inside their own boundary, using the Boards voting formula based on population to defeat the plan. Later he told press that he wanted to protect Edmonton’s right to future annexation. Within a month regional citizens learned of Edmonton’s annexation of the Leduc County.

Mandel sites his rational as two fold. He says that the county does not have the capacity to pay the estimated billions in infrastructure costs, leaving the Province to pay for new roads, LRT and overpasses. Mandel also noted later that Edmonton needs to grow and that “significant portions of the potential tax base of the region can use boundaries to escape paying a fair share”. 

In the State of the City address, Mandel noted that small municipalities receive a disproportionate share of policing, infrastructure, affordable housing and other grants, while the regional growth plan remains half-done, he said, calling on the province to re-engage in the issue. The next day in a television interview he repeated that there are inequities and that teeth must be put into the regional structure.

Just to balance this picture with some fiscal facts.

• Edmonton is the second largest recipient of MSI funding in the province, after Calgary.
• Edmonton’s population of 850,000 received over $170 million in transfers from the province.
• The 24 surrounding municipalities, with a population of 350,000 received about 70 million in MSI funding this year. 

When compared on a per capita basis, these numbers don’t translate to any significant inequities. These municipal infrastructure funds are paid by the taxpayers of Alberta, including the Capital Region, Calgary, and rural Alberta. The taxes our residents pay are meant to be used in a fair manner for the betterment of all citizens.

Now let’s talk about the 23 smaller municipalities that make up the capital region. Citizens of the Capital Region contribute indirectly to the economy of Edmonton, through shopping in the capital region, working in the capital region etc. Edmonton is the net beneficiary through taxation of those businesses. Residents of Strathcona County and the other surrounding municipalities will not directly benefit from the investment in a new Hockey arena, but Mandel wants provincial money for it.

Mandel takes issue that ‘Edmonton receives $16 per cap allocation on policing while many  neighbours have their policing costs funded 100% by the province”.

Having approved a costly policing budget every year, I can tell you that Strathcona County pays the cost of our own policing. Mandel states that they ‘often pay the region’s share for link up roads to the Henday’. I do however know that Strathcona County pays for linkages to all provincial highways and all transit within our borders. Doesn’t most of the Henday actually lay within Edmonton’s boundary? We also supply commuter service to Edmonton so that the 450 Edmonton companies that service the oil industry and the provincial government have staff. Our own residents pay for this inter-municipal service. Like many of the surrounding municipalities, we have our own comprehensive medical facility (albeit not open yet), courthouse, schools.

Mandel holds up Calgary’s annexation model as a solution for Edmonton. “the ability to annex – and keep 90% of the regional residential and industrial tax assessment within its boundaries has made a fundamental difference”.

No doubt!

But a fiscal solution for a large metro area should not come at the cost of the small municipalities and rural areas. The wave impacts of mega metro sprawl have its downside at the provincial level and a dramatic effect on the surrounding municipalities.

The fiscal ask just keeps getting larger. It is folly to feed the metro appetite by carving up our smaller municipalities. 

Toronto would be a good example of a city allowed to gobble up its neighbours and the resulting issues. Another city feeling the consequences of urban sprawl is Detroit which expanded outwards and is now trying to get citizens to move to the core. In this economy it is not able to service such a large area.

Cities around the world facing space constraints have taken up this model with the recognition that it cuts the costs for them to service a larger area by keeping their citizens in a more contained space, reducing costs for street maintenance, policing, fire, etc.

A fiscal solution for a large metro area should not come at the cost of the small municipalities and rural areas. Edmonton needs to strengthen its focus on self sufficiency and efficiencies not unrestricted growth to solve its problems. 

Enhanced cooperation within the Capital Region Board is the key to a better future for all municipalities; equitable cooperation and collaboration not annexation will insure our shared prosperity.