Alberta towns, villages face challenges due to population, job issues

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A new University of Calgary research paper says Alberta villages and small towns face serious fiscal challenges, but suggests Alberta’s case-by-case way of helping struggling municipalities deal with their problems is appropriate.

Smaller municipalities have seen their populations stagnate or decline while job opportunities and young people leave for bigger cities, and also face low birth rates and the attraction of big cities for immigrants looking to settle in the province, says the paper, called “Assessing the Viability of Smaller Municipalities: The Alberta Model.”

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“Given the nature of changes both in our population and in our economy it’s just become more difficult for smaller towns and villages to sustain themselves over time,” said Kevin McQuillan, a research fellow with the University of Calgary’s School of Public Policy and one of the study’s authors.

The research paper, released Tuesday, says the “vast majority” of Alberta’s 332 municipalities are in good financial shape. To help struggling municipalities, the Alberta government uses municipal viability reviews, which address the situation on a case-by-case basis. A total of 26 municipalities have undergone reviews, and half – 13 – have voted to dissolve and become hamlets in their counties or municipal districts. There are three viability reviews currently underway, for the villages of Delia and Bittern Lake, and the summer village of Ma-Me-O-Beach.

“(The viability review process) is quite a distinctive way of approaching a problem that we see right across Canada and other countries too, in England and parts of Europe, in Australia,” said McQuillan.

Many of the struggling municipalities have a declining and aging population. Among the towns the province has reviewed, only one grew in population between 2016 and 2021, says the research paper. Most of the reviewed villages saw a drop in population, and in nine communities the population’s median age was over 50, it says.

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The municipal council sometimes asks for a review, or sometimes it’s initiated by Alberta Municipal Affairs, said McQuillan. He said local residents have quite a bit of input during the process, which ends in a referendum to see whether community residents dissolve as an independent municipality or continue to deal with the issues brought up during the viability review.

“The idea of allowing a vote for the community and certainly encouraging participation is a good one, but it does raise some issues if a community decides, ‘No, we don’t want to dissolve,’ but the problems persist and may even get worse over time,” said McQuillan.

He added that calls into question whether there needs to be another direction the Alberta government can take to order the municipality to be dissolved or reorganized in some way.

While Alberta hasn’t run into those kinds of problems yet, there are some communities that have decided to stay independent but continue to face problems such as a declining and aging population and infrastructure deficits, said McQuillan.

Emotion also plays a part in some resident’s preference to keep their community’s municipal status, with some having lived in their community for many years and having ties to the community going back several generations, said McQuillan. He recalled one local official telling him that the community is named after the person’s great-grandfather.

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“It’s distressing for them to see it kind of winding down and dissolving and losing its status as a village or a town,” he said.

But even if a community does dissolve, it’s not a “cure-all,” the paper’s authors point out, and merely transfers the municipality’s problems to the rural municipality that absorbs it. That’s a worry for the rural municipality, particularly in situations where there’s a big backlog of infrastructure projects that need to be addressed, said McQuillan.

“How much help will there be for them if they’re suddenly faced with having to take on responsibility that has dissolved,” he said.

Deborah Reid-Mickler, vice president of villages and summer villages for Alberta Municipalities, said most smaller towns and villages are like small community businesses, such as restaurants, that run on very small margins. 

“We basically run to balance (the budget) and run on very lean and tight margins all the time, and what means is that you only need one small thing to upset the balance,” said Reid-Mickler, who’s also the deputy mayor of the southern Alberta village of Duchess, which has a population of roughly 1,100.

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Increasing costs for infrastructure projects are pricing smaller communities “right out of the market,” she said.

“Even with the funding that we get, we’re looking at years before you can do anything with it on a major front with it,” said Reid-Mickler.

Alberta’s 2024 budget includes $724 million through a new program, the Local Government Fiscal Framework, for municipal infrastructure projects. The government would provide a total of $2.4 billion over three years, but Alberta Municipalities president Tyler Gandam has said the organization wanted over $1 billion more than what was promised in the budget.

An official for the village of Champion, a southern Alberta community that went through a municipal review and kept its municipal status, said every Alberta municipality has infrastructure issues. 

“I don’t think there’s any municipality in the province that doesn’t have infrastructure concerns as far as the funding and the infrastructure deficit that has been built over the years,” said Derek Kwiatkowski, the village’s chief administrative officer. 

The economy has changed dramatically since Alberta villages and small towns were established, said Kwiatkowski, with the village he runs being incorporated as as village in 1911.

“A lot of places haven’t kept up with that trend,” said Kwiatkowski.

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