Published on September 21, 2021

A Balanced Budget Isn’t Always a Healthy One

Municipalities are legally required to pass a balanced budget each year. However, passing a balanced budget does not mean that it is a sustainable budget. In order to have a sustainable budget, you need to be able to balance out normally occurring expenses with normally occurring revenues.

Areas of Risk

  1. Inflationary Costs
    Each year, the City needs to figure out how to support rising inflationary costs. Our external contracting expenses increase each year, and we need to decide how we will foot the bill. For example, power costs annually increase for residents and the City. We need to decide how to cover these costs - new revenue streams, increased taxes, decreased services, etc. 
  2. Depleting Reserves
    It is best to live within our means. Rainy day funds are there for a reason, but if we are continually drawing on them then we leave ourselves in a dangerous position should an economic downturn hit. Pulling from these reserves is not a sustainable way to balance the budget.
    • COVID-19 Recovery Fund
      The challenges that municipalities are facing as a result of the pandemic are unprecedented, it’s anticipated to result in long-term financial, economic, and social impacts. As a result, the City of St. Albert has had to adjust and adapt its operations, services and programs to accommodate this new reality. Thankfully, we have one-time COVID-19 Recovery Funding from the province to help mitigate this impact as the community recovers.  This is a finite amount of money. If non-tax revenues do not recover to pre-pandemic levels in the near future, we will need to look for other ways to fund our ongoing programs and services.
  3. Revenue Sources
    As we move forward, the City will need to prioritize its limited resources and identify new revenue sources.
    • Reduced Government Grants
      Our capital grant funding from the Province has been reduced, making it difficult to plan. We find ourselves in a predicament where we are trying to fund our infrastructure deficit (by allocating money to our repair, maintenance and replacement budget) and balance the budget all at once. 
    • Impact of COVID-19
      COVID-19 has significantly impacted our revenue streams over the past year. The City’s response to the pandemic has been guided by the need to protect residents, visitors, patrons and staff, while also exercising fiscal responsibility. There are many municipal services that we needed to continue to provide (i.e., garbage pick-up, fire services, etc.). However, by providing those services we incurred expenses during a time when we had decreased revenues. 
    • Non-Residential Tax Base
      When comparing cities in Alberta, St. Albert remains one of the highest residential tax bases at almost 80 per cent residential to 20 per cent non-residential. From 2008 to 2019, the City moved from 85:15 to 80:20. If we are to tackle increased taxation over the next few years, we need to reduce the burden on household tax increases by increasing the non-residential base. 
    Since April of this year, we have been engaging with the community (Planning Forward: Setting the Context) to build a greater shared understanding of the financial challenges facing the City. Complex problems need innovative solutions. We recognize that St. Albert is made up of remarkable people with vast experiences, and we have enlisted residents to help us tackle this challenge. To avoid either raising taxes or reducing services, the City has been looking to crowdsource ideas of new revenue streams.

2022 Budget

The budget planning process is a full year initiative. Preparation begins in early January for the following budget year. The 2022 Proposed Budget will be presented to Council in November and adopted prior to the calendar year end December 31. Watch for updates online, visit

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Last edited: September 22, 2021