Municipalities have been allocated more than $14.6 billion since the Municipal Sustainability Initiative (MSI) program launched in 2007. Communities have been able to build and rehabilitate:
- roadways and bridges
- water and wastewater systems
- public transit facilities
- recreation and sport facilities
- other key local priorities
Future of MSI
MSI ends in 2023 and will be replaced with the Local Government Fiscal Framework (LGFF) beginning in 2024. The LGFF will include $722 million in capital funding legislated under the Local Government Fiscal Framework Act and non-legislated operating funding.
The change from MSI to LGFF provides an opportunity to seek input on the details of the new program, including the allocation formula and program administration. The Government of Alberta is currently engaging with local governments to seek their input in these areas.
View the MSI allocation estimates (PDF, 406 KB) for 2023, the last year of the program. These estimates were prepared based on the annual MSI program target of $515 million announced in Budget 2022 and are subject to legislative approval of Budget 2023.
Budget 2022 provides capital funding under the MSI and the LGFF that will total nearly $1.7 billion over the next 3 years. This includes $485 million in MSI capital funding for 2022 and 2023.
From 2021-22 to 2023-24, MSI capital funding will average $722 million per year. This is a 25% reduction over 2020 levels, which brings Alberta funding more in line with municipal funding in other provinces. However, MSI capital funding was front-loaded in 2021, providing $1.2 billion to help municipalities recover from the pandemic and plan for future capital projects. This front-loading means that MSI funding for 2022 and 2023 has been reduced proportionately. In 2022, municipalities will receive $485 million in capital funding.
2022 MSI operating allocations were set at the 2021 level.
Transition of MSI to LGFF
The last program year for MSI is 2023, and several program changes have been implemented to facilitate program closure and the transition to the LGFF in 2024.
View the Overview of the Changes to the Municipal Sustainability Initiative Program Guidelines (PDF, 341 KB) for an overview of the changes in effect for 2022 and 2023 for the MSI operating and capital components.
For more details on these changes, we encourage municipalities to review the updated MSI capital and operating guidelines.
The key program changes for MSI capital are as follows:
MSI Guidelines Section 6.2: Carrying Forward Funds
- The time limits to spend MSI capital funding will be strictly enforced when MSI ends in 2023. Municipalities who have not expended their 2007 to 2018 allocations, including credit items on or before December 31, 2023 will be required to return those funds to the Government of Alberta and/or if applicable, the municipality will forfeit any 2007 to 2018 unpaid allocations. MSI funding including credit items, from 2019 to 2023 will be transferred to the LGFF. Municipalities will still be able to access their 2019 to 2023 allocations under the LGFF.
MSI Guidelines Section 8: Application and Amendment Process
- Municipalities will not be able to submit any new MSI capital projects and/or MSI capital project amendments after December 31, 2023. However, new capital projects or existing MSI projects that may require additional funding can be considered under the LGFF.
MSI Guidelines Section 8.4: Maximum Project Commitment Limit
- The maximum amount of MSI capital funding municipalities can commit to projects is based on total MSI allocated to date (2007 to 2022), including credit items plus the estimated 2023 MSI funding allocation (rather than the previous limit calculated at 5 times the current year allocation).
MSI Guidelines Section 10.1: Payments
- Allocation payments will only be made in a single installment (rather than having the option of a 50% payment).
- Allocation payments will only be issued to municipalities whose previous year Statement of Funding and Expenditure (SFE) reporting has been certified (rather than upon SFE submission).
The key program changes for MSI operating are as follows:
MSI Guidelines Section 6.2: Carrying Forward Funds
- The time limit to spend MSI operating funding will be strictly enforced when MSI ends in 2023. Municipalities are strongly encouraged to expend their MSI allocation, including credit items, on/before December 31, 2023. Municipalities who have not expended their MSI operating allocations, including credit items, by December 31, 2024 will be required to return those funds to the Government of Alberta and/or if applicable, the municipality will forfeit any unpaid allocations.
MSI Guidelines Section 8.1: Payments
- Allocation payments will only be issued to municipalities whose previous year SFE reporting has been certified (rather than upon SFE submission).
MSI Guidelines Section 8.2: SFEs
- Effective 2022, operating SFEs cannot be reset under any condition.
MSI funding is distributed to municipalities after legislative approval of the program budget, submission of sufficient project applications, and certification of SFEs. In addition, to receive payment of 2022 MSI allocations, each municipality is required to have an executed Amending Memorandum of Agreement.
Use of all funding must follow the terms and conditions outlined in the MSI capital and operating guidelines.
MSI funding formula
The MSI funding formula is based on municipal population, education tax requisition and road length information. The formula also includes base funding for all municipalities and sustainable investment funding for municipalities with limited local assessment bases.
A portion of MSI funding is allocated via the funding formula that was in place under the former Basic Municipal Transportation Grant (BMTG) program, which was consolidated with the MSI in 2014. The BMTG funding formula is based on municipal status.
- Calgary and Edmonton receive funding based on litres of taxable road-use gasoline and diesel fuel sold in the province.
- Remaining cities and urban service areas receive funding based on a combination of population and length of primary highways.
- Towns, villages, summer villages, improvement districts and the Townsite of Redwood Meadows receive funding based on population.
- Rural municipalities and Metis Settlements receive funding based on a formula that takes into account kilometres of open road, population, equalized assessment and terrain.
MSI funding and individual allocations require legislative and ministerial approval as noted in program guidelines.
Allocation amounts by municipality
View 2022 and prior years' MSI allocations.
All municipalities in Alberta are eligible for funding based on the terms set out in their long-term MSI funding agreement. For the purpose of municipal grants, improvement districts, special areas, Metis Settlements and the Townsite of Redwood Meadows are considered municipalities.
Municipalities determine projects and activities to be funded based on local priorities within the general criteria set out in the program guidelines and are encouraged to take a long-term approach to planning for capital projects. Municipalities may choose to contribute funds for use towards eligible MSI projects to other municipalities, regional services commissions or non-profit organizations.
A detailed list of eligible project activities is available in the MSI capital and/or operating guidelines located in the Program resources section.
Eligible capital projects include municipal:
- public transit vehicles or facilities
- emergency services facilities or equipment
- water and wastewater systems
- solid waste management facilities or equipment
- regional and community airport facilities or equipment
- other municipal buildings such as recreation and sports facilities, libraries, public works buildings and cultural and community centres
Eligible operating projects include:
- capacity building activities that improve efficiency or effectiveness
- municipal services
- planning activities
- assistance to non-profit organizations
MSI capital and operating guidelines:
- Overview of the Changes to the Municipal Sustainability Initiative Program Guidelines (PDF, 341 KB)
- MSI Capital Application Guide – Question 4: Functional Project Category (PDF, 159 KB)
- MSI Capital Application Guide – Question 5: Resulting Capital Asset (PDF, 147 KB)
SFEs for the 2021 program year are due by May 1, 2022.
Municipalities can submit their capital and operating SFEs through the Municipal Sustainability Initiative Online (MSIO) system.
All MSI documentation, including MSI capital project applications and amendments, and capital and operating SFEs, must be submitted through the MSIO system.
These documents are not accepted through email, fax or post. A signed copy of the MSIO documentation is not required.
Access to MSIO is available through MAConnect, the web portal that provides Government of Alberta staff and external stakeholders secure access to Municipal Affairs' key business applications.
Individuals can request access to MSIO through their municipal MAConnect Stakeholder Administrator. Municipalities that need to update their Stakeholder Administrator will have to submit a new Stakeholder Agreement before requesting access to MSIO.
To request a Stakeholder Agreement or for MSIO support, see the Contact section.
MSIO user guides
- MSIO Capital Application User Guide (PDF, 2.7 MB)
- MSIO Operating User Guide (PDF, 200 KB)
- MSIO Capital SFE User Guide (PDF, 564 KB)
- MSIO Operating SFE User Guide (PDF, 316 KB)
Accepted projects by municipality:
- MSI – Capital: Accepted Projects Report
- MSI – Operating: Report on Government-wide Objectives for Municipal Grant Funding
Connect with the programs:
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