Much of Lethbridge’s financial strain is caused by the provincial government
By Lethbridge Herald on January 13, 2026.
For years, Lethbridge residents have been met with a recurring refrain: that ballooning municipal budgets, climbing property taxes, and the erosion of public services are the unfortunate but unavoidable byproduct of “economic realities.” A close look at our finances reveals that our city’s economic strain is not an act of nature; it is the calculated result of policy choices spearheaded by Danielle Smith’s UCP government.
The provincial government has framed its recent manoeuvres as “fiscal discipline,” but on the ground in Lethbridge, the reality is far more predatory. Local revenue streams have been chocked while the government has simultaneously offloaded costs onto the city. And the province has also effectively weakened the very institutions that anchor our local economy.
The dismantling of photo radar as a municipal revenue source is a prime example of this sleight of hand. Previously, Alberta municipalities captured tens of millions of dollars from unlawful speeders. These were funds that were legally mandated to support road safety, policing, and vital infrastructure. By stripping this away, the province hasn’t just removed a “cash cow”; it has left a massive hole in the local budget with no meaningful replacement. When the province unilaterally removes revenue while leaving the local responsibilities untouched, it is the property taxpayer who is forced to pick up the tab.
Provincial grants tell a similar story. For years, our city relied on predictable provincial transfers for capital projects such as roads, water systems, recreation facilities and other essential infrastructure. That stable funding came through the Municipal Sustainability Initiative (MSI). Those funds provided billions of dollars to municipalities across the province over nearly two decades. But in 2023 the MSI was ended and replaced with the Local Government Fiscal Framework (LGFF). For Lethbridge and many other Alberta communities, that shift has meant a nearly 37 % reduction in provincial capital funding, with far less available for core projects than under the old model. City council describes the new framework as “tight,” forcing them to freeze or delay infrastructure work and to prioritize only maintaining assets rather than building for the future.
It’s not just cuts in traditional grant programs. The Grants in Place of Taxes (GIPOT) program (a program which is designed to compensate municipalities for province-owned properties that don’t pay local taxes) was cut in half in recent years for Lethbridge. Between 2018 and 2024, GIPOT funding plummeted from about $1.2 million to roughly $586,000, a 50 % reduction that forced the city to make up more than half a million dollars annually from local taxpayers.
Only now, in the 2025 provincial budget, has that funding begun to be restored. This year it’s back to 75% of what the city would have collected in tax revenue in 2025, with full restoration to 100% expected next year. But (and this is a big BUT) there’s no compensation for the years of shortchanged revenues that already cost Lethbridge taxpayers hundreds of thousands of dollars.
Worse still is how the province structures education property taxes. In 2025–26, the education requisition rate rose by 13.8 %, after prior increases of 6.1 % and 3.2 % in previous years. This sharp increase isn’t due to any decision by Lethbridge City Council. It’s imposed by the province. And it shows up on your property tax bill. You see larger tax bills, and Lethbridge and all municipalities bear the administration cost and political blowback while the province collects and controls the funds.
We also feel the cost of provincial mandates that add expense but no revenue. A prime example was the recent municipal election, where the province’s insistence on manual vote counting instead of electronic counters added tens of thousands of dollars in staffing and overtime costs for Lethbridge.
The city just recently received an Award of Excellence from an association which represents public finance officials throughout the US and Canada for its strong financial management. The city’s finance department needs this financial stewardship to weather the strain imposed by the provincial government.
The pressure doesn’t stop at city hall. Lethbridge’s post-secondary institutions, the UofL and Lethbridge Polytechnic are among the city’s largest employers and economic drivers. They too have been hit hard by provincial funding decisions. Since 2019, Alberta universities have seen operating grants reduced by roughly 20 per cent in real terms. At the UofL, this has translated into tens of millions of dollars less each year compared to previous funding levels. The consequences are predictable: hiring freezes, fewer course offerings, larger classes, and reduced student support. And less money going into the community.
Lethbridge Polytechnic faces even greater vulnerability. Polytechnics rely more heavily on tuition revenue, particularly from international students, to offset insufficient operating grants. When funding is unstable and enrolment fluctuates, institutions are forced to cut programs and positions. Those job losses do not just affect campuses, they ripple through the local economy, reducing spending and weakening the city’s long-term growth prospects.
Strong cities and strong post-secondary institutions are investments, not liabilities. Lethbridge’s financial strain is not inevitable. It is the consequence of provincial choices, choices made by Danielle Smith and her UCP government. Until those choices change, and until local advocacy becomes more effective, Lethbridge will continue paying the price.
Ken Moore is a longtime resident of Stirling and retired news director at CFAC Television
14-13
Yet, despite the shenanigans of dumping costs to municipalities and families (with more and greater service fees), the Smith government was still able to run a $5+ billion dollar deficit. Even while enjoying good oil prices. Worse to come as Western Canadian Select oil futures turn down.
Maybe we’ll see fewer tax breaks to corporations, fossil subsidies, and coal company giveaways – though, to be fair, this government never did promise fiscal responsibility. They only promised social engineering.
yeah, but if it wasn’t for the ndp being in power millions of years ago smith would never have had to run that deficit, nor would she have had to line big coal pockets, nor would we have no money in our trust fund, even though norway has a trillion (and proof, norway did not ever have the ndp there), nor would our health care be in a state of emergency, nor would have to have our police, nor would we have to have our own pension plan, nor would we have all that toxic mess to clean after allowing the oil robber barons to steal our wealth and leave us a hundreds of billions of dollars cost to mitigate all of that.
heck, if it wasn’t for the ndp, smith would be able to look after the most vulnerable, rather than have to steal federal money given for those on aish so as to ensure the biggest sleazes get more than their fair share.
The UCP sure are good at blaming others for their incompetence.
Indeed, Mr. Moore. Dr. Andrii Pavlov and Prof. Vitalii Lunov speak, in part, to the why by UCP design engineered to insure failure to enable more consolidation of power for the premier and the cabinet.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4555542
News director!!!! No need to read this.
A pathetic but totally predictable response from a cantankerous curmudgeon.
Great comments Ken . Those of us who had ties to oil industry know that by destroying Lougheed’s oil and corporate tax structures Albertans have been screwed out of $1.2 trillion and by destroying Lougheed’s protection on our mountains we lost $238 million in lawsuit settlements with another $10 billion to go thanks to these Reformers, that’s how stupid it is.
You are correct. Municipalities in Alberta are still reeling from Ralph Klein’s foolish cuts, and the UCP have made matters worse.
Yes, Lethbridge taxpayers are still paying dearly for the addiction crisis the NDP caused when it governed Alberta and brought in all of the failed harm reduction policies and Supervised Drug Consumption Sites from BC even though BC had them in place since 2003 and fatal overdoses, numbers of addicts and crime continued to rise every year after 2003. 22 years later and they still don’t get it, but that is the NDP for you!
Locally those policies forced on our city against our wishes cost multiple businesses to fail, cost tens of millions of local tax dollars and cost hundreds of lives! Take a good look in the mirror when you accuse a government attempting to bring some fiscal responsibility to our province.
How much has this massive NDP operation to bring down our provincial government, collaborating with unions, special interest groups, and other cancel culture activists??? This began over a year ago!
How much will that cost the taxpayer in the end? First estimates by Elections Alberta said each recall would cost $1.1 million, but after it went over 20 it lower those costs to $330,000 per recall. Currently we are looking at over $10 million in costs to the taxpayers just to process the recalls. Then there is another early election! What is that going to cost?
The issues from the drug problems the NDP brought to our city, with all of the related issues that come with it: increased organized crime, increased prostitution, human trafficking and sex trafficking, child exploitation and pornography, stolen goods brokering, auto theft, extortion, property damages, vehicle break-ins and more!!!!
That has cost the taxpayers in this city tens of millions each year just paying for increased police, fire, paramedics, watch program, encampment outreach, D.O.T., Clean Sweep, funding of non-profits to deal with the issues, and many more services to compensate for impacts!
Lethbridge would look like the Vancouver DTES if the UCP didn’t take over and begin to reverse the damages done by the NDP!
A reminder that the greater Vancouver DTES is only 20,000, yet they pump over $400 million annually into that small area for housing, social services and other supports services supplied by over 270 non-profits!
That is where we would have been at if we had continued with the NDP government!
The UCP has saved several hundred lives with their treatment recovery policies which are not fully operational, todate and tens of millions in related costs!
More NDP propaganda!
Thanks for adding to biff’s post above. He must have forgotten about the NDP causing addictions across North America.
haha! thanks for the good laugh!
indeed – and that is why neudorf is going to soon be announcing a name change in lethbridge; well, a guy named ryan tanner will be standing in for him at the naming rights ceremony. galt gardens will heretofore become ndp park, because of the addictions they have created.
curious, say what, and you are, quite sadly, not alone in your outlook, but why ever on the high horse about the ndp and your poor belief that they cause so much of what ails us, and you never shout out about how the cons since at least the 90s in this province have overseen the most egregious wrongs in alberta. and, we are not talking about just 4 years, as were the ndp, but 30 years of graft, nepotism, ineptitude, waste. they have overseen the siphoning of our wealth into the hands of the few, while undermining the health and welfare of the many.
so, let me ask, how did the ndp, in 4 years, and just a few years ago, manage to go back in time and cause so much harm to our province when they never had any effect on legislation and govt practices whatsoever before their time in power here?