'On standby to help': Alberta Premier Danielle Smith concerned with turmoil at Edmonton city hall

“No one has stepped in, no one has intervened, no one is doing an audit, no one is taking any extraordinary measures, but if they need our help then we are ready and on standby to help,” Smith said

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Recent turmoil at Edmonton city hall has caught the attention of the Alberta government and Premier Danielle Smith says she is concerned and waiting to offer help.

Smith said she’s concerned about the city’s finances and stability, telling reporters Wednesday her government has reached out to Edmonton Mayor Amarjeet Sohi to offer assistance. She said intervening in the workings of the municipal government would be a big step but Edmonton may be able to sort out its own issues.

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“We have had a number of reports that do have us concerned. We stand by ready to assist if they would like to ask us for assistance, but I understand there’s a couple of serious financial challenges that they’re facing, they have seen (seven) senior executives including the city manager leave, that’s a sign that has us concerned about stability,” she said.

“It may be that they are able to work through these problems on their own, and look, it’s a big step if you try to intervene in any council’s decision-making, let alone a city as large and important as our capital city, and we would not take that decision lightly, and we would want them to be very specific about whether they think we can help and how they would like us to help.”

Details on any specific financial problems in Edmonton that may warrant added scrutiny and provincial involvement were not provided.

Edmonton Journal columnist David Staples wrote Wednesday the Alberta government is considering a move to “stabilize and audit” the City of Edmonton and its corporate culture. He wrote “the government is alarmed by what it is hearing” but no moves have been finalized. Smith confirmed during the news conference no firm plans to take action have been made.

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“No one has stepped in, no one has intervened, no one is doing an audit, no one is taking any extraordinary measures, but if they need our help then we are ready and on standby to help,” Smith said.

Sohi issued a statement in response to the column in the Journal and comments from the premier downplaying the potential for provincial intervention, saying the municipality is not breaking the law and he has a good relationship with the provincial government.

“The City of Edmonton is in compliance with our guiding legislation in all aspects of our operation, including with our financial policies, which are well within the legislated limits. We have a collaborative working relationship with Premier Smith and cabinet and we will continue to advocate on behalf of Edmontonians for the stable and equitable funding we need. It was clear from the premier’s comments today that there are no inspections or audits planned for the City of Edmonton.”

City administration and council have openly discussed financial strain on the municipality in recent years, including the projected deficit of around $50 million for 2024. The city has a rainy day fund, the financial stabilization reserve, meant to cover short-term funding gaps.

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Reviewing this year’s budget is already on council’s schedule for the annual spring budget update next month which will be debated in public.

The City of Edmonton also routinely releases audits on its finances from external law firms and employs an in-house auditor as well.

Municipal Affairs Minister Ric McIver told reporters Edmonton is a big city and has an elected city council to look after issues.

“I’m of the opinion that if they need help, they will ask,” he said. “My preference is to let municipalities sort out their own opportunities and problems. I try to make that my starting position.”

“I would say that Edmonton is securely and safely in the hands of the duly-elected council of the City of Edmonton.”

Campaign of ‘fear and smear’: Notley

Alberta NDP Leader Rachel Notley said the provincial government is running “a campaign of fear and smear” against the city.

“It’s part of the UCP plan to campaign against politicians they disagree with, and it’s a gross misuse and abuse of their authority and power as a provincial government in relation to a different level of government that deserves the respect of people who have been elected by their constituents,” she told reporters.

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“This is a gross abuse of power on the part of the premier.”

Notley said the current government has criticized municipalities with elected officials they disagree with, saying any potential intervention stemming from a divergence of political opinions would be “overstepping their role.”

If the province is concerned about the City of Edmonton’s finances, or those of any Alberta municipality, Notley thinks they should look in the mirror. The province got rid of big city charters in 2019 and has been pulling funds back from municipalities since then in different areas.

“They are creating the fiscal pressure,” Notley said.

One city councillor has said the province has shortchanged Edmonton $60 million by not paying grants in lieu of taxes since 2019. A city official previously told Postmedia Edmonton the shortfall for that program represents a loss of $13.2 million in revenue in 2023 which was equal to a 0.7 per cent tax increase.

Provincial interventions rare

An intervention by the province in the autonomy of Edmonton’s municipal government would be unprecedented in this city and extremely rare in the province’s history.

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Asked why this government has said it won’t intervene in Medicine Hat but is considering doing so in Edmonton — Medicine Hat city council recently stripped its mayor of some powers and halved her salary because of a code of conduct violation — Smith said they would not take such action lightly.

Medicine Hat’s finances are healthy, she added.

“They have their own gas company, they operate their own power company, they have a massive fund that they have for some of their surplus revenue. I think the nature of the challenges in Medicine Hat are quite different from the challenges that we’re hearing about in Edmonton.”

Edmonton city council has faced a wave of crises and controversies of late, from narrowly averting a major strike of civic workers, to the exodus of seven top city officials including the city manager within 12 months, to controversies around how the city handles its encampments, to tight budget constraints and a shooting at city hall in January.

– With files from Matthew Black

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