This central Alberta town is grappling with a financial crisis. Could it have been avoided?
The financial situation of a central Alberta town could prove to be a cautionary tale for other rural communities as officials work to piece together how the situation deteriorated.
The Town of Gibbons has started working with the Alberta government, a consulting company and neighbouring Sturgeon County to rectify what the town’s officials say is years of financial mismanagement. But a former Gibbons councillor says the problems were flagged long before with little done.
A town official said that the issues have developed over multiple years because of an ongoing inability to balance operating costs, the depletion of reserves and an increasing reliance on operating debt.
Those details were provided in a presentation to Sturgeon County council on Tuesday as a viability review of the town is currently underway by the Alberta government, which has provided $500,000 in grant money and approved increasing the town’s debt limit.
Gibbons Mayor Rick Henderson and interim chief administrative officer Tim Duhamel presented the town’s financial situation to Sturgeon County mayor and council as the town may need to dissolve and become absorbed into the county.
Duhamel said the town is “near the maximum of our debt capacity,” with $6 million of that being “operational debt, which should have never been taken out.”
Duhamel, who founded the Bloom Centre for Municipal Education, was brought in by the town to help clean up the municipality’s finances along with two other people from the centre.
He said that his consulting team has uncovered that an arena in the town had been mortgaged to support capital expenditure, with the town using $2.6 million of that money to cover off operating costs.
“We reached out to the province and told them, very frankly, if we don’t have some type of infusion of some kind, we have no choice but to not ask for viability review, but to actually hand over the keys and close the doors.”
The new town council in Gibbons, Alta., didn’t expect their first months in office to involve a financial crisis. The council, made up of fresh faces who were elected in the fall, learned the town was nearly out of cash, close to its borrowing limit and facing ongoing losses. Mayor Rick Henderson and interim chief operating officer Tim Duhamel tell us more about the situation, which ultimately led to provincial intervention.
During the presentation, Sturgeon County Mayor Alanna Hnatiw expressed concern over the future of who would be in charge of making decisions in Gibbons.
“There is a new council, but we don’t know really who’s in administration. That has yet to be determined. And we need to manage risk. And when we look at, some might say dysfunctional, you’ve [Duhamel] used the term unconventional leadership, which has created systematic and structural challenges,” Hnatiw said.
“I’m struggling with assuming that this is a clean slate and that we can move forward with the new structure when we look at … and to be quite honest, a decade of history where folks that had concerns and asked hard questions were gaslit and sanctioned on more than one occasion.”
Former councillor recalls ‘red flags’
Amber Harris sat on Gibbons council from 2013 to 2025.
Harris, and other councillors at various points, were subject to sanctions for issues ranging from misuse of a corporate credit card to disrespect toward city employees and fellow councillors, according to documentation provided to CBC News.
In an interview with CBC News, Harris recalled several occasions where she attempted to call out financial mismanagement by the town and report it to the province.
“My red flags started in around January, February of 2023, when really I was just sort of asking very basic questions that were par for the course … as in my duties as a councillor,” Harris said.
“And what ended up happening is that every question that I would ask typically would result in four or five new questions to ask just because the answers really didn’t make sense to me.”
Harris said she had significant concerns about the budgeting process in 2023.
“It was due to the lack of transparency on the town administration, to the council, we got very, very little information, or even ability to make any decisions with the budgets,” Harris said.
“[Information] was so vaguely relayed to council that … and I said this repeatedly, I wouldn’t have been able to tell our residents why we were raising taxes, because I didn’t know what we were getting for our money.”
University of Alberta chair Karim Jamal with the department of accounting and business analytics looked at the town’s finances and said there were several key capital projects that stood out.
“They’re putting in sewers, and they’re dealing with housing and rec centres and things of that sort. But these guys are doing a lot more,” Jamal said.
“They’ve got a power plant going up, and they were trying to run a credit card function where they would become a dealer … there’s dumping stations and internet, all kinds of things that really, you wouldn’t think a municipality would be doing. So that’s where the overreach is.”
Jamal said the financial issues are confusing because the town continued to publish its financial statements publicly.
“There’s no lack of transparency. I mean, they produce financial statements. Every year, they’re audited. They supply them to the provincial government. They’re on their website. You can go and see back for the last five years what the numbers look like.”
In an interview with CBC News, current Gibbons Coun. Ashley Morrison said there were systemic issues.
“The council has a tendency to trust the information that is being presented by administration, and unfortunately, that information and those decisions were not necessarily strong decisions.”
Municipal Affairs Minister Dan Williams declined an interview.
In response to multiple questions to the ministry including whether regulatory measures are being explored, whether there are any potential violations under the Municipal Government Act that are being investigated and what measures are in place for councillors to report wrongdoing, the minister’s office sent a short statement.
“We are aware of the situation in the Town of Gibbons and are supporting council in stabilizing the municipality’s finances and returning to full legislative compliance,” a spokesperson for the minister’s office said.
On Dec. 10, 2025, Harold Johnsrude was appointed as official administrator to provide additional oversight and support during this period, the spokesperson added.
“We will continue to monitor the situation closely as it evolves,” the spokesperson said.
Kara Westerlund, president of the Rural Municipalities of Alberta, said the situation in Gibbons is symptomatic of larger issues facing rural Alberta communities.
“It’s an accumulation of funding cuts and years of downloading and just struggling day to day with trying to keep up with infrastructure needs and the demands and the pressures that the community puts on the municipality.”
Westerlund said more needs to be to ensure that councillors are trained to handle multi-million dollar projects.
“I think for the most part, the majority of people who decide to run for office, while you’ve done your homework, I don’t think people are quite prepared enough or understand the magnitude of what they’re taking on and the responsibility that comes along with it.”
Harris said this lack of training makes councillors reliant on administrative staff and at their mercy.
She did not mince words in saying consequences should be doled out for Gibbons’s financial crisis.
“Heads should roll,”Harris said.
“No way should the town of Gibbons residents and taxpayers be on the hook for this and it’s very frustrating for me.”
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