The Alberta government is changing how it funds transit by placing a higher priority on projects that encourage regional collaboration.

The province is making $215 million available over five years for municipalities to purchase low or zero-emission vehicles. About $115 million for the Alberta Community Transit (ACT) fund is coming from carbon tax revenue.

Grants will go to municipalities that collaborate with their neighbours on a regional transit plan, Transportation Minister Brian Mason said Tuesday.

The project also aims to reduce the carbon footprint by getting more people to take transit and put more low emission buses on the road.

"This is strictly a merit-based program," Mason told an Edmonton news conference.

Under the old Green Trip program, Mason said, smaller municipalities were buying one or two buses to set up or add to their own system.

He suggested that didn't make financial sense because additional money would be required for training, maintenance and administration. GreenTrip only provided funding for capital expenditures — not operating costs.

Mason acknowledged there is less provincial money available under the new program. But he noted the federal government still has plenty of funding available for transit.

'Fiscal realities'

"Would I like it to be a lot more? Sure I would," Mason said about his new fund. "But we all need to recognize the fiscal realities that we face."

Edmonton Mayor Don Iveson said the ACT funding is above the $3 billion the province is spending over 10 years on rapid transit in Edmonton and Calgary.

Iveson said Edmonton has been talking to St. Albert about collaboration that could range from having routes going across boundaries to a fully integrated system.

He said other municipalities in the region are also interested in talking about collaboration, which could involve the creation of a regional transit commission.

"With the added incentive from the province of dollars to reward collaborative behaviour, I think that helps move us in the right direction toward delivering better, borderless, seamless results," he said.