Learn Spanish (Latin America): El municipio anunció que cancelaría el subsidio. - The municipality announced that it would cancel the subsidy.

This is an example of reported speech, often called the future in the past. When the municipality originally made the announcement, they likely used the future tense to say they will cancel it (cancelaremos or cancelará). Because the reporting verb (anunció) is in the past, the future tense shifts to the conditional (cancelaría) to mean would cancel.

Why doesn't anunció que trigger the subjunctive in the second clause?

The verb anunciar is a verb of communication or reporting. It simply declares a piece of information or a fact. Because it doesn't express doubt, emotion, or a direct command for someone else to act, it takes the indicative mood rather than the subjunctive.

Could cancelaría also mean I would cancel? How do we know who is canceling?

Yes, cancelaría is the exact same form for both the first person (I) and third person (he, she, it) in the conditional tense. Here, context makes it clear that el municipio (it) is both the entity announcing and the entity doing the canceling. If a different person were canceling, a pronoun would usually be added for clarity.

Is there a difference in meaning between el municipio and la ciudad?