BEYOND THE HEADLINES: An F for the A word

The Greater Vernon chamber nay want amalgamation, but an Ontario study questions the process

It’s interesting to point out that while the Greater Vernon Chamber of Commerce is pushing for changes to local governance, a new study pokes holes into the financial benefits coming from amalgamation.

On Tuesday, the Fraser Institute issued a report on municipal amalgamation in Ontario and whether cost-savings were achieved when smaller jurisdictions came together.

Now of course the Fraser Institute is a right-wing think tank and previous studies have been widely criticized. But you would think that if any group would support “finding efficiencies at the local level,” as the Greater Vernon chamber calls for, it would be the Fraser Institute.

“In the late 1990s, the (Ontario) government of the day wanted to consolidate municipal governments in an effort to reduce waste and lower property taxes. While that may have been a laudable goal, it’s become clear that those benefits never materialized,” said Lydia Miljan, co-author of the study.

As part of the process, the study compares pre and post amalgamation financial indicators in the amalgamated communities of Kawartha Lakes, Essex Township and Haldimand-Norfolk compared to un-amalgamated communities.

“In almost all cases — in both the amalgamated and un-amalgamated communities — the study finds significant increases in property taxes, compensation for municipal employees, and long-term debt between 2000 and 2012,” states a release.

Apparently between 2000 and 2012, property taxes in Haldimand County increased 50 per cent while municipal employee compensation in Kawartha Lakes ballooned 52.8 per cent.

“If amalgamation had in fact led to cost savings and lower property taxes, then one would expect an amalgamated municipality’s financial indicators to exhibit a downward trend over time, at least in the initial years of the amalgamated community. That didn’t happen,” said Miljan.

The study finds the Ontario government pressured municipalities to amalgamate too quickly which led to poor planning and execution.

“Moreover, when rural areas were amalgamated with urban areas, residents demanded similar services and amenities that had been available in more urbanized communities,” states the release.

The bottom line is the Fraser Institute isn’t impressed with what happened in Ontario.

“Our study reinforces earlier research about amalgamation of larger cities which suggests that amalgamation in Ontario didn’t achieve cost savings, and in some instances might have actually raised costs,” said Miljan.

Now of course Ontario is Ontario and B.C. is B.C. and some factors may be different, but the basic guidelines to operating a municipality should be the same no matter where you go.

And when the Fraser Institute highlights that rural residents in an amalgamated municipality sought urbanized services, consider what may happen in Greater Vernon. Quite reasonably, BX residents may start demanding upgraded roads, which would be a costly proposition for taxpayers in the existing City of Vernon (rural roads are presently a provincial responsibility).

Amalgamation would mean fewer politicians but that’s a financial drop in the bucket. The reality is that most employees will still be needed to provide services, and, as a result, property taxes aren’t going to drop.

The Greater Vernon chamber’s call for a local governance review hit a wall last year when all jurisdictions outside of the city refused to participate. That has now led the chamber to lobby the province to initiate a review even if only one jurisdiction is interested in exploring the pros and cons of regional governance.

That campaign may play well with chamber members and some residents but forcing a community to participate in a process it doesn’t support isn’t very democratic.

Given that Victoria has insisted it won’t force the A word, don’t expect the chamber’s plans to go anywhere.