The still-fragile state of the economy and the consequences of rampant public sector spending growth worldwide have made many Canadians austerity-minded. But the need to curb “too much government” doesn’t necessarily mean that there are “too many governments”.  As New Brunswickers get closer to local elections, it is a good time to review the issue of local governance reform.

It wouldn’t be a difficult exercise to identify instances of wasteful spending by New Brunswick’s 371 local government units, but it would be a mistake to conclude reducing their number would lessen theinefficiencies.  Municipal amalgamations have been promoted in a number of Canadian jurisdictions—frequently by politically-conservative fiscally-committed governments.  The results in many instances have been that delivery standards have been raised to those enjoyed by the better-serviced pre-merged communities—resulting in higher costs and reduced neighbourhood engagement.  At the same time, residents of fiscally prudent communities have been saddled with the debt of their more profligate—or even bankrupt—neighbours.

It is tempting to believe that there are savings to be wrung by eliminating bureaucratic duplication, but experience elsewhere suggests that too often the outcome is that staffing costs increase as wages in amalgamated municipalities rise to the highest pre-merger remuneration rate.  Moreover, larger administrations typically expand their in-house management to perform functions previously provided by elected officials or even by volunteers.

From a political perspective there is an even more compelling reason for shunning municipal mergers—they are intensely unpopular.  In nearly every instance amalgamations have been conceived and enacted by a senior level of government—sometimes with cost saving in mind—sometimes, it has been suggested,with ulterior political objectives! Rarely has the initiative come from the residents themselves.

That sense of community is notonly an argument against union, it may also represent a strong case for why smaller communities may, in fact, be the more cost effective model.  Smaller neighbourhoods may have a much clearer sense of the values they share and hence what level of service they wishto provide from a common pool.  They are also less likely to demand amenities that they believe are being paid for by outsiders.  If competition is the chief engine of efficiency, the very existence of closely neighbouring communities that provide better overall value for residential tax dollars may be a  powerful, limit on officials: residents will leave poorer performing jurisdictions, their valuations will flag and ultimately lower revenues will impose their own restraint.

Given these realities it is notsurprising that the New Brunswickgovernment has adopted a “no-forced-amalgamation” approach to local governance reform.  But what of the plans it has announced?  Will the proposed twelve new Regional Service Commissions actually contribute to efficiencies or simply constitute just another layer of authority?  The answer is unclear, but the essentially collaborative nature of their mandate may provide a clue.

There can be no harm in extending the planning boundaries beyond merely local perspectives—many facilities serve patrons well beyond their immediate location and basic local services are so similar in nature that their providers can only gain by sharing procurement information.  As constituted, however, the Commissions appear to have limited powers and they could easily degenerate into fruitlessforums for bickering and grandstanding.

If one is seeking a hidden agenda, that reality could point to an inevitable “next stage”.  Once firmly established and once recognized for their lack of cohesion, could the next step be to “beef up” their enforcement powers—essentially establishing a new super-level of local government?

Where the Commissions can serve a useful role would be if they encourage local municipalities to determine local preferences and, building on their role as regional coordinators, act as common bargaining agents to negotiate best deals with suppliers.  To avoid the real dangers of wage inflation, however, the business of establishing labour terms and conditions should remain firmly in the hands of local authorities.


Don McIver is a Senior Fellow with the Atlantic Institute for Market Studies, a social and economic policy think tank based in Halifax, NS.