You really know an idea went wrong somewhere when your closest friends dump all over it.
It’s interesting, in that context, to read a report called Municipal Amalgamation in Ontario released by the Fraser Institute on May 26.
The institute, often described as “a right wing think tank,” examines the impact of the late-1990s amalgamation initiative driven by the Mike Harris Conservatives, whom few would argue displayed a noticeable starboard list.
The report examines claims at the time that restructuring would produce more efficient and less costly local governments. It compares financial indicators in three smaller rural municipalities, Haldimand-Norfolk, Essex and Kawartha Lakes, with a number of similar municipalities that were not amalgamated.
The study concludes “amalgamation in Ontario did not achieve cost savings and in some instances might have actually raised costs.” In their executive summary, authors Lydia Miljan and Zachary Spicer state, “We find significant increases in property taxes, compensation for municipal employees and long-term debt in both amalgamated and unamalgamated communities, suggesting there was no tangible, financial benefit from amalgamation.”
The study found that, in most amalgamated cases,“the per-household municipal tax burden increased.”
Notable cost increases (between 2000 and 2012) for the amalgamated communities in the study include:
– in Haldimand County property taxes increased 50%;
– in Kawartha Lakes municipal employee compensation increased 52.8%; and
– in Norfolk long-term debt increased 111%.
The study blames the increased costs, in part, on “the speed with which the province implemented restructuring.”
The authors point out, “The process was quick and received little provincial assistance. As a result, wages were harmonized upwards in this period, which had a significant impact upon the cost of service delivery.” The study also found, “When rural areas were amalgamated with urban areas, residents began to demand more urban services, which further stretched municipal budgets in the years following the initial consolidation.”
The only mention of Wellington County in the study is as an example of an area where municipalities rushed into amalgamation more out of fear of the province’s ineptitude, than any belief it was a good idea.
In Wellington, along with Victoria, Dufferin and Perth, “The strategy was to find a local solution among the county participants as a way to stave off being forcibly merged with a dominant urban municipality.”
In other words, everyone was trying to avoid the Chatham-Kent experience. In that region Chatham and all the lower tier municipalities of Kent County were amalgamated at the order of a provincially-appointed commissioner, despite the objection of 21 of 22 involved municipalities.
Among the conclusions of the study was that, “If the government of the day was truly interested in finding efficiencies at the local level, it might have been better off to pursue policies such as shared service agreements rather than municipal restructuring.”
While we’re not sure of the cost of the Fraser Institute’s report, we suspect it was exponentially more than that expended on the stipend of this correspondent, who wrote in a Dec. 5 editorial, “Interestingly, just before the Mike Harris Conservatives came into power in the ‘90s and coerced municipalities into their current configuration, ‘sharing services’ was a common theme at council meetings around Ontario … Of course that talk all ended when Harris entered the picture and threatened municipalities with restructuring commissions should they fail to get together on their own.” To be fair, similar wisdom has also been dispensed in most coffee shops for quite some time now.
No one, including the Fraser Institute, is suggesting we spend the untold millions it would take to reverse the situation.
However, it does seem a useful exercise to take an occasional look back at how we got here before some future cash-strapped government suggests we compound the mistakes of history.
