Frédérick Dion

The association representing 50 francophone and bilingual municipalities in New Brunswick is calling on Premier Higgs to follow through on his pledge to reform the fragmented patchwork of local governments in the province.

“Municipalities need to play a role at the local level in development,” says Frédérick Dion, Chief Executive Officer of the Association of Francophone Municipalities of New Brunswick (AFMNB).

During a telephone interview on Thursday, Dion said many of New Brunswick’s 104 municipalities and 236 local service districts (LSDs) lack the financial resources needed, for example, to promote economic development, attract immigrants and provide public transportation.

“Many rural communities cannot talk about immigration or economic development, they cannot play a role because they certainly don’t have the capacity or fiscal resources to do so,” Dion added.

He pointed to a 70-page report the AFMNB released in September calling for an overhaul of local governance in the province by December 2025.¹

The report outlines various options including one that would see LSDs joining with neighbouring municipalities and the consolidation of those municipalities into what the report calls “communities of interest” along the lines recommended by Commissioner Jean-Guy Finn in 2008. (The Finn Report suggested, for example, that Sackville join with the villages of Port Elgin and Dorchester along with nine LSDs to form one municipality within a regional service district.)

Alternatively, the AFMNB report says individual towns and villages could remain after absorbing their neighbouring LSDs, but would enter into formal cost-sharing agreements for common services overseen by an inter-municipal council governed by their mayors.

Tax reform and economic development

The report says municipal restructuring could be accompanied by tax reforms that would give local governments the money needed to provide other essential services such as emergency preparedness measures and climate change adaptation.

Dion argues that the Equal Opportunity Program of the 1960s was a great success in eliminating regional inequalities. “But one of its weaknesses was the fact that we centralized economic development in Fredericton,” he says, adding there were good reasons for that at the time.

“But as we saw after that, municipalities need to play a role at the local level in economic development.”

The AFMNB report calls for tax reforms that would give municipalities more independence by reducing their reliance on provincial transfer payments.

It suggests providing other potential sources of revenue such as sharing one per cent of provincial income, sales and corporate taxes as well as the provincial portion of property taxes and revenues from cannabis sales.²

Excerpt from AFMNB report The AFMNB report says other potential sources of municipal revenues could be taxes on hotel rooms, entertainment taxes on ticket sales and sharing the provincial portion of fuel taxes. (The federal government already transfers more than $2 billion of its gas tax revenues to municipalities. Sackville’s share this year amounts to $367,359.)

Dion says combining the restructuring of municipalities and LSDs with provincial tax incentives represents a “carrot and stick” approach.

He adds that residents of LSDs, for example, who chose not to participate, could be required to pay higher taxes to cover administrative and road maintenance costs that the province now subsidizes.

Excerpt from AFMNB reportDion responds with a chuckle when asked whether he thinks the Higgs government will actually proceed with municipal reform given the reluctance of previous governments to tackle it.

“That’s the one million dollar question,” he says.

Dion adds that Higgs himself is an engineer, not a career politician.

“We think that Premier Higgs wants to do some reforms and local governance is one of them,” he says. “At this time, we think we can work with the Higgs government to improve the local governance.”

1. One of the authors of the AFMNB report is Gérard Belliveau, Executive Director of the Southeast Regional Service Commission which oversees land-use planning and waste management for local governments, including Sackville, in Albert and Westmorland Counties. In November, CBC quoted Premier Higgs as saying that municipal reform could include strengthening the powers of regional service commissions: https://www.cbc.ca/news/canada/new-brunswick/higgs-duplication-throne-speech-1.5809045
2. A 25-page academic study of municipal reform in New Brunswick by Mt. A. Politics Professor Geoff Martin points out that before the Second World War, municipalities, not the province, collected personal income taxes as well as property taxes. In addition, a municipal poll tax was levied on all adult men. “Municipalities had access to a number of revenue sources that would make contemporary municipal politicians green with envy,” Martin writes.