The New Brunswick government is pushing ahead with municipal amalgamations in spite of warnings from a chorus of experts that merging local governments leads to higher costs and often, to higher taxes.
“All of the [academic] work on municipal amalgamation has demonstrated that it does not save money,” says Jack Novack, professor of local government at Dalhousie University.
He explains that demands for service across the amalgamated areas tend to rise along with employee salaries and other administrative costs.
Richard Tindal, retired professor of government in Kingston, Ontario writes:
“Many of us in the academic world have debunked the myth about amalgamations saving money for decades.”
He adds there are many reasons why costs actually rise.
“Amalgamations bring together municipalities with varying levels of service standard. We correct these disparities by levelling up – to the highest existing service standard,” he writes.
“The resulting improvement in services (typically to outlying and more rural areas) is widely welcomed as a by-product of amalgamation, but such improvements raise costs rather than reducing them.”
Tindal writes that staff salaries tend to rise too:
“Amalgamations also bring together municipalities with varying wage levels and union experiences. Once again, we resolve this disparity by levelling up, to the highest wages being paid – and we also extend unionization across the new municipality.”
Tindal also points out that amalgamation does not produce more cost-efficient services:
“Amalgamations don’t achieve the promised economies of scale in service delivery because the optimum size for delivering municipal services varies widely. Indeed, for services such as policing, there is ample evidence to show that some aspects (such as neighbourhood patrols) are best handled by small detachments whereas others (such as dispatch systems and training facilities) are best handled over much larger areas.”
Tindal writes that amalgamations may reduce the number of elected representatives, but their salaries tend to rise anyway.
“The increased workload for councillors of enlarged municipalities usually leads to salary increases and (in some cases to the addition of support staff for councillors). The net result is no savings from fewer councillors, not that council salaries ever were a significant part of the total cost of municipal government.”
To read Tindal’s complete blog post, click here.
Reduced citizen involvement
A 2015 report on the growing movement for de-amalgamation in Canada, commissioned by the right-wing Fraser Institute, sums up what it sees as the disadvantages of amalgamation:
Although nearly every province in Canada has pursued some form of local restructuring over the past 25 years, municipal amalgamation remains a controversial subject. A vast amount of research has found that consolidation fails to produce promised cost savings, rarely leads to more efficient service delivery, and reduces the ability of citizens to be involved in the life of their local governments. It is no surprise, then, that local restructuring proposals have often been met with stiff resistance from local residents. It also comes as no surprise that many residents argue that their communities were better off prior to amalgamation.
One of the Fraser report’s authors, Zachary Spicer of Brock University, also co-authored a commentary for the C.D. Howe Institute that cites numerous other academic studies:
Municipal amalgamation, in fact, produces few economies of scale, as many studies have shown (see, for example, Byrnes and Dollery 2002; Hirsch 1959; Bird and Slack 1993; Found 2012). Rather, costs generally increase after amalgamation, despite repeated assertions that larger units of local government will result in cost savings (Blom-Hansen 2010; Dahlberg 2010; Bird 1995; Flyvbjerg 2008; Vojnovic 1998). Aside from an increase in costs, research has also found that amalgamation has not led to municipal service efficiencies (Kushner and Siegel 2005; Found 2012; Moisio, Loikkanen and Oulasvirta 2010).
Spicer argues that regional co-operation among municipalities works better than forced amalgamations, a point that Professor Zachary Taylor of Western University made in a recent interview with Warktimes.
In 2019, Ontario’s Ford government announced that it would no longer consider forced amalgamations — a move heartily welcomed by the Fraser Institute on the grounds that municipal mergers make local governments less accountable to citizens:
Reducing the number of elected officials (who undergo electoral scrutiny) simply pushes more decision-making to city staff who do not face the same incentives to balance the costs and benefits of their decisions. The larger the municipality, the greater the distance between local decisionmakers and citizens.
To read the report, click here.