Municipal amalgamations lead to higher costs, experts warn

Professor Jack Novack

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.

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12 Responses to Municipal amalgamations lead to higher costs, experts warn

  1. Christian Corbet says:

    Please reference the historic mass amalgamation of Chatham-Kent, Ontario and surrounding areas in 1997. Council walked away and it was the best thing 23 municipalities could have ever done to be amalgamated. Today the economical impact has been beneficial to all whilst a great balance for environmental awareness and action too.
    Onward and upward!

  2. Dr Janet E Hammock says:

    My simple question is “how can we stop this?” It appears to me from all I have read that we are powerless to stop this. If anyone knows a way, please tell us! Thanks!

  3. Mike Gallant says:

    If my yawn gets any bigger they’ll have to assign it a hurricane rating. No wonder good people don’t want to offer (or reoffer) for elected office. To quote Mayor Quimby (from the Simpsons) “You people are making me sick! I’m leaving this town and taking the town treasury – once re-established, I will send for you”. Meanwhile Grampa Simpson yells at clouds.

  4. Geoff Martin says:

    I think the ultimate outcome will be the one that is highest priority for the provincial government. They want to reduce their costs–the staffing and expenditures to provide local services in LSDs like policing, fire protection, and highway expenses. Taxes will go up but it will be the Entity 40 council that raises them, not the provincial government!

  5. Thilo Joerger says:

    I reiterate Janet Hammock’s question: “how can we stop this?” It appears that Bruce has done a lot more research on this topic than our Council, or the Higgs government.

    What should have been done at the first notice of this is a concerted effort to stop it. Ideally with support from our Council and our own MLA, as well as the opposition parties from whom little was heard.

    It was clear that there would be no pushback from Council when Mayor Mesheau stated “We’ve been dealt a hand of cards here that maybe we’re not happy with, but we have to play those cards and move it forward,” (WarkTimes. January 29, 2022). This does not sound like a Mayor representing or fighting for us. Is it too late now?

  6. Sandra Stephenson says:

    Thank you for this article. On the island of Montreal municipalities were forced. After court challenges, those who wanted to de-amalgamated. It would be of interest to know whether Ste Anne de Bellevue, for example, still feels de-amalgamation was the best thing.

    In Parrsboro there seems to be only one person who represents us, and she won’t answer phone calls unless she chooses to. There’s definitely less accountability.

  7. Mike Gallant says:

    Voters should ask our MLA how she voted on this issue (since the opposition decided not to have a recorded vote). Notice she’s been mostly silent on this issue and her local supporters are fine with that – the fight, if there is one is in Fredericton (not here). Funny how people are mad at Mayor and Council who had zero influence in this matter.

    • brucewark says:

      A bit unfair, I think Mike, to say that the MLA has been “mostly silent” on amalgamation. She gave a lengthy, 40-minute speech in the legislature in which she outlined her position in a fairly detailed way. Like the rest of us, Mitton doesn’t know crucial details of how amalgamation will work — for example, how much representation will Sackville have on the new council? So, it’s hard to criticize specifics when we don’t know them. In any case, I reported on Mitton’s leg speech and so you can read what she said here:

      • Mike Gallant says:

        Thanks – I did read your referenced article. Other than that she’s been MIA on this issue. Have you or the other resident media asked why she was compliant on not having her vote recorded? The Liberals and Greens are happy that they didn’t pull the trigger on this. Seats on the new council? Those are to be determined – like the multitude of other concerns to be worked on. The two advisory committees are not Sackville centric – they are working toward the new community. And in case it matters, I don’t hold a membership card in any political party and my vote has varied over the spectrum.

    • Les Hicks says:

      Hi Mike, the voters of New Brunswick handed Higgs a majority government in the 2020 provincial election. Correct me if I’m wrong, but with a majority in the legislature his Conservative government can do whatever it wants regardless of the protests of the opposition parties. What do you expect Megan to do other than voice her opposition in the legislature, which she did? If you want to cast blame, then blame the voters who voted Conservative and gave Mr. Irving the ability to ram through whatever legislation he wants.

    • brucewark says:

      OK, so I checked and MLA Megan Mitton voted against Bill 82. Her 40-minute speech in the legislature in December made her opposition to it pretty clear.

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