De-amalgamation of cities could reap mixed results

When many municipalities across Canada were forced to amalgamate in in the 1990s and 2000s it created a turbulent client landscape for many consulting engineers who do a lot of civil engineering work for this government sector.

Earlier this year, Lydia Miljan and Zachary Spicer of the Fraser Institute, published a report on the impacts of municipal amalgamations and the fact that in Ontario merged municipalities did not lead to the promised economic savings.

Now in a follow-up, they caution communities against rushing headlong into separation and municipal divorce.

In an article in the Financial Post on July 15, Miljan and Spicer reiterate the point that amalgamation failed to realize the predicted benefits. They point out: “Costs generally increase after amalgamation, largely due to a harmonization of costs and wages… “. They say municipal mergers “reduce competition between municipalities, which weakens incentives for efficiency and responsiveness to local needs …”

As a result, they say, it’s no surprise that many local residents think they were better off before amalgamation and are starting to call for de-amalgamation.  (If that devolution were to happen in Toronto for example, the city would likely revert to the wards it once constituted: Toronto proper, East York, Scarborough, North York, York and Etobicoke.)

In the article Miljan and Spicer ask whether it’s even possible or desirable to de-amalgamate the larger municipalities. Taking two examples, Montreal and Headingley in Manitoba, they decided the answer is mixed.

In Montreal, a de-amalgamation referendum was already held. As a result the province allowed some communities to leave the municipality, but many chose to stay. This situation, the authors say, forced the creation of a new level of government to coordinate government activity on the Island of Montreal. What happened then was “to further complicate the region’s governance, and distract from much more important conversations about regional policy integration and planning.” They conclude: “The key lesson from Montreal’s experience with de-amalgamation is that allowing certain areas to de-amalgamate and others to stay can create a fragmented patchwork of governance across the region.”

The other example was more positive. Headingley in Manitoba fought to secede from the city of Winnipeg and with the province’s support finally succeeded. As a result: “post-merger Headingley remains small, which is what the de-amalgamation proponents advocated. They are also a fiscally healthy community with a $30 million surplus in 2011.”

To read the article, click here.