Amalgamation didn't help smaller communities, report says

The decision to amalgamate many Ontario cities and towns in the 1990s did not produce the cost savings it intended to, according to a new a report.

Essex performed better than most smaller towns studied

The decision to amalgamate many Ontario cities and towns in the 1990s did not produce the cost savings it intended to, according to a new a report.

"Ontario's push for municipal amalgamation in the 1990s has failed to deliver cost-savings and efficiencies promised for both large and small cities, finds a new study released Tuesday by the Fraser Institute, a public policy think-tank based in B.C.

Specifically, the study compares pre- and post-amalgamation financial indicators in the amalgamated communities of Kawartha Lakes, Essex Township and Haldimand-Norfolk relative to comparable un-amalgamated communities.

In almost all cases — in both the amalgamated and un-amalgamated communities — the study finds significant increases in property taxes, compensation for municipal employees, and long term debt between 2000 and 2012. In other words, un-amalgamated and amalgamated municipalities appear to exhibit similar trends suggesting there was no tangible benefit to amalgamation.

"In the late 1990s, the government of the day wanted to consolidate municipal governments in an effort to reduce waste and lower property taxes. While that may have been a laudable goal, it's become clear that those benefits never materialized," said University of Windsor political science professor Lydia Miljan, a Fraser Institute senior fellow and co-author of Municipal Amalgamation in Ontario.

"While you do get rid of some mayors and town councillors, we increased all number of different ways. We increased long-term debt. We increased property taxes. Most notably, park-recreation costs, those things went up as well," Miljan said.

The Town of Essex was one of the amalgamated municipalities studied. It performed better than most other municipalities studied.

Miljan said Essex actually saw smaller increases in costs than many other communities did.

Essex managed to hold the line on taxes and decrease remuneration, but its long-term debt increased by 41.5 per cent, which was directly related to its increased spending on recreation facilities.

The problem, according to the report, is that when rural areas were amalgamated with urban areas, residents demanded similar services and amenities that had been available in more urbanized communities.

"Our study reinforces earlier research about amalgamation of larger cities which suggests that amalgamation in Ontario didn't achieve cost savings, and in some instances might have actually raised costs," Miljan said. "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 agreements rather than municipal restructuring."

You can read the entire report here.