Jordan Bateman: Don’t rush down the amalgamation aisle in the Capital Regional District

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      In the excitement of several Capital Region communities voting for an amalgamation study, there seems to be a rush to get these cities down the aisle and married off as quickly as possible.

      Not to sound like the grumpy parents of two love-struck teenagers, but there is a whole lot more to consider before taxpayers give their approval to such a wedding.

      Most people think it’s obvious that putting smaller cities together will save taxpayers money. The academic work of Robert Bish proves otherwise—the vast majority of city amalgamations have cost taxpayers more money.

      This is due to three items that are rarely considered in amalgamation: the menu of services, labour costs, and loss of tax competition. Thus far, very little has been said about these vital issues, but they must make up key components of the study promised by Community, Sport and Cultural Development Minster Coralee Oakes.

      Bish writes in-depth on how amalgamations usually end up with every city rising to the highest, most expensive level of services available. This throws away any sense of frugality or consideration of hyper-local needs.

      That menu of services leads into the second point: labour costs. Municipal government, as a whole, has done a poor job managing its labour costs. A B.C. government report shows municipal payrolls have grown twice as fast as in the provincial government and 15 percentage points more than inflation.

      But within the CRD, there are cities doing a pretty good job of managing those costs. Langford, for example, believes in contracting out as much work as possible. This has actually lowered how much they pay staff in salaries, wages, and benefits from $8.3 million in 2009 to $8.1 million in 2013; this also saves money in pension payouts down the road.

      However, for every Langford, there is a Saanich, which saw its payroll bloat from $77.2 million in 2009 to $87.9 million in 2013. Victoria shot up too: from a payroll of $89.3 million in 2009 to $104.2 million in 2013.

      So whose view of labour management will win out? Very likely the more expensive Victoria/Saanich model.

      The Community Charter stipulates that a majority of the residents of each city involved in amalgamation must vote in favour of such a plan. In an area like Greater Victoria, with so many unionized public sector employees and potentially many jobs at stake, you can bet the unions will be out in force. As former Ottawa mayor Larry O’Brien used to quip, the only people who had a plan for amalgamation in Ontario was CUPE.

      To get that necessary majority, amalgamation proponents may feel the need to cut a deal with the unions to protect jobs and pay scales, and for taxpayers in well-run cities like Langford, that will mean far more cost. If the only staffing redundancy being eliminated is politicians, cost savings will be minimal at best.

      Finally, tax competitiveness must be considered. As hard as it is to believe when you rip open that property tax bill every spring, having cities compete for residents and businesses does help push down tax rates. Every city council looks at how their tax levels compare to their neighbouring jurisdictions and, often, this keeps politicians looking for cost savings.

      Like any business (well, except for B.C. Ferries), they know that raising rates will cost them customers. Losing that sense of competition should concern taxpayers—and must be considered before an amalgamation vote.

      There’s no reason why some cities can’t decide to share services or contract with each other where there will be cost savings, but it’s unlikely a full-on marriage of the CRD communities will save taxpayers money when it comes to labour or taxes.

      Hopefully, the province’s study will look at all of these issues before anyone gets too excited about popping the question.

      Comments

      6 Comments

      John Vickers

      Nov 22, 2014 at 8:17am

      I helped found Amalgamation Yes in Victoria. Dr. Bish's pronouncements simply don't bear fruit in BC where we have had over 20 amalgamations. Even in communities that stumbled out the amalgamation door like Halifax (after being forced with no public support) where costs went up disagree unanimously with Dr Bish today as to where they have ended up and would never go back to the wasteful dysfunction of their old system. Victoria with its 340,000 residents (way smaller than Surrey but we have 91 mayors and councillors) is a governance mess and it will take people and the province to right the ship. Let academia contribute to the conversation, but until there is an opportunity to address so many misstatements don't believe what you read is true. Considering the scope and width of amalgamation, my assessment of the academias work in Canada on the subject reminds me if someone assessing a single pieces of an overall engine that is purring just fine.
      We have 4 city halls alone within less than 10 kilometers of our Blue Bridge downtown that feature different garbage programs,different bylaws and approval processes, competing economic and tourism offices, no cost sharing on infrastructure, no governing transportation body for our congested highways as we move back and forth daily into the core, 6 911 centers, 10 unrelated emergency management plans, almost 600 bylaws,etc. Ready willing and waiting to have the question popped ANYTIME.

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      @John Vickers

      Nov 22, 2014 at 1:27pm

      Your striking points about Victoria notwithstanding, most of us in cities across Canada are comfortable with the "overall engine that is purring just fine..." because it helps us avoid the absolute crushing disaster of the amalagmation that brought Rob Ford to power in Toronto with no way to get him out. We don't want Metro Vancouver being run to suit Langley.

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      OMG

      Nov 23, 2014 at 8:52am

      Good food for thought.

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      Kim Reynolds

      Nov 24, 2014 at 11:03am

      the only people who had a plan for amalgamation in Ontario was CUPE

      Why is it that it’s always the unions that are the big municipal cost. Lets start looking at management as well. Their wages are sky high and then there are all the severance packages when they go there own way.

      The City of Prince George when it amalgamated with surrounding districts in the early 70's received six million from the provincial government to provide services to the amalgamated areas. Today its costing the residents of the Hart area tens of thousands of dollars to connect to the municipal sewage system. So who was the big winner ? It certainly wasn’t CUPE
      Cheers

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      David

      Nov 24, 2014 at 3:59pm

      I see amalgamation as an opportunity to reset the high costs of management and union wages. All municipal govt's must stop using citizens as an ATM.

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      David

      Nov 24, 2014 at 7:51pm

      I'm actually surprised by the author's fatalistic "well what can you do" attitude towards this opportunity to improve local governance and reduce overhead costs.

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