Should the York Region northern six municipalities amalgamate?

Amalgamation has potential to drive the tax burden up rather than realize cost savings: political science professor Lydia Miljan

Yorkregion.com
January 31, 2019
Teresa Latchford

One York Region ratepayer’s group would welcome exploring an amalgamation of the northern six municipalities.

On Jan. 15, the provincial government announced it would be reviewing upper and lower tier governments in nine regions, including York. While Newmarket Taxpayers Advocacy Group Inc. president Teena Bogner said the group would be interested in looking at the potential for amalgamation, she does have some stipulations.

“As long as the decisions made by the provincial government are fact based and not politically based, NTAG would support any amalgamation that could increase efficiencies, decrease waste and costs while providing strong service levels to the public,” Bogner added.

The N6 refers to the six northernmost municipalities of York Region including Aurora, East Gwillimbury, Georgina, King, Newmarket and Whitchurch-Stouffville.

A number of municipal restructurings occurred in the late 1990s across Ontario and with none of the N6 having interest in taking part, the municipalities began to explore the possibilities of collaborating on service delivery with the intention of offering the taxpayer the best bang for their buck in service levels.

Many agreements were formed before the N6 partnership became official in 2005, including shared water, sewer and transit services.

In 2002, Newmarket and Aurora merged their independent fire service departments and Central York Fire Services was established, just one of the many successful partnerships that pushed the municipalities to seek more shared service agreements.

In 2005, the mayors and chief administrative officers of the six municipalities met to discuss opportunities that had the potential to achieve efficiencies in administration or operations, and a mandate was given for the CAOs to further explore initiatives of mutual interest.

Service partnerships began with audit services and continued with the sharing of waste collection, drinking water quality management systems, insurance, accessibility standards for customer service, training and development, economic development, employee benefit reviews, fire and emergency services co-ordination, website redevelopment and most recently animal control services.

The N6 initiatives have been recognized across Ontario by various municipal organizations and publications for using innovation to increase customer service levels while saving money.

“It is a common perception that amalgamating municipalities will reap cost savings, but our research shows that’s not always the reality,” University of Windsor political science professor Lydia Miljan said. “Our analysis suggests amalgamation did not result in cost savings or lower property taxes in the cases we examined.”

Her study for the Fraser Institute, Municipal Amalgamation in Ontario, focused on the restructuring of Haldimand-Norfolk, Essex and Kawartha Lakes. In most cases studied, the per-household municipal tax burden increased.

“It seems like a good idea to reduce the number of councillors but their salaries are just a drop in the bucket when you are talking about a municipal budget,” she said. “There are many other factors to consider.”

There are instances where merging urbanized towns like Newmarket and Aurora with rural communities like Georgina, East Gwillimbury, King and Whitchurch-Stouffville drive the cost of services up. For example, urban towns have full-time fire services staff while rural towns may still have volunteer firefighters and merging the services would require making all of the staff full-time with the same benefits. Rural town staff would also see a pay raise to equal out the pay grid across the board.

“We also found urban-rural restructuring caused residents to demand more urban services, which further stretched municipal budgets,” she added.

For instance, residents living in a rural area who were happy with living on a gravel road and an older recreation facility to have a lower tax rate would begin demanding the roads be paved and a state-of-the-art facility be constructed because they are now paying the same tax rate as the urban areas that have these same things.

“Amalgamation does make sense in some cases, like when a small community is abutting a large urban area,” she said. “However, many cases would benefit more from partial amalgamation or sharing of services that make sense.”

In the past 20 years there haven’t been many municipal amalgamations, Miljan said. It is difficult to make a generalization about amalgamation but when considered, it should be done on a case-by-case basis.

While Newmarket mayor John Taylor said he would be willing to look at any idea or governance model to improve service and efficiency, he can’t say whether he would support it or not without all of the information in front of him.

“The question is can these efficiencies be achieved without amalgamation and what are the unintended consequences of amalgamation?” he said. “I tend to believe that it is better for the N6 to continue to advance shared services over amalgamation, which could lead to less access to elected officials, service reduction and financial sustainability challenges for smaller centres.”