Amalgamation brought fewer Ontario cities, but more city workers, report finds

Thestar.com
January 13, 2014
By Wendy Gillis

It was dubbed the Common Sense Revolution - Progressive Conservative premier Mike Harris’s 1995 campaign to slash the province’s bloated public sector through massive municipal government restructuring, to the tune of $250 million in taxpayer savings.

But new analysis has found that while amalgamation technically decreased the number of municipalities in Ontario - down from 850 to 445 - and 23 per cent of elected official positions were axed, more people than ever are working in Ontario’s municipal governments.

“The conclusion is very strong: amalgamation didn’t reduce the size of municipal government,” said Timothy Cobban, political science professor at Western University and lead researcher.

Cobban and his team crunched government data, including Statistics Canada numbers for 15 years before and after the provincial amalgamation, to determine just how much sense Harris’s plan made in the long run.

The results show the municipal public sector grew, both in employment and cost, and expanded at a faster rate than it had in the decade before amalgamation.

From 1981 to 1996, Ontario’s municipal governments grew by 23.9 per cent overall, adding 39,191 jobs. During the 15 years post-amalgamation, from 1996 to 2011, they grew by 38.8 per cent, adding 104,200 jobs. In total, about 270,000 people work in the municipal public sector in Ontario today, compared with 160,000 people in 1995.

That has translated into a sizeable spending spike: in 1981, Ontario spent just under $200 million on local government salaries and wages. By 2011, that number had increased to $750 million.

The rising number of government workers is not explained by population growth, Cobban says: The statistics show that in 1990, there were 15.8 municipal workers per thousand residents, while in 2010 there were 20.9 workers per thousand.

Cobban attributes this expansion to several other factors.

First, when municipalities merge, there will inevitably be jobs created in some fields. For instance, if suburban and urban areas merge, new firefighters will probably need to be hired, because the suburb may have previously had a part-time or volunteer department.

“Typically, as they get merged into a city, you end up with a full-time fire department and various other services,” said Cobban. “There’s upward pressure on services as people in one area of a city will understandably demand comparable services as people on other sides of the city.”

Amalgamation also tends to hike wages for public-sector employees, since merging of collective bargaining units usually means compensation is harmonized upwards, Cobban said.

Growth can also be partly explained by the so-called “downloading” of provincial responsibilities onto municipalities that occurred under the Harris government, including social assistance, public housing and public health.

For instance, in 1991, just 3.4 per cent of Ontario’s municipal government workers were employed in social services. By 2011, that number had more than doubled, to 7.8 per cent.

But numbers also increased in areas unaffected by downloading, including administrative roles such as clerks and treasurers, Cobban found.

“This is a significant finding because the (Common Sense Revolution) platform sought to reduce the number of administration roles ... by reducing the number of municipalities, but this did not occur,” Cobban wrote in a preliminary report on the research, prepared for a recent presentation to Hamilton’s city council.

The findings don’t necessarily mean amalgamation as a whole was a failure, Cobban said. Though it’s clear it didn’t achieve its stated goal, it may have produced municipalities that are stronger and better run, he said.

“We’re agnostic about the conclusion, about whether it’s good or bad on its own,” he said.
Andrew Sancton, Western University professor and author of Merger Mania: The Assault on Local Government said he was not surprised by the findings.

Sancton was hired by the pre-amalgamation city of Toronto to prepare a rebuttal to the province’s report, prepared by KPMG, which said the changes suggested in the Common Sense Revolution would save money.

Based on academic research and real-world examples of other amalgamated cities, Sancton’s report found that there wasn’t a strong argument to be made for economies of scale - that is, that costs decrease when operations grow. Sancton found that there weren’t many economies of scale in services that were not already amalgamated in Toronto and other cities.

It also foreshadowed Cobban’s findings, saying wage and service levels were likely to increase.

“All the evidence was that there was little or no prospect of saving money,” he said.

Chris Stockwell, a member of the Harris government during amalgamation, said he was opposed to it from the beginning. He claims there was little discussion about its implications before the idea was launched into the public realm during the 1995 election.

“Listen, I’m a big fan of the Harris government; we made some good decisions, but this one . . . it just came out of the air,” Stockwell said.

A politician who worked in local, regional and then provincial government, Stockwell felt government grew less connected to constituents the bigger it got, and that small governments are the most efficient.
Doug Holyday, former Toronto deputy mayor and now the MPP for Etobicoke-Lakeshore, was Etobicoke’s mayor during the push for amalgamation, and was in the minority among GTA mayors when he did not oppose it.

At the time, it seemed there was logic in fusing the numerous clerical offices, fire departments and more, and he was seeing similar moves in the corporate world.

“There were companies amalgamating throughout the world that were doing it, for good reason, and I thought those good reasons should apply here,” he said. But he’s not surprised to learn the size and cost of municipal governments in Ontario is larger than ever. “I watched it happen,” he said.

A major problem was the lack of political will on the part of municipal leaders, who did not strongly enforce cuts in the number of jobs in their offices by getting rid of redundant positions, he said.

“Bureaucracy just by its nature grows, unless it’s fought with,” Holyday said.

Cobban’s team also found that Ontario has more municipal government workers than any other province. Forty-three per cent of all municipal employees in Canada work in Ontario - a disproportionately large share, says Cobban, since Ontario has only 38 per cent of the country’s population.

Researchers also found a shift in government employment in Canada in general. In 1981, the largest portion of government workers were federal, followed by provincial workers, then municipal. By 2000, that structure had become bottom heavy, with 43 per cent of public-sector employees in Canada working for municipal governments, followed by the federal then provincial governments.

Amalgamation, by the numbers

Number of municipal workers in Canada in 1981: 270,000
Number of municipal workers in Canada in 2011: 580,000
Percentage of Canadian municipal workers employed in Ontario: 43
Percentage of the Canadian population living in Canada: 38
Local government employees per 1,000 people in 1990, in Ontario: 15.8
Local government employees per 1,000 people in 2010, in Ontario: 20.9