Amalgamation is an expensive alternative for Victoria, says report

Small municipalities within regional districts make better decisions than amalgamated cities, according to Fraser Institute report

British Columbia’s unique regional district system allows the 13 municipalities of Greater Victoria to provide more cost-effective services than an amalgamated bureaucracy would achieve, says one of the authors of a report published on Wednesday.
“If you think about the variety of things that local governments do, it’s everything from victim services to dumps,” says Robert Bish, a UVic professor emeritus who taught local government from 1979 to 1998. “Some things have to be done regionally, but other things can be done by small municipalities and they do just fine. The regional district system is the most flexible system in North America for allowing those kinds of arrangements.”
In the November 2014 municipal election, seven of Victoria’s municipalities voted in non-binding referendums to explore the idea of amalgamation. The provincial government pledged to look at the issue, and a group called Amalgamation Yes formed to push for a binding referendum on a new model of municipal service delivery in the 2018 municipal election.
Bish says he wanted to contribute more substance to the debate, and he approached the Fraser Institute, a public policy think-tank, to sponsor a study. Governing Greater Victoria, which he co-authored with Josef Filipowicz, concludes that the Capital Regional District allows small cities to achieve economies of scale without incurring the excessive costs of larger bureaucracies. Amalgamation, in implementation and operation, can be very expensive; the report notes that the amalgamation of municipalities in Halifax costed an estimated $40 million, about $30 million more than officials had predicted. 
Since British Columbia’s regional district system was implemented in 1965, municipalities have chosen which services to contract and which to provide themselves. Recreation centres, water, transit and garbage collection are examples of those with economies of scale that are shared among several municipalities. What has evolved, says Bish, is specialization and trade in services, similar to what happens in the private sector of market economies.
For example, Oak Bay, with a population of 17,448, specializes in police patrol. However, it contracts other police services from Saanich, which has a population of 110,767. “They figured out, there’s no economies of scale in police patrol, but there are economies of scale in police dispatching, in running the jail, in criminal investigation,” Bish says. “They’ve done a pretty good job of sorting these things out, and most people just aren’t aware of it. It’s a market.”
By leaving the responsibility for decision-making at the local level, the system also ensures that cost-effective decisions are made because small municipalities are very sensitive to tax-rate increases. “It’s taken 50 years, and it’s a slow evolution of the adjustments of how you’re going to get things done. And it doesn’t happen because technical people did studies, it happened because municipal councillors figured it would save money.”
The regional district system is not perfect, he notes, and the report includes recommendations for its improvement. Victoria has no urban arterial highways, for example, that are overseen by the Victoria Regional Transit System. While the current regional executive is made up of municipal politicians, Bish would like to see an elected chair to strengthen the regional representation.

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