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Ontario municipalities spending more since amalgamation: report

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In Governance
Jan 13th, 2014
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Global News

TORONTO –Amalgamating Toronto, Scarborough, York, North York, East York, and Etobicoke has cost taxpayers more money, not less, according to new research out of the University of Western Ontario.

But it’s unclear what caused those increased costs.

Western University professor Timothy Cobban led a team of researchers who found that in the 15 years since amalgamation municipal governments across Ontario grew significantly.

Over that period, municipal governments expanded by almost 40 per cent, adding over 100,000 jobs.

“The common sense revolution didn’t reduce the size of municipal government, if we look at across the province,” Cobban said in an interview Monday. “On average all municipalities added employees, but restructured ones, ones that were amalgamated, added employees at twice the rate of unrestructured municipalities, ones that were left alone.”

Amalgamation was touted as a way of cutting costs across the province. By amalgamating services across already closely-knit communities, governments would be able to provide more efficient services with fewer government employees.

“It was a failure of the common sense revolution to deliver on its enunciated goal,” Cobban said.

But he’s unsure exactly what caused those extra costs. They could be a result of the harmonization of wages or the pressure on governments to provide services across the previous boundaries.

To former mayor Mel Lastman, the harmonization of wages hurt the city’s finances. He said prior to amalgamation, firefighters and other workers were paid different salaries in Toronto, Scarborough, East York, North York and Etobicoke. But the new city of Toronto was forced to harmonize those salaries, resulting in significant wage increase to some employees.

Lastman opposed it while he was mayor, suggesting there was “no plan.”

Former premier Mike Harris wouldn’t consent to an interview Monday but suggested in an email to Global News that local councils failed to take advantage of amalgamation, saying: “you can lead a horse to water but you can’t make it drink.”

Merged municipalities, including Ottawa, have hired more workers than those left alone, researcher finds

BY DAVID REEVELY, OTTAWA CITIZEN JANUARY 13, 2014

OTTAWA — Ottawa’s municipal workforce has grown sharply since amalgamation in 2001, part of a provincewide trend identified by a Western University professor who’s found that cities that were forcibly merged by the province then have hired more staff than cities that weren’t.

“I think they really overestimated the economies of scale they thought were available, especially where there were two-tier structures,” Tim Cobban said in an interview. In places like Ottawa and Toronto, which had lower-level municipalities for local duties and regional governments managing things like police and transit service, most of the tasks it made sense to share were being shared. “Those services had already migrated to a regional government.”

Cobban’s research group at Western crunched figures from municipalities across Ontario and found that from 1995 to 2010, municipalities that weren’t restructured increased their workforces by 1.77 full-time workers for every 10,000 residents. Those that were amalgamated hired 3.25 workers for every 10,000 residents.

They also compared their workforces one year before amalgamation with five years after. Ottawa went from 9,767 full-time equivalents to 12,813, an increase of nearly a third.

The numbers vary a lot from municipality to municipality. There’s no obvious correlation to population size, which often goes a long way to explaining difference in cities’ and towns’ spending and employment. Toronto’s city workforce shrank 2.7 per cent in the five years after its amalgamation, Cobban found.

(Since the five-year mark, Ottawa’s workforce has grown further: up to 15,074 full-time equivalents this year. That’s a bit of a dip from the previous couple of years, as the city government has invested heavily in automating paperwork, but still a 54-per-cent increase over 14 years.)

Overall, the number of jobs in Ontario’s city governments went up by 23.9 per cent in the 15 years before amalgamations started in 1996, and then 38.8 per cent in the 15 years after, Cobban found. That’s while government employment in general has decreased in Canada.

“Although the Harris government was able to significantly reduce the number of municipalities in Ontario, the size and expense of municipal government actually increased, and at a faster rate than in the preceding years,” Cobban’s preliminary report says.

Population growth explains part of the increase — you need more police officers to patrol a bigger city, more social-service workers to serve more clients, and more human-resources staff to oversee them all.

An increase in cities’ responsibilities is also a factor. The Harris government merged cities on the grounds that it would mean fewer local politicians and functionaries (the bill that amalgamated Ottawa was the Fewer Municipal Politicians Act) but it also downloaded numerous responsibilities to cities in the late 1990s, especially in running social-welfare programs, which meant taking on workers to do things the cities hadn’t had to do before.

That doesn’t cover all of it, though. “The data indicates that while there has been some growth in social services, there has been almost as much growth in general administration roles,” Cobban’s report says. “We also find that general administration has grown faster than the rest of the municipal workforce.”

Cobban is still working on why, but he said previous research has looked at what happened in a handful of Ontario cities — Kingston was the biggest. “There tends to be upward pressure on service in outlying areas, where they want levels of service that match those in the urban centres,” Cobban said, in things like firefighting, parks programs and libraries. And in a related but separate phenomenon, volunteers and part-timers also tend to be replaced over time by full-time staff, he said.

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

New analysis finds local governments actually grew bigger, faster, after Mike Harris’s so-called Common Sense Revolution, which massively restructured Toronto and other cities with the aim of reducing costs

By Wendy Gillis Toronto Star January 13 2014

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 Canadian population living in Ontario: 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

 Bratina brings amalgamation debate back

Presentation catches councillors by surprise, draws sharp criticism

By Matthew Van Dongen Hamilton Spectator January 9 2014

Mayor Bob Bratina says he’s resurrecting a three-year-old election vow to review Hamilton’s contentious 2001 merger to “heal the rifts that divide us” — but he won’t rule out the prospect of deamalgamation.

Bratina, who hasn’t said if he’ll run for office again this fall, startled the audience at his state of the city address Wednesday by arguing it is “reasonable and perhaps critical” to look back at the 13-year-old amalgamation after years of silence on the issue.

He followed up with an afternoon promise to independently ask the province to review a new Western University study on amalgamation.

Bratina repeatedly refused to rule out deamalgamation but added it would be unlikely anytime soon.

“There may also be some way of relieving the costs that were brought on the amalgamation process by further, in-depth review by the province,” he suggested.

The announcement, made at a hastily arranged study presentation at the Sheraton, infuriated several councillors who called the move electioneering.

“He’s not registered to run yet (as a candidate) but he’s using his office to campaign,” said Councillor Sam Merulla.

He noted that the mayor’s office paid for equipment for the state of the city address as well as the cost of a Sheraton room for the study presentation.

“We’re paying for him to talk about an old campaign promise? If this is city business, why is it not happening in council chambers? It’s bad politics and bad optics.”

Flamborough Councillor Rob Pasuta came out to hear the afternoon presentation from assistant professor Timothy Cobban, who argued the amalgamations across the province in 2001 spurred a spike in hiring rather than cost savings. His data was not immediately available.

When asked to comment on the provincial review request, Pasuta shook his head and said “It’s election year.”

Bratina bristled when asked if the review is part of an election platform, telling the press conference he was acting not as an election candidate but as an elected mayor delivering requested information to constituents.

He said he chose to introduce the study outside of council because it’s not “Hamilton-centric” and didn’t require council direction. The mayor said he hasn’t asked for the amalgamation review yet, but added Municipal Affairs Minister Linda Jeffrey has previously said she’s open to the idea.

Bratina couldn’t immediately say how much it cost to book the Sheraton room, but added it was a pittance compared to the money he’s saved by cutting mayoral office staff this term.

Councillor Brian McHattie, a declared mayoral candidate for 2014, repeatedly called the mayor’s references to amalgamation “irresponsible.”

“We’ve moved on,” the Ward 1 councillor said after the state of the city speech.

Liberal Hamilton MPP Ted McMeekin praised Bratina’s morning speech for highlighting major city accomplishments such as an on-budget Pan Am stadium, major developments downtown, a Randle Reef partnership and a record number of building permits.

Asked about the amalgamation review, he said there’s nothing wrong with learning from the past, “but it can never be about looking back to go back.”

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