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N.B. municipalities call for rapid financial reform amid expanded services – New Brunswick

An organization that represents municipalities and the official opposition in New Brunswick is calling on the government to move ahead with financial reform as many lead into budget season.

Back in 2021, the Higgs government overhauled the local governance structure, merging many areas and increasing mandated services for municipalities.

The white paper proposed creating more sustainable and vibrant municipalities, with more people able to have a say in local representation and services.

But Union of Municipalities of New Brunswick (UMNB) president Andrew Black said many municipalities have not seen the necessary funding flow with the newer and more expanded services, as well as extra residents.

“It seems to be there is an understanding from the provincial government that reform is done,” he said in an interview Monday. “Reform has been completed, but in reality, if the fiscal part of reform isn’t completed, then reform isn’t finished.”

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A municipality’s main source of funding comes from the taxation of its assessment base, but it only gets a portion of that money. It also gets equalization grants, and many municipalities have said it is hard to ascertain how that money is decided.

Black said the UMNB and other organizations representing municipalities and local service districts suggested to the government that the financial reform come first.

“Of course that didn’t happen, and here we are,” he said.

He said municipalities are already funding regional service commissions, and are also putting money forward to address traditionally provincial responsibilities, like housing and health care.

“Financial viability would mean our communities would be sustainable and vibrant,” he said. “We would be able to fund ourselves adequately. We would be able to deliver services to people who live in our communities adequately.”

He said there is no doubt municipalities are choosing between services, projects and just keeping the lights on.

“Municipalities are the government closest to the people, that are the ones who make decisions that affect residents of New Brunswick day-to-day lives — really close to the ground — and to not be able to have the capacity to do that hinders the municipality itself, but it also in the end, hinders the province,” Black said.

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For some municipalities, he said it might be a sacrifice to much-needed infrastructure work or even cutting municipal jobs because in New Brunswick, municipalities can’t run deficits.

Policing and fire services are also a challenge for municipalities, with many having to fund both RCMP and municipal services until a change-over of authority happens in January.

In September, the department of local government and local governance reform abruptly cancelled a finance summit scheduled with the municipal associations to discuss several aspects of reform.

At the time, it said in an email statement that “it has become clear that there has been a misalignment of the provincial and association goals concerning the intended scope, content, and potential outcomes of this summit.”

It said a report being prepared by two economists was also unfinished.

“This report was foundational to the planned discussions at the summit,” the statement read. “Having advanced access to the report prior to the summit is crucial to drive constructive dialogue to solving collective challenges.”

The summit has not been rescheduled, according to the UMNB. Financial reform was not mentioned in the most recent Throne Speech delivered last week either, furthering concerns of those waiting for changes to start happening.

Global News reached out to the department with several questions about the ongoing issues municipalities are facing and is awaiting a response.

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Liberal local government critic Jacques LeBlanc said he has heard from many municipalities concerned about the financial situation.

He said he has been told by an economist that there are up to 20 municipalities that are on the brink of insolvency.

“The municipalities are asking for a meeting,” LeBlanc said in an interview on Monday. “They’re concerned. There is a lot of services they’re going to assume.”

LeBlanc said it means tax rates will likely have to go up to help keep municipal books in the black to avoid contravening the Local Governance Act. 

“There needs to be transparency and more accountability,” he said. “Municipalities need to know we’re moving forward with all fiscal reform.”

Both Black and LeBlanc called on the government to reschedule the summit before the end of the fiscal year as time counts down on the budget process.

“The reality is we are expected to do more with the exact same amount of money that we have year to year,” Black said. “It’s just not an appropriate or tenable position.”

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