‘ We are at least more sta­ble as a gov­ern­ment’

CBRM debt a legacy of amal­ga­ma­tion

Cape Breton Post - - FRONT PAGE - BY NANCY KING

Right from the start, the Cape Bre­ton Re­gional Mu­nic­i­pal­ity had a huge bur­den to shoul­der with the debt it was forced to carry for­ward.

When the eight mu­nic­i­pal­i­ties that formed the CBRM — most of whom were on emer­gency fund­ing from the province — merged in 1995, they took with them a com­bined debt of $39 mil­lion. Mayor Ce­cil Clarke ar­gues that, in to­day’s dol­lars, that re­ally rep­re­sented a much larger num­ber.

“We be­lieve the con­sol­i­dated debt was in ex­cess of $60 mil­lion,” he said.

“What I be­lieve our sit­u­a­tion to­day is, as much as it’s fi­nan­cially chal­leng­ing and we have many so­cial is­sues and pres­sures, we are at least more sta­ble as a gov­ern­ment, and that’s part of the last three years of try­ing to build to­ward sta­bil­ity.”

The re­gion has strug­gled to carry the debt bur­den, with the long-term debt hit­ting a high of $129 mil­lion in 2010. That amount is cur­rently down to $83.6 mil­lion, for which Clarke cred­its the CBRM’s debt man­age­ment pol­icy.

“One of the rea­sons, frankly, why the CBRM was set up was to re­lieve the province of the bur­den of the debts of some of the for­mer mu­nic­i­pal­i­ties,” said Cape Bre­ton Univer­sity po­lit­i­cal sci­en­tist Tom Ur­ba­niak.

“In some ways it was an un­fair ex­pec­ta­tion, it was poor com­mu­ni­ties sup­port­ing even poorer com­mu­ni­ties. Some of the prom­ises around mas­sive sav­ings and things sud­denly start­ing to hap­pen be­cause now you have the re­gional co­or­di­na­tion, those prom­ises were vastly over­stated.”

The re­port of the in­dus­trial Cape Bre­ton mu­nic­i­pal re­form com­mis­sioner, which pre­dated amal­ga­ma­tion, iden­ti­fied a po­ten­tial sav­ings of $7.3 mil­lion in re­al­lo­ca­tion of ser­vices, a sav­ings of $6.5 mil­lion an­nu­ally or more in es­tab­lish­ing a re­gional gov­ern­ment, and pre­dicted a 20 per cent cut to mu­nic­i­pal taxes.

“When we amal­ga­mated, the province, in their great wis­dom, put us all to­gether as one but did not leave the emer­gency fund­ing in place to cover the debt, so all the debt the oth­ers had was dumped on it,” said Dist. 4 Coun. Claire Detheridge.

“From Day 1, we were al­most buried in debt, and we have been re­ally strug­gling ever since fi­nan­cially to get our­selves out of there.”

Other than the merger of Hal­i­fax county mu­nic­i­pal­i­ties in 1996, there have been no other forced merg­ers in the province. There have been some vol­un­tary unions and some strug­gling towns have been dis­solved.

Detheridge, who is vi­cepres­i­dent of the Union of Nova Sco­tia Mu­nic­i­pal­i­ties, said that in the cases of vol­un­tary amal­ga­ma­tion, the province has pro­vided some as­sis­tance with the debt in­volved

“It’s a dou­ble stan­dard, what was done be­fore and what is be­ing done now,” she said.

While com­mu­ni­ties that had been run­ning sur­pluses were up­set that they were vi­able but were be­ing swal­lowed up by re­gional gov­ern­ment, Clarke said he be­lieves had amal­ga­ma­tion not oc­curred, the re­gion would have seen a Springhill and Bridgetown, which gave up their town char­ters be­cause they went broke.

He did say the merger seemed to be a lot more of a num­bers ex­er­cise than a peo­ple process.

“The gov­ern­ment of the day made their de­ci­sion and they took the ap­proach that they did,” Clarke said. “That I can’t change. But the re­al­ity was it was pred­i­cated that there were com­mu­ni­ties that were no longer sus­tain­able and more were on emer­gency fund­ing from the depart­ment of mu­nic­i­pal af­fairs than were ac­tu­ally driv­ing a sur­plus.”

While the debt is a bur­den, Ur­ba­niak said it’s not un­prece­dented when you look at other ur­ban re­gions across the coun­try. It is a worry, how­ever, be­cause of the lim­ited tax base and be­cause eco­nomic op­por­tu­ni­ties are lim­ited.

“In a kind of a larger more eco­nom­i­cally ro­bust city, this would not be some­thing to lose sleep over but it’s some­thing that we do have to keep a very close eye on, be­cause it’s com­pounded by the eco­nomic sit­u­a­tion,” he said.

Zach Churchill re­cently be­came the pro­vin­cial min­is­ter re­spon­si­ble for mu­nic­i­pal­i­ties.

In a state­ment, he said ev­ery mu­nic­i­pal­ity and re­gion is fac­ing dif­fer­ent cir­cum­stances, and he knows many are fac­ing sig­nif­i­cant chal­lenges as a re­sult of de­clin­ing pop­u­la­tions, chang­ing de­mo­graph­ics and shrink­ing tax base. He said the province will do what it can to sup­port mu­nic­i­pal­i­ties look­ing to ini­ti­ate change.

CAPE BRE­TON POST

CBRM Mayor Ce­cil Clarke says he can’t change the way the province went about form­ing the re­gional mu­nic­i­pal gov­ern­ment 20 years ago, and he is fo­cused on try­ing to im­prove its sta­bil­ity.

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