‘ We are at least more stable as a government’
CBRM debt a legacy of amalgamation
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.
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.