by Lydia Miljan
and Zachary Spicer
DE-AMALGAMATION
IN CANADA
Breaking up is hard to do
JULY 2015
fraserinstitute.org
Contents
Executive Summary
1
Introduction
3
Amalgamation in Canada 4
Evaluating the Amalgamation Process
5
De-amalgamation in Canada
9
Evaluation of the Case Studies
16
Is De-amalgamation Possible?
17
References
23
About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Publishing Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Supporting the Fraser Institute . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Purpose, Funding, and Independence . . . . . . . . . . . . . . . . . . . . . . . 30
About the Fraser Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Editorial Advisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Executive Summary
Although nearly every province in Canada has pursued some form of local restruc-
turing over the past 25 years, municipal amalgamation remains a controversial
subject. A vast amount of research has found that consolidation fails to produce
promised cost savings, rarely leads to more efficient service delivery, and reduces
the ability of citizens to be involved in the life of their local governments. It is no
surprise, then, that local restructuring proposals have often been met with stiff
resistance from local residents. It also comes as no surprise that many residents
argue that their communities were better off prior to amalgamation.
In the wake of this lingering resentment, de-amalgamation is often offered
as a solution. For many, the idea has some merit: if the new municipality has
become inefficient, costly, and less responsive to local need, then simply undo
the work of amalgamation and return the municipality to its original borders. For
those unhappy with the new incarnation of their municipal government, this is
an attractive prospect, but poses some significant challenges. There are significant
costs to de-amalgamation, there is no guarantee a municipal government would
be any more efficient after de-amalgamation than before, and, finally, there is no
guarantee there would be community consensus to move forward with the plan.
Despite all of these concerns, de-amalgamation proposals continue to emerge in
amalgamated communities. Some are more vocal than others, but lingering con-
cerns about the efficiency, cost, and the nature of representation within amalgam-
ated communities persist.
Taken together, the prospect of de-amalgamation raises two important
questions. First, is it possible to reverse a municipal amalgamation? And, second,
if so, is it even desirable to de-amalgamate? This paper delves into these questions
and examines two cases of municipal de-amalgamation: Montreal, Quebec and
Headingley, Manitoba, which seceded from Winnipeg. After provincially imposed
amalgamations, residents of both communities demanded institutional reforms.
In Montreal, a change in provincial governments led to a de-amalgamation ref-
erendum, as communities within the newly amalgamated cities were given the
opportunity to leave the new city. While many opted to stay, some did leave, forcing
the creation of a new level of government to coordinate government activity on
the Island of Montreal. In Headingley, community residents demanded they be
allowed to secede from the amalgamated City of Winnipeg. After many years, the
province finally took up their case and legislated their removal from the City of
Winnipeg, sparking bitter separation negotiations that nonetheless finally restored
Headingley’s independence.
In this paper, we examine the fiscal and governance implications of both
de-amalgamations and provide a set of criteria to evaluate when considering the
de-amalgamation of a consolidated local government. Overall, we find no reason
that de-amalgamation cannot be pursued, but we argue that is not often desirable.
2 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Provincial governments have the ability to amalgamate municipalities and, there-
fore, also have the ability to separate them. Looking at the case of Montreal, we
demonstrate that, if de-amalgamation is not done correctly, it is very possible
to further complicate the governance of a region and distract from much more
important conversations about regional policy integration and planning. We
argue that the difficulty in successfully implementing de-amalgamation means
that amalgamation is something that cannot, and should not, be easily entered
into. More care needs to be taken in finding the best institutional structure for our
municipal governments.
3 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Introduction
At the conclusion of Toronto’s most recent municipal election, pundits and
researchers lined up to analyze the results. One of the most frequent arguments
was that the city was divided, not a surprising conclusion for those looking at the
electoral map. John Tory won votes mainly in downtown and mid-town Toronto,
whereas Doug Ford won most of the polls in the city’s suburbs in the former muni-
cipalities of Etobicoke and Scarborough. When examining the election results,
Globe and Mail columnist Marcus Gee described the city as “hopelessly, irretriev-
ably divided” and laid the blame for this divide on the city’s 1998 amalgamation:
“throwing the suburbs and the core together into one big city was a disaster” (2014).
Similar conclusions were reached by the
National Post’s Robyn Urback, who also
described Toronto as “divided” (2014), and Ryerson University’s Murtaza Haider
who argued the city’s politics were polarized between the core and its peripheries
(2014). Haider even speculated on the shape of the city’s politics if amalgamation
had not occurred: “if Toronto were not amalgamated, Mr. Ford would have been
the mayor of Scarborough and Etobicoke” (2014).
The question is what should we do about this division? Many pundits put the
responsibility upon newly elected mayor John Tory, who promised to build “One
Toronto”. Robin Sears of the
Toronto Star went so far as to speculate openly about
whether John Tory could truly accomplish this task, bluntly asking, “can John Tory
unite a deeply divided Toronto?” (2014). Time will tell, but another group of pun-
dits turned their attention to institutional change, expressing much less comfort in
the notion of political healing between each part of a city united through a provin-
cially imposed union. John Barber sang the praises of Metropolitan Toronto in the
Toronto Star, arguing that the two-tier system was a “brilliant innovation” that let
“localism thrive while leveraging the downtown tax base for massive, cross-border
public works” (2014). His solution is a system of “refederation”, where devolution
could slowly resurrect the two-tier system over time (2014). Others did not share
Barber’s enthusiasm. Marcus Gee took time to argue that de-amalgamation was
not the answer because “amalgamation is a done deal, in place for 16 years” (2014).
Gee, however, does not offer much more in terms of support, only asking
a series of rhetorical questions: “Does anyone seriously argue that it would make
sense to break into pieces again? Do we want to go back to having, say, a separate
city of East York with its own mayor and city council?” (2014). This reaction is not
uncommon. When you ask people to reflect upon the amalgamation experience
and outcomes, you often receive a similar response: amalgamation caused a host
of problems but we likely cannot do anything about it. The
status quo, most will
argue, is challenging but change is impossible.
Amalgamation could be compared to making an omelet or scrambling an
egg. Many parts are combined together to create a whole, leaving the question: can
we really unscramble an egg? Are pundits like Gee right? Is amalgamation set in
4 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
stone? Is there truly no way for amalgamated cities, such as Toronto, to return to
their pre-amalgamation configuration? Or, are those such as John Barber correct in
arguing that amalgamation can, and, in some cases, should be reversed? This paper
begins to examine these questions, asking whether de-amalgamation is possible.
If so, is it something desirable? Much of our research on restructuring has focused
on the process of amalgamation. Very little has looked at the policy ramifications
of reversing amalgamation. With this paper, we hope to change that.
There are several sections. In the next, we examine the process of amalgam-
ation in Canada. Several provinces have pursued consolidation aggressively: the
most notable is Ontario, the most recent, Manitoba. This section reviews these
efforts, examining the process and outcomes. The next section examines the liter-
ature that has examined amalgamations in Canada empirically. Much of this work
has been centered on Toronto. Since it is the largest city in Canada, it is certainly
a unique case, but we can learn much from the results of its forced amalgamation.
For the most part, the promises surrounding cost savings and efficiency have not
materialized.
Next, we focus on the viability of de-amalgamation, examining both the
costs and benefits that could come from reversing the consolidation process. We
also examine two cases of de-amalgamation, the secession of Headingley, Manitoba
from the amalgamated city of Winnipeg, and the city of Montréal. In the concluding
section, we present a set of criteria for establishing the viability of de-amalgamation.
Amalgamation in Canada
Municipalities across the country—small and large—have experienced restruc-
turing in the past several decades. While some amalgamations, such as the 1995
amalgamation of Abbotsford and Matsqui in British Columbia, have been volun-
tary and approved by voters in a referendum, the trend in Canada has been towards
involuntary, or provincially mandated, amalgamation (Sancton, 2011). The first
case of a municipality amalgamated against the expressed will of voters and council
occurred in the Windsor area in 1935. In that case, the more affluent community of
Walkerville was forcibly consolidated by the province with the three surrounding
municipalities to create the new City of Windsor in an effort to stave off insolvency
(Kusilek and Price, 1988). Walkerville fought the restructuring, even taking the
matter to the Judicial Committee of the Privy Council in England, which at the
time was Canada’s highest court of appeal (Sancton, 2011).
After the precedent set in Windsor, a number of provincial governments have
amalgamated their municipalities by force. One of Canada’s first large-scale urban
amalgamations occurred in Manitoba where, in 1971, the provincial government
5 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
consolidated the two-tier Metropolitan Corporation of Greater Winnipeg into a
single-tier “unicity” (Kiernan and Walker, 1983). The provincial government had
created the two-tier government only 11 years earlier in 1960 as a way to coordinate
area-wide servicing between the City of Winnipeg and its ten neighbouring com-
munities (Higgins, 1986). Motivated by a desire to end inter-municipal bickering
and promote fiscal equity within the Winnipeg area, the provincial government
amalgamated Metro Winnipeg in 1971 (Sancton, 2011).
Following Winnipeg’s consolidation, amalgamations went forward in
the Atlantic cities of Charlottetown and Summerside in Prince Edward Island,
Miramichi in New Brunswick and Cape Breton, and Halifax in Nova Scotia (Sancton,
2011). Many of these amalgamations were limited to larger cities. Other provinces,
namely Ontario and Quebec, later set out to restructure municipal government
on a much larger scale. In the 1990s and 2000s, these provincial governments
engaged in one of the country’s largest consolidation programs. When Mike Harris
and his Progressive Conservative government was elected in 1995, there were 850
municipalities in the province but by 2000 that number had been reduced to 444
(Siegel, 2005: 129). Much of the focus of the Progressive Conservatives was on
Toronto, where the two-tier Metropolitan Toronto government was dismantled
and converted into a single-tier government (Frisken, 2007). In Quebec, the prov-
incial government moved forward with wide-ranging municipal amalgamations in
2001 and 2002, largely at the request of big-city mayors. Amalgamations occurred
in and around Montreal, Quebec City, Longueuil, Hull, Chicoutimi, Sherbrooke,
and Trois-Rivières (Sancton, 2011). A de-amalgamation movement discussed later
in the paper reversed some of this restructuring.
Amalgamation in Canada is, of course, not a thing of the past. Manitoba’s
government is currently attempting to amalgamate every municipality in the prov-
ince that has fewer than 1,000 residents. The government’s plan would require
87 municipalities to amalgamate, a decision that prompted the Association of
Manitoba Municipalities to file legal action against the province (Lambert, 2013).
Many of the municipalities in the Greater Victoria Area recently held referendums
to consolidate the region into a single municipality. Most voters opted to explore
amalgamation (Knox, 2014).
Evaluating the Amalgamation Process
Much has been written about amalgamation in Canada. Forcible amalgamation
has occurred in a number of Canadian jurisdictions. What has been the effect
of this restructuring? Most of the research has analyzed amalgamated commun-
ities on one of two fronts: fiscal—Did amalgamation result in efficiencies? Did
6 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
amalgamation create cost savings? Did amalgamation save money?—and govern-
ance—Did amalgamation create challenges for governance? Did amalgamation
create greater access for citizens? Did amalgamation increase accountability and
transparency?. We explore both below.
Fiscal challenges
There is some debate about the fiscal advantages of consolidation. While some
(Bahl and Linn, 1992) have argued that consolidated, single-tier municipalities
offer greater fiscal capacity, more ability to borrow, and larger taxation capacity,
most academic research has found that consolidation produces fiscal challen-
ges. For the most part, local consolidation has produced few economies of scale
(Byrnes and Dollery, 2002; Hirsch, 1959; Bird and Slack, 1993). Costs generally
increase after amalgamation, largely because of a harmonization of service costs
and wages (Blom-Hansen, 2010; Dahlberg, 2010; Bird, 1995). The transitional
costs after amalgamation are often quite high and, in some cases, can reduce or even
eliminate any immediate cost savings anticipated from consolidation (Flyvbjerg,
2008; Vojnovic, 1998). Research has also found that amalgamation has not led to
more efficient service production or delivery (Kushner and Siegel, 2005; Found,
2012; Moisio, Loikkanen, and Oulasvirta, 2010). Additionally, municipal mergers
reduce competition among municipalities, which weakens incentives for efficiency
and responsiveness to local needs, while also reducing the choice of residents to
find an ideal ratio of tax to services (Charlot, Paty, and Piguet, 2012; Bish, 2001).
Since municipal mergers rarely result in boundaries that encompass entire metro-
politan regions, externalities may still exist in transportation and land-use planning
(Bahl, 2010; Slack and Chattopadhyay, 2009). Municipal amalgamations have also
been shown to internalize externalities (for example, by forcing rural residents to
pay for urban services to which they do not have access) (Vojnovic, 1998).
Within Canada, the cost savings always promised as a benefit of large-scale
amalgamation have not materialized (Sancton, 1996; Slack, 2005; Sancton, 2000).
For example, Kushner and Siegel, in their examination of three mid-sized amal-
gamated Ontario cities, found few cost savings: there were lower expenditures
after amalgamation in Central Elgin but none found in the larger municipalities of
Kingston or Chatham (Kushner and Siegel, 2005).
Toronto is perhaps the best-known example of consolidation in Canada. As
such, it has attracted much of the scholarly attention in this area. Slack and Bird
(2013) examined expenditures in some core areas of service delivery—fire protec-
tion, garbage collection, libraries, and parks and recreation—between 1997 and
2009 and found very few cost savings after Toronto’s amalgamation. Expenditures
for fire protection, garbage collection, and parks and recreation increased after
amalgamation. Only expenditures for library services decreased, although the
authors argue that this is likely the result of the changing nature of library ser-
vice, which moved from handing out books to providing electronic and internet
resources (Slack and Bird, 2013). Slack and Bird also found that residential and
7 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
business property taxes decreased after amalgamation. Much of this, however, can
be attributed to political decisions aimed at alleviating the widespread notion that
amalgamation would lead to higher taxes (Slack and Bird, 2013).
A significant proportion of the anticipated cost-savings from the Toronto
amalgamation was lost in the transition period. Schwartz (2003) found that the
transition from Metropolitan Toronto to the new consolidated city cost $275 mil-
lion. The harmonization of service levels across the city was the major cause of
these transition costs, but harmonization of wages and salaries was also a significant
expense. Research has also found that, while some positions were eliminated in the
wake of amalgamation, many more were added over time. Schwartz (2004) found
that, between 1998 and 2002, about 2,700 positions were eliminated because
of amalgamation but, over the same time period, an additional 3,600 positions
were added. “Downloading”—that is, the transferring of responsibility for ser-
vices from the provincial government to municipalities—also complicated the
post-amalgamation financial picture of the city. The provincially mandated process
of Local Service Realignment drove up expenditures in key Toronto service areas,
particularly social services (Schwartz, 2001; Slack and Bird, 2013).
Impact on governance
Along with the fiscal impact of municipal restructuring, amalgamation has also
caused strain in city governance. In the wake of Toronto’s amalgamation, for
instance, there were concerns that resident’s access to local decision-makers would
be diminished. In an effort to ensure there was adequate access for those com-
munities amalgamated into the new city, a network of community councils was
established; however, past research has found that these councils have largely fallen
into a state of disuse, and been reduced in number (Golden and Slack, 2006; Côté,
2009). A similar situation occurred after the creation of the Winnipeg “megacity”:
embedded resident advisory groups were eliminated and community committees
were reduced after they received mixed reviews (McAllister, 2004; Kiernan and
Walker, 1983; Axworthy, Grant, Cassidy, Siamandas, 1973).
Amalgamation in both Toronto and Winnipeg also neglected the regional
question. In Toronto, for example, the provincial government seriously examined
the broader integration of the Greater Toronto Area (GTA) prior to a change in
government. The most notable effort in this area was the Task Force for the Future
of the Greater Toronto Area, chaired by Anne Golden, which recommended a
relatively powerful, but not directly elected, Greater Toronto Area Council, which
would act as a new upper-tier authority and replace Metropolitan Toronto and the
four adjoining GTA regional governments (Todd, 1998; Golden, 1996). Golden,
of course, was also quite critical of the prospects of amalgamation for the GTA,
arguing that the cost-saving benefits of amalgamation were often “over-stated” and
that consolidation can also create diseconomies of scale (Sancton, 2000: 116). The
provincial government, however, disregarded many of Golden’s recommendations
and instead moved forward with altering the internal borders of Metropolitan
8 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Toronto (Sancton, 1999). The regional conversation that Golden began fell by
the way side and the problems with regional coordination identified by Golden
and others persisted.
Taking these two governance issues together, researchers have concluded
that Toronto is both too big and too small (Slack and Bird, 2013; Spicer, 2014).
Slack and Bird argue that “the city is too small to address the regional issues that
plague the GTA (such as transportation and land use planning and economic
development) and too big to be very responsive to local residents” (2013: 20).
Winnipeg experienced a similar phenomenon after consolidation. In
1971, the amalgamated City of Winnipeg accounted for 99.1% of the popula-
tion within the Winnipeg Census Metropolitan Area (CMA) and 92.7% in 1996
(Sancton, 2000: 61). Between 1991 and 1996, the City of Winnipeg’s population
increased by 0.5% while the rest of the CMA increased by 7.7% (Sancton, 2000:
62). Because of this regional disparity, the provincial government initiated the
Capital Region Review in 1998. In the Review’s report, the following problems
were identified:
the existing legislative, policy and procedural framework in the Region
has not been entirely effective. In particular, there is a need to improve
regional awareness and thinking; to institute strategic regional planning
of those activities which involve region-wide impacts; and to ensure that
the costs and benefits of service delivery in the Region are better allocated
among the various governments, ratepayers, and residents … We believe
that some form of regional agency is required to address these needs.
There is a broad spectrum of options available, ranging from a third tier of
government to greater collaboration between existing local governments.
(Sancton, 2000: 62)
Much like Toronto, Winnipeg eventually found itself in a situation where the
enlarged, restructured city was unable to capture all of the region’s growth. In this
case, the new City of Winnipeg was simply too small to address the growth pres-
sures of the province’s largest (and only true) city region. As a result, the province
began to muse about adding additional tiers of government to help manage growth
and development that spilled over the city’s boundaries.
Taken together, the research on amalgamation has largely proven that con-
solidation has created a series of fiscal and governance challenges. Since this is so, it
is no surprise that many jurisdictions that were amalgamated have been calling for
institutional change. For instance, in Ontario, the Municipality of Killarney recent-
ly passed a motion asking the province to de-amalgamate part of the community
(2014: 14-232). Of course, they are not alone. Ontario municipalities such as
Essex, Sydenham, and Kawartha Lakes all have groups calling for de-amalgamation
(Gowan, 2013). Would de-amalgamation be a viable alternative? In the next section,
we examine this prospect.
9 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
De-amalgamation in Canada
In Canada, the overall trend in municipal restructuring has been toward creat-
ing larger, not smaller, municipalities. Very rarely have we seen municipalities
de-amalgamate. This, however, does not mean that it is impossible to reverse
restructuring. Below, we provide two examples: Headingley, Manitoba, and
Montréal, Quebec. The two offer insight into different processes and results.1
Headingley is a rural municipality west of Winnipeg and was de-amalgamated
after a number of studies identified very little commonality with the rest of urban
Winnipeg. The community was primarily rural and presented a servicing burden
for the amalgamated City of Winnipeg. In 2003, the amalgamated City of Montréal
was given the option of de-amalgamating in a city-wide referendum. Some areas
chose to de-amalgamate, while others did not, creating a governance challenge
for the region.
The two regions give us a look at the differences between urban and rural
de-amalgamations. In the case of Headingley, the municipality was permitted to
de-amalgamate largely because it was rural and had little in common with the rest
of the city. Officials from the community wanted to remain rural and feared urban
development would slowly overtake the area if they remained within the bound-
aries of the City of Winnipeg. Those in Montréal took a different perspective. Every
community within the amalgamated City was urban and the referendum focused
mainly on taxation and service levels along with the language politics that generally
consume debate within the Montréal region.
Case study: Headingley, Manitoba
Winnipeg has undergone intense institutional change. Much like Toronto,
Winnipeg was federated as a two-tier municipality prior to being forcibly consoli-
dated in 1971. Caught in this process was Headingley, a small rural community on
the western edge of the City of Winnipeg. After amalgamation, those in Headingley
pushed for secession. As a primarily rural community, residents did not believe
they had much in common with the larger, urban sections of the city.
The arguments of Headingley residents were finally formally addressed in a
1986 review of the City of Winnipeg’s governance structure. The review was initiated
by the provincial government in 1982, with a focus on examining, “city planning
[and] the distribution of responsibilities and powers between the City of Winnipeg
and the Province of Manitoba” (Wichern, 1986: 3). The review committee even-
tually made 73 recommendations concerning everything from the composition
of council, to intergovernmental relations to the city’s electoral system (Wicher,
1986: 3). Their recommendations on Headingley were, therefore, only one part of
1. There are relatively few examples of de-amalgamation in Canada. Therefore, the two most
prominent were selected for this paper.
10 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
the extensive review but, for our purposes, they are central. Headingley, the report’s
authors argued, should be allowed to secede from the City of Winnipeg, noting:
We perceive the area as a predominantly rural area without the status of a
rural municipality. It would appear beneficial, therefore, to permit the area to
pursue its rural and agricultural future as either a separate municipality or as
part of an existing rural municipality. As an important asset in the Winnipeg
region, rural Headingley should be given the opportunity to govern itself
within the role that apparently all parties within it play. (Sancton, 2000: 61)
In 1987, before the review was issued, the residents of Headingley began
a campaign that called for the town’s secession from the City of Winnipeg
(O’Brien, 1993: 32). These efforts were mainly led a group called the “Headingley
Taxpayers Association”, who had been agitating for a review of the new amal-
gamated city structure since consolidation. The report merely confirmed their
attitude toward Winnipeg.
In 1990, the City of Winnipeg commissioned a survey of Headingley
residents2 to gauge their attitudes on issues such as service delivery and govern-
ance. The survey did not ask residents specifically whether they wished to continue
as part of the City of Winnipeg. What the survey did reveal, however, was that
residents had a deep desire to continue as a rural community. A vast majority want-
ed Headingley to continue to keep its “semi rural atmosphere”, with very little new
development. Reduced property taxes were also favoured by a majority of residents
over improved services and the introduction of “urban services”. The largest con-
cerns of Headingley residents were the loss of farmland from their community
(City of Winnipeg, Dep’t of Environmental Planning, 1990).
Overall, the survey found that most residents within the community had
no desire to develop along the same grounds as Winnipeg. Headingley residents
overwhelmingly wanted to remain as a rural community. Most respondents indi-
cated that they liked most about living in Headingley was the “peace and quiet”
(29.60%) and the “country atmosphere” (31.39%). Very few (6.27%) indicated
they enjoyed the community’s “proximity to Winnipeg” (City of Winnipeg, Dep’t
of Environmental Planning, 1990).
The City of Winnipeg used many of these results in drafting its “Action
Area Plan”, a framework for examining the status of Headingley. The report began
by acknowledging the deep distinctions between Headingley and the rest of the
communities within the City of Winnipeg. Of note, the report’s authors identified
the following about Headingley: its land area is one fifth that of Winnipeg, its
predominant land use is agricultural, it has a rural service level and, finally, its
2. The survey itself was distributed both by mail to all homes within the Headingley community
and at a public, open-house meeting. In total, 312 questionnaires were distributed, with a resulting
coverage of 61.3% of the homes in Headingley. 194 questionnaires were returned, for a response
rate of 62.2%.
11 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
groundwater is not potable (City of Winnipeg, 1991). The report also began
by recognizing that many residents had concerns about tax dollars leaving their
community to subsidize services in urban portions of the city and that it would
be challenging to create a more compact urban form while still within the city’s
boundaries (City of Winnipeg, 1991).
The study identified that the community of Headingley was still very small.
In total, 1,380 residents were identified as living in 435 private dwellings. The land
area of the community was quite large (29,445 acres), with most of the land used
for agriculture (75%) (City of Winnipeg, 1991). Although the report’s mandate
did not include the community’s concerns with taxation, it did identify several
challenges to providing city services within such a rural area, namely the inability
of city buses to navigate primarily gravel side roads, the high cost of water delivery
in consideration of the households served, and a lack of municipal water supply in
the delivery of fire protection (City of Winnipeg, 1991).
Overall, however, the report found that the largest impediment to improv-
ing service levels in Headingley were the desires of local residents to maintain
their semi-rural character. Wanting to remain rural was identified as an impedi-
ment to increased development in Headingley, which would have more easily
facilitated extension to services to the community. As it stood, delivering such
services was more costly than it needed to be. Residents also expressed concerns
regarding the cost to them through local improvement levies for the local distribu-
tion system (City of Winnipeg, 1991). In short, the residents of Headingley were
unwilling to accept the increased density that would have more easily facilitated
the expansion of services and were unwilling to pay more such services in the
absence of such development.
In 1991, approval was granted from the provincial government to allow the
residents of Headingley to hold a referendum on secession (O’Brien, 1993: 32).
Of the 1,390 people entitled to vote, 1,163 voted and of these 1,008, or 86.7%, sup-
ported secession and the establishment of a new rural municipality (Sancton, 2000:
61). Following the results of the referendum, Jim Ernst, the provincial Minister of
Urban Affairs, presented a bill before the Manitoba Legislature that would allow
Headingley to separate from the city of Winnipeg (O’Brien, 1993: 32). Ernst read
a summarized list of residents’ concerns in the Legislature on February 24, 1992:
Unlike most suburban residential communities in Winnipeg, Headingley is
a semi-rural community with no municipal sewer or water service, a limited
bus service and unpaved roads … in short, Headingley has more in com-
mon with its neighbouring rural municipalities than it does with Winnipeg,
in terms of land uses and levels of municipal services available in particular
(O’Brien, 1993: 32).
Ernst reassured his colleagues that his government continued to support the con-
cept of the Unicity despite the secession of Headlingly:
12 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Let me assure the House that the government is fully committed to the
concept of the Unicity. The government does not encourage or support the
dismantling of Unicity. In our view this would be counter-productive. To
conclude that because we agreed to Headingley’s secession we would there-
fore permit any other community to become an independent municipality
is … an incorrect assumption (O’Brien, 1993: 33).
Ernst’s bill contained an amendment that prevented any secession from leading
to a new urban municipality and stated that Headingley was an isolated incident
and did not threaten the Unicity concept, stating that “given the very special cir-
cumstances of Headingley there is no legitimate basis for concluding that allowing
Headingley to secede means other communities will be permitted to withdraw one
by one over time … I can assure you this is not the government’s intention, nor
will that happen” (O’Brien, 1993: 33). Headingley was separated and gained the
status of an independent Rural Municipality.
While the secession went ahead as planned, the legal wrangling over assets
continued for some time. Headingley and Winnipeg were unable to find an appro-
priate method of dividing assets and referred the matter to the Municipal Board of
Manitoba for a resolution. The Board examined four main issues:
1. division of the excess of assets over liabilities;
2. allowance for out-standing taxes payable to Winnipeg by Headingley taxpayers;
3. provision for Winnipeg-owned land within Headingley;
4. provision for debt relating to Headingley infrastructure.
Headingley made a submission, claiming they were owed a significant sum
from the City of Winnipeg. Specifically, Headingley argued that they were
owed: payment of $650,000 for infrastructure capital costs in 1993, payment
of $100,000 to cover the cost of the consultants and preparation of materials
for the Municipal Board hearing, the transfer of all Winnipeg-owned proper-
ties within Headingley, cancellation of all capital debt charges claimed by the
City of Winnipeg for maintenance of farm drainage during the 1980s, cancel-
lation of a retainer fee for fire services for 1993 ($166,839), contribution of
$146,000 towards a repayable loan from the provincial government to support
the operation of Headingley from 1992, and financial considerations for the
John Blumberg Golf Course, which was formally a Winnipeg-run operation
(Municipal Board of Manitoba, 1994). Overall, the most surprising part of
Headingley’s statement of claim was the demand for compensation for “neglect
and excessive taxes” that the City of Winnipeg extracted from the community
over the twenty-year period it was part of the amalgamated city (Municipal
Board of Manitoba, 1994).
The City of Winnipeg agreed to the transfer of property, which was trans-
ferred to Headingley for the sum of $1.00 (Municipal Board of Manitoba, 1994).
13 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
The Municipal Board did not see any validity to the claim that the continued oper-
ation of the John Blumberg Golf Course requires any compensation from the City
(Municipal Board of Manitoba, 1994). On the more substantial issues, such as
the transfer of assets from each community, the Board established some general
protocols. The Board believed that since the two communities shared a governance
structure for only 21 years, Headingley did not have a reasonable claim to share
in all of the assets developed by City (1994). Assets put in place during that per-
iod, such as the City’s Solid Waste Disposal System, were sharable (1994).3 The
Board also felt that existing tax revenue was not sharable, but the City’s unallocated
reserves were (1994). Despite the objections of the City of Winnipeg, the Board
also recommended that the equity from the Land Operating Reserve also be shared
(1994).4 The Board considered City equipment and chattels sharable. These were
estimated at a cost of $53,204,600 (Municipal Board of Manitoba, 1994).
Once it had been established which assets were considered sharable, there was
still disagreement about the apportionment of these assets. Headingley maintained
that this ratio should be in proportion to the municipality’s assessed value (in this
case 0.0053) while Winnipeg argued it should be based upon portioned value, that
is, the value on which taxes are levied (0.00424). The Board argued that the appor-
tionment should be based upon portioned value (Municipal Board of Manitoba,
1994). Using that formula, Headingley’s share of the equity of $178,242,000
apportioned on the base of assessment amounted to $755,746 (Municipal Board
of Manitoba, 1994). In terms of outstanding taxes, the Board found that Winnipeg
owed Headingley taxpayers $139,055 (1994). Conversely, the Board also found that
Headingley owed Winnipeg $108,670 in outstanding taxes (1994).
Since Headingley left the City of Winnipeg, there have been no other seces-
sions from the city, nor has the provincial government encouraged them.
Case study: Montreal, Quebec
Municipal amalgamation had been explored for some time in Quebec prior to
Montreal’s restructuring. After the wide-ranging amalgamations in Ontario dur-
ing the 1990s, Quebec Premier Lucien Bouchard began to explore restructuring
in earnest by assigning chairs of advisory committees for municipal structures in
Montreal, Quebec City, and the Outauoais area (Sancton, 2011). Louis Bernard
was appointed as chair for Montreal, and eventually proposed the creation of
27 boroughs, each of which would have a council with authority to manage a
range of local services and levy property tax within the territory of the borough
(Sancton, 2011). The Province put its agenda into action in December 2000, with
the passage of Bill 170 in the Quebec National Assembly. The legislation led to the
3. On this particular component, Headingley was entitled to $435,000 in equity from the Solid
Waste Disposal System.
4. The Interim report on Headingley’s secession argued that this Reserve had not originally
included equity from land in Headingley but the City of Winnipeg was unable to prove conclu-
sively that this was true. This led to a re-adjustment of the total allocation by the Municipal Board.
14 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
consolidation of 213 municipalities into 42, with the most significant amalgama-
tion on the Island of Montreal where all 28 municipalities were merged to create a
new Montreal megacity (Spicer, 2014). On top of the newly created amalgamated
city, was another tier of government called the Montreal Metropolitan Community
(MMC), which covered the entire metropolitan area (Sancton, 2011).
Because borough governments were included, Montreal’s new structure
would look very different from that of Toronto. According to Sancton, this step
was unique: “never in Canadian municipal history had a serious proposal for an
amalgamation been accompanied by such a high degree of political and financial
decentralization” (2011: 159). Tomàs (2012) explains that there were two main
reasons for creating the borough governments. The first was linguistic, as 14 of
the municipalities where English was the language spoken by the majority had a
bilingual status prior to amalgamation and provided services to citizens in both
English and French. The second was about local responsiveness: the boroughs
were seen as a way to preserve the sense of community in the former municipalities.
The amalgamation of Montreal was controversial. The mayors of many
suburban municipalities were opposed to the merger. Some even held public
consultations in their municipalities to gather support to oppose the mergers
(Vaillancourt and Meloche, 2013). Others even took the matter to the courts and
attempted to block the forcible consolidation (Vaillancourt and Meloche, 2013).
Since this was the case, we should not be surprised that a level of animosity was still
present after the restructuring process. In the 2003 provincial election campaign,
the Quebec Liberal Party (PLQ) promised to allow residents to have a say on the
municipal mergers. The PLQ’s commitment to allowing debate on municipal amal-
gamation was long-standing. At the party’s 2000 congress, a resolution allowing
for de-almalgamation was moved by Roch Cholette, the party’s municipal affairs
critic (Sancton, 2006). Party leader Jean Charest expressed support for the motion,
including the need for voters to have a say in the fate of their communities (Sancton,
2006). The current government’s merger plan, Charest argued, was heavy handed
and largely excluded the public. During the election campaign, a large public rally
was held in Pointe Claire in the west end of the Island of Montreal, where Charest
promised to provide a mechanism for de-amalgamation, if elected. Specifically,
Charest stated: “The Liberal Party [has promised] once it forms a government
[that it will] allow the citizens who have been victims of these formed mergers to
speak and undo what the Parti Québécois has done” (Sancton, 2006).
The PLQ went on to win the election and, once in power, passed a law
requiring citizen consultations on the territorial reorganization that would allow
municipalities that wished to leave any newly amalgamated municipalities to do so
under certain conditions. Two conditions were put forward for de-amalgamation:
first, a minimum of 10% of registered voters within a former municipality’s borders
had to sign a register and, second, a referendum to lead to a de-amalgamation had
to include a majority of voters who represented at least 35% of registered voters
(Vaillancourt and Meloche, 2013). Across the province, 31 municipalities—15 of
15 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
which were on the Island of Montreal—opted for de-amalgamation (Spicer, 2014).
Municipalities that chose to de-amalgamate had their independent status restored
on January 1, 2006.
Agglomeration
The de-amalgamation on the Island of Montreal required yet another provincial
reform: the creation of the Agglomeration. This new upper-tier structure was given
responsibility for delivering higher-order services across the Island, including prop-
erty assessment, social housing, large parks, policy, public transit, major streets,
water supply, and sewage treatment. While the Agglomeration provides upper–tier
services to the 15 de-amalgamated municipalities, it is dominated by the City of
Montreal, which constitutes 87% of the population on the Island (Spicer, 2014).
The Agglomeration council is headed by the mayor of Montreal and consists of 31
elected officials representing all of the municipalities on the island of Montreal: the
mayor of Montreal, 15 members of Montreal’s city council named by the mayor,
the 14 mayors of the reconstituted municipalities (Île-Dorval and Dorval share one
representative), and a second representative from Dollard-des-Ormeaux (because
of the size of its population) (Vaillancourt and Meloche, 2013). Voting on the
Agglomeration council is weighted, so that Montréal has 87% of the votes.
Servicing responsibility for the Island of Montréal is divided between the
Agglomeration, the City of Montreal, and the boroughs. The Agglomeration is
responsible for area-wide services (for example, property assessment, social hous-
ing, transit, and public safety). The City and boroughs are responsible for local
services with the City managing services such as water, waste management, and
economic development, while the boroughs oversee services such as local street
maintenance, snow removal, libraries, and local parks (Spicer, 2014).
Borough governments are funded largely through transfers from the City of
Montreal; the transfers totalled $850 million in 2012 (Vaillancourt and Meloche,
2013). Property tax rates are relatively consistent throughout the city, as boroughs
make little use of their taxation powers. Still, some boroughs are raising up to
20% of their revenues from their residents—largely through service charges such
as parking revenue—whereas local revenues represent as little as 5% in others
(Vaillancourt and Meloche, 2013).
The amalgamation and subsequent de-amalgamation of Montreal has led
to a great deal of complexity in governance. Within Montreal, there are effectively
four levels of government: the boroughs, the City of Montreal, the Agglomeration,
and the Montreal Metropolitan Community. Many of these have elected repre-
sentatives. Borough governments are not distinct corporate entities and operate
within the City of Montreal. Each has a directly elected mayor who also sits on city
council. Most have at least one other councillor on its borough council and some
have up to four more. In total, 40 borough councillors are elected to serve at that
level, while 64 members are elected to serve on Montreal city council, including
the Mayor of Montreal and the 18 borough mayors (Sancton, 2011).
16 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Evaluation of the Case Studies
Since de-amalgamation, Headingley has remained relatively small. As of 2011, the
municipality had a population of 3,215 people and only $139 million worth of
assessed property.5 In this sense, de-amalgamation advocates got their wish. The
1991 survey by the City of Winnipeg’s planning office identified 1,380 residents,
which means the community has seen only a marginal increase in population over
20 years. Headingley is also a fiscally healthy community. As of 2011, the municip-
ality had over $7 million in cash reserves and a $30 million surplus—the highest
in its municipal class (populations between 1,000 and 5,000). Unfortunately, we
do not have a survey similar to the one conducted in 1991 by the City of Winnipeg
to gauge the satisfaction of residents with their municipal services but, from the
latest financial returns, it appears that Headingley is fiscally healthy.
The case of Montreal is, of course, considerably different. As noted above,
the partial de-amalgamation of the city has caused significant challenges in govern-
ance. The region is also experiencing fiscal challenges. In a 2013 article, Vaillancourt
and Meloche argue that it is challenging to identify cost savings results from amal-
gamation because of the complexity of governance arrangements following the
creation of borough governments and de-amalgamation. Servicing responsibil-
ity for the Island of Montréal is divided between the Agglomeration, the City of
Montréal and the boroughs, all of which, they argue creates a host of service ineffi-
ciencies (Vaillancourt and Meloche, 2013). There is no clear formula to determine
who ought to be responsible for delivering which services, but Vaillancourt and
Meloche (2013) argue that efficiency will generally be higher when responsibil-
ities and costs are shared appropriately. They, therefore, identify ways in which
Montreal’s financial and administrative arrangements could be made more efficient.
They suggest that three borough-administered services—libraries, waste collection,
and road maintenance and snow removal—could be more efficiently delivered by
the City of Montreal (2013). They further argue that transactions between the bor-
oughs also need to be priced properly in order to provide full accounting for muni-
cipal services (2013). Similarly, cost-sharing mechanisms should be fully explored
to bring more efficient service delivery for items delivered partially by both the
city and the boroughs, such as library services, since borrowers may come from
outside a particular borough library catchment area. Overall, it is unclear whether
amalgamation and the reforms that followed produced cost savings in Montréal,
but there seems to be plenty of scope for making the city’s current administrative
arrangements more efficient than they are at present.
Headingley and Montreal have provided some valuable lessons about
de-amalgamation. The case of Headingley should provide some hope for
5. Data from the Province of Manitoba’s Municipal Statistical Information. These figures are as
of the end of the 2011 fiscal year.
17 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
de-amalgamation advocates in the rural parts of Ontario’s “megacities”, such
as Ottawa and Hamilton. In both, the provincial government merged rural and
semi-rural communities with large urban centres, a measure that was met with
stiff resistance. If Headingley could secede based on its relatively few connections
to the urban centre of the city, then so too could communities like Flamborough
in Hamilton or Osgoode in Ottawa. Headingley also seceded from Winnipeg
21 years after first being amalgamated, which provides hope for communities
told that too much time has passed since their original consolidation to reverse
restructuring effectively.
Montreal provides some very different lessons. The PLQ government should
be credited for providing voters with a mechanism to vote for de-amalgamation.
They promised to do so in the 2003 campaign and, when given the opportunity,
held to their promise. The Ontario Liberal Party under Dalton McGuinty’s leader-
ship promised something similar during the 2003 Ontario election campaign, but
abandoned the notion of allowing de-amalgamations, even after a referendum on
the issue was held in the consolidated municipality of Kawartha Lakes (Sancton,
2006). For the most part, the Ontario Liberal government felt that the fiscal
health of many smaller, municipalities would be in jeopardy if they were allowed
to de-amalgamate.6
While McGuinty was heavily criticized for his decision, examining the com-
plicated governance network in Montreal may lend some support to his decision.
Residents in Montreal now live in a multi-tier system, where decision-making
authority, servicing, and financing responsibility is fragmented. While it is com-
mendable that the government of Jean Charest, unlike the previous PQ govern-
ment, allowed residents to have a say in the future of their municipal governments,
by not reversing amalgamation completely, they created a needlessly complicated
system of local governance.
Is De-amalgamation Possible?
De-amalgamation does not necessarily mean a return to pre-amalgamation bound-
aries. As we have seen through the two examples above, often de-amalgamation
means accepting peculiar boundaries and new governance arrangements. In
Headingley, the community long felt that they had no connection to the rest of
the City of Winnipeg. As a rural community, residents of Headingley took pride in
their agricultural economy and feared that urban expansion would soon overtake
their community. The section of the City of Winnipeg that contained the former
6. Personal communication from Richard Joy, Former Advisor to Minister of Municipal Affairs
and Housing, John Gerretsen, Government of Ontario (February 28, 2014).
18 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
municipality was sectioned off and Headingley was reborn with Rural Municipality
status. The legal wrangling over assets took some time to conclude, largely because of
how long Headingley had been part of the City of Winnipeg. In Montreal, the amal-
gamated city was not together very long, allowing de-amalgamation without many
legal complications. The question remains, however, is de-amalgamation possible?
In a theoretical sense, de-amalgamation is certainly possible. If the bor-
ders of municipalities can be enlarged, they can be reduced or divided. Provincial
governments in Canada have the ability to redraw local boundaries and re-assign
responsibilities. Simply put, if provincial governments can amalgamate, they can
de-amalgamate. The question then becomes: If de-amalgamation is possible, is
it desirable? Would de-amalgamation correct many of the problems identified
above? In this case, the question is less clear. In fact, as we have seen by examining
Montreal, the end result of de-amalgamation could be a messy governance arrange-
ment. Below are some items to be taken into account when evaluating whether
de-amalgamation would be beneficial.
Fiscal health
One of the most important factors in restructuring municipal governments is the
fiscal health of the community. For many municipalities, size and function are
often most important for ensuring municipalities are fiscally healthy. Does it have
enough of an assessment base to properly deliver services to residents? What the
Ontario Liberals found when they examined the case for de-amalgamation of the
City of Kawartha Lakes was that many of the smaller communities, who were once
independent municipalities in Victoria County, were not able to absorb the cost
of many of the services transferred to their responsibility by the provincial gov-
ernment. It is likely that many communities could be facing similar situations. In
the years since amalgamation, fiscal conditions may have changed. Therefore, it is
important to find the right governance structure to ensure the new municipality
is fiscally healthy.
Governance
Consideration must be given to the type of governance network that would accom-
pany de-amalgamation. In Montreal, de-amalgamation led to the creation of a new
tier of government to help coordinate services. This new system, as we have seen,
has created confusion amongst residents and fragmentation in the region’s govern-
ance and service-delivery structure. De-amalgamation in Montreal has created a
patchwork of governance within the region and blurred the lines of accountabil-
ity. Adding institutional layers to a region, however, does not always solve these
types of servicing and governance dilemmas. Research has shown that inter-local
cooperation shows promise in ensuring service and policy continuity throughout
a region (Feiock, 2007). De-amalgamation could, therefore, be achieved with-
out replicating the complexity found in Montreal by relying on voluntary service
sharing networks.
19 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Service delivery
In many cases, amalgamation is pursued to better provide for service continuity, or
to limit the amount of inter-jurisdictional bickering related to servicing. It is unclear
whether de-amalgamating a community would mean a return to these types of
servicing dilemmas. Structural change does not always solve inter-jurisdictional
conflict. For this reason, there is a chance that de-amalgamation may further
complicate matters, an aspect the Montreal case clearly demonstrates. How can
economies of scale and scope be best achieved? Would service quality improve?
Would service delivery be more efficient? In certain cases, de-amalgamation may
likely make achieving service efficiency more challenging if the right governance
structure is not put in place.
Transaction costs
The relationship between Headingley and Winnipeg in wake of Headingley’s
de-amalgamation has shown that there are steep costs to de-amalgamation. When
communities de-amalgamate, they are rarely able to leave without some costs, espe-
cially if they have been amalgamated for a particularly long time. In some cases, the
transaction costs may be too high to make de-amalgamation possible. Not only
will there be legal and financial negotiations with the municipality from which the
community is separating, but consideration will have to be given to the transition
costs of establishing a new administrative and political structure. As we noticed
with Toronto’s amalgamation, labour costs erased much of the anticipated savings.
The same forces would be at play during de-amalgamation. In some cases, these
transaction costs could affect the ongoing fiscal health of the community, perhaps
making de-amalgamation unfeasible.
Public support
As we have seen, the public is often excluded from decisions surrounding amalgama-
tion. Municipalities can be forcibly consolidated without ever gaining consent from
the community. In fact, a number of provincial governments have taken this route.
Manitoba is currently engaged in a large-scale forced amalgamation of its smallest
municipalities. A number of municipalities in the Greater Victoria Area recently held
referendums on whether to explore amalgamation. This, however, is a rarity. Even
when public input was not sought prior to amalgamation, it is important to seek it
prior to de-amalgamation. Institutional change should have the broad support of
residents. In Montreal, the option of de-amalgamation was provided to all former
municipalities and was rejected in many. As unpopular as forced amalgamation
often is, many do find benefit in these new governance structures. Seeking a clear
mandate to pursue de-amalgamation not only bolsters the case of those advocating
it but also ensures community support.
Even in the right conditions, provincial governments will not always con-
sider de-amalgamation. Politics are inevitably in play during amalgamation
20 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
and de-amalgamation. In the absence of provincial political support or if
de-amalgamation does not make sense, administrative decentralization may
help residents return some semblance of local control to their communities.
Community councils may be able to accomplish this, if they were empow-
ered with decision-making ability and responsibility over local matters and
some finances. Participatory budgeting and the type of borough councils
that Montreal has in place also show some promise. There is a way that these
types of mechanisms would garner the benefits of a two-tier system: local
control over fiscal and planning functions, but with an area-wide purview
for service delivery.
De-amalgamation, however, has been shown to be possible. It has been
pursued on a number of occasions, but rarely achieved. Provincial governments
are generally not motivated to reverse their decisions. Even new provincial govern-
ments are loathe to revisit the decisions of previous administrations when it comes
to municipal amalgamations. Opponents of amalgamation have made their case to
reverse restructuring decisions in certain cases. Headingley and Montreal present
two cases: one is rural, while the other is urban; one was a partial de-amalgamation
and the other was gauged on a city-wide basis. An important distinction, how-
ever, is also the length of time between amalgamation and de-amalgamation. In
Montreal, de-amalgamation activists pressured the government to reverse their
decision throughout the merger process. An opposition party saw an opportunity
to capitalize. In Headingley, the de-amalgamation process took more than 21 years
to achieve but, in this case, advocates never relented and continuously made a
case restore their community’s autonomy. The key, then, appears to be advocacy
and research.
Returning to the question posed by Gee and his colleagues, what
would de-amalgamation look like in our largest city, Toronto? Is Gee right that
de-amalgamation is not possible? Quite frankly, no. De-amalgamation in Toronto
is possible. Montreal has shown us that de-amalgamation of a large city is possible.
Headingley has demonstrated that the tenure of consolidation complicates the
de-amalgamation process, but that does not fatally harm it. The City of Toronto,
therefore, could, at least in theory, be de-amalgamated and the previous borders
restored. However, is it desirable to do so?
The key lesson from Montréal’s experience with de-amalgamation is that
allowing certain areas to de-amalgamate and others to stay can create a fragmented
patchwork of governance across the region. A similar situation in Toronto is not
desirable. If de-amalgamation were to be pursued, the return of a two-tier struc-
ture would be the best option. The external boundary of the City of Toronto and
Metropolitan Toronto are the same. The provincial government merely removed
the internal boundaries at the time of amalgamation. Some of these boundaries are
still in place. In the wake of amalgamation, community councils were established
to address issues that were local in nature, such as business licensing and property
standards issues. Originally six community councils were established, adhering to
21 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
the boundaries of the former lower-tier municipalities in Metropolitan Toronto.
In 2003, the number of community councils was reduced to four: Etobicoke-York;
North York; Scarborough; and Toronto and East York.
These current boundaries could theoretically serve as new internal bound-
aries, leaving the exterior boundaries in place. Servicing responsibility could be
decentralized within the city and placed in the hands of these local councils, effect-
ively recreating a two-tier system that was, at one time, widely praised for its ability
to balance local interests with servicing efficiency. Metropolitan Toronto origin-
ally had responsibility for area-wide services, such as property assessment, the
construction and maintenance of arterial roads, major sewage and water facilities,
regional planning, public transportation, the administration of justice, metropol-
itan parks, and housing (Colton, 1980: 71). The lower-tier municipalities would be
responsible for local services, such as police and fire protection, business licensing,
public health, and libraries (Colton, 1980: 71). In other service areas, responsibility
was shared with Metropolitan Toronto (Colton, 1980: 71). The same servicing
arrangement could be put in place again, thereby ensuring a degree of localization
while maximizing economies of scale and scope.
All of this, however, is only speculative. There is no guarantee that the
service framework or governance structure mentioned above is even feasible. In
fact, the possibility of de-amalgamation in Toronto needs to be buttressed by
two important points. First, the majority of the research on Toronto’s amalgam-
ation has indicated that restructuring has created a host of challenges for the city.
There is no reason for us to believe that today’s provincial officials would do a
better job de-amalgamating the city than yesterday’s officials who were respon-
sible for its amalgamation. Second, prior to Toronto’s amalgamation, provincial
policy-makers were engaged in a regional conversation, attempting to bring about
greater connections between the city and its suburban neighbours. Amalgamation
ended those discussions. Since then, regional coordination continues to be a
challenge. De-amalgamation, then, could very well postpone those much-needed
discussions once again.
Municipalities require the right governance structures. Research has shown
that municipal amalgamation is fraught with fiscal, policy, servicing, and govern-
ance challenges. Policy-makers ought to pursue an institutional arrangement that
best provides for economies of scale and scope, while also allowing citizens suit-
able access to decision-makers. It is not always apparent whether de-amalgamation
would provide this type of institutional arrangement. A number of factors, includ-
ing fiscal health, governance, service delivery, public input, and transaction costs
need to be carefully considered prior to pursuing de-amalgamation. In certain
cases, such as Toronto, de-amalgamation is possible, but likely not desirable, mostly
because such a decision would further complicate the region’s coordination chal-
lenges. We have, however, seen cases of successful de-amalgamation. Headingley
provides us with an excellent example of a community that expressed their desire to
be independent and long pressed their concerns with the province. By all accounts,
22 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
today the municipality is fiscally healthy and free to remain primarily rural, a key
desire of de-amalgamation proponents. Montreal, on the other hand, provides us
with an example of how de-amalgamation can create a messy and blurred govern-
ance network. As such, Montréal is an example that de-amalgamation proponents
should hope to avoid.
Overall, however, examining both cases and considering de-amalgamation
in a large city like Toronto, should give us pause when considering both amalgam-
ation and de-amalgamation. The goal of policy makers should be to find the right
type of institutional structure for municipalities that is embraced by citizens. As we
have seen from this discussion on de-amalgamation, reversing local institutional
change is very difficult. It is a long and challenging process, that often has high
legal and financial costs. Therefore, provincial governments should more carefully
examine the benefits of amalgamation because once implemented, this type of
restructuring is nearly impossible to reverse without significant cost and challenge.
Institutional restructuring, therefore, is something we should never take lightly.
23 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
References
Axworthy, Lloyd, Maureen Grant, Jim Cassidy and George Siamandas
(1973).
Meeting the Problems and Needs of Resident Advisory Groups. Institute of
Urban Studies.
Bahl, Roy (2010). Financing Metropolitan Cities. In
Local Government
Finance: The Challenges of the 21st Century, Second Global Report on Decentralization
and Democracy(United Cities and Local Governments; Edward Elgar): 67–71.
Bahl, Roy, and Johannes Linn (1992).
Urban Public Finance in Developing
Countries. Oxford University Press.
Barber, John (2014). Bring Back Truly Local Government.
Toronto Star
(October 13). <http://www.thestar.com/opinion/commentary/2014/10/13/bring_
back_truly_local_government.html>.
Bird, Richard (1995).
Financing Local Services: Patterns, Problems and
Possibilities. Major Report 31. Toronto: Centre for Urban and Community
Studies, University of Toronto.
Bird, Richard, and Enid Slack (1993).
Urban Public Finance in Canada.
John Wiley and Sons.
Bish, Robert L. (2001).
Local Government Amalgamations: Discredited
Nineteenth-Century Ideals Alive in the Twenty-First. CD Howe Institute
Commentary. CD Howe Institute
Blom-Hansen, Jens (2010). Municipal Amalgamations and Common
Pool Problems: The Danish Local Government Reforms in 2007.
Scandinavian
Political Studies 33, 1: 51–73.
Byrnes, Joel, and Brian Dollery (2002). Do Economies of Scale Exist in
Australian Local Government? A Review of the Research Evidence.
Urban Policy
and Research 20, 4: 391–414.
Charlot, S., S. Paty, and V. Piguet (2012). Does Fiscal Cooperation
Increase Local Tax Rates in Urban Areas? Working Paper. Institut National de la
Recherche Agronomique.
City of Winnipeg, Department of Environmental Planning (1990).
Headingley Action Area Plan: Results of Resident Survey. City of Winnipeg.
24 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
City of Winnipeg, Planning Department (1991).
Headingley: Area Action
Plan. City of Winnipeg.
Colton, Timothy J. (1980).
Big Daddy: Frederick G. Gardiner and the
Building of Metropolitan Toronto. University of Toronto Press.
Côté, Andre (2009).
The Maturing Metropolis: Governance in Toronto a
Decade on from Amalgamation. Institute on Municipal Governance and Finance.
Dalhberg, Matz (2010). Local Government in Sweden. In Antti Mosio,
ed.,
Local Public Sector in Transition: A Nordic Perspective (Government Institute
for Economic Research): 122–146.
Feiock, Richard C. (2007). Rational Choice and Regional Governance.
Journal of Urban Affairs 29, 1: 47–63.
Flyvbjerg, Bent (2008). Curbing Optimism Bias and Strategic
Misrepresentation in Planning: Reference Class Forecasting in Practice.
European Planning Studies 16, 1: 3–21.
Found, Adam (2012).
Scale Economies in Fire and Police Services. IMFG
Paper 12. Institute on Municipal Finance and Governance, Munk School of
Global Affairs, University of Toronto.
Frisken, Frances (2007).
The Public Metropolis: The Political Dynamics of
Urban Expansion in the Toronto Region, 1924–2003. Canadian Scholars’ Press.
Gee, Marcus (2014). Toronto May Be Deeply Divided, but There Is Still
Hope for a Better City.
Globe and Mail (October 24). <http://www.theglobeandmail.
com/news/toronto/toronto-may-be-deeply-divided-but-there-is-still-hope-for-the-city/
article21360706/>.
Golden, Anne (1996).
Greater Toronto: Report of the GTA Task Force.
Province of Ontario.
Golden, Anne, and Enid Slack (2006). Urban Governance Reform
in Toronto: A Preliminary Assessment. In Eran Razin and Patrick Smith,
eds.,
Metropolitan Governing: Canadian Cases, Comparative Lessons (Hebrew
University of Jerusalem Magness Press): 29–74.
Gowan, Rob (2013). De-Amalgamation up to Liberals: MPP.
Owen Sound
Sun Times (September 12). <http://www.owensoundsuntimes.com/2013/09/12/
de-amalgamation-up-to-liberals-mpp>.
25 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Haider, Murtaza (2014). Toronto Is a City Divided into the Haves, Will
Haves and Have Nots.
Huffington Post (October 30): <http://www.huffingtonpost.
ca/murtaza-haider/toronto-mayoral-race_b_6071726.html>.
Higgins, Donald (1986). The Process of Reorganizing Local Government
in Canada.
Canadian Journal of Political Science 19, 2: 219–242.
Hirsch, W.Z. (1959). Expenditure Implications of Metropolitan Growth
and Consolidation.
Review of Economics and Statistics 41: 232–241.
Kiernan, Matthew, and David C. Walker (1983). Winnipeg. In Warren
Magnusson and Andrew Sancton, eds.,
City Politics in Canada (University of
Toronto Press): 222–254.
Knox, Jack (2014). So Greater Victoria Is in
Favour of Amalgamation—Kinda.
Victoria Times Colonist
(November 16). <http://www.timescolonist.com/news/local/
jack-knox-so-greater-victoria-is-in-favour-of-amalgamation-kinda-1.1588633>.
Kushner, Joseph, and David Siegel (2005). Are Services Delivered More
Efficiently after Municipal Amalgamations?
Canadian Public Administration 48,
2: 251–267.
Kusilek, Larry, and Trevor Price (1988). Ontario Municipal Policy
Affecting Local Autonomy: A Case Involving Windsor and Toronto.
Urban
History Review 16, 3: 257–262.
Lambert, Steve (2013). Manitoba Sued By Municipalities over Forced
Amalgamation.
Globe and Mail (December 11). <http://www.theglobeandmail.
com/news/politics/manitoba-sued-by-municipalities-over-forced-amalgamation/
article15898588/>.
McAllister, Mary Louise (2004).
Governing Ourselves? The Politics of
Canadian Communities. UBC Press.
Moisio, Antti, Heikki A. Loikkanen, and Lasse Oulasvirta (2010).
Public Services at the Local Level – the Finnish Way. VATT Policy Reports 2.
VATT Government Institute for Economic Research. <http://www.vatt.fi/en/
publications/latestPublications/publication/Publication_1345_id/857>.
Municipal Board of Manitoba (1994).
Report and Recommendation:
Settlement of Assets and Liabilities: The City of Winnipeg and the Rural Municipality
of Headingley. Municipal Board of Manitoba.
26 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Municipality of Killarney (2014). Regular Meeting of Council (May 14).
<http://municipalityofkillarney.ca/images/support/municipal/meetings/council/regular_
meetings/2014/RM05-Regular_Minutes-14-05-2014.pdf>.
O’Brien, Allan (1993).
Municipal Consolidation in Canada and Its
Alternatives. ICURR Press. <https://www.muniscope.ca/library/publications/
index.php>.
Sancton, Andrew (1996). Reducing Costs by Consolidating
Municipalities: New Brunswick, Nova Scotia and Ontario.
Canadian Public
Administration 39, 3: 267–289
Sancton, Andrew (1999). Differing Approaches to Municipal Restructuring
in Montreal and Toronto: From the Pichette Report to the Greater Toronto
Services Board.
Canadian Journal of Regional Science22: 187–199.
Sancton, Andrew (2000).
Merger Mania: The Assault on Local
Government. McGill-Queen’s Press.
Sancton, Andrew (2006). Municipal Mergers and De-Mergers in Quebec
and Ontario. Presented at the Annual Meeting of the Canadian Political Science
Association, York University, Toronto, Ontario ( June 1).
Sancton, Andrew (2011).
Canadian Local Government: An Urban
Perspective. Oxford University Press.
Schwartz, Harvey (2001). The Financial Implications of Amalgamation:
The Case of the City of Toronto. Working Paper. Dep’t of Economics, York
University.
Schwartz, Harvey (2003). The Relevance of Toronto’s New
Governmental Structure for the 21st Century. Presented at the International
Conference on Structural Reform and the Transformation of Organizations and
Business, Homerton College, University of Cambridge (September 3–6).
Schwartz, Harvey (2004). The Relevance of Toronto’s New
Governmental Structure for the 21st Century.
Canadian Journal of Regional
Science 27, 1: 99–117.
Sears, Robin (2014). Can John Tory Unite A Deeply Divided
Toronto?
Toronto Star (October 28). <http://www.thestar.com/opinion/
commentary/2014/10/28/can_john_tory_unite_a_deeply_divided_toronto.html>.
27 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Siegel, David (2005). Municipal Reform in Ontario. In Joseph Garcea
and Edward C. Lesage Jr., eds.,
Municipal Reform in Canada: Reconfiguration,
Re-Empowerment and Rebalancing (Oxford University Press):127–148.
Slack, Enid (2005). Assessing Municipal Amalgamation in Toronto,
Canada: What Has it Achieved?
National Security and Defence 11 (71): 49–57.
Ukrainian Centre for Economic and Political Studies/Razumkov Centre.
Slack, Enid, and Richard Bird (2013).
Merging Municipalities? Is Bigger
Better. IMFG Papers 14. Institute on Municipal Finance and Governance, Munk
School of Global Affairs, University of Toronto.
Slack, Enid, and Rupak Chattopadhyay (2009).
Finance and Governance
of Capital Cities in Federal Systems. McGill-Queen’s University Press.
Spicer, Zachary (2014).
Too Big, Yet Still Too Small: The Mixed Legacy
of the Montreal and Toronto Amalgamations. IMFG Perspectives 5. Institute on
Municipal Finance and Governance, Munk School of Global Affairs, University
of Toronto.
Todd, Graham (1998). Megacity: Globalization and Governance in
Toronto.
Studies in Political Economy 56 (Summer): 193-216.
Tomas, M. (2012). Exploring the Metropolitan Trap: The Case of
Montréal.
International Journal of Urban and Regional Research 36, 3: 554–567.
Urback, Robyn (2014). Toronto Election Results Show a City Split
into Three – but Ford Support is Thinning in Scarborough.
National Post
(October 28). <http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpost.
com/2014/10/28/support-for-doug-ford-thinner-in-scarborough>.
Vaillancourt, François, and Jean-Philippe Meloche (2013).
Public Finance in
Montréal: In Search of Equity and Efficiency. IMFG Papers 15. Institute on Municipal
Finance and Governance, Munk School of Global Affairs, University of Toronto.
Vojnovic, Igor (1998). Municipal Consolidation in the 1990s: An
Analysis of British Columbia, New Brunswick and Nova Scotia.
Canadian Public
Administration 41, 2: 239–283.
Wichern, Phil (1986).
Evaluating Winnipeg’s Unicity: The City of Winnipeg
Act Review Committee, 1984–1986. Institute on Urban Studies, University of
Winnipeg.
28 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
About the Authors
Lydia Miljan is an Associate Professor of Political Science at the University
of Windsor, and a Senior Fellow of the Fraser Institute. She was Director of the
Fraser Institute’s Alberta Policy Research Centre and from 1988 to 2001 was the
Chair of the National Media Archive. She holds a Ph.D. in Political Science from
the University of Calgary, specializing in political communication. Dr. Miljan
teaches in the areas of Canadian public policy, research methodology, and pol-
itics and the media. Her main research interests include how journalist’s personal
views are reflected in news content and public opinion formation. In addition to
peer-reviewed papers, she is the author of three books:
Public Policy in Canada,
Hidden Agendas: How Journalists Influence the News, and
Cross-Media Ownership and
Democratic Practice in Canada.
Hidden Agendaswas short-listed for the Donner Prize
for the best book in public policy, 2003/04.
Zachary Spicer is a SSHRC Post-Doctoral Fellow with the Laurier Institute
for the Study of Public Opinion and Policy at Wilfrid Laurier University. He
received his Ph.D. in 2013 from the Department of Political Science at the
University of Western Ontario. In 2013/14, he held a post-doctoral fellowship with
the Institute on Municipal Finance and Governance at the University of Toronto’s
Munk School of Global Affairs. His research has appeared in a variety of academic
journals, including
Canadian Public Administration,
Canadian Public Policy, and
the
Journal of Urban Affairs.
Acknowledgments
The authors wish to thank the anonymous reviewers for their comments, sugges-
tions, and insights. Any remaining errors or oversights are the sole responsibility
of the authors. As the researchers have worked independently, the views and con-
clusions expressed in this paper do not necessarily reflect those of the Board of
Directors of the Fraser Institute, the staff, or supporters.
29 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Publishing Information
Distribution
These publications are available from <http://www.fraserinstitute.org> in Portable
Document Format (PDF) and can be read with Adobe Acrobat® or Adobe Reader®,
versions 7 or later. Adobe Reader® XI, the most recent version, is available free of
charge from Adobe Systems Inc. at <http://get.adobe.com/reader/>. Readers who
have trouble viewing or printing our PDF files using applications from other manu-
facturers (e.g., Apple’s Preview) should use Reader® or Acrobat®.
Ordering Publications
For information about ordering the printed publications of the Fraser Institute,
please contact the publications coordinator:
• e-mail: sales@fraserinstitute.org
• telephone: 604.688.0221 ext. 580 or, toll free, 1.800.665.3558 ext. 580
• fax: 604.688.8539.
Media
For media enquiries, please contact our Communications Department:
• telephone: 604.714.4582
• e-mail: communications@fraserinstitute.org.
Copyright
Copyright © 2015 by the Fraser Institute. All rights reserved. No part of this pub-
lication may be reproduced in any manner whatsoever without written permission
except in the case of brief passages quoted in critical articles and reviews.
ISBN
978-0-88975-357-0
Date of Issue
July 2015
Citation
Lydia Miljan and Zachary Spicer (2015).
De-amalgamation in Canada: Breaking
Up Is Hard to Do. Ontario Prosperity Initiative. Fraser Institute. <http://www.
fraserinstitute.org>
Cover and infographic
Monica Thomas
30 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Supporting the Fraser Institute
To learn how to support the Fraser Institute, please contact
• Development Department, Fraser Institute
Fourth Floor, 1770 Burrard Street
Vancouver, British Columbia, V6J 3G7 Canada
• telephone, toll-free: 1.800.665.3558 ext. 586
• e-mail: development@fraserinstitute.org
Purpose, Funding, and Independence
The Fraser Institute provides a useful public service. We report objective informa-
tion about the economic and social effects of current public policies, and we offer
evidence-based research and education about policy options that can improve the
quality of life.
The Institute is a non-profit organization. Our activities are funded by char-
itable donations, unrestricted grants, ticket sales, and sponsorships from events, the
licensing of products for public distribution, and the sale of publications.
All research is subject to rigorous review by external experts, and is con-
ducted and published separately from the Institute’s Board of Directors and its
donors.
The opinions expressed by authors are their own, and do not necessarily
reflect those of the Institute, its Board of Directors, its donors and supporters, or
its staff. This publication in no way implies that the Fraser Institute, its directors,
or staff are in favour of, or oppose the passage of, any bill; or that they support or
oppose any particular political party or candidate.
As a healthy part of public discussion among fellow citizens who desire to
improve the lives of people through better public policy, the Institute welcomes
evidence-focused scrutiny of the research we publish, including verification of data
sources, replication of analytical methods, and intelligent debate about the prac-
tical effects of policy recommendations.
31 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
About the Fraser Institute
Our mission is to improve the quality of life for Canadians, their families and future
generations by studying, measuring and broadly communicating the effects of gov-
ernment policies, entrepreneurship and choice on their well-being.
Notre mission consiste à améliorer la qualité de vie des Canadiens et des géné-
rations à venir en étudiant, en mesurant et en diffusant les effets des politiques
gouvernementales, de l’entrepreneuriat et des choix sur leur bien-être.
Peer Review : Validating the Accuracy of Our Research
The Fraser Institute maintains a rigorous peer review process for its research. New
research, major research projects, and substantively modified research conducted
by the Fraser Institute are reviewed by experts with a recognized expertise in the
topic area being addressed. Whenever possible, external review is a blind process.
Updates to previously reviewed research or new editions of previously reviewed
research are not reviewed unless the update includes substantive or material chan-
ges in the methodology.
The review process is overseen by the directors of the Institute’s research
departments who are responsible for ensuring all research published by the
Institute passes through the appropriate peer review. If a dispute about the recom-
mendations of the reviewers should arise during the Institute’s peer review process,
the Institute has an Editorial Advisory Board, a panel of scholars from Canada, the
United States, and Europe to whom it can turn for help in resolving the dispute.
32 De-amalgamation in Canada: Breaking Up Is Hard to Do
Miljan and Spicer • Fraser Institute 2015
fraserinstitute.org
Editorial Advisory Board
Members
Past Members
* deceased
† Nobel Laureate
• Prof. Terry L. Anderson
• Prof. Robert Barro
• Prof. Michael Bliss
• Prof. Jean-Pierre Centi
• Prof. John Chant
• Prof. Bev Dahlby
• Prof. Erwin Diewert
• Prof. Stephen Easton
• Prof. J.C. Herbert Emery
• Prof. Jack L. Granatstein
• Prof. Herbert G. Grubel
• Prof. James Gwartney
• Prof. Ronald W. Jones
• Dr. Jerry Jordan
• Prof. Ross McKitrick
• Prof. Michael Parkin
• Prof. Friedrich Schneider
• Prof. Lawrence B. Smith
• Dr. Vito Tanzi
• Prof. Armen Alchian*
• Prof. James M. Buchanan* †
• Prof. Friedrich A. Hayek* †
• Prof. H.G. Johnson*
• Prof. F.G. Pennance*
• Prof. George Stigler* †
• Sir Alan Walters*
• Prof. Edwin G. West*