Showing papers in "The Canadian Journal of Regional Science in 2000"

Municipal Consolidation, Regional Planning and Fiscal Accountability: The Recent Experience in Two Maritime Provinces

Abstract: In the recent debates on municipal consolidation in Canada, the importance of regional planning has emerged as an important aspect of the discourse. The advocacy for consolidation has been particularly apparent in regions affected by rapid physical change. A number of Canadian provinces experiencing rapid population growth in suburban and rural regions -- including Ontario, Quebec, New Brunswick and Nova Scotia -- have advocated consolidation to try to address the dilemmas associated with population spillovers. Establishing new boundaries that encompass the whole area of geographic expansion and in the process establishing a single coordinating political administration, is considered beneficial for both the urbanised municipality and the neighbouring jurisdiction where the population overflow is occurring. The single government is expected to provide much more effective regional planning, allowing the municipality increased capability to deal with issues associated with environmental protection, infrastructure investment and waste management. One particularly important area of concern within the context of regional planning is fiscal accountability. Several provinces have expressed concern over residential and business investors locating just beyond urbanised boundaries, making extensive use of more expensive customised services in the urban jurisdiction, while paying lower rural tax rates (Nova Scotia 1992; New Brunswick 1992; Quebec 1996a, 1996b, 1996c; Vojnovic 1998, 2000a). Thus, while paying only rural rates these residents are able to make use of both the services provided to them by the rural district, and many of the more expensive services available in the urban areas -- such as recreation facilities, libraries and schools with more customised educational amenities. This is the classic dilemma of externalities. It is a common concern in rapidly growing urban regions where population growth spills over beyond municipal boundaries. Supporters of municipal consolidation argue that in instances of spillover benefits, enlarging municipal boundaries and incorporating all the relevant economic agents is an initiative that will ensure fiscal accountability (Nova Scotia 1992; New Brunswick 1992; O'Brien 1993; Quebec 1996a, 1996b, 1996c). Thus, put simply, a single government that encompasses all the beneficiaries of its services will have authority to charge everyone for the public amenities provided within its jurisdiction. However, there are potential problems of merging and harmonising tax structures when there are different service standards and levels, and therefore costs, of providing services to different municipalities. The difficulties are further exacerbated when some merging member municipalities do not have the fiscal capabilities to take on the associated increases in costs of the new service levels or standards. As research on service delivery has shown, variations in service provision are particularly apparent between urban and rural districts -- although more subtle differences will exist between urban and suburban areas, and even urban areas that maintain different preferences for municipal service levels and standards. Some of the major cost differences between urban and rural service delivery exist because rural municipalities generally do not provide water and sewage networks, recreation facilities, libraries, fire hydrants, sidewalks, street and sidewalk snow removal, streetlights, public transit and the general administration that is required to support these municipal functions. Recent studies on per capita expenditures in different sized municipalities in Quebec and Ontario have demonstrated that per capita municipal expenditure can vary by over 300% between smaller rural municipalities and larger urbanised districts. These differences are largely caused by differences in the mix, the levels and the standards of services.(1) If after an amalgamation, the cost variations in service provision between municipalities are not considered in the design of the new tax system, considerable inefficiencies and inequities could be generated -- particularly if the restructuring involves the merger of urban and rural areas. …

Amalgamations, Service Realignment, and Property Taxes: Did the Harris Government Have a Plan for Ontario's Municipalities?

Abstract: Drastic change was contemplated by The Common Sense Revolution (CSR), the election manifesto that brought Mike Harris to power as premier of Ontario in 1995; the Harris government implemented drastic change; therefore the CSR explains what the Harris government has done. The fact that this syllogism is logically flawed should be obvious. The aim of this paper, however, is to go beyond formal logic and show that, with respect to the Harris-government's municipal policies, its substance is flawed as well. Although Harris has brought dramatic change to Ontario municipalities, such change was not the result of the CSR. On municipal issues, the CSR was too vague to account for any of the policies subsequently implemented. The CSR promised only that "any actions we take will not result in increases to local property taxes; that "regional and municipal levels" of government should be "rationalize[d] ... to avoid overlap and duplication that now exists"; and that "we will sit down with municipalities to discuss ways of reducing government entanglement and bureaucracy with an eye to eliminating waste and duplication as well as unfair downloading by the province" (Progressive Party of Ontario 1994). At great political cost, the government launched a massive campaign in late 1995 to promote municipal amalgamation outside Metropolitan Toronto and in 1997 to compel it within, all the while leaving politically unpopular regional governments untouched (until late 1999 at least). In 1997 it also realigned provincial and municipal taxation and service responsibilities in such a way as to make the system more confused and entangled than ever before. Finally, it adopted a new property-tax assessment system, effective in 1998, that will lead to dramatic tax increases for many of its strongest supporters. How did it arrive at this remarkable series of outcomes? Amalgamations Outside Toronto Speaking in Fergus, Ontario in the autumn of 1994, only a few months before the election that brought him to power, Mike Harris had this to say about municipal amalgamations: "There is no cost to a municipality to maintain its name and identity. Why destroy our roots and pride? I disagree with restructuring because it believes that bigger is better. Services always cost more in larger communities. The issue is to find out how to distribute services fairly and equally without duplicating services" (Barber 1997a). Two months after becoming premier, Mr. Harris addressed the annual meeting of the Association of Municipalities of Ontario (AMO). He made no reference to the need for any form of municipal restructuring (Ontario n.d.a). The new minister of municipal affairs and housing, Al Leach, addressed the same conference the day before. He made one reference to municipal amalgamation: "There is no solution that's going to work everywhere. But there are a lot of measures that can make a difference: successful amalgamations, for example -- like the one that created the Town of New Tecumseth; there's annexations, sharing services, deciding what services should be provided; there's the cost management approach used so well by Pittsburgh Township; and there's government restructuring. I want to say I am fully committed to getting the province off your back" (Ontario n.d.b). The reference to New Tecumseth was not accidental. To coincide with the AMO meeting, Mr. Leach published a flashy pamphlet (complete with his own picture) reporting on the results of an internal ministry study that purported to demonstrate cost savings from the amalgamation. Prominently displayed in the pamphlet, under the heading "Less Government" was the statement that the total number of municipal councillors had been reduced from 22 to nine (Sancton 1996a). New Tecumseth is in south Simcoe County, northwest of Toronto. It resulted from legislation sponsored by the Peterson Liberals. Discussing similar legislation for north Simcoe sponsored by the Rae NDP government in 1993, the local conservative member, Jim Wilson, (one of Leach's cabinet colleagues at the time of the 1995 AMO meeting) had this to say: "I've spent the last several months reviewing all the regional governments in Ontario, many of which were imposed by my party in the past, so believe me, I come to this with some experience, and the south Simcoe experience to date. …

Amalgamation Perspectives: Citizen Responses to Municipal Consolidation

Abstract: The 1999 Halifax Regional Municipality (HRM) Citizen Survey is used here to study citizen responses to a municipal amalgamation that created the Halifax Regional Municipality. The analysis of this survey brings forward citizen-based assessments of the amalgamation decision and subsequent municipal governance. Questionnaire items are used to create measures of citizens' views concerning amalgamation, the relationship between the urban and rural spaces of the new municipality, the performance of the HRM political leadership and the impact of amalgamation on municipal services. There are two key research questions. How did HRM citizens assess amalgamation after three years of experience? What factors best explain citizens' views towards amalgamation? The political and policy context of the amalgamation decision taken unilaterally by the Nova Scotia provincial government is briefly described. In turning to the survey data, key variables are developed and then used in a model of citizens' amalgamation perspectives. The Context of Municipal Amalgamation in Nova Scotia In 1991, the Nova Scotia Minister of Municipal Affairs initiated a Task Force on Local Government to balance the design and implementation of local government with provincial settlement patterns. The municipal reform objectives for the province were: * To preserve and develop vital urban centres with a wide range of services, including social, educational, commercial, cultural, governmental and recreational amenities * To deliver services to the communities of Nova Scotia based upon their needs, taking into account the differences in population, environmental circumstances and type of community * To achieve an equitable, effective and fiscally sound system of municipal government to deliver community services (Nova Scotia 1992) This Task Force continued a discussion of municipal reform that had been on-going since the 1970s which began with a royal commission on education, services and provincial-municipal relationships (Nova Scotia 1974). This most recent stage, however, moved from word to deed. The Nova Scotia government passed legislation which amalgamated the communities of industrial Cape Breton (Nova Scotia 1995a). Reflecting on their accomplishment and the lack of immediate, negative political consequences, the government did the same for the Halifax region (field interviews, Nova Scotia 1995b). At the time, proponents of amalgamation argued that this effort would decrease the over-all cost of government, improve the quality and level of services, improve regional planning and strengthen economic development by reducing competition between the four municipalities which were consolidated by the legislation The Municipal Reform Commissioner's Interim Report (on amalgamation) boldly projected efficiencies in both the delivery of services and their administration (Hayward 1993). The single-tiered Halifax Regional Municipality (HRM) was created 1 April 1996 with the amalgamation of four municipalities -- the Cities of Halifax and Dartmouth, the Town of Bedford and the Municipality of the County of Halifax -- and the elimination of the Halifax Regional Authority. The new municipality consists of almost 2,500 square miles and brings together an urban core, suburban neighbourhoods and "big box" shopping centres with small communities, villages, farm land and wilderness. It is diverse in its economy and geography. The regional economy includes the financial centre of the Atlantic region, six universities, the provincial capital, a container port, the Canadian Navy, lobster fishing and dairy farming. Its population density, if expressed as an average, would be completely misleading. Still, most areas within the region are part of a shared social and political life and economy. The amalgamation began in a context of conflict between the provincial and municipal governments and was implemented without municipal consent through legislation by the Nova Scotia government (Nova Scotia 1995b). …

Preliminary Assessment of the New City of Toronto

Abstract: On January 1, 1998, the new City of Toronto came into being by replacing the former metropolitan level of government and its constituent lower-tier municipalities (Toronto, Etobicoke, North York, Scarborough, York and East York) with a single-tier city.(1) This restructuring was not initiated by local initiative but by the provincial government through the passage of Bill 103, the City of Toronto Act, 1996.(2) Indeed, opposition to the proposed amalgamation came from many different quarters: local municipalities (both inside and outside of Metro Toronto), the opposition parties, citizen organisations, and from within the Conservative party itself (see Stevenson and Gilbert 1999; Sancton 1998). The major citizen opposition was led by a former mayor of Toronto, John Sewell, who was behind the formation of the Citizens for Local Democracy in late 1996. Sewell's opposition to amalgamation centred on the loss of local identity and reduced access to local government. In the broader context of the GTA, it was felt that amalgamation would result in increased polarisation within the region. On March 3, 1997, referenda on amalgamation were held in each of the lower-tier municipalities in Metro Toronto; about 36 % of eligible voters voted. Opposition to the proposed amalgamated City of Toronto (referred to as the "megacity") ranged from 70 to 81% of voters depending on the municipality. Furthermore, none of the studies of governance in the Greater Toronto Area (GTA) commissioned by the Province (discussed below) emphasized problems within Metropolitan Toronto or the need to create a megacity. Rather, these studies identified problems with the coordination of transportation, planning, water provision and waste management among the regions within the GTA and focussed on the need for a GTA governing body to address these service coordination issues. This paper provides a preliminary assessment of the creation of the new City of Toronto, focussing on the financial aspects. It is preliminary because one year of post-amalgamation data is not sufficient to estimate the full impact of a restructuring. The paper briefly reviews the history leading up to the creation of the new City, summarises its finances and provides an initial analysis of the impact. In the paper, the reasons for restructuring are evaluated and it is concluded that it is unlikely that this type of restructuring will result in cost savings nor will it solve many of the non-financial problems currently faced by the new City of Toronto. Nevertheless, there may be some benefits from amalgamation. The Need for Regional Governance in the GTA Amalgamation had not been on the agenda prior to the introduction of Bill 103. The Office of the Greater Toronto Area (OGTA), which was established by the Province in 1988, focussed on a strategic vision for the GTA and the coordination of regional issues (Stevenson and Gilbert 1999). A forum of GTA mayors (of local municipalities) and chairs (of regional governments) concentrated its efforts on economic development and marketing in the GTA. Further issues around regional coordination were raised by the GTA Task Force (chaired by Anne Golden). The Task Force was created by the Premier of Ontario on April 1, 1995, in response to growing concerns about the future of the economic performance of the urban region. The major conclusions of the GTA Task Force (1996) were that(3): * the entire GTA needs to be treated as a single economic unit with a unified economic strategy; * a new GTA governmental body is needed to deal with GTA-wide environmental and planning issues and to share major infrastructure and social costs; * more compact urban development that contains sprawl will make transit more viable and reduce infrastructure costs (the Task Force estimated savings at an average of $700 million to $1 billion per year for the next 25 years); * local government within the GTA needs to be simplified by eliminating Toronto's upper tier (Metro) and the four surrounding regional governments, and by reducing the number of local municipalities. …

Alternative Service Delivery in Canadian Local Governments: The Costs of Producing Solid Waste Management Services

Abstract: In this paper, key findings are presented from three complementary national surveys of producers in the Canadian solid waste management industry The surveys, conducted by the Local Government Institute between 1995 and 1999 focused on factors that predict the: unit costs (costs per unit of output) of residential solid waste collection, residential recycling and landfills, respectively Among the variables that were examined was the production arrangement for each service A key question, based on the existing literature is whether private producers tend to be more efficient than their public counterparts The hypothesis that private producers will tend to be more efficient is well entrenched in the literature, which has developed from Ostrom et al's initial formulation (1961) of a polycentric theory of the governance of metropolitan areas Although most research suggests that private producers are more efficient, existing Canadian research has tended to focus on relatively few services The only national study of public and private producers of local services was conducted in the early 1980s and focused on residential solid waste collection (McDavid 1985) The current study offers the first cross-Canada comparisons of the efficiency of three services that are a principal part of the solid waste management industry For the first time, both smaller local governments and Quebec local governments are included in sufficient numbers to permit regional comparisons on key variables Because the three services are complementary, it is also possible to combine findings from all three to address the question of whether recycling residential solid waste is more efficient than conventional collection and landfilling practices Existing Research In 1961, Ostrom et al (1961) introduced their theoretical interpretation of the organisation of urban governments for the delivery of services Their theory, based on the emerging field of public goods economic theory (Tiebout 1956), characterised the existing complex patterns of local governments in metropolitan areas as polycentric systems Key to their theory was the distinction between the provision and the production of local services Local governments, organised on behalf of their residents, can make decisions to provide services to their residents or choose to let residents provide those services for themselves Providing a service creates options for its production A local government can undertake production with its own personnel and equipment, contract out production to another local government or to a private company, franchise production by one or more private companies, use volunteers to produce the service, offer vouchers to residents or use combinations of these options (ACIR 1987) Ostrom et al (1961) contrasted their polycentric theory of local public economies with the then dominant model of metropolitan governance, which they called gargantua Gargantua was characterised as a metropolitan-wide local government structure, which was intended to capture putative scale economies in the production of all local services Advocates lot consolidation of existing jurisdictions asserted that multiple and overlapping local governments were incapable of cooperation to resolve problems that transcended existing boundaries, and competition among local governments was seen to be a wasteful duplication of services Since 1961, the polycentric theory of metropolitan governance has been further developed (Ostrom 1973) and subjected to a variety of empirical tests (Ostrom et al 1978; ACIR 1987; Ostrom et al 1988) Although there continues to be some support for consolidating and simplifying local government structures in the urban areas of the United States, the polycentric theory and its derivatives have become orthodoxy An important feature of the polycentric research program has been the emphasis on the efficiency-related consequences of alternative service production methods (Bish 1971) …

Evolutionary Alternatives for Metropolitan Areas: The Capital Region of British Columbia

Abstract: It is common to examine the organisation of local government in terms of the functions different local governments are responsible for. Equally important, however, is at what level decisions on "who does what" are made and accommodations to change undertaken. On the questions of both functional responsibility and where decisions are made, it is interesting to compare the provincial approaches taken in Ontario, New Brunswick and Nova Scotia with those of Alberta and British Columbia. In this paper, the differences in approaches are briefly described; then, details are provided for one major case in British Columbia, the capital region. Because the capital region of British Columbia has the same population as the newly amalgamated Halifax Regional Municipality (HRM), but could not be more differently organised, some comparisons between the capital region and HRM are provided to illustrate the differences. Provincial Approaches Provincial policy in Ontario, Nova Scotia and New Brunswick implies that the provincial government knows best how to organise local government and assign functions to different local government units as evidenced by provincial imposed reorganisations, including amalgamation, in Miramichi in New Brunswick, Cape Breton and Halifax in Nova Scotia, and in several regions of Ontario (Vojnovic 1997). The policy implies that one can analyze local government services, decide who should do what, and impose the most efficient structure, even when local officials and citizens disagree. This parallels a classical central planning perspective where one assumes that local knowledge is easy to obtain and some optimal organisation can be identified by central authorities. Provincial policy in Alberta and British Columbia is much different. In both of these provinces, their municipal acts set out procedural rules whereby citizens may incorporate, dissolve or amalgamate local government with the initiative coming from citizens or local governments themselves. Both provide for the creation of regional organisations but do not impose them. The approach is one where structure itself is left to local people with the expectation that they will pursue their own interest and evolve appropriate structures of local government over time. In addition, local units make their own decisions on "who does what" in dividing responsibility for different services among themselves, including between the municipal and regional governments. This is much more an evolutionary approach where it is assumed that local people know best and that local government organisation and operations will evolve over time to meet citizens' needs. The provincial government itself provides the basic rules within which these changes can occur much as it provides a basic legal structure for markets. This latter approach contrasts with central planning approaches in that it recognises that local information is costly and that polycentric institutional arrangements may outperform centralised ones in complex environments. It is useful to examine this latter approach with the British Columbia model, and specifically with some comparisons with Halifax. British Columbia British Columbia has a long history of policies allowing local citizens to take the initiative regarding local government structure similar to the states of Washington, Oregon and California. In 1919, for example, "home-rule," where a municipality can organise itself and undertake any activity not specifically forbidden by the provincial government, only failed by one vote in the legislature (Bish and Clemens 1999). British Columbia's philosophy has resulted in municipalities and improvement districts throughout the province, but there was no general form of local government outside of municipal boundaries. In these rural areas the provincial government provided roads and policing, there were school districts across the province and welfare was and continues to be provided provincially province-wide. …

Effects of Property Taxes and Development Charges on Urban Development: Perspectives of Planners, Developers, and Finance Officers in Toronto and Ottawa

Abstract: City and regional planners in North America tend to agree that fostering growth is no longer their prime objective and that the peripheral expansion of cities creates a host of problems The countryside is made beyond reach much of the time Congestion increases, as does pollution Services cost more Repetitive, garage-faced streets push without end through old orchards, farmland, forests and meadows Growth management plans have been developed in many of the coastal areas of the United States to keep uncontrolled development from "killing the golden goose" that brings the demand for more buildings Many of the plans try to manage growth by directly affecting the development process by insisting on concurrent and inter-jurisdictionally consistent infrastructure expansion More direct instruments include growth boundaries and development caps Relatively little has been said in the growth management literature of the efficacy of using fiscal instruments to change the profitability of different types of development and, thereby, influence the way a region develops This article discusses the prospects for using property taxes and development cost charges to affect urban development Property taxes and development cost charges can have environmental impacts by changing the extent to which developers substitute land for buildings and, thereby, the density of the built form, the spread of cities, and the mix of land uses The schedules of rates and fees can promote city spread directly by favouring less dense projects Fiscal instruments can have indirect effects by changing the optimal timing of development that affects the conditions under which it takes place and therefore the density with which land is developed The reliance on property taxes and development cost charges to finance local services may induce municipal officials to encourage developers of the low density projects that are thought, perhaps erroneously, to yield the greatest fiscal dividends The substitution, timing and fiscalisation consequences of property taxes and development cost charges are examined through interviews with Toronto and Ottawa area developers, municipal planners and finance officers The article starts by describing the two financial instruments as they are used in Ontario The expected consequences of the two instruments are presented next The survey and interview methods are described, the context is set, and the findings and conclusions follow Fiscal Instrument and Urban Form The Shift Toward Development Cost Charges The history of development charges and property taxes are closely intertwined in Ontario, as revealed by the development of municipal infrastructure financing mechanisms over the 20th century The Ontario Local Improvement Act of 1914 allowed municipalities to install growth-related services and recover the costs by levying local improvement taxes on the property owners who benefited from the service provision Tax rates were negotiated on a site-specific basis, based on the principle that developers should pay in proportion to the benefits received Although the taxes were structured to cover the full cost of local improvements, when developers failed financially, the costs were transferred to municipal taxpayers In difficult times, this system threatened to bankrupt many of Ontario's financially strapped municipalities (Steele 1956) In the 1950s, growth-pressured municipalities began to transfer the risk of on-site infrastructure financing to developers by requiring them to install roads, sewer and water facilities internal to their subdivisions as a condition of development approval After being challenged by developers in the 1950s, the legality of this practice was established by revisions to the Planning Act in 1959 By the 1960s, most municipalities in Ontario were using subdivision agreements for this purpose Off-site services (ie, investments that could not be linked directly to individual developments) were originally paid for through municipal bonds supported by general municipal revenues such as property taxes …

Regional Restructuring in Montreal: An Historical Analysis

Abstract: The current upsurge of interest in metropolitan government on both sides of the Atlantic is mirrored in the debates raging in Montreal. An earlier boom period in the formation of metropolitan structures in the western world, the 1960s and early 1970s, left the region of Montreal with a legacy of partially fulfilled hopes and promises. At that time, as in many other countries, the political debate centred around issues of service provision, economies of scale and the need for coordination in matters such as land-use, control of urban sprawl, transportation and environmental protection. The instrumental arguments focused on size, territorial extent and representation. Today, while these arguments are still voiced loudly, the context has changed markedly. On the one hand is the ethos of globalisation and the perception that cities must be competitive on the world stage in order to prosper. Neoliberalism, the retreat of the welfare state, and the restructuring of the responsibilities and financial arrangements of the various levels of government have led to increased social fragmentation, social exclusion, often among immigrant groups, and severe inequities between the various parts of metropolitan areas. The central cities tend to house the poor and harbour the homeless, while the suburbs attract the more affluent. On the other hand is the acknowledgment of the importance of localism, community values, knowing why and how dollars are spent, participatory governance, consensual partnerships, along with increasing powers of special interest groups, business leaders, and corporatism in general. The ideas from the 1960s and early 1970s, of top-down directives, forced municipal amalgamations, imposed regional or metropolitan structures, are being challenged by principles of grassroots planning and collaborative action. The purpose of this paper is to examine the slow march of the region of Montreal towards metropolitan governance. It is organised in a chronological manner and follows the historical evolution of policies and debates. Over the decades, local, regional and provincial actors have come to recognise the interdependence of central and suburban municipalities. But they have offered different definitions of what ails the region and have resorted to different rationales for government action (or inaction) on these problems. If there is one continuous thread in Montreal's long saga of half-failed reforms, it is the fact that there is, politically speaking, no such thing as the problem of metropolitan governance. At any given time, various issues get conflated and often confused; over time, different problems gain prominence while others recede into the background. Governmental reforms do not proceed merely because the various parties agree on the problems at hand; they occur when the authorities experience a sense of urgency about one or another issue, be it infrastructure provision, environmental preservation, municipal solvency or economic competitiveness. We argue that the most recent round of municipal reform and regional institution-building is a continued reaction to the fiscal crisis of the State and that it lays the groundwork for a downloading of responsibilities from central to local government. Alongside the search for zero deficits on the part of the province (and the federal government), however, the desire to improve equity among municipalities and the will to foster democracy are strong motivations for local actors. As balancing budgets, downloading responsibilities to lower-level governments, and keeping older cities competitive in the world economy are the order of the day, municipal amalgamations and regional coordination mechanisms are of great interest to decision-makers. In the case of Montreal, local factors such as the political culture of the province and the persistence of linguistic tensions add to the difficulty of arriving at consensual decisions in the region. …

Provincial and Municipal Restructuring in Canada: Assessing Expectations and Outcomes

Abstract: Provincial-municipal restructuring in Canada has received considerable attention during the 1990s from both provincial and municipal levels of government. The fiscal download by the Federal government to the provinces and the municipalities, along with the growing acceptance of a new public management philosophy, have been the two common variables encouraging provincial-municipal reforms over the last decade. With Federal initiatives directed towards shifting a greater portion of the financial burden of governance and service delivery on to the Provinces, as evident with reductions in federal grants and alterations to Federal-provincial cost sharing rules, the provinces have themselves been actively involved with the reorganisation of their own financial and political structures. While these fiscal reforms were in part attributed to the economic pressures of the 1990s, they were also attributed to a new approach in public management at all levels of government that increasingly promoted the entrepreneurial spirit of the private sector in the public realm. The provincial-municipal restructuring initiatives involved increasing municipal fiscal responsibilities in governance and service delivery through the reduction of provincial grants, the reallocation of governance and service responsibilities between the provinces and local governments, and the encouragement of municipal mergers. This special issue on provincial-municipal reforms in Canada will focus particular attention on municipal consolidations. However, other provincial-municipal restructuring initiatives, including the allocation of service responsibilities and alternative service delivery options, will also be explored in order to review the full dimension of the recent reform strategies. Municipal Consolidations Municipal consolidations, whether in the form of amalgamations (the merging of two incorporated municipalities) or annexations (the appropriation of a portion of a municipality by an adjacent municipal unit) have been taking place in North America since the 19th century. Initially, advocates of consolidation have argued that this reform would lead to efficiency improvements that were to be realised by the single, larger, governing unit. Cost savings from consolidation are generally expected with reductions in municipal staff and elected political officials, reductions in the duplication of public agencies, lower costs associated with purchasing in larger quantities, and cost savings from specialisation and coordination improvements in the larger bureaucracy. While the efficiency argument still remains an important component of the debate on municipal consolidation, proponents of this reform have also advanced other arguments supporting the merger of smaller municipalities. Advocates of consolidation have argued that municipal consolidation can also lead to improvements in equity, regional planning, economic development, and citizen access to services, bureaucracy, and elected officials. With numerous municipal consolidations taking place in Canada in the mid- to late- 1990s, including the consolidation of two major urban regions -- the Halifax-Dartmouth Region, Nova Scotia (1996) and Metropolitan Toronto, Ontario (1998) -- the importance of this reform initiative within Canada remains unquestionable. However, the realisation of anticipated governance and service delivery improvements (in efficiency, equity, regional planning, economic development, and citizen access) have still not been convincingly demonstrated. Articles in this special issue of the Canadian Journal of Regional Science will examine a number of recent consolidations in Nova Scotia, New Brunswick and Ontario, as well as the current consolidation debates in Quebec and British Columbia, which will reveal the complexity and the controversy of this particular reform. In her contribution, Enid Slack examines the financial and political impacts of amalgamating six lower tier municipalities and the upper tier metro level of government into the new City of Toronto. …

Marked for Success??? the Winnipeg Core Area Initiative's Approach to Uban Regeneration

Abstract: Introduction The Problem of Inner-City Decline Major urban centres throughout the industrialised world reflect similar trends of physical, economic and social deterioration, along with population loss, in the inner city. Despite local differences, cities are shaped by many of the same conditions that affect urban environments. These conditions include augmenting deficits and accumulated debt burdens, devolutionary pressures in responsibility and financial aid, and the requirement to balance the increased need for services aimed at addressing urban problems against the willingness of citizens to pay increased levels of taxation. It is within this context that the search for and introduction of strategies designed to remedy the problems faced by declining inner cities is of interest and import to government, academics and planning practitioners alike. The complexity of inner city decline has yielded an equally complex array of policy and programmatic responses in the quest to find a single best solution -- a magic formula -- for urban revitalisation. Scope and Objective of Paper This paper combines a review of existing literature on urban policy and practice with an analysis of a major Canadian urban planning intervention -- the Winnipeg Core Area Initiative (CAI). Launched in 1981, the CAI was one of the nation's largest urban regeneration efforts, comprising $196 million in expenditures. Spanning a decade and reflecting unprecedented tri-level governmental cooperation, the CAI was considered to be a unique and notable experiment in public policy and drew considerable attention throughout North America and Europe. The paper's objective is to contribute to the development of comprehensive, strategic and coherent policy formulation and practice in the area of urban regeneration by asking the question "What constitutes success in efforts to address inner city decline?" This question is answered through a survey of policy solutions derived from a literature search, and is illustrated through a review of the relative success or failure of the CAI as compared against this broader policy framework. In this Introduction, Part I, the subject matter importance has been outlined and the purpose presented. In the remainder of the Introduction, the overall organizational structure of the paper is presented and the methodology explained. Part II introduces the notion of `success' in urban regeneration efforts, and uses this as a conceptual framework within which meaningful urban policy can be established and an analysis of the CAI's effectiveness can be undertaken. In Part III, a brief synopsis of inner-city problems is provided along with a description of the evolution of urban regeneration policy, as a theoretical backdrop to case analysis. Part IV outlines the political and socio-economic context within which the CAI was introduced, and provides an overview of the Initiative's scope of programming. Part V includes a detailed discussion of principles or critical success factors underlying effective urban revitalisation efforts. The extent to which the CAI embodied each of these critical success factors is explored. Special emphasis is accorded to the CAI's unique tri-partite model that constituted its structural framework. In Part VI, the focus is on evaluative enterprise in urban regeneration efforts. Recommended components of a comprehensive evaluative framework are identified and an evaluation of the CAI's relative success, including strengths and shortcomings, is undertaken. The notion of sustainability as it relates to urban revitalisation endeavours is highlighted in Part VII, and an examination is made of whether the impression left by the CAI can be characterised as lasting and strong. Finally, Part VIII draws concluding commentary in support of the paper's objective, and suggests what lessons can be learned from the CAI experience towards more informed policy approaches to ongoing inner city challenges. …

Municipal Reorganisation in Quebec

Abstract: This study is based on the assumption that municipal government has a certain autonomy and can influence decisions even at an upper level of government. Local political institutions have an existence of their own even though they are formally creatures of the provincial authorities. They are part of institutional arrangements by which the political system as a whole is held together and functions. Actors within these institutions may develop and stand for local interests that come to be challenged by municipal restructuring. Territorial restructuring, as featured by mergers or amalgamation of municipalities, represent a critical challenge to local autonomy and identity, and may be perceived as an earthquake by local officials and populations. For some policy makers and some experts, however, restructuring may respond to other objectives such as managing metropolitan areas, ensuring equity in taxation and in the level of services, reinforcing local institutions in order to increase responsibilities and attain downsizing goals at the provincial level (Tindal and Nobes Tindal 2000; Sancton 1991; Bourne 1991). Decisions to reorganise municipal structures represent major issues for a variety of social and political actors and are of special interest to provincial and local decision makers. High expectations are placed upon the provincial authorities who have the responsibility for municipal institutions. Some provincial authorities may want to impose their own policy agenda; others simply react to interest groups. The question of municipal restructuring can be approached as a process of agenda setting in Quebec where projects for change have been proposed for decades without results comparable to those in other provinces. What is so particular about institutional arrangements at the municipal level in Quebec? This study considers municipal reorganisation projects which started in the early 1990s and are still under discussion. It is a case study of a policy that is still to be completely adopted, within the context of ongoing debates about the pros and cons of municipal reform. This situation is relevant for a study of what Kingdon calls "streams" affecting public policy making. Three types of streams or windows which create opportunities or openings for action are identified as determinants of the policy making process (Kingdon 1995). The problem stream refers to all activities related to the identification and the diagnosis of a problematic situation. Perceptions of the nature of a problem and even problem recognition are at issue in the initial stages of policy making. Secondly, the political stream carries conditions related to politics, relations of power and partisanship, what Kingdon defines as the narrow sense of the political (1995). Hence, the political mood of key actors towards a given policy proposal creates conditions that may either block or propel policy depending on whether the mood is negative or positive. Third, the policy stream refers to the policy priorities that are imposed by the limited time and resources that can be devoted to any given policy. Policies struggle for a place on the decision agenda where opportunities move ahead of the others. Kingdon points out that these streams may develop separately or may converge and facilitate the adoption of a given policy. This model seems appropriate for the analysis of municipal reform. In fact, this field has raised considerable discussion in the past in terms of the recognition of the problems to be solved by reform (the problem stream). Moreover, the provincial and the municipal mood has settled the conditions for political mobilisation and debates over the issues of municipal restructuring (political stream). Finally, the policy stream is of utmost relevancy in the context of strong pressure for reform in competing fields such as the health and education programs. Our hypothesis is that the cumulative effects of the three streams may explain the slow pace of structural changes in the municipal system in Quebec. …

Canadian Foreign Direct Investment in the U.S.: A Discrete Choice Analysis Approach

Abstract: Canadian researchers have traditionally been most concerned with incoming foreign direct investment (FDI). This preoccupation goes as far back as the late 1870s, when Canada's tariff policy resulted in a large inflow of foreign investment. The net inflow of FDI continued for the next century until the 1970s, when outward FDI by Canadian firms increased so rapidly that Canada became a net exporter of investment. Understanding the motivations behind Canadian investment abroad is an important research goal. While previous studies have produced valuable results, their conclusions are often in conflict indicating that further research on FDI is necessary. For example, studies by Vertinsky and Raizada (1994) and Rao et al (1994) produce contradictory results on a number of factors. The main goal of this study is to determine why Canadian firms choose to invest in particular parts of the U.S. Do Canadian firms invest in the United States to gain greater access to large regional markets? Is it for tax purposes? Is it for skilled labour? Is it for low cost labour? This study attempts to answer questions such as these by analysing the spatial distribution of Canadian FDI in the United States from 1974 to 1994. A multinomial logit model is used to determine those factors that attract Canadian FDI to different U.S. states. Explaining FDI FDI is an activity owned, organised, and controlled by a firm (or group of firms) outside its (or their) national boundaries. Specifically, Statistics Canada defines FDI as "an investment that is made to acquire a lasting interest and an effective voice in the management of an enterprise operating in an economy other than that of the investor" (Statistics Canada 1997: 29). Statistics Canada suggests that to obtain an effective voice or control, a direct investor must possess at least ten percent of the equity of an enterprise (Statistics Canada 1997). Why do firms seek to obtain control of operations in a foreign country? Previous studies have attempted to increase our understanding of FDI through push and pull factors. Pull factors are the aspects of a foreign country that attract investment. On the other hand, push factors are elements of a home country that drive companies to seek investment opportunities elsewhere. Studies (Litvak and Maule 1981; Rugman 1987; Gandhi 1990; Knubley et al 1991; Meyer and Green 1996) repeatedly conclude that pull factors of foreign markets are more important than push factors in Canada. In particular, large foreign markets are attractive to Canadian investors. By examining the distribution of Canadian investment across states, we extend this argument by not only determining the relationship between Canadian FDI and large markets, but additional pull factors as well. Pull factors can be associated with John H. Dunning's (1977; 1991) Eclectic Paradigm. The principal hypothesis on which the Eclectic Paradigm is based suggests that a firm will engage in FDI if and when three conditions are satisfied. First, a firm must possess ownership advantages. These include such considerations as technology, know-how and brand names, and must be of sufficient value to overcome the risks of locating in an unfamiliar business environment. Second, a firm's motivation to invest abroad depends not only on its ownership advantages, but also on its desire and ability to internalise these ownership advantages. Internalisation is the procedure by which a multinational firm preserves its ownership advantages by establishing a foreign subsidiary rather than leasing or selling its ownership advantages. The final aspect of the Eclectic Paradigm is locational advantages. Locational advantages determine which countries or regions host production by MNEs. Some areas appear more attractive to FDI than others. Eden (1993) groups locational advantages into three classes: economic, social and political. Economic advantages are based on an area's endowment of labour, capital, natural resources, market and infrastructure. …

Dynamism of Manufacturing SMEs in the North-Atlantic Islands: A Case Study

Abstract: Research into industrial districts has enabled attention to be redirected towards the Marshallian externalities relating to the economies of conglomeration generated by the concentration of businesses on the same site and in the same sector (Beccatini 1992). These economies of conglomeration are in fact the set of benefits obtained by businesses grouped together in a city area, regardless of sector (Tellier 1993; Polese 1994). Geographical proximity helps reduce transaction costs for businesses, which are thus able to take advantage of what Perrin (1990) refers to as territorial synergy. Similarly, Proulx (1991) mentions the benefits of urban areas over rural areas, including concentrations of better financial, brokerage and transportation services and the existence of networks that facilitate contacts and provide information on market development. This same view is also taken by Gofette-Nagot and Schmitt (1998), who postulate that proximity permits interactions between physical and human resources, thus allowing businesses to cope better with national and international competition. Together, these various considerations give some idea of the handicaps or difficulties faced by businesses in rural and island environments outside the major cities. In recent years, the number of studies of rural businesses has grown considerably, suggesting, as we have already shown (Joyal and Deshaies 1998, 2000), that thanks to the contribution of new technologies, even businesses that are geographically isolated are able to function well. Davidson et al (1994) note that in Sweden, as far as proximity of markets and supply sources is concerned, the facilities available in local infrastructures and the availability of financial assistance are still important elements. However, like Nelson (1998), we believe we have shown that the absence of economies of conglomeration in rural environments is no longer an insurmountable obstacle. It was this observation that led us to compare the situation of SMEs (Small and Medium-sized Entreprises) in island environments and in rural or non-city environments, using a case study to see whether a specific form of dynamism actually exists. Development conditions in island environments are known to be similar to local development conditions. As Cote (1996, 1997, 2000) pointed out, in many such environments social players must learn to rely on their own means and organisational skills in order to meet their own needs. At first glance, it is easy to identify similarities between small and medium-sized enterprises with island locations and those in rural communities. Both are situated at a distance from major decision-making centres and information centres. Their remote locations provide an additional challenge, since they are unable to take advantage of the territorial synergic effects available to city businesses, and there is no local dynamic likely to create an impetus. According to Falcone et al (1996), the greatest obstacle facing rural entrepreneurs is their relative isolation. It is easy to understand why -- they simply cannot count on the same support and assistance as their counterparts in cities or more densely populated areas. The goal of this paper is to see whether the characteristics of rural SMEs also apply to island SMEs. We begin by presenting their characteristics against the background situation, and go on to identify some research guidelines. We then describe the survey methodology, the challenges and dynamism of the SMEs studied for the research, and the factors underlying their entrepreneurial vitality. The Backgound Situation According to Illouz-Winiki and Paillard (1998), a rural area is an environment in which the population is scattered in small towns or villages over a relatively large area that is sometimes, but not always, less developed economically than the other regions of a given country. Rural areas are also distinguished by the presence of primary activities in the natural resource sector, such as farms, outdoor leisure activities, sandpits and gravel quarries, agro-tourism firms and so on. …

Spatial-sectoral Home and Host Country Assessment of United States Direct Investent in Canada

Abstract: There is a large body of empirical research describing the geographic patterns of, and the underlying reasons for, foreign direct investment (FDI). Generally, this research has been conducted at an aggregate level both spatially and sectorally. However, it is certain that more disaggregated approaches can yield important insights. This is particularly true for developed economies where regional differences influence investment decisions. General macro level knowledge can be assumed but regional-based knowledge will be less certain (Qu and Green 1997; Mariotti and Piscitello 1995). In this paper, we provide a detailed spatial assessment of US foreign direct investment in Canada disaggregated by industrial sector, province and state. Moreover, we explore the importance of established economic conditions (as measured by trade flows, number of establishments and distance) on the spatial choices made by US foreign direct investors operating within the highly-integrated and compatible Canadian and US economies. Due to this explicit home and host location viewpoint in explaining spatial-sectoral direct investments patterns, we believe this itemised spatial appraisal of Canada FDI from the US is distinctive. The host country approach is typified by Dunning's (1977) "Eclectic Paradigm of International Production". According to Dunning's model, a firm is unlikely to invest directly in a foreign country if firm (ownership)-specific, internalisation and country (location)-specific advantages are missing (see also Rugman et al 1985). Firm-specific advantages (which are chiefly knowledge-based or technology-oriented attributes) and internalisation properties (the ability to keep these advantages intact) provide the `competitive edge' that a given multinational enterprise (MNE) has over rival firms operating in a market. However, consideration of differences in location-specific advantages is also important. In other words, host locations that are most frequently chosen are those that allow for the most profitable use of an MNE's firm-specific advantages. Some of the more common host country considerations that Dunning and others have recognised as important to foreign direct investors include: * Market factors -- which consists of not only market size and growth potential but also the ability to maintain market shares and to promote trade between the subsidiary and parent company (and, thereby to realise transfer pricing advantages); * Natural and created resource endowment; * Cost factors -- which encompass factors influencing the cost of production (such as labour, energy and supporting industry); * Societal and a financial infrastructure -- such as credit, legal, and educational facilities; * Transportation and communication infrastructures; * Economies of centralisation for RD * Artificial barriers -- such as import controls on the trade of goods and services and exchange rate differentials; * The investment climate -- which consists mainly of political stability, general attitudes toward FDI (which includes corporate tax rates and regulations), and industrial incentives and disincentives; and * Cultural differences and similarities (Dunning 1977, 1993; Rugman 1980). Although Dunning (1993) also recognised that home countries may benefit to varying degrees from the location-specific decisions of their MNEs, his theory is predominantly based on demonstrating what criteria enable host countries to attract FDI. In 1990, Porter added to the FDI literature by providing a theory that helps to explain the global pattern of FDI (and trade) largely from the perspective of differing home country characteristics. With respect to FDI, Porter claims that firms that have attained success within the global market have done so because of their ability to extend their home-based advantages abroad. The home country, then, acts as an incubator and outward FDI is shaped by the country's: qualities of labour, appropriateness of production factors, market and demand conditions, support industries, competitive atmosphere, government policy and so on. …