Assessing the Viability of Smaller Municipalities: The Alberta Model

Abstract

A confluence of economic and social trends has created significant challenges for smaller municipalities in jurisdictions across the advanced industrial societies. Population stagnation or decline and the concentration of major industries in metropolitan centres have weakened the economies of smaller communities and frequently triggered fiscal crises. This leads to serious challenges not only for the local communities but for other levels of government. Responses to this challenge from provincial and national governments have followed a variety of paths. In some cases, governments have opted for major reorganization. This may entail a shift to regional forms of government or support for amalgamations or annexations by larger, financially stronger municipalities. In Canada, Manitoba and New Brunswick provide two recent examples of provincial governments that have chosen sweeping changes to their systems of local government. Alberta, by contrast, has elected a case-by case approach to municipal reorganization. The Ministry of Municipal Affairs has developed a process for viability reviews of municipalities facing serious fiscal challenges. This approach reflects the stronger economic state of most municipalities in the province; at this point, there is no need for a sweeping reorganization of municipal government. To date, 24 municipalities have undergone a viability review and 14 have elected to dissolve. In doing so, they become hamlets in the surrounding County or Municipal District. This process has worked well for Alberta, but challenges remain. Dissolution does not solve all of the problems that communities are facing; the problems that led to dissolution remain and become the responsibility of the absorbing entity. And more municipalities are likely to experience the difficulties that have led others to dissolve. Monitoring the health of local communities and providing support to both struggling municipalities and the counties and districts that may assume responsibility for them will be needed to ensure the sustainability of Alberta’s existing municipal framework.