PROVINCIAL RESPONSIBILITY FOR LOCAL GOVERNMENT

ASPECTS OF MUNICIPAL ADMINISTRATION: A SYMPOSIUM

Cette edition s’eloigne de la procedure habituelle de la revue puisqu’elle ne porte en grande partie que sur un sujet particulier. On se proposait de publier dans un recueil toutes les deliberations du congrhs annuel de PInstitut de 1966, tenu B Montreal. Ce projet nous est apparu irrealisable. On a donc fait un choix des communications, et bien qu’en general elles soient d‘excellente qualitees, nous avons Blimin6 celles qui traitent surtout de sujets d’actualite ou qui abordent les problhmes de Padministration municipale de facon secondaire. Celles que nous presentons dans ce numhro portent dans leurs discussions sur divers aspects du &me g&ndral. I1 faut par ailleurs se rappeler que de recents dkveloppements peuvent avoir une incidence sur certaines des observations formulees lors du congrhs. N.D.L.R.

This issue departs from the usual practice of the review by devoting itself largely to papers on a single subject. It was originally proposed to publish separately the entire proceedings of the 1966 annual meeting of the Institute in Montreal, but this has proved impracticable. Those papers which were deemed to be too topical or to deal only incidentally with municipal administration, although, in general, of excellent quality, have been omitted. Those published here deal with many aspects of the common theme. The reader should note that more recent develop- ments must occasionally be taken into account. THE EDITOR.

PROVINCIAL RESPONSIBILITY FOR LOCAL GOVERNMENT

Murray S. Donnelly

It is, of course, a commonplace that all forms of local government-city, town, village, rural municipality, school board, hospital districts-owe their existence to provincial statutes. From this it follows that provincial responsibility for local government is, in the legal sense, total. The aspect of this responsibility to be discussed here is that of initiating change in the various forms of local government, how this change might best be effected, and what principles should guide the attempt. To begin with, only rural local government will be discussed, because the problems encountered in metropolitan areas are obviously of a different order.

Probably no one needs convincing that reform of local government is necessary. For years in most provinces the list of complaints has expanded steadily: boundaries bear little relationship to fiscal and administrative liability; new units, such as hospital districts or health units, have been superimposed on existing structures in a confusing way; assessment

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PROVINCIAL RESPONSIBILITY FOR LOCAL GOVERNMENT 19 procedures are unscientific; school boards are fhancially irresponsible; municipal councils are hamstrung by semi-autonomous special-purpose boards, by excessive provincial control, and by mandatory reference to ratepayers; public apathy is endemic; petty corruption in some areas is said to be rife; and so on. Just to list the problems that have been hang- ing around and steadily growing more complex would take several pages. The question is what should be done.

One technique is of course to appoint a royal commission to conduct research, go through the largely ritualistic process of public hearings, and deliberate and propose a comprehensive plan or blueprint for change. That procedure has been followed in local government organization and finance or more specific aspects of taxation in Saskatchewan, Quebec, Ontario, Manitoba, and New Brunswick. In Saskatchewan the commission report appears to have been becalmed or perhaps sunk by an abrupt change in the velocity and direction of the political wind. The Belanger document in Quebec may have met a similar fate, for I have no recent reports on its whereabouts or any activity that may be resulting from it, The Ontario commission concerned primarily with taxation ought to be the lustiest of them all. Only in Manitoba and New Brunswick have reports been considered by the cabinet. In Manitoba, to revert to my nautical metaphor, the Michener Report did little more than rock the boat and the bilge has been washing back and forth at an accelerated rate ever since. New Brunswick appears to be where the action is. I believe someone actually threatened the life of the captain when he suggested a change of course. New Brunswick seems to be one of the few provinces that has accepted its responsibility for local government. Very sweeping, and in my opinion admirable changes are being made. The provincial government is taking responsibility for them. This is as it should be. It can only be hoped that Premier Robichaud and his cabinet will never have to face the question: Is it better to have reformed and lost than never to have reformed at all?

Regardless of implementation or non-implementation, what is of interest is the philosophy, or the principles, behind these two reports. In the case of the Michener Report, the basic philosophy is in part revealed in the following quotation:

It is commonly assumed that local government, in the form of city, town, village and rural councils or school boards, has inherent virtue as an indispensable part of the democratic system. Many historians, politicians and other ublic figures

tyranny and bureaucracy, as a means of achieving widespread citizen participa- tion in public affairs, as a part of adult education and social responsibility and a training ground for future parliamentarians. While it is undoubtedly true that local government has contributed much to the western political tradition and is therefore entitled to respect, the Commission has attempted to approach the question of its present value and future role in Manitoba with an open mind. To

have paid tribute to this kind of local administration as a bu P wark against

20 CANADIAN PUBLIC ADMINISTRATION

pay lip service to a conventional point of view might in the long run be a dis- service to the democratic principle. This principle is now widely understood and practised in a multitude of organizations, incorporated and unincorporated, official and private, local and national, which have objectives covering the whole range of economic, social and charitable activities.

The philosophy of the Byme Commission in New Brunswick, on the relationship between the health and importance of local government to the democratic system, was much the same as that of the Michener group, and this comes from the belief that the first criterion in deciding on the efficacy of reform is functional efficiency rather than abstract democracy.

The Saskatchewan Royal Commission on Taxation, source of the McLeod Report, was restricted to the question of money. But, the commissioners write with a deep sigh, “We have no comment that we feel we can or should make concerning the degree of adequacy with which they [the local governments] are discharging the responsibilities placed upon them by the government of the province, nor have we any extensive comments to make about the philosophical propositions which are put forward in justification of local government as such. In general, we accept readily the conception that was repeatedly brought before us that, in a democratic society, it is necessary to have a system of local institutions endowed with appropriate powers to initiate, decide, and act in respect to matters of local importance” ( p. 54). Having thus declared their royal but democratic hearts to be in the right place, the Saskatche- wan group made very trenchant judgments, including one that it makes no sense at all in this day and age to finance services which are designed in part to redistribute income, enhance human dignity, and provide for a minimum of equality out of a tax which “is at best capricious in its workings and at its worst distinctively regressive.”

Royal commissioners write with restraint but, putting the matter bluntly, I think we can dispose once and for all the myth that a wide range of functions decentralized to local institutions has necessarily beneficial effects for democracy. Indeed, almost the reverse may be true, particularly in rural areas where local governments are often narrow in outlook, limited in horizon, self-centred in interest. It would be much better if people came to think provincially-or, hopefully, even nationally -rather than being dominated by an inward-looking local view which often has for its stimulus an aged reeve embalmed in office by successive acclamations.

If a decision on the proper functions of local government, which for the purposes of this paper include towns, villages, and rural municipalities, can be made, on the basis of functional and financial suitability what decision should be made? One finds a great degree of agreement between the Michener and Byrne commissions. Both begin by accepting

PROVINCIAL RESPONSIBlLlTY FOR LOCAL GOVERNMENT 21

the principle that, where a service is or should be universally available to citizens on a uniform basis, it should be provincially financed and administered. However, the Michener Commission applied this only to health and welfare services, arguing that these should become a provincial responsibility, administered on a decentralized regional basis. TOO much cannot be made of this point. In many provinces, this transfer of health and welfare services from local to provincial has gone a long way already and needs only to be completed. In Manitoba, for example, only short-term welfare cases remain local and, as they become too burden- some, provincial financial assistance is forthcoming. This has produced one amusing anomaly which may be mentioned in passing. An unmarried mother with one child is a local responsibility, but with two or more the case becomes provincial. And since provincial rates are higher than local, this amounts to official subsidization of sin!

The Michener Commission arrived at a division of functions between province and municipality whereby the latter would have responsibility for local public works, utility operation, protection of persons and property ( including sanitation) , recreation, and community services. This definition would, in the view of the Commission, have made it possible for the local units to discharge their responsibility 100 per cent from their own revenues without grants, conditional or unconditional, from the province; and, if they were unable to do so, this would be clear evidence that reorganization and boundary change was necessary. The beautiful simplicity of this plan was to some extent damaged by the recommendations an education, which left it shared between province and municipality, with the province bearing a greater amount of the cost. I signed the Michener Report. I have now come to the view that education should become a provincial responsibility in its entirety. It surely has become one of the universal services that is or must be available to everyone and therefore should become provincial. Certainly, as the McLeod Commission argues most cogently, the transfer of education makes great fiscal sense. It must, however, be admitted that there are dangers in this, not the least of which is that the dead hand of provincial bureaucracy will rest heavily on the shoulders of the system. Such a deleterious result might be avoided by adopting two devices, the first of which is a public service education commission, very similar to that proposed by the Byrne group in New Brunswick and rejected by the government. The second possibility, suggested so far as I know by no one, is a much greater role for the teachers' societies in various provinces, perhaps even for the Canadian Teachers Federation. Is it too much to hope that teachers themselves may become increasingly professional and may eventually come to be trusted by society in much the same way as doctors or lawyers? I am all for it; but I think it will never happen.

So far, I have attempted to establish the point that, in thinking of


reforms to be effected in local governments, one need not be greatly concerned about the general health of the democratic system but should rather view the question from the nature of the function to be performed. This leads me to believe that, aside from the metropolitan areas, local governments should attempt less rather than more. In other words their role should be reduced to that of essentially housekeeping chores. These duties should be performed through local councils, financed totally from local tax sources. The main provincial responsibility is therefore to ensure that these changes take place,

One rather elementary concept commonly used these days by the behavioural school of political science may prove useful in further clarification. The concept is the obvious one of the static and the dynamic, two words often used to identify the ongoing political process which takes place within the constitutional, conventional, or accepted framework. The constitution itself is static, designedly so, and provides the framework within which parties, pressure groups, classes, and financial interests enter into the wild dance of power. When the static framework gets out of tune with the tempo of the dance it itself may be subject to change or, if that process is too codned, the changes may take place around, above, or beside the constitutional arrangement. This, so the behaviouralists say, is the way things work in federal-provincial financial relationships, and, of course, one of the dynamic devices which has been used to breach the gap between constitutional arrangements and dynamic actuality has been the shared-cost arrangement. At least in Canada this was the case before we discovered Quebec.

Shared-cost arrangements or whatever the new equivalents are to be are the best we can do in federal-provincial arrangements, but there is no excuse whatever for accepting them in provincial-local arrangements. Unfortunately, this is what has been happening. In many provinces, grant systems have developed a truly Byzantine complexity. It took K. G. Crawford a whole book to summarize the various forms. In Manitoba, the Premier in a budget address stated: ‘‘In 196887, 63% of provincial outlays from current income of $187.3 million is for the purpose of direct grants or financial transfer payments to local government.” Because of constitutional rigidities, cost-sharing arrangements are probably inevitable between province and federal levels, but to my mind it by no means follows that such arrangements are necessary between the province and local units which are after all its own creation.

I t seems clear that provincial governments must accept responsibility for initiating the change. While many governments appear unwilling to accept this responsibility, there appears to be an encouraging develop- ment in Ontario, where the concept of regional review is being used more and more frequently. At the moment, there have been three such reviews: one in Peel and Halton counties, one at the Lakehead examining

PROVINCIAL RESPONSIBILITY FOR LOCAL GOVERNMENT

the twin cities and neighbouring municipalities, and one for Ottawa and Carleton County. These reviews are initiated by the minister, who does not necessarily get formal approval from each council involved. That seems to be one of the keys. Even so, the studies are billed as joint and are financed partly by the province, partly by the municipalities. Such studies appear to have two great merits: they are the first step toward getting the groups involved to think regionally rather than merely locally or parochially, and they may well lead the councils involved to s e e the necessity for reform and thus make possible implementation of the proposals advanced. But it is still too early to say what effect these studies will have on the reform of local institutions. No action has yet been taken on the rather radical proposals made in the Jones Report on Ottawa and Carleton County. Perhaps this is because the report of Carl Galdenberg on Metro Toronto was considered more urgent. In any case, it may be hoped that the Ontario government will accept its responsibilities for initiating and carrying out change and that the other provincial governments will follow suit.

R. A. McLarty

Most readers would expect a paper on the nature of provincial responsibility for local government to be concerned with the nature of a particular relationship. Unfortunately, to expect this is to assume that we know what local government means and that we know what provincial responsibility means. The authors have found that the difficulty was not in understanding the nature of the relationship but in understanding the meaning of the terms,

We do not know what these terms mean because we seldom think about them. While much is written about local government, the material concerns itself with specific items or areas. When it comes to considering the problems affecting local government as a whole, we think neither deeply nor analytically about them. The failure to think about the problems of local government can be traced to the assumption that the subject is dull. We ignore the tremendous problems posed by people living closely together, the tensions of communal existence, the challenges of creating recreational and cultural facilities, the opportunities for leisure, for fun, for beauty, and for achieving peace of mind or the good life. We prefer to view these things in their simplest terms. Galbraith comments on our conviction that life can be simple: “The difficult problems will yield to old and familiar rules and formulas. The church and the family will save us. We must have a simple faith for our times. We should be led by a simple man of simple beliefs. We stop just short of praise for the simple mind.”

% CANADIAN PUBLIC ADMINISTRATION

Thus local government is always viewed in the narrowest terms and the least exciting terms. No wonder we find it dull; much of it is dull. The ultimate administrative organization for the removal of garbage is a grad which few knights seek. Other functims are equally uninspiring. They are things that must be done and, as long as they are done without any grossly impertinent inefficiency, we prefer to ignore them. We do not think analytically about local government because the parameters within which it operates are so narrow that the theoretical, social, political, and economic frameworks of national policy do not operate there.

Almost every economics text lays down guidelines and ways to think about the problems of federal fiscal policy; a few are even beginning to discuss the policy role of state and provincial governments. But the municipal official or councillor trying to decide on a surplus or deficit has little but myths to guide him, partly because the academic seeking to provide a more rational guideline finds the present state of municipal reporting and statistics hardly conducive to general observations, let alone general theories.

Further, we do not know what local government and provincial responsibility mean because we have loaded both terms with such a burden of emotional values that we react to, rather than think about, the subject. The purpose of this paper is to try to clear away the emotional underbrush and to look rationally and objectively at what local government and provincial responsibility are.

What is local government? The variety of sizes, shapes, forms, and types of government surely defies description. Eaton points out that even the Dominion Bureau of Statistics, the country’s greatest classifier, re- quires seventeen footnotes to get all types on one table. Perhaps the last Canadians who could have explained it, all in one sentence, were the Fathers of Confederation. From a legal and constitutional point of view, their definition holds true today. Local government is whatever each provincial government says it is. Section 92 of the British North America Act lists the subjects of the exclusive provincial jurisdiction and, right in the centre, in subsection 8 “municipal institutions in the Province.” This would seem to make it perfectly clear.

But there are many who would appeal to “the spirit if not the letter of the British North America Act.” They claim that “while the provincial governments should and must invoke their broad powers to promote a higher standard of local government and citizen well-being, these powers and their financial attributes should so far as it is possible be delegated for the purposes of administration to the municipal authorities in a manner consistent with independent local self-government.” This approach, however, leads inevitably into the commonest error of the many that plague our definitions of local government: believing that it consists

PROVIN'CIAL RESPONSIBILITY FOR LOCAL GOVERNMENT

of one consistent and homogeneous whole from sea unto sea. A quick glance at the Canada yearbooks dispels that notion. It reminds us that for nine provinces a great percentage of their area is not municipally organized. The percentages so organized run from under 1 per cent in Newfoundland and British Columbia through to Ontario with 10 per cent, Quebec 33 per cent, Saskatchewan 40 per cent, to Nova Scotia, New Brunswick, Alberta, and Prince Edward Island, if we consider only school boards, with 100 per cent. These figures fairly clearly indicate that attitudes toward local government vary substantially even between regions. Presumably, if some traditional single concept of local govem- ment existed it would be just as strong in Newfoundland or PEI as in New Brunswick and Nova Scotia. If geographical factors caused the difference, Saskatchewan and Alberta would not differ as they do.

The figures also point to one of the greatest daerences between local government as we talk about it and local government as it is: we usually talk about local government as though it were a purely urban pheno- menon. But, of the 4,446 municipalities noted in the Canada yearbooks, just over half are rural. Saskatchewan, for example, with 3 per cent of Canada's urban population has 18 per cent of the municipalities. An overall view of the vast differences between local governments can be obtained by comparing urban and rural populations and the number of local government units in each province. While it is commonly expected that Saskatchewan would have the smallest urban municipalities and Ontario the largest, the range and diversity suggest there is no common pattern. Indeed, while Nova Scotia and New Brunswick have similar sized urban municipalities, Nova Scotia's rural municipalities are, on the average, three times as large as New Brunswick's. The only other reasonably close comparison is between urban units in Quebec and Manitoba; here again rural averages show a one-to-three ratio.

This leads to the second level of the problem: the same words used in the same way mean different things. Most of us are quite ready to admit we do not know the difference between rural districts, rural municipalities, and local government districts, or even the differences between the Saskatchewan and the Manitoba rural municipalities. But most of us feel we have a fairly good idea of what those old faithfuls-the city, the town and the village-are. The first appendix in Crawford's Canadian Municipal Government offers some interesting figures on this. The population requirements for a village range from 35 dwellings in Alberta to 750 people in Ontario. Maximum acreages vary from 60 arpents in Quebec to 1,500 acres in New Brunswick, which for quite a few years managed with only one village.

For a town population requirements vary from 500 in Saskatchewan to 2,000 in Quebec, although the number of provinces with no fixed provision increases. The requirement increases again for cities, where


individual charters rather than city acts become commoner; even here the variation in minimum population is from 100 males in British Columbia to 25,000 total population in Ontario, after making the jump from township status, Many who would concede that there are differences in the sizes and shapes of municipalities might still maintain that the mix of services they supply is fairly constant. After a vastly unsuccessful and discouraging attempt to abstract the services for which municipal governments were responsible from the mass of acts, regulations, and charters, I resorted to public finance statistics on the simple ground that governments are responsible for those things on which they spend money. The division of net general expenditures should then give a good indica- tion of the division of responsibilities as between provincial and municipal governments.

The only purely municipal function in terms of expenditures is sanitation and waste removal. It is purely a municipal function, but only because the table excludes by definition the private sector. The writer was surprised, though no Maritimer seems to be, to find it possible to take one’s own garbage to the dump or pay to have it collected weekly. While the yellow pages in Upper Canada and the West go straight from garages to garden equipment, garbage removal provides another source of revenue to Maritime telephone companies. [The Toronto telephone book contains a listing for “Garbage Disposal Equipment” though none for “Garbage Removal.” ED.] Ignoring for the moment the rather special case of Newfoundland, the next most financially stable division of responsibility is protection of persons and property, where the municipal share varies from 55 per cent in PEI to 69 per cent in Ontario. Save again for Newfoundland, education ranks third, with municipal shares ranging from 42 per cent in Alberta to 59 per cent in New Brunswick. Beyond this, the differences are so wide that there would be very little point in seeking a common idea of municipal services in health, welfare, transportation or others.

On both of the main stable items it is fairly obvious that standard financial responsibility allows vast differences in the level and types of service provided. In the larger cities and towns, the local police force may be the chief protection provided, but many dollars of the total are spent on hiring mounted or provincial police to enforce local laws. The laws themselves are as often as not determined outside the locality, for provincial minimums have become municipal standards in many cases, This is even truer of education. Tremendous variety exists in the provision of educational service in different parts of the country and at different times.

Perhaps the one place where common understanding and municipal fact have most in common is on revenue policies. Most of us believe the bulk in municipal revenue comes from property tax-and it does, though

PROVINCIAL RESPONSIBILITY FOR LOCAL GOVERNMENT 27

even here the average of 70 per cent includes a range from 60 per cent in New Bmswick and Alberta to almost 80 per cent in Manitoba. Newfoundland as usual is by itself at 53 per cent. However sound our generalizations about the source of municipal revenues, the methods of assessing and collecting, and even such a basic concept as what taxable property should include, varies greatly even within provinces. Real property is generally the base in Central Canada and the West. But Maritime assessors spend much of their time counting or ferreting out livestock and television sets for personal property assessment. The treat- ment of structures is enough to make most of the tax accountants curse. Assessment between municipalities is non-uniform from province to province and from year to year. Using the national accounts supplemen- tary tables, some idea of the variation over time is available. Real and personal property tax, while almost eight times greater now than thirty- eight years ago, has been declining fairly consistentIy as a percentage of municipal revenues, from 07 per cent of the total in 1927 to under 45 per cent in 1965. Property taxes as a percentage of all government revenue show an even less consistent pattern, falling abruptly in the war years, then rising to about half of their immediate prewar level in the sixties. Even as a percentage of personal income, the property taxes show no constancy over time, rising precipitously in the thirties, falling drasti- cally during the war, and gradually increasing again in the postwar years. A great deal more could be said, and much of it is well said in Eaton’s study on Municipal Tax Systems.

This survey of structures, expenditures, and revenues suggests that municipal government, in the Canadian experience, has never been consistent in its institutional expression throughout the provinces or even within the provinces, There is no consistency as to services offered or revenue sources used to meet the cost of these services. LocaI government in Canada is now and always has been a highly vaned mixture. Seldom in word but often in fact, Canadians have been very pragmatic about the business of municipal government. The one consistent thing about it appears to be that it was designed to meet the challenges and demands of the time and place in which it existed.

Donald Tansley

Unlike the wide variations in how provinces have defined or interpreted local government, the scope of provincial responsibility is fairly clear. It appears to cover, first, the determination of what functions local government will undertake; second, the determination of what revenue sources will be available to pay for those functions; and third, the determination of the form, structure, and general procedures by which local governments will govern.


While its scope may be clear, the nature of provincial responsibility is far from clear. Responsibility surely implies accountability. But what is a province accountable for as far as municipal government is concerned? Surely not for the actions of municipal governments, despite the tempta- tion to use the parent-child analogy and to couple it with the current notion of child psychologists that parents are to blame for everything. The parent-child analogy is useful, though, as a guide to the nature of provincial responsibility for local government. The province is responsible for the overall results of local government action. And, like a parent, it surely follows that the province must decide at any given time what activities its municipal children are suited for and which ones they are capable of carrying out, The province must supply the funds or the revenue sources for that particular mix of functions and it must prescribe the framework within which freedom of action is to be permitted. It must, in short, so rear the municipal creature that it is capable of rational conduct within its predetermined and provincially determined sphere of activities.

It is obvious that what local governments should and can do, and the form and structure they employ to do it, will vary from place to place. It will also vary from time to time as economic conditions, technology, population, and a host of other circumstances change. Viewed in this manner, provincial responsibility for local government becomes an ongoing matter, requiring constant re-examination and adaptation to new circumstances. The chief characteristic of the nature of the provincial responsibility is that it is dynamic.

Almost no one would disagree with this view in theory. But Iet a province attempt to adopt this concept in discharging its responsibility to local governments, let it decide that the scope of municipal activity should be amended or the form and structure altered, and all theory, however sound, is quickly abandoned. Just why this is so deserves examination.

A major factor is found in one of the more persistent myths about local government: the one that begins with the premise that local government is A GOOD THING, like Motherhood and the flag. That is just a truism. The statement that municipal institutions constitute the strength of free nations is the first sentence in Crawford’s Canadian Municipal Govern- ment and thus the first words most students read. It is somehow intuiti- vely logical that democratic and responsible government should have started in small local units and gradually worked its way upwards. The New England town meeting, that North American descendant of Athens, is frequently pointed to with pride. One writer has said: “In the history of the struggle for local self-government, the importance of the United Empire Loyalists in the province of Nova Scotia and New Brunswick cannot be overestimated. Thousands of Loyalists settled in these pro-

PROVINCIAL RESPONSIBBILITY FOR LOCAL GOVERNMENT 29

vinces and because of their experience in the New England town meeting type of government, they demanded and worked for popular control of municipal government.” However appealing this assertion may be, the facts do not bear it out. The Loyalists of New Brunswick not only were not demanding and working for popular municipal government, but when Lieutenant-Governor Colebrooke proposed it, they claimed it would have cut loose that “many-headed monster, direct taxation, and loosed its minions, the tax gatherers, into the home of every poor man throughout the land.” Municipal incorporation, it was argued in the Assembly, would encroach upon the liberties of the people. Opposition to municipal incorporation was, if anything, even stronger and longer lasting in Nova Scotia where, as late as 1879, the citizens of Yarmouth petitioned for permission to revert to unincorporated status.

Once established, however, local government seems to take on a Rock- of-Ages quality. It is not only a good thing; it is a good thing for ever and ever in its existing form and with its existing responsibilities. In the minds of many, it seems, local government, as is, is a basic human right which ranks with Magna Carta as a fundamental part of Western democratic society. Despite a rash of royal commissions across the country calling for every conceivable kind of local government reform and for various redefinitions of provincial responsibility, very little change has in fact occurred in Canada. When the commission reports are published, the trusty myths are trotted out and in most cases the provincial authority hastily retreats, One of the more effective arguments against change is that only local government is responsive or close to the people.

It is true that at the time Canada was being settled, and at the time when our municipal institutions were evolving, local governments were more responsive and responsible than either provincial or national governments. Local governments were close to the people and the people were close to them. Local representatives knew what was going on and they knew what was wanted. To a considerable extent, the legend of the responsibility and representativeness of local government grew out of the transportation and communication systems of the nineteenth century. Byrne has observed that New Brunswick has a transportation system today such that Fredericton is within five hours by automobile, one hour by airplane, one day by railroad of any point in the province; our communications, our way of living, everything has changed. The need of 1840 for municipal government has in many instances disappeared.

Interest seems to be disappearing with it. As Rowat has pointed out, while in national and provincial elections about three-quarters of the electors cast a vote, most local governments consider themselves lucky if half the voters turn out. In Montreal and Toronto the proportion is nearer a third and, at some elections, has actually been less than a quarter.


While local government thus once provided the school for democracy, and this I suspect provided much of the basis for our good opinion of it, it is today a school whose truancy rate is growing remarkably high. With modem communications and news systems, it is even probable that more people can name their federal or provincial member than can name their alderman. Perhaps the concentration, on municipal councils, of real estate men and independent merchants casts further doubt on the responsiveness of councils to public opinion, on questions of parking, shopping hours, and shopping centres. There is scarcely a community where the local council has not lagged far behind the desires and attitudes of the local public.

This brief review of local government legend and folklore is probably enough to demonstrate why we seldom think about the problem of local government, why, if we do think about it, we do so in narrow terms, and why provincial governments seldom view their responsibility for local government in dynamic terms. Today the values, practices, and purposes of federal and provincial governments are constantly changing and these changes are complex and difficult to understand. But, if we can assume that municipal government stands as it has always stood, rock ribbed and copper bottomed, we can replace study and examination with a mystical being whose existence can be conveniently forgotten for most day-to-day decisions. We can pretend that all local governments are just like the one we know, make judgments on this basis, and rest content with the daculties they raise.

After all, and this too is part of the myth, local governments are always having difficulty. It is by definition part of their being. Our view of provincial responsibility and local government has already been stated. Local government in a given province, we have said, is whatever the provincial government says it is. The scope of local government, its form and structure and its financial powers are determined by the province. This determination is, or should be, based on the broad judgment of the degree to which any particular local government is capable of rational conduct. Since this capability is subject to constant change, the extent and nature of provincial responsibility for local government must also be subject to constant change.

To put this concept of provincial responsibility into practice, we need to look at local government and, indeed, government in general in a somewhat different way than we have to date. Government is one way that people organize to do things that can be done better by groups than by individuals. It differs from business organization in that the individual share of what government does is not rationed by his disposable wealth. It difFers from voluntary associations in the totality of its membership and potential scope. Within a province, provincial and local governments are the result of the same people organizing in different types of groups

MUNICIPAL LONG-TERM FINANCING 31

to provide different types of services. The question of the nature of provincial responsibility for local government can now be rephrased as follows: Through what size and type of government can the provincial community rationally organize, provide, and pay for which services?

It follows from this rephrasing that no particular form or structure of local government and no specific combination of local functions are time- less. There is nothing improper about change and we must constantly examine the forms and organizations we use to ensure that they fit the time and place in which they are being used. The present legal responsibility for ensuring that this is done clearly rests with provincial govem- ments. We suggest that they are abdicating their responsibilities in the face of a dynamic technological age if they are not constantly rethinking the structures of local government. And a large part of the responsibility for behaving in a rational fashion at both levels rests with public administrators. We suggest that they are abdicating their responsibility if they replace serious thought about what the time and situation require by devising ever more ingenious formulas of grants that permit another five-year spell of ducking the issues.

MUNICIPAL LONG-TERM FINANCING

Dennis Young

Until just after the Second World War, municipalities in Canada played a relatively minor role in the capital financing undertaken in this country. This may also be said of most borrowing groups, with the exception of the federal government. Indeed, it was largely federal wartime financing that laid the basis for our present bond marketing industry. The Bank of Canada statistical summaries reveal that in December 1946 the total bonded debt of all three levels of government and of private corporations stood at just $22,000 million, with a mere $192 million, or 4.2 per cent, attributable to the municipalities. Over the next twenty years the Cana- dian total almost doubled, and the municipal proportion increased by some 600 per cent to a total of $5,300 million. Although accurate statistics are not available, the percentage increase in the number of borrowers was undoubtedly of similar proportion. It must be obvious to even the most casual observer that an increase of this magnitude in marketing activity by organizations unfamiliar with the basic techniques was bound to create many problems and difficulties.

Before examining these problems and the various methods adopted to cope with them, let us review briefly the causes of this spectacular increase in borrowing activity. In 1946 the population of Canada was

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PROVINCIAL RESPONSIBILITY FOR LOCAL GOVERNMENT