A few months ago, the government of New Brunswick released its plan for reforming local governance. This has been a long time coming and it appears that fiscal pressures have finally forced action. While problems in local governance and cost-sharing have long been recognized, political resistance to change has prevented action until now.
The Province has a significant and growing debt, and, given stagnant economic growth, there is little room for optimism. While a reversal of the corporate and income tax cuts of a few years ago, plus a rise in the HST, might balance the books for now, those measures will provide only a brief respite for the Province’s fiscal managers. The main driver in the decision to move forward with the formation of the Regional Service Commissions was, I am sure, the desire to off-load certain costs to property owners, especially those in rural areas, where villages and local service districts have relied upon the province to provide local services at below cost. This reorganization provides an opportunity for the Province to eventually free itself of a cost burden. Moreover, the property tax hikes that are coming down the road (especially for rural residents) will be the laid at the feet of local governments rather than the Province.
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