Manning, a small town in northwestern Alberta, has an infrastructure problem. It needs to upgrade its arena. The lagoon sludge needs to be dredged and drained. Parts of the town’s storm drainage system are rusted out, causing erosion and uneven sidewalks. The backlog of roadway maintenance is, at best, double what is considered healthy.
All told, a recent engineering study put 209 infrastructure projects with a collective price tag of $20,479,831.05 on Manning’s to-do list.
But with a population of just 1,183 and an annual budget of about $4.5-million, Manning is short on cash, its tax base is shrinking and its long-term municipal debt per capita is more than double the median. Auditors, after reviewing the town’s 2019 financial statements, questioned whether Manning can stay afloat.
“You lose sleep at night trying to figure out what you can do,” said Greg Rycroft, the town’s mayor.
Manning is among the handful of municipalities in Alberta going through the province’s viability review process, which culminates in votes that can reshape local political landscapes.
Next week the town’s electors will vote on Manning’s future: They can opt to dissolve their municipality and join the surrounding county as a hamlet or stick with the jurisdictional status quo but adhere to guidelines set out by the provincial government to get the town’s finances in order.
Municipalities such as Manning are shedding residents and are often burdened with infrastructure deficits, making dissolution attractive. But the adjacent rural municipalities that would absorb them may have neither the financial firepower nor the will to fill the gaps.
Mr. Rycroft and the town’s six councillors are recommending Manning residents vote to stay in business. They can’t see the financial advantage of joining the County of Northern Lights, which itself is struggling to collect taxes from energy companies.
An intangible factor, identity, also factored into the council’s deliberations. “There was some emotional stuff there also,” Mr. Rycroft said.
Manning lacks a plan for its infrastructure, a common shortcoming in rural Canada. Only 29 per cent of small municipalities – those with fewer than 5,000 people – report having an asset management plan that tracks the state of their infrastructure and maps future costs, according to the 2019 Canadian Infrastructure Report Card. Roughly 56 per cent of municipalities with populations between 5,000 and 30,000 keep such plans, compared with 70 per cent of large municipalities, says the report card, which is based on a survey conducted by the federal government in 2017 to which 90 per cent of the 2,000 jurisdictions polled responded.
Meanwhile, public assets are in rough shape. According to the report card, almost 40 per cent of the country’s public roads and bridges are in fair, poor or very poor condition; between 30 and 35 per cent of recreational and cultural facilities such as rinks and pools are in the same shape; and that goes for 30 per cent of water infrastructure such as sewers as well.
Roger Epp, a political studies professor at the University of Alberta, said the financial reckoning in small municipalities is not just a product of the recent economic collapse. It has been decades in the making.
“It has been the hidden story of Alberta for generations,” he said. “Beneath all the big, booming, impressive provincial aggregate numbers has been a serious, documented set of disparities" between rural and urban communities.
In good times, the province threw money at organizations such as agricultural societies and infrastructure projects in rural areas, creating a veneer of prosperity, Prof. Epp said. But now the government is cracking down on spending and shifting costs, such as a greater slice of the policing bill, to its municipal counterparts. Indeed, Prof. Epp is surprised that only a handful of the province’s small jurisdictions are on the verge of dissolving.
Alberta launched 26 viability reviews between 2010 and 2019, according to the most recent annual report from the Municipal Affairs department. Voters favoured dissolution in 11 of those municipalities while opting to carry on in five cases. Five jurisdictions stopped the review process before voting, thus maintaining the status quo, and the other five were still in the review process when Municipal Affairs published its report this summer.
Political skills in rural areas erode when small municipalities evaporate, Prof. Epp said, and that makes it more difficult for these communities to articulate their needs and advance their interests in Edmonton and Ottawa. Fewer municipalities also means fewer training grounds for would-be provincial and federal politicians. “It was an arena of real skill-building in rural self-representation," he said.
But finding people who want to be municipal politicians in small communities can be tricky. All the councillors in Manning’s 2017 election were acclaimed, and there have been five by-elections since. Weak governance structures and subpar administrative skills can result in viability reviews for struggling municipalities.
Earlier this month, residents in Cereal (population: 111) voted 42 to 37 to dissolve their hamlet. Voters in the village of Bawlf (population: 422) this week elected to keep their municipality intact, with 90 people voting for the status quo and 76 against. Its viability review process started in 2018, after residents petitioned the provincial minister. Dewberry (population: 186) is struggling to collect taxes from ratepayers, and its capital spending is less than the depreciation of its assets. Its electors will vote on its future in the first week of November. The villages of Wabamun (population: 682) and Hythe (population: 827) are in the midst of their reviews.
There are 338 municipalities in Alberta, and 245 of those are home to fewer than 5,000 people. The province, based on 2018 financial documents, deemed 94 per cent of its municipalities “not at risk based on financial and governance” markers.
Terry Ungarian is the reeve of the County of Northern Lights, which surrounds the town of Manning. He, like Manning’s mayor, would prefer that the town remain independent. If Manning residents vote to dissolve, and the province approves, the county has no choice but to absorb the town, its assets – and its liabilities. Alberta typically gives receiving municipalities a one-time injection of about $1-million to address infrastructure concerns, as well as cash to cover transition costs such as legal fees and staff severance. But that wouldn’t be enough to solve Manning’s problems.
“We don’t have a money tree out in the back that will fix all the problems that these small towns are facing,” Mr. Ungarian said.
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