A large number of New Brunswick’s municipalities are in danger of going bankrupt, warn opposition politicians – an accusation that the new minister in charge flatly denies.
Details of the insolvency question are likely within a report delivered by a retired economist from the Université de Moncton, but the Progressive Conservative government won’t publicly release it and the academic himself hasn’t answered requests for comment.
Jacques LeBlanc, a Liberal MLA and former Shediac mayor, was the first to raise the spectre in the legislature that up to 20 municipalities could be teetering on the brink of insolvency. That’s a huge number, up to one-quarter of the province’s cities, towns and villages.
LeBlanc said they could be in serious financial trouble following the Progressive Conservative government’s landmark reforms last year, which reduced 340 local governments and local service districts to 77 municipalities and a dozen rural districts.
“We see a lack of government action to support municipalities,” LeBlanc said during a member’s statement on Oct. 20. “Municipalities across New Brunswick are rushing to finish their budgets at a date imposed upon them by the government. I hear that maybe up to 20 municipalities could be insolvent. It’s time for this government to stand up and offer stability and a clear message to every community.”
Six days later, Green MLA Kevin Arseneau said the problem was even worse. The MLA for Kent North said 20 municipalities were in financial distress, along with eight other local government entities.
“We have not received one indication within our department that that is true,” Glen Savoie, the minister of local government, told Brunswick News in an interview. “You have to remember, the numbers that I believe the member of the opposition is basing his information on, are outdated.”
Savoie said the province had just recorded a record $8-billion increase in property values, translating into an extra $100 million available to local governments if they leave their tax rates the same. Even more money is available if they raise their tax rates.
Still, he wouldn’t divulge what was in the report, nor release it.
LeBlanc told reporters he had heard the possibility of 20 municipalities becoming insolvent from André Leclerc, a retired economics professor at Université de Moncton, who’d addressed a large group of local government leaders at a conference held by the francophone municipal association, also called l’Association francophone des municipalités du Nouveau-Brunswick, on the weekend of Oct. 14 and 15.
Leclerc didn’t return several messages from Brunswick News, and a spokesperson for Université de Moncton also said they had failed to get in touch with him. The francophone municipal association said it wouldn’t comment on the issue.
Savoie acknowledged he’d received a report from the professor, commissioned by the provincial government, on Oct. 20, but the minister immediately discounted the idea that so many municipalities could be in serious financial trouble.
During question period on Thursday, Arseneau accused the Tory government of transferring responsibilities to communities, but with very little power and even fewer resources.
“In September, the government cancelled the summit on municipal finances – a summit on the financial framework of municipalities – for no valid reason other than amid election rumours,” he said. “According to a report to which we do not yet have access, we know, however, that 28 entities out of 89 are in danger of going bankrupt; this is serious. Can the minister tell us when the report will be made public and when will the summit be held?”
Savoie replied that under the old system, it “was clear that we were not going to get to where we wanted to be as a province and that it was going to take a reform of this scale and this magnitude to get there.”
But the minister did not say when the report would be tabled, leading Arseneau to raise his voice several decibels.
“This is extremely serious. There are 28 entities, including 20 municipalities, which risk going bankrupt, and you stand up and can’t say anything?”
Savoie said the Green MLA should “perhaps calm himself a little bit.”
He said context was important, explaining that the francophone municipal association had asked for a financial summit.
“The province agreed to do that. But as the process rolled out – and this took months – it became clear that what the members were asking for and what they actually needed, which was different in different areas of the province, were not lining up with what the original intent was,” Savoie said. “Rather than going through a process that perhaps may not have given the results that are needed, the province decided to make sure that we were addressing the actual needs of people.”
The minister said, rather than just meeting for the sake of meeting, “we wanted something productive that was going to be useful and that would advance the interests of New Brunswickers.”
By John Chilibeck, Local Journalism Initiative Reporter
Original Published on Oct 31, 2023 at 10:34