Local Government in a Global World: Australia and Canada in Comparative Perspective 9781442698567

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Recto Running Head i

LOCAL GOVERNMENT IN A GLOBAL WORLD: AUSTRALIA AND CANADA IN COMPARATIVE PERSPECTIVE

Municipalities are responsible for many essential services and have become vital agents for implementing provincial policies, including those dealing with the environment, emergency planning, economic development, and land use. In Foundations of Governance, experts from each of Canada’s provinces come together to assess the extent to which municipal governments have the capacity to act autonomously, purposefully, and collaboratively in the intergovernmental arena. Each chapter follows a common template in order to facilitate comparison and covers essential features such as institutional structures, municipal functions, demography, and municipal finances. Canada’s municipalities function in diverse ways but have similar problems and, in this way, are illustrative of the importance of local democracy. Foundations of Governance shows that municipal governments require the legitimacy granted by a vibrant democracy in order to successfully negotiate and implement important collective choices about the futures of communities. andrew sancton is a professor in the Department of Political Science at the University of Western Ontario. robert young is a professor in the Department of Political Science at the University of Western Ontario and Canada Research Chair in Multilevel Governance.

ii Restructuring Family Policies

The Institute of Public Administration of Canada Series in Public Management and Governance Editor: Patrice Dutil This series is sponsored by the Institute of Public Administration of Canada as part of its commitment to encourage research on issues in Canadian public administration, public sector management, and public policy. It also seeks to foster wider knowledge and understanding among practitioners, academics, and the general public. For a list of books published in the series, see page 269.

Contents iii

EDITED BY EMMANUEL BRUNET-JAILLY AND JOHN F. MARTIN

Local Government in a Global World Australia and Canada in Comparative Perspective

UNIVERSITY OF TORONTO PRESS Toronto Buffalo London

iv Contents © University of Toronto Press Incorporated 2010 Toronto Buffalo London www.utppublishing.com Printed in Canada ISBN 978-0-8020-9963-1

Printed on acid-free, 100% post-consumer recycled paper with vegetablebased inks. Library and Archives Canada Cataloguing in Publication Local government in a global world : Australia and Canada in comparative perspective / edited by Emmanuel Brunet-Jailly and John F. Martin. (The Institute of Public Administration of Canada series in public management and governance) Includes bibliographical references and index. ISBN 978-0-8020-9963-1 1. Municipal government – Canada. 2. Local government – Australia. 3. Comparative government. 4. Globalization. I. Brunet-Jailly, Emmanuel, 1961– II. Martin, John F., 1951– III. Series: Institute of Public Administration of Canada series in public management and governance JS8033.L63 2010

Canada School of Public Service

320.80971

C2010-900178-8

École de la fonction publique du Canada

Financial support from the Canada School of Public Service for this book is gratefully acknowledged. The views expressed herein are not necessarily those of the Canada School of Public Service or of the Government of Canada. University of Toronto Press acknowledges the financial assistance to its publishing program of the Canada Council for the Arts and the Ontario Arts Council.

University of Toronto Press acknowledges the financial support for its publishing activities of the Government of Canada through the Book Publishing Industry Development Program (BPIDP).

Contents v

Contents

Foreword vii Acknowledgments

ix

1 Local Government in a Global World: Australia and Canada in Comparative Perspective 3 emmanuel brunet-jailly and john f. martin 2 Citizen Participation and Local Governance: The Australian Experience 35 chris aulich 3 ‘You Say You Want an Evolution?’ From Citizen to Community Engagement in Canadian Cities 55 susan d. phillips 4 Restructuring and Reform: Australia 81 neil marshall 5 Restructuring and Reform: Canada 108 andrew sancton 6 Performance Management in Australian Local Government 130 louise kloot and john f. martin 7 Performance Management in Canadian Local Government: A Journey in Progress or a Dead End? 154 carol agocs and emmanuel brunet-jailly

vi Contents

8 What’s Fair? Intergovernmental Relations in Australia 179 graham sansom 9 No Joke! Local Government and Intergovernmental Relations in Canada 213 katherine a.h. graham 10 Local Government in a Global World: Comparing Findings and Conclusions 238 emmanuel brunet-jailly and john f. martin Contributors 253 Index

257

Contents vii

Foreword

I received this manuscript with great pleasure because I had a modest role to play in its conception. In 2004, when I was Director of Research at the Institute of Public Administration of Canada (IPAC), I organized a small conference in Toronto on the theme of ‘Municipal Performance and Measurement: International Perspectives.’ I worked diligently to craft a program that featured the cutting-edge practices in Canada, the United States, and Great Britain. The staff in the Ministry of Municipal Affairs of the Government of Ontario, however, was very keen to have a certain Professor John Martin from Australia give a talk. I plunged into his writing, got in touch with him, and pitched my offer to come to Canada. Miraculously, he had time in his schedule to traverse the globe, and he delivered a fine address that capped a memorable meeting. As I recall, I was also exchanging e-mails with Professor Emmanuel Brunet-Jailly, who was eager to start a study team that would compare municipal practices in various jurisdictions. Impressed with John Martin’s talk, I simply put the two men together, and the excellent end result in is your hands. Beyond its role in its beginnings, IPAC has supported the publication of this book because it stands at the intersection of three axes on which it has had a long-standing interest and influence. The first one is on municipal governance. IPAC has published many books and organized numerous conferences on various aspects of municipal governance, ranging from the role of the chief administrative officer to citizen engagement practices. The timing of this book could not be better, as jurisdictions around the world are rediscovering the value of their cities and asking how they can be sustainably managed to meet the incessant demands for low-cost, high-value services.

viii Foreword

IPAC has also played a vital role as a cross-pollinator of good practices in the Commonwealth for the past two decades. In the early 1990s the Board of Directors of IPAC seized on the idea of reproducing IPAC’s practices on an international plane. Working with the Commonwealth Secretariat, it provided incubation to the Commonwealth Association for Public Administration and Management (CAPAM), and from 1994 to 2008 shared offices with this growing organization (it is now based in Ottawa). IPAC, for its part, has continued its international development program, working with countless members of the Commonwealth. The third axis of Australia-Canada comparative studies is relatively new to IPAC, but I am delighted to note that it is growing rapidly owing to the excellent work of scholars such as Brunet-Jailly and Martin. Academics in both countries are increasingly interested in the economic, social, and cultural similarities of the two countries. They seek to compare constitutional developments, policy orientations, and administrative practices. Funding is enabling more exchanges, and one can only hope that the networks of knowledge that have been created by researcher curiosity on both poles will be encouraged. There is much to compare and much to learn. This book offers a stimulating model of how serendipity can combine with hard work and genius to produce a literature that will be helpful to scholars, students, and practitioners on opposite sides of the globe. Patrice Dutil Editor, IPAC Series in Public Management and Governance Ryerson University

Contributors ix

Acknowledgments

Comparative studies of local government systems are rare in both Australia and Canada. The research tradition has been with comparisons between the states and provinces within these federations, not the local government level of public management. It is also rare that scholars are able to bring together the resources and scholarship necessary for such ambitious projects. A project that successfully bridges two countries at the opposite sides of the world also depends primarily on the commitments of its authors to such an endeavour. It is important to acknowledge that without the patience and dedication of our eight colleagues and co-contributors, this book would not have been possible. They agreed to produce long and detailed chapters, each on a specific aspect of their local government systems, and their work was reviewed and then submitted to blind review. This book would not have been possible without the Institute of Public Administration of Canada (IPAC), and particularly without Patrice Dutil’s scientific intuition that a comparative study of local governments in Australia and Canada would be worthy of the funding support of the IPAC Series in Public Management and Governance. We are grateful to both Patrice Dutil and Wendy Feldman, the director of research for IPAC, for their patient and continuous guidance. Earlier drafts of all chapters were presented at a Local Government Knowledge Partnership (LGKP) symposium organized in Victoria in the winter of 2006. Support from the University of Victoria, Evert Lindquist, and David Good, and from officials from the Ministry of Community Services, particularly Deputy Minister Dale Wall, as well as Director of Research Brian Walisser and Policy Director Gary Paget, was essential. The symposium allowed us to compare our findings with the views of British Columbia policy-makers and local government policy experts.

x Acknowledgments

This book came together in the fall of 2008 and benefited greatly from the detailed yet very positive review of two blind reviewers, whose work we would like to acknowledge here. Finally, we would like to thank Wayne Herrington and Daniel Quinlan of the University of Toronto Press for keeping us on track and in time for publication. Emmanuel Brunet-Jailly and John F. Martin February 2010

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LOCAL GOVERNMENT IN A GLOBAL WORLD: AUSTRALIA AND CANADA IN COMPARATIVE PERSPECTIVE

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Ontario 3

1 Local Government in a Global World: Australia and Canada in Comparative Perspective emmanuel brunet-jailly and john f. martin

Federal states, in both the developed and the developing world, now look to their systems of local government to play a central role in the economic and social development of metropolitan and rural communities. It is recognized that such development is a partnership between higher levels of government and these communities (Adams and Hess, 2006); however, as this book reveals, striking the balance is not easy. This book explores and compares changes that have taken place in the Australian and Canadian local government systems, relying on four thematic lenses: citizen participation and governance in local decisions, the restructuring and reforms of local governments, the usage of performance measures and management systems in the administration of local governments, and the relations of local governments with higher levels of governments. In this introduction, we outline our rationale for choosing to compare Australia and Canada. Second, we discuss globalization and its impact on local governments, and then analyse the contemporary literature as it relates to the four thematic pairs of chapters that make up the core of this book.1 In our concluding chapter, we revisit this literature in order to underline and at times challenge prevailing paradigms about the nature and role of local governments in both of these federal states. Our ultimate goal with this book is to provide a comparative assessment of recent local government reforms in Australia and Canada, and to question the influence of globalizing trends, so that policy-makers and public managers at all levels of government in these countries, as well as people interested in local government elsewhere, can develop

4 Local Government in a Global World

an informed view and understanding about effective ways to develop and manage a system of local government that contributes to the sustainable development of communities. Rationale: Comparing Australia’s and Canada’s Local Governments Both Australia and Canada are federations with a similar structure relating to local government. In addition, in both places local government is an instrument of the state or the provincial government, that is, of sub-federal governments. Specifically, they receive various forms of support from their respective federal governments, yet state and provincial governments largely determine, on a day-to-day basis, the legislative and regulatory framework in which each local government operates. Australia and Canada also share social, economic, cultural, and political administrative histories. The Australian and Canadian federations have established local government systems that are legislated over by state and provincial governments, respectively. Local government in both countries has a long heritage dating back to early colonial days, and in the case of Canada, with constitutional reforms in 1982. Both countires fund their local governments through property-based taxes, local fees and charges, and through revenue sharing from federal governments primarily through state and provincial governments. The benefits of local economic success flow back to Canadian communities through local goods and service taxes, a source of revenue that the Australian system of local government does not have. The number of local governments in each federation has changed over time. Canada’s ten provinces and three territories, with a population over thirty-two million, currently have approximately 3,700 municipalities. Periodic reviews across these provinces have delivered restructuration and reforms, including amalgamations and regional groupings of councils to address important regional issues such as the provision of water and sewage, waste management services, and public transport. In Australia, with a population around twenty-one million people across six states and two territories, there are some 600 local government ‘councils’ – as they are more generally referred to – who have witnessed a rationalizing into larger geographical units, most recently in the states of Victoria and Queensland, but also in the other states and the Northern Territory to varying degrees.

Australia and Canada in Comparative Perspective 5

Canadian local government provides a greater range of services than Australian local government, and there is considerable variation between Canadian local governments in service provision. Canadian local government has a significant responsibility in the provision of fire and police services. In Australia these services are the sole responsibility of state governments. Both Australian and Canadian local governments provide a range of commercial services. While in the Canadian provinces of Quebec, Ontario, and Alberta local government commercial services can include electricity, telephone, and gas, there is a marked variation in commercial services provided across Canadian provinces. In New Brunswick – in addition to policing and fire services – we see a range of property services more typical of Australian local government: recreation, land use planning, water and waste water (although in recent decades this service has been taken back by state governments), local roads, and recreational facilities. Canadian local government revenues total about 10% of total Canadian government revenue, compared to 6% in Australia – accounting for the broader range of services provided by the Canadian system. In both countries tax transfers from federal and state/provincial governments account for around 15% to 20% of revenue. This proportion of revenue, however, varies significantly between urban and rural councils, especially in Australia. The difference in proportions of government revenue is a function of Canadian local government providing fire and police services, a significant budget item (around 15% in Canada, whereas the protection of property and persons accounts for around 2% of local government expenditure in Australia). A significant difference between the Canadian and Australian federations is the level of government debt, and its impact on intergovernmental relations. At the end of the 1990s the level of indebtedness of all levels of government in Canada placed considerable pressure on relations with higher levels of governments and on intergovernmental agreements. While Statistics Canada reports that in 1999–2000 the federal government had net debt which was 60% of GDP, and the provinces around 27%, local government debt servicing was only 5% of expenditures. In Australia intergovernmental financial relations face different issues. At the same time in Australia debt servicing by the federal government was only 2%, state debt servicing was 4.6%, and local government had no debt, with a net worth around $2 billion. Major local government borrowings must be approved by state governments in Australia, another measure of the degree of independence of local government in

6 Local Government in a Global World

this federation. One response from higher levels of government to these different financial positions has been for them to ‘download’ (as it is called in Canada) and ‘cost shift’ (as it is called in Australia) services to local governments through provincial and state government legislative fiat. As the chapters in this book will show in more detail the Canadian and Australian systems of local government have much in common, yet with important distinctions. It is the latter that colour the political contours of intergovernmental relations in each country. It is from this similar structural view that we will analyse and contrast the characteristics of local government in both Australia and Canada. Local Government in a Global World The global economy modifies the politics of state relations in the intergovernmental and international arenas, as many scholars have noted (e.g., see Duchacek, 1988; Risse-Kappen, 1995, 1997; Fry, 1998; Courchene, 1999; Balme, 1998; Keating, 1998; Young, 1999). There does not seem to be a consensus, however, on the general transformation of states, whether the pressures of the global economy are resulting in a hollowing out of the state, or whether current shifts simply reflect a functional reorganization. New technologies of information and communication also change the global economy and affect states: free trade integrates the economies of Europe and North America, while free trade regimes pressure governments to ease regulations and open new markets (Keohane and Milner, 1996; Gerdes, 2002) and seem to enhance the role of subnational entities as economic players (Ohmae, 1991; Courchene, 1998). Thus, the global economy, new technologies, and free trade together transform the relations of states and other government tiers with market forces, and thus make governing much more complex. For the last twenty years, scholars have increasingly questioned the relationship between market forces and territories. The traditional views that focused on territorial competitive advantage and infrastructures have progressively given way to new ideas that now point to the social construction of a territorial economy (Clarke and Gail, 1998). The social construction of a territorial economy suggests that modes of production are culturally embedded and take different forms in different times and places, which also suggests that culture, institutions, and individual choice make a difference in the global marketplace. Hence, new intergovernmental relations, legal statutes, and

Australia and Canada in Comparative Perspective 7

institutional arrangements become critical to the capacity of every local community to compete in the market economy because they articulate and mediate the activities of agents into the global world. Federal and unitary states adapt and mediate those international markets and governance changes with varying difficulties (see Young, 1999; Sassen, 1996; Salmon and Keating, 1999). Both Canada and Australia over the past fifteen years or so have witnessed an important wave of local government and multilevel governance reforms at the end of the twentieth century (Young, 1999; Garcea and Lessage, 2006; Lorinc, 2006; Dollery, Marshall, and Worthington 2003). Focusing on the impact of globalization on states, Saskia Sassen explained that new legal regimes ‘un-bundle sovereignties’ and ‘denationalise territories’ (1996: 28), a process that also reconfigures the links between rights and territories and so has ‘disturbing repercussions for distributive justice and equity’ (ibid.: 29–30). Keating (1999a, 1999b) and Salmon and Keating (1999), focusing on multination states in Europe, found that, along with constitutional reforms, an asymmetry of right develops that further differentiates local and regional constituencies in a process where federal and centralized states seem to progressively resemble each other. When looking at economic development policies in the Spanish regions of Catalonia and Galicia, Keating (1991) found that neither culture nor leadership is key; instead, different forms of institution building are central to understanding variances in development and policies. When comparing cities in the United States and Europe, Keating argued that although U.S. cities may have a tradition of local self-government, this does not correlate to greater local governing capacity. In France and the United Kingdom, local governments may have greater governing capacity, but excessive centralization in the United Kingdom and a lack of popular involvement at the local level in France weakens local selfgoverning capacity, while in Canada, the local government system seems to result from a compromise.2 In the same vein, Hank V. Savitch and Paul Kantor, in Cities in the International Marketplace, argue that the bargaining position of cities, particularly a capacity for local policy choice, emerges out of, and is influenced by, contingent constellations of market conditions, popular control, local culture, and intergovernmental support networks, with the most importance accorded to the last variable. This literature suggests that (1) central governments are less able to regulate, to organize fiscal equalization, and to reduce interregional or

8 Local Government in a Global World

provincial competition; (2) in some instances, central governments actually encourage intergovernmental competition at lower government levels; and, most important to our discussion, (3) decentralizing or devolving constitutional reforms and/or statutory prerogatives has implications for intergovernmental relations, local institutional structures, and the governing capacity of lower-level governments, in particular. What these authors have not discussed specifically is whether those changes also influence local bureaucracies and local democratic accountability, for instance, making cities more influential in the intergovernmental networks, which is the core question of this book. Indeed, in both Canada and Australia, the constitution places local governments under the authority of state/provincial governments, which to a certain extent, and until recently, sheltered municipalities and local governments from global forces (see, particularly, Goldberg and Mercer, 1986; Rothblatt and Sancton, 1998; Keating, 1999c). Today, changes in territorial politics may be best described as tendencies towards greater legal, institutional, and functional complexity and an asymmetry of rights; at the same time, institutional capacity and functional allocation increasingly characterize disparate and decentralized urban policies and politics where the ‘winners’ are strong democratic communities in which political legitimacy is tightly woven into sophisticated local governance systems run by accountable and professional bureaucracies, all of which strengthen their intergovernmental position (see Keating, 1999c; Salmon and Keating, 1999). In such cases, governance and participation go hand in hand; yet, as discussed in the following section, the literature assumes that increases in citizen engagement and participation are currently transforming local modes of governance. The evidence presented in this book, however, suggests a more nuanced conclusion. Participation and Governance The shift from government to governance is now widely reported in the public management literature (see Rhodes, 1997). Governance is more about the processes of public policy and engagement than it is about the structure and institutions of government. Governance is a more contemporary concept than government, reflecting the appreciation scholars give to the dynamic context within which public policy is played out. The United Nations Development Program (UNDP) defines governance as ‘the exercise of economic, political and admin-

Australia and Canada in Comparative Perspective 9

istrative authority to manage a country’s affairs at all levels. It comprises the mechanisms, processes and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences’ (UNDP, 1997, chapter 1). This shift in focus on the processes governments employ to engage citizens and interest groups reflects both a broader change in the social context within which local and other levels of government now operate and the concern governments now give to human rights. Davis argued that the disillusionment with government and a general decline in trust of public institutions in Australia, and in Western society generally, has focused attention on the way in which governments work with individuals and communities. He noted that ‘the loss of confidence has been clear and steady in opinion polls since the mid-1960s. It begins in a period of prosperity, and continues to decay at about the same rate through peace, war, boom and bust, oil crises and times of plenty, good and bad leaders, moments of national triumph and sorrow’ (2001: 3).3 Davis also questioned whether declining trust is an outcome of the actions of public and private institutions or symptomatic of broader social change. Although ‘the political process may not be the immediate cause of changing values and lost social capital … governments live with the consequences. Governance must find ways to accommodate these changing public attitudes’ (ibid: 5). But just what is governance? How do scholars of public administration see governance, and what does this suggest for administrative and public management practice? The Governance Working Group of the International Institute of Administrative Sciences (1996) provided several perspectives on governance: • Governance refers to the process whereby elements in society

wield power and authority, and influence and enact policies and decisions concerning public life and economic and social development. • Governance is a broader notion than government, whose principal elements include the constitution, legislature, executive, and judiciary. Governance involves interaction between these formal institutions and those of civil society. • Governance has no automatic normative connotation. However, typical criteria for assessing governance in a particular context

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might include the degree of legitimacy, representativeness, popular accountability, and efficiency with which public affairs are conducted. In other words, governance refers to a process by which governments and non-governmental organizations, including civil society, come together to conduct public affairs and take policy decisions. Denters and Rose (2005) noted that, paradoxically, local governments have taken a greater leadership, or governance role, on issues of community concern while operating in a broader public policy context that squeezes and constrains them (after Stoker, 1999), through requirements to use market mechanisms to deliver services and expectations of greater and increasing efficiency in a transparent and accountable manner. That many local governments have maintained a strong local leadership role in the face of central government attempts to reduce the size of local government by reducing the number of elected councillors through multicouncil amalgamations is certainly to their credit and a measure of the durability and commitment of this level of government. As reported in this book, participation – through a range of mechanisms as citizen, as consumer, as advocate – is still a key part of local government in Australia and Canada. Has this diversity of participation in local government become a hallmark of Australian and Canadian society? How local governments are responding to the opportunities this creates for greater citizen involvement and engagement is a central question addressed in this book. Denters and Rose (2005) identified macro and micro trends in society that give rise to greater calls for participation and governance. The macro trends they identify are urbanization and globalization, and because their work focuses on Europe, they also point to Europeanization. The latter refers to the process of European integration and its implications for local government in the European Union (EU). In the Canadian context, the North American Free Trade Agreement (NAFTA) may also have had consequences for local governments, although these are understudied and may not be similar to those found in the EU (Brunet-Jailly, 2004). In the Australian context, Australia’s relations with New Zealand and its place in the Association of South East Asian Nations (ASEAN) may also have had parallels to European integration. All in all, the impact of some form of integration on local government is mixed: some local governments are more active in international networks and partnerships than

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others; in Europe some benefit from EU funding in their region, while others in the NAFTA or ASEAN regions may have to operate under a changing legal regime that relates to the alignment of the regulatory environment. Both Australia and Canada have experienced increasing rates of urbanization since the second half of the twentieth century, which presents a range of governance issues for urban councils relating to planning and development, major infrastructure works, and their location. Castells argued that ‘the countryside will develop into a set of urbanized villages’ that are part of ‘urban constellations scattered throughout huge territorial expanses’ (cited in Stalder, 2006: 164). These metropolitan regions, containing undifferentiated local governments side by side, give rise to governance strategies that aim to give citizens a sense of place in these agglomerations, creating and maintaining a sense of community that facilitates local connections and makes people feel safe and welcome. In this volume, both Marshall (chapter 4) and Sancton (chapter 5) pick up on these issues and strategies as they review the recent history of local government amalgamations and restructuring in Australia and Canada. Globalization – Denters and Rose’s (2005) other macro trend – reflects the interconnectedness of local governments with others beyond their national borders. This can occur through cultural exchanges (many councils have sister-city arrangements with one and sometimes several other local governments in other countries) or through the encouragement of industry and business associations. Economic development offices in local government organizations, especially large urban councils, work to bring international conferences and events to their cities, typically through international associations in conjunction with their national counterparts. In addition to this business and events orientation, local governments are connected to the world via the media and the Internet. Most have the capacity to research international practice; in Australia and Canada, it is part of their everyday work. Denters and Rose’s micro and meso trends relate more to citizens’ ability and preparedness to respond to the actions of government. The authors argue that the ‘modernization of individual citizens’ (2005: 5) has made them more discriminating and capable of taking action in the face of poor governance. Citizens are more attentive to the performance of government, especially around macro economic performance and, with recent international events, security issues. Equally, they are able

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to give voice to government action and question the role of bureaucrats and private service providers working on behalf of government. Eversole and Martin identified three characteristics for effective participation and governance in regional development: ‘the degree of formality of the participation and governance process; the extent of inclusion – how obvious are in-groups and out-groups; and the degree of influence that the respective parties have over regional development policy and practice’ (2005: 295). Local governance can be assessed in terms of these three characteristics. Processes of consideration have been incorporated into local government legislation in both Australia and Canada; planning development and urban design are common cases. Legislative requirements, however, do not necessarily constitute effective governance. In this volume, Aulich (chapter 2) and Phillips (chapter 3) present the state of the literature (Reddel and Woolcock, 2003; Cuthill and Fien, 2005; Philips and Orsini, 2002; Bradford, 2005) and current evidence regarding participation and governance in local governments in Australia and Canada, and towards answering the following questions: Is there evidence that those affected are engaged in a dialogue with decision-makers about how the actions of government will impact particular communities? Is the voice of these communities heard and reflected in the final decision? Answers to these questions begin to give a more accurate picture of the reality of governance processes in local government. In the end, Aulich and Phillips each illustrate in their chapters how local governments have responded to the demand for local governance in Australia and Canada. Both contributors also reveal that the linkages between governance and citizens are not obvious in every community because all municipalities are not equal in their perception of needs and their policy capacity, but also in their relationship to higher levels of governments. Restructuring and reform of local institutions, the second theme of this book, have also always attempted to address, at least in part, issues of democratic participation and representation. By way of introducing this second theme, these issues are further discussed in the next section, through assessing various literatures on the institutional models and trends of local governance. Restructuring and Reform The institutional forms and functions of cities follow a variable geometry of institutional arrangements that have evolved from traditional

Australia and Canada in Comparative Perspective 13

multifunctional government into a multitude of uni-functional governance arrangements, all of which can be more or less accountable or responsive to a local community. Placing the primacy on political accountability and responsiveness seems to anchor local governing capacity in the local politics of a place; at the same time, shifting the priority towards the efficient delivery of services results in servicing the needs of market forces. Each locality struggles to establish the appropriate institutional framework to meet the needs of its communities and its economic region (Bish, 1979, 1987, 1999; Dollery and Crase, 2004; Dollery, Marshall, and Worthington, 2003; Keating, 1991; Rothblatt and Sancton, 1999; Sancton, 2000: Sancton and Young, 2009). Each local institutional structure is also indicative of broad normative views that frame and inform the policy capacity and choice of a city (Keating, 1991). A single-tier municipality is a multifunctional local government that manages a wide range of functions. An upper-tier municipality has a limited number of functions but is not a special purpose body because it is multifunctional and overlaps a number of lower-tier municipalities. In other words, the functional capacity of an upper-tier municipality spans a much larger territory, one that encompasses all of the constituent lower-tier municipalities. A classic example exists when the planning function is allocated to an upper-tier local government; other functions that have been allocated to upper-tier governments include regional transportation, water, sewage, garbage disposal, and policing. When an upper-tier government body exists, the lower-tier bodies deal with local policy responsibilities. The assumption is that matching the allocation of functions to the appropriate level (appropriate tier) of local government may result in greater efficiency and attend to the regional dimension of service that is needed. It should be noted, however, that single-, lower-, or upper-tier bodies often have multifunctional policy capacities, are often elected, and never deliver services beyond the boundaries of their constituting local municipalities. Tiered-level governments are rooted in the political space from which they emerge. Each level is accountable to an electorate, either directly or indirectly. In most cases, a lower-tier body is directly elected and an upper-tier body is indirectly elected; hence, although their democratic accountability and responsiveness vary, they are entrenched in local communities (Sancton, 1994). A variant to this model is the joint services board, also called a regional district in British Columbia, Canada, or a special purpose

14 Local Government in a Global World

authority, or public authority or district, in the United States. This model’s flexibility allows municipalities to cater servicing arrangements to an optimum economy of scale. A board manages municipal agreements that focus on efficient service delivery. The flexibility of this institutional arrangement, however, loses its appeal once the number of functions to be managed by the board expands. Proponents of this model assert that the board remains accountable to the municipal level and it allows for strong accountability and responsive governance (see Sancton, 1994). Others contend that complex intermunicipal agreements result in unclear bureaucratic and functional responsibility and lack of local control (see Tindall, 2000; Smith and Stewart, 1998). Melville McMillan (1997), when comparing eight large metropolitan arrangements, suggested that above a certain metropolitan size and number of functional responsibilities, there is a greater need for more accountable upper-tier institutions. Another common mechanism emerged at the turn of the twentieth century: the uni-functional special purpose body. This body is used to service the needs of a community and, sometimes, disregards municipal boundaries. The functional accountability of such bodies supports a non-territorial logic that emerges out of the level of satisfaction of their functional community which often shows support by paying a direct fee for service; this may be an advantageous tax instrument for municipalities that do not want to raise property taxes. The councils or boards of these public bodies often are appointed and, traditionally, are used to administer parks, hydroelectric services, transportation services, education, and policing. Until the late 1990s, Vancouver, British Columbia, had seventeen such special purpose boards with responsibilities spanning education to civic theatres, to parks and recreation, to policing and public housing. Opponents of this form of institution argue that an excessive reliance on boards and commissions leads to a great fragmentation of local government institutions and that the efficiency of service delivery does not compensate for the lack of democratic accountability, for instance, with regard to the real cost of services (Richmond and Siegel, 1994). A last mechanism is the appearance of bottom-up partnerships or voluntary cooperation between municipalities or between municipalities and the private sector where services traditionally provided by in-house municipal departments are contracted out to another municipality or private sector service provider (Bish, 1979; Osborne and Gaebler, 1993).

Australia and Canada in Comparative Perspective 15

The efficiency of service delivery is also a concern of higher-level governments. Because of their constitutional prerogative, for example, in Australia, Canada, or the United Kingdom, these governments have been able to force or limit consolidation upon local municipalities. Municipalities in the United States are an exception, however, because of a strong tradition of local democracy that protects them against state initiatives, where for over a century, only indebted municipalities have had to amalgamate. In most cases, local pro-fusion referendums are the necessary condition for consolidation. One argument for consolidation is that efficient local institutional structures would result in efficient growth. It should be noted, however, that the development of cities might not result from their institutional framework. The market regulations of the local economy may be distinct from its economic successes. Local economic policies, however, are multidimensional, rarely relying exclusively on market forces or on institutional frameworks. Hence, most institutional arrangements of urban regions lie in between those two opposite views. The functional capacity of cities relies on two general types of local institutions. The first type, the municipality, is a multifunctional or multipurpose local government; the second type is a uni-functional local government or a special purpose authority. Municipalities are elected bodies that have a wide number of functions. Special purpose authorities are rarely elected and, most of the time, deal with one government function only. As well, the inherent accountability of special purpose bodies relies on the function they deliver to a community being neither territorially identifiable nor even homogeneous. On the contrary, most multifunctional local governments are, in essence, territorially identifiable and accountable and responsive to a community of individuals. Most special purpose bodies are not accountable to electors, but instead answer to appointed officials; although this limits direct public involvement in their affairs, they are closely scrutinized by private sector stakeholders. The functional capacity of local government is a factor of its legal authority as much as its territorial responsibility. In Canada, local governments have limited political and legal authority. They are creatures of the provinces, and provincial government departments are able to use their granting relations to scrutinize the activities of local governments. In the United States, state control is constrained by local governments’ constitutional rights, yet numerous scholars have noted the difficulties that cities encounter when dealing with social and eco-

16 Local Government in a Global World

nomic issues. Keating has argued that, in the United States, despite a strong democratic tradition, local politics is closed and governing capacity is limited (1991: 25–6, 203). Since the 1950s, particularly in North America, metropolitan governance policy-making seems to have become extremely complex due to the largest urban regions’ high degree of fragmentation (Rothblatt and Sancton, 1999). As urban development leads to greater demands on service provision and planning, the complexity of urban regional governance increases. Structural reforms that attempt to catch up with economic growth suggest new amalgamation or the creation of multitiered systems of local government. Proponents of local government reforms, particularly in continental Europe but also in the United Kingdom or Canada and the United States, argue that economies of scale and greatly improved policy-planning capacities – and their impact on economic development and distribution – justify the creation of tiered-government forms or large functional authorities (e.g., see Keating, 1995: 117–34). The critics of consolidation argue that larger units are not more democratic and accountable and that a functional focus to strengthen local governments, planning and redistribution, and economies of scale is a matter of debate (ibid.: 121–2). In the end, Keating (1995) argued that technocratic views of the functions of local governments tend to neglect the debate on the issue of ‘community,’ and this has given rise to many definitions of community: Deutsch’s (1957) Gemeinschaft is about solidarity and attachment to place; Tiebout’s (1956) is about protecting private space and, hence, inclusion and exclusion; and Malibeau’s (1989), which is upheld here, holds that regions emerge out of a cultural and historical construct of social interactions and politics that derives its legitimacy from the recognition that politics sets territorial boundaries. Clearly, neither the public choice view of individual utility maximization nor the functionalist technocratic perspective can protect this liberal democratic equation. In other words, local government institutions not only set the space for individual choices about services and taxes, as defended by the public choice approach, but also involve taking collective decisions, an important aspect of the role of politics in liberal democracies. During the 1960s and 1970s – a new period of vast expansion – there was also a trend to consolidation of local governments or upper-tier reforms. The basic assumption of those times was that consolidation of local government institutions into metropolitan or upper-tier governments would lead to economies of scale and, thus, more efficient gov-

Australia and Canada in Comparative Perspective 17

ernments. It was assumed that efficiency required larger units for the delivery of services and that economies of scale would bring costs down and allow services to be extended from urban to rural areas alike, hence providing constituencies with equitable access to services. Another argument in favour of consolidation assumed that larger units would provide a wider tax base for services, which would, in turn, distribute the tax burden more equally and reduce the complexity of relations with higher-level governments, that is, the systems of redistribution and equalization across territories through grants. It can also be argued that, at the time, senior government encouraged local governments to spend more to complete the development of the welfare state; for instance, planners suggested that cities and their rural hinterlands should be planned together. Planners conceived of large and coherent regional units that would encompass most of the economic and social activities – the living, work, recreation, and shopping patterns – of the population of those regions. Infrastructures would be needed for these larger areas, and plans had to coordinate current and future development of services, including schools in relation to housing, housing in relation to the workplace, and the workplace in relation to shopping. Concomitant with this theoretical push for expanding the range of services that were required and expected of local governments was the sense that local governments should expand their bureaucracies, as needed, to fulfil obligations imposed upon them by central governments. Trends in the United Kingdom and Germany exemplify these transformations of local government forms. In the United Kingdom, the central government imposed extensive consolidation on its municipalities, shrinking their number to 500 from about 1,500. Similarly, Germany reduced its municipalities from 24,000 to 8,500. France was less successful because municipalities in France are the power base of nationally elected officials who also hold parliamentary and senatorial mandates. These officials have always opposed such legislative changes because these changes would sever their ties with their local fiefs and limit their electoral roots. In the United States, local parochialism and concurrent local political rivalries and racial politics have reduced the success of local government reform. A number of structural and ideological transformations that occurred in the 1980s shed new light on these trends towards consolidation. First, there was a growing disenchantment, among academics as well as public officials, with the economy-of-scale argument; instead, argu-

18 Local Government in a Global World

ments that upheld the efficiency of smaller units gained ascendancy. Second, the economic crises of the 1970s had taught that planning in an unpredictable world was a difficult, if not impossible, activity. Third, public choice scholars, reflecting neo-liberal ideologies, asserted that competing local governments better served democracy, efficiency, and consumer choice. Finally, problems had arisen out of the design of upper-tier governments, in particular, with their modes of election and their powers. Higher-level governments feared directly elected uppertier governments might become too powerful, to the point where they became assemblies of municipalities fighting for their own interests rather than for the good of a region, a province, or a state. Thus, the 1980s was a period of upper-tier reform during which central governments reversed decisions they had taken in the previous three decades. A prime example is then British Prime Minister Margaret Thatcher’s decision to abolish metropolitan councils, including the Greater London Council. Other similar examples were the dismantling of the regional authorities in Spain (Barcelona) and the Netherlands (Raandstaat). These changes were all symptomatic of key ideological shifts in which the emphasis was not on service delivery or economies of scale but rather on economic development and planning in the global economy. As this discussion reveals, while these debates have had a great impact on the structures of local governments in European countries, they have been less influential in Australia and Canada. Today, the debate on the ability of these reforms to institute either democratic or efficient local government institutions continues. In Australia, the influence of the public choice views seems to have been superseded by proponents of new public management (NPM; Aulich, 1999). Authors such as Osborne and Gaebler (1993) argued that governments should not ‘row’ but ‘steer,’ suggesting that out-sourcing services could be efficiently measured and managed. In the end, these authors agree that tiered levels of governments are not the answer to the difficult reconciliation of market- versus people-driven services. Thus democracy seems to be affected by the issues of municipal fragmentation and amalgamation. As it is presented in the literature, democracy may vary with local government size, specifically, according to the size of electoral constituencies. Democracy is also influenced by the electoral mechanisms that organize direct or indirect representation of the electorate. The issue of efficiency is found both in the economic literature favoring interurban, market-like competition, as well as in the literature on consolidation. One argument is that the market

Australia and Canada in Comparative Perspective 19

regulates cost-efficient services to the best level; the other argument is that economies of scale are possible in larger local governments. Equity is also important. Local communities may choose to be equitable or not. Clearly, tax systems and mechanisms of redistribution may be a local choice or they may be imposed by higher-level governments. Size and equity may also be mutually reinforcing. Large municipalities are praised for their ability to provide equal access to local services, as are smaller municipalities. Large municipalities, however, have the ability to expand their services to larger regional communities and provide equal service access to a larger population. Development is essential because the income of local government depends on the local economic wealth. In the end, institutions matter. The size of constituencies and the form of government institutions have implications for local democracy and the delivery of local services. In this book Marshall (Australia) and Sancton (Canada) present the state of the literature in Australia (Baker, 2003; Balmer, 1989; Dollery and Crase, 1994; Dollery, Marshall, and Worthington, 2003) and Canada (Betts, 1997; Boudreau, 2000; Frisken, 2007; Garcea and LeSage, 2005; Sancton, 2000; Siegel, 2005) and bring forth new evidence. In chapter 4, Marshall introduces his discussion with references to the influence of new public management views on restructuring and reforms. In the end the findings presented by Marshall and Sancton in their chapters are quite distinct. Indeed, while Marshall seems to be a proponent of amalgamations, Sancton is not convinced they are the best solution. Yet the data submitted in those chapters make clear that amalgamations have been the most important restructuring issue in Canada, while in contrast, reforms have taken place in Australia because of NPM ideas. Both chapters describe and raise these questions addressing issues related to the prevailing views about the size and function, and role and responsibilities, of municipal governments in each country. The next section explores the various debates that relate to the third theme of this book, the modernization of local bureaucracies, particularly, the implementation of performance management techniques in relation to local governance. Performance Management The new public management reforms adopted by most Western governments over the past decade have included a clearer focus on measuring and managing the performance of government (Osborne and

20 Local Government in a Global World

Gaebler, 1993). Just what is measured and what the management implications of this greater interest in performance are has been the subject of considerable academic debate. The balanced score card introduced by Kaplan and Norton (1996) has, for example, triggered an extensive review of performance across all levels of government (Kloot and Martin, 2000). In the case of local government, this research has found a preoccupation with financial performance, much less interest in customer or citizen concerns, even less interest in reviewing organizational processes, and virtually no interest in measuring organizational culture and learning (ibid.). What is measured and how this process is incorporated into the strategic decision-making and planning of local government organizations is an important political and administrative process in local government. Worthington (2001) identified three groups of users of local government performance information. The first user group is the recipients, the local citizens as clients and others as customers, allowing them to make informed choices, where they exist, for local services. The second group is governments (local and state) who purchase from service providers so they can, over time, improve the operating environment and facilitate the monitoring of public sector performance. The third and final user group is the managers themselves, who can use performance information to improve managerial decision-making. Because there are many different stakeholders concerned about the performance of local government, how this performance is measured is a contentious issue. As Wildavsky (1978) noted in his consideration of why traditional budgeting lasts in place of more precise program, or output-oriented, budgeting, the ‘vagueness’ surrounding traditional line-item budgeting gives more flexibility to managers when compared with program budgeting. Yet this is a two-edged sword. On the one hand, managers want to make decisions based on valid and reliable information; on the other hand, they do not always want others to see from the performance information provided that they have been unable to control costs in line with their budget predictions. It is this very dilemma that pervades the discussion on performance management in the public sector management literature. What then are the contemporary approaches to performance measurement in local government, and how do these approaches allow local government to be accountable to key stakeholders? The normative models of performance management emphasize the strategic intent of the local government organization. The view pre-

Australia and Canada in Comparative Perspective 21

sented is that cities and municipalities must have a clear and commonly held view about what future they are trying to achieve with their community and with other key stakeholders. Without some sense of where they want to be as a community, there is not much point focusing on their performance and investing heavily in these processes. However, this notion of having a collective, long-term view is problematic because many local government organizations deal with highly political issues, such as land use planning and rezoning, the location of industry, welfare housing, and road management and upgrading. In this case, managers have to deal with issues in a political manner, and they do not wish to have their processes of decisionmaking open for public scrutiny (Baddeley and James, 1987). If we accept Baddeley and James’s (1987) analysis, this is true in all levels of government and we expect it is the same across different nations and cultures. It is why the development and use of valid and reliable performance management systems, as Wildavsky (1978) so eloquently warned, is problematic in government and will continue to be so. Nevertheless, accountability of government to its constituents is fundamental to modern Western government, and performance measurement and management enable accountability to be determined. Van Dooren asked the tantalizing question: ‘What makes organizations measure?’ In his research on the adoption and implementation of measurement, he found that first, measurability of the services of the organizations is a key factor for implementation. [In local government, this suggests that this level of government measures the services it delivers but much less so in human services areas.] Secondly … organizations that see the lack of political interest as a potential hindrance will measure less. Thirdly, scale is also relevant. Large organizations measure more, [which] invoked questions about the minimal capacity that organizations need to measure. Fourthly, streetlevel discretion … leads to higher implementation of measurement [but not adoption]. Fifthly … the provision of sufficient resources is a critical factor for starting up as well as maintaining and extending performance management. (2005: 380)

Van Dooren concluded that ‘the linkage between goals and indicators seems to be of particular importance for the implementation of performance measurement’ (ibid.). Van Dooren also noted that a per-

22 Local Government in a Global World

formance management policy is an important link in public sector reform. If performance measurement is to occur in all levels of government, there must be specific policy direction to do so. As shown in the chapters by Martin and Kloot (Australia) and by Agocs and Brunet-Jailly (Canada), this direction is not always clear because neither elected officials nor citizens are systematically involved in those systems in Australia and Canada. As part of the rationalization and reform process, local governments have been subject to performance management regimes. Although Kloot and Martin (2001) have shown that these reforms have focused primarily on financial measures, they underpin the accountability expectations put on local government. Just what local government does measure is a function of many things. Tangible service delivery is relatively easy to measure, but other local government impacts are more difficult to identify. Local economic and social development, for example, are two areas in which local government plays a critical role, if not purposefully, then by default. Yet these areas are much more difficult to measure and local governments are less likely to do so. Herein lies the irony in performance measurement and management in local government: they measure what they can count, as the saying goes, rather than measuring what counts. In chapters 6 and 7, the authors review the research on local government performance management and describe and analyse the trends and contemporary views and directions, and ultimately the challenges, facing local governments in Australia (Ferlie et al., 1996; Dollery, Marshall, and Worthington, 2003; Kloot and Martin, 2000, 2001, 2002; Worthington, 2001) and in Canada (Plant et al., 2005; Schachter, 2002; Gergley, 2004; MacDonald and Lawton, 1977). Despite two methodologically different approaches, these paired chapters raise similar questions and conclude with comparable concerns about the implementation success of performance measure and management in local governments. Kloot and Martin (chapter 6) present discussions and conclusions primarily based on new empirical research findings that question the relative influence of NPM ideas on Australian local governments. Agocs and Brunet-Jailly (chapter 7) review the Canadian literature on local government performance management and discuss recent surveys of effective implementation of performance measures and management across Canada. They conclude that local governments have failed to involve citizens, and they have also failed to develop systems of measures and management useful to employees

Australia and Canada in Comparative Perspective 23

and organizations to improve service delivery mechanisms and improve local public administration. In conclusion, they suggest an alternative model, ‘Empowerment Learning.’ Certainly, as local governments increasingly rely on professionals and skilled bureaucracies, they are better able to manage their relations with higher-level governments. These relations, as noted by Keating, Sassen, as well as Young, are progressively becoming more complex and asymmetrical, however. The next section discusses the literature on local government intergovernmental relations. Local Government and Intergovernmental Relations As noted at the beginning of this introduction, traditionally, relations between governments, particularly central-local government relations, whether in centralized (United Kingdom or France) or federal states (Australia, Canada, or Germany) have been top-down. Recently, however, the scholarship has noted that the global economy is modifying the politics of state in the intergovernmental and international areas. As of yet, there is no consensus on what this looks like: Is it a functional reorganization (Keating, 1998) or is it multilevel governance (Hooghe and Marks, 2003)? And is there a clear strengthening of subnational entities (Ohmae, 1991)? The literature underlines that central or federal states mediate these governance changes with varying difficulties (Sassen, 1996; Salmon and Keating, 1999; Lazard and Leuprecht, 2007). For instance, in their comparative work of nine federal and one centralized states, Lazard and Leuprecht argue that multisphere governance systems are developing in response to local challenges, suggesting, however, that governance systems remain predominantly top-down and thus also multilevel (2007: 6–18). Also, they suggest that there is inconclusive evidence that complex mechanisms would have developed in addition to top-down arrangements across most federal systems but find such complex systems in France (centralized) and Switzerland (federal). Finally, they suggest that the appearance of multisphere policy processes would largely result from non-governmental actors. In Canada, the debate about the respective roles of the federal and provincial governments is ongoing. Nevertheless, there are general trends. Since the Second World War, the provinces have been fighting for greater power and Quebec has advocated independence at times (Young, 1999). The federal government has maintained unity and

24 Local Government in a Global World

interprovincial equalization. The relations between the provincial and federal governments, however, are more competitive than collaborative; the bureaucratic elite’s high degree of integration has led to active networking practices that counterbalance the competition and have allowed the mechanisms of accommodation to work (Painter, 1991: 281). Economic development policies result from partnerships. In the 1970s, federal-provincial decision-making bodies negotiated the general development agreements. The federal government focused on goals, while the provinces implemented programs and therefore centred their objectives on regional interests. Progressively, a shared visibility of development politics has become less of an issue at both levels of government. Canadian municipal-provincial relations are still characterized by increasing provincial guidance; for instance, Andrew (1995) suggested that it is still appropriate to use Dupré’s (1968) expression ‘hyper-fractionalized [and] quasi-subordinate’ to describe municipal-provincial relations in Canada. The triumph of provincial authorities is a transverse theme in the literature on Canadian intergovernmental relations.4 The explanation is that since the first half of the twentieth century, and even though the 1849 Baldwin Act that gave municipal governments in Ontario important autonomy, provinces across Canada have progressively restricted the autonomy of municipalities. Provincial intervention was motivated by various factors, such as the Great Depression, the municipal practice of ‘bonusing,’ which risked bankruptcy, and even ‘features of modern society’ (Magnusson and Sancton, 1983: 20–2). The existence of municipalities is not guaranteed under the Canadian Constitution, which leaves provincial governments free to ‘create, modify or destroy any and all units of local government’ (Dupré, 1968: 2). This statutory aspect of municipalities is important because it suggests that municipal governments are ‘subordinate’ to provincial authorities. This is not dissimilar to the position of local government in the Australian Constitution, whereby it is clearly subservient to state government. Originally, Canadian municipalities were administrative units that were governed by justices of the peace. Very progressively, over the first part of the nineteenth century, a few cities acquired the right to incorporate and govern over a small number of local issues, such as real estate matters. The Baldwin Act of 1849, which authorized and regulated the incorporation of local communities, and Section 92 of the British North America (BNA) Act of 1867 embodied those ideas. Today,

Australia and Canada in Comparative Perspective 25

neither the BNA Act nor the Constitution Act of 1982 recognizes municipalities as an order of government. Provincial governments legislate municipal forms and functions, and even if a tradition regarding the functions of local government exists, the functional allocation varies from one province to another5 and may also change over time (Goldsmith, 1987). The courts generally interpret these powers narrowly because the Canadian Constitution only recognizes municipalities as creatures of provincial legislatures. Thus, the courts can forbid all actions but those expressly authorized by provincial legislation, or they can empower municipalities by recognizing them as natural persons that are responsible for ‘spheres’ of jurisdiction. It is clear that, in Canada, the source of municipal authority is the provincial municipal act or, in some cases, a municipal charter that grants specific powers to a city, such as Toronto, in Ontario, or Vancouver, in British Columbia. Over the past fifteen years, the provincial governments of Alberta (1994), Ontario (2002), and British Columbia (2003), for instance, have rewritten provincial statutes that establish local governments and municipalities.6 Although they vary from the Baldwin Act, they do not challenge the Constitution. They impose great changes in the form and function of local governments, including the capacity to establish public-private partnerships (PPPs) and the increased transfer of senior-level services, such as airports, ports, and health and welfare administration (Lidstone, 2002). Compared with Canada, Australia is a more centralized federal government system that is concerned with service access and equity, and where legislative, financial, and policy initiatives are in the hands of federal officials. Hence, for instance, the Australian Office of Local Government (OLG) published in 2005 an inverted pyramid where 55% of the budget expenditures were federal, while states spent 39% and local governments 6%. However, as presented in the early part of this introduction, Australian federalism is a strong political value, the financial and functional stability of which empowers local governments. In other words there is little that the commonwealth (federal) and state governments can implement without local governments, yet local governments cannot function without state and commonwealth funding. In addition, since the 1990s the Australian government system has greatly modernized its intergovernmental decision-making mechanisms, which includes a formal Council of Australian Governments

26 Local Government in a Global World

(COAG) that includes the Australian Local Government Association (ALGA) and a parallel state minister’s meeting including a number of ministerial councils (Mincos). When compared with Canada, those reforms seem to go further. Indeed, during the past decade and a half, changes occurred because of state/provincial and federal initiatives in both Canada and Australia. However, the servicing development rhetoric was different; it now referred to the necessity for fiscal responsibility. The political context was also uniquely different. Governments in each Canadian province argued that they had to balance their budgets and pay their debts. Provinces wanted to ‘disentangle’ local services and increase their accountability and efficiency (Klein, 2002; Campbell, 2001). These reforms have fundamentally transformed the capacity of Canadian cities to mediate social and economic changes because they create a local government system that will be ‘hyper-fractionalized’ but not ‘quasi-subordinate’ (Andrew, 1995: 159). Australian states, however, have had to deal with a domineering commonwealth level. The question that remains unanswered is the following: After a decade and a half of reforms, to what extent is the local level subordinate to the province/state? This is why, as Dupré underlined, the provincial-local political process, which is also a complex system of relations, is key to understanding that municipalities are not entirely ‘subordinate.’ State/provincial and local relations ‘undermine subordination’ because they tend to organize a division of power that favours local autonomy and ‘enhances decentralization’ (Dupré, 1967: 3). A set of influences ‘where political, cultural, demographic and economic forces all interact’ (ibid.; and cited in Andrew, 1995: 156) suggests that entrepreneurial municipal coalitions benefit from the support of both provincial government largesse and local groups, therefore gaining autonomy. Smaller municipalities, on the contrary, are increasingly under provincial supervision. It could be assumed that larger municipalities are less subordinate to provincial authority than smaller ones are. It could be further assumed that such a configuration should emerge throughout the detailed study of specific economic development programs. In their paired chapters Sansom (chapter 8) and Graham (chapter 9) review the current literature and discuss the above questions that are at the core of each national debate regarding intergovernmental relations. They argue that the contemporary debates in Australia and Canada are noticeably different: in Australia, the focus is on fiscal

Australia and Canada in Comparative Perspective 27

relations, while in Canada it seems limited to the issue of municipal jurisdictions. In Summary The impact of globalization on federal states seems to be to transform their capacity to regulate and organize equalization and reduce interregional competition. The current scholarly debates on the overall constitutional position of municipalities do not seem to have had the same impact around the world or to have strengthened their positions. However, reforms affecting the bureaucratic and policy capacity of cities, increasing the governance of citizen participation, grounding reforms in local values, and encouraging democratic and citizen participation in policy-making seem to have further increased the relative power of cities in the intergovernmental network. The authors of the following eight chapters in this book present, by thematic pair, their views of those contemporary changes as they have affected local governments and governance in Australia and Canada in the areas of participation and governance, restructuring and reform, performance management, and intergovernmental relations. In the two chapters on participation and governance, Chris Aulich (chapter 2) and Susan Phillips (chapter 3) present and contrast the Australian and Canadian experiments. They demonstrate that although participation and governance may have become part of the local government scene in Canada, the evidence regarding Australia is unconvincing. The chapters on restructuring and reform by Neil Marshall (chapter 4) and Andrew Sancton (chapter 5) illustrate the complexity of local governments systems and that, in both Australia and Canada, reforms and upper-tier governments are unlikely without state or provincial might. Louise Kloot and John Martin (chapter 6) and Carol Agocs and Emmanuel Brunet-Jailly (chapter 7) present contrasting pictures of each country in the performance management chapters but at the same time conclude that performance measures are professionalizing local bureaucracies. Finally, in their chapters on intergovernmental relations, Graham Sansom (chapter 8) and Katherine Graham (chapter 9) show that Australian issues of efficiency and effectiveness contrast with the Canadian political discussions on role and functions. Our comparison of Australian and Canadian local government reforms leads us to argue there is little evidence to make the case that reforms have resulted from globalizing trends. For instance, the con-

28 Local Government in a Global World

stitutional and institutional positions of municipalities have not been strikingly strengthened from a legal perspective. However, there is a great deal of evidence to argue that these reforms have benefited those cities and urban regions that have tapped into those reforms’ concurrent and increased local political legitimacy – a result of enhanced political participation – particularly because they have purposefully increased their political and managerial accountability, along with their policy capacities and accountability for delivering services, all of which enhances their political and managerial visibility. Moreover, by using local governments’ reforms and reorganizations to restructure the regional governance of their communities, larger cities have also increased their bargaining position in the intergovernmental networks, particularly with higher levels of governments. In other words, the power and influence of specific cities has been greatly enhanced while that of smaller communities may have receded. However, not all cities, urban regions, and local governments have been able to take advantage of these waves of reforms. To follow up on Sassen’s (1996) intuitive theoretical suggestion, it is clear that these reforms have greatly affected the relative power of cities and it has become increasingly complex for local elites to take advantage of those changes.

NOTES 1 The editors of this volume would like to thank two blind reviewers for their very generous and encouraging comments, and their eight colleagues, Caroline Andrew, Carol Agocs, Chris Aulich, Katherine Graham, Louise Kloot, Neil Marshall, Andrew Sancton, and Graham Sansom, for their comments and the lively discussions that took place during the Local Governments in a Globalizing World Conference held at the University of Victoria on 16 November 2006. Also, the findings presented in this book were presented at the bi-annual conference of the Association Tier Monde, Mons, Belgium, 14–15 May 2007, and at the Canadian Political Science Association conference, Saskatoon, Saskatchewan, Canada, 30 May – 2 June 2007. We are grateful to Professor Turunc Garip (Bordeaux, France) and Professor Caroline Andrew (Ottawa, Canada) for their generous comments and encouragements. 2 Specifically see the conclusion in Keating (1991). 3 This is the argument in Davis (2001).

Australia and Canada in Comparative Perspective 29 4 This is the title of Warren Magnusson’s Introduction in Magnusson and Sancton (1983). See also Crawford (1954). 5 The government of Ontario provides that municipalities administer welfare and other health policies. This is not the case in British Columbia. 6 Manitoba also redrafted its New Cities Act but it applies, restrictively, to Winnipeg and a few other cities.

REFERENCES Adams, D., and Hess, M. 2006. ‘Community in Public Policy: Fad or Foundation?’ Australian Journal of Public Administration, 60/2: 13–23. Andrew, C. 1995. ‘Provincial-Municipal Relations; or Hyper-fractionalized Quasi-subordinations Revisited.’ In J. Lightbody, ed., Canadian Metropolitics, 137–60. Toronto: Copp Clark. Aulich, C. 1999. ‘From Convergence to Divergence: Reforming Australian Local Government.’ Australian Journal of Public Administration, 58/3: 12–23. Australian Office of Local Government. 2005. Trends in Local Government Finance–2005–2006. Retrieved 15 June 2008. http://www.mav.asn.au/ CA256C320013CB4B/Lookup/trendslgfinance07/$file/trends%20in %20local%20government%20finance%20-%20summary%20November %202007.pdf. Baddeley, S., and James, K. 1987. ‘Owl, Fox, Donkey or Sheep: Political Skills for Managers.’ Management Education and Development, 18: 3–19. Baker, G. 2003. ‘Management Reform in Local Government.’ In B. Dollery, N. Marshall, N., and A. Worthlington, eds., Reshaping Australian Local Government: Finance, Governance and Reform, 212–28. Sydney: UNSW Press. Balme, R. 1998. Politiques du NeoRegionalism. Paris: Economica. Balmer, C. 1989. ‘Local Government in the Federal System.’ In The Australian Local Government Handbook, 1–7. Canberra: AGPS. Betts, G. 1997. ‘Municipal Restructuring, New Brunswick Style: The Saint John Experience.’ Municipal World, Sept.: 3–8. Bish, R. 1999. ‘Federalist Theory and Polycentricity: Learning from Local Governments.’ In D.P. Racheter and R.E. Wagner, eds., Limiting Leviathan, 203–20. Aldershot: Edward Elgar. Bish, R. 1987. ‘Federalism: A Market Economics Perspective.’ Cato Journal, 7/2, 337–401. Bish, R. 1979. ‘Public Choice Theory for Comparative Research on Urban Service Delivery.’ Comparative Urban Research, 7/1: 18–26.

30 Local Government in a Global World Boudreau, J.-A. 2000. Megacity Saga: Democracy and Citizenship in this Global Age. Montreal: Black Rose. Bradford, N. 2005. Place Based Public Policy: Towards a New Urban and Community Agenda for Canada. Research Paper F/51, Family Network. Ottawa: Canadian Policy Research Networks. Brunet-Jailly, E. 2004. Comparing Local Cross-Border Relations under the EU and NAFTA. Orono, Maine: Canadian American Public Policy. Campbell, G. 2001. Address to Union of British Columbia Municipalities. Retrieved April 2003 from www.gov.bc.ca/prem/popt/speech/sept_27 _ubcm.htm. Castells, M. 2002. ‘Local and Global: Cities in the Network Society.’ Journal of Economic and Social Geography, 93/5: 548–58. Clarke, S., and Gail, G. 1998. The Works of Cities. Minneapolis: University of Minnesota Press. Courchene, T. 1999. From Heartland to North American Regions State. Toronto: University of Toronto Press Crawford, K.G. 1954. Canadian Municipal Government. Toronto: University of Toronto Press. Cuthill, M., and Fien, J. 2005. ‘Capacity Building: Facilitating Citizen Participation in Local Governance.’ Australian Journal of Public Administration, 64/4: 63–80. Davis, G. 2001. ‘State, Citizens and Governance.’ In G. Davis and P. Weller, eds., Are You Being Served? State, Citizens and Governance. Crows Nest: Allen and Unwin. Denters, B., and Rose, L.E. (Eds). 2005. Comparing Local Governance: Trends and Developments. Basingstoke: Palgrave Macmillan. Deutsch, Karl. 1957. Political Community and the North Atlantic Area. Princeton, NJ: Princeton University Press. Dollery, B., and Crase, L. 2004. ‘Is Bigger Local Government Better? An Evaluation of the Case for Australian Municipal Amalgamation Programs.’ Urban Policy and Research, 22/3: 265–75. Dollery, B., Marshall, N., and Worthington, A. 2003. Reshaping Australian Local Government: Finance, Governance, and Reform. Sydney: UNSW Press. Duchacek, I. 1988. Perforated Sovereignties and International Relations: Trans Sovereign Contacts of Subnational Governments. Santa Barbara, CA: Greenwood Press. Dupré, S. 1968. Intergovernmental Finance in Ontario: A Provincial-Local Perspective. Paper prepared for the Ontario Commission on Taxation. Toronto: Government of Ontario. Eversole, R., and Martin, J. 2005. Participation and Governance in Regional Development: Global Trends in an Australian Context. Aldershot: Ashgate.

Australia and Canada in Comparative Perspective 31 Ferlie, E. Ashburner, L. Fitzgerald, L., and Pettigrew, A. 1996. The New Public Management in Action. Oxford: Oxford University Press. Frisken, F. 2007. The Public Metropolis: The Political Dynamics of Urban Expansion in the Toronto Region, 1924–2003. Toronto: Canadian Scholars’ Press. Fry, E. 1998. States and Provinces in the International Economy. Institute for Governmental Studies. Berkeley: University of California Berkeley Press. Garcea, J., and LeSage, E.D. (Eds.). 2005. Municipal Reform in Canada: Reconfiguration, Re-empowerment, and Rebalancing. Toronto: Oxford University Press. Gerdes, J. 2002. ‘Nafta’s Chapter 11 Threatens the Environment and Democracy.’ Environmental News Network. 22 Feb. Retrieved 25 June 2004 from http://www.enn.com/news/enn-stories/2002/02/02222002/s_46465.asp. Gergley, M. 2004. Project for Implementation of Municipal Annual Reporting. Victoria, BC: University of Victoria, School of Public Administration. Goldberg, M., and Mercer, J. 1986. The Myth of the North American City: Continentalism Challenged. Vancouver: University of British Columbia Press. Goldsmith, M. 1987. ‘The Status of Local Government: A Consideration of the Political Position of Cities in Britain, Canada, and the United States.’ In H. Pratt, H. Elder, and H. Woolman, eds. Constitutional Regimes and the City. Detroit: Wayne State University, Department of Political Science. Governance Working Group of the International Institute of Administrative Sciences. 1996. Retrieved 9 June 2006 from http://www.gdrc.org/u-gov /work-def.html. Hooghe, L., and Marks, G. 2003. ‘Unraveling the Central State, But How? Types of Multi-Level Governance.’ American Political Science Review, 97/2: 233–43. Kaplan, R.S., and Norton, D. 1996. The Balanced Score Card: Translating Strategy into Action. Cambridge, MA: Harvard Business School Press. Keating, M. 1999a. ‘Asymmetrical Government: Multinational States in an Integrating Europe.’ Publius, 29/1: 71–86. Keating, M. 1999b. ‘Les nationalités minoritaires d’Espagne face à l’Europe.’ Etudes Internationales, 30/4: 729–43. Keating, M. 1999c. ‘Challenges to Federalism, Territory, Function and Power in a Globalizing World.’ In R. Young, ed., Stretching the Federation: The Art of the State in Canada, 8–27. Kingston: Institute of Intergovernmental Relations. Keating, M. 1998. The New Regionalism in Western Europe: Territorial Restructuring and Political Change. Aldershot: Edward Elgar. Keating, M. 1995. ‘Size, Efficiency and Democracy.’ In D. Judge, G. Stoker, and H. Woolman, eds., Theories of Urban Politics, 117–35. London: Sage. Keating, M. 1991. Comparative Urban Politics. Aldershot: Edward Edgar.

32 Local Government in a Global World Keohane, R., and Milner, H. 1996. Internationalization and Domestic Politics. Cambridge: Cambridge University Press. Klein, R. 2002. Speech to Alberta Urban Municipalities Association. Retrieved 15 March 2003 from www.gov.ab.ca/premier/dsp_speech.cfm?content=31. Kloot, L., and Martin, J. 2002. ‘Transforming Australian Local Government: Insights into Leading Management Practices.’ Accounting, Accountability and Performance, 8/2: 1–22. Kloot, L., and Martin, J. 2001. ‘Accountability in Local Government: Explaining Differences.’ Accounting, Accountability and Performance, 7/1: 51–72. Kloot, L., and Martin, J. 2000. ‘Strategic Performance Management: A Balanced Approach to Performance Management Issues in Local Government.’ Management Accounting Research, 11: 231–51. Lazard, H., and Leuprecht, C. 2007. Spheres of Governance. Montreal and Kingston: McGill-Queen’s University Press. Lidstone, D. 2002. Introduction and Summary of Discussion at the Workshop on the New Community Charter in British Columbia. Vancouver, 14 June. Retrieved 15 Nov. 2003 from http://web.uvic.ca/lgi/. Lorinc, J. 2006. The New City. Harmondsworth: Penguin. MacDonald, V.N., and Lawton, P.J. 1977. Improving Management Performance: The Contribution of Productivity and Performance Measurement. Local Government Project. Kingston: Queen’s University, Business School. Magnusson, W., and Sancton, A. 1983. City Politics in Canada. Toronto: University of Toronto Press. Malibeau, A. 1989. Political Participation in Britain and France. Cambridge: Cambridge University Press. McMillan, Melville. 1997. Urban Government and Finance. Ottawa: CIRRD. Mulgan, R., and Uhr, J. 2001. ‘Accountability and Governance.’ In G. Davis and P. Weller, eds., Are You Being Served? States, Citizens and Governance, 152–74. Crows Nest: Allen and Unwin. Ohmae, K. 1991. The Borderless World. New York: Harpers Business Books. Osborne, D., and Gaebler, T. 1993. Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector. New York: Penguin. Painter, M. 1991. ‘Intergovernmental Relations in Canada: An Institutional Analysis.’ Canadian Journal of Political Science, 24/2: 275–88. Philips, S., and Orsini, M. 2002. Mapping the Links: Citizen Involvement in Policy Processes. Ottawa: Canadian Policy Research Network. Plant, T., Agocs, C., Brunet-Jailly, E., and Douglas, J. 2005. From Measuring to Managing Performance: Recent Trends in the Development of Municipal Public Sector Accountability. New Directions Report 16. Toronto: Institute of Public Administration of Canada. Reddel, T., and Woolcock, G. 2004. ‘From Consultation to Participatory Gov-

Australia and Canada in Comparative Perspective 33 ernance? A Critical Review of Citizen Engagement Strategies in Queensland.’ Australian Journal of Public Administration, 63/3: 75–87. Rhodes, R. 1997. Understanding Governance: Policy Networks, Reflexivity and Accountability. London: Open University Press. Richmond, D., and Siegel, D. (Eds.). 1994. Agencies, Boards and Commissions in Canadian Local Government. Toronto: Institute of Public Administration of Canada. Risse-Kappen, T. 1997. ‘International Relations Theory and the End of the Cold War.’ In J. Smith, C. Chatfield, and R. Pagnucco, eds., Transnational Social Movements. 57–84. New York: Columbia University Press. Risse-Kappen, T. 1995. Bringing Transnational Relations Back In: Non-State Actors, Domestic Structures, and International Relations. Cambridge: Cambridge University Press. Rothblatt, D., and Sancton, A. 1999. Metropolitan Governance. Institute of Governmental Studies. Berkeley: University of California Berkeley Press. Salmon, T., and Keating, K. (Eds.). 1999. The Dynamics of Decentralization – Canadian Federalism and British Devolution. Kingston: Queen’s University, School of Policy Studies. Sancton, A. 2000. Merger Mania: The Assault on Local Government. Montreal and Kingston: McGill-Queen’s University Press. Sancton, A. 1994. Governing Canada’s City Regions: Adapting Form to Function. Montreal: Institute for Research on Public Policy. Sancton, A., and Young, R. 2009. Municipal Government in Canada’s Provinces. Toronto: University of Toronto Press. Sassen, S. 1996. Losing Control. New York: Columbia University Press. Savitch, H., and Kantor, P. 2002. Cities in the International Market Place. Princeton: Princeton University Press. Schachter, M. 2002. Not a Tool Kit: Practitioner’s Guide to Measuring the Performance of Public Programs. Ottawa: Institute on Governance. Siegel, D. 2005. ‘Municipal Reform in Ontario: Revolutionary Evolution.’ In J. Garcea and E.D. LeSage, eds., Municipal Reform in Canada: Reconfiguration, Re-Empowerment, and Rebalancing, 127–48. Toronto: Oxford University Press. Smith, P., and Stewart, K. 1998. Making Accountability Work in B.C. Burnaby: Simon Fraser University, Institute of Governance Studies. Stalder, F. 2006. Manuel Castells: The Theory of the Network Society. Cambridge: Polity Press. Stoker, G. (Ed.). 1999. The New Management of British Local Governance. London: Macmillan. Tiebout, C. 1956. ‘A Pure Theory of Local Expenditures.’ Journal of Political Economy, 64/4: 416–24.

34 Local Government in a Global World Tindall, R. 2000. Local Government in Canada. Toronto: Nelson. United Nations Development Program. 1997. Governance for Sustainable Human Development. New York: Author. Retrieved 20 June 2008 fromhttp://mirror.undp.org/magnet/policy/chapter1.htm#b. Van Dooren, W. 2005. ‘What Makes Organisations Measure? Hypotheses on the Causes and Conditions for Performance Measurement.’ Financial Accountability and Management, 21/3: 363–83. Wildavsky, A. 1978. ‘A Budget for All Seasons? Why the Traditional Budget Lasts.’ Public Administration Review, 38/6: 501–9. Woolman, H. Theories of Urban Politics. London: Sage. Worthington, A. 2001. ‘The Empirical Measurement of Local Government Efficiency.’ In B.E. Dollery and J.L. Wallis, eds., The Political Economy of Local Government: Leadership, Reform and Market Failure, 71–113. Cheltenham: Edward Elgar. Young, R. 1999. The Secession of Quebec and the Future of Canada. Toronto: University of Toronto Press.

Ontario 35

2 Citizen Participation and Local Governance: The Australian Experience chris aulich

The past two decades in Australia have witnessed a sustained program of public sector reform at all levels of government. Consistent with international experience, there has been some decentralizing activity that has enhanced local autonomy and facilitated citizen participation. Despite this effort, the basic nexus between state and local governments has not yet been reformed in ways that fully embrace local government as an active and integral participant in the Australian federation. Nevertheless, there are signs that some of the more recent developments at state and local government levels may enhance citizen participation in government through participatory governance. This chapter maps the impact of these decades of reform on local autonomy and citizen participation in local government in Australia. It traces the development of citizen participation from ‘ratepayer democracy’ to a more inclusive and accountable form of local democracy and notes the current emergence of participatory governance. The chapter considers the extent to which participatory governance has taken root at local levels and concludes that if participatory governance is to be advanced, it may have to look for leadership in organizations other than institutional local government. Citizen Participation to Participatory Governance The opportunity to take part in the political system is such a fundamental tenet of the democratic system of government that its very existence is rarely questioned. People must be able to have their say – to vote, to engage in political debate and to let those in power know their views on

36 Local Government in a Global World issues which concern them. This is what democracy is about. (Richardson, 1983)

While there is almost universal acceptance of the principle of citizen participation in democratic societies, the means and extent of participation are frequently contested. Citizen participation in government has traditionally centred on a series of standardized rules, protocols, and enabling legislation and regulation (Bridgman and Davis, 2000), but there is a growing appreciation that participation in governance involves different principles and methods for engagement. These means might include innovation, negotiation, and transformative partnerships; policy learning; the reinvention of government based on systemwide information exchange, knowledge transfer, decentralization of decision-making, and inter-institutional dialogue; and the shift of the state towards relations of reciprocity and trust within governance institutions and processes (Reddel and Woolcock, 2003: 93). This recent emergence of interest in more engaged, collaborative, and community-focused public policy and service delivery finds its sources in the United Kingdom, the European Union, and to some extent, the United States. In particular, ‘third way’ politics has popularized a number of reforms centred on ideas of devolution, stakeholders, inclusion, partnerships, and community (Reddel and Woolcock, 2003: 81), ideas that are generally related to community participation. Paradoxically, this is occurring at a time when globalization and supranational interests have also become focal points of state activity. The two apparently contradictory focuses can be related to the extent that participation models appear to enable governments to better deal with the consequences of globalization, especially those regional inequalities that arise from it. Communities are being challenged to develop their local capacities or social capital to cope more effectively with issues like social exclusion and disadvantage; such issues have often accompanied economic restructuring that is responding to global imperatives. The shift from local government to local governance involves institutions and actors drawn from within but also beyond government and leads to the blurring of boundaries and responsibilities for tackling social and economic issues (Geddes, 2005). There is a growing enthusiasm for new forms of ‘distributed local governance that draws on the skills and resources of public, private, and civil society sectors’

Citizen Participation and Local Governance: Australia 37

(Reddel and Woolcock, 2003: 81). As Stoker (1998) argues, governance implies that the capacity to get things done does not rest only on the power of government to command or use its authority. The acceptance of new public management (NPM) notions has added impetus for greater participation by communities, especially through the policy-making processes. As governments aim to be more concerned with steering than rowing, facilitating rather than doing, they search for alternative sources of advice to that traditionally monopolized by its public services, given that many of those actually providing public services are from outside of government. To be effective, policy-makers require more information about service delivery and what works, and participatory processes provide essential feedback for policy-making (Edwards, 2003). Participatory processes may also be seen as an antidote to problems of coordination that have emerged from the fragmentation of the public sector that has occurred under neo-liberal regimes. Governments are also responding to demands for participation from better educated, more articulate, and more demanding citizens, many of whom express a declining level of trust in political institutions and a belief in the ‘democratic deficit’ (Pharr and Putnam, 2000; Edwards, 2005). This fuels demands for supplementary engagement of citizens beyond the traditional democratic processes of three- or four-year elections, with demands for more meaningful exchanges with government (Curtain, 2003, 2006). Further, there is recognition that many more social problems are cross-cutting, or ‘wicked,’ and seem to defy resolution by government alone (Stoker, 2004; Geddes, 2005). These problems require multiple inputs to integrate responses in order to formulate and implement coherent policy and determine whether policy prescriptions are actually working and may require greater participation by communities to assist in their resolution. Participatory governance is considered by some to be at the apex of citizen engagement, both as a form of participatory and deliberative democracy (Caddy and Vergez, 2001; Stewart, 2003) and as a form of governance that seeks active partnerships and collaboration between civil society, the private sector, and governments (Reddel and Woolcock, 2003). This not only reflects an acceptance of ideas of community, social capital, and localism as the foundations of political activity and policy-making but also involves ‘social connectedness,’ a critical element in the formation of social capital (Putnam, 2000) that actively engages the state in capacity building in local communities.

38 Local Government in a Global World

Participatory governance gives stakeholders the opportunity to engage in policy-making, which directly leads to ‘cross-boundary forms of negotiated order that involve government agencies and other stakeholders in both policy formulation and implementation’ (Stewart, 2003). It involves a shift from the technocratic development of policy, with its programmatic or regulatory control, to situations where some control may be negotiated away from single government agencies. It marks a sharp divergence from the neo-liberal concept of reducing the role and size of government to conceiving government as an active partner in ‘associational’ governance (Smyth, Riddel, and Jones, 2005). Both the traditional notion of citizen participation and this emerging idea of capacity and relationship building have roots in the notion that citizen participation is a ‘basic building block for contemporary democratic society and sustainable communities’ (Cuthill and Fien, 2005: 64). This notion aims at devolving power and resources away from central control and towards front-line managers, local democratic structures, and local consumers and communities in what Stoker (2004) terms ‘new localism.’ The following two sections examine the impact of local government reform in Australia on two key dimensions of local governance: local autonomy and citizen participation. This is followed by a section that identifies and discusses activities initiated by state and local governments to enhance participatory governance in Australia. Local Government Reform: Devolution and Local Autonomy All three spheres of government in Australia have undergone relentless reform for more than twenty years, representing the most significant set of changes since Federation in 1901. Reforms have been comprehensive at the management, legislative, and structural levels of local government and have focused on two primary agendas: first, the improved management of resources and, second, governance issues, especially the redefinition of roles and responsibilities of the various stakeholders in the local sphere of government (Aulich, 2005; Marshall, 1998). It is this second agenda that is of particular interest for this chapter. An earlier renaissance in local government reform occurred in the 1960s when ‘the combination of grass-roots participation and the discovery of the urban problem stimulated wide interest in [local government] potentiality’ (Halligan and Wettenhall, 1989: 80). Consistent with

Citizen Participation and Local Governance: Australia 39

broader pressures for social change, the reform agendas at this time, inter alia, included moves to widen the franchise, eliminate multiple voting, and redraw boundaries to ensure greater adherence to principles of ‘one-person-one-vote.’ It represented a shift away from the notion of ‘ratepayer democracy’ in which the dominant considerations had been the ‘protection of one’s own interests and those of one’s own kind’ (Chapman and Wood, 1984: 27). The reform impetus appeared to dissipate in the late 1970s under the pressures of fiscal austerity and inflexible management (Aulich, 1999). The revitalization of the reform movement in local government in the past two decades has coincided with the period in Australian history of intensive administrative change to public sectors at all levels in the federation. The centrepiece of local government reform was the reformation of state1 government legislation. Between 1989 and 1996 the local government acts in each state jurisdiction were scrutinized and reformed. Common to all was the shift away from the prescriptive and limiting powers reinforced by the doctrine of ‘ultra vires,’ which restricted councils to performing only those activities specifically nominated under the legislation. All of these new acts granted forms of general competence powers to enable local councils to undertake any activities necessary for them to fulfil the functions and powers delegated to them. Typical was the Victorian Local Government Act, which gave councils the power to ‘do all things necessary or convenient to be done for or in connection with the performance of its functions and to enable it to achieve its purposes and objectives’ (Clause 8.3). While widening the scope of local government activities, the nature and extent of the delegated powers did not change significantly in any state jurisdiction. Despite the modernization of the new acts, there is little evidence of significant changes to the state-local power nexus, and no new functions were added to those already undertaken by local government. Only in Tasmania was a thorough review of state and local government functions included as a major agenda item in the reform process. Reserved powers remain with the state governments, typical of which is the provision in the New South Wales legislation that gives the minister for local government ‘the power to issue any order that a council may issue,’ and that in Queensland, where the state government is empowered to refuse approval to by-laws, overturn existing gazetted by-laws, and overturn council resolutions. Even under the reformed acts, local government remains a creature of state

40 Local Government in a Global World

and territory governments with over-rule powers uniformly remaining with state governments (Aulich, 2005). The move towards general competence powers appears to be a sincere attempt to strengthen local autonomy by enabling councils to engage more in enterprise activities, free of the limitations imposed by the old, prescriptive local government acts. However, it may also have been a means of reducing state government responsibilities for, and burden of, financing local government. For example, the government of Victoria’s microeconomic reform paper began with the statement: ‘While the Victorian Government was able to take up some of the slack in local government funding through the mid 1980s it can no longer do so because of the significant real terms in reduction in state general purpose grants’ (LGV, 1990: 2). The commitment to local autonomy was tested in those states collectively known as the ‘rust belt’ (Victoria, South Australia, and Tasmania), where state financial problems became the justification for later state government-driven approaches to reform that focused more on cost reduction than on enhancing local governance (Aulich, 2005). In these states, later phases of reform moved more towards restructuring than enhancing state-local partnerships. Municipal amalgamation, financial reform, and in Victoria the mandated use of competitive tendering became the key agendas of reform in the latter part of the 1990s (Aulich, 2005; Marshall, 1998). In justifying this refocusing of reform effort, states pointed to lower local taxes, debt retirement, and improved quality of services to residents. Few mentioned the impacts on traditional local governance issues and values. In Victoria there was a dramatic decline in the language and practice of community development. This reform focus may have reflected the impatience of some state governments with the pace of earlier consultative approaches to reform and a reorientation towards a view of local government primarily as a provider of services. Nevertheless, reform processes were typically consultative, using tools such as discussion papers, exposure drafts of legislation, inquiries, seminars, community consultations, training programs for newly elected local members, and the like. In New South Wales, for example, the process of review took four years, the release of a discussion paper, and an extensive consultation program that involved over 3,000 attendees at seminars, 900 written submissions, and 450 telephone calls (NSW Government, 1991: 3). In both South Australia and Western Australia, new agreements were reached between local and state governments on principles including enhancing local govern-

Citizen Participation and Local Governance: Australia 41

ment autonomy and capacity for self-management. In the case of South Australia, the agreement was designed to ‘establish new relationships reflecting a co-operative approach to the development of the state’ (Bannon and Plumridge, 1990); however, the collaborative arrangements were significantly weakened within a few years under pressure of a major downturn in the state economy (Aulich, 2005). At the end of nearly two decades of reform, some devolution of functions to the local sphere has occurred, but the historic reality of administrative subordination of local government continues to be a central feature of central-local relationships in Australia (Gerritsen and Whyard, 1998). While its counterparts in many overseas jurisdictions enjoy the fruits of growing acceptance of new governance principles such as subsidiarity and ‘joined-up’ government, Australian local government has not yet been released from a nineteenth-century legislative stranglehold imposed on it by state government. Local Government Reform: Enhancing Citizen Participation Efforts at reforming local governance have largely been based on ‘indirect participation’ or ‘citizen participation,’ that is, ‘those legal activities by private citizens that are more or less directly aimed at influencing the selection of government personnel and/or the actions they take’ (Richardson, 1983: 11). The new local government acts included provisions to strengthen the accountability of both the local community and the state government, improve management capacity, and make local government more democratic. Provisions included broadening the franchise, enhancing arrangements for referenda, exposing key documents for public scrutiny, extending freedom of information provisions to local government, and mandating community engagement in planning activities. These are congruent with Bridgman and Davis’s (2000) articulation that citizen participation is traditionally focused on enabling protocols, regulation, and legislation more than on those forms of participatory governance that actively engage communities in policy formulation. With this form of citizen participation, the role of government is a relatively passive one, promoting policies that enable access to ‘participants’ who choose to become involved and providing more transparent and accountable decision-making. It is important to note the significant variation in the local government electoral systems in Australia that have emerged from these

42 Local Government in a Global World

reforms. These variations relate to term lengths, who can vote, the obligation to vote, and the voting system itself (see Tables 2.1, 2.2, and 2.3). For example, South Australia has fixed three-year terms but most other states have four-year terms; in some states, all positions are contested simultaneously, while in others the election cycle is more continuous, with only a proportion of positions contested at each election; some states mandate postal voting, while some allow it and others do not; in some states, votes are counted on a first-past-the-post basis, while in others proportional representation is used; and, significantly, in some states, voting is compulsory, aligning this obligation with state and national elections, while elsewhere voting is not compulsory at the local government level. While some vestiges of ratepayer democracy, such as multiple voting, have been removed, local government has yet to adopt universal franchise in all states. As indicated in Table 2.1, a majority of states retain a property franchise, which excludes from the local government franchise many citizens who are eligible to vote in elections conducted for other spheres of government. Voter turnout is one important measure of successful participation. Table 2.2 indicates that voter turnout is low in those states where voting is not compulsory, despite increased rates of voter participation with the introduction of postal voting in several states (e.g., in South Australia it was primarily responsible for a rise from 15% to 39% in voter turnout). Voter turnout at local elections ranges from 12% to 65%, with averages just over 30%. For most rural local governments, only a minority (about 30%) of all seats are contested at elections, although this figure is about 60% for urban elections (Gerritsen and Whyard, 1998: 42). This low voter turnout indicates that the enfranchised are not necessarily enthusiastic about exercising their rights to vote in local government elections. Perhaps there is still some remnant of the poor reputation of elected councils revealed in research conducted in the 1980s that found that many Australians considered their local councillors ‘at best incompetent and, at worst, corrupt’ (Bowman, 1983: 180). Or, perhaps it is due to broader cultural issues such as the ‘widespread lack of confidence most citizens have in Australian political institutions’ (Curtain, 2006: 124). Although variations in electoral arrangements reflect local preferences (even if mediated through state government legislation), what is significant is the limited capacity of local governments to change these arrangements. In Table 2.3, the right-hand column outlines the proce-

Yes

Yes

Yes

Yes

Yes

Yes

Yes

NSW

VIC

QLD

WA

SA

TAS

NT

No

Yes

Yes

Yes

No

Yes

Yes

Is there a property franchise?b

Yes

No

No

No

Yes

Yes, for residents

Yes, for residents

Is voting compulsory?

Full exhaustive preferential

Proportional representation modelled on Hare-Clark system

Proportional representation

First past the post

First past the post

Proportional representation

Proportional representation

Voting system

4 years

4 years but election for half the members occurs every 2 years

3 years

4 years but election for half the members occurs every 2 years

4 years

4 years

4 years

Electoral cycle

A ‘residency franchise’ gives an entitlement to vote to residents in the council area if the resident is on the state electoral roll for the area. b A ‘property franchise’ gives an entitlement to vote to owners or occupiers of ratable property in the council area. There are differences in the state legislation on the way this operates. Source: Department of Transport and Regional Services, Local Government National Report (Canberra: Author, 2005).

a

Is there a residency franchise?a

State

Table 2.1 Comparison of Arrangements for Local Government Elections in Australia

Citizen Participation and Local Governance: Australia 43

44 Local Government in a Global World Table 2.2 Voter Participation in Local Government (LG) Elections, by State NSW

Voting in LG elections is compulsory. Voter participation for the 1999 and 2004 council elections was 84% and 85.7%, respectively.

VIC

Voting in LG elections is compulsory. Average of 75% (range, 67%–87%) for 54 councils where elections were conducted in 2002/3. For November 2004 postal elections (22 councils), the average participation rate was 75% (range, 65%–84%).

QLD

Voting in LG elections is compulsory. The LGAQ estimates average voter turnout in the 2004 election at 80%, with the average informal vote at 5%.

SA

Voting in LG elections is not compulsory. State average turnout in the 2003 election was 33% (range, 23%–68%). From 1997, all councils in SA were given the option of conducting their elections by postal voting. The councils that conducted their elections with postal voting saw an increase in turnout of 150% over 1995, with a turnout of 39%, compared with 15% in councils using polling booths in 1997. Based on the 1997 results, exclusively postal voting was made mandatory from 2000.

WA

Voting in LG elections is not compulsory, and polling is conducted exclusively by post. Elections held in May 2005 showed an average participation rate of 36%, compared with an average of 22% in councils using in-person voting in 2003.

TAS

Voting in LG elections is not compulsory, and polling is conducted exclusively by post. Elections held in 1999, 2000, and 2002 received voter participation rates of 55%, 58%, and 57%, respectively.

NT

Voting is compulsory and conducted through attendance voting only. An average of 72% of electors cast ballots in these elections (including informal votes); the range was 66%–76%.

Source: State departments responsible for local government.

dures necessary to effect change; only in New South Wales can individual local governments change electoral arrangements unilaterally as a result of citizen referenda. In all other states, state government or electoral commission approval is required. There are other structural impediments to developing more active citizen participation, for example, the levels of allowance or remuneration for elected members, which also vary across states and, in some instances, between councils in the same state. With most local governments, allowances are so low that serving as an elected member remains largely a part-time occupation and therefore restricts the

5

5

5

5

None specified

Legislation specifies number of elected members for each council

5

State

NSW

VIC

QLD

WA

SA

TAS

NT

Manner of election of principal member (e.g., Mayor)

Either chosen from within council or elected at large

At large

Chosen within council (only Melbourne has mayor elected at large)

Wards, whole of area, Either chosen from within or a combination council or elected at large

Wards, whole of area

Wards, whole of area

Wards, whole of area

Wards, whole of area, Either chosen from within or a combination council or elected at large

Options for electoral structure

None specified

Wards, whole of area

At large

Legislation specifies Wards, whole of area, At large number of elected or a combination members for each council

None specified

15

None specified

12

15

No. of members (max.)

Councils review and recommend to minister

Local government board reviews and recommends to minister

Councils review; electoral commissioner certifies process

Councils review and recommend to minister

Local government electoral and boundaries review commissioner, on referral from minister

Independent review by electoral commissioner who recommends to minister

Referendum of electors in the area

How arrangements are reviewed and changed

Source: Department of Transport and Regional Services, Local Government National Report (Canberra: Author, 2005).

No. of members (min.)

Table 2.3 Comparison of Arrangements for Election of Local Members in Australia

Citizen Participation and Local Governance: Australia 45

46 Local Government in a Global World

opportunity for representation to those with other sources of income. Given that payment for members of parliament has been a basic feature of democratic societies for more than a century so as to enable all citizens the opportunity to represent their communities on a fulltime basis, the failure to extend the provision to all local governments appears somewhat anachronistic. A more recent attempt to examine cost-shifting between the spheres of government resulted in comments by the House of Representatives Economics, Finance, and Public Administration Committee that local government has been short-changed, particularly by the actions of state governments in maintaining revenue denial. There are increasing expectations of local government to provide services but no, or insufficient, funds are provided to undertake them. The committee’s report, completed in 2004, recommended a series of follow-up activities to establish a blueprint for future intergovernmental arrangements (HREFPAC, 2004). In an article on local government funding (Canberra Times, 9 November 2005), Tinkler reported that the Australian Local Government Association (ALGA) continues to complain of this vertical fiscal imbalance and is lobbying to increase local government’s share of the annual national tax take of $200 billion from its current level of $7 billion. Martin (2006) argues that this resource deficit is precisely the reason why local governments have been unable to become further engaged in community building and that leadership in this area has ‘been usurped’ by the state government. However, he infers that some of this state government leadership is designed more for securing political advantage than as a genuine commitment to community engagement. Martin goes on to assert that the use of community development opportunities for political purposes detracts from the effective public management of what is regarded in other parts of the world as important social processes at the core of effective local governance. What is clear is that there are significant structural, legislative, and financial impediments to fully enabling citizen participation in local government in Australia. These underline the perception of local government as a poor relation in the political system and further diminish its status and hence its capacity to genuinely embrace notions of community governance.

Citizen Participation and Local Governance: Australia 47

Participatory Governance: Active Partnerships with Local Communities While the most recent phases of local government reform in Australia have continued to focus on structural reform, the language of partnership between state and local governments and their communities is beginning to re-emerge, as participatory governance and community building become the new strategic focuses of governments at the state level. Such participation is not new in Australia: local governments have (perhaps, intermittently) long provided forums and organizing capacity to facilitate arrangements that engage and build local capacity. A generation ago, local government’s singular focus on physical infrastructure, reflected in the label ‘roads, rates, and rubbish,’ was supplanted by increasing concerns for the provision of community and human services and stronger community participation in matters such as land use planning and community development. At the state and national government levels, there is a long history of facilitation of area-improving programs, regional initiatives, and local capacity-building projects. However, these have rarely been sustained and too often their effectiveness has not been evaluated. More recently, national governments have asserted an interest in social capital formation but appear unwilling to invest directly in such programs. While believing ‘in the ability of people to generate their own solutions to their own problems’ and that ‘social participation helps people to grow and flourish as human beings and be full members of Australian society’ (Reddel and Woolcock, 2003: 82), national governments over the past decade also appear to believe that this is best achieved if handled without government and bureaucracy or their resources. The Rudd government, elected in December 2007, echoes the interest shown by its predecessor but it remains to be seen whether resources will be applied to address the issues involved. At the state government level, almost all state governments are now taking a more direct role in facilitating community capacity building. Typically, this is formalized through establishing agencies with specific tasks in this area to encourage collaborative and communitybuilding initiatives. This activity carries an implicit view that traditional notions of consultation and centrally managed community input into the policy process are no longer sufficient to manage com-

48 Local Government in a Global World

munity expectations and the complexity of modern political life (Davis, 2001: 230). For example, the governments of South Australia and Victoria have established administrative units to provide an improved political and bureaucratic focus for a range of community-building and joint statelocal strategies. The Victorian government has commenced work on community capacity building; on measures for social capital, service integration, and community well-being; and on local learning and employment networks. As well, it has formally adopted a set of principles to underpin its engagement policy and encouraged local governments to develop four-year community plans that include processes of community participation (Martin, 2006). However, Wiseman (2005) concludes that while the Victorian government has energetically explored an extensive program of consultative and community-building strategies, it has been more cautious about opening up debate about participatory and deliberative decision-making processes. He observes that in Victoria ‘there is mounting concern within local government and non-government organisations about the extent of state government commitment to back the language of partnership with real changes to decisionmaking and resource allocation processes’ (2005: 69). Others have also raised the issue of the resource deficit faced by many local authorities and provide evidence that some councils are actually withdrawing from community engagement at the same time as state-level governments are enhancing their involvement (Martin, 2006). The Queensland, Tasmania, and New South Wales governments have also initiated engagement strategies (Reddel and Woolcock, 2003). Their state programs have tended to emphasize locality and local disadvantage, and ‘place management’ has emerged as a new term in spatial policy language to signal a holistic view of the needs of localities (Smyth, Reddel, and Jones, 2005: 39). In Queensland, the intention to utilize multisector partnerships was signalled by the premier, who declared: ‘There is … an emerging service delivery model involving governments working in partnership with communities to determine needs, devise strategies for meeting these needs, implementing activities consistent with these strategies and ultimately monitoring results. The emphasis is on community empowerment and not on traditional functional program delivery’ (Queensland Government, 2001: 10).

Citizen Participation and Local Governance: Australia 49

The government of Queensland subsequently issued a package of policies and programs aimed at greater participation in policy development and service delivery, although it should be noted that these represent strategic intentions that have yet to be fully implemented or evaluated (Reddel and Woolcock, 2003). Reddel and Woolcock argue that these strategic intentions are overdue in that past practices have failed to appreciate the critical role of local government, community associations, and other forms of civil society, and even when recognized, their diversity and complexity were not always easy to accommodate because of the dominance of managerial policies that foster largely passive notions of consultation and agency coordination (2003: 90). More recent reports on the Queensland programs indicate some positive gains in several programs, notably the community renewal program that focuses on fifteen disadvantaged areas in the state and the Cape York initiative that is attempting to address long-standing social problems in indigenous communities in one locality. In both cases, the claim is made that these early successes may be due to the use of techniques of ‘associational governance,’ where integrated policy responses involve a movement outside of the traditional social welfare constituency to engage communities more broadly (Smyth, Reddel, and Jones, 2005). A growing number of cases are emerging where local governments have developed or contributed to associational governance, giving prominence to the notion of ‘place,’ for example, the City of Playford, in South Australia, in its development of a high-performance growth hub (Genoff, 2005) or the Sydney Harbour Manager project, involving a memorandum of understanding between fourteen agencies and nineteen local councils. The latter example is a particularly interesting development, as the ‘model emphatically does not seek a single vision, an ongoing consensus, or a grand plan. It assumes many voices, competing interests and goals, and shifts in interests and alliances. The model enables clusters of stakeholders and interest groups to develop joint positions and then enter into a dialogue with other main players’ (Dawkins, 2003: 63). A number of important issues emerge from these examples. First, the cases are anecdotal, and a more complete examination of the extent of any shift towards more participative forms of governance has yet to be undertaken. It is very much a work-in-progress, and further research is required to map the diversity of state and local government policy intervention (Smyth, Reddel, and Jones, 2005: 8), and impor-

50 Local Government in a Global World

tantly, to assess the effectiveness of such interventions. A profound difference of perspective exists in relation to many of the communitystrengthening initiatives. Some report positively on early trends and on anecdotal-output feedback of some of these initiatives, especially in Victoria; others suggest that ‘many claims about the benefits of strengthening social bonds and increasing civic participation are overblown, and that attempts to present local self-help, volunteering and social entrepreneurship as panaceas for deeply rooted structural inequalities and injustices are naïve and misleading’ (Wiseman, 2006: 103). The second issue relates to the endemic weaknesses of the local sphere of government in Australia and the increasing number of tasks mandated to it by other spheres. Geddes (2000) questions the capacity of local partnerships to create structural change and resolve complex economic and social problems. In particular, there must be concerns about the capacity of local government to assume broader roles in developing leadership in regional participatory governance arrangements. As Beer et al. conclude, ‘It is not surprising that most economic development agencies [at local level] were small with very few staff and limited budgets, that they have been unstable, and that in many cases they did not have community and political support and in the perceptions of practitioners had little impact on their locality’ (quoted in Rainnie, 2005: 132). With 560 local governments, or 78% of the total number, classified as ‘rural’ or ‘regional’ (DOTARS, 2005), the urbanrural divide represents one dimension of uneven resource endowment recognized by the provision of national government grants to those councils most in need. Despite attempts at horizontal equalization, many of these local governments appear poorly placed to assume the type of leadership required to advance participatory governance. Third, there are some doubts that government at state levels will ever be able to effectively assume management of local initiatives. As Martin comments, there is a ‘question [of] how far state governments can go in brokering community engagement strategies across small rural towns and communities’ (2006: 2). By contrast, it has often been acknowledged that local government in Australia has satisfactorily met its intended functions of service delivery, adequate representation and participation, and advocacy of constituent needs to higher levels of government (Marshall, 1998). Self argues that the local sector of government ‘remains genuinely local and grass roots in a way that is no longer true of most overseas systems’ (1997: 298). This provides some

Citizen Participation and Local Governance: Australia 51

confidence that local government has a significant place and skills set to be a valued partner in participatory governance, even if there are questions about its leadership capacity. Fourth, there are some embedded practices in the Australian experience that may need to be challenged if there is to be a significant shift towards participatory governance. There is no coordinated approach to citizen consultation in Australia, and it receives highly variable treatment by various government agencies, typically limiting stakeholder engagement to organized interests (Curtain, 2006). For there to be a benefit from citizen engagement, public-policy consultation needs to move beyond the piecemeal and haphazard process that it constitutes in Australia today. Conclusion The shift from traditional approaches to citizen participation towards contemporary programs that actively seek to develop participatory governance has been slow to develop in Australia. At state and local government levels in Australia, there is increasing evidence of a willingness to consult with citizens beyond consultation with users of public services, or ‘customers.’ However, although most states and local governments have developed explicit protocols to assist this consultation, as well as signalling to their communities that such consultations are valued, there are few examples where consultation has been established and accepted as a citizen’s right. Engagement appears to be valued, perhaps even seen as necessary, but in few states has the practice been accepted yet as a fundamental right of communities to be active participants in governance. While the rhetoric from state governments has been positive with respect to this development, the barriers to accepting local government as a full and capable partner in governance remain. These barriers are partly legislative, with state governments maintaining powerful control over local government; they also reflect the paucity of resources available to local government, leaving many councils unable to accept a leadership role in participatory governance. State governments may need to surrender their legislative power over local government for ‘real’ partnerships with local communities to develop, partnerships that embrace notions of participatory governance. At this stage, it is unclear whether they will meet this challenge in ways met by other jurisdictions, where principles of subsidiarity,

52 Local Government in a Global World

citizen empowerment, and community engagement appear to be accepted more as regular aspects of the political landscape.

NOTE 1 The terms ‘state’ or ‘states’ are used in this chapter to refer to the six states and the Northern Territory governments which are at the intermediate level of the Australia Federation and have local government systems with similar arrangements.

REFERENCES Aulich, C. 2005. ‘Australia: Still a Tale of Cinderella?’ In B. Denters and L. Rose, eds., Comparing Local Governance: Trends and Developments, 193–210. Basingstoke: Palgrave. Aulich, C. 1999. ‘From Convergence to Divergence: Reforming Australian Local Government.’ Australian Journal of Public Administration, 58/3: 12–23. Bannon, J., and Plumridge, L. 1990. Memorandum of Understanding. Adelaide: Government of South Australia. Bowman, M. 1983. ‘Local Government in Australia.’ In M. Bowman and W. Hampton, Local Democracies: A Study in Comparative Local Government, 165–84. Melbourne: Longman Cheshire. Bridgman, P., and Davis, G. 2000. Australian Policy Handbook (2nd ed.). Sydney: Allen and Unwin. Caddy, J., and Vergez, C. 2001. Citizens as Partners: Information, Consultation and Public Participation in Policy Making. Paris: OECD. Chapman, R., and Wood, M. 1984. Australian Local Government: The Federal Dimension. Sydney: Allen and Unwin. Curtain, R. 2006. ‘Engaging Citizens to Solve Major Public Policy Challenges.’ In H. Colebatch, ed., Beyond the Policy Cycle: The Policy Process in Australia,121–42. Sydney: Allen and Unwin. Curtain, R. 2003. ‘What Role for Citizens in Developing and Implementing Public Policy?’ In National Institute for Governance (NIG), Facing the Future: Engaging Stakeholders and Citizens in Developing Public Policy, 127–46. Canberra: University of Canberra, NIG. Cuthill, M., and Fien, J. 2005. ‘Capacity Building: Facilitating Citizen Participation in Local Governance.’ Australian Journal of Public Administration, 64/4: 63–80.

Citizen Participation and Local Governance: Australia 53 Davis, G. 2000. ‘Government by Discussion.’ In P. Botsman and M. Latham, eds., The Enabling State: People before Bureaucracy, 219–31 Sydney: Pluto Press. Dawkins, J. 2003. ‘New Kinds of Networks for Policy-Making besides Government.’ In NIG, Facing the Future, 55–69. Canberra: University of Canberra, NIG. DOTARS (Department of Transport and Regional Services). 2005. Local Government National Report. Canberra: Author. Edwards, M. 2005. ‘A Big Shift in Decision-Making.’ Public Sector Informant, Nov.: 12–13. Edwards, M. 2003. Introduction. In NIG, Facing the Future, 9–14. Canberra: University of Canberra, NIG. Geddes, M. 2005. ‘International Perspectives and Policy Issues.’ In P. Smyth, T. Reddel, and A. Jones, eds., Community and Local Governance in Australia, 13–36. Sydney: UNSW Press. Geddes, M. 2000. ‘Tackling Social Exclusion in the European Union? The Limits to the New Orthodoxy of Local Partnerships.’ International Journal of Urban and Regional Research, 24/4: 782–800. Genoff, R. 2005. ‘A Case Study in the New Regionalism.’ In P. Smyth, T. Reddel, and A. Jones, eds., Community and Local Governance in Australia, 167–86. Sydney: UNSW Press. Gerritsen, R., and Whyard, M. 1998. ‘The Challenge of Constant Change: The Australian Local Government CEO.’ In K. Klausen and A. Magnier, eds., The Anonymous Leader, 31–48. Odense: Odense University Press. Halligan, J., and Wettenhall, R. 1989. ‘The Evolution of Local Governments.’ In The Australian Local Government Handbook, 77–87. Canberra: AGPS. HREFPAC (House of Representatives Economics, Finance and Public Administration Committee). 2004. Rates and Taxes: A Fair Share for Responsible Local Government. Canberra: Author. LGV (Local Government Department of Victoria). 1990. Microeconomic Reform in Local Government. Melbourne: Author. Marshall, N. 1998. ‘Reforming Australian Local Government: Efficiency, Consolidation and the Question of Governance.’ International Review of Administrative Sciences, 64: 643–62. Martin, J. 2006. ‘Government and Community Engagement.’ Paper for the Tenth International Research Symposium on Public Management, 10–12 April, Glasgow, Scotland. NSW Government (New South Wales Government). 1991. Reform of Local Government in New South Wales: Exposure Draft Local Government Bill 1992. Sydney: Department of Local Government and Co-operatives.

54 Local Government in a Global World Pharr, S., and Putnam, R. 2000. Disaffected Democracies: What’s Troubling the Trilateral Countries? Princeton, NJ: Princeton University Press. Putnam, R. 2000. Bowling Alone: The Collapse and Revival of the American Community. New York: Simon and Schuster. Queensland Government. 2001. Smart State – Investing in People and Communities. Brisbane: Goprint. Rainnie, A. 2005. ‘Regional Development Policy and Social Inclusion.’ In P. Smyth, T. Reddel, and A. Jones, eds., Community and Local Governance in Australia, 131–48. Sydney: UNSW Press. Reddel, T., and Woolcock, G. 2003. ‘A Critical Review of Citizen Engagement Strategies in Queensland.’ In NIG, Facing the Future, 80–97. Canberra: University of Canberra, NIG. Richardson, A. 1983. Participation. London: Routledge and Kegan Paul. Self, P. 1997. ‘The Future of Local Government.’ In N. Marshall and B. Dollery, eds., Australian Local Government: Reform and Renewal, 297–310. South Melbourne: Macmillan. Smyth, P., Reddel, T., and Jones, A. (Eds.). 2005. Community and Local Governance in Australia. Sydney: UNSW Press. Stewart, J. 2003. ‘Participatory Governance, Power and Public Management.’ In NIG, Facing the Future, 150–3. Canberra: University of Canberra, NIG. Stoker, G. 2004. Transforming Local Governance. Basingstoke: Palgrave Macmillan. Stoker, G. 1998. ‘Governance as Theory: Five Propositions.’ International Social Science Journal, 155: 17–28. Wiseman, J. 2006. ‘Local Heroes? Learning from Recent Community Strengthening Initiatives in Victoria.’ Australian Journal of Public Administration, 65/2: 95–107. Wiseman, J. 2005. ‘Designing Public Policy after Neo-liberalism?’ In P. Smyth, T. Reddel, and A. Jones, eds., Community and Local Governance in Australia, 57–74. Sydney: UNSW Press.

Ontario 55

3 ‘You Say You Want an Evolution?’ From Citizen to Community Engagement in Canadian Cities susan d. phillips

Citizen engagement is at once old and new for local governments in Canada. Consulting with and involving citizens through various means in policy development and planning, outside of elections, have been regular practices for municipal governments for the past thirty years. Provincial legislation mandates public consultation in official land use planning and certain other circumstances, and requires that all debate and decision-making by local councils be conducted in public. Municipal governments, especially those in the larger urban centres, have generally gone far beyond their provincially legislated obligations for engaging citizens, however. Indeed, they have been leaders in citizen participation in Canada by undertaking a variety of experiments in participation, often setting best practices for provincial and federal governments. In this sense, citizen participation has become standardized practice, perhaps too standardized. Often, public consultation has not been the two-way exchange of information and constructive dialogue that actually influences policy and planning outcomes, as citizens expect it will (Graham, Phillips, and Maslove, 1998: 136–7). Over the past decade or so, a public backlash against token forms of participation has occurred that has forced some rethinking, reinventing, and renaming of citizen participation. An offshoot of this movement, led mainly by scholars and participation ‘experts,’ has focused on developing more institutionalized and iterative forms of dialogue that are rooted in principles of ‘deliberative democracy’ (Bohman, 2000; Cohen, 1997; Dryzek, 2000; Goodin, 2003). As a means of signalling that such deliberative practices would be fundamentally different from the one-way flow of information – from public to government – into which ‘consultation’ had seemingly

56 Local Government in a Global World

devolved, the concept was relabelled as ‘citizen engagement’ (Phillips and Orsini, 2002: 3). For many proponents, the appeal of this new label lay in the notion of greater deliberative engagement. For others, particularly within the governments, the interest was on greater involvement of citizens, who would participate as individuals rather than as group representatives. Far from being a paper exercise, the main impact of the movement for citizen engagement in the early 2000s was to give rise to a variety of experiments in new methods for involving citizens. For instance, novel and bold experiments in citizen assemblies were undertaken by the governments of British Columbia and Ontario to lead their process of developing new electoral systems. Think tanks, with federal government support, led more iterative processes of deliberation to help come to consensus on a number of challenging policy issues, such as nuclear waste management and health care reform (see Abelson and Gauvin, 2004; Turnbull and Aucoin, 2006). At the municipal level, citizen panels were established to work on many different kinds of issues ranging from participatory budgeting (e.g., in the Regional Municipality of Burlington; Fenn, 1998) to amalgamation (e.g., in the City of Ottawa). The focus on deliberative democracy helped spark a renewed interest in participation and in a broader array of means to achieve it. The citizen engagement movement did not, however, lead to a fundamental transformation in the relationship between governments and citizens. Although citizen engagement was often widespread across municipal departments, it was often project based or an ad hoc process, applied as needed, rather than becoming more formally institutionalized (Turnbull and Aucoin, 2006). In most municipalities, it did not lead to the creation of new institutions or sustained processes for reforming relationships between governments and civil society on an ongoing basis. Citizen participation is now on the verge of a renaissance of sorts in Canada’s major cities. This is significant not only because it brings another wave of interest in engagement but because it represents an important evolution from citizen to community engagement. Recent developments in several urban centres hold the potential for more transformative change in institutions and relationships, I suggest, than did the more scholarly push for engagement in the early 2000s. Unlike the citizen engagement movement, emerging interest is not so much rooted in philosophies of democracy, but driven by the pragmatics of two intersecting agendas.

From Citizen to Community Engagement in Canadian Cities 57

The first is a city-building agenda that has emerged out of the struggle being led by the big cities for new powers and revenues and more effective governance structures that better suit the reality of political, economic, and social life in Canada’s metropolitan areas. As part of this process, cities are not only pressuring provincial and federal governments for new authorities and sources of revenues, but are revamping democratic processes and structures, redesigning governmental structures, and attempting to find greater integration and ‘horizontality’ in service delivery. Local efforts are reinforced in a number of municipalities by experiments in multilevel governance in which local, provincial, and federal governments are working collaboratively through various framework agreements and programs aimed at addressing specific problems, such as the federal Infrastructure Program or the Vancouver Agreement, which is intended to address issues of poverty, drug use, and social exclusion in the city’s Downtown Eastside. At the same time, place-based community-building agendas are unfolding in most Canadian cities (see Bradford, 2005). The goals of these sometimes quite discrete and disconnected initiatives are to create stronger neighbourhoods; more vibrant, healthy, resilient, and/or sustainable communities; and to build greater capacity in community organizations. What is distinctive is that most are happening outside of governments, led by foundations, voluntary organizations, and citizens, although many are federally funded. The central argument of this chapter is that the intersection of the municipal government-led city-building and the externally driven community-building agendas has created a space for and given rise to innovation in ways of reconfiguring relationships among governments, citizens, and communities. What is new about this most recent evolution in citizen participation is the establishment of new institutions or institutionalized mechanisms of engagement and more integrated forms of neighbourhood planning and community capacity building. This innovation is at the very early stages and varies extensively in form and commitment across Canadian municipalities. In addition, community organizations and citizens continue to face enormous pressures caused by the lack of capacity and the demands for accountability that are holdovers from the downloading and neo-liberalism of the 1990s (see Ilcan and Basok, 2004). Whether this innovation can be sustained long enough to produce significant change in planning and policy processes, and the influence of citizens on them, is still too early to tell.

58 Local Government in a Global World

This chapter explores the changing dynamics of citizen participation in Canada, drawing selectively from recent developments in major urban centres. It begins by outlining alternative models for participation in governing. These range from open, representative democracy that has traditionally characterized local governments in Canada to newer forms of citizen and community governance. The chapter then explores the changing dynamic, beginning with a brief overview of current practices of both civic and citizen participation in Canadian municipalities. These current practices are being reshaped by emerging agendas aimed at both city and community building. What are these agendas and what effect are they having on how municipal governments relate to their citizens? The chapter concludes by considering what it will take to make the innovations in community engagement that are emerging from these agendas sustainable. Models of Citizen and Community Engagement Participatory government is often presented as a contrast with representative government. The presumed contrast is that policy and decision-making either is solely in the hands of elected officials or is intentionally open to various forms of participation by citizens. Particularly in local government, this is too simple a dichotomy for two reasons. First, municipal government has long incorporated various participatory mechanisms in addition to the electoral apparatus. As Sullivan notes, ‘It is now taken for granted that representative democracy without participatory democracy is insufficient’ (2001: 8). Second, the concept of government acting autonomously, in a top-down manner and in isolation from various constituencies, has given way in Canada, as in Australia and elsewhere (see Aulich, this volume; Rhodes, 2000), to the notion of ‘governance’ in which governments collaborate in policy development and service delivery with various non-governmental actors. In distinguishing models of relationships between governments and citizens, then, the differences are not between purely representative versus participatory models, nor between top-down government and collaborative governance. Rather, the distinction is where the emphasis lies. Sullivan (2001) provides a very useful classification of how the emphasis might be mixed between representative/participatory democracy and government/governance approaches in models of community engagement. With some modification of labels, these are

From Citizen to Community Engagement in Canadian Cities 59 Table 3.1 Elements of Models of Community Engagement

Representative Participatory

Government

Governance

– Community government

Local governance Community governance

summarized in Table 3.1. The model of ‘representative government’ appears as a null set because, as noted, municipal governments have long ago moved towards incorporating some elements of participation and collaboration. In the Canadian context, municipalities have also already embraced, to varying degrees, models of community government and local governance. The current evolution that is taking place is towards models of community governance. Community Government In a model of ‘community government’ the emphasis rests on increasing the capacity and authorities of local government while strengthening its accountability and responsiveness through greater citizen participation in government (Sullivan, 2003; Somerville, 2005). The focus is on restructuring existing or creating new local government institutions so as to enable deeper and broader involvement by a broad range of citizens. This might be done either through devolution or democratization, or both. The former approach involves bringing policy and decision-making closer to citizens by devolving authorities to local governments and giving them the capacity and autonomy to act on behalf of their citizens in a responsive and accountable manner. The latter strategy is to open up the existing institutions and policy processes to greater involvement by citizens. In either scenario, government needs to develop the capacity to lead, not control. It must give up some space and control to enable a democratized process to have any meaningful input, although it retains accountability for decisions and for the process as a whole. Both devolution and democratization have been at work in Canadian municipalities in recent years. Strengthening the authority and capacity of municipal governments by acquiring the requisite authorities and revenues to be responsive to local needs is at the heart of the

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city-building agenda advanced by Canada’s big cities, as discussed below. Making policy processes more deliberative and inclusive, and in particular stressing the involvement of individual citizens rather than organized interests, has been central to the citizen engagement movement in recent years. Local Governance In this model, the focus is foremost on governance and on building the networks and partnerships among governmental and non-governmental players needed to support collaboration, rather than on the government or the ‘community’ per se. The underlying principle, suggests Somerville (2005: 129), is that ‘institutions should be controlled by their “stakeholders,” organized on the basis of mutual benefit for all (which would confer both legitimacy and authority on the institutions concerned), and integrated within a regime of participatory multi-stakeholder governance.’ In this model, the players are more likely to be organizations than citizens, but the defining features are the creation and maintenance of networks, whether orchestrated largely by governments or by communities. The primary role of government in this approach is to orchestrate or lead public-private partnerships (PPPs), establish frameworks or rules for involvement, and act as the director of a hub of partners. The creation and management of partnerships may entail the creation of new social enterprises that include representation of directly affected publics that reinvest in community or of relatively autonomous partnership vehicles, such as the strategic local government partnerships in England and New Zealand’s Stronger Communities Action fund (Larner, 2004). This approach is often supported by devolved or innovative funding arrangements and relies to a considerable extent on self-regulation by the networks themselves (Newman, 2001: 93). The greatest challenges for governments relate to the potential for a democratic deficit that arises from fewer, more elite participants representing organizations and networks (Sullivan, 2003) and the ability to develop appropriate accountability mechanisms that can contend with the shared responsibilities (see Auditor General of Canada, 2002). This model has been tried in many Canadian municipalities, although often driven as much by managerialist agendas of finding cost savings by working more extensively in PPPs.

From Citizen to Community Engagement in Canadian Cities 61

Community Governance The third model places the emphasis on communities, rather than on participation, governments, or the mechanisms of collaboration. In effect, this is the most bottom-up model and would go the furthest in decentralizing control from governments. The key elements are building greater capacity within communities to mobilize collective action, taking leadership in decision-making, and acting both autonomously from governments and collaboratively with them. Establishing this degree of community involvement and control also entails the creation of new decision rules, new frameworks for relationships, and new decision-making institutions, such as civic forums and neighbourhood councils. Such bodies ‘allow for authentic, normative and technical deliberation as well as community authority to formulate and implement policy’ (Skelcher et al., 2005: 579). Further, the community governance approach implies that communities themselves have a strong sense of identity and self-reliance where cooperation rather than competition contributes to the ability to consensually set shared values and goals (ibid.). While the instances of such devolution of authority combined with self-reliance are rare, examples such as the Porto Alegre experiment in Brazil (Fung and Wright, 2003) have given proponents renewed belief that such models are not mere idealism. Articulation of this model of community-first governance often assumes, in an almost wistful way, that it can only happen or is best facilitated on a small scale of either place-based or interest-based communities (Atkinson, 1994). The challenge for implementation of community governance for the big urban municipalities is how to scale up, from the neighbourhood to the metropolitan area. The central argument of this chapter is that a new community-building agenda is being advanced in many Canadian municipalities, led by non-governmental actors and by communities themselves. This is pulling governments into more extensive experimentation with various forms of community capacity and institution building needed to realize and sustain a model of community governance. It is important to note that I am not arguing that community governance is more ‘advanced,’ more participatory, or more democratic, nor that it is necessarily more effective than community government or local governance models. A model of community governance is undoubtedly

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better at some things – fostering a stronger sense of community and greater inclusiveness as a community rather than as individual, autonomous citizens, for instance. But, it is also more limited in other respects, such as having close institutional ties to governmental decision-makers. Also, we should not view the models as either/or choices: that by building stronger mechanisms of community government, municipalities are foreclosing on devolving some decisionmaking to communities. Rather, what is new in how citizens and communities are starting to be engaged in Canadian urban municipalities is the emergence of all three models, at work in different ways or operating simultaneously. These newer forms of citizen and community participation enrich rather than displace the existing practices of civic participation (in electoral and party processes). Just as Aulich (this volume) has given us an overview of municipal electoral systems in Australia, the next section provides a brief sketch of such mechanisms and the principles of open government that underpin representative democracy in Canadian municipal governments. Building on a Base of Civic and Citizen Participation Civic Participation Citizen participation has never intended to replace representative democracy, but to supplement it, and the representative and participatory routes to engagement in local government do not happen in isolation. Indeed, supplementing electoral participation with more specialized discussions around specific issues is critically important, given the inefficiency of elections at dealing with the broad and complex range of issues facing major cities and the long history of a relatively low voter turnout in municipal elections. The fact that Canadian municipalities are ‘creatures’ of the provinces is reflected in municipal voting systems, as it is in other aspects of local policy and decision-making. Electoral rules are set by provincial legislation and vary by province, although there is considerable consistency in the essentials. The franchise is universal, with a minimum age (usually 18), citizenship and residency requirements (ranging from three months to one year), but no requirements for property ownership (although non-resident property owners are eligible to vote, but only once in a given municipality). Voting dates are fixed, normally every three or four years, and there is a movement in some provinces,

From Citizen to Community Engagement in Canadian Cities 63

notably Ontario, with three-year terms to move to four. In contrast to some Australian states (see Aulich, this volume), voting has not been made compulsory under any provincial legislation, nor is this a question for serious debate in Canada. Municipal elections are decided on a plurality basis, with most using a single-candidate ward system and mayoral election at-large. The only exception to the ward system among major cities is Vancouver which, in spite of several referenda on the issue, still has its entire eleven-member council (and several independent boards) elected at-large. As a result of the forced amalgamations in several provinces (see Sancton, this volume), the mayors in the big cities now represent massive numbers of voters, more than any elected official at the provincial or federal levels. Indeed, twenty times more people are eligible to vote for the mayor of Toronto than for the prime minister of the country. The legitimacy that such population backing provides has been a factor in enabling the big city mayors to take more prominent roles on the national political stage in recent years and, working together, to become an effective force in lobbying the federal government. Municipal councils tend to be relatively small, averaging fewer than twenty-two seats even in the large centres (with the exception of Toronto and Montreal), in part as a result of explicit attempts by provincial governments in recent years to reduce the number of local politicians. Non-partisanship has been the norm in Canadian municipalities and, although the pros and cons of a party system are widely discussed, it remains quite entrenched. Only Vancouver and Montreal have well-developed (civic) party systems. In most other cities, the partisan leanings of candidates towards provincial or federal parties are often well known, but such affiliations are seldom officially declared during local campaigns. The lack of political parties tends to increase the informational hurdles for the public during elections because party labels are not available to provide a shorthand signal of candidates’ positions, and this may contribute to the low voter turnout in municipal elections (Cutler and Matthews, 2005). The advantage of non-partisanship, however, is that councillors generally feel quite free to vote the issue, and thus arguably are more open to persuasion by citizens and the outcomes of exercises in citizen participation outside of the electoral process. As in Australia, there tends to be a fairly large proportion (25%) of acclamations, particularly in smaller centres, and incumbents have a distinct advantage in local politics.1

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The transparency of political decision-making is buttressed by provincial legislation that requires all discussions among elected officials to be conducted in public (with exceptions for personnel and related matters). Thus, all council committees and policy-making, including negotiations over budgets, are public and any member of the public can fairly easily get on the agenda at a council committee meeting. Voter turnout in municipal elections, which averages 41% compared with voter turnouts between 60% and 70% in provincial and federal elections, is often decried as a sign of a serious democratic deficit.2 Low voter turnout is not a new phenomenon, however, and there has not been the same rate of decline as has occurred at the federal level in recent years. Indeed, turnout in municipal elections has remained fairly stable for the past fifteen years in Canada. Minor variations and blips occur depending on the tightness of the race and the media attention given to the mayoral campaign, whether major issues are on the agenda, and whether there are important policy questions to be decided by referendum at the same time (Graham, Phillips, and Maslove, 1998: 114–16). Although the lack of media attention and meaningful issues are often cited as key reasons for the historically and consistently low levels of voter turnout, another may simply be that in municipal government, elections are not the only assured opportunity for citizen input. Rather, the traditions of open government and multiple opportunities for citizen involvement in major planning and policy issues mean that people do not need to wait for the next electoral round to be heard. Efforts at enhancing civic participation have been part of democratic renewal processes in several provinces, and experiments with alternative means of voting are under way in many municipalities, particularly in Ontario following amendments to provincial legislation in the late 1990s that allowed municipalities to have greater control over voting means and standards. As Aulich (this volume) notes, several Australian municipalities have had considerable success in increasing voting rates by using mail-in votes. Because extensive experimentation with both postal and Internet voting only began in a serious way after 2000, the effects cannot yet be assessed fully in Canada. In addition to increasing voter turnout, the representation of women has been an issue at the local level in Canada, as it has at senior levels. The Federation of Canadian Municipalities (FCM) is leading an effort to increase the number of women who run for and attain municipal office. At

From Citizen to Community Engagement in Canadian Cities 65

21.7%, the representation of women in local elected office is low compared with many other countries, although it is higher than in provincial or federal politics in Canada (FCM, 2005). Perhaps the most pressing issue surrounding civic participation, at least for the big cities, is attaining even greater control over election rules and procedures, such as the setting of ward boundaries and election financing (Sewell, 2005), an issue that is squarely part of a city-building agenda that has been advanced in the past few years. Citizen Participation: Current Practices The mechanisms of representative democracy have long been enhanced at the municipal level by a wide array of methods of consulting with and involving citizens between elections (Graham and Phillips, 1998). Some citizen participation is provincially mandated, most notably through land use planning and environmental assessment legislation. In addition, several provincial frameworks set the basis for referenda (technically, non-binding plebiscites) and citizeninitiated petitions which can force municipal councils to act or to put the issue to a referendum.3 However, most of the innovation and experimentation with citizen participation has been locally driven. In contrast to the often quite formal hearings that are part of the development of official plans or environmental assessments or the more limited opportunities for two-way dialogue that surround the mechanisms of direct democracy (i.e., referenda and recall), local experimentation has involved a wide range of methods and issues. Indeed, public ‘consultation’ – the process of providing information to and then getting information back from the public – has become a regular part of policy-making in most cities. Commitment to more deliberative forms of citizen engagement, involving meaningful twoway dialogue that has the potential to influence policy and planning decisions, varies across municipalities and over time, depending on the priorities of council and staff. Municipalities deploy a broad range of methods for consulting and involving citizens including focus groups, public meetings and town hall meetings (both held in person and as forms of e-governance), conferences, summits, advisory bodies, and citizen juries or panels. For instance, the City of Winnipeg’s efforts in 2003 to create a ‘New Deal’ related to municipal taxation are typical of major exercises in citizen participation. A one-day conference involving a broad cross-section of the community was held to

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‘imagine’ the new regime; seven public town hall meetings, attended by approximately 2,800 people in total, were held to outline a case for a New Deal and to identify initial ideas for addressing the challenges in doing so; a series of community workshops were conducted to develop a better understanding of the issues for various constituencies; and mechanisms for individuals to provide input, by mail or email, were available, which resulted in 250 letters, 500 phone calls, and nearly 1,000 e-mails being received (City of Winnipeg, 2004). Recognizing and working with the diversity of the Canadian population is an important part of such involvement. Most of the major cities provide translation of consultation documents, outreach to ethnocultural communities, engagement with community newspapers, and cultural training for staff (see Graham and Phillips, 2007). In addition, most large municipalities help build community capacity by providing grants to community organizations and by co-production of services through various purchase-of-service arrangements with these associations. In smaller centres, participation is often less distinct from the regular business of council and municipal administration, as people can fairly readily make their views heard with elected officials and staff. In rural and small-town Canada, the main challenges relate to engaging not only citizens but provincial and federal governments in addressing some of the tectonic shifts of demography and economy that have taken place over the past twenty years. In this, the Rural Secretariat of Agriculture and Agri-Food Canada, working in partnership with provincial ministries of rural affairs under the National Rural Framework, has been particularly active, hosting a series of roundtable discussions in small and medium-sized municipalities across Canada. Here, the magnitude of the issues goes well beyond the capacity and resources of local governments to address them on their own. Most acutely, they face the difficulties of undiversified economic bases and lack of sustainable livelihoods, decreasing and aging populations with particular concerns over the loss of youth, problems maintaining or developing physical and social infrastructure, the decreasing ability to manage change, and problems in sustaining community and government interest for addressing rural viability (Government of Canada, 2005: 3). Many small communities are thus focused on short-term horizons in planning and development – retaining their capacity (of people, services, and facilities) – while also attempting to attract new assets in the medium term (ibid.).

From Citizen to Community Engagement in Canadian Cities 67

If a general pattern can be identified from the variety of experiments and experiences across Canadian local governments, it is that municipalities sponsor broad and diverse forms of citizen participation in a decentralized manner across many departments and related to many different issues, but there is seldom an overarching strategy, set of guiding principles, or centralized coordination (Robinson, 2005). Whether participation should be centralized and thus under the control of process specialists (but substantive generalists) is a matter of debate, however. If centralization further removes participation from actual decision-makers, and thus reduces the possibility for influence, it is likely to be a detriment rather than to add value, although there is merit in greater coordination to reduce the risk of consultation ‘fatigue.’ While participation has in many instances become more deliberative in nature, the fact that it continues to be more episodic than sustained means that it has fallen short of what the proponents of citizen engagement would call deliberative democracy (Robinson, 2005: 6). Two noted exceptions stand out from this general pattern, one positive and one with still unfolding implications. On the progressive side, the City of Montreal has gone the furthest of any Canadian municipality in developing institutions for citizen consultation. Montreal has a Charter of Rights and Responsibilities that highlights the values underpinning citizen engagement and the rights of citizens in this, and in the late 1980s established an office of public consultation that facilitates linkages with city departments and that publishes an annual report documenting the city’s consultation processes (see Hamel, 2002: 229; Robinson, 2005: 10, 14). The second example, still experimental in many places in spite of a long history, is the creation of geographically defined mechanisms for citizen involvement and community-based decision-making, most of which arose as a means of accommodating concerns over amalgamation. As part of its founding political and administrative structures in 1998, the new City of Toronto established six ‘community councils’ based on the original municipal boundaries (later reduced to four due to ward restructuring). Operating as committees of city council, each community council consists of the elected officials from six to ten contiguous wards (the former lower-tier municipalities) and each represents between about 300,000 and 650,000 people. The community councils are the first line for considering matters of a purely local nature, and are intended to provide a forum for citizen input into deci-

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sion-making at this level. Based on community input, they make recommendations to council on local planning, development, and neighbourhood matters, such as local traffic plans and by-law changes. Community councils have been developed in a number of Canadian cities, and their composition and authorities – and perceived effectiveness – varies greatly. In Winnipeg, which established such councils in 1972 as part of its amalgamation, they basically function as standing committees of council (with councillors from three wards comprising a council) rather than as truly decentralized structures. The councils are supplemented, however, by a network of residential advisory groups that are very active in representing neighbourhood interests and advising city council about civic issues. With amalgamation in 1996 in Halifax, now a city of about 375,000 covering a vast geographical area, five community councils were created to address some of the localized concerns over amalgamation. The councils, each consisting of elected councillors from three to six districts, are responsible for encouraging public input, but also have specific, limited powers under the provincial Municipal Government Act. Although they cannot pass by-laws, the councils can recommend changes to by-laws, appropriate service levels, user chargers, or other changes that would enhance their communities. However, most matters, particularly divisive ones, still go to city council via committee of the whole. The most decentralized system, called borough councils, operates in the province of Quebec. As the Quebec government moved towards legislating the merger of Montreal (and other municipalities) in 2000, twenty-seven borough councils were established as a means of mediating linguistic, local, and union interests with those of the province. The structure of the borough councils survived the subsequent demerger three years later with the result that Montreal now has four tiers – the metropolitan community, an agglomeration council, city council, and nineteen borough councils. The latter are not distinct corporate entities but part of the city corporation, although they have the same functional responsibilities as the de-merged municipalities, except they cannot levy their own taxes without the permission of the city council and their personnel are technically city employees subject to city collective agreements (Sancton, this volume, and 2006; Leblanc, 2006). The key concerns facing the community councils as mechanisms of engagement have been issues of scale and authority. Scale goes to the question: How large and diverse can a community be while still being

From Citizen to Community Engagement in Canadian Cities 69

a ‘community’ with collective interests? Because the Toronto councils cover such large geographical areas and populations, their meetings are lengthy and their agendas extremely heavy, which limits their ability to provide meaningful discussion and deliberation on community matters. Scale is relative, however: whereas citizens of Toronto may complain about the challenges of representing a ‘community’ of 600,000, in a rural part of Halifax, a community council covering 20,000 is seen by many residents to be too large and the interests too dissimilar to enable them to truly represent and undertake community-based decision-making. The critique of community councils is also reflective of the broader agenda of city building: the councils lack inadequate authority because municipalities themselves do not have the policy authorities or financial capacity to delegate decision-making. With recent changes in municipal acts in several provinces that enable greater delegation of their powers to other bodies, including community councils, the debate over the appropriate responsibilities of such mechanisms continues. In addition to engaging citizens, how much power and financial authority should they have to adequately address communitybased issues without reproducing the lower tier of government that amalgamation sought to eliminate? As Toronto and a number of Canadian cities undertake a re-examination of their governing structures, there is a commitment to maintaining the community councils but also to redesigning them as stronger mechanisms of participation and bottom-up decision-making. Such rethinking is illustrative of current trends towards models of community governance that are being produced by a convergence of city and community-building agendas. The City-Building Agenda In recent years, Canada’s larger municipalities, led by the big city mayors and supported by their federal and provincial associations of municipalities, have been engaged in a struggle with provincial governments to bring their authorities, revenue sources, and governing structures in better alignment with their increasing responsibilities (see Broadbent, 2005). This agenda, which is focused on powers, revenues, and governance, has tended to separate the large urban centres from the smaller ones. The big cities have been arguing for differentiated or special legislation, authorities, and relationships with senior governments – an argument that has never sat well in Canadian poli-

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tics. Increasingly, many provincial governments, notably the Liberal government of Ontario, are coming on board with the need for reform to address the distinctive challenges of the big cities. This is deepening an existing fissure in Canadian local government because many small and medium-sized municipalities do not share the need, and in many cases do not have the desire, to hold more extensive decision-making authorities or responsibilities. Canadian municipalities were not established as a separate order of government, but as ‘creatures’ of the provinces that have only delegated powers from provincial governments. This means that provincial municipal acts have had to specify in great detail what municipalities are required and able to do. The lack of autonomy forces municipalities to seek ministerial approval on often very minor actions, and they are unable to further delegate authority. The fiscal aspect of the city-building agenda relates to the fact that Canadian municipalities rely heavily on inelastic property taxes (which constitute over 50% of their operating budgets, compared with only 15% in the United States and 5% in Europe; Broadbent, 2005: 7), and they have access to a limited range of other revenue sources or tools for debt financing. At the same time, financial pressures have increased significantly in recent years due to the offloading of services from provincial and federal governments and to amalgamation which did not produce the cost savings it was touted as doing (Slack, 2005: 16; Sancton, this volume). While the limited set of powers and revenue sources may have been workable for small towns in the 1800s, it is clearly dysfunctional for today’s big cities, particularly for the City of Toronto, whose population and operating budget is larger than that of six of Canada’s provinces (Slack, 2005: 15). The big cities are seeking not only to change legislative frameworks, but to secure access to more diverse revenue sources and tools for debt management. Ideally, for many this would mean the transfer of tax room without strings attached. In a number of provinces (starting with Alberta in the mid-1990s), municipal acts have been reworked to grant spheres of authority (also called spheres of competency) and the power of ‘natural persons’ to municipalities. The push for greater autonomy has been realized most fully in Toronto, for which a new City of Toronto Act was passed by the province of Ontario in late 2005, and it gives the city broad permissive powers related to governance and financial management. It will also provide the city with the ability to delegate its authorities and to establish new accountability mechanisms (such as a lobbyist regis-

From Citizen to Community Engagement in Canadian Cities 71

ter and an auditor general). At the federal level, the former Liberal government had committed to sharing a portion of the gas tax, a measure extended and now entrenched by the current minority Conservative government. The issue of addressing the fiscal imbalance more generally, which implies more significant sharing or transfer of tax room, is still advanced by municipal associations. Although municipal governments have seen waves of internal restructuring over the years as various managerial fads took hold, the current debates on governance are addressing much more fundamental issues related to leadership and democratic control. They are thus playing out as a broad rethinking of the institutions that structure the relationships among the mayor, council, administration, and citizens. One reason for this meta-governance frame is that the basic conception of municipalities has been transformed in recent years, from thinking of municipalities as being deliverers of (hard) services to thinking of them as democratic governments. Some of the issues of governance currently under review include reconsideration of whether the traditional weak mayor system provides the right balance between leadership and democratic control, and exploration of various means for strengthening relationships with citizens and communities. As a result of the recent amalgamations, several municipalities (notably Ottawa and Halifax) ended up with large tracts of rural land under a single administration. They have been struggling to address appropriate means of representation, differing sets of issues, and a sense of alienation among rural residents that the former two-tiered systems had been better able to accommodate. Even for those cities that do not need to bridge an urban/rural divide, how to engage citizens is part of broader restructuring debates. In preparing for government under the new City of Toronto Act, for instance, there has been extensive discussion about increasing the number of community councils and enabling them to be more inclusive and effective in engaging citizens and grappling with community matters. Finally, governance debates encompass the kinds of institutional arrangements needed to manage issues on a regional or metropolitan scale, particularly but not exclusively related to land use planning and infrastructure (see Sancton, this volume). Much of the reform that flows from this city building could be seen as strengthening community government: creating or strengthening the institutions of local governments so as to become more autonomous, democratic, responsive, and accountable to their own citizens. The

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From Citizen to Community Engagement in Canadian Cities 73

attention to local autonomy and institutions does not imply that municipalities are moving away from collaborative relationships with other governments or with non-governmental partners. Rather, they are also developing along a governance track, and such collaboration is being fostered by recent developments in multilevel governance. As Graham notes in her chapter for this volume, one of the recent developments in intergovernmental relations has been the attempt by municipal, provincial, and federal governments to deal with complex urban problems in specific locales through formal tri-level agreements. These agreements, such as the five-year Vancouver Agreement signed in 2000, are generally regarded as successful in adding new resources and mobilizing collaboration, albeit less effective in working with communities in this process (McLeod Institute, 2004; Mason, 2006). In dealing with other tough urban problems, such as homelessness, the federal government has worked in a different trilateral way, involving the federal government, the municipality, and the ‘community.’ As these initiatives are discussed elsewhere in this volume (see the chapter by Graham), they will not be reviewed here. The point to make is simply that recent initiatives have continued a long trend of local governance in which municipalities work alongside other governments and non-governmental actors and with the involvement of local communities. When the city-building agenda intersects with a bottom-up community agenda, however, we see an additional model under construction (see Figure 3.1). The Community-Building Agenda Although less prominent so far than the city-building agenda or formal multilevel agreements, recent processes of community building are having an equally important impact on restructuring relationships between municipalities and citizens. Led to a large extent by voluntary organizations and foundations, the community-building agenda comprises three related but distinct elements. The first are placed-based initiatives, focused on neighbourhoods and the provision of integrated services for them. This is part of scholarly and policy recognition that ‘place matters’ – that local context shapes outcomes and that different policy responses may be needed for different places (Bradford, 2004). It is also associated with a growing interest in identifying and building on the strengths of community assets, as advocated by McKnight (see Kretzmann and McKnight, 1993)

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among others. Although neighbourhood and community planning is not a new concept, current experiments are different from those of the 1970s because they tend to be collaborative in nature, rather than centred in planning departments, and they are aimed not only at land use planning but at a broad array of services, and at integrating services across municipal government and with other service providers. In addition, participation of residents and community organizations is being institutionalized as part of this process, rather than being periodically injected through the occasional meetings. The Neighbourhood Planning Initiative in three demonstration sites in Ottawa is a good example as it illustrates the interest in institution building as part of participatory processes. A cross-departmental internal steering committee leads the integration of services; local planning committees comprised of eight to twelve citizens will guide the development and implementation of neighbourhood plans; an advisory committee of representatives of voluntary organizations will provide guidance at a citywide level; implementation of neighbourhood plans will be achieved through community-business-government partnerships; and the longer-term intent is to achieve a realignment of corporate processes to support more placebased approaches (City of Ottawa, 2006). Second, apart from the efforts at neighbourhood planning and asset building being led by municipal governments, a number of initiatives and collaborations are occurring outside of governments, led by voluntary organizations and foundations, often with funding from the federal government (see Taylor Simpson, 2006; Community Social Planning Council of Toronto, 2005). These Comprehensive Community Initiatives include, to name only a few: the Healthy Communities movement, begun in the 1980s as a broad-based network of organizations; the Vibrant Community initiative, a community-driven effort to reduce poverty in fifteen centres that is sponsored and managed by three foundations; Inclusive Cities Canada, a collaboration of five social planning organizations, the Federation of Canadian Municipalities, a private foundation, and the federal government; Action for Neighbourhood Change, led by the United Way; and additional initiatives around safer, more resilient, socially just, sustainable, and learning communities. The diversity of such initiatives is reflective of specific interests or perspectives – e.g., health, social justice, reducing poverty – being overlaid on place. It also reflects the magnitude of the capacity building that needs to be undertaken among voluntary organizations at the local level and demonstrates that networking is often best built with various intersecting connections.

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The third element is the creation of greater capacity and cooperation among voluntary organizations at a community level. Traditionally, Canada’s voluntary sector has been organized along the lines of subsectors that produce more vertical than horizontal structures. For example, social service organizations may be affiliated in umbrella groups and federations with other social service organizations, sports organizations with other sport organizations, and so forth. At the city level, there have been very few means of linking organizations working in different service fields with each other, which meant that voluntary organizations were often more likely to see their differences than their commonalities and that sharing information and services or coalition building was fairly limited. Over the past few years, cross-cutting networks of voluntary organizations, sometimes called ‘chambers’ of voluntary organizations as they are modelled loosely after the chamber of commerce model, have been created in many regions. These fifteen plus local networks have formed a loose pan-Canadian Federation of Voluntary Sector Networks. One eventual outcome of such network building is that local groups, which have tended to focus on the provision of services rather than on public policy advocacy, may develop a greater interest in and capacity for participation in policy development, thus becoming more involved – and more demanding actors – in municipal governance. These efforts are evidence of the beginning of a model of community governance at play, in which the focus is on communities and their development. What is happening at the intersection of the city- and community-building agendas is an expansion of the space for innovation. Instead of simply developing better services for their customers, as was the focus of the new public management reforms of the 1980s and early 1990s, the emphasis in this space is on citizens, and their participation in agenda setting. The reason that this may have more lasting impact than previous processes of citizen engagement is, first, that it includes the creation or strengthening of institutions and the enhancement of community capacity and relationship building. Second, it is bi-directional, with government reaching out to communities, and communities working collectively with each other and then reaching out to engage municipal and other governments. Finally, the process involves a greater range of actors, including not only several levels of government, but foundations, voluntary organizations, and often the private sector as well. By building a broader platform, there is increased likelihood of sustainability.

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Conclusion The practice of citizen participation in Canadian municipal government has had its ups and downs over the past few decades. As in Australia, participation is still not seen as a right in Canada, but it has become a regular feature of how municipal business is conducted. Over the years, there has been pressure to extend participation, and make it more genuinely deliberative, with limited results. This chapter has argued that citizen participation is undergoing another wave of reinvention in Canadian municipalities as a consequence of two intersecting agendas. One agenda is focused on city building and the search for appropriate degrees of municipal autonomy from provincial governments, more expansive revenue sources, and effective governing structures. The other brings together a variety of public, private, and voluntary sector actors in pursuit of place-based, comprehensive community development. The duality and intersection of these agendas has opened new innovative spaces for citizen participation. Drawing on recent British literature, this chapter has articulated three distinct models for engaging citizens and communities: community government that centres on democratizing the institutions of local government; local governance that focuses on building collaborations and networks across governments and with non-governmental actors; and community governance that seeks to build greater capacity and autonomy within communities to act on their own behalf, as well as establishing institutionalized means for shared decision-making. To some extent all three approaches are being used to enhance citizen participation and create more responsive government institutions at the municipal level in Canada. This has not been an entirely smooth process, but we are seeing indications, I suggest, of an evolution. This evolution represents a shift from involving individual citizens as individuals to engaging with whole communities. It is a subtle shift from making the process of participation more genuinely deliberative to institutionalizing such processes across the whole of government. Although still very early days, this evolution promises to bring about more experimentation with citizen participation than has been evident for some years in municipal government in Canada. Will these initiatives succeed and will they be sustainable? The answer will need to wait for a second edition of this volume.

From Citizen to Community Engagement in Canadian Cities 77 NOTES 1 See the Association of Municipalities of Ontario at http://www.amo.on.ca/YLG/ylg/elections.html. 2 Voter turnout tends to be highest in wards or municipalities with 2,500 to 5,000 electors and lowest in those with under 2,500 eligible voters. These figures are for Ontario; see the Association of Municipalities of Ontario at http://www.amo.on.ca/YLG/ylg/elections.html. Smith and Kennedy Stewart (2005: 33) reach a somewhat different conclusion regarding turnout in British Columbia: that turnout is higher the smaller the municipal unit. 3 Municipal councils can put any question to voters through a non-binding plebiscite as long as the question is posed fairly and the municipal government presents background information in a neutral manner. Due to cost, most plebiscites are held at election time, but even so they are not used extensively in Canada as they have been in several American states. Perhaps the most controversial in recent years have been the series in Vancouver as to whether the electoral system should convert from an atlarge to a ward basis (Vancouver is the only major city in Canada to still use an at-large system). In the most recent vote on the matter, held in October 2004, the ward system was rejected by a vote of 54% to 46%, with a 23% voter turnout rate (see http://www.city.vancouver.bc.ca /ctyclerk/newsreleases2004/NRdecision2004unofficialresults.htm). Provincial law, notably in the western provinces, also makes provisions for citizen-initiated petitions directed to municipal councils on matters within municipal authority (e.g., to pass, amend, or repeal a by-law). In response to a petition, municipal councils must either do as the petition indicates or put the matter to a plebiscite. Changes to provincial requirements in the 1990s, however, increased the number of signatures required on a petition (to 10% of the population of the municipality) so that they now rarely succeed.

REFERENCES Abelson, J., and Gauvin, F.-P. 2004. Engaging Citizens: One Route to Health Care Accountability. Ottawa: Canadian Policy Research Networks. Atkinson, D. 1994. The Common Sense of Community. London: DEMOS. Auditor General of Canada. 2002. Report of the Auditor General of Canada. Ottawa: Office of the Auditor General. Retrieved 20 April 2009 from

78 Local Government in a Global World http://www.oag-bvg.gc.ca/domino/ reports.nsf/ html/ 20021209xe07.html. Bohman, J. 2000. Public Deliberation: Pluralism, Complexity, and Democracy. Cambridge, Mass.: MIT Press. Bradford, N. 2005. Place-Based Public Policy: Towards a New Urban and Community Agenda for Canada. Research Paper F/51, Family Network. Ottawa: Canadian Policy Research Networks. Bradford, N. 2004 ‘Policy Matters and Multi-Level Governance: Perspectives on a New Urban Policy Paradigm.’ Policy Options. Feb. Retrieved 15 April 2009 from http://www.irpp.org/po/index.htm. Broadbent, A. 2005. Introduction. In Broadbent Group, Towards a New City of Toronto Act. Toronto: Zephyr Press. City of Ottawa. 2006. Health Recreation and Social Services Committee Report 33. Presented to City of Ottawa Council. City of Winnipeg. 2004. New Deal: Report on Public Consultations. Winnipeg: City of Winnipeg. Cohen, J. 1997. ‘Procedure and Substance in Deliberative Democracy.’ In J. Bohman and W. Rehg, eds., Deliberative Democracy: Essays on Reason and Politics, 407–37. Cambridge, Mass.: MIT Press. Community Social Planning Council of Toronto. 2005. Inclusive Cities: Canada – Toronto, Community Voices: Perspectives and Priorities. Toronto: Community Social Planning Council of Toronto. Cutler, F., and Matthews, J.S. 2005. ‘The Challenge of Municipal Voting: Vancouver 2002.’ Canadian Journal of Political Science, 38/2: 359–82. Dryzek, J.S. 2000. Deliberative Democracy and Beyond. Oxford: Oxford University Press. FCM (Federation of Canadian Municipalities). 2004. Increasing Women’s Participation in Municipal Decision Making: Strategies for More Inclusive Canadian Communities. Ottawa: FCM. Fenn, W.M. 1998. ‘Expanding the Frontiers of Public Participation: Public Involvement in Municipal Budgeting and Finance.’ In K.A. Graham and S.D. Phillips, eds., Citizen Engagement: Lessons in Participation in Local Government, 113–36. Toronto: Institute of Public Administration of Canada. Fung, A., and Wright, E.O. (Eds.). 2003. Deepening Democracy: Institutional Innovations in Empowered Participatory Governance. London: Verso Press. Goodin, R.E. 2003. Reflective Democracy. Oxford: Oxford University Press. Government of Canada and Government of Alberta. 2005. Hanna Roundtable: Working Together for the Future of Our Rural Communities, Summary Report. Ottawa: Agriculture and Agri-Food Canada. Retrieved 19 April 2009 from http://www.rural.gc.ca/dialogue/report/ab/hanna_e.phtml.

From Citizen to Community Engagement in Canadian Cities 79 Graham, K.A.H., and Phillips, S.D. 2007. ‘Another Fine Balance: Managing Diversity in Canadian Cities.’ In K. Banting, T.J. Courchene, and F.L. Seidle, eds., Belonging? Diversity, Recognition and Shared Citizenship in Canada, 155–94. Montreal: Institute for Research on Public Policy. Graham, K.A.H., and Phillips, S.D. 1998. ‘Making Public Participation More Effective: Issues for Local Government.’ In K.A. Graham and S.D. Phillips, eds., Citizen Engagement: Lessons in Participation in Local Government, 1–24. Toronto: Institute of Public Administration of Canada. Graham, K.A.H., and Phillips, S.D. 1997. ‘Citizen Engagement: Beyond the Customer Revolution.’ Canadian Public Administration, 40/2: 255–73. Graham, K.A.H., and Phillips, S.D., with Maslove, A.M. 1998. Urban Governance in Canada: Representation, Resources and Restructuring. Toronto: Harcourt Brace. Hamel, P. 2002. ‘Urban Issues and New Public Policy Challenges: The Example of Public Consultation Policy in Montreal.’ In C. Andrew, K.A. Graham, and S.D. Phillips, eds., Urban Affairs: Back on the Policy Agenda, 221–38. Montreal and Kingston: McGill-Queen’s University Press. Ilcan, S., and Basok, T. 2004. ‘Community Government: Voluntary Agencies, Social Justice, and the Responsibilization of Citizens.’ Citizenship Studies, 8/2: 129–44. Kretzmann, J., and McKnight, J. 1993. Building Communities from the Inside Out: A Path toward Finding and Mobilizing a Community’s Assets. Evanston, Ill.: Center for Urban Affairs and Policy Research. Larner, W. 2004. ‘Neoliberalism in (Regional) Theory and Practice: The Stronger Communities Action Fund.’ Research Paper 14, Local Partnerships and Governance. Auckland: University of Auckland. Leblanc, M.-F. 2006. ‘Two Tales of Municipal Reorganization: Toronto’s and Montreal’s Diverging Paths toward Regional Governance and Social Sustainability.’ Canadian Journal of Political Science, 39/3: 571–90. Mason, M. 2006. ‘Collaborative Partnerships for Urban Development: A Study of the Vancouver Agreement.’ Research Papers in Environmental and Spatial Analysis, No. 108. London: London School of Economics. McLeod Institute. 2004. In the Spirit of the Vancouver Agreement: A Governance Case Study. Retrieved 21 April 2009 from http://www.deo.gc.ca/rpts/ audit/va/default_e.asp. Milroy, B.M. 2002. ‘Toronto’s Legal Challenge to Amalgamation,’ In C. Andrew, K.A. Graham, and S.D. Phillips, eds., Urban Affairs: Back on the Policy Agenda, 157–78. Montreal and Kingston: McGill-Queen’s University Press. Newman, J. 2001. Modernising Governance: New Labour, Policy and Society. London: Sage.

80 Local Government in a Global World Newman, J., Barnes, M., Sullivan, H., and Knops, A. 2004. ‘Public Participation and Collaborative Governance.’ Journal of Social Policy, 33/2: 203–23. Phillips, S.D., with Orsini, M. 2002. Mapping the Links: Citizen Involvement in Policy Processes. Ottawa: Canadian Policy Research Networks. Rhodes, R.A.W. 2000. ‘Governance and Public Administration.’ In J. Pierre, ed., Debating Governance, 54–90. Oxford: Oxford University Press. Robinson, P. 2005. Background Paper: Civic Engagement and the City of Toronto: Review and Reflection on Current Practices and Future Approaches. Paper for consideration by the Governing Toronto Advisory Panel. Toronto: City of Toronto. Sancton, A. 2006. Municipal Mergers and Demergers in Quebec and Ontario. Paper presented at the Annual Meeting of the Canadian Political Science Association, 1–3 June, York University, Toronto. Sewell, J. 2005. ‘Thinking about a New City of Toronto Act.’ In Broadbent Group, Towards a New City of Toronto Act, 10–14. Toronto: Zephyr Press. Skelcher, C., Mathur, N., and Smith, M. 2005. ‘The Public Governance of Collaborative Spaces: Discourse, Design and Democracy.’ Public Administration, 83/3: 573–96. Slack, E. 2005. ‘Easing the Fiscal Restraints: New Revenue Tools in the City of Toronto Act.’ Broadbent Group. 2005. Towards a New City of Toronto Act, 15–20. Toronto: Zephyr Press. Smith, P.J., and Stewart, K. 2005. ‘Local Government Reform in British Columbia, 1991–2005: One Oar in the Water.’ In J. Garcea and E.C. LeSage Jr, eds., Municipal Reform in Canada, 25–56. Toronto: Oxford University Press. Somerville, P. 2005. ‘Community Governance and Democracy,’ Policy and Politics, 33/1: 117–44. Sullivan, H. 2003. Community Governance and Local Government: A Shoe that Fits or the Emperor’s New Clothes? Paper presented to the Political Studies Association Conference, 15–17 April, Leicester, U.K. Sullivan, Helen. 2001. ‘Modernisation, Democratisation and Community Governance.’ Local Government Studies, 27/3: 1–24. Taylor Simpson, S. 2006. Sixteen Great Ideas for Strengthening Linkages between Local Government and Comprehensive Community Initiatives (CCIs). Paper prepared for the Tamarack Institute, Waterloo, Ontario. Turnbull, L., and Aucoin, P. 2006. Fostering Canadians’ Role in Public Policy: A Strategy for Institutionalizing Public Involvement in Policy. Research Report P/07 Public Involvement Network. Ottawa: Canadian Policy Research Networks.

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4 Restructuring and Reform: Australia neil marshall

During the 1990s Australia’s local government sector began a process of extensive structural reform. The impetus for this reform came partly from actions taken by state governments and partly from initiatives that arose from within municipalities themselves. This chapter explores the four main dimensions of the reform process. The first section considers how, and why, the scope of council functions have expanded significantly. The second considers the widespread consolidation programs that have been implemented in five of Australia’s six states and evaluates their effectiveness. The third section considers the resurgence of regional voluntary cooperation between municipalities that has taken place across the nation in recent years. In contrast to amalgamation, which has usually been a ‘top-down’ exercise, collaboration between councils has predominantly involved a ‘bottom-up’ approach. In the fourth section, discussion turns to an examination and assessment of internal organizational reform. Between 1989 and 1995 all state governments enacted legislation that introduced new governance and management practices for local authorities. In each jurisdiction, the roles of elected members and appointed officials were redefined to ensure a clear separation between policy and administration. The influence of new public management (NPM) perspectives has been highly influential in this arena. The chapter concludes that structural change as a whole is likely to be an ongoing exercise in Australian local government. Municipal Functions Local councils in Australia have never offered the same range of functions as municipalities in other Anglo-based nations. Primary respon-

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sibility for policing, health, public housing, and education has always been the preserve of state governments. From the country’s inception in the nineteenth century until after the Second World War, municipalities were preoccupied with providing physical infrastructure requirements: building roads, bridges, sewerage systems, and so forth (Balmer, 1989). From the 1970s onward, however, the sector’s profile began to alter noticeably when it started to allocate much greater resources to developing facilities for people. This new orientation accelerated particularly during the last decade of the twentieth century. In a major review of local government finance in 2001, the Commonwealth Grants Commission (CGC) observed that the composition of services offered by local government had ‘changed markedly’ (2001: 54). The CGC reported (2001: 53) that some of the more substantial changes were: 1 A move away from property-based services to human services 2 A decline in the relative importance of road expenditure (although it remains the largest function, its level of importance has declined from about half of total expenditure in the 1960s to a little more than a quarter in the 1990s) 3 An increase in the relative importance of recreation and culture, and housing and community amenities (these are now large areas of local government expenditure, each approaching 20% of total) 4 An expansion of education, health, welfare, and public safety services (this has increased from 4% of total expenditure in 1961/2 to about 12% in 1997/8). Such has been the shift in emphasis that the 2003/4 Local Government National Report submitted: ‘There is no longer a standard definition of “core” local government services such as “roads, rates and rubbish”’ (DOTARS, 2003: 2). Today, Australian municipalities typically deliver functions/services relating to engineering (public works), recreation and leisure facilities, health and safety, child and aged care, building and planning approvals, administration of parks and lands, access to libraries and museums, economic development and tourism promotion, and environmental management (DOTARS, 2002: 10; LGSA, 2001: 9–10). The expenditure pattern varies between states. For example, Victoria, Western Australia, and South Australia place more emphasis on health and community services, while New South Wales, Queensland,

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and Tasmania give greater weight to public housing (DOTARS, 2003: 31). Significant differences in expenditure patterns are also apparent between different types of councils within states. Densely populated urban municipalities use a smaller proportion of their revenue for infrastructure and tend to offer a narrower range of services; this is because transportation requirements have been long established and many facilities are provided by the private sector. Regional and rural councils, on the other hand, are often still committed to building new infrastructure. They must also provide community services in instances where state authorities and commercial enterprises have centralized their activities and withdrawn services from country areas. Nevertheless, while the range and depth of functions can vary widely between municipalities and states, the vast majority of local governments have greatly enlarged their range of services to constituents over the past few decades. Indeed, many councils have evolved into complex, sophisticated, multifunctional organizations. A number of closely interrelated factors have contributed to this expanding list of commitments. First, higher levels of government have devolved activities to the third tier. In Victoria during the 1990s, for example, underfunding of the Health and Community Care program by both the federal (commonwealth) and state governments forced municipalities to step into the breach in order to maintain what was a critical community service (VLGA, 2002: 4). Similarly, federal authorities simply ‘compelled’ councils across the country to take responsibility for regional airports (HRSCEFPA, 2003: 35). In addition to facilities and programs, state governments have required municipalities to adopt a much stronger regulatory role in relation to environmental protection and development planning. In the case of New South Wales, the government passed ten pieces of legislation between 1995 and 2001 that covered such areas as pollution control, land management, administration of parks, and waste disposal (LGSA, 2001: 15–16). Oversight of all these new activities was to be undertaken by local authorities. The other states have gone down much the same path to a greater or lesser extent. The cumulative result over a decade or so of devolution of functions has been a significant broadening in the role of municipalities. Second, community expectation of the services councils can, and should, provide has increased substantially in recent years. Residents seek to increase their quality of life and, consequently, ‘will always expect more from governments’ (Johnson, 2003: 62). Moreover, they

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are not only better informed about the processes of government than a generation ago but also better organized in terms of effective political activism. These characteristics are no doubt closely related to the heightened sense of identity and belonging evident in many localities at the start of the 2000s (DOTARS, 2002: 7). Growing citizen expectations were undoubtedly encouraged by the revised local-government legislation introduced across the six states during the 1990s. In most instances, the new acts included provisions requiring councils to establish more transparent management practices and introduce measures that would facilitate constituent involvement in decision-making (see below). Third, although councils have been under pressure to respond to the demands of both constituents and higher levels of government, it is clear that individual authorities have actively sought to expand their roles. The revised legislation enacted by the states in the last decade of the twentieth century also bestowed the power of general competence on local governments. This provision effectively enabled them to become involved in areas of activity previously denied to them. Consequently, many local governments have exercised their power of policy choice to pursue fresh strategies and new directions. Indeed, one federal inquiry into local government in 2003 wondered whether some authorities could have overreached their capacities by ‘trying to be all things to all people’ (HRSCEFPA, 2003: 10). A number of councils themselves suggested that the time may have come for them to start saying ‘no’ to external demands where possible (ibid.). Finally, consolidation programs by the majority of states have created a number of larger municipalities that are better resourced and able to offer a wider range of services. This dimension of structural reform is taken up in the following section. Amalgamations Amalgamation has long been a feature of local government reform in Australia. Dollery and Crase note that there is an ‘enduring and apparently timeless belief … that “bigger is better” in local governance’ (2004: 265). Never was such thinking more apparent than in the 1990s. Over the seven-year period between 1991 and 1998, the number of local governments shrank from 826 to 626 – a fall of 24% (NOLG, 1998: 51). The extent of this change in historical perspective is conveyed by the fact that it had taken eight decades for a similar percentage decline

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in the number of local governments (from 1,066 in 1908 to 828 in 1988; Balmer, 1989: 4). The dramatic reduction of the 1990s was due to extensive programs of consolidation across four states. Tasmania was the first to embark on this exercise. In what was a well-planned and highly collaborative procedure, the state’s forty-six local governments were reduced to twenty-nine over the two years 1992 and 1993. South Australia adopted a similarly consultative approach. Between 1995 and 1997 its 118 councils diminished to seventy-two. Queensland, too, chose to confer closely with affected residents in its amalgamation of nine local governments from 1993 to 1995 (from 134 to 125); the state government, however, chose to appoint a single commissioner to supervise the task rather than a board, as South Australia and Tasmania had done. In contrast to the other three states, the Victorian experience was considerably more far reaching in scope and brutal in execution. Between 1993 and 1995 an extensive merger program resulted in a decline of local governments from 210 to seventy-eight. The government implementing the restructuring adopted an autocratic approach that allowed little opportunity for engagement with the community. A board was created to make recommendations on the size and shape of reorganized councils. One memorable aspect of the state government’s policy was the appointment of commissioners to administer the freshly constituted authorities for a period of eighteen months. After this initial phase, elections were held to restore democratic functions. Across the four amalgamating states, the overwhelming perception was that consolidation would deliver significant efficiencies in operation. Larger municipalities were seen as providing economies of scope and scale, enhanced management capacity, and reduced administrative costs. As Chapman (1995: 14) observed at the time, it seemed to be ‘universally accepted’ that the proportion of funds allocated to administrative functions would decline with increased size. Certainly, policy analysts in the four states appear to have had few doubts about the efficacy of merging small authorities. Victorian officials stated firmly that ‘larger councils are by and large more efficient than smaller ones’ (VOLG, 1994: 13); the South Australian Committee thought the arguments for amalgamation were ‘compelling’ (MAGLGR, 1995: 7.21), and the Tasmanian Local Government Advisory Board considered the expected benefits to be ‘self evident’ (TLGAB, 1992: 73). Such was the preoccupation with amalgamation as the most effective means of structural reform that the review committees in the four

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states all but ignored available evidence to the contrary. Although most of the committees did review the literature on the subject, this was a largely cursory exercise. National and international analyses warning that the economic benefits of amalgamation were far from certain appear to have fallen on deaf ears. In one instance, South Australia’s committee simply discounted unpalatable conclusions from the United Kingdom (MAGLGR, 1995: 4.3). Western Australia was the only state to conduct its own study of the actual costs-benefits to be derived from mergers. That state’s structural reform committee concluded that the relationship between size and efficiency was far from obvious and recommended against proceeding with a merger program (LGSRAC, 1996: 51). Nor did the amalgamation states spend much time considering alternative approaches to structural reform. Resource sharing, which involves two or more councils pooling relevant properties such as equipment, infrastructure, personnel, and technology, has had a long, and often successful, history in Australia (see below). Although the model was briefly examined by Victoria, South Australia, and Tasmania, it was given little weight in terms of being a serious concept. The Queensland commissioner’s terms of reference included consideration of resource sharing as an option to that state’s structural reform strategy. He appears, however, to have given little more than passing acknowledgment of the approach in subsequent reports. By contrast, Western Australia and New South Wales pursued resource sharing as a viable policy during the mid-1990s. While the review committees of the amalgamating states largely rejected resource sharing as an option, they did devote attention to the impact that mergers would have on the integrity of governance (though this was less true in Victoria). The grass-roots nature of local democracy in Australia has long been a salient and valued feature of the system. Certainly, it was difficult for state structural reform committees to dispute Western Australia’s observation that ‘representation of the community is enhanced in smaller councils’ (LGSRAC, 1996: 56). The consolidation programs of the four states, however, involved a significant reduction in the proportion of elected members. The outcome of Queensland’s amalgamations was a 30% decline in the number of councillors (OLGC, 1994a); in South Australia, the figure was 31% and in Tasmania, 37%. Victoria experienced the steepest decline – a massive drop of 73%. The solution to the problem of diminished representation, arrived at in all four states, were proposals to set

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in place measures to facilitate and enhance citizen involvement. ‘It is not the level of representation that is important,’ South Australia’s structural reform committee argued, ‘but rather the process of consultation and community participation that have an impact on the capacity of community to be adequately represented’ (MAGLGR, 1995: 7.11). All the amalgamating states did subsequently explore a number of approaches to public participation. South Australia (MAGLGR, 1995: 7.27), Tasmania (TLGAB, 1992: 77–80), Western Australia (LGSRAC, 1996: 23–4), and even Victoria (Hallam, 1994: 10) considered proposals to establish systems of district (or precinct) committees. Both Tasmania and South Australia subsequently incorporated provisions within their local government acts to enable merged councils to adopt such an arrangement if they wished. Western Australia, for its part, encouraged individual councils to explore the benefits of adopting the model. Victoria appears to have dropped the idea altogether. In addition, most states encouraged amalgamated bodies to establish related, lowerlevel consultative mechanisms to encourage community involvement (OLGC, 1994b: 193; LGSRAC, 1996: 57). The question arises as to why four of the states pursued amalgamations, while Western Australia and New South Wales were satisfied with resource sharing. First, consolidation offered a speedy, decisive intervention that was perceived as delivering clearly quantifiable outcomes. Not only did resource-sharing arrangements require much longer to negotiate but final results were also uncertain. This factor was of particular consequence to the three rust-belt states of Tasmania, Victoria, and South Australia. The economies of each were in transition from manufacturing to service-based industries and were under considerable financial stress (Aulich, 1999: 20). Second, in the context of its NPM public sector reforms, the commonwealth strongly supported programs of amalgamation and provided some $1.3 million as an incentive to facilitate structural reform across all the states (NOLG, 1998: 51–61). A third reason was that amalgamation as an issue aroused little general public interest. Contemporary surveys of local government constituents indicated that levels of representation were a low priority. Both Queensland’s commissioner and Western Australia’s structural reform committee observed that representation in particular, and consolidation in general, did not seem to be a matter of concern to residents (OLGC, 1994a: vii; LGSRAC, 1996: 2). Victoria’s decision to dis-

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pense with elected members altogether for eighteen months was greeted with widespread apathy. In fact, the state government received requests from some quarters of the community for a continuation of the interim commissioners on the grounds that the new councils were being run more efficiently (Newnham and Winston, 1997: 121). It was a response that did not go unnoticed in South Australia and almost certainly influenced the nature of that committee’s deliberations (MAGLGR, 1995: 9.4). Overall, public disinterest in the whole question of local government reform allowed state review bodies considerable latitude in the way they approached their merger programs. Despite the strong economic grounds on which the amalgamation programs were based in Tasmania, South Australia, Victoria, and Queensland, none of these states has undertaken a comprehensive and independent evaluation to see if these objectives were in fact achieved. In part this has been due to the difficulties involved in making ‘before’ and ‘after’ judgments. Victoria is a good example. There, compulsory competitive tendering (CCT) was closely interwoven with the implementation of mergers, and unravelling the impacts of each was problematic. Consequently, studies to assess the costs and benefits of the mergers (and these are few in number) have fallen to independent research bodies. The findings of these investigations, moreover, are not always easily comparable, given their different foci and emphases. (There appear to have been no independent evaluations of Queensland’s mergers.) The majority of post-amalgamation studies indicate that the consolidation programs across Victoria, South Australia, and Tasmania have resulted in reduced costs. In South Australia, savings on total councils’ expenditures have been estimated at between 3% and 5% (NOLG, 1999: 52), while in Tasmania, administrative outlays are thought to have fallen by about 6% (Haward and Zwart, 2000: 38). After promising 20% in savings – from both amalgamations and CCT – the Victorian government appears to have achieved only 8% or 9% (Allen, 2003: 75). Overall, May’s assessment of the extent of the revenue benefits achieved by the mergers is probably close to the mark; after reviewing the available amalgamation literature, May suggested: ‘Evidence concerning the achievement of economies of scale and financial efficiency appears to be grounded far more in prediction rather than actuality’ (2003: 96). However, although savings may have been limited, it does seem that enhanced administrative capacity was a significant outcome of the

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merger programs. There is some consensus that post-amalgamation councils possess greater depth of specialist expertise, improved technology, and enhanced strategic skills and that they have been able to offer a wider range of services (Pocock, Sexton, and Wilson, 2001: 41; Haward and Zwart, 2000: 38; Spence, 2004). Certainly, there were negative impacts from the amalgamations. Large numbers of employees were made redundant, and many of those who remained experienced job insecurity. Post-amalgamation workloads were often significantly higher and roles uncertain, a situation that contributed to poor morale in a number of organizations. For a few municipalities, particularly those in rural locations, operational capacity in fact declined (Pocock, Sexton, and Wilson, 2001: 42; Hallebone, Townsend, and Mahoney, 2000: 20). In Victoria especially, the heavy-handed approach to forced mergers left a legacy of anger and hostility within a number of municipalities, which took a decade or more to dissipate. In terms of public perception, attitudes towards post-amalgamation local governments across the states have generally been favourable. Surveys taken over the period from 1997 to 1999 indicate that a majority of residents in Tasmania, South Australia, and Victoria supported the reforms (Marshall, Witherby, and Dollery, 1999: 49–50; Pocock, Sexton, and Wilson, 2001: 80). Most felt they were better off overall and enjoyed improved standards of service. Significantly, the bulk of constituents did not feel that democratic values had been undermined and were content with the levels of representation they received in the enlarged authorities. Indeed, the surveys suggest that electors as a whole were not particularly interested in the representative dimensions of local government. This sentiment appears to have since been borne out by experience; there have been very few attempts to reverse amalgamations. Lack of public interest in the structure and size of local government and, consequently, the absence of any serious threat of electoral backlash have been important factors underlying the willingness of state governments to pursue amalgamations. So too is the widespread perception of substantial savings to be gained from extensive merger programs. This is especially the case when no hard empirical evidence exists to indicate that structural reform has long-term adverse effects. It is then not surprising that in the course of 2004 the New South Wales government followed the lead of its southern counterparts and reduced the number of the state’s councils from 172 to 152 through

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forced amalgamations (NSWDLG, 2004). It is highly likely that Western Australia will follow suit. Amalgamations will continue to be attractive options to financially stressed state governments. Yet there are indications that this stance is softening to some degree and policy-makers are becoming more aware that voluntary cooperation among councils may offer not only greater financial benefits than consolidation but also more desirable social and civic outcomes. This is the subject of the next section. Regional Organizations Voluntary cooperation between local governments, like consolidation, has a long history in Australia. This activity has involved such matters as exchanging information, problem solving, coordinating activities across jurisdictions, and resource sharing (resulting in economies of scale and improved efficiencies of operation). The most institutionalized expressions of voluntary collaboration have been regional organizations of councils (ROCs), which consist of groupings of neighbouring local authorities formed to implement mutually beneficial economic, social, and political goals. In particular, ROCs have had a long tradition of acting as regional lobbyists and advocates. Because of their salience in the local government arena, much of this section focuses on these entities. The first ROC was established in Tasmania in 1922 and was followed by others across all states in the course of the following decades. Many of these proved to be temporary affairs that survived only a few years. From the mid-1980s to the early 1990s, however, there was an upsurge in the formation of new ROCs due to the conviction of the national government of the day that local authorities could make a useful contribution to the country’s economic reform strategy. Regional organizations of councils were viewed as a potentially important means of building regional economic development and acting as a suitable mechanism for the delivery of federal services (Garlick, 1999). Federal authorities subsequently injected nearly $6 million into programs that would facilitate the establishment and growth of ROCs (VRC, 1993: i). These efforts bore fruit; in 1995, there were fifty ROCs nationwide, covering 45% of councils and 75% of the population (Northwood, 1995: 1). By this stage, however, the commonwealth had lost interest in ROCs as a catalyst for regional development. Evaluations of existing bodies indicated that although some were performing very well, many lacked

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the infrastructure and capabilities necessary to deliver programs (NCRC, 1993: 7–14). During 1993 a new national program was launched that provided funding for the establishment of regional development organizations (REDOs) across all states. REDOs comprised a broader cross-section of participants – business, education, trade unions, and the environment, as well as the public sector. Without federal assistance, it was widely believed that the ROC movement would quickly wither. A proliferation of additional regional organizations and programs, sponsored by state and federal agencies, had sprung up across Australia by the mid-1990s, and it seemed doubtful that ROCs would be able to survive in such a fragmented and contested environment. In particular, it was anticipated that they would experience difficulty competing with regional development organizations (NCRC, 1994: 7), and a number of ROCs were indeed subsequently discarded by their constituent local authorities in favour of REDOs. Contrary to expectations, however, the ROC movement grew and expanded into the new century. A 2002 survey by Marshall and Witherby estimated that there were about fifty operational ROCs nationwide. Their study examined thirty-one examples and provided informative data about how they function. Regional organizations of councils from all six states were represented in the study. The largest of the ROCs surveyed comprised eighteen member councils, while twenty-four had between five and fifteen members, and four had less than five members. In twenty-five cases, the ROCs were bound by an agreement; eight operated in the absence of any formal arrangements. The core business of ROCs focuses on regional advocacy, political lobbying, and fostering cooperation between member councils. Beyond this, common features include economic growth, resource sharing, strategic planning, and community well-being. Healthy ROCs have a budget, with regular funding, which sometimes involves significant outside grants. One-third of ROCs levy equal payments, while half of them use some form of pro-rata levies. Nearly all ROCs function as regional mayors’ forums, meeting bimonthly or quarterly, and provide an informal gathering for a wide range of issues to be discussed. Executive committees and subcommittees are common, and about half of all ROCs have full-time executive support. Having staff resources is important for the success of many ROCs. When asked about their success as an organization, the great majority of ROCs cited an extensive list of positive outcomes in recent years.

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Political lobbying and strategic planning were the two arenas in particular where almost all ROCs claimed significant ‘wins.’ Certainly, a strong perception exists among ROC members that their organization fulfils an important function in the region. The study suggested that of the thirty-one organizations surveyed, seven could be classified as high performers, twenty were in good health, and two were in obvious decline (Marshall and Witherby, 2002). Not only have the majority of ROCs prospered into the twenty-first century, but some have also moved considerably beyond their original objective of acting as a cooperative forum for neighbouring councils. A number have gone on to develop extensive links with public, private, and community organizations in their localities. These operational networks have evolved into frameworks that approximate regional governance structures. Some ROCs have clearly developed a degree of autonomy and play a significant role in coordinating and implementing policy initiatives across the three established levels of government. These networks function as a critical lubricant in relation to difficult intergovernmental issues, and their activities fill in policy gaps left by existing federal, state, and local agencies. Three examples of these governance frameworks are considered here to provide some idea of the size, scope, and diversity of different approaches. • The Western Sydney Regional Organization of Councils (WSROC)

is Australia’s oldest and best known ROC. It covers 5,741 square kilometres, contains 1.2 million people, and is made up of eleven member councils. Three of its major accomplishments over the years include helping to found the University of Western Sydney (1987), making a decisive contribution to the state’s Regional Public Transport Strategy (1995), and persuading the New South Wales government to appoint a minister for Western Sydney (1997). During the late 1990s WSROC expanded its range of activities by recruiting local business, education, environment, and community groups to assist in pursuing economic and social goals that would benefit the region (WSROC, 2000; Gibbs, Gooding, and Jones, 2002). • The South East Queensland Regional Organization of Councils (SEQROC) comprises eighteen member councils, covers an area of 24,400 square kilometres, and contains 2.2 million residents (66% of Queensland’s total population). The area generates 62% of Queensland’s gross state product (10% of Australia’s GDP). SEQROC

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embraces the same collaborative principles as WSROC but employs more formalized patterns of interaction between existing agencies to achieve policy goals. One of its major successes has been the strategic planning of the South East Queensland Growth Corridor. This process involved bringing together all stakeholders, including the state government. It was a key factor in achieving new levels of coordination in one of the fastest-growing areas in Australia (Abbott, 2001; Bertelsen, 2002). • Network governance is not limited to the large metropolitan arenas. In contrast to both WSROC and SEQROC, Riverina Eastern Regional Organization of Councils (REROC) presides over a population of just 120,000 residents. This rural ROC is located in southern New South Wales, is made up of thirteen councils, and is spread over 41,000 square kilometres. In a relatively short period of time, REROC has managed to harness the skills and resources of a range of agencies to achieve some impressive outcomes for the region as a whole. Over the five and a half years, it achieved savings of at least $4.7 million (through resource sharing) for its member councils. REROC has also raised substantial sums in external funding for the locality and been highly successful in lobbying both state and federal governments (Dollery, Johnson, Marshall, and Witherby, 2004). That these regional organizations of councils have emerged as the core of effective regional networks is perhaps due to the fact that they have grown out of existing democratic institutions and possess legitimacy and credibility in the public eye. The goodwill and cooperation initially generated by participating councils has, in turn, enabled the ROCs to build a climate of trust and commitment among a broader spectrum of community bodies. ROCs possess significant advantages over amalgamation: the individual local government members of ROCs maintain their levels’ representation and they preserve their sense of local autonomy and regional identity. ROCs are the most visible and publicly recognized forms of interaction between local governments. Yet they are essentially institutionalized pinnacles in a wider landscape of less-formal cooperative ventures. The considerable majority of municipalities in Australia engage with their counterparts in one form or another. Such contact may be limited to a simple understanding between two adjoining jurisdictions or may involve an agreement with a dozen or so regional neighbours.

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In many instances, councils are members of overlapping networks that vary in size, complexity, and dispersion. One of REROC’s constituent councils, for example, has joined sixteen specialized groupings that focus on such varied matters as forests, fire, libraries, tourism, and weeds. These circles of involvement are spread across regions, interlinking with each other. The nature of regional cooperative arrangements does seem to vary between states. Loose affiliations and groupings of councils appear to be more prevalent in Western Australia and Victoria, while ROCs take a higher profile in the other four states. It is probable that the shadow of forced amalgamations has acted as an incentive for local governments to seek productive forms of collaboration in general, and ROCs in particular. Certainly, this has been the case in Western Australia. The considerable success of ROCs and other forms of collaboration in recent years has put to rest the concerns about their effectiveness that arose in the mid-1990s. Both state and federal governments now acknowledge that these bodies play a critical role in the operation of local and regional governance. Indicative of this changing perspective is that when the New South Wales government presided over the forced merger of twenty councils in 2004, it was also willing to allow forty-eight other councils to trial various forms of strategic alliances and cooperative arrangements as alternatives to consolidation (NSWDLG, 2004: 9). Internal Restructuring This final section moves to the internal arena of municipal activity where structural reform has also been introduced by state governments. During the late 1980s and early 1990s, the federal government, followed in quick succession by the states, embraced the new public management (NPM) as a means of fostering greater efficiency and effectiveness in their public sector agencies. These outcomes were sought by introducing such practices as corporate planning, an emphasis on quantifiable outcomes, competitive tendering, contractual arrangements, and generic management styles. State governments simply assumed that similar strategies were equally as applicable to the municipal sphere (see, e.g., MAGLGR, 1995: 1.2). The introduction of NPM principles into the local government arena was subsequently accomplished through legislation. Over the period from 1989 to 1995, all state governments embarked on extensive

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reviews of their local government acts. The form and content of the new legislation was similar across all six jurisdictions to the extent that the process as a whole can be viewed as a national development (Aulich, 1999: 15). The detailed prescription contained in previous acts was discarded and councils allowed a much greater degree of autonomy. The revised legislation gave local authorities ‘general competence powers that enable them to do whatever is necessary to better meet local community needs and aspirations’ (Wensing, 1997: 43). One of the most salient features of the revised legislation was the requirement that the policy and administrative functions within councils be separated. This was accomplished by redefining the respective roles and responsibilities of elected members and the appointed chief executive officer (CEO). Councillors were expected to represent the interests of their constituents, provide leadership by contributing to the formulation of sound policy, and monitor the performance of the council. The CEO was charged with providing information to the elected members, implementing council decisions, and presiding over the efficient management of the organization. The legislation also embedded the roles and responsibilities of CEOs and councillors in a framework of corporate practices. In all states, local authorities were instructed to prepare management plans that set out the council’s major activities and to identify objectives and performance targets over a three- to five-year period. More stringent accountability procedures were imposed through the preparation of comprehensive financial reporting. In addition, provisions to promote openness and transparency in the council’s operation were introduced. The adoption of corporate governance principles was, in part, an attempt to rectify two problems that had plagued the effective functioning of many local councils during the 1970s and 1980s. The first concerned the widespread perception that the performance of many councillors was mediocre. It was felt that too many elected representatives were preoccupied with narrow, parochial issues and were unable to adopt the broader strategic perspective necessary for such a position. The Advisory Council for Inter-government Relations (ACIR) noted with some frustration: ‘Local council meetings are … said to be concerned less with making broad policy decisions than with attending to pettifogging detail’ (1984: 12.3). The second problem was that too large a number of elected representatives were actively involved in the day-to-day administration of

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the municipality through the prevailing system of standing committees. The committees covered policy arenas such as roads and health and made recommendations to the council on proposed courses of action. It often became the case that committee members aligned themselves closely with the functional divisions of council, which they supervised. As a result, council meetings sometimes degenerated into arenas where elected representatives competed with each other to promote their policy area. This situation created considerable divisions within the council, fragmented policy deliberations, and prevented the emergence of a strategic overview. Moreover, councillors approached employees directly to rectify constituent concerns. Such actions further fractured centralized policy direction and undermined the authority of the chief administrator (Tucker, 1997: 76). The redefinition of the functions of CEOs and elected members in the revised local government acts was essentially an attempt to graft elements of the corporate governance model onto local government’s traditional system of representative democracy. The anticipated outcome was a more effective contribution from both councillors and management. The following two subsections explore how the new approach operates in practice and the issues that have emerged. The discussion looks first at the role of councillors and then at the relationship between CEOs and councillors. The Role of Elected Representatives Although the revised local government legislation emphasized the critical role played by elected members, it contained no measures to ensure that higher-calibre candidates would stand for election. Consequently, the capacity of individual councillors remains a matter for concern, especially as boundary reform in local government has resulted in a more complex and exacting operational environment. The three expected roles of councillors, as set out in state legislation, are discussed in turn. The representative duties of many elected members have become more difficult as a result of local government mergers. For those members elected in post-amalgamation municipalities, there are far more residents to look after and often much longer distances to travel – no minor consideration given the vast geographical areas that some authorities cover. Effectively, there are now substantially fewer councillors to cater to the same, or an increasing, population.

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The expectation that councillors contribute productively to strategic policy development for the municipality has proved problematic. Many elected members represent highly populated, ethnically diverse, urban constituencies. Somewhere between six and fifteen councillors are confronted with a policy environment that can sometimes be volatile and uncertain. At one level, they must make decisions about a range of disparate issues of immediate concern to residents. At another, they must comprehend the dynamics of an external environment that has become increasingly sophisticated over the past decade. This involves not only building horizontal cooperative arrangements with other councils but also vertical linkages with state and federal agencies. Moreover, elected members must find ways of meeting rising community expectations for an expanded range of services within existing budgets. Clearly, to cope with such a range of issues councillors need to be well informed and interested in a wide range of matters. Realistically, many councillors simply do not possess the knowledge or expertise necessary to participate effectively in demanding strategic policy exercises. Some will have been elected for the sole purpose of pursuing a limited agenda of a few concerns – the well-known ‘pot hole councillors’ (MAV, 1996: 13). Certainly, a significant number are unable or unwilling to embrace the larger perspective. One middle-level manager in a South Australian municipality commented: ‘Elected councillors do not have the big picture and do not understand the consequences of their decisions’ (Pocock, Sexton, and Wilson, 2001: 38). Even the director-general of Queensland’s Department of Local Government has gone so far as to suggest that municipalities need to ‘evolve to the position where the majority of Councillors are seen as community leaders with the interests of the community and its future as their primary concern’ (Campbell, 2002: 9). This situation becomes even more complicated when the third role of councillors is taken into account: monitoring the planning and budgeting functions of the council. In this respect, all of the revised local government acts assume that elected members understand, or will come to understand, the detailed internal processes of the authority’s organizational structure. Elected members are expected to possess the skills to interpret and digest financial reports and performance outcomes and participate in the strategic management cycle. The extent to which this task is actually fulfilled is open to question. It is probably most effectively undertaken in the metropolitan areas where a larger

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number of elected members have the managerial expertise necessary to evaluate the authority’s strategic performance (NSWDLG, 2000: 24). Those without appropriate experience or qualifications can, over time, develop the skill required to interpret financial documents. However, a factor working against the accumulation of such skills is the regular turnover of councillors following elections. The 1999 poll in New South Wales brought a 43% influx of new members; for Queensland’s 2004 election, the number was 40%. These figures suggest a reasonably high rotation rate of councillors. Consequently, continuity of office is reduced and the opportunity to build substantive managerial expertise over a period of time is weakened. Taken together, the three primary functions of councillors, as set out in the revised local government legislation, are very demanding and require a considerable range of skills and effort to carry out effectively. This has become even more the case in the wake of the extensive structural reform experienced by most municipalities since the late 1990s. This situation is not helped by the part-time status of the position or the fact that councillors do not have policy advisers or personal assistants to provide information and advice. In terms of time alone, a postamalgamation study of one council in South Australia found that councillors were spending some twenty hours per week on council business (in addition to their full-time job), and the newly elected mayor, sixty hours (Pocock, Sexton, and Wilson, 2001: 37). Indeed, it is entirely possible that the demands imposed on elected representatives in Australian local government today are greater than those of the company director whose role was so influential in the drafting of the revised local government legislation. Many councillors do perform their functions very well. The best clearly inject a real sense of leadership and direction into their municipality’s deliberations. Some, however, clearly struggle in their positions and make only a limited contribution to the operation of their council. The local government associations in each state are well aware of the problem and have taken steps to try and lift the calibre of elected representatives by mounting instruction programs for new members. Although important, this training needs to be supplemented by higher-order education offered by universities or similar institutions. A large proportion of councillors, unlike company directors, have had little relevant practical experience with municipal activities when they take up their duties. Specialized programs designed to impart such skills as policy analysis, financial manage-

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ment, and interpersonal communication would help to build professional skills. A second question that arises is whether councillors should be paid a meaningful salary. At present, in all states except Queensland, representatives are paid an annual allowance (only the Queensland Local Government Act allows municipalities to pay salaries, with a small proportion of councils taking up this option). The broad issue of providing salaries to councillors was first raised by the Advisory Council for Inter-government Relations in 1983. The ACIR suggested that payment would ensure a better choice of candidates at elections (1983: s. 28). Given the increased demands of office in the 2000s, this point would seem to hold even greater weight today. It can also be argued that salaried members are more likely to fulfil their roles with an added sense of commitment and professionalism. The amount of remuneration involved could vary from municipality to municipality, according to circumstance and budgetary constraints. Salaries offered may be sufficient to enable individual councillors to reduce their regular day-to-day work commitments or even, perhaps, be employed as full-time representatives. In Queensland, a small proportion of councillors (less than 10%) are employed on a full-time basis in some of the largest local government authorities. In other states, such fulltime status is limited to a few mayors of major urban municipalities. Councillors and CEOs The second major issue to emerge in the wake of internal structural change is the nature of the relationship between councillors and the CEO. Under the corporate governance model, if purposeful policy development and decision-making is to take place, there must be a productive relationship between management and elected members; governance and executive roles should merge at the interface. In this regard, the Municipal Association of Victoria (1996) wrote: ‘While the separation of policy-making and day-to-day management is important, it should be managed sensitively so that a high level of trust is cultivated between the Councillors and the CEO and a sound effective working relationship is achieved’ (MAV, 1996: 15). Many local governments throughout Australia have achieved just such a relationship. For a proportion, however, the emergence of stability and trust has proved elusive. This is clearly indicated by the rate of CEO terminations across the states. Surveys undertaken in New

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South Wales and Queensland during 1998 discovered that since 1994 there had been an annual turnover of CEOs of 13% and 12%, respectively (NSWDLG, 1998: 34; LGAQ, 1998: 4). Although death, retirement, and promotion accounted for a proportion of the figures in each state, the New South Wales Department of Local Government and the Queensland Local Government Association were sufficiently concerned to mount a review to identify causes. Both bodies reported problems with conflict between senior management and elected representatives. The Queensland association reported a number of instances where hostile relations had developed (LGAQ, 1998: 28–30). In New South Wales, it was found that ‘where there has been a breakdown in the relationship, the situation has not been well managed by all parties’ (NSWDLG, 1997: 31). Both studies covered the period immediately following the introduction of the local government acts in 1993. A decade on, however, the situation is little changed. Across most states, the turnover in CEOs runs at between 10% and 20% per annum (Burges, 2002: 2; Spence, 2004; LGMA/LGAQ, 2004: 1). Several factors appear to lie at the root of the ongoing instability between councillors and CEOs. First, there is an imbalance in power and resources between management and elected members. Although CEOs have experienced the same degree of change that has confronted councillors over the past decade or so, they have been much better equipped to cope. Because of the extensive training made available to councils in the wake of the introduction of new public management (NPM), municipal staff, by and large, now possess the qualifications and expertise to effectively tackle the more complex organizational environment in which they function. It follows that CEOs who have put in place comprehensive strategic management structures, and are supported by competent employees, will be well informed about all aspects of the activities of their domain. Indeed, they are likely to have a much more detailed understanding of the critical policy issues facing the authority than any (perhaps all) of the elected members. Clearly, with such knowledge at their fingertips, the chief executive’s views will carry considerable weight in the course of the council’s deliberations. This authority derived from policy expertise is reinforced by the fact that the CEO possesses substantial control over both staffing and organizational structure. In all six states, the revised local government acts invest the CEO with the responsibility for the appointment, supervision, and dismissal of employees; staff carry out their duties in accordance with the directions of the chief executive, not the councillors.

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Additionally, legislation in each state allows CEOs almost unfettered scope to shape the organizational structure of the authority along the lines that they wish. These provisions in the local government acts give CEOs substantial discretion for determining the organization’s staffing profile and how the work environment is arranged. When these powers are combined with specialist expertise, CEOs are well placed to influence both the direction of council decision-making and the manner in which policies are subsequently implemented. The position of the CEO vis-à-vis elected members is further reinforced by the fact that the CEO often enjoys a longer period of incumbency than the mayor. The turnover of mayors in the 2004 Queensland local government elections was 37% and it was 30% in Western Australia‘s elections (LGAQ, 2004: 8; WALGA, 2003: 4). In some municipalities, the mayor’s office rotates on an annual basis. Taken together, these points all indicate an organizational and political environment that, in the wake of the revised local government legislation, strongly favours the CEO. In Victoria, one informed observer described the chief executives in that state as having become ‘extremely powerful’ (Rowe, 2004). The process of wielding influence at the interface, however, is not necessarily a one-sided affair. To a considerable extent, the potential power of CEOs is counterbalanced by the fact they no longer hold a permanent position. In all states, the chief executive is appointed on a contract basis for a period of up to five years, subject to an annual performance appraisal. They must now demonstrate to council that they have performed satisfactorily over a sustained period if they wish to have their contract renewed. Just what ‘satisfactory performance’ involves, however, can be difficult to quantify and may be used as a potent critical measure by councillors. Clearly, in situations where a strong mayor enjoys the backing of a majority of councillors, pressure can be brought to bear upon the CEO to ‘toe the line’ if she wants her contract renewed. In such scenarios, the CEO’s ability to provide ‘frank and fearless advice’ is brought into question. At least one practitioner has argued that the current use of contracts impacts adversely on the local government bureaucracy: ‘Contracts of employment for senior staff have resulted in a less independent bureaucracy with less certainty for the future which can effect the long term strategy, planning and vision of the organization’ (Barnes, 2002: 12). A third matter that has caused difficulty at the interface is that councillors, and to a lesser extent management, have not adhered to their

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roles and responsibilities as set out in the revised local government acts. In 1998 the Local Government Association of Queensland noted that many elected representatives were reluctant to relinquish their involvement in the internal affairs of the municipality and leave the CEO free to handle management questions (LGAQ, 1998). Five years later, the LGAQ observed: ‘The issues of councillors directing staff and the conflict between the strategic role of Councillors and the operational role of staff is continually brought to the LGAQ’s attention … Confusion over the roles is still a large problem’ (2003: 2). Similarly, in Western Australia, ‘role ambiguity’ remains a matter of concern (Cetenic-Dorol, 2000: 42), and it has been much the same story in New South Wales. A survey of 156 councils in 2001 by the Independent Committee Against Corruption discovered that about 10% of staff had felt pressured by councillors to do something they were not supposed to do or provide information that was confidential (ICAC, 2001: 18). Refusal to accept changed roles and responsibilities, Burges noted in relation to Western Australia, can lead to ‘a negative and hostile working relationship’ (2003: 2). In an attempt to clarify the respective roles and responsibilities of elected members and senior management, all states have compiled codes of conduct for their local government sectors. In some jurisdictions, these codes have been incorporated in legislation and are legally enforceable. Research is also being undertaken to find ways of improving interaction between elected members and senior officers. A significant study by Martin and Simons suggests that it is important for councillors and senior officers to develop complementary managerial styles if the organization is to function effectively (2002: 73–4). The work by Martin and Simons emphasizes that profound change needs to take place in the political and organizational cultures that underpin local governance. In this respect, there are evident tensions between traditional approaches to representative democracy – on which local government has evolved – and the corporate governance model adopted in the revised legislation of the 1990s. That there is a need to revisit the principles underlying local governance is beginning to be acknowledged in some states. There are indications that such reviews favour greater acceptance of private sector perspectives. In 2004, for example, the Western Australian Local Government Association commenced offering a training module for elected members mounted by corporate governance specialists. The module ‘takes the view that Local Government is a business and as such, universal gov-

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ernance principles and best practice management applies’ (Burges, 2004: 2). The Municipal Association of Victoria, similarly, appears to be edging towards full acceptance of the ‘corporate model’ (Spence, 2004). Conclusion The structural reforms considered in this chapter have, collectively, transformed the landscape of local government activity in Australia. Yet, although the shape and fabric of the sector have changed substantively since 1990, there has been little in the way of strategic coherence and rationale underlying the reforms as a whole. Each dimension was set in train independently of the others. Nevertheless, it is possible to discern a degree of complementarity to the overall process. Indeed, an underlying, interactive dynamic has emerged. There is little doubt that the amalgamation exercises implemented across the majority of the states provided those councils that had not merged with a strong incentive to explore the possibilities of voluntary cooperation as an alternative. In turn, it is clear that both larger municipalities and authorities that participate in regional cooperation are better placed to offer a wider range of functions. Moreover, municipalities possessing competent elected representatives who have developed a sound relationship with a high-performing CEO are well positioned to fully exploit the potential offered by a merged council or regional organization. How this mix of reforms develops in the longer term remains to be seen. Certainly, all four dimensions will be subjected to further change. Consolidation will remain a staple reform option, although the extent of this policy choice will depend on how successful voluntary cooperation between councils proves to be. It is possible that the benefits accruing from collaboration – under particular circumstances – will be seen to outweigh those arising from mergers. The spread of services offered by councils will continue to be influenced by their size and format and by the effectiveness of their management processes. It is the corporate governance structures for local government introduced by each of the states during the 1990s that are likely to be the most problematic aspect of the structural reforms. It may take some time to correctly align theories of corporate governance with the realities of municipal administration and to accurately define the roles, responsibilities, and conditions of elected members and appointed staff.

104 Local Government in a Global World REFERENCES Abbott, J. 2001. ‘A Partnership Approach to Regional Planning in South East Queensland.’ Australian Planner, 38/3–4: 114–20. ACIR (Advisory Council for Inter-government Relations). 1984. Responsibilities and Resources of Australian Local Government. Canberra: AGPS. ACIR. 1983. The Role of Local Government Councillors. Discussion Paper 11. Hobart: Author. Allen, P. 2003. ‘Why Smaller Councils Make Sense.’ Australian Journal of Public Administration, 62/3: 74–81. Aulich, C. 1999. ‘From Convergence to Divergence: Reforming Australian Local Government.’ Australian Journal of Public Administration, 58/3: 12–23. Balmer, C. 1989. ‘Local Government in the Federal System.’ In The Australian Local Government Handbook. Canberra: AGPS. Barnes, T. 2002. Evolution and Future Direction of Local Government. Paper presented to the Cutting Edge of Change Conference: Shaping Local Government for the 21st Century, 14–17 Feb., University of New England, New South Wales (hereafter Cutting Edge of Change Conference). Bertelsen, J. 2002. South East Queensland Regional Organisation of Councils (SEQROC) – Regional Cooperation – Going from Strength to Strength, 10 Years on. Paper presented to the Cutting Edge of Change Conference. Burges, R. 2004. ‘Inside Cover.’ Western Councillor, April, Perth. Burges, R. 2003. ‘Inside Cover.’ Western Councillor, Feb. Perth. Burges, R. 2002. ‘Inside Cover.’ Western Councillor, Nov./Dec. Perth. Campbell, T. 2002. Emerging Issues in Queensland Local Government. Paper presented to the Cutting Edge of Change Conference. Cetenic-Dorol, C.J. 2000. ‘An Attitudinal Response to Role Conflict in Local Government.’ Australian Journal of Public Administration, 59/4. CGC (Commonwealth Grants Commission). 2001. Review of the Operation of the Local Government (Financial Assistance) Act 1995. Canberra: Panther Publishing. Chapman, R. 1995. Amalgamations, Modernizations and Efficiency Gains – The Tasmanian Experience. Paper presented to the National Conference of Local Governments Grants Commission, Nov. Dollery, B., and Crase, L. 2004. ‘Is Bigger Local Government Better? An Evaluation of the Case for Australian Municipal Amalgamation Programs.’ Urban Policy and Research, 22/3: 265–75. Dollery, B., Johnson, A., Marshall, N., and Witherby, A. 2004. Regional Capacity Building: How Effective is REROC? Wagga Wagga, NSW: Riverina Regional Organization of Councils.

Restructuring and Reform: Australia 105 DOTARS (Department of Transport and Regional Services). 2003. Local Government National Report. Canberra: Author. DOTARS. 2002. Submission to Inquiry into Local Government by the House of Representatives Standing Committee on Economics, Finance and Public Administration. Canberra: Author. Garlick, S. 1999. ‘The Australian History of Government Intervention in Regional Development.’ In J. Dore and J. Woodhill, eds., Sustainable Regional Development: Final Report, 177–86. Greening, Australia. Gibbs, M., Gooding, A., and Jones, R. 2002. Regions and the Role of ROCs in an Urban Context. Paper presented to the Cutting Edge of Change Conference. Hallam, R. 1994. Minister’s Review. Local Government in 1994: It’s Coming Together. Melbourne: Minister for Local Government. Hallebone, E., Townsend, M., and Mahoney, M. 2000. ‘Globalising Policy Changes, Social Impacts in Two Australian Rural Towns.’ Journal of Family Studies, 6: 214–30. Haward, M., and Zwart, I. 2000. ‘Local Government in Tasmania: Reform and Restructuring.’ Australian Journal of Public Administration, 59/2: 34–48. HRSCEFPA (House of Representatives Standing Committee on Economics, Finance and Public Administration). 2003. Rates and Taxes: A Fair Share for Responsible Local Government. Canberra: Parliament of the Commonwealth of Australia. ICAC (Independent Committee Against Corruption). 2001. Corruption Resistance Strategies: Researching Risks in Local Government. Research Findings Summary. Sydney: Author. Johnson, A. 2003, ‘Financing Local Government in Australia.’ In B. Dollery, N. Marshall, and A. Worthington, eds., Reshaping Australian Local Government. Sydney: UNSW Press. LGAQ (Local Government Association of Queensland). 2004. Executive Report to 108th Annual Conference. Brisbane: Author. LGAQ. 2003. Response to Discussion Paper on Code of Conduct for Councillors. Brisbane: Author. LGAQ. 1998. Review of Local Government Chief Executive Officer: Mobility and Attrition. Brisbane: Author. LGMA (Local Government Managers Australia) and LGAQ. 2004. Review of CEO Recruitment and Retention Issues for Rural and Remote Councils, Executive Summary. Brisbane: Author. LGSA (Local Government and Shires Association of New South Wales). 2001. Advancing Local Government: Partnerships for a New Century. Sydney: Author. LGSRAC (Local Government Structural Reform Advisory Committee). 1996.

106 Local Government in a Global World Advancing Local Government in Western Australia: Report of the Local Government Structural Reform Advisory Committee. Perth: Author. MAGLGR (Ministerial Advisory Group on Local Government Reform). 1995. Reform of Local Government in South Australia. Adelaide: Department of Housing, Urban Development and Local Government Relations. Marshall, N. 2003. The Roles and Responsibilities of Chief Executive Officers and Councillors in Australian Local Government: A Corporate Governance Perspective. Armidale: University of New England. Marshall, N., and Witherby, A. 2002. The Roles and Functions of Regional Organisations of Councils. Paper presented to the Cutting Edge of Change Conference. Marshall, N., Witherby, A., and Dollery, B. 1999. ‘Management, Markets and Democracy: Australian Local Government Reform in the 1990s.’ Local Government Studies, 25/3: 35–57. Martin, J., and Simons, R. 2002. ‘Managing Competing Values: Leadership Styles of Mayors and CEOs.’ Australian Journal of Public Administration, 61/2: 65–75. MAV (Municipal Association of Victoria). 1996. From Citizen to Councillor. 2nd ed. Victoria: Author. May, P. 2003. ‘Amalgamation and Virtual Local Government.’ In B. Dollery, N. Marshall, and A. Worthington, eds., Reshaping Australian Local Government. Sydney: UNSW Press. NCRC (National Committee on Regional Cooperation). 1994. ‘Networking Counts’: Proceedings of the Fourth National Conference on Voluntary Regional Cooperation among Councils. Canberra: Author. NCRC. 1993. Productive Partnerships: Towards Regional Prosperity. Canberra: Author. Newnham, L., and Winston, G. 1997. ‘The Role of Councillors in a Changing Local Government Arena.’ In B. Dollery and N. Marshall, eds., Australian Local Government: Reform and Renewal. Melbourne: Macmillan. NOLG (National Office of Local Government). 1997–2001. Local Government National Reports 1996/97 – 2000/01. Canberra: DOTARS. Northwood, K. 1995. From Parochialism to Partnership: Voluntary Regional Organisations of Councils and the Regional Development Organisations. Canberra: NCRC. NSWDLG (New South Wales Department of Local Government). 2004. Structural Reform of Local Government in New South Wales. Sydney: Author. NSWDLG. 2001. Candidates and Councillors 1999–2000: Report on the Survey of Local Government Elected Members. Sydney: Author. NSWDLG. 1997, 1998, 2000. Annual Reports. Sydney: Author.

Restructuring and Reform: Australia 107 OLGC (Office of Local Government Commissioner). 1994a. Gold Coast City/Albert Shire/Beaudesert Shire – A Review of Local Government Boundaries and Structures, vol. 2. Brisbane: Author. OLGC. 1994b. Recommended Merger of Warwick City, Glengallan, Rosenthal and Allora Shires into a New Warwick Shire. Report No 2. Brisbane: Author. Pocock, B., Sexton, M., and Wilson, L. 2001. Doing More, with Less: Tension and Change at Work in South Australian Local Government. Adelaide: Adelaide University, Centre for Labour Research. Rowe, A. 2004. Chief Executive Officer of the Victorian Local Governance Association, Melbourne, interview. Spence, R. 2004. Chief Executive Officer of the Municipal Association of Victoria, Melbourne, interview. TLGAB (Tasmanian Local Government Advisory Board). 1992. Inquiry into the Modernisation of Local Government. Hobart: Author. Tucker, D. 1997. ‘Queensland Local Government: Rationalisation to the 1990s and Beyond.’ In R. Chapman, M. Hayward, and B. Ryan, eds., Local Government Restructuring in Australasia. Hobart: University of Tasmania, Centre for Public Management and Policy. VLGA (Victorian Local Governance Association). 2002. ‘Submission to Inquiry into Local Government Cost Shifting.’ Submission 224. Melbourne: Author. VOLG (Victorian Office of Local Government). 1994. Structure and Efficiency Working Paper: Improving Local Government Efficiency. Melbourne: Office of Local Government. VRC (Voluntary Regional Cooperation). 1993. Third National Conference on Voluntary Regional Cooperation among Councils: Conference Papers. Canberra: Author. WALGA (Western Australian Local Government Association). 2003. Western Councillor, Oct./Nov. Wensing, E. 1997. ‘The Process of Local Government Reform: Legislative Change in the States.’ In B. Dollery and N. Marshall, eds., Australian Local Government: Reform and Renewal. Melbourne: Macmillan. WSROC (Western Sydney Regional Organisation of Councils). 2000. WSROC Annual Report 1998–99: 25th Anniversary. Sydney: Author.

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5 Restructuring and Reform: Canada andrew sancton

Since the early 1990s, municipal officials in many parts of Canada have spent much of their time worrying about restructuring, debating it, or trying to implement it. Now that the dust has settled, there is not a great deal to show for all the activity. The municipal world in Canada is not dramatically different now than it was then, except that there are fewer municipalities and some very big ones, both in terms of population and territory. Such absence of fundamental change is surprising because elsewhere in the world governments at all levels have been swept by the effects of implementing the new public management (NPM). With the possible exception of performance measurement, there is very little evidence of NPM in Canadian municipalities. In any event, as Agocs and Brunet-Jailly point out elsewhere in this volume, performance measurement existed long before NPM. Other NPM nostrums such as contracting out and competitive tendering have been very limited; privatization almost non-existent. A few special operating authorities have been established, but probably no more than in periods before NPM had been invented. As will be described in the second section of this chapter, there has been much municipal restructuring in Canada since the early 1990s, but it is difficult indeed to connect legislated municipal amalgamations to NPM. In many respects the deliberate creation of larger municipal governments, with their ever-larger bureaucratic hierarchies and powerful unions, goes directly against the basic ideas of NPM, which focus on nimbleness, adaptability, and competition. The council of the largest and best-known amalgamated municipality in Canada, the City of Toronto, has deliberately resisted NPM-inspired initiatives. For example, it rejected plans to establish a special operating authority for

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water supply because of political fears that such a move was the first step to privatization. It is difficult to prove a negative proposition. But one of the main arguments of this chapter is that NPM has had very little influence on all the restructuring conflicts and controversies that will soon be described. Indeed, much of the recent political discourse about municipal restructuring in Canada seems to relate more to the nineteenth century than to the 1990s (Sancton, 2000). The following discussion of restructuring and reform in Canadian municipalities is divided into four sections: changes in municipal functions, amalgamations and de-amalgamations, regional organizations, and structural changes that are internal to municipalities. Municipal Functions It would be reasonable to expect that any restructuring of municipal government would be designed to relate in some way to the functions that are performed by municipal government: either to adapt structures to current functions or to change them in conjunction with functional modifications. The argument to be advanced here is that there has been little or no connection in Canada between changes in municipal functions and changes in municipal structures. This argument is not commonly accepted; the claim often made is that municipal amalgamations in some provinces were the inevitable result of the provincial government’s decision to ‘download’ certain functions to municipalities. Such a view is especially widespread with respect to Nova Scotia and Ontario, and each of these cases will be examined below. First, however, it is necessary briefly to review the main functional responsibilities of Canadian municipalities. The key point is that exact functional responsibilities vary widely across the country. Even within the same province, municipalities of similar size and character often do not have the same list of functions. In Quebec, municipalities have virtually no involvement with hospitals or social services. In Ontario, municipalities operate homes for the aged, provide child day care for low-income families, and are responsible for the delivery of welfare payments. They have no formal responsibility for local hospitals but are sometimes expected to make significant contributions to their capital fundraising campaigns. Most urban municipalities in Canada have direct control over parks and recreation, but in Vancouver this task is performed by a directly elected local commission. In Quebec, local police forces are generally under the direct control of the munic-

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ipality. In Ontario and other provinces, the municipalities generally pay the bill while the forces themselves are controlled and directed by commissions not directly accountable to the municipal government. Public schools are operated by directly elected school boards, although in many provinces these boards in recent years have lost much of their decision-making and taxation authority to their respective provincial governments. Almost without exception, Canadian provinces have assigned the following functions to municipalities: land use planning; fire protection; local roads and streets; the collection and disposal of residential solid waste; sewage systems; the taxation of land and buildings; and the regulation of local land use. The common thread in this list of functions is property. This has led many in Canada – practising municipal politicians, journalists, and academics – to conclude that municipalities are the units of government concerned with regulating, servicing, and taxing our built environment. For many politicians, other functions are at best frills and at worst the unjustifiable result of provincial policies aimed at unloading costly social functions on unwilling municipalities and their overburdened taxpayers. As noted earlier, the functional responsibilities of municipalities in Canada have been the subject of debate and change in both Nova Scotia and Ontario. In Nova Scotia the subject has been labelled ‘service exchange’ and in Ontario it has been called ‘disentanglement,’ ‘Who Does What?’ and ‘local services realignment.’ Whatever the label, the original intent in both provinces was to clarify the functional responsibilities of each level of government. The original plan in both provinces – dating back at least to the early 1990s – was to reduce or eliminate the municipal role in welfare (i.e., income security) and most other forms of social services. In return, municipalities were to take responsibility for all but the most important provincially operated and/or financed roads within their respective territories. This seemed to be a remarkably sensible approach, because there were obvious problems with having municipalities responsible for programs that were largely redistributive in nature and had obvious inefficiencies connected with both provincial and municipal bureaucracies looking after similar kinds of roads. However, in both provinces much controversy ensued as politicians and administrators tried to determine financial winners and losers, both between the provincial and municipal sectors collectively and among individual municipalities.

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After much difficulty and many modifications and short-term transitional arrangements, the scheme was largely implemented in Nova Scotia, notwithstanding the fact that it appeared to have some perverse distributional effects: fiscally weak municipalities generally seemed to lose from the exchange and fiscally strong ones seemed to gain (Vojnovic, 1999). In the Halifax area, service exchange had the effect of increasing annual costs in rural Halifax county by $4 million (out of a total operating budget of about $100 million) and deceasing them by $12.9 million in the three urban municipalities of Halifax, Dartmouth, and Bedford (annual operating costs in all three municipalities totalled about $340 million; Vojnovic, 1999; Nova Scotia, 1993: App.C). Mitigating the distributive effects of service exchange in this area might have been one of the reasons why the Nova Scotia government later amalgamated all four municipalities into the Halifax Regional Municipality, although no one has claimed it was the main one. The story in Ontario is much more complex. In 1995 a Progressive Conservative government came to office promising to cut government, eliminate annual provincial budgetary deficits, and reduce personal income tax rates. Its own ‘Who Does What?’ commission initially recommended that the province increase its funding for schools and take over responsibility for most of what were municipal welfare and social services functions. Even though the commission urged the Ontario government, if forced to choose between removing social services from the local property tax or removing education, to remove social services, the government opted to remove education, at least from the residential property tax. This left Ontario municipalities with more financial responsibility for welfare and social services than before the whole exercise started. They were supposed to be able to finance their added responsibilities by taking over tax room vacated by the local school boards. As in Nova Scotia, however, there was considerable controversy about the extent to which these changes were indeed ‘fiscally neutral’ and the extent to which they benefited some municipalities rather than others. There was even more concern that, during the next recession, municipalities would simply be unable to meet their new responsibilities for welfare and social services. In the end the government backtracked, leaving some education costs on the residential property tax and reducing the extent of fiscal ‘downloading’ to municipalities from the level that it had originally proposed. The result was that a process originally designed to ‘disentangle’ provincial-municipal relationships actually made them considerably more complex (Siegel, 2005).

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Many municipal observers in Ontario seem to believe that municipal amalgamations were a direct result of downloading. There is even less evidence to support this belief in Ontario than there is for Nova Scotia. This is because all of the new costs for municipalities were charged to upper-tier authorities (counties and metropolitan or regional municipalities) or single-tier cities with relatively large populations. The merger of lower-tier units within a single upper-tier authority – which was the type of amalgamation most prevalent in Ontario – was quite irrelevant, unless one assumed that these mergers would themselves create great savings that could be used to finance new costs at the upper tier. If anyone ever did make such an assumption, it turned out not to be justified. Although Ontario municipalities were expected collectively, as a result of these changes, to pay a higher proportion of the costs of municipal services from their own funds, it is not true that they became responsible for a wide range of entirely new functions. The main exception to this general statement relates to land ambulances, which the province devolved to municipalities as an entirely new functional responsibility (although the Municipality of Metropolitan Toronto had been providing ambulance services financed largely by the province within its territory for many years). Ironically, it was at about this time that the government of Alberta was removing the ambulance service from municipalities (LeSage, 2005: 72–3). It should be clear from this discussion that there have been no dramatic changes in Canadian municipal functional responsibilities since the early 1990s, even though there has been considerable controversy about how they should be financed. Amalgamations and De-amalgamations The most important structural change affecting Canadian municipalities since the early 1990s has been the wave of forced amalgamations in eastern Canada that started in a modest way in the area around St John’s, Newfoundland, in 1991 (Sancton, James, and Ramsay, 2000: 41) and ended more dramatically in Quebec in 2002 with a series of forced amalgamations that in turn led to de-amalgamations that took effect in 2006. Interestingly, there have been no significant forced amalgamations in the four western provinces, although Saskatchewan came close to implementing a major scheme to reduce its large number of rural municipalities. It was stopped by a combi-

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nation of rural outrage and a finely balanced provincial legislature (Garcea, 2005). Scattered amalgamations were legislated in Newfoundland and Prince Edward Island during this period, but none were of great significance. The story is more interesting in New Brunswick because original plans were more ambitious, because one of the amalgamations (Miramichi in northern New Brunswick) was quite controversial, and because full-scale amalgamation was deliberately rejected in two of the province’s largest cities, Moncton and Saint John. In the case of Moncton, one of the suburban municipalities, Dieppe, has a Frenchspeaking majority. Merging it with Moncton was seen an assault on minority rights and was avoided. Because Dieppe was left alone, the English-speaking suburb of Riverview was also left undisturbed and the three communities worked on ways to increase intermunicipal cooperation. The case of Saint John is even more interesting. It was the only case in all of eastern Canada during this period when a provincial government backed away from an apparent commitment to full-scale amalgamation. The government of New Brunswick appeared convinced that spreading the pension plan of the City of Saint John to suburban municipalities would cost taxpayers more than any amalgamation might save. Instead, it reduced the number of suburban municipalities from eight to three and created new regional institutions covering the metropolitan area (Betts, 1997). The first of Canada’s major urban amalgamations during this period took place in Halifax, Nova Scotia. The Halifax Regional Municipality (HRM) was created in 1995 by a law approved by the Legislative Assembly of the Province of Nova Scotia. The law merged three urban municipalities (Halifax, Dartmouth, and Bedford) and one rural one (Halifax County) into a single municipality that occupies about 5,600 square kilometres. At the time of the merger, there was also an intermunicipal institution known as the Metropolitan Authority, but its functions were so limited that it could never be described as an uppertier metropolitan government. The HRM includes the largest urban area on Canada’s east coast (the old City of Halifax), dozens of small towns and fishing villages, and hundreds of lakes surrounded by uninhabited forest. The HRM council comprises twenty-three councillors, each elected from one of twenty-three wards, as well as a mayor elected at-large. The councillors each sit on one of six community councils, which are charged with making decisions about local land use issues. There are three different basic tax rates for real estate taxes

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– urban, suburban, and rural – each of which is meant to cover a different level of municipal services, depending on location. Different area rates exist in different suburban and rural locations depending on the nature of the services provided (Halifax Regional Municipality, 2004). HRM was created to save money and to eliminate perceived destructive intermunicipal competition for economic development. There is no evidence that money has been saved (Dann, 2004) but, since amalgamation, the Halifax area has experienced an economic boom, mainly due to offshore energy production. It is unlikely that the boom has been affected one way or another by the amalgamation. With the help of the federal and provincial governments, the HRM has successfully arranged for the construction of three new sewage treatment plants to bring about the clean-up of Halifax harbour (Halifax Regional Municipality, 2004). A public opinion survey of residents of the HRM taken in June 2005 shows that 57% of the respondents support dividing HRM into two, one for the urban portion and one for the rural portion (Boomer and MacKinlay, 2005). Ironically, rural residents tend to be the ones most dissatisfied with the HRM, notwithstanding the evidence cited above that one of its major effects has been to channel urban tax revenue to rural areas. But it was Canada’s largest province, Ontario, that engaged in the most dramatic initiatives relating to municipal amalgamations. Between 1995 and 2000 the number of municipalities in the province was reduced from 815 to 445 (Ontario, 2005). The origins of the amalgamations were both bureaucratic and political. Since the 1960s public servants in the Ministry of Municipal Affairs had been promoting larger municipalities in one form or another so as to increase local government capacity. In 1995, as was noted earlier, a right-wing populist government was elected that wanted to save money, reduce the number of local politicians, and eliminate ‘overlap and duplication.’ Although its leader stated prior to the election that ‘I disagree with restructuring because it believes that bigger is better’ (Barber, 1997), he ended up as a fervent advocate. There were three distinct laws that caused the amalgamations. Each will be described in turn. The first was the Savings and Restructuring Act, 1996. Largely inspired by public servants, it established a streamlined mechanism for municipalities to amalgamate voluntarily. Most of Ontario’s amalgamations of smaller municipalities actually took place in this way. The real cause of the ‘voluntary’ amalgamations, however, was a pro-

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vision in the legislation stating that a single municipality could ask the province to send in a ‘commissioner’ if it felt others were unnecessarily blocking amalgamations. The commissioner had the final authority to order a solution. The first commissioner ordered the merger of all twenty-one municipalities in Kent County, even though virtually none of the participants favoured such a solution. The result was a single municipality for one city, a few small towns, and more than a dozen rural townships. The amalgamated Municipality of Chatham-Kent has a population of just over 100,000. Chatham-Kent became the ‘horrible example’ that caused dozens of other municipalities in the province to begin serious negotiations with each other about amalgamation. Any arrangement seemed better than being saddled with a commissioner. In general, however, rich municipalities sought out rich partners, and poorer ones were sometimes left partnerless. Often the resulting amalgamations made little sense and many real boundary problems were left untouched. In 2000 another commissioner merged all the municipalities in Victoria County and called the new entity the City of Kawartha Lakes, thereby simultaneously enraging small-town boosters, farmers, and tourism promoters, none of whom wanted to be in a so-called city apparently made up of lakes. The commissioner’s opponents started calling the new entity the ‘City of Kawartha Mistakes,’ and they launched a fledgling de-amalgamation movement in Ontario that has not met with the success of its Quebec counterparts. The second law bringing about amalgamations in Ontario was the City of Toronto Act, 1997, that the Municipality of Metropolitan Toronto and its constituent parts would be merged into one new City of Toronto. The primary stated purpose of this policy was to save money. The policy caused a huge political battle that has been welldocumented elsewhere (Horak, 1998; Boudreau, 2000; Sancton, 2000; Frisken, 2007). The controversial amalgamation had little to do with providing more effective metropolitan governance. In 2001 the population of the new city was 2.48 million while the Toronto CMA comprised 4.68 million people and the Extended Golden Horseshoe, 6.70 million (Statistics Canada, 2004a, 2004b). All the difficult issues associated with metropolitan growth were taking place outside the new city’s borders. In any event, the amalgamation did not save money. In April 2003 the Toronto City Summit Alliance, ‘a coalition of over 40 civic leaders from the private, voluntary and public sectors in the Toronto region’ (Toronto City Summit Alliance, 2003) argued that Toronto needed ‘a new fiscal deal’ in part because: ‘The amalgamation

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of the City of Toronto has not produced the overall cost savings that were projected. Although there have been savings from staff reductions, the harmonization of wage and service levels has resulted in higher costs for the new City. We will continue to feel these higher costs in the future’ (ibid.: 4). The third law was the Fewer Municipal Politicians Act, 1999. In addition to reducing the size of the Toronto city council from fiftyeight members to forty-five, it also amalgamated all the municipalities within the two-tiered regional systems in Ottawa-Carleton, HamiltonWentworth, and Sudbury. It created ‘cities’ with very large rural hinterlands. Even though these rural areas have received more representation on the new city councils than their respective populations entitle them to, there is still considerable rural alienation, and some local activists have joined the de-amalgamation movement referred to earlier. In 2000 the Quebec government decided to follow Ontario’s lead by introducing legislation to force all the municipalities within each of the two-tiered metropolitan governments of Montreal, Quebec, and Hull to merge with each other. There were also provisions for mergers in other urbanized parts of the province, including Chicoutimi-Jonquière and Sherbrooke. This initiative reduced the number of municipalities in Quebec from 1,306 to 1,115 (Hamel, 2005: 154). Hostility to the mergers was so intense that Opposition leader Jean Charest promised to create a mechanism to undo them if he were elected premier. When he was elected premier, in 2003, he surprised many by going at least part way to implement his promise. His government introduced legislation stating that a referendum on demerger would be held if 10% of the eligible voters in a merged municipality signed an official petition. For a demerger to be implemented, it had to receive the support of more than half the people voting in the referendum and this group had to comprise at least 35% of all eligible voters. In June 2004 eighty-nine such referendums were conducted. In only thirty-two cases were the requisite numbers of votes obtained to bring about a demerger. Fifteen of these were within the territory of the newly amalgamated City of Montreal and two within Quebec City (Hamel, 2005: 154–6). The result is that, for both Montreal and Quebec City, the current system of municipal government is almost indescribably complex, especially because there is now an ‘agglomeration council’ which links the demerged municipalities with the municipality that they have chosen to leave. Within the City of Montreal, there are also borough

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councils with decision-making authority for local issues, including zoning. The outcome of the amalgamation process in Montreal was dramatically different from what it was in Toronto. There is no provincial government in Canada that is currently pursuing forced municipal amalgamations. For now, all eyes are on Quebec so as to determine the viability of undoing amalgamations that were created a few years before. Amalgamating municipalities was a governmental fad in eastern Canada that has come to an end. Had the results of amalgamation been more positive, presumably the process would have continued. Regional Organizations In local government circles Canada has been well known for its early innovations in two-tiered metropolitan and regional government. The Municipality of Metropolitan Toronto (1953–97) and the Corporation of Greater Winnipeg (1960–71) are the prime examples. Starting in 1968, similar two-tiered systems were implemented in most of the heavily urbanized parts of Ontario. They became intensely unpopular, both because they appeared to lead to higher costs and because their establishment was accompanied by many forced lower-tier amalgamations that led to the demise of small-scale local government. As a result, aspiring municipal reorganizers in other provinces were usually anxious to make clear that whatever it was they were proposing, it did not involve two-tiered regional government in the Ontario style (Sancton, 2002). This was particularly evident in British Columbia in the late 1960s, when the provincial government established a network of twenty-nine regional districts covering the entire province, successfully claiming throughout the process that, rather than establishing a new level of local government, it was simply establishing flexible mechanisms for intermunicipal cooperation whose affairs were to be subject to the control of a ‘board of directors’ rather than to a new kind of municipal council. Richard Tindal and Susan Tindal rightly claim that ‘the regional district model is now the most enduring of the forms of restructuring introduced in Canada, approaching forty years in existence’ (2004: 91). Over the years the province has tinkered with the model, but its main characteristics have remained constant. The Greater Vancouver Regional District, now called Metro Vancouver, is the most important, because it covers the territory of the province’s largest city and its bur-

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geoning suburbs. In 1999 the province transferred its responsibility for public transit in the area to a new Greater Vancouver Transportation Authority (Translink), most of whose members are appointed by the Metro Vancouver board of directors (Smith and Stewart, 2005: 35–6). In Ontario at the beginning of the 1990s it looked as though the province would be overhauling its system of two-tiered urban and regional government. This was especially evident in Toronto in 1994, when the government created a Greater Toronto Area (GTA) Task Force, chaired by Anne Golden. The task force recommended the abolition of the Municipality of Metropolitan Toronto (Metro) and the four two-tiered regional governments surrounding it and their replacement by a Greater Toronto Council that could act as a real metropolitan government for the entire built-up area. Because the Golden task force was created by a social democrat provincial government and ended up reporting to a conservative one, it is perhaps not surprising that the new government ignored its advice and instead created an amalgamated City of Toronto from among Metro’s constituent parts. The same government, as we have seen, later did the same thing for the two-tiered regional systems in Ottawa, Hamilton-Wentworth, and Sudbury. The only two-tiered regional systems that remain are the four that still surround the amalgamated City of Toronto, one west of Toronto in Waterloo and another to the south across Lake Ontario, in Niagara. In late 1998, to the surprise of many, Ontario’s government established a Greater Toronto Services Board covering the entire GTA. In introducing the legislation, the minister of municipal affairs stated the following: ‘The legislation would enable the board to prepare strategies on how GTA municipalities provide the sewer and water pipes, the roads and transportation systems their communities need, and how to make sure they are efficiently used. The board would manage GO [commuter] Transit through an authority that would be called GT Transit. It would help coordinate economic development and tourism ... It would help resolve disputes. It would be a forum for municipalities to discuss the administration and costs of social assistance and social housing programs’ (Ontario 1998, 25 Nov.). The legislation established a forty-person board, comprising at least one member from each constituent municipality (but eleven from Toronto and two from Mississauga) as well as the four chairs of the remaining regional municipalities. There was a system of weighted voting so as to promote representation by population. By-laws to

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establish GTA strategies required a two-thirds majority in order to be approved. The GTSB only lasted from 1999 until 2001. To justify the board’s abolition, the government claimed that there was insufficient agreement among member municipalities about the shaping of future growth. Because the government also decided to take back responsibility for GO Transit, there was really little for it to do, especially since the provincial government itself became quite involved in regional planning for the entire area. Such involvement has only intensified since a Liberal provincial government was elected in 2003. The Liberal government has developed elaborate regional plans for a territory it calls the Greater Golden Horseshoe, a territory much larger than that covered by the GTSB. It has also recently established a Greater Toronto Transportation Authority (Metrolinx) to integrate regional public transit systems and to take over management of GO Transit. In the Prairie provinces (Alberta, Saskatchewan, and Manitoba), there has been less need for regional intermunicipal organizations in urban areas because one municipality usually includes all or most of the metropolitan population. In Alberta, regional planning commissions were dismantled in 1994 as an economy measure and as a means to promote local economic development by making individual municipalities almost completely responsible for land use issues (LeSage 2005: 69–70). The demise of the Edmonton Metropolitan Regional Planning Commission was especially problematic because the City of Edmonton comprised only just over 70% of the metropolitan population, the remainder living in almost two dozen suburban and rural municipalities. In 1998 the Alberta government appointed a former provincial treasurer, Lou Hyndman, to review the governance arrangements for the entire area. Mr Hyndman’s final report is an important document for local government in Canada because it does not focus on structural change: Many different approaches were considered as part of this Review. Of the many options available, partnerships are the best option for this region. Partnerships involve networking, negotiation and mutual investment for mutual gain. The old style, centralized approach with command and control from the top is not the way to govern our region ... Over the last four decades, this region has developed as a ‘community of communities,’ offering a range of residential and business choices that

120 Local Government in a Global World is unusual in comparison to most metropolitan areas in Canada. This is a strength of the region and it should be respected. A standardized ‘one size fits all’ approach to the delivery of services in the region simply will not work. Citizens and their municipal leaders want choices. Those choices must include being able to choose among the diverse neighborhoods and communities in the region ... Choices in how services are delivered in the region must also be considered. These could include municipal collaboration, cooperation or integration, service boards, agencies and commissions, private companies, volunteer associations, or any combination of these options. (Alberta, 2000: 11–12)1

Nevertheless, Mr Hyndman did recommend that a ‘Greater Edmonton Partnership’ be established comprising all twenty-one municipalities in the area, each of which would have voting strength roughly equivalent to its relative share of the total population (Alberta, 2000: 19). Such an institution was essentially the continuation of the Alberta Capital Regional Alliance (ACRA), a voluntary intermunicipal body that had been in existence since 1995. Rather than legislating for the new body, the Alberta government simply encouraged ACRA to continue (LeSage 2005: 74). But in 2008 the Alberta government replaced it with the Capital Region Integrated Growth Management Board so as to coerce all municipalities to be involved in the regional planning process. Meanwhile, in Calgary, ACRA has since served as a model for the creation of the Calgary Regional Partnership (CRP), which now contains eighteen municipalities. The City of Calgary, however, comprises more than 90% of the population of the territory included in the CRP. Since the early 1990s, Quebec has been the only Canadian province which has established new regional institutions for multi-municipal metropolitan areas. In 2000 the Quebec legislature established ‘metropolitan communities’ for both Montreal and Quebec City. The territory of the Montreal Metropolitan Community (MMC) corresponds very closely to that of the federally defined Montreal census metropolitan area, indicating that its territorial scope is quite comprehensive. The MMC includes the territories of the amalgamated cities of Montreal and Longueuil (before any demergers) and of sixty-one other municipalities. It has planning and coordinating responsibilities relating to regional development, waste disposal, regional parks, public transportation, economic growth, regional infrastructure, and cost-sharing for public housing. It is governed by a twenty-eight-

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person council, of which thirteen members come from the City of Montreal. The council’s chair is the mayor of Montreal, who is the MMC’s main political spokesperson (Communauté métropolitaine de Montréal, 2004). Residents of the City of Montreal now effectively have four tiers of local government: borough, city, agglomeration, and metropolitan community. It is still far too early to assess the impact of the new metropolitan communities in Quebec, but it appears that they have been structured to resemble much more the regional districts in British Columbia than the more rigid two-tiered systems of metropolitan and regional government that were in the past associated with Ontario’s system of municipal government. Internal Restructuring Debate and conflict about internal structures of municipal government are constant features of Canadian local politics. Should the council be smaller to be more efficient or larger to be more representative? Should councillors be elected by ward to insure every part of the territory is considered or at-large so that all councillors will focus on the wellbeing of the municipality as a whole? Should there be an executive committee of council or should the mayor be given more executive authority? If the mayor is not to have executive responsibility, should there be a strong city manager or merely a coordinating ‘chief administrative officer’? How should special-purpose bodies such as school boards, police boards, and park boards relate to municipal councils? Or should they exist at all? Such questions have been on local political agendas for at least a hundred years in most parts of Canada, and the outcomes have been different at different times and in different places. There is not much consistency even within provinces, let alone among them. Perhaps the only possible generalizations are that school boards exist everywhere, although their authority varies considerably from province to province and that there are no American-style ‘strong mayor’ systems in Canada. The key point is that there has been nothing much new added to these debates during the period since the early 1990s. There have been no comprehensive studies or reports relating to the internal structures of Canadian municipal government and no comprehensive plans for change. There is no evidence that ideas relating to the new public management (NPM) have had any influence on how citizens and

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municipal officials think about the structures of their municipal governments. As we have seen earlier, the focus, in eastern Canada at least, was on municipal amalgamations, not internal restructuring. Implementing the amalgamations did require, of course, that someone pay attention to how the new municipalities were to be structured. But the transition teams charged with this task generally adopted the principle that the implementation period for an amalgamation was not the time to experiment with new forms of internal decision-making and administration. In Ontario amalgamations were promoted by the government as a means of reducing the number of local politicians. Such an objective was ludicrously advanced as a mechanism for reducing the size of government itself. Some municipalities reduced the size of their respective councils as a way of demonstrating that they need not amalgamate. Although about 1,800 municipal elected positions – almost all of which were remunerated on a part-time basis – were eliminated, little to no thought was given to making other kinds of structural changes. Students of the American Progressive movement at the turn of the twentieth century might have thought, for example, that creating smaller councils might be accompanied by at-large elections and/or the adoption of a ‘council manager’ form of municipal government. There is no evidence at all that such thinking took place. The sole objective was to reduce the number of municipal councillors. Amalgamating three or four small municipalities and creating a new council of seven members was a difficult, but not impossible task of political engineering. Things did get more complicated, however, in the amalgamated City of Toronto. Opponents of amalgamation argued that creating a new municipality with a population of more than two million and, say, twenty councillors (the pre-amalgamation City of Toronto with a population of about 600,000 had twenty-two) would mean that each councillor would represent more than 100,000 people, more than a member of the federal House of Commons. The traditional view that the municipal level of government was the most accessible to the public would, on the surface at least, be severely compromised. Apparently sensitive to this point, the provincial government initially established the amalgamated City of Toronto with a council of fifty-eight members and a mayor, a size quite unprecedented in the modern history of Ontario. No consideration appeared to have been given to how such a large council would actually work. The City of Montreal had a council of approximately the same size, but its

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members were invariably elected on local party slates, providing an element of discipline and cohesion. No such local parties existed in Toronto, making the task of organizing the disparate members almost impossible. In 1999 the government attempted to address the problem by reducing the size of the council to forty-four members and a mayor, but such a change, because it was part of the Fewer Municipal Politicians Act, seemed to have been motivated more by eliminating elected positions as an objective in itself rather than by trying to create a structure that could actually work. How the City of Toronto is to be structured internally remains a topical subject, and it will be addressed again after a look at Winnipeg, the one other major Canadian city in which internal structures have recently been a significant issue. In 1997 a business-oriented mayor, Susan Thompson, undertook to bring significant change to Winnipeg’s political and administrative structures. Under her leadership, city council agreed to engage a wellknown Canadian municipal consultant, George B. Cuff, to review the city’s operations. Much of Cuff’s report called for the standard nostrums of the new public management, some of which were implemented and some not. But he also addressed structural issues. Probably his most notable recommendation was to abolish the city’s board of commissioners. Such a board was a peculiarly western Canadian structure that included a chief commissioner as chair, who was the city’s senior staff member, other commissioners who headed different parts of the administration, and the mayor. In addition to acting as a kind of official management team, the board was also charged with preparing the council agenda. Cuff concluded that the existence of the board of commissioners caused confusion and delay and hampered transparency and accountability. As a result of Cuff’s report, city council abolished the board and replaced it with a single chief administrative officer (CAO), a position found in the vast majority of larger Canadian municipalities, including, now, all the major cities in western Canada. The Cuff report also had the effect of further strengthening the role of the mayor in Winnipeg. Leo and Piel point out: ‘Under the new system, the mayor became arguably the most powerful executive officer in Canada. The mayor chairs the Executive Policy Committee (EPC), the equivalent of a cabinet, and appoints its members, four of whom she simultaneously appoints as chairs of the standing committees. The mayor also has the power to suspend the CAO for up to three days, by which time the EPC must extend the suspension for 30 days,

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reinstate the CAO, or recommend dismissal to council’ (2005: 117). Because the mayor is not clearly and solely responsible for the administrative operations of the municipal government, Winnipeg cannot be said to have an American-style ‘strong mayor.’ Such a system has been increasingly discussed recently as a possible mechanism for extracting the City of Toronto from the obvious structural difficulties it has been in since the amalgamation of 1998. One of the most significant documents from within the City of Toronto on the subject of internal structures was prepared in the CAO’s office and released in April 2003. This document claims that ‘in the western democratic world there are four basic models in use’ (Toronto, 2003: 21). Toronto is described as using the ‘strong council’ model, the main problem with which is ‘the potential for members to focus on ward-based issues, rather than city-wide concerns’ (ibid.). Given the current interest in the ‘strong mayor’ model, it is instructive to quote the document’s entire analysis of this option: A mayor with substantial executive (statutory) powers or a mayor leading an empowered executive committee characterizes this model. The model is generally accompanied by a system of party politics. The mayor is a highly visible, chief executive officer, often with the authority to prepare a budget, control the city administration, appoint chief officers, and sometimes has the power to veto legislation proposed by council. This model supports strong and visible leadership in the community and the ability to push issues through the decision making process to implementation. The mayor also has the ability to focus on city-wide issues and provide a strong intergovernmental voice. Accountability is seen to be more direct in this model since there is a high degree of power and authority in one position. However, since the model concentrates power, other members of council relinquish at least some of their policy-making ability and influence, potentially resulting in a reduced community voice. Depending on circumstances or the makeup of council, a dysfunctional council may be the result. As well, centralization of power can sometimes delay decisions by overloading one office with responsibility for very complex issues. This model politicizes the civil service, linking senior staff appointments (and thus turnover) to the mayor in power and may cause regular cycles of instability. (Toronto 2003: 21–2)

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The other models discussed are labelled ‘parliamentary’ and ‘council manager,’ the former requiring a party system, which Toronto does not have. ‘Council manager’ systems are generally associated with smaller cities and suburbs. No municipal government in North America remotely approaching the size of the amalgamated City of Toronto has adopted the ‘council manger’ model, in which the city manager has complete control over the administrative apparatus and is responsible for preparing a budget for council approval. Ironically, in 2005 city council changed the title of the CAO to ‘city manager.’ However, except for the fact that the city’s human resources division was made to report directly to her, the city manager was not given any more authority than she already had as CAO. It is therefore clear that, notwithstanding the change in labels, Toronto does not now use the ‘council manager’ model; it still uses the ‘strong council’ model even though its top administrative official is called the ‘city manager.’ The document devotes considerable attention to analysing different ways of grafting an effective executive committee of council on to the existing ‘strong council’ model. It includes brief accounts – not always accurate – of how such committees are structured and empowered in other major North American cities. But the document as a whole is meant solely for discussion. No particular options are recommended, which is not surprising given that that it was prepared by municipal staff on a topic that is profoundly political at its heart. The issue of internal decision-making structures for the City of Toronto became more urgent in the second half of 2004 when the Ontario government agreed to negotiate with the city about making amendments to the provincial legislation that controls the city’s jurisdiction and its main structures. The city claimed it needed more taxation authority and more autonomy to make policy decisions in fields that are not already occupied by the federal and provincial governments. The province’s response has been the City of Toronto Act that provides the city with more general grants of legal authority and some new sources of revenue, such as additional taxes on alcohol and theatre tickets. The implementation of this response was dependent, however, on the city streamlining its political and administrative structures so as to enhance accountability, especially by strengthening the authority of the mayor. City council decided in June 2006 that, starting in 2007, the mayor would appoint a deputy mayor and the heads of the council’s standing committees, who would in turn comprise the majority on a new thirteen-member executive committee which is supposed

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to provide policy leadership to the council as a whole. These relatively minor changes have met the province’s requirements. In February 2008 the Mayor’s Fiscal Review Panel reiterated previous proposals that ‘the mayor should have the power to direct, appoint, and dismiss the City Manager’ (Toronto, 2006: 61). This significant move towards a full strong mayor system is likely to be adopted. The general perception in the past has been that the city’s forty-four city councillors are each differently involved in various aspects of city decision-making and that no one – not even the mayor – is really in charge. Such a perception is consistent with how the council of the preamalgamation City of Toronto worked, but that municipality had only one-quarter the population and number of councillors as the amalgamated city does and major infrastructure projects were the responsibility of a quite separate upper-tier authority, the Municipality of Metropolitan Toronto. Few participants in the debate about new decision-making and management structures for the City of Toronto have come to grips with the unique characteristics of Toronto’s municipal government. Where else in advanced liberal democracies is there a single-tier central city with a population of over two million people and in which there are no organized political parties operating at the municipal level? Conclusion Amalgamations have undoubtedly been the biggest municipal restructuring issues in Canada since the early 1990s. Although not implemented in western Canada, proposals for them caused considerable conflict and anguish in the Edmonton area of Alberta and in rural Saskatchewan. But it is in Montreal and Toronto where the legacy of amalgamation still dominates the local political scene. Montreal has experienced a demerger process that is quite unprecedented. It appears to be producing a set of political institutions at the local level so complex and indefensible that they can surely not survive for an extended period of time. This means that the Montreal area seems doomed to still more years of conflict about municipal structural arrangements. Perhaps the best that can be hoped for is that the ‘agglomeration council’ will emerge as the de facto central-city municipality, comprising both boroughs of the city and the separate corporate entities that are the de-merged municipalities. If this is to happen,

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there will have to be changes to make the agglomeration council more democratic, and everyone will have to learn to live with a set of arrangements that no one could possibly have anticipated or desired before the amalgamation process began. In Toronto the amalgamation itself is almost universally accepted as a fact of municipal life. But implementation issues remain ten years after it came into effect. More importantly, politicians at both the provincial and municipal levels are still struggling with the implications of the amalgamation. Can the municipal political process carry on much as before, with continuing skirmishes about whether to do things the way the old Toronto did, or in accordance with the practices of one of the other constituent units? Or are we witnessing the birth of a genuinely new kind of government within Canadian federalism – the empowered urban government that approaches political equality with its provincial creator? What does all this mean for the governance of the larger Toronto city-region? Will the province continue to make major planning and infrastructure decisions for the city-region without there being any kind of metropolitan-wide local political institution? These are the kinds of questions that remain unanswered as Canada’s most populous urban area continues to grapple with the implications of reckless structural change. While urban municipalities elsewhere in the world have been implementing new ways to deliver public services outside the traditional hierarchies of public sector bureaucracies, most Canadian cities, especially in eastern parts of the country, have been forced to reshuffle their hierarchies to respond to provincial initiatives relating to new boundaries and new functions. Such initiatives have had very little to do with the new public management and everything to do with trying to make provincial governments look as though they have been acting dramatically and decisively.

NOTE 1 For a discussion of Canadian examples of various forms of institutional and non-institutional intermunicipal cooperation, see Sancton, James, and Ramsay (2000).

128 Local Government in a Global World REFERENCES Alberta, Municipal Affairs. 2000. Alberta Capital Region Governance Review Final Report, Dec. Calgary: Author. Barber, J. 1997. ‘Harris’s Words Come Back to Bite Him.’ Globe and Mail, 19 Feb. Betts, G. 1997. ‘Municipal Restructuring, New Brunswick Style: The Saint John Experience.’ Municipal World, Sept.: 3–8. Boomer, R., and MacKinlay, S. 2005. ‘57 per cent Want Split, Amalgamation Poll Says.’ [Halifax] Daily News, 15 June. Boudreau, J.-A. 2000. Megacity Saga: Democracy and Citizenship in this Global Age. Montreal: Black Rose. Communauté métropolitaine de Montréal. 2004. Retrieved 8 Aug. 2005 from http://www.cmm.qc.ca/accueil/index.asp. Dann, M. 2004. The Costs and/or Savings of Amalgamation. HRM Amalgamation Project. Retrieved 15 Sept. 2004 from http://www.mgmt.dal.ca/spa. Frisken, F. 2007. The Public Metropolis: The Political Dynamics of Urban Expansion in the Toronto Region, 1924–2003. Toronto: Canadian Scholars’ Press. Garcea, J. 2005. ‘Saskatchewan’s Municipal Reform Agenda.’ In Garcea and LeSage, Municipal Reform in Canada, 83–105. Garcea, J., and LeSage, E.C., Jr. (Eds.). 2005. Municipal Reform in Canada: Reconfiguration, Re-empowerment, and Rebalancing. Toronto: Oxford University Press. Halifax Regional Municipality. 2004. Retrieved 15 Sept. 2004 from http://www.halifax.ca.index.html. Hamel, P. 2005. ‘Municipal Reform in Quebec: The Trade-off between Centralization and Decentralization.’ In Garcea and LeSage, Municipal Reform in Canada, 149–73. Horak, M. 1998. The Power of Local Identity: C4LD and the Anti-amalgamation Mobilization in Toronto. Research Paper 195. University of Toronto: Centre for Urban and Community Studies. Leo, C., and Piel, M. 2005. ‘Municipal Reform in Manitoba.’ In Garcea and LeSage, Municipal Reform in Canada, 106–26. LeSage, E.C. 2005. ‘Municipal Reform in Alberta: Breaking Ground at the New Millennium.’ In Garcea and LeSage, Municipal Reform in Canada, 57–82. Nova Scotia, Municipal Affairs. 1993. Interim Report of the Municipal Reform Commissioner Halifax Count (Halifax Metropolitan Area). Halifax: Author. Ontario, Legislative Assembly. 1998. Hansard. Sancton, A. 2002. ‘Signs of Life: The Transformation of Two-tier Metropolitan Government.’ In C. Andrew, K.A. Graham, and S.D. Phillips, eds., Urban

Restructuring and Reform: Canada 129 Affairs: Back on the Policy Agenda, 179–98. Montreal and Kingston: McGillQueen’s University Press. Sancton, A. 2000. Merger Mania: The Assault on Local Government. Montreal and Kingston: McGill-Queen’s University Press. Sancton, A., James, R., and Ramsay, R. 2000. Amalgamations vs. Inter-Municipal Cooperation: Financing Local Infrastructure Services. Toronto: Intergovernmental Committee on Urban and Regional Research. Siegel D. 2005. ‘Municipal Reform in Ontario: Revolutionary Evolution.’ In Garcea and LeSage, Municipal Reform in Canada, 127–48. Smith. P., and Stewart, K. 2005. ‘Local Government Reform in British Columbia, 1991–2005.’ In Garcea and LeSage, Municipal Reform in Canada, 25–56. Statistics Canada. 2004a. Retrieved 8 Aug. 2005 from http://www12.statcan.ca/english/profil01/PlaceSearchForm1.cfm. Statistics Canada. 2004b. Retrieved 14 Sept. 2004 from http://geodepot.statcan.ca/Diss/Highlights/Page8/Page8_e.cfm. Tindal, C.R., and Tindal, S.N. 2004. Local Government in Canada. (6th ed.). Toronto: Thomson Nelson. Toronto, City of, Mayor’s Fiscal review Panel. 2008. Final Report: Blueprint for Fiscal Stability and Economic Prosperity – A Call to Action. Toronto: Author. Toronto, City of, City Clerk. 2005. Consolidated Clause in Policy and Finance Committee Report 6, which was considered by City Council on June 14, 15 and 16, 2005. Toronto: Author. Toronto, City of. 2003. Council Governance Review Discussion Paper, April. Toronto: Author. Toronto City Summit Alliance. 2003. Enough Talk: An Action Plan for the Toronto Region. Retrieved 15 Sept. 2004 from http://www.torontocity summit.ca/pdfs/TCSA_report.pdf. Vojnovic, I. 1999. ‘The Fiscal Distribution of the Provincial-Municipal Service Exchange in Nova Scotia.’ Canadian Public Administration, 42/4: 512–41.

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6 Performance Management in Australian Local Government louise kloot and john f. martin

As Chris Aulich (chapter 2, this volume) and Neil Marshall (chapter 4, this volume) have already highlighted, significant restructuring and reform in Australian local government have been driven by an ideological agenda from higher levels of government that puts greater emphasis on local governance, outcomes-oriented performance, and accountability to stakeholders, typically referred to as the new public management (NPM; Hood, 1995). All Australian local government state acts from the late 1980s to the mid-1990s were changed to ‘enabling’ legislation (more general ‘powers of competence’) to give local governments more autonomy to determine the future of their own community (Wensing, 1997; Dollery, Marshall, and Worthington, 2003). The price of this autonomy from state government control under this new regime is the requirement for much more stringent and comprehensive reporting by local government to state government for almost all of their activities. For example, each local government is required to prepare corporate and strategic plans (Kloot, 2001) that outline its intentions over the coming year and to report annually on its performance against these plans. Several other annual reports are required by each state government’s local government monitoring body, for example, budget reports, best value reports, and community-satisfaction reports. There are differences between the approach in states and territories, most noticeably between Victoria and the rest of Australia. Victoria has undergone the most significant restructuring and reform over the past decade and there is a discernible pattern that is reflected in local government research (Kloot and Martin, 2001, 2002). For example, Victoria instituted a regime of compulsory competitive tendering (CCT) under

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the rule of a conservative coalition party that was replaced by a best value1 regime (which includes both contestability and community satisfaction) with the change to the current Victorian state Labor government (Martin, 1999). All other states have committed their local government system to competitive tendering because of the federal government’s national competition policy (NCP) legislation. The NCP requires all states to introduce contestability into the delivery of works and services (Victoria’s CCT was ahead of this federal government requirement). Victoria’s CCT regime was introduced in 1994/5 with the primary goal ‘to improve the efficiency, quality, accountability, and flexibility of councils’ in the delivery of services through the market testing of services to determine a competitive price. CCT, largely adopted from the British model, required councils to develop service specifications, and tender publicly for the provision of a service through the open market. This resulted in many services being contracted out to private providers, including in some cases organizations which were formerly part of the council and which had performed the work then being put to tender. However, it was recognized that the drive for efficiencies reduced the collaborative partnerships both inter- and intra-council which was important in providing services to communities. Best Value was introduced into Victoria in 1999, with the aim of retaining the accountability of councils for their expenditure and value for money while removing the rigidity and inflexibility to allow a focus on local community needs and building effective partnerships with their local communities. Best value principles were derived from the British model and the objectives for their introduction were to foster: local accountability; a whole of organisation response; consultation on performance; best value outcomes (enhanced service and organisational performance); benefits, not costs; and to encourage innovation. The best value principles are: all services must meet quality and cost standards; all services must be responsive to the needs of the community, a service must be accessible to those for whom it is intended; a council must achieve continuous improvement in its provision of services; a council must develop a program of regular community consultation; and a council must report at least once per year to its community [and to the Best Value Commission] on its achievements in relation to Best Value. (Department for Victorian Communities, 2005: 1)

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Despite the differences between states and territories, there has been an overall move to focus on performance and accountability across the Australian system of local government. These changes reflect a trade-off between local autonomy and independence and the requirement for mandatory reporting to the state government on each local government’s performance. Typically, as our research outlined below reveals, this has more to do with efficiency and regulation than with innovation specific to the needs of the local community. Although local governments determine the allocation of resources, this must be done within a regulatory and reporting regime set by state governments. For example, development planning must be done according to a strict code, as must building and health regulations whose standards have always been set by the state. States arbitrate on local-planning disputes between, for example, the local government, residents, and developers through state commissions and tribunals. In addition, in some states, such as New South Wales, Queensland, and Victoria, state governments undertake periodic surveys of local communities to assess their satisfaction with the services provided by their local governments (Herbert-Cheshire and Higgins, 2004). Kloot and Martin (2000, 2002) reported on the way in which local governments structure and manage their performance in terms of state-government requirements. It is a management axiom that structure follows strategy: the organization sets its strategy and then ties its operational and business plans to that strategy (see, e.g., the balanced score card of Kaplan and Norton, 1996). If the strategy is about compliance and reporting, it is no surprise that local governments develop administrative systems that reflect these requirements. In this chapter, we review the research on Australian local government performance management, analysing the approach taken by local government in terms of contemporary thinking about public management and the way in which government organizations should work. Although we recognize that each Australian state and territory approaches the management of their local government system in different ways (ways that reflect their unique state-based political and administrative circumstances), we are interested in how local government maintains its autonomy and demonstrates accountability and responsibility to achieve local goals and objectives within state-based legislative and administrative frameworks that keep local government dependent on state government.

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Our position on local government is that it is an arm of state government, even though it has apparent autonomy for decision-making that is independent of the state government. Despite the rhetoric of decentralization, the reality is that local government operates within a strict ‘process’ reporting regime to its state government, which preoccupies and overwhelms its attempts to be innovative and truly local in its democratic processes. In terms of models of public sector reform (Ferlie et al., 1996; Kaplan and Norton, 1996), local governments largely still operate with a focus on efficiency and financial stewardship rather than being driven by values such as the learning organization, local innovation, and being accountable to and oriented towards serving the local public (Kloot and Martin, 2000). We recognize the increasing importance of accountability and a focus on serving the public as the reform of all levels of government continues. In our research, we asked three broad and related questions, which reflect and extend on Kaplan and Norton’s (1996) balanced score card. First, to succeed, how should local government appear and account for its performance to stakeholders and ‘customers’? Second, to satisfy its stakeholders and the community, what business and management processes must local government excel at? Third, to achieve its vision, how will local government sustain its ability to change and improve? These questions were explored first through an in-depth field study of seven Victorian councils regarded as leaders in local government management reform (Kloot and Martin, 2000). This research was followed up with a national survey of local government managers that addressed two related issues: attitudes to accountability (Kloot and Martin, 2001) and the nature of management practices underpinning reform (Kloot and Martin, 2002). Finally, a survey of all managers (CEOs, directors, and third-level managers) in six Victorian councils (Kloot and Martin, 2004, 2007) examined the relationship between corporate culture and the use of accounting and financial management information. In our most recent research about the relationship between aspects of local government reform and the use of accounting and financial management information (Kloot and Martin, 2004), local government managers indicated that contestability had been the most significant aspect impacting their use of accounting information and other administrative and management practices within their council. Although this was most pronounced in Victoria, where local governments have had to adapt to an imposed regime of CCT (since superseded by best

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value), our experience working with local government managers in other states, for example, Queensland and New South Wales, indicated they have a similar view. Other factors rated as important were the type of financial reporting (the requirement to report using accrual accounting under Australian Accounting Standard AAS27 Reporting by Local Government), rate capping, and measurement of community satisfaction. Significantly, best value did not rate as highly, probably because of the significant efficiency gains introduced under CCT, which resulted in far less significant changes in the move to best value. Our research has revealed much about local government managerial attitudes relating to performance management and accountability and the focus that managers give to this. To assist in the analysis of our research findings, we used Ferlie et al.’s (1996) typology of public sector organizations, which presents four models that reflect the changing nature of public service: the Efficiency Drive Machine model, the Downsizing and Decentralizing model, the Search for Excellence model, and the Public Service Orientation model. As will be seen, the Efficiency Drive Machine model dominates, as it can be easily counted or measured and thus rewarded. Ferlie et al. (1996) suggested there is a range of institutional settings that constitute public sector organizations. Their first model, the Efficiency Drive Machine model, represents a public sector organization that has grown from financial constraints, seeks to achieve value for money, and focuses on strong finance, strong management, and the customer. Although the principles underlying this type were sustained through times of fiscal stringency, they are now recognized as being overly simplistic and inadequate. Efficiency and value for money will not be the single most important concerns into the twenty-first century. The second type, the Downsizing and Decentralizing model, incorporates competition, contracting out, and purchaser and provider splits. The organization focuses on management by contract, a small strategic core, and quasi-markets. The model emphasizes the significant structural reforms that took place in the 1980s and 1990s and is of particular relevance to the reforms that have been imposed on local government. The third model, the Search for Excellence model, reflects the popular work of Peters and Waterman (1982). This model is driven by the recognition of the importance of quality in public sector organizations, of which best value is one example. It focuses on organizational culture, the learning organization, and corporate symbols. The

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problem with this model is the difficulty of explaining the operationalization of excellence in public sector organizations. The final type, which Ferlie et al. (1996) suggest as an aspirational model, is the Public Service Orientation model. This model recognizes the unique nature of the public service and combines selected public and private sector ideas to stress the importance of citizens and their concerns while introducing ideas such as quality management and efficiency. It has a strong focus on public accountability, on the importance of the citizen, and on elected bodies. Although not yet fully developed, this model appears to encompass a realistic set of principles and may point the way into the future of the public sector. It is axiomatic in organizations that what is measured and rewarded is what matters. Council administrators and managers are motivated by what is measured and rewarded. The next section of this chapter discusses research on local government performance management, subsequent management practices, notions of accountability, and the implications of these in the current and future local government environment. Performance Perspectives What do local government managers think about performance? What is their conceptual framework for developing performance management strategies? Kaplan and Norton (1992, 1996) provide a conceptual framework for performance measurement and management that has received acclaim in management and accounting circles and has been widely adopted in practice in public and private organizations. This framework measures performance over four dimensions: financial, customer satisfaction, internal business processes and innovation, and growth and learning. The framework’s strategic logic is that if organizations effectively manage the processes of innovation and learning and internal business-process improvement, then future outcomes for customer satisfaction and financial performance will be enhanced. By investing in learning and internal processes today, there will be positive outcomes across all four dimensions in the future. The message behind this framework is that managers need to measure their performance across all four dimensions, not just the outcome of financial performance. Kaplan and Norton also noted that the four dimensions are inextricably linked with the organization’s strategy: its strategic

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vision defines all the performance measures and how performance is managed to achieve its strategy. The in-depth study by Kloot and Martin (2000) of performance measurement in well-managed Victorian councils found that local government performance measurement has focused on the results of councils’ financial performance (the Efficiency Drive Machine model) and to a lesser extent on how the community views their performance. Indeed, local government managers were very concerned that financial reports should provide information to the local community; specifically, these reports should indicate value for money, transparency in financial transactions, and stewardship of resources. An additional set of financial reports had to be presented annually to the Victorian state government, which managers found both time consuming and costly, a reflection of Dixon et al.’s 1998 observation that ‘monitoring bureaux become increasingly involved with the minutiae of administration and increasingly demand greater quantity and detail of reporting’ (cited in Kloot and Martin, 2000: 239). Even though local government managers were preoccupied with financial reporting, a common theme was that financial information was poor and at times negatively impacted on performance management. In certain aspects of competitive tendering, the poor financial information led to a lack of urgency in cost reduction. Another common theme was that financial information was so poor it was ‘a reporting nightmare’ and negatively impacted on performance management. Additionally, the often-used split between ‘purchasers’ and ‘providers’ had mixed incentives: there were no financial incentives to improve financial outcomes for purchasers (because they contracted out at a fixed price), but there were (profit) incentives for providers to reduce costs and improve their efficiency in using resources. Local government plans are strongly community focused, with the strategic imperative being related to satisfying community needs (Kloot and Martin, 2000). Local governments manage not only their performance to achieve their strategic goals but also their community’s perceptions about the success of program outcomes in order to convince the community they are in fact delivering on their goals and objectives. Community consultation and collaboration and education of the community and consumers are used to achieve high levels of community satisfaction. Learning and innovation (the Search for Excellence model) were managed on an ad hoc basis with few formal performance indicators

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or attempts at performance management at an organizational level. Even though managers largely agreed that this dimension is important, it was the weakest dimension (Kloot and Martin, 2000). There were gaps between what is needed and what is measured, and little recognition of the need for innovation and learning in formal plans and documentation. It was suggested that heavy workloads contributed to a lack of time to develop innovative ideas. Although there was reform in the way that internal business processes were carried out (largely due to CCT requirements at that time), these processes were for the most part not measured, as might be expected in a quality-management environment. There was little integration of business processes into a strategic framework, and this lack of strategic focus resulted in changes in business processes being reactionary rather than strategic. Benchmarking, both formal and informal, was a popular method of process improvement, although lack of valid information for accurate benchmarking was a recurring theme (Kloot and Martin, 2000). Local government managers primarily thought about performance management in terms of financial outcomes and, to a lesser extent, customer satisfaction outcomes. Their administration paradigm was to ‘measure and manage the money,’ paying much less attention to those processes that make a difference over the long term, such as internal business processes and the development of a learning culture. These managers were operationally focused and the performance indicators in this dimension are prolific. There were few strategic indicators and there was a lack of coherence between indicators and strategy, but this is understandable as there is a lack of measurement technologies for government at any level. Extant measures focus on the financial, and a decade of research has resulted in little progress in public sector outcome measures for anything other than the financial. Accountability Perspectives Given the limited perspective on performance management in this research (Kloot and Martin, 2000), what is the impact on questions of accountability espoused by local government managers? The research we undertook in 2001 examined questions of accountability throughout Australia and analysed the results by both state and local government type. We investigated how local government managers perceive their accountability to different stakeholders and how accountability

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can be demonstrated, that is, is accountability demonstrated solely by financial reporting or are there other ways? Managerialist changes (the new public management) suggest that accountability is increasingly difficult to define in the public sector. There are definitions ranging from explaining actions, providing information about plans and outcomes, setting goals, accepting responsibility, being concerned with probity, and being answerable for producing outputs and using resources. Parker and Gould noted that ‘in its broadest sense accountability simply refers to the giving and demanding of reasons for conduct in which people are required to explain and take responsibility for their actions’ (1999: 116). Yet accountability in local government is much more than explaining and taking responsibility for actions – it has become enshrined in both regulation and practice throughout Australia’s system of local government. Regulations pertaining to accountability derive largely from a managerialist perspective asserting that accountability is a matter of imposing performance monitoring and tight budgets (Sinclair, 1995). Over a decade ago Sinclair (1995) argued that public sector accountability had moved beyond compliance and the focus was now on reporting performance and effectiveness. However, Kloot and Martin (2001) found that performance reporting, as well as traditional compliance reporting by an entity, is still emphasized in Australian local government. Although accountability is difficult to define, it is fundamental to the Westminster system of government. The new public management, with its competitive theory, raises questions about the nature of government accountability. Is a private contractor delivering services on behalf of local government accountable to its shareholders or to the community it serves? The NPM raises considerable unresolved dilemmas in this regard. There are multiple accountabilities in local government: managers need to balance notions of public and program accountability to ratepayers and the local community, of political accountability to councillors, and of administrative accountability to the state government. Empirical research into these multiple accountabilities, unlike much of the normative research in this area, examined managers’ actual perceptions of accountability (Kloot and Martin, 2001). Our research evidence suggests that local government managers want to be held accountable and want to demonstrate their accountability to their stakeholders (Kloot and Martin, 2001). In 2001, we sur-

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veyed all 666 Australian local governments (response rate of 30.5%), asking CEOs a range of questions about accountability. Specific questions were about the relative importance of different stakeholders: state government, ratepayers, the wider community, and councillors. Managers attached very high levels of importance to ratepayers and councillors, with slightly less importance attached to the wider community, and less importance again to the state government. Managers also reported that they had perceived an increase in accountability over the preceding three years. Victorian local government – the state that had been subjected to heavy state government intervention via restructuring and reform – reported the highest perceived increase in accountability to the state government. This finding supports our broad assumption that local government managers manage according to the real politic of what matters in the broader local government policy context. Performance monitoring and tight budgets are often used to demonstrate accountability, but they do not capture the multiple concepts of accountability in local government. Accountability is as much a social construct as a financial one, and therefore administrative and monitoring mechanisms cannot capture its diversity. Some of the many facets of accountability mechanisms in our research (Kloot and Martin, 2001) are discussed below. Demonstrating Accountability to Ratepayers Fiduciary accountability (looking after the money) is satisfied when annual financial reports are prepared and made available to the community. There are many other dimensions of accountability to ratepayers, however, which can be addressed in a more timely and targeted manner: for example, newspaper reports and public hearings. Overall, about 96% of councils prepared articles for local papers. This high percentage indicates a strong sense of accountability through providing easily accessible information to ratepayers. Given the reaction of some managers to the outcomes of the Community Satisfaction Measurement Program (CSMP) and their intention to change perceptions rather than change outcomes, it may also indicate a desire on the part of some managers to ‘massage the message’ and engender a more favourable view of the council when the next CSMP program is conducted. In a similar vein, preparing a regular council or mayor’s column in local papers was less common: only about 65% prepared

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such columns. There was also a marked difference between classifications: remote rural councils were much less likely to prepare such a column (only about 44% do so), while those in regional cities were more likely to do so (about 78%). This may reflect the smaller skill base available to councils with fewer staff in remote areas or it may reflect that smaller councils are closer to their communities and therefore do not perceive the same need for regular columns. Presenting a regular segment on local radio was another method of demonstrating accountability; just over half of the councils had an information segment on local radio. Finally, 90% of councils prepared regular reports to ratepayers and delivered them to their homes or businesses. The number of councils providing regular reports was high enough to again demonstrate a strong sense of accountability to ratepayers. Public hearings and community consultation in preparation of plans and policies are other methods of demonstrating public accountability. For community involvement in strategic planning, community workshops had the lowest level of involvement, and there was only marginally higher community involvement using focus groups. Community involvement was highest when public meetings were held on strategic planning. When specific policies were being developed, there was moderate involvement in environment and economic development policies and some involvement in health and transportation policies. Community consultation was of vital importance in Victoria where local government operates under the best value regime. Accountability to Councillors As accountability to councillors relates to performance and process, it is often discharged through performance reporting. With the emphasis on fiduciary accountability, such reports often relate to financial measures. Previous research by Kloot et al. (1999) revealed budget variance analysis as the most common form of performance reporting; this was confirmed by Kloot and Martin (2001), with 74.6% of local government managers reporting moderate to high use of budget variance analysis. Frequency of reporting is another method of demonstrating accountability to councillors. The more frequent the reports to councillors, the greater the degree of accountability, as councillors can intervene earlier if problems arise. Managers are under less scrutiny if reports are infrequent.

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Accountability to the Wider Community Stakeholders in local government include ratepayers, residents, those who use council services (both fee-for-service and free), and the wider community, for example, those who work or trade with businesses in the local area. Many of the mechanisms by which accountability was demonstrated to ratepayers were also the mechanisms by which accountability was demonstrated to the wider community. Newspaper articles, radio segments, community consultation, and the like were not limited to ratepayers – they also involved the wider community, as we have noted earlier in this chapter. Accountability to the State Government Formal reporting and information requirements imposed on local governments by the states give rise to high levels of legislated accountability. State governments provide the legislative framework and operating environment for local governments. State governments impose conditions on local governments and may, as happened in Victoria, radically restructure and reorganize local government. Each local government must report on its performance over a number of dimensions to its respective state government. On the basis of perceived performance of local government, the state can determine whether or not a local authority will continue to exist, which leads to high formal accountability to the state government. Capital city managers perceived accountability to the state to be only moderately important, while remote area managers perceived it to be of high importance. This may possibly be explained in terms of capital city managers perceiving themselves to be more like equal partners with the state due to their size and complexity. It may also be explained in terms of the level of funding provided by the state to local government. Because state government funding through the Commonwealth and State Grants Commissions is higher for rural and remote rural area councils than for urban councils, remote area councils have more to lose if they do not perform well on state government criteria. This discharge of accountability to the state government is largely reliant on mandatory reporting. Annual financial reports, reporting progress against corporate plans, reporting on customer satisfaction,

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annual best value reports, and annual Grants Commission returns are some of the reports that are designed to ensure that local government is accountable to the state. Other dimensions of accountability may include methods such as benchmarking: a local government trying to demonstrate to the state that it is efficient and effective may undertake benchmarking as a method of proving this. Performance Management and Management Practices How do local government managers administer and manage their organizations according to their view of performance management and accountability? As part of the national survey of 666 councils, Kloot and Martin (2002) also asked managers about the importance they place on a wide range of management practices. Given the national competition policy (NCP) requirements, they identified practices that would assist in the implementation of competitive practices, for example, process reviews, benchmarking of processes, and supplier evaluations. They also identified practices relating to legislative requirements, for example, Occupational Health and Safety (OH&S) and best-practice management from the literature, such as multiskilling, use of cross-functional teams, and use of qualitative measures of performance and enterprise-based bargaining. Not surprisingly, managers placed greatest importance on those regulatory requirements such as OH&S and traditional financial practices such as budget variance analysis. Disappointingly, managers placed much less emphasis on management practices that result in improved performance, such as undertaking culture or climate surveys that lead to organizational development over the long term. Benchmarking service characteristics, which provides an external reference point for improvement, and in-house awards for new processes, which provides an internal reference point for improvement, also rated poorly. Positive indications came from the use of multi-skilling, formal employee and management training, an emphasis on a participative culture and empowering employees, and both work-based and cross-functional teams. In contrast to the lack of attention given to acknowledging innovation in new processes, managers rated the implementation of new processes and a focus on new ideas as important. This is significant, if we accept the proposition that what is rewarded in organizations gets attention. Clearly, managers have positive views relating to the Search for Excellence model but do not have performance man-

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agement systems to focus attention on the processes that underpin this model. One of the lowest-ranked management practices was the use of the balanced score card. Given the prominence of the BSC in academic and professional literature and its place as one of the most influential management ideas of the 1990s, it is surprising that this strategic and operational management tool was not used more by local government managers now operating in the new public management era, which calls for the application of such thinking. These responses tell us much about the design and management of Australian local government administration. They are largely financial-process oriented and employee-centred. They pay much less attention to strategic management issues around innovation and learning and the renewal of business processes. These findings are consistent with the survey of Australian local government CEOs that was undertaken by Gerritsen and Whyard (1998) as part of an international study of appointed CEOs in Western local government (Klausen and Magnier, 1998). Gerritsen and Whyard concluded that ‘in terms of establishing priorities in their daily work, accomplishing tasks efficiently and quickly easily topped the list as our CEOs first priority, followed by ensuring wide involvement in the decision making process’ (1998: 39). Organizational Cultural Perspectives and Critical Events How are culture and strategic financial management and control systems related? The apparent lack of diffusion of leading management practices in Australian local government reflected in the findings from our research described above led us to seek explanations for this phenomenon. Looking to earlier work, we decided to examine the notion of organizational culture in relation to management control systems and developed a survey to determine the relationship between organizational culture, the use of financial information processes, critical events in the life of the council, and other factors requiring enhanced management and best practice, such as best value, as developed in the United Kingdom and prescribed in local legislation in Victoria (Kloot and Martin, 2004, 2007). The survey was carried out in Victorian local government in 2004. Our survey asked managers to report events that had a critical impact on their day-to-day management. The critical event that was

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most frequently mentioned as one of the top three and that was scored most frequently as critical was compulsory competitive tendering (Kloot and Martin, 2004, 2007). Introduced in 1994/5 over a three-year period CCT has since been superseded by best value but is still regarded as being the most critical event to change the face of local government. CCT required, for the first time, an approach focused on markets, competition, cost efficiency, and process efficiency. Much of the downsizing within the sector was the result of services that had previously been provided in-house being subsequently provided by external tenderers or by leaner in-house teams, cut down to compete with the private sector. Fundamental changes in business practices, costing processes, and management accounting information were required because of the implementation of CCT. It resulted in a preoccupation with internal processes and has been a catalyst for process reengineering, the introduction of private sector management practices, and organizational change and learning (Kloot et al., 1999). In particular, in order to manage public sector organizations in a privatized climate, CCT caused the introduction of different types of accounting, budgeting, and financial information (Kloot et al., 1999; Kloot, 1997). Two events ranked almost equally in second place: rate capping and amalgamation and the introduction of accrual accounting under Australian Accounting Standard AAS27. Rate capping was critical because, for the first time, councils faced external restrictions on their ability to raise revenue, which required new management skills to maintain not only the quantum of services (or even enhance services) but also service quality with reduced revenue. It led to changes in systems and information needs and to more explicit and transparent consideration of costs and potential efficiencies. The introduction of AAS27, an accrual accounting reporting system, required councils to explicitly consider depreciation of assets. For many councillors and managers, this was a revelation of significant proportions, as to some extent the need to include depreciation in the operating statement restricts expenditure potential. It is also seen as emphasizing and reinforcing the change from public sector practices to private sector practices. Two events ranked equally were the Community Satisfaction Measurement Program (CSMP), introduced by the Victorian state government in 1998, and best value. Councils’ local communities were surveyed by consultants on behalf of the state government and were benchmarked against each other on a number of measures thought to

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be important to local communities. For many, this represented the first time that they needed to seriously consider the views of the community. Councils subsequently developed their own community satisfaction measures and have worked hard at improving local communities’ perceptions of their local government. This has further developed as the move to best value, the next critical event, was introduced. Best value, or evaluating programs on cost and quality, ranked equally with the CSMP in our survey, leading us to question why it ranked relatively low. Best value was introduced when the Liberal state government was replaced by the Labor government; it was introduced in order to include consideration of community outcomes, in addition to economic outcomes, when evaluating programs and tenders and thus would appear to constitute a significant change. It appears, however, that local government managers view best value as a bureaucratized, regulatory regime that has changed CCT from a hard-nosed approach to, as one manager noted, a ‘blancmange approach.’ Managers just tried to weather the storm and questioned whether things were really any different (Martin, 1999). The Impact of Organizational Culture It has long been recognized that organizational culture impacts on the efficacy of management control system design and use (for a good summary, see Scheytt, Soin, and Metz, 2003). Ouchi (1977, 1979) suggested that culture is an important factor in the design and operation of organizations. There are many definitions of organizational culture; for example, Morgan (1986) regarded it as the shared meanings, shared understandings, and shared sense making that result from the process of reality construction, which allows people to see and understand particular events and processes in distinctive ways. Ouchi (1979) described three organizational control mechanisms: clans, bureaucracies (hierarchies), and markets. To measure culture in organizations, Kloot and Martin (2004, 2007) used the competing values framework developed by Cameron and Quinn. This framework, which was designed to ‘narrow and focus the search for key cultural dimensions’ (Cameron and Quinn, 1999: 29), is helpful in organizing and interpreting organizational phenomena and it operationalizes the cultural types developed by Ouchi (1979). Cameron and Quinn identified two major dimensions that organize

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cultural dimensions into four main clusters; these clusters make up the competing values framework. These dimensions relate to flexibility and discretion versus stability and control and to internal focus and integration versus external focus and differentiation. Cameron and Quinn noted that the four core values ‘represent opposite or competing assumptions. Each continuum highlights a core value that is opposite from the value on the other end of the continuum – that is, flexibility versus stability, internal versus external’ (1999: 31). The resulting competing values framework is set out in Figure 6.1. In the clan culture, control is achieved through shared values and beliefs; in the hierarchy (bureaucratic) culture, control is achieved through formal rules; and in the market culture, control is achieved through price mechanisms (Langfield-Smith 1995: 180). Hofstede (1981) suggested that one specific cultural type – the clan – is important in ensuring operational control in public sector organizations that have difficulty measuring performance. The market culture may be important in ensuring control in a public sector organization that is required to tender a large share of its expenditure to market competition, where price will determine the outcome of the tender. The results were surprising on several fronts. The most obvious is that the clan culture predominated: forty of the forty-four respondents were scored2 as being in a clan culture, with two calculated as being in a market culture and one each in a hierarchy and an adhocracy. Despite gains made by women in management, the respondents were predominately male (90%), long serving in the local government sector (median, 17 years), and aging (median, age 45, with 50% within the 45to 54-year range). These demographics help explain why the clan managerial culture in Australian local government persists, although managers were mobile within the sector (median with current council is five years). This is consistent with earlier research by Gerritsen and Whyard (1998). There was an expectation that more managers would come from a private sector background – introduced to help implement competitive tendering and contracting out along with other new reforms – but this was not the case, in contrast to earlier research by Kloot et al. (1999), who found that significant numbers of private sector managers had moved into local government to assist with the change to the CCT environment. The likely explanation is that these private sector managers found the local government clan culture so entrenched that they were unable to achieve their goals of a more private sector or market-based culture. After a few years of working in

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Figure 6.1: The competing values framework

Clan: Facilitator and Mentor roles Control: shared values and beliefs

Adhocracy: Innovator and Visionary roles Control: not specified

Hierarchy: Monitor and Coordinator roles Control: rules

Market: Competitor and Producer roles Control: Price mechanisms

External focus and differentiation

Internal focus and integration

Flexibility and discretion

Source: K.S. Cameron and R.E. Quinn (1999), Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework (New York: Addison-Wesley, 1999), with additional control emphasis adapted from K. Langfield-Smith, ‘Organisational Culture and Control,’ in A.J. Berry, J. Broadbent, and D. Otley, eds., Management Control Theories, Issues and Practices (London: Macmillan, 1995).

local government, many had returned to the private sector by the time the Kloot and Martin research was undertaken. The leadership role in the clan culture is people and process oriented, in effect, managing conflict and seeking consensus. Influence is based on mutual respect and trust. Given the changes in the Australian local government system over the past two decades, the survey results were expected to indicate more managers with a leadership style consistent with the market culture, where the leadership role is one of competitively pursuing goals and is energized by competitive situations focused on external competitors. The leadership role is task oriented and work focused, with an influence based on rational arguments and accomplishments. The market culture is much more

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consistent with the requirements of the national competition policy (NCP). Paradoxically, as noted above, the most critical event has been the influence of the NCP and the adoption of competitive tendering, followed by the adoption of accrual accounting similar to that used in the private sector. We concluded that this inconsistency (a clan culture in a market environment) reflects the fact that managers who developed and were comfortable in a clan culture would find the requirements of a competitive situation personally most challenging and were, therefore, reluctant to change. In terms of the importance they placed on specific management practices, these managers were found to use financial information in a way that is inconsistent with a competitive organizational environment. For example, their emphasis in meeting the budget was not strong, nor was discussing the budget in detail, relative to the importance managers placed on the introduction of new accounting and financial management practices. These responses are consistent with the way in which leadership was expected to be exercised in a clan culture, where senior managers are supportive of staff and place less emphasis on attending to budget details. The national survey research of Australian local government that Kloot and Martin (2004, 2007) have undertaken over several years brought out differences and similarities between states. For example, best value is a legislative requirement in the state of Victoria but was known to only a few local government managers in other states. Despite extensive local government reforms in Victoria, the clan culture was the dominant type in this state, as it was across the national system of local government. Conclusion The research into Australian local government performance management conducted by Kloot and Martin over an extended period highlights the variation in the nature of these organizations and the different ways in which they are administered and managed. Local government managers are aware of the critical nature of the changes that have been imposed on them but do not always implement practices in a manner that allows those changes to work effectively. Using the Ferlie et al. (1996) typology of public sector organizations, these managers seem preoccupied with the Efficiency Drive Machine and

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Downsizing and Decentralizing models, yet aspire to the Search for Excellence and Public Service Orientation models. We believe Ferlie et al.’s four models are not mutually exclusive, however. Each model helps to explain how managers with different cultural traditions working in conflicted political and administrative environments and with agendas driven by central governments develop different approaches that enable them to survive and meet the needs of their many and varied stakeholders. Equally, this conclusion fits with Kloot’s and Martin’s (2000) interpretation of the response made by Australian local government managers to the balanced score card strategic-management framework presented by Kaplan and Norton (1992). Their research (outlined earlier in this chapter) reported that local government managers were more concerned with measuring performance as it related to financial outcomes (Efficiency Drive Machine model) and customer satisfaction (Efficiency Drive Machine and Public Service Orientation models) than they were with internal business processes (Downsizing and Decentralizing model) and learning and innovation (Search for Excellence model). We believe that a local authority that is well tuned to the requirements of its local community and state government (1) is adequately resourced – with financial, human, and capital assets; (2) is strategic in its thinking (as presented by Mintzberg, 1994) and planning; and (3) is well placed to respond to the often conflicting demands of its numerous stakeholders. State governments require their local governments to report on a myriad of issues, consistent with the assumptions underpinning the Efficiency Drive Machine model. They are also required to manage more services through market mechanisms and contestability. Equally, they aspire to the Search for Excellence model, believing in the importance of organizational culture and the learning organization, but do little in the way of managing process to achieve this focus. Finally, the ideal model according to Ferlie et al. (1996) – the Public Service Orientation model – is an aspiration of managers who want to be accountable and who agree with the importance of citizens and elected councillors in their respective roles. Our conclusion is that these managers have no system of performance measurement that allows them to know how well their strategies and plans are being implemented. We suggest that the Efficiency Drive Machine model predominates across Australian local government because state and territorial gov-

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ernments are preoccupied with seeking information that measures council performance in terms of council financial sustainability (New South Wales and Queensland reviews). State-mandated reforms imposed on local government have focused on fiscal responsibility and efficiency in resource use, which are essential elements of the Efficiency Drive Machine model. Moreover, the imposition of mandatory competition to drive costs lower is moving local governments in some states to a Downsizing and Decentralizing model. They are using detailed measures, such as service-cost information, that reflect the implementation of competition policy in local government organizations but rarely include the impact of local government on wider social and economic outcomes. State and territorial governments determine the type of local government, the performance management systems, and the corresponding organizational models based on the performance information they demand, even while espousing organizational choice for the sector. The Search for Excellence and the Public Service Orientation models are ideal types, aspirations of which we see glimpses in the Australian local government research. Although there is an aspiration to move to the Search for Excellence model, current limitations in public sector measurement technologies are an impediment to the full development of this type. We can neither properly define nor properly measure ‘excellence’ in a political environment that has the current ill-defined social service outcomes expected of local government. However, the move to community consultation and collaboration and the managerial focus on accountability to the community, which we have seen in our research, augurs well for the future of the Public Service Orientation model. The best value regime in Victoria requires considerable community consultation and collaboration and will facilitate the ideal of public service, which other Australian states may well follow as they reform their local government system.

NOTES 1 As part of an election promise, in 1999 the Bracks Labor government replaced CCT with legislation requiring local governments to adopt a best value reporting process similar to that introduced in the United Kingdom by the Blair Labour government.

Performance Management in Australian Local Government 151 2 Cameron and Quinn’s (1999) competing values framework questionnaire completed by respondents does not use terms such as ‘clan’ but rather asks a series of questions that are later scored and classified according to the typology outlined in this chapter.

REFERENCES Cameron, K.S., and Quinn, R.E. 1999. Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. New York: AddisonWesley. Department for Victorian Communities (DVC). 2005. The Local Government Best Value Commission 2004 Annual Report. Victoria: Best Value Commission. Dixon, P.B., Madden, J.R., and Peter, M.W. 1993. ‘The Effects of Reallocating General Revenue Assistance among the Australian States.’ Economic Record, 69/207: 367–81. Dollery, B., Marshall, N., and Worthington, A. 2003. Reshaping Australian Local Government: Finance, Governance and Reform. Sydney: UNSW Press. Ferlie, E., Ashburner, L., Fitzgerald, L., and Pettigrew, A. 1996. The New Public Management in Action. Oxford: Oxford University Press. Gerritsen, R., and Whyard, M. 1998. ‘The Challenge of Constant Change: The Australian Local Government CEO.’ In K.K. Klausen and A. Magnier, The Anonymous Leader: Appointed CEOs in Western Local Government, 31–48. Odense: Odense University Press. Herbert-Cheshire, L., and Higgins, V. 2004. ‘From Risky to Responsible: Representing Success and Failure in Strategies of Rural Community Development.’ Journal of Rural Studies, 20/3: 289–302. Hofstede, G. 1981. ‘Management Control of Public and Not-for-Profit Activities.’ Accounting, Organisations and Society, 6/3: 192–211. Hood, C. 1995. ‘The New Public Management in the 1980s: Variations on a Theme.’ Accounting, Organisations and Society, 20/2–3: 93–110. Kaplan, R., and Norton, D. 1996. ‘Using the Balanced Scorecard as a Strategic Management System.’ Harvard Business Review, Jan.–Feb.: 75–85. Kaplan, R., and Norton, D. 1992. ‘The Balanced Scorecard: Measures that Drive Performance.’ Harvard Business Review, Jan.–Feb.: 71–9. Klausen, K.K., and Magnier, A. 1998. The Anonymous Leader: Appointed CEOs in Western Local Government. Odense: Odense University Press. Kloot, L. 2001. ‘Using Corporate Plans in Local Government.’ Australian Journal of Public Administration, 60/4: 21–33.

152 Local Government in a Global World Kloot, L. 1997. ‘Organisational Learning and Management Control Systems: Responding to Environmental Change.’ Management Accounting Research, 8: 47–73. Kloot, L., and Martin, J. 2007. ‘Public Sector Change, Organisational Culture and Financial Information: A Study of Local Government.’ Australian Journal of Public Administration, 66/4: 485–97. Kloot, L., and Martin, J. 2004. The Impact of Organisational Culture on Outcomes Oriented Financial Management and Control Systems in Local Government. Paper presented at the 27th annual congress of the European Accounting Association, 1–3 April, Prague. Kloot, L., and Martin, J. 2002. ‘Transforming Australian Local Government: Insights into Leading Management Practices.’ Accounting, Accountability and Performance, 8/2: 1–22. Kloot, L., and Martin, J. 2001. ‘Accountability in Local Government: Explaining Differences.’ Accounting, Accountability and Performance, 7/1: 51–72. Kloot, L., and Martin, J. 2000. ‘Strategic Performance Management: A Balanced Approach to Performance Management Issues in Local Government.’ Management Accounting Research, 11/2: 1–22. Kloot, L., Italia, M., Oliver, J., and Brooks, A. 1999. Organisational Learning and Management Accounting Systems: A Study of Local Government. Sydney: UNSW Press. Langfield-Smith, K. 1995. ‘Organisational Culture and Control.’ In A.J. Berry, J. Broadbent, and D. Otley, eds., Management Control Theories, Issues and Practices, 179–202. London: Macmillan. Martin, J. 1999. ‘Leadership in Local Government Reform: Strategic Direction versus Administrative Reform.’ Australian Journal of Public Administration, 58/3: 24–37. Mintzberg, H. 1994. The Rise and Fall of Strategic Planning. New York: Free Press. Morgan, G. 1986. Images of Organisation. London: Sage. National Inquiry into Local Government Finance. 1985. National Inquiry into Local Government Finance. Canberra: Australian Government Publishing Service. Ouchi, W.G. 1979. ‘A Conceptual Framework for the Design of Organizational Control Mechanisms.’ Management Science, 25/9: 833–48. Ouchi, W.G. 1977. ‘The Relationship between Organisational Structure and Organisational Control.’ Administrative Science Quarterly, 21/1: 95–113. Parker, L., and Gould, G. 1999. ‘Changing Public Sector Accountability: Critiquing New Directions.’ Accounting Forum, 23/2: 109–36.

Performance Management in Australian Local Government 153 Peters, T.J., and Waterman, R. 1982. In Search of Excellence. New York: Harper and Row. Scheytt, T., Soin, K., and Metz, T. 2003. ‘Exploring Notions of Control across Cultures: A Narrative Approach.’ European Accounting Review, 12/3: 515–47. Sinclair, A. 1995. ‘The Chameleon of Accountability: Forms and Discourses.’ Accounting, Organisations and Society, 20/2–3: 219–37. Wensing, E. 1997. ‘The Process of Local Government Reform: Legislative Change in the States.’ In B. Dollery and N. Marshall, eds., Australian Local Government: Reform and Renewal. Melbourne: Macmillan.

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7 Performance Management in Canadian Local Government: A Journey in Progress or a Dead End? carol agocs and emmanuel brunet-jailly

For the past ten years many of Canada’s local governments have had to comply with provincial legislation requiring that they implement performance measurement systems. Provincial governments in Quebec, Ontario, Nova Scotia, and British Columbia have launched requirements for specific measures. In most cases, however, as this chapter documents, these requirements have not really addressed the role and function of citizens or elected officials in the design and implementation of performance measures. Furthermore, for the most part, performance measures rather than performance management systems have been implemented in Canadian local governments.1 Measurement alone cannot improve organizational results. Measures are most likely to improve government services if they are directly applicable to municipal operations. This is most likely if they are elements of a holistic performance management system in which measures are developed and used by front-line staff who deliver the services. Performance measures can also contribute to making local government more accountable to citizens, and assist elected officials to fulfil their decision-making role. Again, these purposes are most likely to be served if citizens and elected officials are engaged in the development and use of performance measures. There is little available Canadian research on the involvement of citizens and elected officials in performance measurement in local government, or on the uses of measures in the context of comprehensive performance management systems. However, there is evidence that performance measurement initiatives have not been as useful or as effective in improving transparency, accountability, and performance as their proponents may have hoped.

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In this chapter we examine the history, theory, and practice of performance measurement and performance management in government in Canada, with a focus on local government. The first section outlines the Canadian experience, introduces the debates, and defines and distinguishes between performance management and performance measurement. Next, a review of the scholarly literature on performance measurement and management identifies three themes: advocacy, critique, and involvement of citizens and elected officials. The chapter then reviews the successive waves of implementation of performance measures by provincial and local governments. This discussion highlights the specific characteristics of the local government context where provincial requirements are mute on the role of elected officials and citizens in the development and use of performance measures. The third section of the chapter suggests the organizational elements of a strategic performance management system capable of using performance measures to guide improvements in local government operations. These elements include a post-bureaucratic organizational structure in which work teams are a basic unit, as well as staff empowerment and union-management cooperation. Finally, our conclusion raises important issues regarding the future of performance management in strengthening accountability, transparency, and democratic participation in the local government system in Canada. Emerging Interest in Performance Measurement in Canada In Canada’s public sector there has been a strong interest in performance measurement and performance management for the past thirty years (MacDonald and Lawton, 1977). It emerged from the new public management (NPM) movement, which advocated for better evaluation, measurement, and accountability of government operations (Bouckaert and Peters, 2002; Peters and Savoie, 1996, 1994). The prominence of NPM ideas during the 1980s was clear in the United Kingdom and the United States, where public sector professional organizations defended the necessity to make government finances more accountable and rigorous. Such associations as the Government Finance Officers and the Government Accounting Standards Boards encouraged their members and thus their employers, government organizations, and departments, to increasingly use performance measures and the tracking of inputs, outputs, and outcomes as new accountability instruments in the public sector.

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The Canadian movement was launched in the mid-1990s, when the federal government became the target of criticisms concerning the transparency of its functioning. Peter Aucoin (1998) noted that all Canadian governments were asked to work on accountability measures to match similar reforms already in progress in the United Kingdom and the United States. At the time, the auditor general of Canada had already gone beyond auditing to actually evaluate the general performance of the federal government. In 1995 the federal government launched two initiatives to improve the public perception of its activities: Results for Canadians and Managing for Results. The goals of these initiatives were to change the way government departments and agencies responded to citizens, and to reflect the values of Canadians, by becoming more focused on results, particularly in the area of public expenditures. All federal government departments and agencies were to link goals clearly to expenditures so as to ensure increased citizen awareness of government activities, particularly spending. The assumption was that becoming more accountable was good for government programs, and essential to the legitimacy of government in the minds of citizens. The measurement systems to be implemented were to target all departments, programs, and services in ways that would reflect on broad societal trends, particularly government transparency, priorities, and interdepartmental initiatives. The system followed a three-step process focusing on results-based management that required each department to (1) commit to clear goals, (2) implement a performance measurement system, and (3) publish annual reports for Parliament and the general public. For two years, until 1997, the systems were tested in various departments. The first annual report, presented to the president of the Treasury Board in 1995, clearly followed the management by results and performance measurement systems that were established across the test departments. That same year, Parliament decided to pull the Estimates out of the Departmental Performance Report and the Report on Plans and Priorities. Then in 2000 the Standing Committee on Procedure and House Affairs reviewed Improving Reporting to Parliament (2000). This concluded the trial period and launched the general implementation of performance measures across all departments and agencies, and also initiated a trickle-down process across Canadian provincial and local governments. Nova Scotia and Ontario, then Quebec and British Columbia, passed legislation that required the use of performance measurements in local governments.

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From Performance Measurement to Performance Management In some theoretical and applied contexts, we note the lack of a clear distinction between the concepts of performance measurement and performance management, leading to a lack of clarity about goals and anticipated results. Hence we begin with definitions and a discussion of the contexts in which these approaches have evolved in Canada. Performance Measurement: The Concept and Its Applications in Canada’s Public Sector The influential Government Accounting Standards Board in the United States has defined performance measurement as: ‘the act of measuring (assessing) the manner and effectiveness in which something or somebody functions, operates or behaves in carrying out a given task or action within a branch or agency of a public system. Performance measurement produces information that can be used to help make decisions. Literally, it creates measures or indicators of the volume, quality, efficiency and outcomes of public services. The products of performance measurement are yardsticks we can use to figure out if government is working well or poorly, or somewhere in between’ (U.S. Government Accounting Standards Board, 2000). Interest in implementing performance measurement systems tailored to local government organizations has been developing over the past thirty years in Canada (MacDonald and Lawton, 1977). Performance measurement in government can be seen as part of a broader concern with the interrelated priorities of assuring effective and efficient use of public resources, providing services of high quality that meet citizens’ needs and expectations, and institutionalizing mechanisms such as auditing and public reporting to ensure accountability and transparency. In Canada, as noted above, the federal government has been working to develop and implement systems of performance measurement in order to address the needs of Parliament and the public for transparency, accountability, and service improvement (Treasury Board Secretariat, 5 and 16 May 2005). Federal government requirements for reporting performance indicators and benchmarks are built into recent federal-provincial agreements in several policy areas, including relationships with municipalities (Wernick, 2005). Provincial governments – notably British Columbia, Alberta, Nova Scotia, and

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Ontario – have been leaders in Canada in developing performance measurement and reporting systems for their own operations as well as requirements for municipalities. For example, in Ontario in 2000, the Ministry of Municipal Affairs and Housing established a Municipal Performance Measurement Program which now requires Ontario municipalities to apply fiftythree performance measures that address both efficiency and effectiveness in twelve core service areas and to report annually to citizens. Larger Ontario municipalities also voluntarily participate in the Ontario Municipal CAOs’ Benchmarking Initiative, which is working towards a standard performance measurement framework and set of best practices for Ontario municipalities. The Ontario Centre for Municipal Best Practices, involving collaboration among the ministry, the Association of Municipalities of Ontario (AMO), and other stakeholders, is developing measurement, analytical, and reporting tools to assist municipalities to improve service delivery (2004: 88–90). These initiatives are paralleled by performance measurement projects undertaken by municipalities themselves. Performance measurement is increasingly seen as an indispensable management tool for helping governments become more efficient and effective in meeting public demands while reducing the costs of services. However, performance measurement systems have often failed to deliver the expected improvements. For example, in the United States, where performance measurement has been implemented in governments for many years, research in 2000 for the General Accounting Standards Board examined the development of performance measurement systems in 489 U.S. state and local government agencies (Melkers et al., 2002). Performance measures were assessed as somewhat effective in increasing awareness of results and factors that affect results. However, only a minority of agencies reported that performance measures were effective in improving organizational effectiveness, responsiveness to customers, service quality, cross-agency coordination, communication with the public and elected officials, or cost savings. Only a third of city and county agencies reported that performance measures improved the effectiveness of their programs. Clearly there is more to getting results than simply implementing a performance measurement system. Why have the results of performance measurement programs often been disappointing? Published research and theory suggest the following explanations:

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• Performance measurement is often viewed as a technical exercise

in which little consideration is given to governance, or to political, organizational and management issues and realities, particularly those characteristic of local government. • Performance measurement is often implemented with a focus on assessment and reporting rather than on the use of measures to improve operational performance on an ongoing basis. Performance measurement frequently functions as an instrument of control rather than as a tool that managers and staff develop and use to assist them to manage and improve organizational performance. • Performance measurement is often implemented unilaterally by top management, with the result that front-line employees, and sometimes supervisors and middle managers, may experience it as oppressive, while the local council and citizens – when they are aware of it at all – may view it as irrelevant to their concerns. • Performance measurement, particularly in local government, presents many measurement challenges with respect to what should be measured and how, and what standards should be used for assessing performance. These challenges include measuring the wrong thing (e.g., inputs rather than outcomes), measuring at the wrong time, generating data that are too general to be useful, setting standards that provide incentives for misdirected staff effort (e.g., cases closed rather than clients’ problems resolved). There is a large literature that addresses these measurement issues in terms of validity, appropriateness, timeliness and lag, cost-effectiveness, utility to various stakeholders, assessment of client/citizen satisfaction, and other considerations (e.g., see Bens, 1998; MacDonald and Lawton, 1977; McDavid, 1998; Ontario Ministry of Municipal Affairs and Housing, 2003, 2004; Schachter, 2002; Swindell and Kelly, 2000). These issues have been discussed rather extensively in the performance measurement literature and will not be addressed in this chapter, which focuses on the organizational and governance dimensions mentioned in the first three points above. It is evident that improved performance in local government cannot result from measurement of performance alone. We seek to broaden the scope of discussion beyond performance measurement to encompass performance management as an organizational and governance issue.

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Performance Management: Measures as Part of a Holistic System for Improving Performance From an organizational perspective, performance management may be understood as the system of strategic organizational arrangements and practices that are intended to ensure that work-related behaviour conforms to organizational expectations. The purpose of a performance management system goes beyond assessment and reporting; its goal is improvement of organizational outcomes. Carroll and Dewar (2002: 413) suggest that performance management consists of four elements: 1 Standards: objectives, goals, benchmarks, targets, or some other conception of the planned or desired level of performance, or the result that it should achieve 2 Measurement of performance 3 Communication of performance information 4 Use of this information to compare actual performance with the standard. A fifth element needs to be added to complete the performance management system, namely, the actions undertaken within the organization to close any gaps between actual performance and the standard or target. Performance management for the purpose of improving organizational outcomes is fundamentally about relationships and communication among people in the workplace, and the organizational arrangements that institutionalize these relationships. It thus engages central issues and controversies concerning structures, culture, and power within the organization, at both the strategic and operational levels. At the same time, performance improvement requires detailed knowledge and a constructive critique of how people use technology, skills, and knowledge to perform specific tasks and work processes. Furthermore, in local government, elected officials and citizens have roles to play in performance management in government administration. Performance measurement is viewed as one element of a general management system in a local government that is comprised of many essential components that together form a performance management framework. These components include the following: strategic plan-

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ning to set organizational goals and unit-level and program objectives; design of organizational structures and processes to facilitate the attainment of goals and objectives; organizational communication and decision-making processes that facilitate joint problem-solving and action; reward systems that provide incentives to strive for success; technology and resources adequate to support expected performance; the budget process and arrangements for accountability; support for skills development and learning; and mechanisms to facilitate ongoing communication among administrative staff, elected officials, and citizens. We propose that performance management, if implemented as part of a coherent strategy together with authentic empowerment and organizational learning, can benefit staff and elected officials as well as the local government organization and the citizens it serves. Perhaps most important, a performance management system that works can assist elected officials and administrative staff to close the gap between policy and practice – between the purpose of a program or policy and the disappointing results that are often attained when it is implemented. Issues Arising from Performance Measurement Applications From its inception, performance measurement was about improving public sector management. Much of the scholarly and applied literature on performance measurement suggests that it is a managerial tool that is not value-laden, but on the contrary, is a practical technique that can be implemented in various cultures and settings within the public sector. It also is generally accepted that political leadership along with strong managerial commitment is important to successful implementation of performance measurement. It is important to acknowledge that measurement is a political process that occurs within a context of power relations. What is measured is endowed with significance, and choices regarding measurement are political choices that are influenced by values and ideologies that represent positions on questions such as the purpose of local government and the stakeholder interests that should have priority in government decision-making. Such choices may also reflect the priorities of powerful decision-makers within the organization. The selection of indicators and other operational decisions are not value-neutral technical exercises.

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The implementation of measurement tools in the service of strategic plans relies on a multitude of factors, starting with the selection of indicators (Kaplan and Norton, 1996). Hatry (1999), Hatry and Fisk (1992), and Hatry and Wholey (1992) suggest that good indicators measuring effectiveness, efficiency, productivity, or even citizen satisfaction are key in measuring an organization’s performance. Indicators comparing public and private sector productivity may be useful in some instances, in addition to the usual practice of benchmarking against other public organizations that have some similar characteristics. Measurement tools have in many instances enhanced the power of specific government functions such as finance or accounting departments, and in this sense they have implications for organizational politics. Over time, performance measurements have been implemented in tandem with various financial management techniques including performance-based budgeting systems as a progression from line item budgeting. Such applications become powerful when dealing with control and audit functions, but weaker in relation to strategic management issues. In some instances, as well, performance measurement systems are equated with performance appraisal or human resource performance, as in management-by-objectives programs. Currently the most respected system in widespread use is the balanced score card (BSC), because it allows organizations to address longterm objectives from several perspectives, as well as resource constraints (Kaplan and Norton, 1996). BSC organizes indicators according to four perspectives: financial, customer (or client or citizen), internal business process, and learning/growth, and it also empowers public organizations by developing a strategic management system that is relevant to the public sector. It organizes relationships of cooperation across the organization in pursuit of common performance objectives and helps an organization to articulate the interdependencies and linkages of its varied functions and departments. Three Strands in the Literature on Performance Measurement and Management The literature on performance management basically takes three forms, although with some overlapping themes. The first focuses on advocacy for performance measurement. The second consists of a more analytical focus on performance management and performance measurement and their relationship. The third focuses on problems

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with the way performance measures and the management of performance are practised. Advocates of performance measurement underline its positive contribution to organizing systems of accountability and control in the public sector. This literature is made up of professional papers and books oriented towards practitioners, but with some scholarly contributions as well, such as the work of Borins (1995) and Bernstein (1999), who promote performance measurement and reporting. Performance measurement and new public management are related for Borins, who underlines the central advantages organizations have when they focus on results, are organized so as to be results-oriented, and take responsibility for results. Other authors have questioned those views. Lindquist (1998), Perrin (1998), and Gow (2001) do not see a relationship between performance measurements and NPM. They point to the role of measurement in systems of management techniques such as program-planned budgeting, management by objectives, zero-based budgeting, and management by results that existed prior to the NPM trend. What these authors do not question, however, is that the dominance of new public management has increased greatly the general interest in performance measures. For instance, the Canadian Comprehensive Auditing Foundation assumes that public accountability systems and auditing are related. This professional organization underlines the leadership function, suggesting that legislators and other elected officials, as well as public servants, should demonstrate guidance in the implementation of reporting systems and performance measures. Similarly, in Canada today numerous public sector web pages promote their reliance on performance measures and reporting exercises. The provincial governments of British Columbia and Ontario, as well as local governments, such as Victoria or Vancouver in British Columbia or London and Ottawa in Ontario, advertise their performance on public web pages. The second strand in the literature includes a number of scholars who are questioning the validity and general contribution of measurements to better management and the improvement of public and private organizations. Mayne (2001), Perrin (1998), Pollitt (2001), and Newcomer (1997) are not convinced that performance measurements really add anything to organizations. Perrin suggests that measurements contribute as little as any other failed managerial trend would. He equates performance measurement to program-planned budget-

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ing, or management by objectives or results. In his view these managerial exercises do not ask the most important questions, the ‘why’ and ‘how’ questions that are central to sound program evaluation, and therefore they are doomed to fail. The last strand in the literature is less developed. It underlines the lack of serious social scientific attention to the central empirical issues around the uses and contributions of performance measurement and reporting to organizations. There are a few studies that offer typologies of performance management and provide examples of states, provinces, and other governments, local or municipal, that after having implemented measurement systems, nonetheless faced disappointing results. Key examples cited in this literature include a 1995 Alberta study, a 1995 Minnesota study, a 1999 research project by Streib and Poister (1999, 2002), and a failed attempt in 2000 of the Manitoba Office of the Auditor General, which asked respondents to evaluate the usefulness of provincial performance indicators. These studies underlined low ratings of performance measures in many policy areas, including resource allocation, policy development, policy and program design, Cabinet decisions, Treasury Board decisions, feedback from opposition and other legislators, citizens’ feedback, and client decision-making. Perrin (1998) underlined the need to address the ‘why’ question so as to understand those failures. Similarly, Shane (2001), focusing on local governments, found that senior levels of government are not concerned with building the capacity of local levels, which often do not have the resources, whether financial or human, to implement new managerial trends. These analyses suggest that local elected officials and citizens have a central role in public policy which is too often ignored in the implementation of performance measurement systems. Wray and Hauer (1997) contend that enhancing public participation correlates with broader constituencies and with better public policy visions for communities where priorities are well identified, which in turn contributes to public officials being held accountable more effectively. In their view, involvement of elected public officials and citizens is central to successful performance measurement exercises. Similarly, Callahan and Hodzer (1999) suggest that citizens have to be involved in order to keep managers focused on the needs of the community. The empirical literature on performance measurement, generally speaking, is narrowly concerned with managerial needs, neglecting the needs and interests of citizens and elected officials. One plausible

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explanation for this is that performance measurements often originate in the work of managers in senior-level governments, which legislate their implementation onto lower-level governments. Another may be a failure of some local government officials themselves to acknowledge a role for the community in public administration. This becomes particularly clear in a 2000 study by the U.S. Government Accounting Standards Board of county and city officials about their understanding of the role of citizens and other stakeholders. Only 30% believed that citizens’ views were important to their policy work. Only 3% of U.S. city managers of communities with populations smaller than 25,000 believed that citizen involvement matters (Stergios, 2000; Streib and Poister, 2002). The literature suggests three major reasons to underline the importance of involving elected officials and citizens in performance measurements exercises. First, simple access to reports on how governments serve citizens is a step towards greater transparency, but it does not empower them to become involved in governance. Second, limiting citizens’ input in turn limits the amount of information available to managers and elected officials, with implications for the quality of their decisions (Callahan and Hodzer, 1999). Third, when citizens are not part of the performance measurement exercise, elected official are less concerned with it. This in turn impacts what managers do. For instance, the Iowa Citizen Initiated Performance Assessment involved citizens of thirty-two Iowa cities in the performance measurement design. Their input was key to the resultant priorities and led to increased participation by citizens and elected officials, resulting in a positive overall view of the program (Tat-Kei Ho and Coates, 2004). Performance Management in Practice in Local Government: Elements of an Effective System In considering the future for the implementation of performance management in Canadian local governments, our discussion focuses on two debates. The first underlines the importance of the participation of citizens in the application of performance management and examines the gap between the theorized benefits of citizen participation and the reality that such participation is infrequent (King and Stivers, 1998; Schachter, 1997). The second debate that concerns us addresses the features of a performance management system that could lead to improvements in the performance of local governments. Since

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research on the implementation of such systems in Canadian local governments is lacking, we are unable to assess current practice. Instead, our discussion proposes a model of how a holistic approach designed to use performance management to improve local government services might look. The Role of Elected Officials and Citizens in Canadian Performance Measurement and Management Systems In 2001 the Ontario Ministry of Municipal Affairs and Housing (2003) was the first provincial ministry to push for a new bill for a Municipal Performance Measurement Program (MPMP). This act required that all municipalities produce an annual report, including a Financial Information Return (FIR). The central objectives of this reporting exercise are to benefit city councils, to lead local governments to work with the provincial government to exchange data on policies and programs, and to assist local governments to learn from each other’s programs and problems. The ministry’s objective was to develop an assessment system for municipal service delivery and raise the overall performance of local agencies and departments. Ideally, the province would be able to measure efficiencies (cost) and effectiveness (quality) and raise the ratio of service per dollar spent. Since the reports are published, the accountability of the local government system would also benefit from greater visibility, citizen participation, and knowledge of municipal activities. The province suggested to municipalities that each indicator should be coupled with a time frame and goal and published yearly using mail, public notices, and local government web pages. As early as 2002, most Ontario municipalities were complaining that they were unable to address the provincial requirements. The City of Ottawa, for one, recognized the importance of the legislation but also admitted struggling with many requirements, and particularly the ‘one size fits all’ assumption, and placed incomplete reports on its web page, with apologies. The criticisms of the Municipal Performance Measurement Program process fall into three categories. The first is that the law did not take into account the varied needs of municipalities and local governments, such as differences due to size, and did not provide flexible means to address the diversity of local issues. Second, because the set of MPMP indicators is provincewide it does not take into account municipal and local differences so that municipalities can meaningfully compare

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measurements and performance. Hence two sets of factors are not taken into account: the natural competitive advantages or disadvantages a municipality may have as a result of its location, size, climate, or economic situation, and the varied activities and strategies municipalities implement to address their needs and deliver services under diverse conditions. Ministry officials agreed that consultation prior to 2000 would have made a great difference: rather than imposing new constraints on small and large local governments without differentiating among them, the MPMP requirements might have recognized the need to tailor the policy to local circumstances. For example, smaller municipalities could have been allowed to respond to the requirements according to capacity, while more would be expected of larger and better-staffed local governments.2 Ontario’s MPMP served provincial goals while disregarding the needs of local governments. In Nova Scotia, a similar top-down and legislated exercise took place in the late 1990s when Service Nova Scotia and Municipal Relations initiated a provincial-municipal discussion regarding performance measurements. A new municipal act required the annual publication of performance measures. Prior to this provincial initiative, local governments reported on financial indicators annually. The new municipal act expanded these to form a strategic and managerial measurement system that included forty-one provincial indicators in the Municipal Indicators Handbook. This annual report focused on environmental changes as well as municipal activities designed to increase transparency and accountability (Nova Scotia, 2002). For example, it documented the number of kilometres of road built, the tonnage of solid waste collected, and municipal staffing levels (Nova Scotia, 2002). Service Nova Scotia and Municipal Relations noted that the provincial initiative worked reasonably well. Clearly, early consultation with local officials facilitated the implementation of the provincial objectives while serving local governments as well.3 The set of indicators developed seem to offer flexibility and comparability and therefore to serve municipal and provincial policy objectives. Nevertheless, because it gives priority to forty-one provincial indicators, the Nova Scotia performance measurement system prioritizes panprovincial comparisons that are very useful to provincial policymakers but cannot provide information that is effective for individual municipalities.

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On the west coast of Canada, the provincial government of British Columbia launched performance measurement reforms as early as 1995, when it undertook to make public mandatory annual reports on municipalities’ performance. The new Liberal government of 2000 also passed, as one of its first acts, a budget transparency and accountability act that affected all ministries, departments, agencies, and local governments. A reform of the municipal act, called the New Community Charter, introduced performance measurement systems to all municipalities along with annual reports and biannual citizens’ surveys. Municipalities have to report annually to the public on their goals and the indicators they will use to measure their achievements. A provincial survey of the impact of these changes on municipalities underlines a number of central points (Gerley, 2004). First, elected officials did not answer the survey; instead CFOs and CAOs were the survey contact persons. Second, at the time of the survey most (99%) municipalities published a financial plan annually. They also reported on land use planning (87%), their mission statement (30%), formal planning strategy (9%), council/board planning (71%), and public meetings (63%). All in all at least one in three reported up to five of those actions. Third, at the time of the implementation of the B.C. reforms, 80% of the municipalities had already established financial goals, and nearly half of them (46%) had non-financial annual goals and 57% of them reported on achievements. However, fewer than 15% relied on formal planning strategies and only about 40% evaluated outcomes and 30% measured their successes. Also, 73% admitted to having increased their planning and reporting activities over the past five years to better serve their board, the public, or managers’ goals. Nearly 40% of all local governments expressed difficulties with performance measures that would include targets and benchmarks. They found developing measures difficult. For instance, 33% were struggling with linking goals and targets, while 52% had difficulties with communicating results, and 27% found it difficult to collect data. Finally, nearly two-thirds of all municipalities in British Columbia used consulting firms to establish measures or best practice guides, and 50% to establish benchmarking. The report concluded that to succeed, any performance measurement exercise should make sure that council members are actively committed, and that they launch and decide the strategy. Also important is the role of the CAO along with all municipal staff so as to identify key issues. The report’s rec-

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ommendations include having information and educational material available to enhance reporting and communication, and increasing staffing levels to allow adequate organizational change. It is striking that this report does not discuss the role of citizens in developing and using performance measures, and that the role of elected officials is only mentioned in the conclusions and recommendations. The survey itself was exclusively concerned with the administrative capacity of municipalities. It is interesting that the survey also notes similar difficulties across three provincial jurisdictions. In both Ontario and Nova Scotia, municipalities’ initial responses were to oppose the provincial initiatives, and there were issues with implementing the new provincial requirements. In all three provinces it seems clear that consultation and increased communication were determining factors in the successful implementation of the performance measurement system. Finally, municipalities found it difficult to compare with each other, and implementing the reforms was hardest for the smallest municipalities (Gerley, 2004: 55). Clearly, what is at stake in the current interest in performance measures is the professionalization of local governments. Yet the scholarly literature underlines two distinct priorities. Attention is called to the importance of enhancing and improving government activities, particularly the delivery of services. It is also recognized that improvements, including more professionalism in government, may arise from the increased exercise of democratic participation. This view suggests that the role of local elected officials and of citizens in the design and implementation of local policies is central. However, we do not find this latter view prominent among local governments in Canada. Local elected officials and citizens are not, nor have they been for the past twenty-five years, recognized as important players in the ideological and technocratic movement to measure government performance. On the contrary, it is higher levels of government that are leading the reform movement, and their prescriptions focus on measures. The development of the technocratic administrative capacity of local governments preoccupies provincial departments and is their primary focus. The advocacy literature is the only voice that calls attention to the importance of citizens and their elected officials in the development and use of performance measures. Performance measurement systems in Ontario do not focus on the specific needs of individual communities or formally take into account

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the needs and demands of citizens. In Nova Scotia, municipalities have a greater say. In British Columbia, provincial legislation seems to give more freedom to municipalities to implement a performance measurement system that will address local needs. However, the Ministry of Community Services focuses on developing information and tools for the smallest communities to enhance municipal initiatives involving citizens and elected officials. Further research is needed to test the extent to which suggestions about performance measurement found in the scholarly literature are influencing practice in Canadian local governments. Wray and Hauer (1997) suggest that increased citizen participation positively impacts accountability. Callahan and Hodzer (1999) propose that involving citizens has positive effects on policy-making in local communities. Perrin (1998) suggests that measures should identify successes and failures, that is, the ‘why’ rather than the ‘how’ of performance. There is guidance in the literature that could help in developing performance measurement systems that increase policy efficiencies and effectiveness, and strengthen accountability. Canadians like to think that their local governments and municipalities are closest to the people, and therefore the most democratic level of government. Indeed, Canadian local governments have a strong democratic tradition and one of citizen engagement that dates from the 1970s at least. Both formal mechanisms, including local elections, advisory committees, and consultation required as part of formal planning processes, as well as a number of informal arrangements allow elected officials and citizens to keep in touch. This tradition, however, is clearly struggling with contemporary changes that are bringing greater complexity and professionalism while at the same time raising citizens’ expectations for accountability, transparency, and participation. Provincial requirements for annual reporting are a response to these changes. Performance reporting also brings citizen engagement to the forefront of local government policy-making as staffs and elected officials consider the implications of those performance requirements for the ways they engage citizens. At present there is little research evidence that the performance measurement requirements have given rise to changes in patterns of citizen engagement or participation. In the past, engaging citizens may have been understood as simple participation, or the involvement of citizens in processes of consultation through participating on a board, task force, or public forum as an

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important step in the policy process. Engaging citizens with the prospect of managing performance, however, goes further, and challenges local governments’ staff and councils because it is a process that includes collaborating with interest groups to develop policy alternatives and identify preferred solutions. The mechanisms to undertake such collaboration are developing in ad hoc fashion, if at all. Many barriers stand in the way of these higher-level forms of citizen engagement. Citizen apathy may be perceived as a lack of interest. Also, engaging citizens is costly and time-consuming because it requires staff to be knowledgeable about how to actively discuss and manage broader constituency negotiations about complex issues. Local government staff and elected officials have to learn to manage the expectations of citizens as critical elements of the performance management process. However, in the end the lesson learned is that citizen engagement across a range of activities, including the development and use of performance measures, should be recognized as an important way for local governments to enhance good governance and local democracy. An Empowerment-Learning Model of Performance Management in Local Government The case for involving citizens and elected officials in the measurement and management of local governments’ performance can be made, in parallel fashion, for the workings of the local government administration itself. A focus on enlarging citizen engagement suggests a vision of local government as a locus of democracy rather than simply a provider of services, and implies greater empowerment of staff. Contemporary local governments are making efforts to move towards a post-bureaucratic structure and culture characterized by staff empowerment, team structures, labour-management cooperation, a focus on service to citizens, and productivity improvements designed to do more with less. In this context, the essential purposes of performance management are to attain: • Effective, efficient, and responsive service delivery that contributes

to a high quality of life within a changing local community • Citizen satisfaction with local government services and programs • Community well-being and sustainability • Employee satisfaction and development.

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A performance management system provides feedback from citizens and stakeholders in the community and from staff responsible for program delivery, which helps the organization to learn and to correct and improve its performance. Performance management can be viewed as a holistic system for improving the results obtained by local government. We have identified this hypothetical system as an empowerment-learning model of performance management (Plant et al., 2005). A performance management system in a local government begins with local council’s mandate, which sets the strategic goals of the organization that are often reflected in a corporate strategic plan. Departmental strategic objectives are aligned with the strategic goals. Enabling conditions such as authority, training, budgets, and other resources provide the tools for empowering front-line employees to achieve the goals and objectives. Organizational learning theory suggests that objectives and performance standards at the operational level can be developed through a consultative process involving managers, employees, elected officials, unions, and citizens. These same actors may be involved and/or consulted in the monitoring, assessment, and interpretation of performance information, and in decisions regarding the recognition of performance outcomes. The response of employees, citizens, and local council becomes feedback that enables learning, resulting in the modification of performance standards, enabling conditions, and task performance as needed to satisfy operational objectives and strategic goals set by the council. In order to ensure a high level of public service, departments and operating divisions develop business plans and performance standards for their key programs and units. These business plans outline the goals, resources, and action plans of the operating divisions over a period of time, typically one to three years. The performance management focus is on the operational task performance, and on use of performance measures to monitor and provide feedback regarding that performance. In this way, the performance management system is a learning system in which empowered employees at all levels are involved in developing appropriate measures and regularly reporting, interpreting, and acting upon information provided by the performance measures. Strategic, operational, team, and individual levels are interdependent, and performance measures derive their value from their utility to staff who deliver programs, their managers, and the elected officials and citizens to whom they are accountable.

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In local government organizations learning occurs primarily through interaction with the community, and it is supported through arrangements for the democratic participation of citizens. Developing a capacity to learn gives the organization the ability to recognize and react to the changing needs of the community. An organization that is able to learn is also more likely to be able to effectively address ‘wicked’ problems – the systemic issues and vicious cycles that increasingly confront us. Empowerment of staff means, in essence, that front-line staff have the mandate and capacity to engage in independent action to accomplish the goals of the organization. The elements of this capacity include the authority to make decisions, the knowledge or expertise required to exercise this authority, information about the organizational factors implicated in their decisions, and a share in the consequences of decisions – including rewards as well as responsibility. Teams that operate with some level of self-management are a fundamental element of the empowerment/learning model of performance management. The team, as the front-line unit responsible for service delivery, has an advisory, decision-making, and implementation role to play in setting performance standards, deciding on and implementing performance measures, comparing actual with expected performance, and closing any performance gaps. An empowerment/learning model of performance management is difficult or impossible to implement in the absence of teams, but the presence of teams in itself is not a sufficient condition for the implementation of such a model, since in some organizational settings teams are not empowered to diagnose and solve problems. The introduction of performance management systems is often a labour relations battleground, especially when there has been a history of adversarial union-management relations. Yet experiences in some municipalities suggest that the traditional script can be rewritten, and that it is both desirable and possible for management and unions to develop ways to work together in pursuit of shared interests such as the preservation of local government jobs, investment in training, enhancement of job quality, and quality in service delivery. The success of such a working partnership requires the involvement of unions from the beginning of a performance management process, in both design and implementation. Failure to recognize and act on the union’s legitimate role in representing its members’ interests in a major change project such as this can be

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expected to mobilize union opposition to the scheme, and with it, staff resistance. Implementing an empowerment-learning approach implies that all actors in the local government system – including the council, senior and middle management, front-line staff, unions, and citizens – have an essential and legitimate role to play in implementing performance management systems that can deliver performance improvements in local government. Conclusion In reviewing the theory and practice of performance measures and performance management systems in Canadian local government, we identified two deficiencies that may limit their success: (1) the failure of governments to involve citizens and elected officials, as well as staff, in the development and use of performance measures, and (2) a focus on performance measures as ends in themselves rather than on implementing measurement as part of a holistic performance management system designed and used by employees at all levels of the organization to guide their work, and by elected officials and citizens. The theme that is common to both of these issues is a lack of democratic participation in the development and use of performance measures. We suggest that through the involvement of citizens, elected officials, and front-line staff in the design and application of performance measurement and management systems, these systems can serve as aids to democratic governance and to the improvement of public administration at the local level. In the absence of democratic participation, performance measures may risk becoming just another management fad that fails to deliver the benefits and improvements they are meant to bring to local government administration.

NOTES 1 For a more detailed discussion of the distinction between performance measurement and performance management in the Canadian local government context, see Plant et al. (2005). 2 See Gerley (2004: 51). Gerley interviewed Bohdhan Wynnycky, a manager of the Municipal Performance and Accountability Branch of the Ministry of Municipal Affairs of Ontario, on 5 May 2003, who reported these diffi-

Performance Management in Canadian Local Government 175 culties. Gerley also mentioned a 2003 article by Jeff Buckstein, ‘A Delicate Balance,’ in Certified General Accountants Magazine, Jan./Feb. (retrieved 25 July 2004 from http://www.cga-canada.org/eng/magazine/jan-feb03 /balance_e.htm). Buckstein specifically pointed out these issues. 3 See Gerley (2004: 53). Gerley interviewed Robert Houlihan, a municipal adviser for Service Nova Scotia and Municipal Relations, on 7 May 2003.

REFERENCES Alberta, Government of. 1995. Measuring Up. Aucoin, P. 1998. Auditing for Accountability: The Role of the Auditor General. Institute on Governance. Retrieved 15 July 2004 from http://www.iog.ca/ publications/aucoin.pdf. Bens, C. 1998. Public Sector Performance Measurement: Successful Strategies and Tools. Sarasota: Best Practice Consulting. Bernstein, D.J. 1999. ‘Comments on Perrin’s “Effective Use and Misuse of Performance Measurement.”’ American Journal of Program Evaluation, 20/1: 85–93. Borins, S. 1995. ‘The New Public Management Is Here to Stay.’ Canadian Public Administration, 38/1: 122–32. Bouckaert, G., and Peters, B.G. 2002. ‘Performance Measurement and Management: The Achilles’ Heel in Administrative Modernization.’ Public Performance and Management Review, 25/3: 359–62. Callahan, K., and Hodzer, M. 1999. ‘Results Oriented Government: Citizen Involvement.’ In A. Halachmi, ed., Performance and Quality Measurement in Government: Issues and Experiences, 32–45. Burke, Va.: Chatelaine Press. Carroll, B.W., and Dewar, D. 2002. ‘Performance Management: Panacea or Fools’ Gold?’ In C. Dunn, ed., The Handbook of Canadian Public Administration, 413–29. Don Mills: Oxford University Press. Gerley, M. 2004. Project for the Implementation of Municipal Annual Reporting. MPA Final Report. Victoria: University of Victoria, School of Public Administration. Gow, I. 2001. ‘Accountability, Rationality and New Structures of Governance: Making Room for Political Rationality.’ Canadian Journal of Program Evaluation, 16/2: 55–70. Gow, I. 1999. Introduction. International Review of Administrative Sciences, 65/1: 5–12. Hatry, H.P. 1999. Performance Measurement: Getting Results. Washington, DC: Urban Institute.

176 Local Government in a Global World Hatry, H.P., and Fisk, D. 1992. ‘Measuring Productivity in the Public Sector.’ In M. Holzer and J. Dekker, eds., Public Productivity Handbook, 139–60. New York: Monticello. Hatry, H.P., and Wholey, J. 1992. ‘The Case for Performance Monitoring.’ Public Administration Review, 52/6: 604–10. Kaplan, R.S., and Norton, D.P. 1996. ‘Linking the Balanced Scorecard to Strategy.’ California Management Review, 38/1: 53–77. King, C.S., and Stivers, C. 1998. Government Is Us: Public Administration in an Anti-government Era. Thousand Oaks: Sage. Lee, Derek. 2000. Improved Reporting to Parliament Project – Phase 2: Moving Forward. Thirty-seventh Report of the Standing Committee on Procedure and House Affairs. Ottawa: House of Commons. Lindquist, E. 1998. ‘Getting Results Right: Reforming Ottawa’s Estimates.’ In L. Pal, ed., How Ottawa Spends, 1998–1999: Balancing Act: The Post-Deficit Mandate, 153–90. Don Mills: Oxford University Press. MacDonald, V.N., and Lawton, P.J. 1977. Improving Management Performance: The Contribution of Productivity and Performance Measurement. Local Government Project, Series B Publications. Kingston: Queen’s University, School of Business. Mayne, J. 2001. ‘Addressing Attribution through Contribution Analysis: Using Performance Measures Sensibly.’ Canadian Journal of Program Evaluation, 16/1: 1–24. McDavid, J. 1998. Linking Program Evaluation and Performance Measurement Systems: Are There Ways We Can Build and Sustain Performance Measurement Systems? Victoria, BC: University of Victoria, School of Public Administration. Melkers, J., Willoughby, K., James, B., Fountain, J., and Campbell, W. 2002. Performance Measurement at the State and Local Levels: A Summary of Survey Results. Washington: U.S. General Accounting Standards Board. Minnesota Planning. 1992. Minnesota Milestones. Retrieved 25 June 2004 from http://www.mnplan.state.mn.us/mm/aboutmm.html. Minnesota Planning. 2002. Minnesota Milestones: Proposed Revisions. Retrieved 25 June 2004 from http://www.mnplan.state.mn.us/pdf/2002/MilestonesMeasuresthatMatter.pdf. Newcomer, K.E. 1997. ‘Using Performance Measurement to Improve Public and Non-profit Programs.’ In K. Newcomer, ed., New Directions for Evaluation, 5–15. San Francisco: Jossey-Bass. Nova Scotia, Service Nova Scotia and Municipal Relations. 2002. Municipal Indicators Handbook. Retrieved 15 July 2004 from http://www.gov.ns.ca/snsmr/forms/pdf/2002-03_AR.pdf.

Performance Management in Canadian Local Government 177 Ontario Ministry of Municipal Affairs and Housing. 2004. A Guide to Service Delivery Review for Municipal Managers. Retrieved 20 July 2004 from http://www.mah.gov.on.ca. Ontario Ministry of Municipal Affairs and Housing. 2003. Municipal Performance Measurement Program, 2003 Handbook. Retrieved 20 July 2004 from http://www.mah.gov.on.ca/userfiles/page_attachments/Library/1/12386 32_Charrette_Proce edings_Report.pdf. Perrin, B. 1998. ‘Effective Use and Misuse of Performance Measurement.’ American Journal of Program Evaluation, 19/3: 367–79. Peters, G., and Savoie, D. 1996. ‘Managing Incoherence: The Coordination, Empowerment Conundrum.’ Public Administration Review, 56/2: 281–90. Peters, G., and Savoie, D. 1994. ‘Civil Service Reform, Misdiagnosing the Patient.’ Public Administration Review, 54/5: 418–25. Plant, T., Agocs, C., Brunet-Jailly, E., and Douglas, J. 2005. From Measuring to Managing Performance: Recent Trends in the Development of Municipal Public Sector Accountability. New Directions Report 16. Toronto: Institute of Public Administration of Canada. Pollitt, C. 2001. ‘How Do We Know How Good Public Services Are? In G. Peters and D. Savoie, eds., Governance in the Twenty-First Century: Revitalizing the Public Service. Montreal and Kingston: Canadian Centre for Management Development and McGill-Queen’s University Press. Schachter, H.L. 1997. Reinventing Government or Reinventing Ourselves: The Role of Citizen Owners in Making a Better Government. Albany: State University of New York Press. Schachter, M. 2002. Not a Tool Kit: Practitioner’s Guide to Measuring the Performance of Public Programs. Ottawa: Institute on Governance. Retrieved 25 July 2004 from http://www.iog.ca. Shane, B. 2001. Implementing Performance Measurement in a Public Service. BPC Management Consultants, Ottawa. Retrieved 28 Aug. 2004 from www.performance-measurement.net/news-detail.asp?nID=64. Stergios, J. 2000. Government Effectiveness Index: A Cross-State Survey. Government Accounting Standards Board Survey. Boston: Pioneer Institute, Center for Restructuring Government. Streib, G., and Poister, T. 2002. ‘The Use of Strategic Planning in Municipal Governments.’ In The Municipal Yearbook 2002, 9–15. Washington, DC: International City/County Management Association. Streib, G., and Poister. T. 1999. ‘Assessing the Valididy, Legitimacy and Functionality of Performance Measurement Systems in Municipal Governments.’ American Review of Public Administration, 29/2: 107–23. Swindell, D., and Kelly, J. 2000. ‘Linking Citizen Satisfaction Data to Perfor-

178 Local Government in a Global World mance Measures.’ Public Performance and Management Review, 24/1: 30–2. Tat-Kei Ho, A., and Coates, P. 2004. Citizen Based Performance Measurement – The Iowa Experience and Lessons for Eastern European Countries. Alfred Sloan Foundation. Retrieved 10 May 2004 from www.sloan.org. Treasury Board Secretariat Canada. 2005. Guide for the Preparation of 2004–2005 Departmental Performance Reports. 5 May. Retrieved 10 May 2006 from www.tbs-sct.gc.ca/rma/dpr1/04-05/guidelines/guide01_e.asp. Treasury Board Secretariat Canada. 2005. Budget 2005: Strengthening and Modernizing Public Sector Management. 16 May. Retrieved 21 May 2006 from www.tbs-sct.gc.ca/s[s,-rgsp/smpsm-rmgsp_e.asp. U.S. Government Accounting Standards Board. 2000. Performance Measurement for Government. Retrieved 11 Nov. 2006 from http://72.3.167.245/aboutpmg/index.shtml. Wernick, M. (Privy Council Office). 2005. The Government’s Agenda. Presentation to 19th Annual University Seminar, 5 May, Canada School of Public Service, Ottawa. Wray, L., and Hauer, J. 1997. ‘Performance Measurement to Achieve Quality of Life.’ Performance Measurement, 79/8: 4–8.

Ontario 179

8 What’s Fair? Intergovernmental Relations in Australia graham sansom

At its 2005 National General Assembly of Local Government, the Australian Local Government Association (ALGA) launched a campaign for ‘fair federal funding of local government, fair treatment of local government by state and federal governments, and formal recognition of local government in the Australian Constitution’ (Bell 2005). ALGA’s ‘log of claims’ highlights a central paradox in local government’s relations within the Australian federation: legally, it is a creature of the states, but it is the federal government that provides the bulk of grant funding to councils, and it is largely federal policies that have propelled local government on to the national stage over recent decades. This chapter therefore focuses primarily on local government’s emerging web of intergovernmental relationships at the federal level. It begins with an overview of the constitutional framework, financial context, and history of Australian intergovernmental relations to the end of the 1980s, and then explores some of the key developments in respect to local government during the next two decades. There is brief coverage of some significant recent trends and developments in statelocal relations. The chapter concludes by considering whether ALGA’s campaign accurately reflects the strengths and weaknesses of local government as a player in the federal system, and hence those factors that will make the difference between continued enhancement of its role and status, or a return to irrelevance (in federal terms) as merely a local service provider. Constitutional Framework The Australian federation was established in 1901 and comprises a federal (aka Commonwealth or Australian) government, six states

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(New South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania), and two largely autonomous federal territories (Northern Territory and Australian Capital Territory). Local government is established under the laws of the six states and the Northern Territory. There is no separate local government in the Australian Capital Territory, where the territory government also undertakes municipal functions. Local government is not mentioned in the federal Constitution, but is granted varying degrees of recognition and protection under state constitutions – although most of these can be altered simply by an act of the state legislature, whereas changes to the federal Constitution require a referendum. As shown in Figure 8.1, a literal interpretation of Australia’s Constitution places the federal and state governments on roughly equal terms, with little overlap in functions. Local government is wholly subservient to the states, with no direct relationship to the federal government. By contrast, the practical reality is one of federal dominance, extensive functional overlap between federal and state governments, and direct links (both financial and functional) between local and federal governments. This reflects the federal government’s financial strength, derived from control of both income and indirect taxes, as well as a series of High Court decisions that have interpreted the Constitution in such a way as to extend federal powers. Figure 8.1 also hints at perhaps a small measure of local government autonomy – not legally but in the sense of its democratic status, community support for its continued existence, and large measure of financial independence. Financial Relationships Intergovernmental relations in Australia are dominated by vertical fiscal imbalance: the federal government has a taxation base far in excess of its own expenditure needs, while the states1 and to a lesser extent local government lack the capacity to raise the revenue required to meet their responsibilities. The states are particularly dependent on federal funding to bridge the gap between revenue capacity and expenditure needs. They remain responsible for major infrastructure and services including health care, education, transportation, environmental management, and others, but have a weak revenue base and are reliant on minor and in some cases inefficient taxes, such as payroll tax, stamp duty, land tax, taxes on

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Figure 8.1: Constitutional fiction and reality

Federal Federal

State

State Local Local

gambling, licence fees, and user charges. More than half of the states’ total expenditure is funded by federal grants and tax transfers, especially the goods and services tax introduced in 2000 (see below). Local government raises around 3% of total taxation, entirely from property rates, plus a range of user/service charges and licence fees. On average, it is more than 80% self-sufficient, because its expenditure responsibilities are relatively limited and match its revenue base quite well. However, the tendency for federal and particularly state or territory governments to ‘cost shift’ or hand councils ‘unfunded mandates’ (to transfer or legislate responsibility for areas of service delivery without corresponding funding or revenue sources) is a significant cause for concern (House of Representatives, 2003). Also, many smaller rural and regional councils struggle to generate rate income and are heavily dependent on grants. Federal assistance to the states and local government includes the following four main elements: 1 Revenue from the goods and services tax (GST), distributed to the states

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2 Additional general-purpose payments to the states made under the 1995 National Competition Policy (NCP) agreement2 3 Financial assistance grants (FAGs) to local government, allocated to the states per capita and then distributed to individual councils by state local government grants commissions applying ‘horizontal fiscal equalization’ – but with all councils receiving a minimum per capita payment3 4 Specific-purpose payments (SPPs) to the states and local government for particular functions such as education, health care, transportation, and environment. Local government receives grants from both federal and state governments. In 2004/5 federal grants amounted to around $2 billion, including some $1.6 billion in financial assistance grants. State grants totalled around $800 million, but this figure included some other federal payments passed through the states to local government. The level of own-source state assistance to local government varies greatly from state to state. General-purpose assistance to local government has been provided by the federal government since 1974/5. Under current arrangements, it is regulated by the Local Government (Financial Assistance) Act, 1995. The federal treasurer is responsible for determining the annual increase in FAGs, which by intergovernmental agreement is based on a ‘real terms per capita’ formula, reflecting both population growth and movements in the consumer price index. However, the rate of increase in local government FAGs has been much slower than that in GST revenue passed to the states. For larger metropolitan councils and major regional centres federal funding is relatively minor. These councils typically raise 90% or more of their revenue from property rates and service fees and charges. Smaller rural or remote councils are heavily dependent on federal grants, as well as various forms of special-purpose assistance, especially for roads. An interesting question is whether local government has tended to use federal grants to keep local property taxes lower than they would otherwise have been, and to reduce debt. Several states have pressured local government in various ways to keep rates low, for example, through rate-capping in New South Wales and (for some years in the 1990s) South Australia and Victoria. Also many councils have eliminated debt in recent years, even though funding is often urgently

Intergovernmental Relations in Australia 183 Table 8.1 Commonwealth General Purpose Assistance to Local Government 2006/7 (in millions of AU$) State

General Grant

Roads Component

New South Wales Victoria Queensland Western Australia South Australia Tasmania ACT Northern Territory Total

386.3 286.6 227.8 115.0 87.8 27.7 18.5 11.6 1,161.4

149.5 106.2 96.6 78.8 28.3 27.3 16.5 12.1 515.4

Total 535.8 392.8 324.4 193.8 116.2 55.0 35.1 23.7 1,676.8

Source: Commonwealth Budget Paper No. 3, 2006.

required for major items of infrastructure and loans are an appropriate way to finance such expenditure. It seems strange that the federal government should continue paying very large grants to councils but apparently turn a blind eye to questionable financial management – although the previous government led the rhetoric on the need to reduce debt (see Table 8.1). The Development of Federal-Local Relations The history of intergovernmental relations as they affect local government has been covered in detail elsewhere (e.g., Chapman and Wood, 1984; Chapman, 1997a). What follows is a brief summary focusing on some of the key factors that have shaped relationships over recent decades. This provides the basis for discussion of several recent landmarks in local government’s relations with central governments, and consideration of future prospects. As noted previously, Australian local government exists solely under state and Northern Territory laws. Local authorities were established by the colonial authorities in the nineteenth century largely as an administrative convenience, and there was little sense of civic values. Local government was not considered in the constitutional conventions that led to federation in 1901, and the local government acts of the early twentieth century locked in systems of generally small urban municipalities and rural shires with quite limited powers and responsibilities.

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After the Second World War, however, the role of local government began to expand significantly. A number of forces were at work including: rapid population growth due to large-scale immigration; consequent urban expansion on the fringes of metropolitan areas and in some regional and emerging industrial centres; the introduction of modern town planning systems, which became largely a local government responsibility; and the stronger role of the public sector generally in the era of the welfare state. These forces reflected the changing policies of the federal government, based initially on the drive for postwar reconstruction, and later its steadily increasing financial dominance and widening spheres of interest and influence. A critical threshold in local government’s involvement with the federal government came in the early 1970s, when the Whitlam Labor government introduced general-purpose financial assistance to local government and also greatly expanded special-purpose funding. Key elements of Whitlam’s approach were encouragement for local government to broaden its horizons and support for regional organizations of councils as one means of doing that. These moves were undoubtedly aimed in part at bypassing the states, which were seen as having outlived their usefulness and likely to frustrate necessary expansion of federal government functions. Many in local government shared the states’ concerns about Whitlam’s intentions and opposed his policies, despite the financial benefits and promise of more status in the federal system. In 1975 Whitlam’s government was replaced by a conservative coalition and many of his programs were abandoned. However, the system of federal financial assistance to local government was retained and substantially expanded, and in a very significant move the new Fraser government established an Advisory Council for Inter-government Relations (ACIR). This reflected the need, highlighted by Whitlam’s initiatives, to address the changing balance between federal and state governments, but importantly the ACIR’s brief and membership also extended to local government (Balmer, 1989). Indeed, the ACIR put considerable time and resources into examining issues affecting local government and its place in the federal system, leading to the recognition of local government in several state constitutions and ultimately a 1988 referendum on the recognition of local government in the federal Constitution. While that referendum was lost, local government had become a player in intergovernmental circles and was soon to strengthen its position still further.

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During the 1980s there was steady growth in federal-local links. The Hawke Labor government elected in 1983 established an Office of Local Government (OLG) under a former Whitlam minister, Tom Uren. Although the Hawke government adopted a much more conciliatory approach to the states than Whitlam, the OLG reintroduced funding for what were now termed ‘voluntary’ regional organizations of councils and, together with other departments, supported a larger role for local government across a broad range of functional areas including economic development, environmental management, and community services. These federal policies resonated with a growing belief among both elected members and managers in local government itself that its role should expand significantly and its operations should be modernized to reflect a more ‘corporate’ approach. By the 1980s the growth of metropolitan areas and some regional centres, coupled in some cases with amalgamation of councils to create larger local government units, had created a group of large, relatively well-resourced councils across Australia that were beginning to see themselves as important contributors to the broader system of government. This group included, for example, Brisbane City Council – created in the 1920s as a single local authority to cover most of the then metropolitan area; a number of large or rapidly expanding councils on the fringes of the other state capitals – previously rural areas overtaken by urban development; and regional centres such as Townsville, Gold Coast, Newcastle, Wollongong, and Geelong. Also during the 1980s the state local government associations began to support a stronger national presence through the Australian Council of Local Government Associations. This was originally established as a part-time organization in 1947, principally to lobby for federal funding. Encouraged by the policies of the Hawke government, it established a full-time secretariat in Canberra in 1976, and in 1986 changed its name to the Australian Local Government Association (ALGA). These moves positioned local government to participate fully in the emerging system of intergovernmental relations (Cutts and Sansom, 1997). In 1987 the federal government initiated a ‘Rationalisation Exercise’ to explore opportunities to streamline and better coordinate the delivery of local services by the three levels (‘spheres’ was local government’s preferred term) of government. Demonstration projects were undertaken by individual local councils, groups of councils, and state

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local government associations to explore potential improvements to program arrangements. But while the exercise had the personal support of the prime minister, the response from federal and in particular state agencies was generally one of indifference or even opposition, and little progress was made. Nevertheless, the federal government supported a follow-up ALGA project on Integrated Local Area Planning (ILAP) that sought to realize the potential for local government leadership in driving coordinated strategic planning and service delivery at local and regional levels. ALGA’s publications on ILAP (ALGA, 1992, 1993) provide a forceful statement of its views on the need for further improvements in intergovernmental relations, coupled with improved skills and capacity within local government itself to enable councils to fulfil their potential as community leaders and strong partners with state and federal agencies. In turn, those views reflected ALGA’s burgeoning experience of the realities and practicalities of intergovernmental relations, and its appreciation of the opportunities for local government to enhance its presence. The late 1980s and early 1990s were thus in Australia a period of transition to what might be termed the modern era of local government’s involvement in federal relations. Ministerial Councils and Council of Australian Governments Australia’s Constitution has very little to say about intergovernmental relations. Nor is there much in the way of law to guide cooperation or resolve disputes between federal and state governments. What has emerged, however, is an extensive and quite complex framework of intergovernmental forums and other mechanisms established administratively. The 1980s saw a substantial increase in the number of ministerial councils (Mincos) – regular meetings of federal and state ministers with closely related or overlapping responsibilities. This was a response to the need to manage new relationships created by the extension of federal activity into areas previously the exclusive domain of the states. One such area was local government: a Local Government Ministers Conference was established and supported by a committee of senior officials – essentially the heads of state local government departments and their federal counterpart from the Office of Local Government. ALGA became a member of both the conference and the senior officials group, and over the years has been able to play

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a significant role in steering the agenda and contributing to specific projects and studies. In the early years the agenda included an important series of reports titled ‘Developments in Local Government’ that were influential in promoting new perspectives on the roles and responsibilities of local government. In 1990 Prime Minister Hawke launched a major new initiative to improve intergovernmental relations – the Special Premiers Conferences (SPCs). These two conferences were intended to promote a range of reforms to federal-state relations as well as to continue and extend the long-standing micro-economic reform agenda of the federal government that began with floating the Australian dollar in 1984. ALGA had observer status at the conferences, although local government issues as such were not discussed. Subsequently, however, local government through ALGA was involved in follow-up activities such as the Inter-governmental Agreement on the Environment, to which ALGA was a signatory – an historical first. And more importantly, the president of ALGA became a member of the successor body to the SPCs, the Council of Australian Governments (COAG), sitting alongside the prime minister, state premiers, and territory chief ministers. Representatives of ALGA were then included in a raft of committees and working groups of officials established to assist COAG and pursue specific agendas such as microeconomic reform (leading to adoption in 1995 of the National Competition Policy), ecologically sustainable development, and coastal management. In the main, ALGA had to rely on federal government support to secure its seat at the table: the states tended to be cautious or negative about the participation of local government in what were often sensitive discussions touching on the balance of power between themselves and the commonwealth. As a result, ALGA has sometimes been excluded from particular working groups, but never from COAG itself. In parallel with its involvement with the Council of Australian Governments, ALGA progressively increased its participation in a range of existing and newly established ministerial councils. In a few cases this was strongly resisted by the states, notably by environment and health ministers. In other cases, such as the Australian Transport Council (of ministers) and its related bodies, local government participation was warmly received, perhaps reflecting the undeniable importance of the role of local government in the construction and maintenance of roads. Indeed, ALGA membership in the council (albeit as a participating

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observer) was confirmed by legislation. A similar provision was included in the legislation establishing an intergovernmental National Environment Protection Council, although in that case ALGA was only guaranteed representation on the standing committee of officials. The National General Assembly By the early 1990s it was clear that local government, and specifically ALGA, needed a much more robust policy platform and stronger political presence to carry its rapidly growing representational load and advocate effectively in intergovernmental forums. A number of the larger urban councils were expressing dissatisfaction with ALGA’s performance, the capital city lord mayors had established their own national body,4 and although ALGA had set up a number of ‘portfolio’ committees with members drawn from across local government, it was debatable whether the views of councils throughout Australia were being faithfully reflected in Canberra. To a significant extent, ALGA’s difficulties resulted from its federal structure. It was and remains a ‘wholly owned subsidiary’ of the seven state and territory local government associations, with no direct representation from individual local councils. Its funding is provided largely by the state associations, with the inevitable tendency for budgets and hence the staffing of the Canberra secretariat to be kept to a minimum. In addition, some state associations have from time to time taken the view that they can be just as effective as the national body in advocating their case to the federal government. These factors remain unchanged. To strengthen its position, ALGA decided to replace annual conferences held on rotation in the states – and sometimes poorly attended – with a National General Assembly of Local Government to be convened in Canberra. Moreover, it revamped its previous set of policy statements as a new National Agenda for Australian Local Government, to be adopted and then updated annually by the General Assembly. The inaugural General Assembly was held in November 1994 and attracted around 700 delegates. It was addressed by the prime minister, deputy prime minister, and the leader of the Opposition. Assemblies have been held in Canberra every year since, except in 2002, when the venue was shifted to Alice Springs in recognition of the ‘Year of the Outback’ – an important symbolic gesture given that most local

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councils are in rural and regional Australia – and in 2007 when the Assembly was again held in the Northern Territory, this time in Darwin. Delegates at General Assemblies represent their councils, with one vote per council, although resolutions have to be confirmed by a subsequent ALGA annual general meeting comprising representatives of the state and Northern Territory associations. In addition to the National Agenda for Australian Local Government, successive General Assemblies have produced a number of significant policy statements and commitments, for example, the Declaration on the Role of Australian Local Government, adopted in 1997. There is little doubt that the advent of the General Assemblies has consolidated ALGA’s position as the national arm of local government, and enhanced its presence in both the political arena and intergovernmental forums. The Accord Another innovation of the late 1980s was the introduction of annual meetings between the ALGA national executive and the prime minister and senior ministers, known as the High Level Consultations. These provided an opportunity for ALGA to argue local government’s case for both specific policy initiatives and improvements to intergovernmental relations more generally. At the 1995 consultations ALGA proposed negotiation of a Commonwealth-Local Government Accord. This was seen as a means of consolidating recent gains in federal-local government relations, as well as making further progress on key local government concerns such as obtaining additional federal financial assistance, gaining federal support for another referendum on recognition in the Australian Constitution, and enhancing the relatively weak role given to local government in some recently introduced federal programs, notably Building Better Cities and the Regional Development Program. The then prime minister (Paul Keating) and deputy prime minister (Brian Howe, whose portfolio included local government) saw merit in the proposal and agreed that negotiations should commence immediately with a view to signing the accord during the General Assembly later in 1995. As negotiations proceeded it became clear that the federal government would not agree to a substantial increase in generalpurpose funding to local government, but would commit to address-

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ing many of local government’s other concerns in return for a commitment by ALGA to support national policy priorities such as microeconomic reform, improved urban planning, social justice, and environmental management. The accord was signed by the prime minister and ALGA’s president on 14 November 1995. The commonwealth agreed among other things to support constitutional recognition; to build a closer working relationship with local government (including an effective whole-of-government approach, echoing ALGA’s earlier ILAP initiative); to support ALGA participation in all activities of COAG and ministerial councils in which local government had a legitimate interest; to secure effective local government involvement in all relevant federal programs through specific program agreements; and to fund a substantial Local Government Development Program. It also agreed to a joint review of the financial position of local government. In the event, the accord was short-lived, as the Keating government lost the federal election held in March 1996, and the incoming conservative coalition was not prepared to honour the agreement. An attempt was made to negotiate a replacement memorandum of understanding, but this foundered when the new government refused to support constitutional recognition and also failed to maintain (although only in one year) the real terms per capita escalation factor for financial assistance grants that had been agreed as part of the National Competition Policy package. Significantly, ALGA leadership put the decision to withdraw from negotiations to a vote at the 1996 General Assembly, thus obtaining the broadest possible endorsement from its constituency and highlighting the assembly’s political role and value. The Howard Years From 1996 to 2007 Australia’s federal government was a conservative Liberal-National Party coalition led by Prime Minister John Howard. Local government’s relations with the Howard government did not have an auspicious beginning: not only was the attempt to negotiate a memorandum of understanding a failure, but also local government (along with most other sectors) suffered from a series of budget cuts, there were moves to abandon federal involvement in regional development altogether, and even a suggestion that the general-purpose financial assistance grants (FAGs) to local government should be com-

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bined with similar grants to the states and administered by them. Concern about such a handover focused on the likelihood that funding for local government might not be quarantined and increased in accordance with the real terms per capita guarantee, and that the states might attempt to divert some of the funds to bolster their own weak financial position. In the event no changes were made at that time, but when in 1999 the federal government moved to introduce the GST and allocate all revenue from this tax to the states, it proposed that as an offsetting measure the states should accept responsibility for assistance to local government. Except in Queensland, where the local government association negotiated a satisfactory revenue-sharing arrangement with the state government, local government was again fearful about the longer-term implications of being dependent on the states for funding and strongly opposed the coalition’s plan. ALGA lobbied the Australian Democrats, who held the balance of power in the Senate (upper house of federal Parliament), and when a deal was struck to introduce the GST but with an exemption for most food items – thus substantially reducing anticipated revenue – it was also agreed that the federal government would retain responsibility for local government FAGs. Despite these previous tensions, the early years of the twenty-first century saw a strengthening of federal-local relationships. There appear to have been two key factors at work. First, local government was able to capitalize on renewed federal interest in regional development, sparked by the need to bolster the National Party’s position against both right-wing forces and populist independent candidates. In 1998 ALGA began to produce an annual ‘State of the Regions Report,’ complementing a regional development forum held each year as part of the General Assembly. These reports and forums have enabled local government to pursue issues such as concerns about economic and social dislocation in many rural areas, the need for improved telecommunications in regional Australia (a key federal responsibility and hot political issue for the past several years), and the financial problems facing rural councils (especially the cost of maintaining and upgrading roads and other infrastructure). Second, the federal coalition found itself confronted by Labor governments in all states and both territories. Not surprisingly, this turn of events appears to have weakened traditional conservative support for ‘states rights,’ and like its Labor predecessors, the coalition apparently came to see local government as a useful mechanism to implement

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some of its policies and programs – with or without state support and involvement. These forces coalesced in the federal government’s decision in 2000 to provide an additional $300 million per annum in funding to councils through a four-year Australia-wide Roads to Recovery Program. Significantly, these were tied funds rather than the increase in generalpurpose funding favoured by local government, and grants were paid directly to councils under a national formula, rather than being passed through the states. Roads to Recovery was adjudged a success and has since been extended until at least 2012. The Cost-Shifting Inquiry One of the most significant events of the past decade for local government was the commissioning in 2002 by the federal minister of an inquiry into Local Government and Cost Shifting. This was a partial response to pressure by ALGA for the federal government to address the deteriorating financial position of local government, but many saw it also as a political move designed to embarrass Labor state and territory governments. While there are some examples of the federal government adding to local government’s responsibilities without providing additional funding, cost-shifting is primarily a state phenomenon – a mix of devolution without funding (‘unfunded mandates’), legislation that imposes new functions or compliance requirements but without matching revenue, levies on local government to help fund state services, and restrictions on local government rates or charges. The inquiry was conducted by the House of Representatives Committee on Economics, Finance, and Public Administration. Its terms of reference were broad. They promoted a wide-ranging examination of the position of local government in Australia’s federal system including its current roles, responsibilities, and financial position, as well as its relations with state and federal governments. The committee’s report Rates and Taxes: A Fair Share for Responsible Local Government (House of Representatives, 2003) concluded that costshifting ‘is, ultimately, a symptom of what has become dysfunctional governance and funding arrangements. It is time to combine the best efforts of governments and choose a better way.’ The principal findings were the following:

Intergovernmental Relations in Australia 193 • Growth in local government’s responsibilities has outpaced rev-

• •

•

•

•

enues with the result that most councils are underfunding infrastructure maintenance and renewal. Cost-shifting is widespread and exacerbated by councils accepting even more functions to satisfy community expectations. Overall, local government is in good shape financially, with historically low levels of debt. But many councils in rural and remote regions have very limited resources and are highly dependent on grants. Also, states have at times imposed unwarranted revenue limitations on councils and some state and federal government agencies and business enterprises still do not pay council rates. Local government does not always receive its fair share of commonwealth special-purpose payments made to and through the states, and in some cases states have offset increased federal grants by reducing their own assistance to councils. Some councils are guilty of poor financial management: not increasing rates when they could and should, investing in nonessential infrastructure and assets that are very costly to maintain, and not saying ‘no’ to unwarranted community demands for expanded services. Intergovernmental relations are often poor. The definition of roles and responsibilities is unclear and the costs of duplication and coordination are excessive.

The committee made a wide range of recommendations to address these issues. These included: • New intergovernmental agreements on roles, responsibilities, and

associated funding measures to tackle cost-shifting and to address arbitrary state restrictions on local government revenue • Greater local government participation in formulating federal-state agreements, and provision of a share of funding for local government wherever it plays a significant role in delivering the programs concerned • Local government impact statements to identify additional financial pressures that may flow from federal or state legislation • Ensuring that federal special-purpose payments intended to pass through the states to local government reach their target, and are

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• •

• •

not offset by states cost-shifting or reducing their own expenditure – including monitoring by the commonwealth auditor general Payment of council rates by state and federal government agencies and businesses A new Local Government Liaison Unit to support improved intergovernmental relations, enhance direct federal-local government links, and monitor program implementation and cost-shifting A COAG Summit on intergovernmental relations in 2005 to review progress and promote further improvements A House of Representatives resolution recognizing local government as an integral level of governance of Australia.

Significantly, the committee aired the possibility that states might in future be penalized for cost-shifting, failing to pass on local government’s intended share of federal program funds, reducing their own assistance to councils, or imposing arbitrary limits on councils’ revenues. Evidently it became convinced that the commonwealth has not been getting full value for the billions of dollars provided to local government over the years through financial assistance grants and other programs. This realization seemed long overdue. The committee also put forward some bold recommendations to improve the FAGs system. These revolved around the need to increase funding to smaller regional and rural councils with limited capacity to raise their own revenues. Proposals included abolishing the guaranteed minimum grant to free up more funds for needy councils and distributing grants directly to councils from the federal government, applying uniform equalization principles across all states. Responsibility for FAGs was to be transferred to the federal treasurer, so that support for local government could be integrated with the broader framework of intergovernmental financial relations. The committee gave a strong hint that the total amount of financial assistance grants should be increased, although its terms of reference precluded a firm recommendation on this. It also indicated support for greater monitoring of council performance, and suggested that grants to councils that failed to demonstrate sound financial management might be reduced. The federal government’s response to these quite radical recommendations was perhaps predictably cautious (Australian Government, 2005). It rejected a COAG summit on intergovernmental relations but agreed to put a motion to both the House of Representatives

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and the Senate recognizing the role of local government. It also gave in principle support to an intergovernmental agreement (IGA) to deal with cost-shifting and related issues, and acted quickly to initiate negotiations. A fundamental question here was whether the federal government would use its financial muscle to force changes in the way the states dealt with local government. Other elements of the response, including the following, indicated this was not on the agenda: • Responsibility for the financial relationship with local government

was not transferred to the treasurer, suggesting that local government finances would not figure significantly in broader intergovernmental negotiations. • The recommendation for scrutiny by the auditor general of the states’ handling of special-purpose grants intended for local government was rejected. • The federal government also rejected paying rates on federal property, and introducing local government impact statements, leaving it in no position to pressure the states on those fronts. The response also shied away from the recommended shake-up of the FAGs system, but the government did announce a follow-up Productivity Commission5 inquiry into the capacity of local governments to raise revenue from their own sources. This would provide the opportunity for a more detailed examination of rate capping and other ways in which the states impose limits on revenue-raising by councils, as well as the scope for councils to increase rates, fees, and charges. Interestingly, the federal government also indicated support for increased borrowing by councils to address infrastructure needs – and additional borrowing requires additional recurrent revenue to make the repayments, unless other expenditures are reduced. Larger and more affluent councils were no doubt pleased that their grants were to be maintained, including guaranteed minimum grants even where there is no evident need for equalization support. But this may prove to have been a pyrrhic victory. The financial problems of smaller councils will not go away, and the system of local government as a whole must inevitably be weakened if a significant and growing number of councils cannot function effectively. The amalgamation of councils into potentially more viable units and/or regional cooperation and resource-sharing have been favoured at various times by both state and federal governments, but amalgamation is usually strongly

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resisted by local government, and both amalgamation and regional cooperation may be impractical in thinly populated rural and remote regions. The response would have disappointed those who hoped for a significant strengthening of the position of local government in the federal system. It rejected the proposed federal Local Government Liaison Unit and flagged no change in the approach to local government involvement in ministerial councils and intergovernmental negotiations. It emphasized that ‘the participation of local government during the negotiation of ... inter-governmental agreements would depend on the agreement of all parties and would not be appropriate in all circumstances.’ Evidently, the proposed parliamentary resolution recognizing local government was not seen to represent any real challenge to the status quo – but then nor would any achievable form of constitutional recognition, given the inevitable opposition of the states to changes that would further undermine their authority. The Intergovernmental Agreement and Parliamentary Resolution Following the tabling of its response to the cost-shifting inquiry the federal government moved with relative haste to honour its undertakings to promulgate an intergovernmental agreement and seek a parliamentary resolution recognizing the role of local government. The Inter-Governmental Agreement Establishing Principles Guiding Inter-Governmental Relations on Local Government Matters was signed by the commonwealth, all states and territories, and ALGA in April 2006. It begins by acknowledging that local government is established and regulated under state laws, but also that there is a need to develop a framework to improve the way the three spheres of government relate to each other in achieving the best possible outcomes for communities, including how services are funded and delivered. The purpose of the intergovernmental agreement is stated as follows: • To encourage the conduct of positive and productive relations

between the three spheres of government in a spirit of respect with an emphasis on partnership and cooperation • To provide an overarching framework from which further agreements covering specific services and functions should be developed.

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The agreement ‘grandfathers’ all existing arrangements for service delivery, so that local government cannot use it to reverse previous cases of cost-shifting. For the future, it promotes, and in some instances requires, greater consultation and negotiation with local government when federal or state governments seek or impose the provision of additional services or functions by councils. As a general rule, more attention is to be given to the financial implications and other impacts of adding to the functions of local government. For its part, local government through ALGA committed to sound public governance through good fiscal and asset management, ensuring that decisions have regard to their effects on future generations, better strategic planning and pricing regimes, and taking responsibility for the funding implications of its own policy decisions. These undertakings address some of the criticisms of local government management in the cost-shifting report. Clearly the agreement is essentially a statement of good intent on all sides. Implementation and compliance are to be monitored by the Local Government and Planning Ministers Council, and it will be interesting to see if the states do in fact keep an eye on each other’s performance in improving their dealings with local government – which could fairly be described as patchy – and whether the federal government keeps a closer watch on proceedings than in the past. In September 2006 the federal government moved on its second key commitment: the parliamentary resolution. It introduced a draft resolution that Parliament: • Recognizes that local government is part of the governance of Aus-

tralia, serving communities through locally elected councils • Values the rich diversity of councils around Australia, reflecting

the varied communities they serve • Acknowledges the role of local government in governance, advo-

cacy, the provision of infrastructure, service delivery, planning, community development, and regulation • Acknowledges the importance of cooperating with and consulting with local government on the priorities of their local communities • Acknowledges the significant Australian government funding that is provided to local government to spend on locally determined priorities, such as roads and other local government services • Commends local government elected officials who give their time to serve their communities.

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The Labor Party unsuccessfully moved that the first paragraph be amended to read: ‘supports a referendum to extend constitutional recognition to local government in recognition of the essential role it plays in the governance of Australia.’ This reflected long-standing party policy and the agreement with ALGA reached in the 1995 accord. The resolution falls well short of local government’s preferred position of federal constitutional recognition, but does highlight the democratic election of councils, which is not presently guaranteed in all state constitutions, as well as the value of diversity and the need to cooperate with local government. Like the wording of the intergovernmental agreement, these are significant statements of good intent and provide a platform to further advance the position of local government. Whether local government can capitalize on these and other opportunities will be considered in the final section of this chapter. The Rudd Labor Government In November 2007 Australians elected a Labor federal government led by Prime Minister Kevin Rudd. A key plank of Labor’s platform had been to improve federal-state relations: Labor was then in power across the whole of Australia. Rudd moved swiftly to revitalize the Council of Australian Governments, with seven new working groups to focus on various aspects of his federalism agenda. Local government through ALGA is represented on the working groups for infrastructure, housing, and climate change. Another key area of COAG activity – reform of business regulation – addresses two core concerns for local government, namely, development assessment and building control. The revitalized COAG agenda thus poses major challenges for local councils to perform effectively, both in areas of core business and in addressing broader national priorities. Can local government demonstrate that it has a real contribution to make to national productivity, infrastructure improvement, housing affordability, Indigenous wellbeing, climate change, water reforms, and other pressing issues? Labor’s election policies also involved the establishment of three new federal bodies of great importance to local government. First, Infrastructure Australia is a high-level advisory body with a mandate to formulate and review proposals for nationally significant projects: local government was promised representation but the person appointed is only a former councillor. Regional Development Australia comprises a national board and a network of regional commit-

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tees to advise the federal government on regional issues, formulate regional strategies, and develop projects for funding under various programs; local government may or may not have a major role depending on how different regional committees are established. The third body is the Australian Council of Local Government (ACLG). This is a consultative and advisory forum comprising a broad crosssection of local government representatives and stakeholders appointed by the federal minister. ACLG is intended to enable local government to discuss national issues directly with the federal government, including financial sustainability of councils, infrastructure, regional development, housing affordability, and a process that may lead ultimately to constitutional recognition. The establishment of ACLG seems likely to create both opportunities and risks for local government. Until now, local government’s interests at the national level have been pursued primarily through ALGA, which has been recognized by successive federal governments as its principal representative. As ACLG brings a more diverse range of stakeholders and views to the table, will local government be able to present a coherent and united position on key issues, and reinforce its credentials as a valuable partner, or will ACLG become a Tower of Babel? Responding to the opportunity once again to pursue constitutional recognition will be another difficult test. ALGA has enthusiastically embraced this element of Labor policy and held a National Constitutional Summit in Melbourne in December 2008. The hard question is what form of recognition to seek: the wording defeated at the last referendum on this issue in 1988 would simply have required all states to legislate for a system of elected local government. This would not have lessened state control over councils, nor would it necessarily have brought about any change in underlying federal relations – and local government has already gained federal funding as well as membership in COAG and other federal forums even without recognition. So should it now press for more far-reaching constitutional change in order to become a ‘truly equal partner’?6 The chances of gaining necessary bi-partisan support federally and in a majority of states for such a bold move look slim, given that it would challenge state authority. But is it worth taking the risk of another failed referendum aimed at merely ‘symbolic’ recognition? A further significant development since the 2007 federal election has been the publication of the much delayed Productivity Commission

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study into local government’s own revenue-raising capacity. The commission found that over the past decade local government property rates have declined as a percentage of GDP, depriving councils of a potential $1 billion or more in extra revenue, and that most councils across Australia have scope to increase rates within reasonable limits of communities’ ability to pay. Moreover, the commission again highlighted the need for improved financial management in local government, and suggested there may be a case to review current arrangements for the distribution of federal financial assistance grants.7 Its findings could prove attractive to a federal government committed to cutting expenditure in order to curb inflationary pressures and repay debt. Local-State Relations Legally, Australian local government is created by and wholly subservient to the states. The states can dictate what councils shall or may not do; they can place limits on councils’ revenues and levy councils to help fund state services; they can amalgamate or abolish local government areas, adjust boundaries, and dismiss elected councils. But most councils are to a large extent financially independent of their state masters, and as was the case in colonial times when local government first emerged, many administrative, regulatory, and public works functions can only be carried out effectively at the local level. Certainly, the states have the option of delivering ‘local’ services by regionalizing their agencies, but this can be expensive, and recent years have seen a reduction in the number and scope of state-funded regional authorities and offices. It would also be possible for the states to make local councils simply ‘branch offices,’ raising their own revenues through taxes and charges but with no elected members. To this point, however, there has been no serious challenge to the continuation of democratically elected local government. The situation is further complicated by local government’s expanding links with the federal government, and the states’ increasing dependence on federal funding. The transfer of GST revenues to the states could be withdrawn at any time – it is legally a grant. In effect, state and local governments compete for federal assistance. Relationships are consequently uneasy and unstable. The activities and futures of state and local governments are inextricably linked, but as the cost-shifting inquiry found, this is rarely manifested in a clearly articulated statement of roles and responsibilities or shared priorities.

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Scarce resources are often wasted due to lack of coordination between state and local policies, programs, and expenditure decisions. The quality of relationships varies markedly from state to state and time to time (Sansom, 2002). Relationships tend to deteriorate sharply when states move to amalgamate (or, very occasionally, subdivide) councils, impose additional functions or cost burdens, restrict local government revenues or powers, or make significant decisions that are seen to impact adversely on councils and their communities – for example, changes to development plans and major public works. Such moves are seen as attacks on cherished local autonomy, again harking back to colonial times. Due to their legal relationship and overlapping functions, state and local governments are engaged in a more or less continuous dialogue at an operational level. This is commonly conducted by means of a raft of special-purpose consultative or advisory committees. Formal mechanisms for exchange of views on policy matters, or for joint planning, are much less common, particularly on a ‘whole of government’ basis. Nevertheless, recent decades have seen a number of interesting experiments. Two examples follow. Queensland Queensland has probably the strongest system of local government – politically and financially – in Australia. This reflects a number of factors including: • It is Australia’s most decentralized state, with a smaller proportion

of the population in the capital city metropolitan area (although this has now become contiguous with the subsidiary Gold Coast metropolis), a number of substantial regional centres remote from the capital both inland and along the north coast, and a strong rural tradition. • Brisbane City Council is the largest local government authority in Australia, with a population of nearly one million and a budget approaching AU$3.5 billion. • Politically, local government in Queensland is well organized with an effective local government association. A large number of state-local government agreements and protocols have been negotiated over the years, covering various areas of shared activity (such as the planning system and roads and transportation), as

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well as an umbrella protocol on respective roles in the system of local government itself. Importantly, these agreements have extended to financial relationships: as noted previously Queensland was the only state to agree to pass on to local government a substantial share of payments received from the federal government under National Competition Policy arrangements, and a similar deal was struck under the federal government’s original proposals to fund local government financial assistance from the new GST. An interesting aspect of state-local relations in Queensland has been the approach to regional planning. Until recently there was no legislation under which regional plans are formally prepared and then approved by the state; rather, the planning process was based on an attempt to reach consensus on key issues so that senior political representatives of both levels of government could ‘sign-off’ the agreed outcomes and implementation responsibilities. This approach was particularly evident in South East Queensland, where throughout the 1990s and into the early years of this century planning for the growth of metropolitan Brisbane was a voluntary partnership between the state government and the South East Queensland Regional Organization of Councils (Abbott, 2001). Of late, however, the state government has moved to exercise much tighter control over the planning process, apparently in response to the mounting pressures of rapid metropolitan growth. It has also assumed responsibility for bulk water supply to address concerns arising from the recent severe drought in southeast Queensland. Another important development has been widespread amalgamation of local councils to reduce the total number by about half. According to the report of the Local Government Reform Commission (2007), which planned the mergers, a central aim was to strengthen the capacity of local government to deal with ‘big picture’ issues by creating financially robust councils with the skills, knowledge, resources, and capacity for innovation necessary to manage rapid and often unexpected change. Queensland now has several of Australia’s largest and (potentially at least) politically influential councils. The Brisbane metropolitan area is divided into only seven councils, each with a popularly elected mayor. No comparable state capital has anything close to such a concentration of local government power. Tasmania Tasmania – Australia’s smallest state with a population of less than 500,000 – has introduced arguably the most comprehensive set of

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arrangements for formal state-local relations. Following controversy over proposals to cut the number of councils in Tasmania from twentynine to eleven, in 1999 a new state government was elected, at least in part on the basis of promises to abandon the amalgamations and work more effectively in partnership with local government. The incoming premier himself assumed the local government portfolio and immediately initiated moves for state-local partnership agreements. These were to be negotiated with individual councils, regional groups, or the state local government association. The expressed purpose of the agreements was to ‘facilitate the role of local government in a strategic way which will, in turn, drive their local economies and communities.’ According to the former head of the Local Government Division in the Department of Premier and Cabinet: ‘They not only provide the state government with a structured way of talking to local government, they also reflect the increasing complexity of local government as it expands its responsibilities towards the broader social mix of community democracy’ (Scott, 2002). The negotiation of agreements involves joint identification by teams of state agency and council officials of key issues in a local area requiring cooperative action, and then formal agreement among the parties concerned on the action to be taken to address priority tasks. The Department of Premier and Cabinet coordinates negotiations on behalf of the state, and either the premier himself or another senior minister provides political leadership, dealing with mayors or the local government association. A key issue for the state government has been the need for its agencies to learn to collaborate with each other in their dealings with local government, that is, to come to terms with what ‘the whole of government’ may mean in practice. Agreements deal with a wide range of planning, service delivery, and economic development issues. They are not necessarily focused on ‘big ticket’ items: the scale of local government in Tasmania is generally small, and often communities and councils have wanted relatively minor, niggling problems addressed – for example, the maintenance of vacant state land, cooperation in promoting tourism, or the finalization of the delegation of responsibility for local traffic management. However, one of the more recent agreements is a statewide agreement on financial reform.8 This was the first of its kind in Australia and led to: • The state government paying council rates on Crown land, apart

from certain types of reserves, roads, bridges, and associated

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infrastructure and land owned by the Hydro-Electricity Commission • Councils being required to pay all state government taxes including payroll tax and land tax (with the exception of parks, reserves, and conservation areas) • The abolition of up to $10 million in state government levies on councils. The partnership process is monitored by the Premier’s Local Government Council, through which he and other senior ministers meet three times each year with the executive of the local government association. The council also provides a forum for regular exchanges of views and policy development. It is supported by a committee of senior state and local government officials. Interestingly, the process has extended to a tripartite agreement between local, state, and federal governments on ‘Positive Ageing in Tasmania,’ signed in August 2006 by the premier, the president of the local government association, and the responsible federal minister.9 Future Prospects To a large extent, and especially at the federal level, the future course of intergovernmental relations is beyond the control or even influence of local government. If they wish, the federal government and the states can exercise their power and structure relationships in a way that excludes or completely overrides local government. But on the other hand, the experience of the past few decades at both the federal and state levels shows that local government can position itself in the intergovernmental arena in a way that capitalizes on its strengths and makes it a valued partner. Table 8.2 summarizes some key strengths and weaknesses, actual or potential, of Australian local government in making it a force to be reckoned with. The most obvious strength of local government is precisely that it is ‘local’: it can reflect the desire of communities to have a substantial measure of control over their affairs, and to have their interests represented effectively in state and national forums. And with the trend to globalization, towns, cities, and regions are dealing with each other more directly across national borders, creating further opportunities for local government to assert a local interest in a way that demon-

Intergovernmental Relations in Australia 205 Table 8.2 Strengths and Weaknesses in Intergovernment Relations Strengths

Weaknesses

Informed localism and regionalism Place focus as core business Financial autonomy Larger councils and creative diversity Community support

Fragmented parochialism Scatter-gun wish lists Mendicant mentality ‘Whingers’ and ‘basket cases’ Disengaged communities

strates a sound grasp of the ‘big picture’ and the potential to make a significant contribution at the highest levels of policy discourse. This is reflected in the emergence of influential transnational associations of local governments such as United Cities and Local Governments and the Commonwealth Local Government Forum. ALGA’s decisions to convene the annual National General Assembly, compile a National Agenda, and commission annual ‘State of the Regions’ reports can be seen as a concerted move in the direction of presenting an informed localism and regionalism that warrants the attention of federal and state counterparts. The ever-present danger, of course, is that councils and councillors, as well as state associations, will pursue their individual interests even if that means local government as a whole is unable to mount a coherent argument. McKinlay (2005) has submitted that the role of local government in place management – in local and regional planning, environmental management, and provision of infrastructure and services – is also becoming crucial in terms of global competition for skilled workers and investment. National governments will increasingly depend on local government to ensure that towns and cities and rural areas are attractive places to live and work, and hence give countries a competitive edge. This proposition adds a new dimension to what might be regarded as local government’s ‘core business’ and, together with the continuing need to maximize quality of life for existing residents, supports the proposition that local government is an essential partner in the federal system. Again, however, this line of argument is easily undermined if local government fails to present a consistent strategy in terms of its role and the contribution it can make, and instead opts to put forward wish-lists of items for state and federal assistance.

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One of the undoubted strengths of Australian local government in terms of intergovernmental relations is the high degree of financial independence enjoyed by medium-large councils. These councils are able to deliver a range of essential infrastructure and services from their own resources, and thus make a real difference to community and environmental outcomes on their own terms. Yet on the other hand, local government often presents itself as a mendicant, unable to meet its responsibilities unless state and federal governments provide increased support. In part, this accurately portrays the growing difficulties faced by smaller rural and regional councils with a limited rating base, but the recently released Productivity Commission study suggests that it also reflects an apparent reluctance among many councils to maximize revenue from their own sources – rates, fees and charges, and borrowing. In New South Wales this reluctance is compounded by the state’s rate-capping system. The proportion of local government revenue derived from property rates fell from 60% in 1962 to 47% in 1998 (Commonwealth Grants Commission, 2001), and appears to have declined still further since then. There has been substantial growth in service fees and charges as a source of revenue, but unlike state and federal taxes property rates have failed to keep pace with growth in GDP and personal incomes. A related strength has been the emergence of a substantial number of large, well-resourced councils that are clearly significant units of government in their own right and are reminders of the need to take local government seriously. Brisbane City Council remains by far Australia’s largest, followed by Gold Coast with 450,000 people, and then about twenty-five councils with populations of 150,000 or more. Also of importance is a diverse group of smaller metropolitan and regional councils that demonstrate effective and often creative ways of providing sound local governance – a reminder that dispersed power and decision-making is a good way of responding to Australia’s varied geography and of promoting innovation in government. Unfortunately, too often attention is focused on those other local governments that lack capacity and resist change – the ‘whingers’ and ‘basket cases.’ Recent inquiries into the financial health and sustainability of local government in South Australia, New South Wales, and Western Australia have all confirmed that a quarter or more of councils are unsustainable in the medium-long term without significant policy changes and substantial external support.10

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Ultimately, the place of local government in the federal system rests on the politics of local communities and its ability to leverage community support (Sansom, 2005). If councils can engage more closely with local communities and demonstrate the importance of their role to community well-being, they should strengthen their political position. The danger is that councils will mouth the rhetoric of being ‘closest to the people’ but fail to respond effectively to community needs and aspirations, thus bringing about disengagement and alienation. Available evidence (e.g., IRIS Research, 2005) indicates solid community support for local government, but equally that it cannot be taken for granted. In all this, the network of state and federal local government associations has a central role to play. Much of the work of state associations revolves around working links between local government and state agencies, plus what might be termed ‘operational policy’ – issues such as how legislation is administered, or how state programs of assistance to councils are managed. From the perspective of this chapter, however, the more significant role of the associations lies in the contribution they make to the ongoing evolution of the system of government and how local government fits into that system: Can they encourage and enable councils to work collectively and with some sort of common vision, and are the associations capable of articulating and arguing a forceful case with the same degree of sophistication as their state and federal counterparts? As noted previously, local government has had great success over recent decades in gaining membership in intergovernmental forums: the question is whether it can make the best use of that access to the highest levels of policy-making. Writing over twenty years ago, Chapman and Wood reflected on the gains local government in Australia had already made in establishing itself on the intergovernmental stage, but noted that much more needed to be done: ‘To survive as part of the body politic local government must accustom itself to, and be seen to be, operating as part of the inter-governmental network. Just as actors in the other two spheres are recognized to be negotiating this maze, building up coalitions, bargaining and consulting, so it should be clear that the same is happening to local government actors. The inter-governmental network is in a sense most appropriately seen as the framework within which local authorities exist’ (1984: 12). Chapman and Wood argued that intergovernmental negotiations demand much more than simply advocacy of local concerns and per-

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spectives: ‘Advocates respond to issues: what is needed to protect local interests in the inter-governmental system is not advocacy alone, but full-time involvement in the political and administrative activity of the federal and state governments’ (1984: 167–8). They also highlighted the need for a more professional approach to participation in intergovernmental forums, noting that local government was often represented by councillors acting without staff support. Undoubtedly there have been major improvements to local government’s capacity and performance in intergovernmental relations since the mid-1980s. This is evidenced by its record in negotiating protocols and agreements in several states and federally, and in maintaining a presence on a wide range of ministerial councils and intergovernmental committees. Nevertheless, the resources applied to state and national associations remain generally minimal except where they are augmented by other sources of revenue;11 there is still a tendency to appoint councillors to what are really technical committees, often without staff support; and there remains a strong emphasis on advocacy – often strident – rather than on policy development. The need for a focus on policy is particularly acute at the federal level. In his 1994/5 annual report, the then president of ALGA emphasized that the presence of local government in intergovernmental forums must be supported by a strong base in research and policy development (ALGA, 1995). Yet an examination of subsequent annual reports and information provided on its website suggests that ALGA now has fewer policy staff than it had a decade ago, although there does appear to have been an increase in contracted research, such as the annual ‘State of the Regions’ report. This brings us back to ALGA’s campaign for ‘fair funding, fair treatment and formal recognition.’ The campaign appears to be essentially a continuation of the long-standing efforts of local government to gain increased federal funding and constitutional recognition, updated by reference to the findings of the cost-shifting inquiry. There is little evidence that local government is bringing substantial new policy perspectives to the intergovernmental table, or presenting wellresearched arguments for a reappraisal of its place in the system of government and hence financial arrangements. Even if ALGA presents such arguments, it is debatable whether and to what extent they are understood and endorsed by individual councils that focus almost exclusively on the size of the annual cheque from Canberra. Campaigns simply for more money are likely to confirm the widespread

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impression (sometimes self-serving) in state and federal circles that local government is a mendicant rather than a dynamic contributor to the national agenda. The risk local government faces is that large numbers of councils will project an image of incapacity and the lack of a clear sense of purpose and direction, leading to a steady loss of influence and community support. At the same time, there are signs that state governments, themselves suffering from the ever-growing financial and policy power of the commonwealth, may look to tighten their grip over key functions such as urban planning, natural resource management, and the provision of infrastructure at the expense of councils. Moreover, through increasing land tax and stamp duties on property transfers, the states are eating into local government’s revenue base. Local government could slide into irrelevance as far as the federal discourse is concerned (Sansom, 2005). Much will now depend on how local government responds to the findings of the Productivity Commission study into its revenue base, and to the new federalism agenda of the Rudd government. If the Productivity Commission’s findings could be used to create a climate in which councils feel empowered to reverse the decline in rate revenues compared with state and federal taxes, then the position of local government in the federal system could be strengthened considerably. Similarly, local government has an opportunity to demonstrate its relevance, capacity, and credibility in terms of the emerging federal agenda. Simply asserting that councils have an important role to play, and then asking for more money to help them perform, is an unlikely recipe for success. But as the Productivity Commission has shown, while many small councils will increasingly struggle to remain financially viable, there are a large number of populous, financially robust urban and regional councils that can do much to advance the wellbeing of local communities with little or no external support. These local governments can become worthy partners in the federal system. As noted earlier, a stated aim of the recent amalgamations in Queensland was to create councils with the capacity to address ‘big picture’ issues. Australian local government thus faces a choice. It can continue to pursue an agenda of constitutional recognition and bids for additional funding that tends to focus attention on its weaknesses and seems unlikely to achieve very much in the short-to-medium term. Or it can accept further reforms to improve its financial position and build its

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capacity, while capitalizing on its existing strengths, especially the real scope for larger councils to add value to federal initiatives. As one former president of ALGA put it: ‘[Australia’s tradition of local democracy] is under threat when local government tries to cling to the irrelevant or inappropriate, when it underestimates the significance of its own responsibility or waits for a lead from other spheres of government. We have to do better as well’ (Plumridge, quoted in Chapman 1997b: 14).

NOTES 1 Unless otherwise indicated, ‘states’ includes the two territories. 2 In Queensland a substantial proportion of these payments has been passed on to local government, but in other states local government has received only minimal sums or nothing at all, even though it is also bound by competition policy principles. 3 Horizontal fiscal equalization seeks to ensure that all councils could provide an average level of service if they made the same reasonable effort to raise revenue. However, given the severe revenue and/or expenditure disabilities faced by many councils, this would require far more funding than is presently available. 4 The Council of Capital City Lord Mayors. In most cases, the ‘capital city’ was a local government area covering the central business district and immediately adjoining areas, although in Brisbane and Darwin the ‘city’ council also administered much of the urban area. 5 See Local Agenda, no 15. (Mar. 2008): 25. 6 ALGA President Cllr Paul Bell quoted in ALGA News, 14 Mar. 2008. Retrieved 14 June 2008 from http://www.alga.asn.au. 7 Productivity Commission, Assessing Local Government Revenue Raising Capacity, Draft Research Report, Commonwealth of Australia, 2007. 8 See http://www.dpac.tas.gov.au/divisions/lgo/partnerships/financialreform.html. 9 See http://www.dpac.tas.gov.au/divisions/lgo/partnerships/ tripartite.html. 10 See, e.g., the report of the Independent Inquiry into the Financial Sustainability of NSW Local Government, May 2006. Retrieved 14 June 2008 from http://www.lgi.org.au. 11 Several of the state associations raise much of their revenue from commercial activities such as training arms, procurement and investment services, and insurance pools.

Intergovernmental Relations in Australia 211 REFERENCES Abbott, J. 2001. ‘A Partnership Approach to Regional Planning in South East Queensland.’ Australian Planner, 38/3–4: 114–20. Australian Government. 2005. Response to the Report of the House of Representatives Standing Committee on Economics, Finance and Public Administration – Rates and Taxes: A Fair Share for Responsible Local Government. Canberra: Author. Australian Local Government Association (ALGA). 1998. Annual Report 1997–98. Deakin ACT: Author. Australian Local Government Association (ALGA). 1995. Annual Report 1995–95. Deakin ACT: Author. Australian Local Government Association (ALGA). 1993. A Guide to Integrated Local Area Planning, the Association. Deakin ACT: Author. Australian Local Government Association (ALGA). 1992. Making the Connections: Towards Integrated Local Area Planning, the Association. Deakin ACT: Author. Balmer, C. 1989. ‘Local Government in the Federal System.’ In Australian Local Government Handbook, 1–7. Canberra: Australian Government Publishing Service. Bell, Councillor Paul. Opening Address to the 2005 National General Assembly. Retrieved 14 June 2008 from http://www.alga.asn.au/newsroom/ speeches/2005/NGAOpening.php. Chapman, R. 1997a. ‘Inter-government Relations.’ In B. Dollery and N. Marshall, eds., Australian Local Government: Reform and Renewal, 40–68. Melbourne: Macmillan. Chapman, R. 1997b. ‘Role of Local Government.’ In R. Chapman, M. Haward, and B. Ryan, eds., Local Government Restructuring in Australasia, 1–23. University of Tasmania, Centre for Public Management and Policy. Chapman, R.J.K., and Wood, M. 1984. Australian Local Government: The Federal Dimension. Sydney: Allen and Unwin. Commonwealth of Australia et al. 2006. The Inter-governmental Agreement Establishing Principles Guiding Inter-Governmental Relations on Local Government Matters. Retrieved from http://www.alga.asn.au/policy/finance/costshifting/iga/fulltext.php. Commonwealth of Australia and Australian Local Government Association. 1995. An Accord between the Commonwealth of Australia and Local Government. Canberra: Author. Commonwealth Grants Commission. 2001. Review of the Operation of the Local

212 Local Government in a Global World Government (Financial Assistance) Act 1995, Commonwealth of Australia. Canberra: Author. Cutts, L., and Sansom, G. 1997. The Council Connection: A History of the Australian Local Government Association 1947–97. Deakin ACT: ALGA. Government of South Australia and Local Government Association of South Australia. 2004. State-Local Government Relations: An Agreement between the State Government and Local Government in South Australia. Retrieved from http://www.lga.sa.gov.au/webdata/resources/files/State_Local_Government_Relations_Agreement_2004.pdf. House of Representatives Standing Committee on Economics, Finance, and Public Administration. 2003. Rates and Taxes: A Fair Share for Responsible Local Government. Canberra: Parliament of the Commonwealth of Australia. IRIS Research. 2005. Opinion Poll on Role of Local Government in New South Wales: Final Report. Prepared for the Independent Inquiry into the Financial Sustainability of NSW Local Government, Local Government and Shires Associations. Sydney: Author. Local Government Reform Commission. 2007. Report, vol. 1., State of Queensland. Retrieved from http://www.dip.qld.gov.au/resources/report/commission-recommendation/vol-01/volume-1-report.pdf. McKinlay, P. 2005. Future of Local Government Summit: A New Zealand Perspective. Proceedings of Future of Local Government Summit, Municipal Association of Victoria, Melbourne. Retrieved 14 June 2008 from www.mav.asn.au/folg2005. Sansom, G. 2005. ‘A Change of Direction or a Dead End? Alternative Futures for Australian Local Government.’ Proceedings of the CLAIR Forum. Melbourne (CD). Sydney: Japan Council of Local Authorities for International Relations. Sansom, G. 2002. ‘Three Weddings, a Loveless Marriage and a Rich Uncle: Local Government Reform and Inter-government Relations in Australia.’ Proceedings of the CLAIR Forum. Wellington, NZ (CD). Sydney: Japan Council of Local Authorities for International Relations. Scott, M. 2002. ‘Partnering for Change: The Tasmanian Partnership Agreements Experience.’ Presented at the Cutting Edge of Change Conference, 14–17 Feb., University of New England, Armidale.

Ontario 213

9 No Joke! Local Government and Intergovernmental Relations in Canada katherine a.h. graham

There is a common joke that a good Canadian can turn almost anything into an intergovernmental issue. But the question of how local governments in Canada relate to provincial/territorial governments and to the federal government is not a joking matter. That is because locality has re-emerged as a key organizing concept for Canadians, after what might be described as an era of provincial ascendance in the period from the end of the Second World War until the turn of the millennium. Indeed, one of Canada’s leading economists has come to conclude that Canada is now characterized by ‘hourglass federalism,’ whereby the federal government is increasingly using its spending power to transfer financial capacity directly to city governments, leaving provincial governments to grapple with ever more burdensome financial obligations in areas of provincial jurisdiction (Courchene, 2004). Most notably, provincial pressure is felt in health care and education, leading provincial premiers to renew their cries of ‘fiscal imbalance’ and seek federal redress. In light of this situation, it is important to understand the contemporary relationship between Canada’s local governments and its other two levels of government. Such understanding is particularly important in the case of Canada’s urban governments. Like Australia, Canada is overwhelmingly an urban nation. As of the last reported Census, in 2006, more than 80% of Canada’s population lives in urban areas (Statistics Canada, 2006a). Moreover, nearly half of the population lives in three conurbations: the ‘Golden Horseshoe’ in southern Ontario (centred on Toronto), Montreal and its environs, and the Lower Mainland/southern Vancouver Island area (ibid.). Furthermore, Canada’s big city governments are big governments. For example, the size of the civic bureaucracy in Canada’s largest municipality, the City of Toronto, is

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approximately 33,500 people. The city’s 2008 operating budget was $8.2 billion (Toronto, 2008). The level of employment and the budget of the City of Toronto exceeds that of three of the ten provincial governments (Statistics Canada, 2006b). This chapter provides an overview of the financial and legal context of municipal intergovernmental relations in Canada. It also attempts to give a sense of the dynamics of relations between local governments, provinces/territories, and the federal government since the mid-1980s. These dynamics are probed using the following three examples: • The attempt by Canadian big city mayors to have a national ‘urban

agenda’ • The National Homelessness Initiative (NHI) • Specific attempts by all three levels of government to deal with

complex urban problems through place-centred initiatives, specifically in Vancouver and Winnipeg. From a comparative perspective it is noteworthy that the presence of a large Aboriginal population in both Vancouver and Winnipeg was an important factor in these tri-level engagements. The chapter will also explore Canadian intergovernmental relations in terms of (1) local government reporting on performance, (2) the extent to which local government effectiveness in dealing with a broad range of local problems is a focus, and (3) the implications of reporting on and the effectiveness of prevailing views about the extent to which local governments in Canada should be autonomous from the other two levels. Key developments and themes that will be drawn out in greater detail include: • The fluidity of the intergovernmental fiscal relationship since the

1980s • The entanglement of local governments and the voluntary sector in

dealing with local issues and intergovernmental arrangements • The fact that provincial governments and the federal government

have employed, variously, a carrot-and-stick approach to local government performance reporting • The disconnect between focusing on policy and program effectiveness and quests to improve the effectiveness of municipal government per se through intergovernmental engagement

Intergovernmental Relations in Canada 215 • The fact that the debate over the optimal level of autonomy for

municipal governments in Canada is, at best, unresolved. The Constitutional and Legal Context Strictly speaking, one should not talk about local intergovernmental relations in Canada. That is because, in the nineteenth century, the framers of Canada’s Constitution conceived of municipal institutions that were to be established and controlled by provincial governments. This control extended to the determination of sources of municipal revenue. The assignment of sole responsibility for municipalities to the provincial order of government was, essentially, a non-issue between the provinces and the federal government during the protracted and fraught deliberations that resulted in Canada’s Constitution Act of 1982. Efforts by the Federation of Canadian Municipalities (FCM), which lobbies on behalf of municipal governments at the federal level, and by some provincially based municipal organizations to insert the constitutional status of Canadian municipalities into the agenda failed utterly. The original wording of the relevant sections of the 1867 British North America Act was transferred verbatim into the 1982 Constitution Act. As it turns out, provincial governments have established municipal governments over some, but not all, parts of their respective jurisdictions. In most provinces there are vast ‘unincorporated areas’ that are administered directly by the provincial government. Municipalities are governments by virtue of being independently elected and having some own revenue sources. However, only recently have some provinces and territories begun to move away from a highly regimented model of delegated authority to determine what municipal governments can and cannot do. Further, provincial governments have tended to limit municipal revenue sources to property taxes, user fees, and fine/licensing revenues. Generally, the main contemporary arena for fundamental reform of municipal fiscal capacity has been through municipal governments’ efforts (sometimes supported by provinces) to get a designated share of federal revenues. This has occurred in parallel with attempts to simplify provincial-municipal fiscal relations by reducing provincial grants to the municipal level and reallocating responsibilities between these two levels of government so that municipal governments might fund their responsibilities primarily out of own-source revenues. Standard descriptions of Canadian federalism and intergovernmental relations refer to the two constitutionally defined orders of govern-

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ment – federal and provincial – and to three levels of government, thereby injecting municipal governments into the intergovernmental arena, even though municipalities are creatures of provincial statute (Dupré, 1968; Cameron, 1980; Graham and Phillips, 1998). Further, the standard accounts of the evolution of Canadian federalism focus on the shift from the federal government and provinces exercising their respective jurisdictions as if they were in ‘watertight compartments’ to a situation of ‘entanglement,’ most notably characterized by the federal government moving into areas of provincial jurisdiction (such as health, education, and social welfare) through the use of federal spending power (Simeon, 2005). Functionally, Canadian cities have been beneficiaries of this shift. For example, in the Great Depression of the 1930s, the federal government intervened to provide social relief for those on the streets. The prospect of a federal role in social welfare has continued to the present day, albeit with drastically different levels and philosophies of federal engagement at different times. Federal incursion into housing, beginning as early as 1917, but particularly through its provision of mortgage insurance and funds for ‘urban renewal’ after the Second World War, fuelled the suburbanization of Canadian cities and shaped them in other important ways (Dennis and Fish, 1972; Filion, Bunting, and Gertler, 2000). In terms of intergovernmental relations, however, the focus of many significant initiatives by the federal government has been more on improving local conditions, rather than on engaging and improving the performance of local governments per se. Improvement of local government performance and intergovernmental engagement to achieve that goal has been, until recent times at least, within the sole purview of the provinces. They have used a variety of means to this end: structural reform, functional reform, fiscal reform, and in a few notable cases, jurisdictional reform. Local Government Reform and Intergovernmental Relations The broad subject of local government reform in Canada is treated elsewhere in this volume. Even more fulsome is Garcea and LeSage’s volume (2005) assessing municipal reform in Canada. It provides an invaluable overview of the intent and shape of recent municipal reform initiatives undertaken in every province and territory in Canada. However, some key elements of various local government reform agendas in Canada have a direct bearing on intergovernmental

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relations. These include the raw politics of local government reform, as well as the shape of reform agendas that have emerged in different provinces and territories. Various commentators have described the overarching goal of local government reform in Canada as improving governance capacity at the local level (see, e.g., Frisken, 1993; Graham and Phillips, 1998; Tindal and Tindal, 2004; Garcea and LeSage, 2005). While this may be so, local government reform initiatives in different provinces and territories have been characterized by very different levels of engagement between provincial governments and municipalities. The process of intergovernmental engagement and the specifics of the reforms undertaken have variously had a negative or positive effect on the provincial-municipal relationship. Recent reform initiatives in five provinces – Nova Scotia, Quebec, Ontario, Alberta, and British Columbia – provide an indication of the spectrum. In Nova Scotia, the provincial government began a highly controversial amalgamation to create a new Halifax Regional Municipality (with an area roughly equal to the province of Prince Edward Island) out of four long-established municipalities. There was significant public outcry over this move, as well as resistance by local political leaders. The politics of this initiative was described as ‘a strong dose of medicine to municipalities unable to reform themselves’ (Graham and Phillips, 1998: 84). However, Poel suggests that the anxiety over the process of structural reform in Nova Scotia has been blunted by two other developments. First, the Nova Scotia government engaged in a ‘service exchange’ with Nova Scotia municipalities that Poel concludes has improved the financial position of municipal governments (2005: 191). In addition, the provincial government legislatively entrenched its commitment to consult with Nova Scotia municipalities on proposed amendments to municipal legislation and federal-municipal financial arrangements. In Quebec, the unilateral move in 2002 by a Parti Québécois government to ‘fuse’ (amalgamate) municipal governments in nine major conurbations, including Montreal, has been widely viewed as a significant factor in that government’s electoral defeat in 2003. Opposition to ‘fusion’ was particularly vociferous in the Montreal area, where the politics of language – the predominance of English and French in different areas – has historically shaped municipal structure (Sancton 1983, 2000). The victorious Liberal Party held out the promise that ‘defusion’ (de-amalgamation) could occur, if it were elected. As a

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result of local referenda that followed the 2003 provincial election, fifteen former municipalities in Montreal were reconstituted in 2006. The de-amalgamation debates were almost as inflamed as those around amalgamation (Hamel, 2005). Further, the implementation of de-amalgamation has been chaotic, at least in the short term – particularly in Montreal. This extreme turbulence has induced, at least for the short term, a cooling-off period, in terms of provincial-municipal relations. The focus is on sorting out the practicalities of de-amalgamation. The period 1995 until 2003 was characterized by vitriolic provincialmunicipal relations in Canada’s most populous province, Ontario. In 1995 a neo-conservative government came into office to embark on a ‘Common Sense Revolution.’ This agenda had three elements that shaped provincial-municipal interaction and relations for the ensuing eight years, until a change in government. These were (1) to have less government, (2) to have simpler government, and (3) to reduce the provincial debt while, simultaneously, (4) cutting personal income taxes. Less government was achieved by eliminating provincial programs and passing responsibility for many of them to municipal governments and the voluntary sector. Privatization of key activities, such as water testing, to the private sector also occurred. Simpler government was achieved through significant reduction in the number of municipalities in the province. The tool of choice was amalgamation. In the case of smaller municipalities, the combination of fiscal constraints and the burden of downloaded services proved to be either a sufficient carrot (where relations among adjacent municipalities were relatively good) or stick (where they were not). But the most raucous amalgamation by far was caused by the unilateral announcement by the provincial government that, as of 1 January 1998, all of the municipalities in the two-tier Municipality of Metropolitan Toronto would become one. The resulting political and legal fight against amalgamation (Moore Milroy, 2002) and the administrative and political chaos that accompanied the first five years of the new city’s existence had a toxic effect on the relationship between the Province of Ontario and Canada’s largest city. More generally, the quest for simpler government, to be achieved in part by a wholesale realignment of service responsibilities between the province and municipalities, poisoned the general atmosphere. Unilateral announcements by the provincial government of ‘who does what’ in 1998 were accompanied by dubious claims that the shifts in functions between the province and municipal governments would be revenue neutral. The province’s failure to

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produce real evidence of this and the sense that realignment really meant downloading galvanized the Ontario Municipal Association (AMO), the lobbying organization for the province’s municipalities. The Common Sense Revolution officially ended with the defeat of the Conservative government in Ontario in 2003. The newly elected Liberal government was much more conciliatory, at least in its early days. The new minister of municipal affairs was formerly the mayor of one of the province’s medium-sized cities. Although definitely calmer, the provincial-municipal waters have experienced some choppiness since 2003. The Liberal government introduced what, in essence, is a provincial land use plan, designating growth and no-growth areas. This has been controversial, particularly in cases where municipalities anticipating or seeking growth have been designated as no-growth areas. Further, there are questions concerning the provincial government’s ability to make the plan stick in light of pressures from the development industry. In the early days of the new government, the minister of municipal affairs held out an olive branch, promising to institutionalize consultations with the Association of Ontario Municipalities on legislation affecting municipal governments. This angered officials in the City of Toronto, who argued that the economic importance of the city and the complexity of its needs warranted special status. The City of Toronto subsequently withdrew its membership in AMO in protest. The provincial government has actually gone some distance to recognize Toronto as a special case. On 1 January 2007 a new City of Toronto Act was proclaimed, setting Toronto apart from other municipalities in Ontario and giving it more permissive powers. These include the ability to levy new taxes (but not access to the income tax, gas tax, or general sales tax), explicit authority to enter directly into agreements with the federal government, and increased latitude to determine the city’s own governance structures (Toronto, 2007). The Ontario government simultaneously renovated its Municipal Act, giving all other municipalities in the province greater powers (subject to the ability of the province to withdraw these powers if it deems necessary), including expanded authority to delegate. The new legislation also increases the accountability of municipalities, especially as it relates to personnel and property issues and the conduct of closed meetings. The legislation includes a mandatory investigation regime to insure that every municipality complies with the requirements for open council meetings. Ontario’s new Municipal Act, in keeping with similar reforms in municipal legislation in other

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provinces, may suggest to some that provinces are inclining to recognize municipalities as an ‘order’ of government. In a constitutional sense, however, the reality that Canada has two orders of government – federal and provincial – remains firmly in place. The provincial-municipal dynamic in Alberta contrasts sharply with the Ontario, Quebec, and Nova Scotia examples. There are a number of reasons why the relationship in Alberta is on a more even keel. The first is that the same party, the Conservative Party, has been in power at the provincial level since 1971 – albeit with four different premiers. This thirty-four-year reign is eclipsed by the Conservatives’ predecessor, the Social Credit Party (also conservative in character), which ruled the province from 1935 until 1971. The phrase ‘one-party democracy’ was applied to Alberta over half a century ago (Macpherson, 1953) and it remains apropos, despite significant changes in the demographics and economy of the province since that time. Clearly, municipal governments in Alberta have the luxury of dealing with provincial governments that are relatively predictable, by virtue of their longevity. The second reason is that successive Alberta governments have adopted a laissez-faire approach to municipal restructuring. The province’s major cities have always been single-tier municipalities and, generally, geographical overspill has been addressed through amalgamation. The one slight exception to this is the so-called Alberta capital region, anchored by the city of Edmonton but with substantial suburban municipalities. Even there, however, the Alberta government has used a relatively soft touch by encouraging joint planning and service delivery, rather than mandating it (LeSage, 2005: 74). Finally, in 1994 the provincial government introduced a new municipal act that pioneered the idea that municipal governments could have ‘natural person powers’ and should not be required to seek explicit provincial approval every time they enter new policy territory. The province of British Columbia is generally acknowledged as having some of the most fractious provincial politics in Canada. No Alberta, provincial power in British Columbia is traded back and forth between parties of the right and left. Legislative and public opposition to the party in power can be virulent, if not violent. In recent years, there has been strong outcry against provincial government service cutbacks and downloading. This has included loud objections to the negative impact of provincial cutbacks on local governments and community-based voluntary organizations. It is therefore somewhat sur-

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prising that these controversies have not spilled over into other aspects of the provincial-municipal relationship in British Columbia. One reason for this is that the provincial government has specifically committed not to embark on unilateral structural reform and to engage in institutionalized consultation with the Union of B.C. Municipalities. A recent manifestation of this commitment is the 2002 Community Charter (Ministry of Community, Aboriginal, and Women’s Services, The Community Charter: A New Legislative Framework for Local Government, May 2002). This continues a pattern of incremental, voluntary reform that began in the 1960s when regional districts were created using a ‘strategy of gentle imposition’ (Tennant and Zirnhelt, 1973). A second reason is that the province and its largest municipality, the City of Vancouver, have been able to innovate collaboratively (along with the federal government) to deal with some of that city’s significant social problems. The Vancouver Agreement, through which this collaboration occurs, will be dealt with subsequently. To conclude this discussion of the relationship between local government reform and intergovernmental relations, we can see how entangled the relationship is between provincial governments’ agendas for local government reform and the provincial municipal relationship. In some instances (Nova Scotia, Quebec, and Alberta) reform has been provincially driven and has had a prominent structural character. Where that has occurred, the provincial-municipal relationship has soured. The structural reforms undertaken in these three provinces might be thought to have had the effect of creating stronger municipalities. Certainly, the larger size of the new municipalities could be thought to portend greater political clout in the intergovernmental arena, as well as greater local fiscal capacity to deal with local issues. It is somewhat ironic, then, that in the short term, the political and public upset over these reforms, combined with the administrative challenges of implementing these mergers, consumed local energies. Further, the fiscal reforms, as exemplified by Ontario’s ‘who does what?’ exercise and service exchange in Nova Scotia, were widely seen as downloading responsibilities from provinces to municipalities and the voluntary sector without financial backing. In the other two cases discussed here, Alberta and British Columbia, structural issues are much less important in shaping the provincial-municipal relationship. In these jurisdictions, the key drivers appear to be provincial downloading, exemplified by provincial budgetary cutbacks in British Columbia and the legislative encouragement for

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municipal governments to be more assertive in taking on responsibilities in Alberta. The second important conclusion is that the federal government has not been a key player in the formal reform of municipal governments. This is a reflection of Canada’s constitutional arrangements. Nonetheless, the federal government is exerting an influence on the structure and operations of municipal governments. It is doing so through national programs such as the National Homelessness Initiative and through its participation in tri-level city-specific initiatives. The federal government’s response to Canadian municipalities’ quest for a national urban agenda is also having a reciprocal influence on municipalities. Again, reflecting constitutional niceties, some of this influence is mediated by provincial governments. There are, however, direct federal-municipal impacts. The Tri-level Relationship in Canada: From Tri-level Government to Tri-level Governance As stated earlier, the federal government in Canada has been perennially preoccupied with dealing with local social and economic issues. It has not, however, consistently seen local governments as a potential participant in policy development or in the implementation of federal initiatives with a local focus. Historically, federal ministries and Crown corporations were the agent of choice. Over the past fifty years, there have, however, been two important periods in which local governments have sought to change the stage for intergovernmental relations in Canada – enlarging it to accommodate themselves as key players, along with the federal government and the provinces. The two cases are studies in contrast. They suggest a shift in the focus and practice of tri-level intergovernmental relations. Notably, the second phase is characterized by a willingness of governments at all levels to engage community-based voluntary organizations in dealing with local issues; hence the shift from an intergovernmental model to a governance paradigm. The first period dates from 1968 until 1979. As Cameron notes, ‘Urban affairs policy and practice in the 1970s were the outgrowth of the postwar spirit of reconstruction that dominated the 1950s (physical reconstruction) and the 1960s (social reconstruction)’ (2003: 303). This spirit was accompanied by a heavy reliance on government action. The movement to social reconstruction of the 1960s was shaped, in part, by

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disturbing developments in American cities that were fraught with racial tensions and violence. It was also shaped by the physical realities of Canadian urban growth in the postwar period. The suburbs had spread. Inner cities were suffering economic challenges and social decline. From a local government perspective, the ability to deal with these issues was hamstrung by a lack of funds. From a federal perspective, a requirement for action was catalyzed by three important reports. The first was a (somewhat surprisingly) high-profile book by two academics, Harvey Lithwick and Gilles Pacquet. Taking aim at the federal and provincial governments, they submitted: ‘A discussion of urban policy currently being implemented in Canada requires little space. There is in fact no such thing’ (1968: 269). Interestingly, a role for local government in developing or implementing urban policy was not part of their prescription. Lithwick and Pacquet viewed the challenges to be confronted as exceeding the political and administrative capacity of local government. The second document was the 1969 report of a federal task force on housing, chaired by the minister responsible for the Canada Mortgage and Housing Corporation. It chose a radical course, outlining sweeping prescriptions for an urban crisis (including but not exclusively a housing crisis) that blatantly ignored the niceties of provincial jurisdiction. The third report, commissioned by the federal government to reduce the resulting federalprovincial tension, focused on the federal role and machinery for dealing with urban issues. It recommended a federal role in research and in convening the parties to deal with Canada’s urban challenge (Lithwick, 1970). A significant outcome was the federal government’s establishment of the Ministry of State for Urban Affairs (MSUA) in 1971. It was the chosen vehicle to implement the research and convening agenda, within the federal government and beyond. The goal was concerted action. An activist leadership at Canada’s national municipal lobby, the Federation of Canadian Municipalities (FCM, which at the time was known as the Canadian Federation of Mayors and Municipalities), seized the moment and began to press for a tri-level process that would focus on the financial plight of municipal governments. MSUA was a federal advocate, and the first tri-level conference was convened in 1971 – despite the reticence of a number of provinces and the increasingly apparent difficulty for MSUA to fulfil its coordination role with much more powerful federal departments and agencies. Subsequent to a second tri-level conference, held in 1973, a task force on

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public finance, headed by one of the country’s pre-eminent economists, was commissioned to examine the fiscal framework for local government and funding needs. This occurred in the face of growing resistance by provinces to the process. When that task force reported, in 1976, the federal and provincial governments decided that they alone should consider its recommendations. The motives for provinces were constitutional. At the federal level, the Department of Finance, as keeper of the federal purse, held sway with its view that involvement in urban issues amounted to a federal money pit. MSUA’s urban advocacy was easily brushed aside. The Federation of Canadian Municipalities responded by publishing a polemic entitled Puppets on a Shoestring (1976). Aside from its tone, this report was filled with factual errors. As a result, its basic arguments were easily dismissed by the federal and provincial governments and this tri-level experiment came to an ignominious end. Within the federal government, MSUA limped along, discredited and ignored, for another three years before being put out of its misery in 1979. Other than its soap-operalike quality, this period of tri-level engagement reflects Canadian intergovernmental practice of the time. The conferences were highly ritualized and formal. There was also a lot of backroom business. Significantly for what was to come later, they involved governments. Ideas of citizen and community engagement as part of an intergovernmental process had not yet emerged. The period 1979 to 1994 can be described as an interregnum. The most high profile intergovernmental issues surrounded patriation of the Constitution and subsequent efforts to have Quebec formally sign on. The idea that constitutional renewal should involve examination of the status of municipal government was a total non-starter, despite some efforts by the FCM to suggest that it be part of the agenda. The federal government retreated totally from any centralized thinking or action on urban issues that would engage it with municipalities. Even a high-profile former mayor of Toronto, who had been heavily involved in the tri-level process, had virtually no municipal government contact during his tenure as a federal Cabinet minister in the 1980s. Instead, the federal government began to experiment with broader forms of community engagement. Two examples are the Community Futures Program, created in 1985, and the Canadian Healthy Communities Project, established in 1988. Community Futures is an employment initiative that funds committees composed of local government, local voluntary organizations, and private sector individuals

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to assess local economic problems, develop employment opportunities, and encourage private sector and government job development. Healthy Communities is under the auspices of the federal Department of Health and focuses on developing and advocating ‘whole health’ initiatives that link in with improvements in the local environment, transportation, and housing, just to name a few. Participating localities also have broad-based local steering committees for their Healthy Communities Program. Faced with the federal government’s reticence to re-engage municipal governments, Canadian municipalities, again through the FCM, tried another tack. Instead of focusing on the system of public finance per se they began to focus on the state of municipal infrastructure. In 1985 the FCM published Municipal Infrastructure in Canada: Physical Condition and Funding Adequacy. This task force report, two years in the making, wrote of the declining and bad state of infrastructure in Canadian municipalities. It argued that a five-year tri-level program was needed. At that time, it was estimated that the ‘infrastructure gap’ was $12 billion. The federal government of the day demurred on the basis of financial stringency, constitutional propriety, and the policy implications of the FCM proposal (Andrew and Morrison, 1995: 109). Waiting in the wings, however, was the Liberal opposition, which adopted establishment of an infrastructure program as a formal plank in its platform for the 1993 federal election. As the Liberals were victorious, Canada Infrastructure Works was slated for implementation early in the new government’s agenda. Constitutional etiquette was upheld by modelling the program on using federal funds for municipal projects that would be undertaken based on provincial approval. The federal government quickly negotiated agreements with each province, including Quebec, that permitted the funds to flow. In four of the ten provinces there was provision for municipal government representation on the provincial management committee (ibid.: 120–1). The federal government suggested but did not impose guidelines for project approval. A minister responsible for infrastructure, supported by a small secretariat, was designated, but implementation of the program across the country was assigned to existing regional development agencies. Compared with the earlier period, it was ‘implementation light.’ The federal government progressed from having its toe to having its foot in the water in 1999 when it began the National Homelessness Initiative (NHI). From the early 1990s onward, the problem of homeless-

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ness became increasingly visible – especially in Canadian cities. Analysts attribute this to a number of factors, including the withdrawal of the federal and provincial governments from the provision of social housing and support for affordable housing (Layton, 2000; Golden, 1999). In at least one province, Ontario, a neo-conservative government demonstrated blatant lack of sympathy for those whose ability to find housing is tenuous. Private developers were quite open in discrediting the idea that social housing could be left to the market. Municipal governments with public housing stock were facing mounting maintenance bills and had no access to capital funding for expansion. Hence, voluntary community-based organizations were under significant pressure to provide housing and other supports to the vulnerable. The prime minister signalled impending federal action by appointing a member of the federal Cabinet to consult with the public, community organizations, other governments, and the housing industry on the issue of homelessness in mid-1999. In December the federal government announced the National Homelessness Initiative (NHI). This was a multifaceted program, but the most significant element was the Supporting Community Partnerships Initiative (SCPI). Initially, SCPI had a budget of $258 million over three years. The program was extended in 2003 with another $405 million commitment until the end of fiscal year 2006/7. The Conservative government of Stephen Harper, elected in 2006, rebranded the NHI as the Homelessness Partnering Strategy. SCPI itself was relabelled the Homelessness Partnership Initiative (HPI). The HPI will receive the bulk of the $269.6 million allocated to the Homelessness Partnership Strategy until the end of fiscal year 2009/10 (HPI, 2008). SCPI’s/HPI’s mandate is to undertake local programming to ease the hardships of homelessness. It is essentially a bandaid, providing more shelter spaces and other supports for the homeless population. However, it is also intended to engage other governments, community-based organizations, and the private sector in developing a more fundamental understanding of the roots of homelessness and more comprehensive strategies for dealing with the problem. The nexus between intergovernmental and non-governmental relations in the implementation of SCPI was innovative and significant. The federal-provincial dimension of SCPI was highly idiosyncratic. Provincial governments could collaborate by providing complimentary funding and/or programming but there was no dedicated link. Most provinces stood aside.

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The model for linking the program with local governments was variable. In some communities, the local office of the federal department responsible for SCPI took the lead in implementation, including disbursement and tracking of funds to local projects, largely undertaken by community-based voluntary organizations. Importantly, funding was tied to a ‘Community Action Plan.’ These plans were developed through community consultation and were a uniform requirement for SCPI implementation in Canadian cities. The planning process was led by a community-based organization, sometimes the local Social Planning Council. These are peak associations of voluntary organizations and other key community stakeholders found in many Canadian cities. In this model of direct federal implementation, then, municipal governments were not involved. This model was termed the ‘shared delivery’ model to connote the relationship between the federal government and the local voluntary sector. In the Supporting Community Partnerships Initiative there was, however, the potential for significant municipal government involvement. The second model of local implementation was to delegate authority for SCPI to a ‘community entity.’ Local stakeholders could, by consensus, opt to have the local municipal government (or some other designated local organization) be that designated entity. Municipal governments were designated in a number of major Canadian cities, including Ottawa, Hamilton, and Toronto. Regardless of which level of government was responsible for implementation, there was a significant role for volunteers. In every SCPI community, funding decisions were made on the advice of a ‘community advisory board’ (CAB), a widely representative group of volunteers who met regularly to review and make recommendations on specific project proposals. Depending on the model used, these recommendations went to the local federal office or to the municipality for formal approval and due diligence. Phillips, Graham, and Ker sum up the differences between these two approaches succinctly: ‘The essential difference is that, under the CE [Community Entity] model it appears that “ultimate” responsibility for project selection and decision making formally rests with the Community Entity, while under the shared delivery model “ultimate” decision making responsibility formally rests with the Minister responsible for SCPI, although the Minister will receive the benefit of advice from the community through an advisory body’ (2003: 15). It is important to note that the ultimate accountability for SCPI implementation is to the federal minister and Parliament, regardless

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which model is employed. This has had some interesting effects on performance reporting by municipalities. There have been a number of significant scandals over federal government spending in recent years. These have had two impacts that are relevant in this case. First, federal public servants are increasingly loath to take risks and, some would argue, innovate. The second is that there has been an exponential increase in the appetite for data to prove performance and accountability. The Supporting Community Partnerships Initiative is a case where these two impacts have come together. From a federal perspective, the model of implementation, be it the ‘shared model’ or the ‘community entity’ model, is both innovative and risky – given the reliance on local community organizations and other stakeholders to plan and deliver SCPI projects. This, combined with the size and the high public profile of homelessness as an issue and SCPI as a response, propelled the federal department responsible to develop highly detailed project and program tracking requirements. Where municipal governments serve as the ‘community entity,’ they have the obligation to meet these requirements. Similarly, community-based organizations undertaking SCPI projects have to comply. The resulting accountability regime has been described at the community level as ‘onerous’ and as diverting community efforts to actually deal with the problem (Phillips, Graham, and Ker, 2003: 27). For municipalities there is no option but to comply with federal requirements, but they may sap municipal officials’ efforts to think beyond ‘form filling’ in terms of developing and evaluating other local responses to the homelessness problem and housing issues more generally. The infrastructure and homelessness initiatives represent pan-Canadian initiatives involving municipal governments and the federal level. The infrastructure case is explicitly tri-lateral, while the homelessness case is a recent instance of direct federal action, perhaps involving provincial and/or municipal governments. There is a third approach to tri-lateral relations that has emerged in recent years. It involves establishment of comprehensive city-focused agreements to deal with urban problems that are recognized as complex and requiring attention by all jurisdictions and sectors. There are two particularly prominent examples of this approach. All three levels of government have been signatories to formal agreements to deal with the challenges of the City of Winnipeg’s core area and the City of Vancouver’s Downtown Eastside. Winnipeg is the capital of the province of Manitoba, the most easterly of Canada’s Prairie provinces. Historically, it was Canada’s

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‘gateway to the west,’ a transportation and commercial centre that grew quickly in the early part of the twentieth century as Canada’s first western metropolis. As of the 2006 Census, Winnipeg has a population of 633,451, representing 55% of Manitoba’s total population (Statistics Canada, 2006c). It is dominant as the generator of economic activity in Manitoba (Leo and Piel, 2005: 107). Winnipeg has weathered periodic economic and social storms, but after the Second World War it began a period of significant economic and social challenge. Other western cities experienced greater economic and population growth. In addition, Winnipeg became an increasing magnet for Aboriginal people, seeking a better life but not necessarily finding one in an urban setting. One manifestation of this was a significant decline in the physical and social conditions in the city’s core. Beginning in 1981, there have been a series of tri-level agreements to deal with these challenges. The first agreement focused on physical redevelopment or old railway lands. Subsequent agreements have focused more strongly on economic development (1992) and, most recently (2004), specifically on an urban Aboriginal strategy. The five-year Winnipeg Partnership Agreement focuses on Aboriginal participation, neighbourhood renewal and sustainability, downtown renewal, and supporting innovation and technology in local development (Government of Canada, 2004). From an intergovernmental perspective, it is significant to note how strongly these Winnipeg agreements were politically driven. For almost this entire period, one of the city’s members of Parliament was a senior Cabinet minister. He had spent part of his early career as Director of the Institute of Urban Studies at the University of Winnipeg, itself located in the core. His commitment and ability to manoeuvre Cabinet and the federal bureaucracy to deal with the Winnipeg situation was crucial. From a municipal and provincial perspective, the need for concerted action was more self-evident. That, combined with limited provincial and municipal financial resources, induced collaboration. It is also important to note that the Aboriginal population in Winnipeg became increasingly involved in these initiatives. Consultations associated with the first redevelopment initiative resulted in ‘The Forks,’ a culturally respectful complex in a location with great sacred and traditional meaning. The Aboriginal community itself became active in redevelopment, turning a former railway station into the Winnipeg Aboriginal Centre and undertaking further redevelopment for economic and social purposes. Finally, one important element of

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the Urban Aboriginal Strategy is co-location of government services in the Aboriginal Centre. The Vancouver Agreement was concluded between the City of Vancouver, the Government of British Columbia, and the Government of Canada in 2000. It commits all three governments to deal with what is generally considered Canada’s most blighted urban area – the Vancouver Downtown Eastside. This area is poor and has very high rates of homelessness, crime, drug use, and prostitution. In addition, these conditions have turned it into an incubator for an alarming incidence of HIV/AIDS among its residents, a significant number of whom are Aboriginal. The squalor and dangers of the Downtown Eastside cast a pall on an aggressive city that aspires to the rank of ‘world class.’ The fact that Vancouver is hosting the 2010 Winter Olympics is another impetus for dealing with the complex bundle of problems that characterize the area – as if human misery were not enough. From a public policy and administration perspective, perhaps the most significant innovation of the Vancouver Agreement is that it specifically attempts to deal with the Downtown Eastside through both vertical and horizontal collaboration. It is tri-level – a significant achievement. But each level of government has committed to deploying the necessary resources across its own domain to understand and deal with the complex mix of problems being confronted. Social workers will work with police, with immigration officers, with employment counsellors, and so on. Implementation of the Vancouver Agreement is a work in progress. Not surprisingly, there have been challenges. They include integrating different organizational and professional cultures and synchronizing different organizational procedures. The transaction costs of managing the agreement are very high, and speedy action, when called for, remains a challenge. Nonetheless, the agreement is generally considered a model and a foundation for replication in other Canadian cities. In 2005 the Vancouver Agreement received a U.N. Public Service Award – one of only eight awarded worldwide (Vancouver Agreement, 2005). Municipal Intergovernmental Relations in Canada: Dawn of a New Era? In light of these three recent developments in tri-level relations in Canada, how would one characterize the current relationship and agenda? The Federation of Canadian Municipalities’ push for more

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funding for cities, beginning with the infrastructure funding drive, the focus on planning and community engagement that characterize the Homelessness Initiative, and the city-specific focus, which, so far, has reached its apex in the Winnipeg and Vancouver agreements, incorporate the key elements for discerning the present and thinking about the future. Key actors at this stage are the federal government and local governments, represented by the FCM and Canada’s big city mayors. Provinces are definitely on the stage also but are currently playing more shadowy roles. The political signals that broader change may be in the works began with the federal Speech from the Throne in January 2001. It committed ‘to engage in dialogue with citizens, experts, and other orders of government on the opportunities and challenges facing our urban regions’ (Sgro, 2002a: 7). Subsequently the prime minister established a Caucus Task Force on Urban Issues to undertake this task. The title of the task force’s report clearly signals its conclusion: Canada’s Urban Strategy: A Blueprint for Action, and it recommended that ‘an enhanced relationship between the Government of Canada and among our urban partners, provincial and municipal governments, the private sector, community and business leaders and the voluntary sector, will guide strategic federal capital investment in our cities’ (Sgro, 2002b: 5). The report was delivered at a time of transition in prime ministerial leadership. However, the leading candidate to succeed Jean Chrétien as prime minister, Paul Martin, caught the wave, announcing in June 2002 at the FCM annual conference that he would strike a new deal for cities if elected prime minister. Martin was indeed successful and assumed the prime ministership in December 2003. The Martin Cabinet contained a new portfolio, minister for infrastructure and communities, signalling that both hard infrastructure and a community agenda were important. The choice of ‘community’ as a focus was intended to allay fears expressed by mayors of medium and small municipalities that Canada’s big cities would capture all of the attention and all of any federal funding that might be forthcoming. ‘No community too small,’ announced John Godfrey (2004), the minister responsible for the cities and communities file. The first Martin government Speech from the Throne, in February 2004, announced a ‘new deal for cities and communities.’ The first step was to forgive the federal goods and services tax (Canada’s federal value-added tax) that municipal governments had been required to pay previously. This would amount to about $7 billion in retained rev-

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enues for Canada’s municipalities over the next ten years. The next step came in the March 2004 budget in which the federal government’s intention to devote a portion of the federal gas tax to infrastructure was announced. Simultaneously, it was announced that $78 million in federal funds were to be made available to support ‘the social economy’ (community economic development by community-based voluntary organizations). Implementation of this plan had a number of elements that appeared to be lessons learned from recent tri-level experience. Some of these concern the gas tax. First, the gas tax transfer would only occur if a provincial government agreed through a joint federal-provincial agreement. This harkens back to the first infrastructure program. Second, municipal governments were required to prepare and to come to a consensus on infrastructure plans – focusing on transportation and transport. There would then be city-specific agreements (sectorally focused but roughly mimicking the Vancouver and Winnipeg approaches, as well as the use of municipalities as ‘community entities’ for implementation of the Supporting Community Partnerships Initiative). This approach proved successful for the Martin government. Provincial governments generally endorsed this approach. In terms of the social economy initiative, the federal government appeared to be favouring the approach of using a variety of models for actually delivering the funds. In some cases, federal regional economic development agencies might be responsible. In other provinces, peak associations representing the social economy sector were tapped to play this role. Regardless of the approach used, the social economy initiative signalled the Martin government’s recognition of the importance of community-based voluntary organizations to local economic and social well-being, even if this initiative does not speak to the full spectrum of the voluntary sector in Canada. The Martin government fell in late 2005. The ensuing election campaign was significantly silent on the question of federal policy towards cities and communities. The prominent issues were government ethics and accountability, taxation, child care, and health care. The Conservative Party, led by Stephen Harper, achieved a minority victory. Cities, communities, and infrastructure issues are not high on the Harper government’s agenda. The infrastructure file has been attached to the portfolio of the minister of transport. There has, however, been one notable development on the infrastructure file since the Conservative victory. The 2008 federal budget announced that the federal Gas Tax

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Fund would transfer $2 billion annually to provinces and territories for infrastructure in perpetuity. Implicit is that these funds will be for local infrastructure. The priorities and process for allocation of these funds can vary among provinces. Use of the word ‘community’ has disappeared from Cabinet nomenclature. The new government abandoned the social economy initiative. Further, the prime minister seems more intent on listening to provincial premiers’ concerns about fiscal imbalance than to the representations of the Federation of Canadian Municipalities or big city mayors. The primary policy gateway into matters urban or municipal for the Harper government appears through the prism of environment. Environmentalal issues have risen to the top of Canadians’ agenda. One factor in this has been the Harper government’s quick repudiation of Canada’s commitments under the Kyoto Accord and an initial legislative package on the environment that has generally been found wanting. The prime minister has acknowledged that a new direction and more effort are required, but there is no indication what shape this will take either substantively or in terms of the intergovernmental dimension. Environment is one jurisdiction that in Canada is shared between the federal and provincial governments. This and the renewed emphasis on federal-provincial relations provide clues that municipal governments may not be at the main table in the near future. Nonetheless, the recent infrastructure and gas tax initiatives suggest that provincial governments are prepared to accept federal engagement with municipal governments if provincial governments are formally part of the process. The Vancouver and Winnipeg agreements suggest that raw need can induce genuine tri-level cooperation. Finally, the National Homelessness Initiative represents a case where, in the view of some provincial governments, federal action gets them ‘off the hook’ to commit resources and political capital to an issue that is not part of their political agenda. Conclusion A number of key themes were identified at the beginning of this chapter. By way of conclusion, they should be revisited. The intergovernmental fiscal relationship as it relates to municipal governments has indeed been fluid since the 1980s. In many provinces there has been a significant decrease in provincial transfers to municipalities as provincial governments themselves have disengaged from

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program spending and tried to simplify provincial and municipal roles and responsibilities. At least some of the impetus for this has been the trickle-down effect of changes in the federal-provincial fiscal framework that restricted provincial governments’ room for manoeuvre. For its part, the federal government has employed both timelimited program spending, for example, in the National Health Initiative and Vancouver and Winnipeg agreements, and more long-term commitments, as exemplified in the recent Gas Tax Fund announcement, in its relations with municipalities. When we think of Courchene’s image of contemporary ‘hourglass federalism,’ it is federal transfers that will result in any thickening of the ‘provincial neck.’ A second major theme has been the increasing involvement of the voluntary sector with all three levels of government in dealing with national issues that have a profoundly local dimension. Arguably, local governments in Canada have always had strong links with the voluntary sector in their respective communities. It is the federal and provincial governments’ discovery of the voluntary sector as a locus of policy engagement and program delivery that marks this period. Hence the observations about how Canada has moved from a model of tri-level intergovernmental relations to a governance model. A question for the future is to what extent municipal governments will still be part of the equation as federal and provincial links with the voluntary sector become more established. It is in the interests, presumably, of the federal and provincial governments to have policies and programs that are effective in and of themselves. Involvement of municipal governments and the use of federal and provincial initiatives to make local governments more effective as governments is not necessarily part of the agenda. At the same time, both the provincial and federal governments have made demands on local governments to perform effectively or become more effective. In some instances, provinces have seen the mechanism of amalgamation as the instrument for achieving this goal. In the case of the federal government, requirements for locally developed plans as a precondition to accessing housing or transportation funding are important. Also, the increasingly stringent federal reporting requirements reflect, at least in part, the federal government’s goal of demonstrating that it can make municipal governments (and local voluntary organizations) ‘perform.’ One important motivation is to have local performance reflect well on the federal government itself. This leads to the final conclusion. Canada’s largest cities are increasingly arguing that they require more autonomy (and independent

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resources) to deal with local issues. This is most prominent in the discussions between the City of Toronto and the Ontario government about the city’s legislative powers and structure. The City of Toronto views its new act as just one way-station on the road to more autonomy. It is also the mantra of the so-called Big City Mayors. However, this may be a mistaken approach, if the history of Canadian federalism is any teacher. The idea that the federal and provincial governments in Canada could operate in ‘watertight compartments’ has proven impossible to realize. Similarly recent efforts by some provinces to simplify responsibilities and fiscal relations between themselves and municipal governments have been difficult to sustain. Perhaps the reality in the Canadian context is that government is messy and entangled. The real limits of what any level of government can do to deal with a particular issue or realize a policy agenda are circumscribed by the need to engage other governments and sectors of society. From a municipal intergovernmental relations perspective, that does mean that almost anything is an intergovernmental issue.

REFERENCES Andrew, C., and Morrison, J. 1995. ‘Canada Infrastructure Works: Between Picks and Shovels and the Information Highway.’ In S.D. Phillips, ed., How Ottawa Spends, 1995–96: Mid-life Crises, 107–36. Ottawa: Carleton University Press. Andrew, C., Graham. K.A., and Phillips, S.D. 2003. Urban Affairs: Back on the Policy Agenda. Montreal and Kingston: McGill-Queen’s University Press. Cameron, D.M. 1980. ‘Provincial Responsibilities for Municipal Government.’ In K. Cameron, ed., Canadian Public Administration, Special Issue, Municipal Government in the Intergovernmental Maze, 23(2): 222–35. Cameron, K. 2003. ‘Some Puppets; Some Shoestrings! The Changing Intergovernmental Context.’ In Andrew et al.,’ 303–8. Canadian Federation of Mayors and Municipalities. 1976. Puppets on a Shoestring: The Effects on Municipal Government of Canada’s System of Public Finance. Ottawa: Federation of Canadian Municipalities. Courchene, T. 2004. ‘Hourglass Federalism – How the Feds Got the Provinces to Run Out of Money in a Decade of Liberal Budgets.’ Policy Options, (Nov.): 12–17. Dennis, M., and Fish, S. 1972. Programs in Search of a Policy. Toronto: Hakkert. Dupré, J.S. 1968. Intergovernmental Finance in Ontario: A Provincial-Local Per-

236 Local Government in a Global World spective. A Sudy for the Ontario Committee on Taxation (Smith Committee). Toronto: Queen’s Printer for Ontario. Federation of Canadian Municipalities. 1985. Municipal Infrastructure in Canada: Physical Condition and Funding Adequacy. Ottawa: Federation of Canadian Municipalities. Filion, P., Bunting, T., and Gertler, M. 2000. ‘Cities and Transition: Changing Patterns of Urban Growth and Form in Canada.’ In T. Bunting and P. Filion, eds., Canadian Cities in Transition: The Twenty-First Century, 1–25. Don Mills: Oxford University Press. Frisken, F. 1993. ‘Planning and Servicing the Greater Toronto Area: The Interplay of Provincial and Municipal Interests.’ In D.M. Rothblatt and A. Sancton, eds., Metropolitan Governance: American/Canadian Intergovernmental Perspectives, 153–204. Berkeley: Institute of Governmental Studies Press. Garcea, J., and LeSage, E., Jr. 2005. Municipal Reform in Canada: Reconfiguration, Re-empowerment and Rebalancing. Don Mills: Oxford University Press. Godfrey, Hon. John. 2004. Speech delivered at the What Is Good Public Policy in Canadian Municipalities Conference, 28 Oct., Ottawa. Golden, A., et al. 1999. Taking Responsibility for Homelessness: An Action Plan for Toronto. A Report of the Mayor’s Homelessness Action Task Force. Toronto: City of Toronto. Government of British Columbia. 2002. New Community Charter Legislation. Retrieved 29 Oct. 2009 from http://www.cd.gov.bc.ca/lgd/gov_structure /community_charter/legislation/charter_highlights.htm. Government of Canada. 2004. Winnipeg Partnership Agreement. Retrieved 29 Oct. 2009. Graham, K.A., and Phillips, S.D. 1998. Urban Governance in Canada: Representation, Resources and Restructuring. Toronto: Harcourt Brace. Hamel, P. 2005. ‘Municipal Reform in Quebec: The Trade-off between Centralization and Decentralization.’ In Garcea and LeSage, 149–73. Homelessness Partnership Initiative (HPI). 2008. Home page. Retrieved 13 June 2008 from www.homelessness.ca/about_us/index_e.asp#HPI. Layton, J. 2000. Homelessness: The Making and Unmaking of a Crisis. Toronto: Penguin. Leo, C., and Piel, M. 2005. ‘Municipal Reform in Manitoba: Homogenizing, Empowering and Marketing Municipal Government.’ In Garcea and LeSage, 106–26. LeSage, E., Jr. 2005. ‘Municipal Reform in Alberta: Breaking Ground at the New Millennium.’ In Garcea and LeSage, 57–82. Lithwick, N.H. 1970. Urban Canada: Problems and Prospects. Ottawa: Central Mortgage and Housing Corporation.

Intergovernmental Relations in Canada 237 Lithwick, N.H., and Pacquet, G. (Eds.). 1968. Urban Studies: A Canadian Perspective. Toronto: Methuen. Macpherson, C.B. 1953. Democracy in Alberta: Social Credit and the Party System. Toronto: University of Toronto Press. Moore Milroy, B. 2002. ‘Toronto’s Legal Challenge to Amalgamation.’ In Andrew et al., 157–78. Phillips, S.D., Graham, K.A., and Ker, A.J. 2003. The New Trilateralism: Experiments in Federal-Municipal-Community Relationships. Paper presented to the annual meeting of the Association for Research on Non-profit Organizations and Voluntary Action (ARNOVA), 22 Nov., Denver, CO. Poel, D.H. 2005. ‘Municipal Reform in Nova Scotia – A Long-Standing Agenda for Change.’ In Garcea and LeSage, 174–95. Sancton, A. 2000. Merger Mania. Montreal: Price-Patterson. Sancton, A. 1983. Governing the Island of Montreal: Language Differences and Metropolitan Politics. Berkeley: University of California Press. Sgro, J., et al. 2002a. Canada’s Urban Strategy: A Vision for the 21st Century. Interim Report of the Prime Minister’s Caucus Task Force on Urban Issues. Ottawa. Sgro, J., et al. 2002b. Canada’s Urban Strategy: A Blueprint for Action. Final Report of the Prime Minister’s Caucus Task Force on Urban Issues. Ottawa. Simeon, R. 2005. ‘Plus ça change … Intergovernmental Relations Then and Now.’ Policy Options, (March–April): 84–7. Statistics Canada. 2006a. Provincial statistics. Retrieved 30 April 2008 from www.statcan.ca/english/census06/analysis/podwell/subprov4.cfm. Statistics Canada. 2006b. Census Series. Retrieved 30 April 2008 from www.statcan.ca/english/census06/. Statistics Canada. 2006c. Community Profiles. Retrieved 30 April 2008 from www.statcan.ca/english/census06/data/profiles/community/details/. Tennant, P., and Zirnhelt, D. 1973. ‘Metropolitan Government in Vancouver: The Strategy of Gentle Imposition.’ Canadian Public Administration, 16/1: 124–38. Tindal, R., and Tindal, S.N. 2004. Local Government in Canada. 5th ed. Toronto: McGraw-Hill Ryerson. Toronto. 2007. City of Toronto Act. Retrieved 13 June 2008 from http://www.toronto.ca/mayor_miller/torontoact.htm. Toronto. 2008. Budget. Retrieved 13 June 2008 from www.toronto.ca/torontobudget/. Vancouver Agreement. 2005. U.N. Public Service Award. Retrieved 13 June 2008 from http://www.vancouveragreement.ca.

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10 Local Government in a Global World: Comparing Findings and Conclusions emmanuel brunet-jailly and john f. martin

The object of this collection of essays has been to compare changes that have occurred in Australia’s and Canada’s local government system during the past two decades. A second objective was to evaluate the evidence regarding the impact of globalization on local governments, their local bureaucracies, and local democratic accountability. Possible outcomes that we have assessed include whether cities have become more influential in the intergovernmental networks, whether central states have become less able or willing to regulate and to organize fiscal equalization, but more likely to encourage intergovernmental competition, and whether we can see the decentralization or the devolution of statutory prerogatives and functions, hence impacting the governing capacity of local governments. Our research questions were organized through four thematic lenses: (1) issues of governance and participation are examined in chapters 2 and 3, which discussed whether communities are engaged in a dialogue with decision-makers about how government action might impact them; (2) local governments’ restructuring and reforms are in question in chapters 4 and 5, which looked at whether new public management (NPM) ideas have influenced amalgamations and regional formations; (3) the professionalization of local governments is the subject of chapters 6 and 7, which review recent advances and implementation successes of performance measurement and management policies at the local level; and, finally, (4) the extent to which the local level is subordinate to provinces or states and federal governments through intergovernmental relations is discussed in chapters 8 and 9. Overall, we find that local government in Australia and Canada shows a remarkable similarity in history, development, and contem-

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porary issues. The most striking feature is that for both nations, this level of government is an instrument of the states and provinces. Given this intergovernmental relationship, we ask how globalization has affected local governments in both countries. The overarching answer is that there is partial and limited evidence that local communities have adapted to globalization per se. Both systems have been reformed substantially, but, as argued in this volume by both Marshall and Sancton, in some instances, higher levels of government have reformed without clear policy objectives, instead partially following ideas such as the NPM ideas in Australia, or in the case of Canada, simply unclear policy goals. However, the final picture of change is not black and white. As we discuss below, this edited collection brings to bear some evidence that local governments have been faced with significant changes, including increased networked governance for policy-making, decentralization, increased democratic accountability pressures, and governance changes characterized by increasingly competitive intergovernmental multilevel relations for influence and resources. All of these shifts in turn have significant impacts on the redistribution and equity goals of local government. In this final chapter, first we review the contributions of our Australian and Canadian colleagues, using their observations, analyses, and insights to show how local governments work with state and provincial governments and federal government to provide services to their communities and play a renewed role in the social and economic development of their communities. In the second and concluding part of this chapter we discuss our findings in relation to our overall assumptions and the existing literature. Participation and Governance We asked whether Australian and Canadian local governments faced participatory governance changes, and in brief, Aulich and Phillips present mixed arguments based on limited evidence. The shift from government to governance seems clearer than that of other related issues, including diversity of participation, the existence of clear dialogues between decision-makers and those affected by decisions, and whether the voices of communities are reflected in local decisions. In other words, participatory governance is in an early stage of formation in both countries.

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Indeed, in his chapter on citizen participation and local governance in Australia, Chris Aulich notes that the distinction between government and governance is now clear: the former dominates while the latter is aspirational and rarely achieved. The several waves of policy reform that have focused on participation have ‘dissipate[d] under the pressures of fiscal austerity and inflexible management.’ Between the mid-1980s and 1990s, all Australian local government acts were ‘reformed’ around enabling principles. As Aulich notes, ‘Despite the modernization of the new acts, there is little evidence of significant changes to the state-local power nexus, and no new functions were added to those already undertaken by local government.’ The Canadian experience is less straightforward. Susan Phillips notes that the history of citizen participation in Canadian local government is not always about a two-way exchange of information and has become ‘perhaps too standardized’ in government. She adds that local government reforms in Canada ‘did not lead to the creation of new institutions or a sustained process for reforming relations between governments and civil society on an ongoing basis.’ Phillips reflects on three models of citizen and community engagement: community government (democratizing the institutions of local government), local governance (building collaborations across governments and non-governmental actors), and community governance (building greater capacity and autonomy within communities). Notwithstanding these three different developments, she notes that many of the largest Canadian communities have formulated their own agenda in spite of government. This community-building agenda is being driven by ‘non-governmental actors or by communities themselves.’ This trend seems apparent in Australia as well. In the Australian federation, Aulich observes an emphasis on the rhetoric of Third Way politics, with terms such as stakeholders, inclusion, partnerships, and community occurring, paradoxically, when globalization and broader supranational interests are acting in concert with community participation efforts to ‘enable governments to better deal with the consequences of globalization, especially those inequalities that arise from it.’ At the same time, many different initiatives in local government across the Australian federation have attempted to enhance the governance role of local government. Aulich concludes that ‘the data are incomplete and anecdotal about the extent of any shift towards more participative forms of governance.’ In Canada, there is greater evidence of the emergence of participatory governance in the largest cities.

Comparing Findings and Conclusions 241

Indeed, Phillips notes there has been a shift from government to governance in Canada’s largest cities. She asserts there is now a ‘metagovernance frame’ in which the ‘basic conceptions of municipalities have been transformed in recent years, from thinking of municipalities as being deliverers of (hard) services to thinking of them as democratic governments.’ As in Australia, the shift has been from ‘involving citizens as individuals to engaging with whole communities.’ This tension between local government and local governance has become apparent in our consideration of the two national systems of local government in Australia and Canada. Who drives this shift is of interest as it points to possible future change in these local government systems. These trends are not for all urban communities, however; in most instances, smaller, peri-urban or rural communities would have no experience of such changes in government. The following section also reviews the mixed changes that have affected the structures of local governments in both countries. Restructuring and Reform In our introduction we raised the question of the influence of NPM ideas on local government restructuring and reforms, and the prevailing views about the size and functions of local governments. A summation of the evidence discussed in chapters 4 and 5 leads us to suggest that local government restructuring has not emerged from clear strategic federal or state or provincial policies in Australia or Canada. In the case of Australia, local government reforms materialized out of a mix of ideas related to the NPM literatures. These include the privatization of some functions, and amalgamations or localregional partnerships, while in Canada Andrew Sancton found that amalgamations surfaced from mixed initiatives that demonstrated the provincial need to act ‘dramatically and decisively’ but with a questionable understanding of the implications of such reforms. Neil Marshall charts the recent history of restructuring and reform in Australian local government, suggesting that the influence of NPM ideas is unquestionable. He makes two important distinctions in these reforms. The first is that municipal boundaries have been ‘reshaped,’ ostensibly into larger areas, based on the assumption that economies of scale in administration and service delivery will return to these larger councils. The second distinction is that the relationship of internal organizational roles and responsibilities, especially those between

242 Local Government in a Global World

councillors and staff, has changed. The CEO in Australian local government is employed by the council and is, in theory, the sole point of contact for the elected members. It is the combined influence of the push for small (Osborne and Gaebler, 1993) and corporate (Hood, 1995) government reflected in the two distinctions made by Marshall about local government restructuring and reform in Australia. Marshall’s conclusion is that ‘the spread of services offered … will continue to be influenced by their size and format, and the effectiveness of their management processes.’ In his discussion of restructuring and reform in Canadian local government, Andrew Sancton finds it much more difficult to see managerial philosophies such as NPM (Hood, 1995) being reflected in the rationale for reform. He argues that ‘there has been little or no connection between changes in municipal functions and changes in municipal structures.’ In fact, Sancton is rather scornful of the reforms in Canada, arguing that ‘much of the recent political discourse about municipal restructuring in Canada seems to relate more to the nineteenth century than to the 1990s.’ He asserts that there is little rationale for reform based on an assessment of function or form. Indeed, because the efforts of higher levels of government are to keep the politics out of local or city government, efficiency or effectiveness criteria have become lost in many cases. Sancton also notes that for many local government organizations, the ‘municipal world in Canada is not dramatically different now from what it was then’ (in the early 1990s). It is clear that the Canadian reforms have resulted in fewer municipalities. The focus has been on the formation of sometimes very large municipalities, and the politics of restructuring and reform that surround these institutions and their communities have affected both large and small municipalities. In his chapter, Marshall focuses on the reform process as it was played out across different Australian states. He outlines the different attempts at establishing regional development organizations across the nation by state and, primarily, successive federal governments, and particularly praises the regional organizations of councils. Sancton also discusses the Canadian history of regional government; however, the difference between the two nations is quite significant. In the Australian situation, regional development organizations were originally instruments of the federal government in that they were funded by them for a period of time and when that funding ran out most of these organizations closed down. But, as Marshall argues, they have become key to regional part-

Comparing Findings and Conclusions 243

nerships and networks, and have broadened their activities based on repeated successes. In Canada, regional organizations have a role well beyond economic development, something for which, as Sancton notes, Canada is well known. Sancton reviews the history of two-tier metropolitan and regional government, which appears to be amazingly volatile, caught up in the politics of provincial government, much more so than with the federal government. The focus of these large metropolitan agencies is to coordinate metrowide services, such as water and sewer, transportation, and health and welfare services, around both the provision of facilities and funding of the services they provide. This has not been a tradition in the Australian federation. The only major amalgamation of metropolitan municipalities in Australia occurred in the mid-1920s, when the urban councils that made up metropolitan Brisbane amalgamated to form the City of Brisbane. Now the largest local government authority in Australia, with over 800,000 residents, it is rapidly growing over several hundred square kilometres around the mouth of the Brisbane River. All other Australian capital cities have very small city councils, cover quite small areas, and have far fewer residents than Brisbane. The large utility services, water, sewer, and transportation are owned and managed by private companies as part of partnerships with state government, not local government. This is one reason why, when compared with other local government systems in OECD countries, Australia has a relatively small system of local government in terms of public-sector spending. All in all, it is clear that the ideas that motivated restructuring and reforms in Australia and Canada are very different. New public management ideas were only influential in Australia. These influenced functional public-private partnerships, managerial excellence, and bottom-up regional networks of local governments. In Canada, the legislated amalgamations in the eastern provinces were successful across the board, along with important functional downloading, and only a few municipalities were able to mitigate their decisions (e.g., Montreal). While Marshall concludes that what cities can do depends on size, function, and good management, Sancton is more reserved. He raises the question of the emergence ‘of a new kind of government – the empowered urban government,’ an allusion to these very large municipalities that have emerged in most central and eastern provinces, and have great political representation, which Toronto epitomizes.

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Performance Management In chapters 6 and 7, Martin and Kloot and Agocs and Brunet-Jailly review recent advances and implementation successes of performance measurement and management policies at the local level. Both chapters conclude that performance measurement systems currently forgo including citizens and elected officials in community-wide consultations and collaborations. Carol Agocs and Emmanuel Brunet-Jailly describe how, for the past ten years, Canada’s local governments have had to comply with provincial legislation requiring them to implement performancemeasurement systems. Provincial governments in Quebec, Ontario, Nova Scotia, and British Columbia launched requirements for specific measures. As the authors document, in most cases these measures did not involve citizens or address the roles and functions citizens or elected officials may play in the design and implementation of performance measures. In the same vein and based on their extensive research, Louise Kloot and John Martin highlight inconsistencies in the local government management system in Australia. Managers are aware of the changes they face, that is, a drive towards efficiency and value for money, but aim to implement a system of excellence with a strong focus on public accountability, which includes citizens and elected officials. For Agocs and Brunet-Jailly, performance measurement rather than performance management systems have been implemented in Canadian local governments, although measurement alone cannot improve organizational results. Measures are most likely to be effective as elements of a holistic performance-management system in which measures are developed and used by front-line staff who deliver local government services. However, there is evidence that performance-measurement initiatives have not been as useful or as effective in improving transparency, accountability, and performance as their proponents may have hoped. Agocs and Brunet-Jailly’s review of the scholarly literature on performance measurement and management identifies three themes: advocacy, critique, and involvement of citizens and elected officials. Here again, there are similarities in the Australian study by Kloot and Martin, who found clear limitations in the current public-sector measurement technologies because it is difficult and complicated to define ‘excellence’ in a political environment.

Comparing Findings and Conclusions 245

In Canada, the successive waves of implementation of performance measures by provincial and local governments highlight the specific characteristics of the local government context in which provincial requirements are mute on the role of elected officials and citizens and citizen engagement is left unacknowledged. The organizational elements of a performance-management system capable of guiding improvements in local-government operations include a post-bureaucratic organizational structure in which work teams are a basic unit, as well as staff empowerment and union-management cooperation. Similarly, Kloot and Martin underline that, in Australia, the future holds many changes, including further community consultation and collaboration and a managerial focus on accountability. In the end, these studies confirm that excellence may include considerable community consultation and collaboration. Intergovernmental Relations In our introduction we ask whether local governments are still subordinate to state/provincial governments after a decade and a half of reforms. The evidence discussed by Sansom and Graham suggests that they are, but significant changes have occurred that make the place of local governments in the intergovernmental arenas more complex and diverse, and possibly also more influential. Indeed, the overall Australian picture is that over the past ten years or so local governments have established federal-level policy influences, but also formal intergovernmental recognition. This is much less clear in Canada. On the one hand, provinces such as Alberta, Ontario, and British Columbia have granted natural person powers to municipalities within limited areas of jurisdiction, yet on the other hand, a very large municipality, such as Toronto, has been engaged in a tug-of-war with the province of Ontario for a distinct charter and, since 2007, for further powers and resources to address local issues. All in all, Graham’s assessment is that intergovernmental relations do not yet fully include local governments and that under the current Harper government both provincial and federal levels of government have progressively reasserted their traditional relationship. However, the volunteer sector is a new contender at the provincial policy table. It is important to note that Canadian local governments are heterogeneous in size: the City of Toronto, with a budget of over $8 billion, exceeds that of three of the ten provincial governments. The same is

246 Local Government in a Global World

true in Australia: the Brisbane City Council’s budget matches the smallest state, Tasmania, and exceeds that of the Northern Territory. The question is, of course, whether this disparity in size translates into other inequalities between local governments. Graham Sansom clearly sets out the relationship between local government and the other two levels of government in the Australian federation. Constitutionally, local governments are a creature of the states, yet the federal government provides a significant level of funding to local government. These two aspects of local government’s place in the Australian federation have contributed to a history of volatility in the relationships between all levels of government in Australia. Sansom notes, however, that federal policies have largely propelled local government onto the national stage over recent decades. It is through fiscal/financial relationships with the states and local government that the federal government exercises its influence. Sansom notes that the Australian Local Government Association (ALGA) has a history of participation on federal-state councils such as a number of Ministerial Councils (Mincos; federal-level meetings), and the Council of Australian Governments (COAG; state-federal level meetings), and recently became a signatory to an agreement establishing principles guiding intergovernmental relations on local government matters. In other words, Australian local government can also be a valued partner. In contrast, Katherine Graham notes that although intergovernmental frustrations are often the butt of popular jokes, the relationship between local government and provincial and federal government in Canada is nothing to joke about. She also suggests, however, that while there have been many reforms in Canada, the provinces, not the federal government, have been the key players. Federal government programs have been levied to address social and economic issues at the local level; hence there has been a recent drive to engage all levels of government and community-based voluntary organizations, which has transformed Canadian intergovernmental relations into a governance paradigm. Sansom points out that local government is not recognized in the Australian Constitution. In fact, a referendum to this effect was lost in 1988, but since the intergovernmental agreement of April 2006 established a framework meant to improve relations between the three spheres of government, there is an implicit recognition of local government in the Australian intergovernmental networks. It seems Canadian local government has trod a similar path, but unsuccessfully.

Comparing Findings and Conclusions 247

In 1982, during a period of change in Canadian constitutional history, efforts to insert recognition of local government into Canada’s Constitution Act failed. A revival of federal interest under the Chrétien and Martin governments first focused on cities (2001) and then on communities (2004). But the current Harper government does not seem as interested as its two predecessors in engaging local governments, instead focusing on relations with the provinces. This is clearly illustrated in Graham’s reference to hourglass federalism, where current federal transfers are ‘thickening provincial necks,’ and the recent discovery of the ‘voluntary sector as a locus of policy engagements.’ In other words, Australian local governments seem engaged in multiple and formal policy processes that allow for broad and legislated policy influence, and there is little evidence of unequal impacts on municipalities. This is not the case in Canada, where local governments have been the beneficiary of specific policy decisions but are not broadly associated with provincial-federal discussions. Formally, however, Canada’s largest municipalities seem to be set apart. Conclusion With this book, we have undertaken a comparison of recent local government reforms in the Australian and Canadian federations, and have attempted to determine how these reforms impact and assist local communities to manage the challenges of being in a ‘globalized’ world, a world in which dynamic and ever-changing external factors intersect with the nature and character of local communities and bring forth unique and common challenges. What we find is a clearer picture of the changes that have occurred in Australia and Canada, and a mixed picture regarding those themes discussed in the literature on globalization. Going back to our four thematic lenses of participation and governance, restructuring and reform, performance management, and intergovernmental relations and the literature on globalization, which highlights how intergovernmental relations articulate local claims in a global world, we ask, first, whether there is evidence of a shift from government to governance. Second, we assess our evidence against the ideas that increased local participation and accountable bureaucracies may make local communities more influential in the intergovernmental networks. Third, we review the evidence of increased competition between municipalities and evidence of increased asymmetry of rights.

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The first theme of this book is whether local governments play a new and vital role in developing and managing the place of community, including a key role in engaging communities to build local capacity for the social and economic engagement of citizens. Particularly, we wondered whether local governments have sufficient autonomy and responsibility to engage citizens. The evidence confirms a shift from government to governance. However, evidence of citizen participation is scant. While there may be more and increased citizen participation in larger Canadian municipalities, this development does not reach smaller communities, particularly those located in rural and peri-urban areas. In contrast, in Australia, despite initiatives and rhetoric on Third Way politics and stakeholder inclusion, the evidence is inconclusive. The second theme involves the role of restructuring and reform of local governments’ structures and institutions. The evidence clearly underlines two very different federal trajectories. The Australian federation has witnessed reforms following the views of the NPM literature, which results in intermunicipal partnerships developing successfully. In Canada, reforms are not justified on the basis of NPM ideas and have instead led to the creation of large municipalities. For both Canada and Australia, however, neither globalization nor global competition ideas emerge as key factors behind local government reform; in fact, as stated elsewhere in this volume, it is possible that neither country has been following a clear reform strategy. It is notable, however, that the diversity of local government institutions seems to have increased in both countries. In both countries, local government institutions are asymmetrical and diverse in forms and functions. Both have some municipalities that have budgets and bureaucracies larger than some of the provinces or states. In Canada, there are a few very large municipalities (Toronto, Halifax, Winnipeg), whereas in Australia, there is one very large municipality (Brisbane), but over fifty very large multifunctional regional partnerships that group municipalities. Finally, key services are contracted out by Australian states, while in Canada, provinces have downloaded responsibilities to local governments. The third theme focuses on local government bureaucracies, particularly on performance measurement and management. Despite very different research methodologies, the authors of these two chapters point to similar trends and agree on most findings. In both federations, local governments have been asked by higher-level governments to

Comparing Findings and Conclusions 249

report formally and to measure a multitude of activities; local governments use performance-measurement systems to report and publicize their activities widely; and local government bureaucracies have only started to initiate community and citizen participation and collaboration. In both countries, however, there are limitations to what performance-measurement technologies can do, and the involvement of elected officials and citizens is a clear challenge to the managers of local governments. The final theme is intergovernmental relations. The central question is whether local governments are still subordinate to states/provinces. They are, but their relationship is more complex in Australia, and also more asymmetrical in Canada. In both cases, local governments are the ‘creatures’ of superior governments – the states in Australia and the provinces in Canada. Overall, local governments have much broader policy, institutional, and formal influence in Australia than they do in Canada. The federal government of Australia provides substantial amounts of funding, which are primarily allocated on the basis of needs. In Canada, local governments recently have gained some influence from their role in federal programs addressing social and economic policies. But this new role is not institutionalized or formal as it is in Australia. Also, a few provinces have granted local governments natural person powers over a limited number of policy arenas. Finally, Toronto was granted its own charter. These elements bring forth a greater asymmetry of influence in intergovernmental relations in Canada, which does not compare in Australia. There is no clear evidence, however, that rural communities are left behind in Canada. Overall Similarities and Differences Over the past twenty years, both systems of local government have evolved significantly in a few policy areas but have maintained clear similarities and historical consistencies. Hence, to sum up, both systems of local government face a shift from government to governance, which points towards greater complexity in local policy decisions and greater involvement of voluntary or third sectors, but there is limited evidence of citizen participation. Similarly, in both Australia and Canada performance measurements are top-down exercises that are used by local bureaucracies, but there is limited evidence that they enhance the policy participation of citizens and elected officials. Instead, they remain measurement tools for management and service

250 Local Government in a Global World

delivery. Also, in both countries restructuring and reforms result in asymmetrical systems of local governments with very large municipalities and regional groupings. As a result of this asymmetry in Canada we find a number of very large municipalities, while in Australia, there are a large number of regional groupings of municipalities. Other differences include the downloading of responsibilities to local governments in Canada, whereas in Australia functions have been contracted out. Also, local governments have garnered more formal and policy influence in Australia than they have in Canada. Canadian intergovernmental relations also seem more asymmetrical. And, while there is agreement that larger communities may have greater influence in intergovernmental networks, there is no evidence that rural communities would be at a disadvantage. In terms of the impact of globalization on local government in Australia and Canada, we note the following. First we find evidence of a clear shift from government to governance. Second, there is limited evidence of neither increased local participation, nor increasing accountability of bureaucracies to local communities; hence we are unable to assess the relative influence of communities over their intergovernmental networks. But it is clear that in both countries both citizen participation and performance management exercises are largely in formative stages. However, using the Toronto experience as a counter-example, it is clear that the linkage between consolidation and participation correlates with influence. Indeed, Toronto was given its own charter in 2007, and is relentless in demanding more resources and powers. Similarly, Regional Organizations of Councils (ROCs) in Australia have survived because they are able to succeed. They combine the size, functions, and professionalization of local government, which correlate with functional intergovernmental influence. What does this tell us about the future for local government in the mature federal state? There are three interrelated trends that affect the intergovernmental relations of cities and local governments, the governance of cities, and finally impact local democracy and local accountability. First, it appears that cities are such important actors in the global economy that senior government levels cannot stay uninvolved. Federal involvement in Australia is clear, and the renewed federal interest in Canada is also an indication of this trend. What emerges from this trend is that national/provincial/state level programs and

Comparing Findings and Conclusions 251

policies for cities are actually implemented by local governments. This trend does not affect all policy arenas equally because competition among local governments remains an important policy tool. But it is likely that in the areas of transportation, education, and social and welfare policy, all levels of governments may become increasingly intertwined in the policy implementation stages. This last development points to a second key trend: local governments are increasingly being compelled to work with each other in the implementation of citywide policies. Hence, the governance of cities and the complexity of those horizontal and vertical relationships among local governments increasingly affect local democracy, and in turn accountability. Finally, political objectives that would want to increase equity among Canadians and Australians will have to be rethought given these increasingly asymmetric federal systems. This book points to the broad reconfiguration of the very structures and institutions of redistribution that make it increasingly impossible for senior government levels to provide one-size-fits-all policies, or even to provide the same service levels to all across the same country. In fact, federal involvements with provinces or states may all be limited by structural asymmetry, since the policy capacity of every level of government influences policy implementation.

REFERENCES Hood, C. 1995. ‘The New Public Management in the 1980s: Variation on a Theme.’ Accounting, Organizations and Society, 20/2–3: 93–110. Osborne, D., and Gaebler, T. 1993. Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector. New York: Penguin.

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Contributors

Carol Agocs is professor emerita in the Department of Political Science at the University of Western Ontario, London, Ontario. Formerly the director of the Local Government Program, she currently teaches in the Master of Public Administration program and the MA program of the Department of Women’s Studies and Feminist Research. Her publications centre on public policy and administration, particularly policies to address discrimination in employment. Chris Aulich is an adjunct professor in Public Administration at the University of Canberra, Australia. He has published extensively in two main areas: local government and public administration at the publicprivate sector interface (specifically, outsourcing, privatization, and public-private partnerships). He has held visiting appointments at the University of St Andrews and the University of Hong Kong. Emmanuel Brunet-Jailly is associate professor in the School of Public Administration, co-director of the Local Government Institute, and director of the European Studies Program at the University of Victoria in Victoria, British Columbia. He is the editor of Journal of Borderland Studies. His research has been published in eight books or special numbers of scholarly journals, and over forty articles and book chapters on comparative urban governance, governance, and theorization of cross-border regions. Katherine A.H. Graham is professor of Public Policy and Administration at Carleton University in Ottawa. She has been active in the field of local government research for over thirty years. Her work has focused on local government reform, the management of local govern-

254 Contributors

ment, urban governance and Aboriginal people, and citizen engagement. She is currently serving as co-coordinator of a series of studies on the role of Canada’s federal government in municipalities, funded by the Social Sciences and Humanities Research Council of Canada. She is also part of a network of Canadian and Chinese scholars undertaking comparative work on citizen engagement and local governance. Louise Kloot is professor of Accounting and associate dean of Research at Swinburne University in Melbourne, Australia. She has a long history of research and engagement in local government in the state of Victoria, particularly in local government management and management accounting. She has published many articles on management and accountability in local government. Neil Marshall is an associate professor in the School of Behavioral, Cognitive, and Social Sciences at the University of New England in New South Wales, Australia. He teaches and writes in the areas of politics, public policy, and regionalism. John F. Martin is professor and director of the Centre for Sustainable Regional Communities at LaTrobe University in Victoria, Australia. He has been working with local governments across Australia, New Zealand, Asia Pacific, and South Africa over the last three decades. He continues to research and consult to local governments on contemporary issues of sustainability, community engagement, and endogenous development. Susan D. Phillips is professor and director of the School of Public Policy and Administration and senior research associate with the Centre for Voluntary Sector Research and Development at Carleton University in Ottawa. Her current research focuses on public policy for the non-profit sector, public management, and citizen engagement. She is a co-author of Urban Governance in Canada: Representation, Resources, and Restructuring and co-editor of Urban Affairs: Back on the Policy Agenda and Citizen Engagement: Lessons in Participation from Local Government. Andrew Sancton is a professor of Political Science at the University of Western Ontario. His latest book, The Limits of Boundaries: Why CityRegions Cannot Be Self-governing, was shortlisted for the 2009 Donner

Contributors 255

Prize. He is co-editor, with Robert Young, of Foundations of Governance: Municipal Government in Canada’s Provinces (2009). Graham Sansom is professor and director of both the Centre for Local Government at the University of Technology, Sydney, and the Australian Centre of Excellence for Local Government. Previously he was chief executive officer of the Australian Local Government Association. He convenes the Commonwealth Local Government Forum’s research advisory group, and edits the Commonwealth e-Journal of Local Governance.

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Ontario 257

Index

Aboriginal 221, 230; participation 229; population 214, 229. See also Indigenous accountability 15, 21, 26, 28, 32–3, 41, 59, 123–5, 130–5, 137–42, 152–5, 157, 166–7, 170, 175, 244–5 Action for Neighbourhood Change 74 Advisory Council for Inter-government Relations 95, 99, 184 Agriculture and Agri-Food Canada 66 Alberta 5, 25, 70, 78, 112, 119–20, 126, 128, 157, 164, 175, 217, 220–2, 236–7, 245 Alberta Capital Regional Alliance 120 amalgamations, 4, 16, 63; legislated: Alberta and 126; Australia 4, 11, 40, 81, 84–90, 93–4, 96, 98, 103; British Columbia and 117–18; and governance 10–11, 19; Halifax 68, 71, 113; Montreal 68, 116–17, 126; most important restructuring issue in Canada 19, 109, 126; New Brunswick 113, 122; Newfound-

land 112, 122; not implemented in western Canada 126; Nova Scotia 109, 122; Ontario 56, 109, 112, 114–16, 122; Ottawa 71, 116; Prince Edward Island 113, 122; Quebec 68, 112, 116–17; Saskatchewan and 112–13; Toronto 67, 69, 70–1, 108, 114–16, 122, 124, 126–7; Winnipeg and 68, 117. See also mergers; demergers Association of Municipalities of Ontario (AMO) 158, 219 Association of South East Asian Nations (ASEAN) 10, 11 Australia and Canada compared 3–4, 6, 10–12, 18, 22, 26–7, 238, 241, 243, 247, 250 Australian Constitution 24, 179–81, 184, 186, 189, 246 Australian Council of Local Government 199 Australian Local Government Association (ALGA) 26, 46, 179, 185–92, 196–9, 208, 211–12, 246, 255 Australian Transport Council 187

258 Index balanced score card (BSC) 20, 132–3, 143, 149, 162 Baldwin Act 24–5 Bedford 111, 113 benchmark/ing 137, 142, 144, 157, 158, 160, 162, 168 Brisbane 54, 105, 107, 210, 243, 248; City Council 185, 201, 206, 246 British Columbia 13–14, 25, 29, 56, 77, 80, 117, 121, 129, 154, 157, 163, 168, 170, 220–1, 244–5 British North America Act 24–5, 215 Calgary 25, 120 Calgary Regional Partnership 120 Canada Infrastructure Works 225 Canada Mortgage and Housing Corporation 223 Canadian Comprehensive Auditing Foundation 163 Canadian Federation of Voluntary Sector Networks 75 Canadian Healthy Communities Project 224 Canadian Policy Research Networks 30, 32, 77–8, 80 Canberra 29, 43, 45, 52–4, 104–7, 152, 185, 188, 208, 211–12 Catalonia 7 child care 232 Chrétien, J. (government of) 231, 247 citizen participation 3, 35, 55–8, 62–5, 71, 75–9, 165–7, 170–1, 240, 241, 245, 248–50, 254; benefits of 165; current practices 65–9; in government 35, 59; and local government reform 41–7; to participatory governance 35–8, 51; scant evidence of 248–9; as standard-

ized practice 55. See also governance, and citizen participation city-building agenda 57, 60, 65, 69–73 City of Toronto Act 70–1, 115 climate change 198 collaboration 24, 36–7, 41, 47, 57–9, 60–1, 73–4, 76, 81, 85, 90, 93, 94, 103, 120, 131, 136, 150, 158, 171, 204, 221, 226, 229, 230, 240, 244–5, 249 Commonwealth Grants Commission 82, 141–2, 182, 206 Commonwealth-Local Government Accord 189–90 Commonwealth Local Government Forum 205 community, engagement. See engagement, community Community Futures Program 224 Community Satisfaction Measurement Program 139, 144–5 compulsory competitive tendering (CCT) 88, 130–1, 133–4, 137, 144, 145, 146 Conservative parties (Canada) 71, 111, 219, 220, 226, 232 consolidation 15–18, 53, 85, 87, 90, 94, 103, 250 constitution, role of 8, 15, 27, 215, 224–6, 246 Constitution Act (1982) 24, 25, 215, 222, 224, 247 constitutional recognition 190, 196, 198–9, 208–9 constitutional reforms 4, 7–8, 199 cost-shifting 6, 46, 181, 192–7, 200, 208. See also downloading Council of Australian Governments (COAG) 26, 187, 190, 198–9, 246

Index 259 culture 4, 6–7, 11, 16, 20–1, 42, 66, 82, 103, 133, 134, 137, 142–3, 145–9, 160, 171, 229, 230 Dartmouth 111, 113 de-amalgamations. See demergers decentralization 33, 36, 128, 133, 236, 238–9 demergers 68, 109, 112, 116, 120, 126, 217–18. See also amalgamations; mergers democracy 18, 36–8, 72, 80, 106, 128, 237; community 203; deliberative 37, 55–6, 67, 78; direct 65; liberal 1, 126; local government 15, 19, 35, 86, 170–1, 180, 201, 210, 251; participatory 58; ratepayers 35, 39, 42; representative 58, 62, 65, 96, 102 democratic: accountability 8, 13, 14, 16, 238–9; communities 8; control 71; council elections 198; equation 16; functions 85; governance 174; governments 35, 71, 241; institutions 93; participation 12, 155, 169, 173–4; policy-making 27; processes 37, 57, 133; renewal 64; societies 46; tradition 16, 170; values 89 ‘democratic deficit’ 37, 60, 64 democratization 59, 76, 240 devolution 36, 38, 41, 59, 61, 83, 238; without funding 192 Dieppe 113 disengaged 207, 234; communities 205 distributive justice 7 downloading 6, 57, 109, 111–12, 218–21, 243, 248, 250. See also costshifting

Downsizing and Decentralizing model 134, 149–50 economic: activities 17; bases 66; benefits of amalgamation 86, 88; boom 114; challenges 223, 229; changes 26; crises 18; development 3, 7, 9, 11, 16, 18, 22, 24, 26, 50, 82, 90, 114, 118, 119, 140, 185, 203, 229, 232, 239, 243; dislocation 191; engagement 248; forces 27; goals 90, 92; growth 16, 91, 120, 229; history 4; importance of Toronto 219; issues 36, 222, 246; life 57; outcomes 145, 150; performance 11; players in a global world 6; policies 15, 249; problems 50, 225; purposes 229; reform strategy 90; region 13; restructuring 36; situation 167; success 4, 15; wealth 18 economics and governance 8 economies: and free trade 6; local 203; of scale 14, 16–19, 21, 88, 90, 241; in transition 87 economy 119; Alberta 220; global 6, 18, 23, 250; local 15, 225; Manitoba 229; market 7; shifts of 66; social 232–3; state 41; territorial 6 education 14, 82, 91, 92, 98, 111, 136, 169, 180, 182, 213, 216, 251 effectiveness 47, 50, 81, 94, 103, 138, 157–8, 166, 170, 214, 242 efficiency 10, 17–18, 26–7, 31, 53, 86, 131–6, 150, 157–8, 162, 242, 244 e-governance 65 elected officials 10, 13, 15, 17, 22, 40, 47, 58, 63–8, 81, 86, 88, 95–103, 109–10, 113, 114, 116, 119, 121–3,

260 Index 134, 149, 154–5, 158, 160–1, 163–6, 168–72, 174, 185, 197–200, 202, 203, 215, 219, 226, 244–5, 249 election 18, 37, 41–5, 55, 56, 58, 62, 63, 65, 85, 96, 98–9, 101, 114, 122, 170, 190, 198–9, 217–18, 225, 231, 232. See also vote/voting electorate 13, 18, 89. See also voter turnout electricity 5, 14, 204 employees 23, 68, 89, 96, 100, 142–3, 159, 172, 174 Empowerment-Learning Model of Performance Management in Local Government 171 engagement: and capacity-building 47; citizen 8, 9, 10, 37, 51, 55–6, 62, 65, 67, 71, 75, 170–2, 245, 248; community 41, 46, 48, 50, 52–3, 55–9, 61–3, 65–7, 69, 71, 73, 77, 79, 85, 224, 231, 238, 240; in community-building 46; of councils with communities 40, 207; with counterparts 93; federal 216, 225, 233; and governance 8, 36, 51, 59; intergovernmental 214, 217, 224, 226, 235, 245–6; levels of 217; mechanisms 57, 68; in political debate 35; policy 48, 234, 247; stockholder 52; strategies 48; trilevel 214, 222, 224. See also disengaged England 60. See also United Kingdom environment 31, 91–2, 110, 140, 182, 187, 233 equalization, 7, 17, 24, 27, 50, 194–5, 238. See also redistribution equity 7, 19, 25, 251; goals 239 ethnocultural groups 66

Europe 6, 7, 10, 16, 18, 70 European Union 10, 11, 30, 36 federal government. See government, federal federal-local relations (Australia) 183–6, 189, 191, 194 federal-municipal financial arrangements (Canada) 217 federal-provincial (Canada): agreements 157; decision-making bodies 24; dimension of SCPI 226; prior fiscal framework 234; relations 233 federal-state (Australia): agreements 193–4; councils 246; relations 187, 198. See also state-federal Federation of Canadian Municipalities (FCM) 64–5, 215, 223–5, 230–1, 233 Fewer Municipal Politicians Act 116, 123 fire (protection from) 5, 94, 110 fishing villages 113 forests 94, 113 France 7, 17, 23 free trade 6, 10 Galicia 7 garbage disposal services 13 Gas Tax Fund 232, 234 Geelong 185 Gemeinschaft 16 Germany 17, 23 global: competition 205; economy 6, 18, 23; forces 8; marketplace 6 globalization 3, 7, 10–11, 27, 36, 204, 238–40, 247–8, 250 GO Transit 118 Gold Coast 185

Index 261 goods and services tax (value-added tax) 4, 18, 181–2, 191, 231 governance: arrangements 119; of Australia 194, 197–8; changes 23, 239; citizen participation and 3, 8–12, 27, 35–8, 41, 47–51, 238–41, 247; city-building and 69; collaborative 58, 73; community 46, 58–9, 61–2, 69, 75–6; corporate model of 95–6, 99, 102–3; current debates on 71; defined 8–9; and democracy 171, 174; dysfunctional 192; financial management and 70; frameworks 92–3; integrity of 87; international markets and 7; issues 38, 71, 159; local (municipal) 8, 13, 16, 19, 27, 38, 40–1, 46, 59–60, 73, 75–6, 84, 102, 115, 130, 194, 198, 206, 217, 219, 250–1; multilevel 23, 57, 72–3 (see also trilevel); networked 93, 239; new principles of 41, 81; paradigm 222, 234, 246; and performance measurement 159, 165; perspectives on 9–10; predominantly top-down 23; public 197; reforms 7; regional 28, 92, 94; responsive 14; shift from government to 8, 36, 247–50; structures 57; tri-level 222. See also e-governance; meta-governance frame government 15, 21, 23, 37, 55–6, 74–5, 84, 108, 111, 115, 138, 156, 162, 235; agencies 38; central (national) 17–18, 47; citizen participation and 36–7; community 59, 61–2, 71–2, 76, 240; federal (Australia) 25–6, 94, 179–92, 194–9, 204, 206, (Canada) 24, 71, 73, 157, 214, 220, 222–5, 232–4, 239, 242, 245–6;

governance broader notion than 9; higher levels of 6, 13, 15–19, 23, 27, 50, 83, 130, 165, 213, 239, 248, 251; local or municipal (see throughout this book); multifunctional 13; performance of 11, 23, 158–9, 164–5, 168; principles of open 62; private service providers and 12; provincial 4, 15, 24–5, 70, 73, 109–19, 122–3, 125, 154–6, 163–4, 214–15, 217–19, 220–1, 226, 232–4, 239, 244–5; relations between levels of 3; revenue 5 (see also taxes); shift from to governance 8, 36, 247–50; spheres of 38, 42, 46, 196, 210; state 4, 5, 6, 39–51, 81–2, 86, 89, 93–4, 131–2, 139, 141, 144–5, 149–50, 164, 179–82, 186, 191, 200–4, 206; territory 40, 149–50, 180, 191; tiered-level 13; tri-level, 73, 214–15, 222–32 Government Accounting Standards Board (U.S.) 157, 165 Greater Golden Horseshoe 119 Greater London Council 18 Greater Toronto Area (GTA) 118–19 Greater Toronto Area Task Force (chairman, Anne Golden) 118 Greater Toronto Transportation Authority (Metrolinx) 119 Greater Vancouver Transportation Authority (Translink) 118 Halifax 68–9, 71, 111, 113, 248 Halifax County 113 Halifax Regional Municipality (HRM) 111, 113–14, 217 Hamilton 116, 118, 227 Harper, S. (government of) 26, 226, 232–3, 245, 247

262 Index Hawke (government of) 185, 187 health 25, 74, 82, 96, 142, 187, 216, 225, 234, 243; care 56, 180, 182, 213, 232; policies 29, 140; regulations 132 Health and Community Care 83 Healthy Communities movement 74, 224, 225 HIV/AIDS 230 homelessness 73, 214, 222, 225–6, 228, 230–1, 233 ‘hourglass federalism’ 213, 234 housing 17, 21, 82, 158–9, 166, 198–9, 216, 223, 225, 226, 228, 234; public 14, 82, 83, 118, 120, 126 Howard, J. (government of) 190–2 Howe, B. 189 Hull 116 immigration 184, 230 Inclusive Cities Canada 74 Indigenous: communities 49; wellbeing 198. See also Aboriginal infrastructure 6, 11, 17, 47, 57, 66, 71, 82, 83, 86, 91, 120, 126, 127, 180, 183, 191, 193, 195, 197–9, 204–6, 209, 225, 228, 231–3 Infrastructure Australia 198 intergovernmental: agreements 5, 10, 24, 40–1, 57, 73, 91, 93, 157, 182, 187, 190, 193, 195–8, 201–4, 208, 220–1, 225, 228–32, 233, 246; arrangements, future 46, 214; competition 8, 238–9; engagement 214; financial relations 5, 194, 214, 234; forums 186, 188–9, 207, 208; influence 250; model to a governance paradigm 222, 247; networks 7, 8, 27, 28, 238, 246, 247, 250; perspective 250; recognition 245

intergovernmental relations 8, 27, 179–81, 188–9, 194, 215, 238–9, 245–7, 250; and Australia’s constitution 186; Canadian federalism and 215–16; capacity and performance in 208; and fiscal imbalance 180; future course of 204; and globalization 237; impact of debt on 5; local (municipal) government and 23–7, 183–6, 206, 207, 214, 217–22, 232–4, 235, 246–6, 249; and non-governmental relations 226; often poor 193; summit on (2005) 194; tri-level 222–30, 234; urban problems and 73 Internet voting 64 judiciary 9 justice 7, 50, 75, 190. See also equity; redistribution justice of the peace 24 Keating, P. (government of) 189–90 Kyoto Accord 233 Labor Party (Australia) 131, 145, 184–5, 191–2, 198–9 Lake Ontario 118 land use planning 5, 17, 21, 47, 55, 65, 71, 74, 110, 168, 219 leadership 7, 34–5, 46, 50, 61, 71, 95, 98, 123–4, 148, 257 legal: authority 15, 102, 125; perspective 6, 8, 28, 41, 179–80, 200–1, 214–16, 218; regimes 7, 11; rights 9 legislation: environmental assessment 65; federal (Australia) 131, 142, 193, (Canada) 233; and governance 9, 12, 36, 38, 46, 51; local

Index 263 (municipal) government 38, 84, 95–6, 98, 101–2, 143, 217, 235, 247; provincial 62–4, 113–15, 116–17, 118, 120, 125, 154, 156, 163, 166, 170, 217, 219, 221, 244; state 81, 83–4, 94–6, 101, 130, 141, 148, 180, 188, 192–3, 199, 200, 202, 207. See also amalgamations, legislated; reform legislative: changes 17; framework 4, 6, 12, 25, 70, 132, 141, 165; impediments 41, 46, 51; initiatives 26 legitimacy 8, 10, 16, 28, 60, 63, 93, 156, 173–4, 190 leisure 82. See also recreation Liberal parties: (Australia) 145, 190; (Canada) 71, 119, 168, 217, 219, 225 libraries 82, 94 Local Government National Report 43, 45, 53, 82, 105 local-state relations (Australia) 200–4. See also state-local managers 3, 20–1, 28, 38, 49, 60, 71, 97–8, 102, 121–2, 125–6, 159, 161, 163–8, 172, 185, 242–5; local government 133–50, 249 Manitoba 29, 119, 128, 228–9 Martin, P. (government of) 231–2, 247 Melbourne 45, 52–3, 105–7, 153, 211–12 mergers: Australia, forced program of 85–6, 88–9, 94, 96, 103, 202; Halifax, legislated 113, 221; Montreal, legislated 68; Ontario, legislated 112, 114–15, 221; Quebec, legislated 116. See also amalgamations; demergers

meta-governance frame 71 Metrolinx 119 microeconomic reform 40, 187, 190 Miramichi 113 Mississauga 118 Moncton 113 Montreal 30, 33, 63, 67–8, 79, 116–17, 120–2, 126, 128, 213, 218, 237, 243 Montreal Charter of Rights and Responsibilities 67 Montreal Metropolitan Community (MMC) 120–1 Municipal Government Act 68 Municipal Performance Measurement Program 158, 166–7 municipalities, medium-sized 66, 70, 219 museums 82 National Constitutional Summit in Melbourne 199 National Homelessness Initiative (NHI) 214, 222, 225, 226, 233 National Party (Australia) 190 National Rural Framework 66 neo-conservative 218, 226 neo-liberal/ism 18, 37, 38, 57 Netherlands 18 new public management (NPM) 18–19, 31, 37, 81, 87, 94, 100, 108–9, 121, 123, 130, 138, 151, 155, 163, 238. See also public management New South Wales 40, 44, 48, 53, 82–3, 89, 92, 94, 98, 100, 102, 104, 132, 180, 182–3, 206 New Zealand 10, 60 Newcastle 185 Newfoundland and Labrador 112–13

264 Index Niagara 118 non-governmental organizations 10 North American Free Trade Agreement (NAFTA) 10, 11 Nova Scotia 110–13, 128–9, 154, 157, 167, 170, 176, 217, 221, 244 OECD countries 243 Ontario 1, 3, 5, 24–5, 29–30, 55–6, 63–4, 80–1, 108–12, 114–18, 154, 158, 217–21, 244–5, 253 Ottawa 28, 30, 32–3, 56, 71, 74, 77–8, 80, 118, 163, 166, 176–8, 235–7 parks 14, 82, 84, 109, 116, 120–1, 204 Parti Québécois 217 participation: Aboriginal participation in neighbourhood renewal and sustainability 229; in agenda setting 76; civic 62–5; community 62, 87; democratic 155, 169, 173, 174; elements of 59; experiments in 55; forms of 55, 58; and governance 8–12, 27, 35–8, 47–51, 238–40; grass-roots 38; history of 246–7; importance of 165; increased 166, 187; linking between consolidation and 250; local government 187, 190, 193, 196, 208, 222, 247, 250; mechanisms of 69; models 58, 61; in policy development 75, 249; political 28; process 9, 76; public 87, 165; of residents and community organizations 74; successful 42; voter 42, 44. See also citizen participation participatory governance. See participation and governance; governance, citizen participation and

performance 49, 97–8, 107, 130, 132, 141, 162; distinction between performance management and performance measurement 155; economic 11; financial 20, 135–6, 149; of government 11, 19–20; greater interest in 20; human resources evaluations of 162; improvement 142, 160, 174, 246; in intergovernmental relations 208; indicators 137, 158, 162, 164; information 20, 150, 160, 172; local government 20–1, 39, 95, 132–3, 141, 216, 234; monitoring 138–9, 194, 197; outcomes 97, 130–1; public sector 20; reporting 138, 140–1, 170; targets (goals) 95, 162, 172 performance management 19–27, 130–7, 139, 141–3, 145, 147, 149–53, 157, 159, 161–7, 169, 174–5, 244–5, 247–8; definition 160; elements of 160; encompasses performance measurement 160; exercises 250; and governance 159; in government 155, 160; local government 22, 134–5, 148, 165–6, 171, 188; models of 20, 171, 172–3; purpose of 160, 171; systems 3, 21–2, 150, 154–5, 160, 165, 172–3, 244–5; techniques 19 performance measurement 20–2, 27, 135–6, 142, 149, 154–64, 171–8; in Canada 155–9, 238, 248; definition 157; difficulty 146; exercises 164–5, 168; local government 21, 22, 150, 154, 159, 161, 166–9; and new public management 108, 163; projects 158; reforms 168; systems 3, 149, 154–8, 162, 167–70, 174, 244, 249

Index 265 planning: community 48, 57, 74, 91, 197, 227–8, 231–2; corporate 94, 141; development and urban design 12; economic 18; financial 168; local government 11, 13, 16, 17, 18, 20, 41, 49, 56–7, 66, 68, 82–3, 97, 108, 120–1, 127, 132, 136–8, 140; local traffic 68; management 95; neighbourhood 74; pension 113; policy 16, 55, 64–5; performance 160; provincial 112–13; regional 119, 204, 205; social 74, 227; service provision 16; strategic 91–3, 130, 140, 150, 160–2, 168, 172, 177, 186, 197; town 184; urban 190, 209. See also land use planning police services 5, 13, 14, 82, 109, 121, 230. See also safety policy capacity 12–13, 27–8, 251 Prince Edward Island 113, 217 provincial-federal discussions 247. See also federal-provincial provincial governments (Canada). See government, provincial provincial-local relations 26 provincial-municipal: discussion 167; fiscal arrangements 215; relations 24, 111, 167, 217–21 public choice approach 16, 18 public management 53–4, 107, 132, 211, 254, 257. See also new public management public-private partnerships 25, 60, 253 Quebec 23, 68, 109, 112, 115–17, 120–1, 154, 217, 220–1, 224, 244 Quebec City 116, 120, 130 Queensland 4, 39, 48–9, 82, 85, 88,

92, 98–9, 101–2, 105, 132, 180, 183, 191, 201–2, 209–10 ‘ratepayers democracy’ 35, 39, 42 recreation 5, 14, 17, 82, 116 redistribution 16, 251; goals 239; mechanisms of 19 referendum 15, 41, 44–5, 63–5, 116, 180, 184, 189, 198–9, 218, 246 reform(s): agendas 39, 40, 187, 216; of accountability measures 156; benefits of 28; boundary 96, 241; of business regulation 198; and city-building 72; comparing Australia and Canada 26, 241–5, 248; constitutional 4, 7; and devolution 36, 38–41; economic 91; and existing fissure in Canadian local government 70; to federal-state relations 187; financial (fiscal) 40, 204, 209, 214, 221; governance 7; hardest to implement 169; microeconomic 40, 187, 190; of local autonomy 35; local government 3, 16–17, 27, 38–41, 47, 84, 88, 148, 150, 202, 216–19, 221–2, 239–40, 247, 248; and local political legitimacy 27–8; movement 39, 169; municipal act (B.C.) 168; new 146; and new public management 19, 81, 241, 248; municipal in Canada 31, 33, 80, 128–9, 236; organizational 96, 241; performance measurement 168; policy 240; process 39–40, 81, 133, 137; public management 19, 75, 133; public sector 22, 36, 87, 133; rationalization and 22; of relationships between governments and civil society 56; result of globalizing trends 27; of

266 Index state government legislation 38; state-mandated 81, 150; upper-tier government 16, 18, 28, 239; voluntary 221; water 198; waves 28 reform(s) and restructuring 4, 12–16, 19, 27, 28, 38, 40, 47, 134, 139, 216–17, 221, 238, 241, 247–8, 250; Australia 81–103, 130, 241–2; Canada 108–27, 242–3. See also amalgamations; mergers; demergers Regional Organizations of Councils (ROCs) 90–4, 105, 250 revenues 4–5, 57, 59, 69, 72, 83, 125, 144, 180–2, 191, 194–5, 200, 208, 210, 218; local government 5, 193, 201, 206. See also taxes rights 51, 67; asymmetry of 7, 8, 247; of citizens 67; constitutional 15; consultation as 51; human 9; legal 9; minority 113; participation as 76; to real estate matters 25; of states 191; voting 43 Rudd, K. (government of) 47, 198, 209 rural: areas 17, 42, 50, 66, 69, 71, 89, 93, 111–16, 126, 185, 189, 192, 186, 201, 205, 248; communities 3, 50, 112, 119, 183, 241, 249–50; councils 5, 83, 140–1, 181–2, 191, 194, 206; urban divide 50, 71 safety 82, 142. See also police services Saint John 113 Saskatchewan 112, 119, 226 Savings and Restructuring Act 114 school(s) 17, 110; boards 110–11, 131 Search for Excellence model 134, 136, 142, 149–50

Second World War 23, 82, 213, 216, 229 service delivery 14–15, 17–18, 22, 36–7, 49–50, 57–8, 120, 131, 158, 169, 173, 181, 186, 197, 203, 220. See also specific services; welfare sewage disposal 4, 13, 82, 110, 114, 118, 243 Sherbrooke 116 shopping patterns 17 small towns 66, 70, 113, 115 social: activities 17; assistance 118; bonds 50; capital 9, 36, 37, 47, 48; change 9, 26, 38; construct(ion) 6, 139; context 8; decline 223; development 3, 9, 22, 222, 249; dislocation 191; economy 323–3; engagement 248; enterprises 60; entrepreneurship 50; exclusion 36, 57; functions 110; goals 90, 92, 339; history 4; housing 118, 226; infrastructure 67; issues 15–16, 37, 222, 246; justice 74, 190; outcomes 90, 150; participation 47; planning 74; policies 249; problems 37, 49, 50, 221, 229; processes 46; services 75, 109–11, 150; welfare 49, 216, 251 Social Credit Party 220 Social Planning Council 227 social workers 230 solid waste 167 South Australia 40–2, 48–9, 52, 82, 85–9, 98, 180, 182–3, 206, 212 South East Queensland Regional Organization of Councils 92–3, 104, 202 Spain 7, 18 sports 75. See also parks; recreation staff 50, 65–6, 91, 100–3, 116, 123–5,

Index 267 140, 148, 154–5, 159, 161, 167–4, 188, 208, 242, 244–5 stakeholder 15, 20–1, 36, 38, 49, 51, 60, 93, 130, 133, 137–9, 141, 149, 158–9, 161, 165, 172, 199, 227–8, 240, 248 state government (Australia). See government, state state-federal level meetings 246. See also federal-state state-local: agreements 201, 203; partnerships 40; power nexus 39, 240; relations 202–3. See also localstate Statistics Canada 115, 129, 213–14, 229, 237 St John’s 112 Sudbury 116, 118 Supporting Community Partnerships Initiative (SCPI) 226–8, 232 supranational interests 36, 240 sustainability 4, 38, 57–8, 61, 66–7, 72, 74–6, 101, 133–4, 150, 171, 187, 199, 206, 229, 235, 240 Switzerland 23 Sydney Harbour Manager project 49 systems: accountability 163; administrative 133; budgeting based on performance 162; civic party 62; committee 87; FAGS 194; federal 23, 25, 180, 184, 192, 196, 205, 207, 209, 251; council manager 125; electoral 4, 56, 62; government 35, 147, 185, 207–8; governance 8, 23; local government 3–8, 16, 26–7, 41, 62, 68, 131–2, 138, 144, 150, 155, 166, 174, 183, 195, 199, 201–2, 238–9, 241–3, 249, 250; management 3, 21, 142–3, 145, 163; political 36, 46; public 157; public

finance 225; rate-capping 205; redistribution and equalization 17; regional 116; reporting 144, 158, 163; reward 160; strategic management 162; strong mayor 121; tax 19; town planning 184, 201; two-tiered 71, 117, 118, 121; voting 42–3, 62. See also performance management; performance measurement Tasmania 39–40, 83, 85–90, 105, 180, 183, 202–4, 246 taxes/taxation 16, 17, 19, 40, 46, 65, 68, 110, 111, 113, 114, 125, 180, 192, 200, 204, 218–19; fee for service as 14; gas 71, 219, 232–3; propertybased 4, 14, 70, 110–11, 113, 182, 206, 209, 215; reserves exempt from 204; transfers 5, 70–1, 181, 232, 233. See also goods and services tax technology 86, 89, 137, 150, 160, 161, 229, 244, 249; new 6 telephone (services) 5, 40 Thatcher, M. (government of) 18 third sector. See voluntary sector Toronto 29–34, 63, 69–70, 78–80, 108, 112, 115–18, 123–9, 177, 213–14, 218, 219, 227, 235–7, 243, 245, 248–50. See also amalgamations; Greater Toronto Area tourism, promotion of 82, 94, 115, 118, 203 Townsville 185 trade unions. See unions Translink 118 transparency 64, 99, 123, 136, 154–7, 165, 167, 168, 170, 244 transportation (services) 4, 13, 14,

268 Index 43, 45, 83, 93, 120, 140, 180, 182, 187, 201, 225, 229, 232, 234, 243, 251 Union of B.C. Municipalities 221 unions 68, 91, 108, 155, 172–4, 245 United Kingdom 7, 15–17, 23, 36, 86, 143, 150, 155–6 United Nations Development Program 8–9 United States 7, 14–17, 31, 70, 155–8, 165 United Way 74 urbanization 10, 11, 216 urban-rural divide 50, 71 value-added tax. See goods and services tax Vancouver 14, 25, 31–2, 63, 77–8, 109, 163, 214, 221, 230 Vancouver Agreement 57, 79, 221, 230, 237 voluntary: cooperation 14, 81, 90, 114, 120, 158, 221; organizations 57, 72–5, 120, 220, 222, 224, 226–7, 232, 234, 246; partnerships 202;

sector 75–6, 115, 214, 218, 227, 231–4, 247, 249 volunteering 50 vote/voting 35, 39, 42–4, 62–3, 65, 77, 116, 118, 120, 189–90. See also elected officials; elections; Internet voting voter turnout 42, 44, 62–5 water 4–5, 13, 109, 118, 198, 202, 218, 243 Waterloo 118 weeds (control of) 94 welfare 17, 21, 25, 29, 49, 82, 110–11, 184, 216, 243; policy 251 Western Australia 82, 86–7, 90, 94, 101–2, 106, 180, 183, 206 Western Sydney Regional Organization of Councils 92–3 Whitlam, G. (government of) 184–5 Winnipeg 29, 65–6, 68, 78, 123–4, 214, 228–9, 248 Wollongong 185 women: in elected office 64, 65; in management 146 workshops, community 66, 140

Recto Running Head 269

The Institute of Public Administration of Canada Series in Public Management and Governance Networks of Knowledge: Collaborative Innovation in International Learning, Janice Stein, Richard Stren, Joy Fitzgibbon, and Melissa Maclean The National Research Council in the Innovative Policy Era: Changing Hierarchies, Networks, and Markets, G. Bruce Doern and Richard Levesque Beyond Service: State Workers, Public Policy, and the Prospects for Democratic Administration, Greg McElligott A Law unto Itself: How the Ontario Municipal Board Has Developed and Applied Land Use Planning Policy, John G. Chipman Health Care, Entitlement, and Citizenship, Candace Redden Between Colliding Worlds: The Ambiguous Existence of Government Agencies for Aboriginal and Women’s Policy, Jonathan Malloy The Politics of Public Management: The HRDC Audit of Grants and Contributions, David A. Good Dream No Little Dreams: A Biography of the Douglas Government of Saskatchewan, 1944–1961, Albert W. Johnson Governing Education, Ben Levin Executive Styles in Canada: Cabinet Structures and Leadership Practices in Canadian Government, edited by Luc Bernier, Keith Brownsey, and Michael Howlett The Roles of Public Opinion Research in Canadian Government, Christopher Page The Politics of CANDU Exports, Duane Bratt Policy Analysis in Canada: The State of the Art, edited by Laurent Dobuzinskis, Michael Howlett, and David Laycock Digital State at the Leading Edge: Lessons from Canada, Sanford Borins, Kenneth Kernaghan, David Brown, Nick Bontis, Perri 6, and Fred Thompson The Politics of Public Money: Spenders, Guardians, Priority Setters, and Financial Watchdogs inside the Canadian Government, David A. Good Court Government and the Collapse of Accountability in Canada and the U.K., Donald Savoie Professionalism and Public Service: Essays in Honour of Kenneth Kernaghan, edited by David Siegel and Ken Rasmussen Searching for Leadership: Secretaries to Cabinet in Canada, edited by Patrice Dutil Foundations of Governance: Municipal Government in Canada’s Provinces, edited by Andrew Sancton and Robert Young Provincial and Territorial Ombudsman Offices in Canada, edited by Stewart Hyson Local Government in a Global World: Australia and Canada in Comparative Perspective, edited by Emmanuel Brunet-Jailly and John F. Martin