In 2021, two PEI rural municipalities submitted to the Island Regulatory and Appeals Commission (IRAC) an application requesting to dissolve as a municipality.
The Rural Municipality of St Louis in western PEI is one of them, submitting a proposal for dissolution in early November.
Incorporated in 1964, officials with St Louis did not wish to comment on their request as they are currently working through the dissolution process.
However, in their proposal, St Louis council cited their reason for wanting to dissolve as a municipality has to due with the new Municipal Government Act (MGA), which came into effect in 2017.
St Louis stated they have done their best to meet all of the requirements of the MGA.
“Regarding bylaws, insurance etc., it is no longer financially feasible to remain as a municipality without a significant tax increase to the small population of the Municipality of St Louis,” stated their proposal.
The estimated population of St Louis is about 75 people.
In July 2021, St Louis council held a public meeting, with councillors and residents in attendance agreeing dissolving the municipality was in their best interest.
According to the MGA, dissolution ‘means the process by which a municipality ceases to be incorporated as a municipality’.
In the case of St Louis, they plan to continue to operate as a community if their request for dissolution is approved, with the intention to incorporate as a non-profit company and transfer land to that non-profit. This move will allow the community to obtain additional funding and to continue to operate the St Louis Community Centre rather than transferring the land to the provincial government. Under the MGA, if a municipality dissolves, any remaining property or assets have to be transferred to the province.
The land which the community centre sits on is one of four properties St Louis owns. According to their proposal, the municipality is currently in the process of transferring the biggest of the four properties, approximately 23 acres, to a local developer who intends to build senior living units on the land. The municipality said they will agree to transfer two other smaller properties they own to the provincial government.
Once the proposal was submitted, IRAC had 45 days to post a notice on behalf of St Louis about their request for dissolution and give the public 30 days to comment. A public notice about the proposal appeared in the Dec. 22 issue of the West Prince Graphic. Any individual or municipality wishing to object or make comment on the proposal has until Jan. 22 to submit a response to IRAC. Then, depending on the response, there may be a public meeting to discuss the proposal. Afterwards, IRAC must deliver a report to the Minister of Fisheries and Communities 45 days after the last comment is received.
St Louis wasn’t the only Island municipality in 2021 to submit a proposal to dissolve.
The Rural Municipality of Darlington, in Queens County, sent in a proposal to IRAC back in January. In their proposal, Darlington said their municipality was also struggling to meet ‘the ever-increasing requirements’ of the MGA.
The President of the Federation of Prince Edward Island Municipalities (FPEIM) Bruce MacDougall said his organization sympathizes with smaller municipalities like Darlington and St Louis.
“They’re trying to provide a municipal government with limited resources and we need to address that,” said Mr MacDougall.
The FPEIM filed a lengthy objection to the Darlington proposal, raising concerns with the dissolution process in general and the possible impact it could have on municipalities and the province as a whole.
“The biggest reason we sent that was because dissolution is not the answer,” said Mr MacDougall. “We want the province to work with these small municipalities to make sure they are viable. The issue is they have limited capacity to operate.”
In statistics provided in their letter to IRAC, the FPEIM said while PEI is the most densely populated province in the country, municipalities only cover about 37 per cent of the area in the province. There are 59 municipal governments in PEI and the six most populated Island municipalities account for almost three-quarters of the municipal population. Nova Scotia has 49 municipalities in total, having ten fewer than PEI, but make up about 26 times the area and nine times as many people.
“We are asking municipal services and the government to do anything possible to make sure municipalities don’t have to dissolve.” said Mr MacDougall. “If they dissolve, they just become another part of the unincorporated areas on the Island and we have the largest amount of unincorporated area of any province... About 67 per cent of the Island is unincorporated.”
Mr MacDougall said there needs to be a good discussion around other options for municipalities struggling to met the requirements of the MGA other than dissolution.
“The government has to realize we have a problem,” he said. “If one dissolves, or trying to dissolve, now we have two, than the province has to realize, yes, we have an issue and they have to address it.”
In March 2021, IRAC issued its report on Darlington’s proposal, recommending to the province the municipality’s request for dissolution should be approved. However, IRAC pointed out in their report, under the MGA, the minister is permitted to undertake a study to investigate other options for the municipality.
A spokesperson for the Department of Fisheries and Communities said in an email the Darlington’s request is currently being reviewed by government.
“The Municipal Government Act provides a framework for good governance, including accountability and transparency, for all municipalities across the province,” stated the email. “The creation of strong municipalities enables them to deliver quality services to residents and address opportunities and challenges that communicates and rural areas face.”
In the fall of 2020, the province introduced changes to the MGA that would allow municipalities to share services with other municipalities such as utilities, emergency measures planning and office space.
“This will allow municipalities to benefit from cost savings and continue to provide the best service to residents,” said the spokesperson. “Municipalities are encouraged to explore this option as it is a step towards working together to provide beneficial services for residents.”
Under current legislation, only two applications for dissolution have been submitted, said the spokesperson.
“The department continues to help local governments in the implementation of the MGA by providing educational opportunities, advice and coaching,” concluded the email.