On Rural Newfoundland: Community Resettlement and Taxpayer Equity

Newfoundland and Labrador (NL) faces unique policy challenges due to the Island’s vast physical geography. Unlike the other provinces in Atlantic Canada, NL has a low population density, with 370,510 square kilometers of land for little more than a half million people. Further, a majority (51 per cent) of the population live outside of census metropolitan areas, with many living in rural or remote communities, some with a recorded population as low as five and reachable only by daily ferry service. While NL’s geographic makeup has created an interesting cultural element for Canada’s most eastern province, it has also created difficulties for the provincial government to ensure services are delivered efficiently to these rural communities. As a result, it is important to consider existing policies put in place by the provincial government that address these difficulties and whether they have been successful. Specifically, it is important to consider perhaps the most controversial policy in the history of provincial-municipal affairs: community relocation.

The provincial government adopted community resettlement policies between 1954 and 1975 in an effort to centralize the province’s population into government directed “growth areas.” In doing so, the government wished to ensure that all residents of the province had access to a reasonable level of government services, which could be achieved through less expensive means, while also encouraging innovation in the province’s economy through reforms to the provincial fishery. The government would provide financial assistance to families prepared to resettle. Initially, this project was a success, as 300 remote communities were abandoned and over 30,000 people resettled. However, the policy became politically unpopular, due in part to the absence of many promised economic reforms and, therefore, led to the end government-initiated resettlement.

Presently, the resettlement policy has been reformed into the current Community Relocation Policy, which is “community-initiated and community-driven.” Communities can apply for community relocation if 90 per cent of the community’s residents agree, in writing, to relocate. Following this process, the government completes a cost-benefit analysis and determines whether the cost of delivering services to the community over a twenty year period exceeds the financial assistance that would be given to residents to relocate. In the event that there is a benefit to government, government will purchase the physical property of these communities for values of $250,000 to $270,000 per household.

While this policy has led to the resettlement of a few communities over the last decade, however, it is far from perfect and the government should, instead, consider reviewing one key element of the policy: the high threshold required for resettlement. As stated, this policy requires that interested communities come together on their own terms, organize their own resettlement committee, and organize their own independent resettlement vote. However, since this vote requires that 90 per cent of residents agree, it often means that less than a dozen individuals can hold up individuals from receiving government assistance to relocate (and, as many individuals are unable to relocate without this assistance, it means they are often left with no other choice but to remain). Furthermore, with such a high vote threshold, taxpayers continue to be on the line because of the actions of just a few individuals, including in cases wherein the financial assistance provided by government would outweigh the costs of government assistance relocation. Since taxpayers foot the expenses of these communities, many of which do not have any need for the service provided, it is clearly unfair for these few individuals to put a majority of taxpayers on the line for the continued delivery of services to these communities. Essentially, because of this clear inequity, government should consider reducing the threshold required for relocation or otherwise take a more government-initiated approach.

Overall, even if one believes the premise that government should provide core services to all residents, it is still important to consider at what level are taxpayers receiving the services for which they are paying. For some rural and remote communities, it appears that the actions of a few individuals are often forcing a majority of taxpayers to foot the bill for services that benefit a few lone actors. While these developments may not justify a complete removal of services to these communities, at the very least they suggest the provincial government should take a look at reforming these policies and some other potential solutions to ensure that taxpayers are treated fairly.

Devin Drover is an AIMS on Campus Student Fellow who is pursuing an undergraduate degree in economics at Memorial University. The views expressed are the opinion of the author and not necessarily that of the Atlantic Institute for Market Studies

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