The Third Tier: A Historical Overview of the Development of Local Government in Newfoundland and Labrador


Melvin Baker and Janet Miller Pitt (c) 1988

(originally published in the Programme of the 38th Annual Convention of the Newfoundland and Labrador Federation of Municipalities, October 7-9, 1988 , St. John's, Newfoundland, 39-43)

Local government in Newfoundland and Labrador, in the formal, structured sense, is a creation of the post-Confederation era, a relatively short time in terms of Canada's municipal history. Before 1949, only about 20 Newfoundland municipalities were incorporated and almost all of these were the burgeoning transportation and industrial centres created by the booming economy of World War II. Over one-third of the growth in municipalities has occurred since the mid-1960s.

Laws against settlement, foreign treaties and a small population scattered in tiny remote outports - all conspired to delay the development of local government. In a country with over 6,000 miles of coastline and nearly 1300 coastal fishing communities - most numbering fewer than 500 population and many under 100 - local government often meant the priest, the politician, the merchant and the teacher. It was this exclusive oligarchy which governed the small but significant local spending of public money - on public roads and bridges.

From 1832, when Representative Government in Newfoundland was established, to 1890, when the Local Affairs Act was passed, government-appointed District Road Boards managed local affairs outside St. John's. Board members were appointed - and removed - at the pleasure of the Governor-in-Council. The board was responsible for the expenditure of annual grants from the Legislature to maintain roads and bridges, and in these matters, they often consulted with the district's Member of the House of Assembly who served as the principle intermediary between constituents and the Legislature.

With the passing of the Local Affairs Act, board members were, for the first time, elected and not appointed, although after the passage of the Act, many boards continued to be composed of appointed officials, the result of public apathy. (This disinterest may have reflected the social stratification and lack of local leadership of many Newfoundland outports where only the merchant, the priest or minister and the teacher would have the time, money, influence - and literacy - to stand for public office.) After 1890, these elected road boards in the various electoral districts continued to administer the annual road grants from the legislature. Each board consisted of five members, who would serve for two terms and who would elect from among their number a chairman and deputy chairman.

In 1915, through the efforts of the Fishermen's Protective Union, the legislature passed a new Local Affairs Act granting the local municipal boards greater authority over streets, bridges and other local services. Interest in the local boards was briefly revived, notably in districts where the Union influence was strong as Unionists sought elections to the boards. By the 1920s, public interest in the boards had again dwindled.

In 1933, in the throes of the Great Depression, Newfoundland itself surrendered the right to responsible government and from 1934 to 1949, the country was governed by a commission appointed in England. In 1933 new legislation empowered the Governor-in-Council to incorporate by proclamation any community with a population of 1,000 or more and to appoint the council's first members, who would remain in office for two years. The act gave the appointed councils the authority to impose property, poll, and business taxes. But because of the widespread local resistance to real property taxation, no communities were incorporated under this legislation.

In 1933 the Amulree Commission, a Royal Commission appointed to investigate Newfoundland's dire economic and political situation, identified the lack of any systematic elective local government outside St. John's as the one of the major reasons for the prevailing public indifference to community pride and civic responsibility and the luckluster community spirit. Outport residents relied heavily on the central government in St. John's, an institution riddled with political patronage and corruption. By 1933, the Commission believed the general public was widely disillusioned with Newfoundland's democratic institutions, including local government. Accordingly, the Commission recommended the establishment of municipal governments in the larger outports "to instill a sense of responsibility in residents who were called upon to pay for the expenses of such governments."

The Commission of Government, established in February 1934, eventually tried to foster the growth of outport local government through a variety of legislation. In 1937 the Government passed the Local Administration Act giving the Governor-in-Commission the authority to organize any municipality. Under this act, the proposed new councils were given one sole source of taxation - the still repugnant real property tax. Consequently, no outport actually took advantage of the act and by 1942 the Commission of Government adopted a new approach: it would pass a special act for each outport wishing to be incorporated, thus allowing each community to determine its own form of taxation. This, coupled with the Commission's 1941 provision of financial incentives and grants to each municipality, enabled even new local councils with limited resources to provide services.

Since 1938 Windsor, the sprawling, haphazard suburb on the outskirts of the neatly planned pulp and paper community of Grand Falls, had been administered by a seven-member Board of Management. Elected by the residents, this board attempted to provide an orderly system of planning and sanitation services. But under this new legislation, in 1942, Windsor became the first community outside St. John's with its own formally incorporated and elected council.

In 1941 the Commissioner for Public Health and Welfare was given authority to impose municipal controls within 15 miles of the American bases at Argentia and Stephenville, while the Commissioner for Public Utilities was given similar authority for the area near the Gander Airport. Each Commissioner had the all the powers of a town council, except the right to impose taxation.

In 1942 the Commission also passed legislation incorporating Corner Brook West, and in 1943 Grand Bank was incorporated. Some residents strongly opposed Grand Bank's incorporation and in 1944 several citizens were arrested and put on trial for tax delinquency. Emotions ran so high that about 50 policemen of the Royal Newfoundland Constabulary were brought from St. John's to maintain law and order. This action had the desired effect; peace was maintained and the delinquent citizens convicted and forced to pay their fines.

In the face of continuing problems convincing outport residents of the benefits of local government, the Commission of Government in 1944 undertook an extensive educational programme by radio, press and public meetings. A Director of Local Government Affairs was appointed to undertake the task, supported by the newly- organized Local Government Division of the Department of Public Health and Welfare.

The approach was successful and incorporation increased. In 1945 Harbour Grace, St. Anthony, Wesleyville, and Channel-Port aux Basques were legally incorporated and the Placentia and Springdale-South Brook regions were incorporated as rural districts. In 1946 Belleoram, Lewisporte, Fortune and the rural district of Badger's Quay-Valleyfield-Pool's Island joining the rapidly-growing ranks of incorporated communities. In 1947 Curling received its act of incorporation while in 1948 Fogo, Carbonear, Corner Brook East and Englee incorporated.

After Newfoundland entered the Canadian Confederation in 1949, the Liberal Administration of Premier Joseph R. Smallwood passed a new Local Government Act which once more restored to the Government by order of the Lieutenant-Governor-in-Council the authority to incorporate communities. Incorporating each community by a special act had proved too arduous and slow; in the face of a mounting number of requests for incorporation, therefore, the new province's government abandoned this approach. Under the 1949 legislation, which excluded the city of St. John's, all communities previously incorporated by special acts were subsumed by the new act, which imposed uniform duties and powers on all municipalities.

Although each municipalities were still permitted to choose their own forms of taxation, government continued to retain strict financial and administrative controls over their affairs. Hence, government had to approve a municipality's annual budget, the imposition and rate of taxes, the remuneration of staff, and the borrowing of money.

The 1949 Act also created a new municipal unit, the Local Improvement District for those communities not large enough to be classified as towns. When a community's population reached 750 residents, it could then become a town if the majority of the people petitioned for this right. In 1952, an additional form of local government, the community council, was created for communities with a population of fewer than 500 residents. Compared with a town council, the powers of the elected community council were very limited and included only the provision of such basic services as water, sewerage and lighting.

Local government expanded during the 1950s and the 1960s and this growth generated a provincial umbrella organization, new government institutions and new adaptions of regional government. In 1951, the Federation of Municipalities was formed to coordinate the views of municipalities on matters of common interest and to present a united front when dealing with the provincial government. In response to the growing demands of the municipalities, the Government of Newfoundland and Labrador established the Department of Municipal Affairs and Supply the following year. In 1952 the Joint Town and Community Council of the Burin Peninsula was formed to discuss common problems associated with that region of the Province.

Meanwhile, the incorporation continued apace, highlighted in 1955 by the formation of Newfoundland's second city, Corner Brook, an amalgamation of the communities of Corner Brook East, Corner Brook West, Townsite, and Curling. The new city was governed by a separate legislation, the City of Corner Brook Act (1955), rather than by the 1949 Local Government Act. By the end of 1955 Newfoundland had two cities, 40 towns, six communities, one local improvement district and one rural district - more than twice the number of municipalities it had had in 1949. By 1966, this number had grown to two cities, 62 towns, two local improvement districts, four rural districts and 74 communities governed by community councils.

The growth of municipalities after 1949 was built on the foundation of financial incentives that had been established by the Commission of Government. As late as 1957 provincial revenue grants to the municipalities were still based on local tax collections and a universal funding formula by which the government gave two dollars for every one dollar collected in municipal taxes up to a total of $1,000, and one dollar for every one dollar collected in taxes from a total of $1001 to $5,000. A municipality received 90 cents for every dollar in municipal taxes collected from $5,000 to $15,000, 70 cents for every dollar in municipal taxes collected from $15,000 to $25,000; and 50 cents for every dollar collected from $25,000 and up.The more a municipality collected in taxes, the lower the proportion of its total revenue granted by the province.

To augment this revenue, however, the provincial government had established in 1951 a programme of loan guarantees and debenture issues for municipalities wishing to finance such expensive projects as water and sewerage systems and road paving. And in 1964 the Smallwood Administration established the Newfoundland Municipal Finance Corporation to undertake the borrowing of all bonds and loans for every municipality except St. John's.

Further rapid growth of the number of incorporated municipalities, the small tax base, the increasing demand for services, the lack of administrative experience and the slow but steady shift in population from rural to urban areas over two decades reached a crisis in the early 1970s. In August 1972, the Progressive Conservative Administration of Premier Frank Moores appointed a Royal Commission of Enquiry to examine the financial situations and administrative structures of municipalities. When the Whalen Commission reported to government in September 1974, it recommended sweeping reforms in the financial and administrative system of local government.

Many of the recommended reforms of the Whalen Commission were incorporated in the 1979 Municipalities Act which was passed during the first term of the Progressive Conservative Administration of Premier Brian Peckford. Local government organization was now to be divided into cities (with St. John's and Corner Brook continuing to be governed by separate acts), towns, communities, local service districts, and a single metropolitan area under the St. John's Metropolitan Area Board, established in 1963 to provide municipal supervision and services to the outskirts of St. John's. The 1979 Act also provided for the establishment of regional governments, although interest in this more expansive form of local government has not, since the passage of the act, been high.

Financial assistance under the Municipal Grants Act, passed in 1977, remained tied to the size of the municipality; the larger the population, the larger the grant. In addition, the legislation was designed to make local governments more reliant on their own revenues, to encourage municipalities to become more autonomous and fiscal responsible. The amalgamation of small communities into larger governing units was also encouraged and inducements were provided under the Grants Act to increase municipal planning and development control.

In 1988, Mount Pearl became the province's third city and today there are a total of 314 incorporated municipalities throughout Newfoundland and Labrador. Although many communities still face the problems of scarce finances, a shrinking revenue base, faltering public infrastructure, few technical services and support and community divisions in the face of amalgamation, local government continues to branch into such new and exciting areas as industrial promotion, recreation and tourism development, heritage conservation, strategic economic planning and increasingly sophisticated development control.

With the improved skills and administrative abilities of local government officials, the municipalities have become a training ground for local leadership and political participation at the federal and provincial levels. As it gains in experience and accomplishments, local government has increasingly become the focal point of community activities and public spirit and an active participant in new regional social and economic development groups. As the Twentieth Century draws to a close, local government in Newfoundland and Labrador has become a mature participant in the province's social and economic development and an important and vital third tier of democratic participation in public affairs. [Further material by Dr.Melvin Baker on the development of municipal government is published in "Government", Encyclopedia of Newfoundland and Labrador, vol. 2, ed. J.R. Smallwood, C. Horan, R. Pitt, B. Riggs (St. John's: Newfoundland Book Publishers, 1984).]