International Conference on Structural Reform and the Transformation of rganisations and Business Homerton College, University of Cambridge, U.K

The government of Ontario has made a number of major changes in the way that municipalities are governed and financed. Some municipalities have been forced to amalgamate despite opposition from their residents. Ontario has also redistributed the responsibilities of the province and the municipalities through the Local Service Realignment Program (LSR). This program is referred to as downloading. Other major changes include the use of market value for property tax assessment and the transfer of education funding to the province from the local school boards. This paper is concerned with two aspects of the changes. The first question is whether megacities are less costly to operate than many small municipalities in a large urban area. The recent amalgamation of Toronto is used to examine this question. Since the amalgamation occurred in 1998, the new city is still adjusting to the change, and only preliminary conclusions can be drawn at this time. The second question is concerned with the impact of downloading on the municipalities. The experience of the new City of Toronto is again used to examine this question.