Summary#
Bill 41, An Act to Amend the Local Governance Act, would amend New Brunswick’s Local Governance Act. Its apparent goal is to let local governments use more arrangements to build and operate clean-energy generation facilities; that is a purpose inferred from the changes, not a promised result. The bill is at first reading, so it is not law, and passage is uncertain.
- It would let a local government build, own or operate a clean-energy generation facility, use the electricity itself, or sell electricity or environmental attributes (such as credits tied to environmental effects), subject to the Electricity Act. It could not distribute the electricity or provide it as a service to residents.
- It would let a local government establish a corporation for a facility, or acquire or hold securities in one. The corporation could operate for profit. Profits paid to the local government would have to go to its general operating fund and be used only for municipal purposes.
- Local governments could acquire land or land interests next to themselves, or next to a local government in a related agreement. They could share costs or make joint arrangements with other local governments, Indigenous band councils, the Crown or any other person.
- A council would have to pass a resolution stating its intention before taking these measures. A local government could also delegate specified powers to a regional service commission by by-law, but the commission would have to agree.
- The bill would allow temporary borrowing for a facility’s operating costs, up to 50% of that year’s budgeted revenue. Operating budgets would have to balance over either one year or four years, at the local government’s choice. It also changes reporting rules for relevant corporations.
What it means for you#
- Residents and taxpayers: The bill does not require a local government to build a facility, and it does not give residents a right to receive its electricity. It does permit local governments to spend, borrow, share costs and enter agreements for facilities.
- Local governments: They would have new or clarified authority to use a corporation, make agreements and, with a regional service commission’s consent, delegate certain powers. For construction borrowing delegated to a commission, each local government would be a guarantor.
- Indigenous band councils and other partners: They could be parties to cost-sharing or joint-facility agreements. The bill does not set out a process for involving them.
- Local government corporations: They could sell electricity or environmental attributes and earn profits, but profits paid to the local government could be used only for municipal purposes.
Money#
The bill gives borrowing and cost-sharing authority, but the available material gives no cost estimate.
- A local government could temporarily borrow for operating costs, up to 50% of the facility’s budgeted revenue for that year.
- If construction borrowing is delegated to a regional service commission, each local government would guarantee the commission’s borrowing.
- The bill sets no spending amount, staffing level, fee or public funding allocation.
What is unclear#
- The Local Governance Act, the Electricity Act and the related regulations were not supplied. I could not verify the full current-law position or the precise rules for selling electricity and environmental attributes.
- “Clean source” and “environmental attributes” rely on definitions in other legislation or regulations that were not supplied.
- The bill does not set out how local governments would choose projects, oversee corporations, or report on facilities beyond specified corporation information.
- It is unclear how the bill’s changes to other borrowing and tax-related provisions would work in practice without the amended Act’s full text.
- The bill text provided has no start date or cost estimate. It also does not explain whether these powers overlap with other programs.
Case for#
- The bill appears intended to give local governments several ways to take part in clean-energy generation: directly, through a corporation, or with partners.
- A corporation could operate for profit, while any profits paid to the local government would be restricted to municipal purposes.
- Shared projects could spread construction and operating costs among local governments and other partners.
- Allowing operating budgets to balance over four years may give local governments more flexibility in planning facility costs.
Case against#
- The bill permits borrowing and profit-seeking corporations but provides little detail on project oversight, reporting or how financial risks would be assessed.
- A local government that guarantees a regional service commission’s construction borrowing could have a financial obligation if the borrowing is not repaid as planned.
- The bill does not explain how residents would have a say in a project or how Indigenous communities would be involved beyond being eligible agreement partners.
- The corporation route is exempt from several provisions that apply to direct local-government facilities. Without the full current Act, the practical effect of those exemptions is unclear.