Summary#
Bill 41, An Act to Amend the Local Governance Act, would amend New Brunswick’s Local Governance Act and a regulation under it. As tabled at first reading, it would expand and change local governments’ powers for “clean energy generation facilities”; its stated goal is not given in the supplied material. The bill is not yet law. The source material contains only the first-reading text, so it does not show whether any later amendments were proposed or adopted.
- A local government could build, own or operate a clean energy facility itself, or establish a corporation—or acquire or hold shares in one—to build or operate a facility.
- A local government or its corporation could use the electricity for its own purposes, sell it as allowed under the Electricity Act, or sell environmental attributes (defined in a regulation under that Act). It could not distribute the electricity or provide it as a service to residents.
- Local governments could acquire certain nearby land and make cost-sharing or joint-ownership agreements with other local governments, band councils, the Crown or any other person.
- A local government using these powers would have to pass a council resolution stating its intention. A regional service commission could exercise some delegated powers, but only through a by-law and with the commission’s agreement.
- Corporations could operate for profit. Any profits a local government receives would have to go to its general operating fund and be used solely for municipal purposes. The bill also adds corporation details—including profits paid to the local government—to information required under an existing regulation.
What it means for you#
- Local governments: They would have new options for owning or supporting clean energy projects, including through corporations and partnerships. The bill does not require any local government to take these steps.
- Residents: A local government or its corporation could not provide the electricity as a service to residents. The bill does not set out whether, or how, residents could buy electricity sold under the Electricity Act.
- Band councils and other potential partners: They could enter into agreements with local governments for shared costs or joint work. The bill does not require a local government to seek such an agreement.
- Regional service commissions: They could take on certain delegated powers, including some borrowing powers. For construction borrowing by a commission, the bill applies a rule treating each delegating local government as guarantor.
- Current-law comparison: The Local Governance Act itself was not supplied, so the existing powers and the exact extent of the change cannot be verified. The bill replaces or changes existing provisions, rather than providing a full account of what is already allowed.
Money#
No cost estimate or funding amount is provided in the supplied material.
- Local governments could share construction and operating costs with partners, and could borrow for some project costs.
- For facilities under the local-government route, operating budgets would have to balance over either one year or four years. Temporary borrowing for operating costs would be capped at 50% of that year’s budgeted revenue.
- The bill says those budget and borrowing provisions would not apply to a local government’s facility under the corporation route. It does not give an estimate of financial risks or returns.
- A local government would have to use any profits it receives from a corporation solely for municipal purposes. The bill does not require the corporation to pay all its profits to the local government.
What is unclear#
- The supplied material does not define which energy sources count as “clean”; it points to a definition in the Electricity Act, which was not supplied.
- The bill does not set out project approval, public consultation, review, appeal or reporting procedures beyond the added corporation information in the regulation.
- It is unclear how the new powers would interact with existing local-government energy projects or other programs.
- The bill does not specify what financial oversight would apply to corporations, or how a local government would assess project risks.
- No amendment documents or later bill version were supplied, so changes after first reading and whether any amendments were adopted cannot be verified.
Case for#
- The bill appears intended to give local governments more ways to take part in clean energy projects, including through corporations and partnerships.
- A possible argument for the corporate option is that it would allow a project to operate for profit while directing any profits received by the local government to municipal purposes.
- Shared projects could let local governments work with band councils, the Crown or other partners and share costs.
Case against#
- One concern is that the corporation route would be exempt from several rules that apply to facilities operated directly by a local government, including the stated operating-budget and temporary-borrowing limits.
- The bill permits agreements with “any other person” but does not set out selection rules or other safeguards for those agreements.
- It is unclear what financial oversight, public input or project review would apply, and the bill provides no cost estimate.