Two P.E.I. communities say dissolving their status as municipalities is the only way forward.
In its proposal to dissolve, delivered to the Island Regulatory and Appeals Commission, the municipality of St. Louis says that it is "no longer financially feasible" to stay a municipality without a tax increase for the population.
St. Louis, located in western P.E.I., has an estimated population of 75.
Darlington, a Queens County community of about 100 people, put forward a proposal to dissolve a year ago, according to officials there.
The proposal shows funding and the rules set out by the Municipal Government Act were the issues.
The Municipal Government Act came into effect in 2017, replacing a patchwork of legislation governing the affairs of Island municipalities introduced in the 1980s. Work on updating those laws began in 2004.
Changes included new rules about audits of financial statements, and standardized requirements for freedom of information and emergency management.
No one at either of the municipalities wanted to do an interview on the subject.
A 'disheartening' move
The Federation of Prince Edward Island Municipalities said this only adds to the unincorporated area in the province.
"It's disheartening to learn that any municipal council is put in a position that they consider that dissolution is the best option," said Bruce MacDougall, president of the federation.
Right now, P.E.I. has 59 municipalities and covers only 37 per cent of the Island, MacDougall said.
By comparison, in Nova Scotia there are 49 municipalities covering the entire province.
He said municipalities need to be funded to a point where they can provide services for the residents, and that a new act was needed for a variety of reasons.
"This is a can that's been kicked down the road a long time," he said.
MacDougall said the previous rules that had been in place were drawn up in the 1800s "when kids were walking to school."
More finances needed to make act viable
"We needed a new MGA to bring transparency to all those other things, open meetings, just clarity about all those things," he said.
"It's alright to put the MGA in place, but you need to put the finances behind it to make municipalities viable."
MacDougall said there have been changes to the act to allow for small municipalities to reach out to neighbouring municipalities to share services.
He said a lot of municipalities can't apply for projects that share funding with the federal government because they can't even pay for their portion.
"We are asking the province to create tax room," he said.
"Where the province collects the dollar, instead of keeping all that dollar, we need them to share that portion of the dollar with municipalities so they have capacity to do things."
Anyone in St. Louis who wants to comment on the proposal through IRAC has to do so before Jan. 22.