The Local Government Performance Index (LGPI) aims to make data on the performance of Canada’s municipalities available in one, easily accessible location so that members of the public, media, and government can better understand how municipalities are performing in comparison to each other.

The hope of the LGPI is that this ease of access to data will help everyone involved in local government to identify best practices and areas for improvement in both actual performance and the way performance is reported on.

The LGPI has been published annually since 2007.  While previous reports were prepared and published within the Frontier Centre for Public Policy, the LGPI is now a living database where anybody can register and examine the data, challenge it, and even add to or change it if they are able to provide a source.

This new methodology is intended to engage more minds in the measurement and pursuit of better local government, resulting in more data for more cities and greater transparency in the way that the data is provided.

The Local Government Performance Index is a project of the Frontier Centre for Public Policy which is made possible by generous donations from the Lotte and John Hecht Memorial Foundation and the Aurea Foundation.

Why Measuring Local Government Matters

While they rarely command the level of nationwide attention that federal or provincial governments do, and many of their activities are literally underground, municipalities are just as important as other levels of government. According to earlier editions of the Local Government Performance Index, municipal government revenues and expenditures equate to six per cent of household income. Meanwhile, the average municipality manages approximately $18,000 of capital assets on behalf of the average household in its jurisdiction. That is easily the second largest “asset” connected to many households behind their houses.

Yet there are vast differences in the performance of local governments. Some manage to operate with zero long-term debt while others spend hundreds of dollars per household per year on maintaining the debt they are carrying. Some have budgets three times larger than others on a per household basis, yet appear to offer similar standards of living. Some report on their performance in great detail while others struggle to meet the basic requirements of their auditors.

The importance of local government combined with the apparent variations in performance suggest that there is significant scope to improve the entire Canadian economy and lifestyle by having all municipal governments performing as well as the best. However, it is necessary to properly understand the differences first, and the LGPI is designed to be a resource for that task.

What the Local Government Performance Index Measures

The LGPI is a measure of municipalities’ financial statistics (e.g. how much tax, expenditure on public safety, debt, etc.), and the quality of their reporting. It does not assess the results of output reporting (e.g. percentage of water leaked from reticulation system or average response time to 911 calls) directly, because this type of reporting is too sparse to make useful comparisons of service delivery performance.

However, it does assess the quality of reporting in the annual financial statements (for example, is a schedule listing tangible capital assets included?). The hope in reporting on the quality of disclosure is that revealing where the “edges of the shadows” are will encourage municipalities to illuminate their service delivery performance by reporting more data.

A full list of measures can be seen by looking at the report for any individual city in the “Browse Cities” section.

A Participatory Index

From 2007-2009, the Local Government Performance Index was published as a traditional index prepared by staff of the Frontier Centre. While these indexes were widely covered in the media and many people expressed that they found the index valuable, there were several areas where the traditional index model might be improved upon.

  • We couldn’t keep up with demand for more cities to be added. We had only enough resources to process data for the 100 most populous Census Metropolitan Areas (CMA’s) or municipal jurisdictions, but we received a number of emails from people in smaller municipalities asking why their municipality could not be covered. The participatory model means that theoretically every Canadian municipality could be entered, although initially the database is configured for only the largest 250.
  • The accuracy of our findings was inevitably disputed after publication. While we made every possible effort to interpret and represent the financial data of Canadian municipalities as accurately as possible with the data being double-checked and the overwhelming majority of it turning out to be accurate, there would always be disagreement. Taking inspiration from the advent of beta-testing, where volunteers test software before it is officially released, and Wikipedia, which has been found to be almost as accurate as Encyclopaedia Britannica yet faster to self-correct, we decided that a participatory approach might improve accuracy. Now, instead of just a few peoples’ judgement, any interested party can access the back end of the LGPI database and add, edit, challenge, or comment on any figure in the LGPI.

While no system of data assembly is perfect, we believe that this “wisdom of crowds” approach will give better results than traditional indexes.

What the LGPI Assumes

Like all projects, the LGPI is based on some key assumptions:

  • Municipal information should be online and in the Annual Report and/or Audited Financial Statements. Municipalities will sometimes claim that further information is available “upon request” or in documents that are online but separate to the Audited Financial Statements. The LGPI assumes that voters should be able to monitor their municipal government with minimal effort, and this means that they should be able to consult an annual report for the financial information they need in order to gain a proper understanding of how their government is performing.
  • The scale of a city should be proportional to the number of households. In order to compare very large municipalities like Toronto to very small ones like Moose Jaw, it is necessary to make some form of context adjustment. One possibility is the population, however while this might be proportional for a provincial government that provides human based services, many of the services provided by a municipality as well as much of the revenue collection is actually related to the number of dwellings. For this reason, the raw figures from the Financial Statements are divided by the number of dwellings reported by Statistics Canada.