Community leaders in Baddeck are considering whether the 112-year-old village in Cape Breton has a long-term future on its own.
Village commissioners say the COVID-19 pandemic is taking a huge bite out of the tourism industry and that will hurt the resort community's revenues.
Two weeks ago at what was billed as a "state of the union" meeting with village leaders, Victoria County councillors and staff from the Department of Municipal Affairs, Baddeck commission chairperson Brian Morrison said the cost of providing sewer and water services are getting overwhelming.
The aging infrastructure is costing a lot and the commission is facing the need for higher taxes and fees, he said.
"This has been bantered around for the last two years or so and I think it is time to make a decision, because we're in a situation with COVID that you can't keep operating, spending money with limited resources coming back in," Morrison said.
"We are one disaster away from not being able to handle a situation. It's a lot for the village to carry."
During the video conference, which was posted to the village's Facebook page, commissioner Bill Marchant said change is inevitable.
"My personal opinion is that we need to pursue a partnership with the county or the dissolution of the village," he said.
Mark Peck, executive director of policy, planning and advisory services with the Department of Municipal Affairs, said the province did a risk analysis for the village and presented it to commissioners already.
He said the village's finances are not good.
"The matter of fact is the village is not equipped to deal with the risks and this is in no way meant to be any disrespect to anybody," Peck said.
"The reality is municipal government has changed in Nova Scotia over the last decade. It's going to continue to change and the challenges that are going to be faced by the village are still going to continue."
The province has concerns with Baddeck's financial capacity, but it's not up to Municipal Affairs to provide direction, he said.
If the village commissioners decide they want to carry on and simply raises taxes, or want help weighing the options and modelling future financial scenarios, the province will support that, said Peck.
In an interview, Morrison said it's difficult to determine exactly how bad this year's finances will be.
"This is uncharted territory for us," he said. "We've never run into this before."
During the meeting two weeks ago, the commission was urged to alert residents as soon as possible about the options facing the community.
Morrison told CBC News that is expected to happen later this week.
"We're still in the discussion process and that dialogue is ongoing," he said.
In an interview, Victoria County Warden Bruce Morrison, the village chairperson's brother, said any change in governance is up to the village, not the county or the province.
Once the village decides what to do, then the county can look at the possible impact on its taxpayers, he said.
Neither municipality will know how bad its finances are until after taxes come due in September, he said.
"It'll be interesting to see what happens with the collection of taxes, because that will tell the true story about what the state of our communities are in," the warden said.
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