ONTARIO'S PROPOSED NEW MUNICIPAL ACT
By: Quinto
M. Annibale
Introduction
For municipal law practitioners, these are indeed heady times. We may have thought that the onslaught of legislative changes which inundated us over the last three or four years were truly remarkable: two major revisions to the Planning Act, major revisions to the Development Charges Act, significant changes to the Municipal Act, a new Assessment Act, wholesale changes to the way provincial offences enforcement services are delivered and a new approach to fire protection services, to name a few. Arguably however, these changes will pale by comparison to the effect that the province’s proposal to enact a new Municipal Act for Ontario will have on the day to day functioning of municipal government. For the municipal law practitioner, the changes will be truly remarkable.
The current Municipal Act finds its origins in the Baldwin Act of 1849. It has served as the "constitution" of municipal law for the better part of 150 years. It has defined, sometimes in painstaking detail, the extent of municipal government and administrative authority in Ontario during that time.
By comparison, the current government initiative finds its origins in the creation of the "Advisory Group on Municipal Government Reform" in October of 1995 (the "Hardeman Committee"), which was created by the Harris government to make recommendations to the government as it sought "to make meaningful reform to municipal structure and to legislation regulating municipalities". The Committee was instructed to report back to the government in time to permit the enactment of a new Municipal Act by the fall of 1996 and well in time for the 1997 municipal election. The work of the Hardeman Committee was subsumed into the mandate of the now famous "Who Does What" panel in May of 1996 and the recommendations of that panel led to the release of a Consultation Document on the new Act on March 10, 1997.
The Process
The Consultation Document was circulated upon its release and stakeholders were given until May 9, 1997 to respond. Many groups, including AMO, the CBAO and individual municipal councils submitted briefs to the Ministry of Municipal Affairs and Housing. The extremely peculiar aspect of the Consultation Document is that it is accompanied by a draft of the "core" parts of the new Act only. In other words, input has been sought from stakeholders, without the entire draft Act being available for comment or input. More peculiar still was the province’s proposal to introduce the full bill for first reading without any additional opportunity for comment or review.
Most of the major submissions made to Municipal Affairs pointed out these flaws in the process. How could meaningful input on legislation this important be expected without a release of the entire draft Act?
As a result, the government apparently has again revised its timetable for introduction of a new Act into the legislature. At the time of writing, word from the Ministry was that it will release draft legislation (the whole Act) for comment over the summer followed by an as of yet undetermined period of public comment. The province is aiming for introduction of a bill for first reading in the early fall, with a view to still having the legislation in place by January, 1998.
This process should be contrasted to the experience in Alberta (which is held up as the model for the Ontario legislation). The legislation which pre-dated the Municipal Government Act of Alberta (the "MGA") was enacted in 1967. In the 1986 Speech from the Throne, the Alberta government of the day committed itself to a review of the existing MGA and related legislation. In 1987, the government established the Municipal Statutes Review Committee, which embarked on a seven year process, culminating in the enactment of the MGA in 1994 (almost ten years in the making). In Ontario, the task will have been undertaken in two years (if the current timetable is met).
Major Changes and Implications for the Practice of Municipal Law
The existing Ontario Municipal Act is prescriptive in nature, meaning that it prescribes, in great detail, each of the powers of a municipality. This is because constitutionally, municipalities are creatures of the province, created by statute. As such, they have only those powers which are expressly granted to them or which can necessarily be implied or are necessarily incidental to the express grant of power or authority. This has resulted in the mushrooming of municipally related legislation over the years: 150 separate pieces of legislation taking up over 1400 pages in the provincial statutes.
The proposed new Act intends to change the approach and philosophy of municipal legislation. The intention as set out in the Consultation Document and the draft of the core sections is to eliminate the necessity of individual prescriptive grants of power. Instead, it adopts the concepts of "natural person powers", "governmental powers" and "areas of authority" (called "spheres of jurisdiction" in the MGA) as the Province of Alberta did in the MGA.
Section 4 of the proposed Act provides that a municipality may exercise authority conferred on it by another provision of the Act or another Act as if it had the capacity, rights, powers and privileges of a natural person, except where the exercise of the authority will result in a conflict with provincial or federal powers or authority. In theory, this means that municipalities should be able to hire and fire employees, provide employee benefits, delegate administrative responsibilities to staff, contract for services, enter into agreements, purchase and dispose of real estate and assets, make investments and borrow money, all without the necessity of identifying a specific power to do so.
Since natural persons do not have the power to make laws, it was necessary to give municipal corporations the ability to legislate, or more broadly stated, the ability to exercise "governmental powers" as well. Thus, Sections 5 and 8 detail a municipality’s power to regulate, prohibit, license, tax and expropriate, all by by-law, as well as the ability to enforce by-laws of the municipality.
Section 8 of the legislation limits this broad grant of authority by restricting the by-law making power to those general areas described as "areas of authority". These "areas of authority" are, for the most part, enumerated in Section 6 of the draft. These areas include: the health, safety, protection and well being of people, public utilities, public highways, the natural environment and economic development. There are 13 "areas of authority".
In addition to these major structural and philosophical changes, the proposed new Act will also incorporate many of the recent changes made to the existing Municipal Act, such as the new electoral rules, the municipal restructuring provisions, user fees and licensing powers.
For those practising in the municipal law field, the changes will be profound. Of greatest significance will be the elimination of a large body of municipal jurisprudence upon which municipal practitioners have come to rely. A large part of the common law related to municipal law is based on the premise that in order for a municipality to act, a specific statutory provision must first be found. These cases will now be of limited applicability, even in situations where the statutory provision has been carried forward, because of the new concepts grafted on to the old powers. Great care will have to be taken in applying the vast body of municipal jurisprudence which has developed over the last century and a half.
As well, proposed as part of the Consultation Document is the eventual repeal of all existing special legislation. Therefore, the special legislation route will no longer be available or will be severely curtailed. Hopefully, this will be offset by the intended objective that the new Act will give municipalities greater flexibility in the exercise of its powers. The three concepts of "natural person powers", "governmental powers" and "areas of authority", if drafted properly, should give municipalities that authority. This should make the municipal solicitor’s task easier in terms of finding the authority for the things that their council’s want to do.
What will become more difficult is determining where the new lines are to be drawn. Just how flexible are the new powers? Just how far will the new powers allow a council to go? These are the new hard questions that will be put to municipal solicitors. Where previously a specific power needed to be found before municipalities could act, now municipal solicitors will be faced with the daunting task of determining whether a particular action is permitted by a very broad grant of authority.
Another more practical result of the broader grants of power inevitably will be that municipalities will be pressured to act, regulate or legislate in areas which historically they have not had the legal competence to do so. This will be especially true for those municipalities that view themselves as more progressive philosophically. It was a very convenient excuse for many councils, in the face of demand for action to say that "the province hasn’t given us that power". Those days may be gone.
If the proposed new Act is passed, litigation involving municipalities should proliferate in the short and medium terms. It will be some time until a body of law develops defining what the limits of the new powers are. I would expect that even in the long term, the new Act will result in more municipal litigation, centered I believe, on the interpretation of the three core concepts of the proposed new Act: "natural person powers", "governmental authority" and "areas of jurisdiction". It will take the courts a long time to flesh out the extent of the new powers and exactly how the new approach will function. Having said this however, it should be noted that the experience in Alberta has been quite the opposite (in the short term at least). Surprisingly, very few cases were decided in Alberta in the two years following the enactment of the MGA which involved an interpretation or application of the new core powers.
One of the most interesting questions which no doubt will have to be answered by solicitors (and ultimately the courts) is how the "health, safety and protection" area of authority will be defined. A similar provision exists under the current Act (Section 102) and the courts have narrowed its meaning almost to the point where it is meaningless. It will be interesting to see if the courts, in taking a fresh look at this provision, give it a more expansive or remedial interpretation in keeping with the philosophy or approach of the new Act.
Strengths and Weaknesses of the Proposed New Act
The time frame leading up to the Consultation Document has been quite compact to say the least, especially when one considers the importance of and the potential impact that the proposed changes will have. As well, the opportunity for public or stakeholder input has been quite limited, especially in light of all of the other legislative changes being made concurrently. As a result, the proposed draft legislation (the core parts), in my opinion, contains several weaknesses, which in most cases are a result of approach rather than drafting. Some of the weaknesses of the proposed new Act are:
1. The province has perhaps over-reached in defining what limitations should be put on municipal powers in areas where a provincial or federal interest can be identified. The range of provincial (and federal) acts or actions which will be deemed to have paramountcy over municipal by-laws or actions have actually been expanded. This is inconsistent with the province’s stated goal of giving municipalities greater flexibility and empowering them to deal with changing times.
2. In many instances, the proposed Act continues (or appears that it will) to define specific municipal authority. This occurs mostly in areas where the province has recently amended the Act and wants to carry the power forward. With properly drafted natural person powers, governmental powers and areas of authority, such further specific grants are unnecessary.
3. The grant of natural person powers stops short of an actual grant of natural person powers. Section 4 of the proposed Act uses the words "as if it had the capacity, rights...". Why did the drafters not simply say "A municipality has natural person powers" as the MGA does? This hesitant wording may give the courts pause or the distinction may result in a restrictive interpretation of the natural person powers.
The section also requires that a specific authority be found either in the new Act or another Act as a precondition to exercising these natural person powers. This may restrict the use of natural person powers which was not the intention. By contrast, the MGA imposes no such restriction.
4. The transition/interpretation provisions are clumsy and are unclear as to how they will apply. As an example, subsection 5(1)(b) purports to carry forward "municipal powers" which existed prior to the coming into force of the new Act (as an aid to interpreting the Sections 4, 6 and 7 powers). It is unclear whether this includes common law powers, all statutory powers, special Acts and the statutory procedural protections which accompany each.
5. The province has missed the opportunity to clean up and make more manageable and understandable the open meeting provisions of the current Act (the Consultation Document indicates that the current provisions will be carried forward). The current provisions make determining what is and is not a "meeting" quite difficult. Many American jurisdictions (such as Michigan) which have extensive experience with "Sunshine Laws" have been able to draft coherent, understandable provisions defining what is and is not a "meeting", which have withstood judicial scrutiny.
6. The restriction on a municipality’s ability to create or hold shares in a publicly held corporation will severely limit a municipality’s ability or flexibility to participate in public/private joint ventures or in economic development initiatives. This may limit the ability to participate in alternative service delivery initiatives or to respond to change (again, one of the goals of the province in making these changes). Related to this are the restrictions on a municipality’s ability to participate in commercial activities. This provision is overly restrictive.
7. The MGA provides "cross authority" between the exercise of natural person powers and area of authorities, giving the municipality the ability to exercise "natural person powers", even if the matter could be dealt with by way of an "area of authority" by-law. The proposed new Act does not do this.
8. The procedural safeguards (such as notice, appeal, legal non-conforming, hearings, etc.) which are a condition procedure or subsequent to certain by-law making powers under the existing Act do not appear to have been carried forward.
9. It is unclear what the future of parking authorities, utility commissions, economic development corporations, housing authorities, etcetera will be.
The strengths of the proposed new Act are as follows:
1. If properly drafted, the concepts of "natural person powers", "governmental powers" and "areas of authority" will greatly expand a municipality's ability to govern and react to changing times. The prescriptive powers model of granting authority is outdated and badly in need of replacement. There is no question that broader grants of authority will significantly increase flexibility.
2. A new Act should eliminate the need for constant amendments to the Municipal Act and should curtail substantially requests for special legislation.
3. Expanded powers to act should lead to greater local autonomy and greater political accountability.
While the proposed new Act will not take municipalities all the way to a "plenary powers" approach nor to a "constitutional entrenchment", it will result in a much less restrictive legislative regime within which to work. Given the extent and breadth of the proposed changes however, it is quite important for the province to get it right. The proposed new Act will benefit greatly from further public comment and the process should not be rushed to meet an arbitrary January 1, 1998 deadline.
or
Public Liability Law
Municipal Law
Environmental Law
Labour and Employment Law
