April 30, 1998
To:Emergency and Protective Services Committee
From:H.W.O. Doyle
City Solicitor
Subject:Accident Towing - Regulation of Collision Reporting Centres
Purpose:
The purpose of this report is to respond to recommendation No. 6 of the former Metropolitan Council, adopted at its
meeting of December 10 and 18, 1997, amending Clause No. 1 of Report No. 13 of its Human Services Committee.
Funding Sources, Financial Implications and Impact Statement:
Not applicable.
Recommendations:
It is recommended that section 15 of Part 6 to Schedule 24 of By-law No. 20-85 of the former Municipality of
Metropolitan Toronto not be amended as proposed in the motion discussed in this report.
Council Reference/Background/History:
At its meeting of December 10 and 18, 1997, the former Metropolitan Council adopted, with amendments, Clause No. 1 of
Report No. 13 of the Human Services Committee. Metropolitan Council amended this Clause by referring a motion to me
that section 15, of Part 6 of Schedule 24 to By-law No. 20-85 of the former Municipality of Metropolitan Toronto, as set
out below, added to the by-law by the enactment of By-law No. 168-97 of the former Municipality of Metropolitan
Toronto, be amended to provide that the statement reads as follows:
AIt is expressly forbidden for any employee or official of a Collision Reporting Centre or a representative of an insurance
company on the premises, to recommend verbally or by telephone, computer or other electronic medium, a body shop or
automotive repair facility.@
Comments and/or Discussion and/or Justification:
Section 15 of Part 6 to Schedule 24 to By-law No. 20-85 of the former Municipality of Metropolitan Toronto currently
reads as follows:
15.(1)Every owner and operator shall display and maintain at least three signs in conspicuous places at the licensed
premises stating the following : AIt is expressly forbidden for any employee or official of Collision Reporting Centre or a
representative of an insurance company on the premises to recommend a body shop or automotive repair facility@.
As stated in my report dated May 5, 1997 to the former Metropolitan Council, my report dated July 16, 1997 to the former
Metropolitan Toronto Special Purpose Committee on Towing Rates and my department=s report dated June 17, 1997 to the
Special Purpose Committee on Towing Rates, it is my opinion that City Council lacks the legal authority, for the reasons
set out below, to enact by-laws to directly or indirectly regulate insurance companies. Accordingly, I do not recommend
that the motion referred to me be adopted by City Council.
(i)The Law
By section 257.2 of the Municipal Act, added to the Act by the Savings and Restructuring Act, City Council may pass
by-laws for the licensing, regulating and governing of any business carried on in the City of Toronto. Subject to specific
exclusions which are not relevant for the purposes of this report, "business" is defined in section 257.1 of the Act to include
a "trade, business or occupation".
Where a by-law enacted pursuant to a general statutory delegation of authority deals with a subject matter which is dealt
with in a comprehensive way in a provincial statute, courts have held such by-laws to be ultra vires the municipality. For
example, in the case of Superior Propane v. York (City), (1995) 23 O.R. (3d) 161, the Court of Appeal for Ontario
considered a by-law of the former City of York passed under the general authority delegated to the City by the Planning
Act. This by-law purported to regulate the storage and distribution of propane in the municipality. The Court declared the
by-law ultra vires the municipality on the basis that "the Energy Act, R.S.O. 1980, c. 139, and the regulation enacted under
it contain a comprehensive scheme to regulate propane dispensing, installation, handling and storage and that these matters
are not subject to legislative authority by municipalities."
(ii)Discussion
While insurance companies could be considered to be "businesses" as defined by section 257.1 of the Municipal Act, they
are regulated by the provisions of the Insurance Act. This provincial legislation constitutes a comprehensive code of
regulation of insurance companies. It is my opinion that as the field of regulation of insurance companies is fully occupied
by the provincial legislature by the provisions of the Insurance Act, City Council lacks the authority to regulate insurance
companies under its general authority to pass by-laws for the licensing, regulating and governing of businesses.
Accordingly, it is my opinion that section 15 of Part 6 to Schedule 24 of By-law No. 20-85, as it currently reads, exceeds
the authority of City Council as it is a direct regulation of the manner in which the insurance business is conducted. This
regulation interferes with and restricts the ability of insurance companies to communicate with and to provide information
to persons with whom they have contracts of insurance. In my opinion, amending this regulation by forbidding
communication by telephone, computer or other electronic medium broadens the scope of this regulation such that it would
clearly apply to insurance personnel who are not physically present at the premises of a Collision Reporting Centre.
Accordingly, it is my opinion that City Council lacks the authority to enact such regulations.
Conclusions:
It is recommended that section 15 of Part 6 to Schedule 24 of By-law No. 20-85 of the former Municipality of
Metropolitan Toronto not be amended as proposed in the motion discussed in this report.
Contact Name
Ansuya Pachai
392-9074
H.W.O. Doyle
City Solicitor
