June 9, 1998
To: Urban Environment and Development Committee
From: H.W.O. Doyle
Subject: Vital Services By-law
Purpose:
The purpose of this report is to review the potential
implications of the motion set out below, to provide information
with respect to the authority of City Council to enact a vital
services by-law, and to explain the limitations on that
authority.
Funding Sources, Financial Implications and Impact
Statement:
There will be costs associated with the implementation of
programs pursuant to a "vital services by-law", should
Council choose to enact such a by-law. In the former City of
Toronto, a similar program was in place pursuant to the former
Citys special legislation. The Budget Committee has
recommended discontinuing that program.
Recommendations:
It is recommended that this report be received for
information.
Council Reference/Background/History:
At its meeting of May 13 and 14, 1998, City Council referred
the following motion to the Urban Environment and Development
Committee for its consideration:
WHEREAS the Budget Committee accepted the proposal of
the Commissioner of Urban Planning and Development to discontinue
the program previously delivered only in the former City of
Toronto, which paid on behalf of property owners and collected
utility payments in like manner as realty property taxes when
such utilities had been discontinued to tenanted properties,
under the authority of Section 6 of the City of Toronto Act,
1936(which applied only in the former City of Toronto); and
WHEREAS it is anticipated that the legislative
authority for this program will be repealed or superseded by the
Provincial Government in the spring of 1998; and
WHEREAS it is desirable to ensure regulations are in
place that are applicable to the whole of the new City of
Toronto; and
WHEREAS Bill 104, The Vital Services Act,
authorizes Municipalities to pass By-laws requiring Vital
Services Utilities to adopt a similar program;
NOW THEREFORE BE IT RESOLVED THAT the City Solicitor be
requested to draft a By-law in accordance with Bill 104 to be
presented to the Urban Environment and Development Committee for
consideration;
AND BE IT RESOLVED THAT City Council communicate with
the Citys vital services utility providers requesting their
cooperation in continuing this service under the authority of and
as would be required by the By-law proposed in resolution No.
(1);
AND BE IT FURTHER RESOLVED THAT the appropriate staff
initiate discussions with the Citys vital services utility
providers to share information regarding the operational aspects
of the former City of Torontos utility restoration program.
Comments and/or Discussion and/or Justification:
The motion set out above, proposes that the City enact a
by-law requiring providers of vital services to adopt a program
whereby the service providers would continue to provide services
to tenanted properties despite the landlords failure to
make utility payments. City Council, however, lacks the authority
to enact such a by-law. Council may require utility companies to
give 30 days notice of the intention to discontinue service for
non-payment; however, after the 30 day period has elapsed,
Council cannot require continuation of the service without
payment to the utility company.
The motion refers to "Bill 104, The Vital Services
Act", which appears to be a reference to the Citys
power, under s. 210.2 of the Municipal Act, to enact a
vital services by-law. There is not actually a statute entitled
"The Vital Services Act". Section 210.2 of the Municipal
Act was added to the Municipal Act in 1994 when the
Legislature passed the Municipal Amendment Act (Vital
Services), 1994, which was Bill 104 when it was introduced.
Section 210.2 will be replaced on June 17, 1998, when the Tenant
Protection Act (the "TPA"), comes into force.
Sections 145 to 153 of the Tenant Protection Act provide
authority that is essentially the same as that currently provided
in s. 210.2 of the Municipal Act. City Councils
authority to enact a vital services by-law will not be changed by
the TPA.
The TPA defines "vital service" as "fuel,
hydro, gas or hot or cold water", and provides that a
"vital services by-law" is a by-law passed pursuant to
s. 146 of the TPA. Section 146 of the TPA provides that a vital
services by-law may require landlords to provide adequate and
suitable vital services to the rental units. A vital services
by-law may require the supplier of a vital service to notify the
municipality if the vital service is to be discontinued for the
reason that the landlord has breached a contract with the
supplier (i.e. failure to make utility payments). At least 30
days notice is required.
The municipality may then arrange for the service to be
provided. The municipality would do this by paying for the
service and then attempting to recover the amount paid plus
administrative costs. Accordingly, the municipality is authorized
to register a lien against the property for the amount, and to
direct the tenant to pay any or all of the rent for the unit to
the municipality. The payment by the tenant is not to be treated
as a default of the obligation to pay rent to the landlord.
Naturally, such provisions do not apply where the tenant has
agreed to maintain the vital services.
There will be administrative costs to the City of
administering a program pursuant to a vital services by-law, and
there may also be some difficulty in recovering all of the money
paid by the City to the utility companies. It is my understanding
that funds have not been budgeted for the administration of a
vital services program by the City.
Pursuant to special legislation, the former City of Toronto
had a program somewhat similar to that which would be permitted
pursuant to a vital services by-law. The Budget Committee has
recommended discontinuation of the program. The other former
municipalities within the urban area that is currently the City
of Toronto had the ability to enact such a by-law, but none of
them enacted one.
Should Council choose not to enact a vital services by-law,
tenants will still have some recourse against landlords who fail
to provide an adequate supply of a vital service. The TPA will
prohibit landlords from withholding a "reasonable supply of
any vital service ... that it is the landlords obligation
to supply under the tenancy agreement". Tenants may apply to
the Ontario Rental Housing Tribunal should the landlord breach
this provision. The Tribunal can provide a range of relief
including an abatement of rent. In addition, I am informed by
staff of the Municipal Standards Division that existing municipal
standards by-laws address the provision of vital services.
Conclusions:
While City Council can enact a vital services by-law, it
cannot require suppliers of a vital service to provide the
service beyond the 30 day notice period or to adopt a program
similar to that which was in place in the former City of Toronto.
Contact Name:
Wendy Walberg
(392-8078)
H.W.O. Doyle
City Solicitor
Legal Services