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 City's 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WHEREAS it is anticipated that the legislative authority for this program will be repealed
or superseded by the Provincial Government in the spring of 1998; and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 City's 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 City's vital services utility providers to share information regarding the operational
aspects of the former City of Toronto's 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 landlord's 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 City's 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
Council's 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 landlord's 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
