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WHEREAS it is anticipated that the legislative authority for this program will be repealed or
superseded by the Provincial Government in the spring of 1998; and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