Proposed New Municipal Act - Ministry of Municipal Affairs

and Housing Consultation Document

 The Strategic Policies and Priorities Committee recommends the adoption of the following joint report (March 31, 1998) from the City Solicitor and the Chief Administrative Officer:

 Recommendations:

 It is recommended that:

 (1)City Council endorse the recommended modifications to the Ministry of Municipal Affairs and Housing=s proposed new Municipal Act, which are set out at Appendix AII@ to this report; and

 (2)this report be forwarded to the Ministry of Municipal Affairs and Housing, for consideration, and circulated to the GTA Mayors and Regional Chairs, other regional governments, and to the Association of Municipalities of Ontario, for information.

 Council Reference/Background/History:

 On March 10, 1997, the Ministry of Municipal Affairs and Housing released a consultation document setting out a proposed legislative framework for a new Municipal Act. Municipalities were invited to review the document and submit commentary by May 9, 1997. Since very little of the proposed framework had been reduced to statutory language, municipalities, in submitting their comments, also sought the opportunity to review the proposed statute once drafting was complete.

 On February 11, 1998, a more substantial consultation document, consisting of a policy outline and a 408 section draft statute, was released. Municipalities have been requested to submit their comments on this version of the document by May 8, 1998. This report summarizes those aspects of the proposed Act which are thought to be significant from the City of Toronto=s perspective, and lists at Appendix AII@ a series of suggested amendments.

 It should be noted at the outset that the document being commented upon is not intended to become the first reading version of the new Act. Discussions are ongoing with Ministry of Municipal Affairs and Housing staff, and recommendations of a technical nature have already been submitted. Likewise, the Ministry may make amendments on its own initiative, having engaged in consultation with affected groups. There will also be companion amendments to other statutes, the details of which have not yet been made available.

 Overview:

 The Proposed New Municipal Act would be divided into 19 Parts, namely:

 Part IGeneralPart XITax Collection

Part IIMunicipal PowersPart XIISale of Land for Tax Arrears

Part III Business LicensingPart XIIIFees and Charges

Part IVMiscellaneous PowersPart XIVDebt and Investment

Part VTransfer of PowersPart XVEnforcement

Part VIMunicipal RestructuringPart XVIMunicipal Liability

Part VIIMunicipal CouncilsPart XVIIRegulations

Part VIIIPractices and ProceduresPart XVIII Transition

Part IXFinancial AdministrationPart XIXRepeals

Part XMunicipal Taxation

 As was anticipated in March of last year, the proposed Act will incorporate many of the significant changes made to municipal statutory law in recent years, including recent amendments to the existing Municipal Act made through the enactment of Bills 26 (Savings and Restructuring Act) and 86 (Better Local Government Act), and the `Fair Municipal Finance Acts=. Other statutes which will be incorporated into the new Act include the Community Recreation Centres Act, the Ferries Act, the Municipal Elections Act, the Local Improvement Act, the Municipal Boundary Negotiations Act, the Municipal Interest and Discount Rates Act, the Municipal Tax Sales Act, the Ontario Municipal Support Grants Act, the Public Parks Act, much of the Public Transportation and Highway Improvement Act, the Snow Roads and Fences Act, the Telephone Act, the Regional Municipalities Act, plus numerous statutes or portions thereof which pertain to specific municipalities and regions.

 Attached at Appendix AI@ to this report is a point-form summary of many of the significant aspects of the proposed legislation from the perspective of a single-tier municipality such as the City of Toronto. For the most-part, the summary is restricted to new features and does not speak to the most recent amendments to the existing Act.

 Municipal Forms, Responsibilities:

 The proposed Act substitutes Alower-tier municipality@, Aupper-tier municipality@ and Asingle-tier municipality@ for the current method of categorizing regional municipalities, cities, towns, counties, etc., although municipalities will have discretion in how they describe themselves. The City of Toronto would be considered a single-tier municipality, and as such would be entitled to exercise all of the general municipal powers which the Act provides. In the case of other municipalities, the proposed Act would allocate powers amongst lower and upper tiers, and provide for a mechanism to transfer most of those powers. Municipal restructuring, and the allocation and transfer of powers, is beyond the scope of this report.

 The proposed Act will provide that councils will have broad discretion to determine their own procedures and arrangements. Municipal councils would therefore have broad discretion to arrange their committee structures and configure their procedural by-laws. Many of the current statutory notice provisions will be removed from the Act and replaced with a requirement that councils establish and adhere to policies governing how they will consult with the public, and in what manner council will give notice to the public concerning the various matters which come before it.

 The proposed Act, however, will not empower municipalities to establish new bodies corporate such as local boards.

 With the exception of the Clerk and Treasurer, the new Act will not mandate particular municipal staff positions, but will set out the administrative duties and responsibilities of the municipality (as outlined above). This would leave a council with broad authority to determine what staff positions it requires and to appoint such staff.

 Municipal Powers:

 The proposed Act will be less prescriptive than the current Act. Whereas the current Act confers specific authority for each power to be exercised by a municipality, much of the proposed Act would take the reverse approach and grant broad powers to municipalities, subject to limitations which would be imposed by statute, regulation, or other >enactments= (a discussion concerning which appears below). Municipalities, however, would enjoy this broad grant of power for the most-part only within 13 enumerated spheres of jurisdiction:

 (a)health, safety, protection and well-being of people and the protection of property;

(b)public utilities;

(c)waste management;

(d)public highways, including parking and traffic on highways;

(e)transportation systems other than public highways;

(f)natural environment;

(g)culture, parks, recreation, and heritage;

(h)economic development;

(i)nuisances, noise, odour, vibration illumination and dust;

(j)drainage, and flood control, except storm sewers;

(k)structures, including fences and signs;

(l)parking, except on public highways; and

(m)animals.

 Within each of these areas, or with respect to any authority conferred by another statute, municipalities would have the powers of a >natural person=, and certain >governmental powers=.

 >Natural person= powers amount, essentially, to the powers of a business corporation. These include the ability to enter into contracts; purchase, own and dispose of property; hire, pay and dismiss employees; delegate administrative responsibilities; provide and charge for goods and services; and sell or otherwise dispose of assets.

 Since natural persons do not have the power to direct the activities of other persons, municipalities would be given certain >governmental powers= to be applied to matters under their jurisdiction, which would include the power to:

 (a)regulate or prohibit, and provide for a system of licenses, permits, approvals or registrations, and to deal differently with different classes of persons, businesses, activities, services, things or geographic areas;

(b)make grants or loans (however bonusing restrictions will continue);

(c) impose fees and charges, and levy taxes (subject to current restrictions) ;

(d) enforce by-laws, create offences, apply for injunctions, and impose fines;

(e)expropriate;

(f) without court order, enter lands or buildings which are not dwellings, for the purpose of inspecting compliance with law;

(g) enter private lands for certain specific purposes, such as erecting snow fences; and

(h) licence businesses similarly to the manner provided for in the current Act.

 The powers (and duties) related to the financial aspects of municipal government will be described in much greater detail than the powers associated with the general areas of authority.

 Restrictions upon Municipal Powers:

 The proposed Act will impose certain restrictions on the exercise of both natural person powers and governmental powers within certain named areas of authority. For example, no municipality would be able to regulate another person=s (i.e. private sector or another municipality=s) facilities by exercising a power within the >public utilities=, >waste management=, or >transportation systems other than public highways= areas of authority, (although a municipality would still be able to regulate by exercising a power under another area of authority or express provision - unless in doing so it creates a conflict with a power of another jurisdiction).

 Unless specifically authorized, a municipality will not be permitted to incorporate a corporation, acquire an interest in a security of a corporation, become bankrupt or make an assignment or proposal as an insolvent person. The Act will not permit municipalities to use natural person powers to impose fees and charges, however that authority is both provided and circumscribed by other provisions of the Act.

 The proposed Act will reserve to the Lieutenant Governor in Council a very broad power to pass regulations to restrict the authority of municipalities to pass by-laws, and specifically to pass by-laws which are in the opinion of the Lieutenant Governor Aunnecessary@ or which Arepresent duplication@, or to restrict a municipality=s ability to engage in commercial (which is undefined) activity, especially commercial activity which in the opinion of the Lieutenant Governor represents >inappropriate competition with private commercial activities=. A statutory amendment would be required to maintain such a restriction for a period longer than three years from the effective date of the regulation.

 Interpretation:

Direction will be given to interpret the municipal powers conferred by the proposed Act broadly, so as to:

 (a)enable municipalities to govern their affairs as they consider appropriate;

(b)enhance their ability to respond to municipal issues; and

(c)in the event of ambiguity, include, rather than exclude, municipal powers that existed on the day before the new powers became available to municipalities.

 The draft statutory language does not direct that municipal powers granted by other statutes (and not falling within the 13 areas of responsibility) be interpreted in the same broad manner.

 Municipal by-laws will be subordinate to enactments (including regulations) made by the provincial or federal governments. Indeed municipal authority will be subordinate to any instrument of a legislative nature, which will include any order, licence or approval made under a provincial or federal statute or regulation. Furthermore, except with respect to by-laws:

 (a)prohibiting or regulating with respect to systems and facilities owned or operated by or on behalf of the municipality;

(b)licensing businesses (except perhaps with respect to conditions imposed on businesses through such by-laws);

(c)specifically authorized by provincial regulation (including special legislation),

 where a matter is subject to provincial regulation (including orders, approvals or licences), a municipal licensing by-law or one supported by a sphere of jurisdiction is without effect to the extent that it prohibits or regulates the matter in substantially the same way as or in a more restrictive way than the provincial regulation. Municipalities are also to be specifically prohibited from passing by-laws respecting human rights, workplace health and safety, employer/employee relationships, and welfare/social assistance programs that are cost-shared with the Province. Having said this, where municipalities currently have by-laws in place that could conflict with any of the afore-mentioned provisions, the proposed Act provides that such by-laws will continue in force until repealed or until the new Act has been in place for three years.

 Unless assigned (by specific reference in a table forming part of the statute) to an upper-tier municipality, lower-tier and all single-tier municipalities will have power to enact by-laws in all thirteen areas of responsibility. The table allocates responsibility to upper-tier municipalities either on an exclusive or non-exclusive basis, and is intended to describe the current division of powers in the regions. Should there be a conflict between a lower-tier by-law and a by-law enacted by an upper-tier pursuant to an assigned area of responsibility, the by-law of the upper-tier will prevail to the extent of the conflict. Special provisions will be provided where other statutes confer authority directly upon upper-tier municipalities.

 Conclusion:

 The proposed new Municipal Act appears to represent the reenactment of existing Municipal Act powers, albeit with certain clear advantages for municipalities. Gone are some of the more cumbersome aspects of the existing Municipal Act. New worries emerge, however, especially with respect to the ability of the province to enact restrictive regulations, or assert its superiority through even minor enactments such as orders or approvals.

 The proposed new Municipal Act does not represent a bold step in municipal empowerment. Uncertainty abounds with respect to how the new provisions will be interpreted by the courts, and whether there will be a propensity on the part of senior governments to restrict municipal powers through the use of statutory amendment, regulations, or minor enactments.

Discussions are continuing with staff at the Ministry of Municipal Affairs and Housing with respect to technical issues arising from the draft. Significant policy changes which might be adverse to the interests of the City have been identified in this report, and in that respect a number of suggested amendments to the proposal have been set out at Appendix AII@. It is recommended that the suggested amendments be endorsed by City Council, and that this report be forwarded to the Minister of Municipal Affairs and Housing. It is also recommended that a copy of this report be forwarded to the GTA Mayors and Regional Chairs, and to the Association of Municipalities of Ontario, for information

 The Chief Administrative Officer has been consulted in the preparation of this report and concurs in the recommendations and suggested amendments.

 Contact Name and Telephone Number:

 Jeffrey A. Abrams, 392-8530.

Mary Ellen Bench, 392-7245.

 Appendix AI@

 Summary of Significant Provisions (City of Toronto Perspective)

Proposed new Municipal Act

The Proposed new Municipal Act introduces a number of changes from the current Act. Although it is not possible to highlight every change, the following is a list of what are considered to be the most significant changes from the perspective of a single-tier municipality such as the City of Toronto. Items marked with an asterisk (*) have companion recommendations set out at Appendix AII@ to this report.

 General:

 The proposed Act will distinguish the responsibilities of council from those of municipal staff:

 Responsibilities of Council:

 (i)representing the public and considering the well-being and interests of the municipality,

(ii)developing and evaluating the municipality's policies and programs,

(iii)determining the services the municipality should provide

(iv)ensuring that there are administrative practices and procedures in place to implement council's decisions effectively,

(vi)maintaining the municipality's financial integrity, and

(vii)carrying out other duties set out in legislation.

 Responsibilities of Head of Council:

 (i)presiding over council meetings;

(ii)representing council at official functions; and

(iii)carrying out other duties assigned by legislation.

 Responsibilities of Staff:

 (i)implementing council=s decisions and establishing administrative practices and procedures to carry out council=s decisions;

(ii)undertaking research and providing advice to council on the policies and programs of the municipality; and

(iii)carrying out other duties set out in legislation or assigned by council.

 It is interesting to note that with respect to the role of the head of council especially, there is a distinct change from the current Act, which reads:

 AIt is the duty of the head of the council,

 (a)to be vigilant and active in causing the laws for the government of the municipality to be duly executed and obeyed;

(b)to oversee the conduct of all subordinate officers in the government of it and, as far as practicable, cause all negligence, carelessness and violation of duty to be prosecuted and punished; and

(c)to communicate to the council from time to time such information and recommend to it such measures as may tend to the improvement of the finances, health, security, cleanliness, comfort and ornament of the municipality.@

 By-laws which no longer are authorized by Municipal Act provisions will be grand fathered for a three year period, or until repealed, and may not be amended during such period.

 Spheres of Jurisdiction:

 (i)under the Ahealth, safety, protection and well-being of people and the protection of property@ sphere, and under the Anuisance, noise, odour, vibration, illumination and dust@ sphere, a matter falls within the sphere so long that it is council=s opinion that the sphere applies; and

 (ii)municipal powers will be subject to specific enumerated conditions (sections 17 through 142), the conflict provisions of the Act, the Charter of Rights and Freedoms, judicial determinations of bad faith on the part of municipal councils, as well as to the province=s own legitimate jurisdiction under the Constitution Act.*

 Natural Person Powers:

 (i)natural person powers relate to how a municipality may exercise its jurisdiction, not to the extent of such jurisdiction, which is to be derived from either a sphere of authority, or other statutory provision; and

 (ii)unless there is a specific statutory provision allowing a municipality to incorporate or acquire an interest in a corporation, impose fees or charges, incur debt or make an investment, provide for pensions, become bankrupt or make an assignment for the benefit of creditors, the municipality cannot undertake such steps, even though a >natural person= might be able to do so.*

 Delegation of Authority:

 (i)there is no specific provision enabling municipalities to delegate administrative functions to staff, because that would be considered to be part of a natural person power. Neither is there a specific provision enabling the delegation of non-administrative activity.*

 (ii)the proposed Act does not assist in determining the meaning of Aadministrative@, giving rise to potential litigation.

 Practices and Procedures:

 (i)municipalities will no longer be subject to the cumbersome notice provisions of the existing Act. Instead, there will be mandatory notice (respecting when and in what manner the municipality will give notice of a by-law about to be, or having been, enacted) and consultation by-laws.

 (ii)municipalities will be permitted to hold in-camera meetings for any purpose, provided the purpose is identified in the council=s procedural by-law, or meets the criteria set out in subsection 248(8) of the proposed Act (i.e. property or labour matters...).

 (iii)municipalities will be required to enact a by-law establishing the organizational structure of the municipality. The proposed Act provides little guidance as to how detailed such a by-law must be, nor in respect of the threshold criteria mandating that such a by-law be amended.

 (iv)the proposed Act does not state expressly that all municipalities should be governed by an official plan (the Planning Act states that >regional= and >metropolitan= governments must have such a plan, but municipal nomenclature will be changed by the proposed Act).*

 (v)the new Act would make applicable to all municipalities what are commonly referred to as the Alame duck@ provisions of the current Act, thereby restricting Council=s ability after voting day.

 Highways:

 (i)no longer will municipalities be susceptible to becoming responsible for highways as a result of the expenditure of money or carrying out work on them (former >statute labour= rule). Highways must be assumed by by-law.

 (ii)where a highway is mistakenly constructed on land which is not road allowance, the lands occupied are deemed to be expropriated and the owner is entitled to compensation.

 (iii)municipalities will no longer be obliged to rebuild bridges

 (iv)cumbersome and expensive alteration and closing by-laws will be replaced with the provisions of the municipality=s notice by-law.

 (v)the concept of controlled-access highway does not appear explicitly in the proposed Act.

 Transit:

 (i)Although prohibited under section 20 of the proposed Act from regulating or prohibiting systems owned by or operated by or on behalf of a person other than the municipality by resorting to the Atransportation systems other than highways@ sphere or jurisdiction, section 99 provides that a local municipality may by by-law provide that no person except the municipality may operate a passenger transportation system within all or part of the municipalities specified. Exempt from such regulation are such things as sightseeing vehicles, school buses, private buses, charters, cabs (which are subject to licensing), railway companies and ferries. Municipal regulation will also not be broad enough to regulate passenger transportation systems which only originate in or terminate in the municipality.

 Finance and Taxation:

 (i)the proposed Act will permit area rating, a means by which an area which derives an additional benefit not received in other areas of the municipality as a result of being a Aspecial service@, is made the subject of a special levy. ASpecial services@ must first be prescribed by the province before they can become the subject of an area rating by-law, unless the by-law is being passed by a restructured municipality (which would include the City of Toronto) with respect to a service which was provided in the year before restructuring within one of the merged areas of the restructured municipality, and continues to be provided in the year after restructuring.

 (ii)similarly, a higher tax rate may be levied to deal with an otherwise unfair advantage to the merged area by off-loading liabilities brought into the restructured municipality. Such an increase is permissible for a limit of 7 years after the year of restructuring.

 (iii)the area rating power can be restricted, and in any event will be governed, by regulations the form of which are not yet known.

 (iv)the provisions of the Fair Municipal Finance Act, 1997, the Fair Municipal Finance Act, 1997 (No. 2) and the Tax Credits to Create Jobs Act, 1997 are carried forward. Continued is the requirement with respect to tax deferrals for low income seniors and persons with disabilities, making it mandatory that municipalities make provision to alleviate financial hardship for these two groups of property owners. The extent of the relief, however, is not prescribed.

 (v)the proposed Act will allow municipalities to enter into agreements with taxpayers providing for alternative installment and due dates, such as monthly billing plans, such agreements however, remaining in force until revoked by the taxpayer; the municipality cannot revoke them in the case of default, for example.

 (vi)a new provision will enable the Treasurer to direct a tenant of property which is in tax arrears to pay the rent to the Treasurer.

 (vii)the language of section 312 of the proposed Act leaves open the potential that the province may direct that the municipality must collect taxes for any body it specifies (as opposed to the typical case where the municipality would impose taxes for itself and its school board(s)). This new provision opens up the potential for the province to levy against the property tax base for its own purposes, or for the Greater Toronto Services Board (if established), or for any other >body= it specifies.*

 (viii)although not yet in the draft legislation, it is understood that the province will be requiring municipalities to pass by-laws which would require landlord and tenant to negotiate the implications of the removal of business tax provisions.

 Fees and Charges:

 (i)fees and charges must be considered as part of the annual budget process. A fees by-law cannot be amended without a companion amendment to the budget.

 (ii)a by-law to impose fees or charges which would raise revenue in excess of full cost recovery must explain why the fee or charge exceeds cost recovery. Although the by-laws are not appealable, such statements could give rise to arguments that a by-law was not enacted in good faith, or was beyond the statutory jurisdiction.

 (iii)fees and charges may be imposed for the capital costs (of non-growth related) sewer and water services. Certain fees and charges may by regulation be deemed to be taxes and be subject to an appeal process, thus substituting for the provisions of the Local Improvement Act.

 (iv)as with the other powers provided by the proposed Act, the province retains the ability to invoke regulations which would restrict the ability of municipalities to charge fees.*

 Business Licensing:

 (i)The proposed Act continues recent amendments to the Municipal Act which provided for broad licensing power, and will provide that a municipality having jurisdiction over licensing will be able to regulate any business, whether wholly or partly carried on within the municipality. As usual, there are limitations attached to these broad powers. In this case, the power to license will not be available in respect of:

 (a)a manufacturing or an industrial business, except to the extent that it sells its products or raw material by retail;

(b)the sale of goods by wholesale;

(c) the generation, exploitation, extraction, harvesting, processing, renewal or transportation of natural resources;

(d) a courier business wherein parcels and documents are conveyed in vehicles used for hire, other than buses and cabs, nor the vehicles used in such a business

(e) a transportation business wherein property is conveyed in vehicles used for hire, other than buses, cabs and tow trucks;

(f) the operation of a group home; and

(g) the rental of a residential housing unit.

 (ii)License fees for each class of business cannot exceed the cost of administering and enforcing the licensing by-law with respect to that class of business.

 (iii)Each licencing by-law must contain a statement as to why the municipality is licensing that class of business.

 (iv)the Act will provide for a regulation making power which would enable the Minister to exempt any business or class of business from any part of the licensing by-law, and imposing conditions and limits on the power a municipality might have to pass a licensing by-law. The regulation can be retroactive in effect for up to 2 years, and could require the return or special use of fees collected before the regulation was enacted.

 (v)The licensing provisions in the proposed Act will apply to any licensing power provided by any statute. To the extent there is a conflict, the least restrictive on the power of the municipality will prevail.

 Business Improvement Areas:

 (i)the proposed Act will continue many of the current BIA provisions, including the recent Bill 106 amendments. Carried forward is the obligation for landlords to notify their tenants within 14 days of notice given by the municipality that it intends to pass a by-law designating a BIA. Only the landlord, however, will be entitled to object to the by-law. Note that BIA charges are deemed to be taxes, and therefore the landlord may be responsible for their payment if recovery from tenants is unsuccessful.

 (ii)even though BIAs establish their own budgets, the proposed Act will enable the municipality to levy higher assessments against parts of the BIA that in Council=s opinion derive special benefit from improvements, as well as to establish minimum and maximum charges applicable to BIAs.

 (iii)the proposed Act does not provide for the imposition of an interim BIA levy.*

 Economic Development:

 (i)the existing prohibition against bonusing is continued, however a new exception with respect to community improvement plans under section 28 of the Planning Act is to be introduced.

 (ii)the Act would enable a school board to exempt from both school and municipal taxes certain properties designated as school capital facilities, without any consent required so to do on the part of the municipality.*

 Tax Sales:

 (i)the Municipal Tax Sales Act will be repealed, and its provisions incorporated into the proposed Act.

 (ii)municipalities will not be able to write off taxes until they go through an unsuccessful tax sale. Should the tax sale be unsuccessful, the municipality is not obliged to register a vesting certificate. This will avoid the municipality having to become responsible for properties which have been abandoned by owners rather than clean up contamination to provincial standards.

 Enforcement:

 (i)the new Act would create an offence for any person who might Ahinder or obstruct, or attempt to hinder or obstruct, any person exercising a power or performing a duty under this Act or a by-law under this Act.@

 (ii)the Act would also introduce an ability for the municipality to conduct administrative inspections at any reasonable time to inspect land and structures to determine whether its by-laws made pursuant to Municipal Act powers were being complied with. The provision does not extend to by-laws which are authorized by other Acts, such as the Planning Act. The right to enter a dwelling unit is subject to a number of conditions, one of which is that the delay necessary to obtain a warrant or the consent of the occupier of the dwelling unit would result in an immediate danger to the health or safety of any person.

 Appendix AII@

 Suggested Amendments to

Proposed new Municipal Act

 1.The proposed Act will confer the power to enact by-laws within the 13 areas of authority assigned by the Act. It is submitted that municipal authority is often exercised without the need for the enactment of a by-law, especially where administrative powers have been delegated to staff, or in the case of operating and policy decisions made by a local board in respect of matters within its jurisdiction. The Act should be modified so as to clarify that the 13 areas of authority describe the subject matter within which municipalities may carry out their natural person and governmental powers (in addition to the powers provided by other statutes), and not merely the areas within which they may pass by-laws.

 It is recommended that the proposed Municipal Act, in assigning powers within the 13 prescribed areas of authority, not restrict the exercise of such powers to the enactment of by-laws.

 2.The interpretation section of the proposed Act is drafted in such a way as to instruct the courts to interpret any ambiguity arising out of the provisions which introduce the powers of a natural person, and allocate the 13 areas of authority, in a manner so as to confer broad authority on municipalities. It is submitted that in order to give the interpretation section its intended effect, the Act should contain the simple statement that all municipal powers should be interpreted broadly.

 It is recommended that the proposed interpretation provision be modified so as to provide that municipal powers, whether they be derived from the new Municipal Act or any other statute, be interpreted broadly so as to:

 (i)enable municipalities to govern their affairs as they consider appropriate,

(ii)enhance their ability to respond to municipal issues, and

(iii)include, rather than exclude, municipal powers that existed on the day before the coming into force of the new Act.

 3.The proposed Act does not repeat the current requirement for certain municipalities to have an official plan.

 It is recommended that the new Act contain a provision making it a requirement that at a minimum all single- and upper-tier municipalities maintain official plans.

 4.Section 20 of the proposed Act would restrict municipal authority in certain areas (for example, it could limit municipal ability to prevent third-party collection of curbside recyclables). The apparent policy behind section 20 is to prevent municipalities from regulating in areas governed by provincial regulation.

 It is recommended that section 20 be drafted in such a way as to meet its narrow policy objective without restricting existing municipal powers.

 5.One of the stated objectives of the proposed Act is to allow municipalities greater flexibility to deal with local issues. In this regard, municipalities are considering commercial ventures (such as public/private partnerships) with private sector firms to decrease the cost of municipal services, and/or to raise revenues for the municipality. One method favoured by the private sector in organizing such ventures is the establishment of a corporation managed by a board of directors composed of representatives of both the private firm and the municipal corporation. Such corporations provide the advantage of responsive and timely decision making processes, as well as protecting the municipality and the private sector partner in the event of losses arising out of the business venture (limited liability). The proposed Act, however, prohibits municipalities from incorporating companies or owning securities in a company.

 It is recommended that municipalities be permitted to incorporate companies or own shares in companies, subject to specific provisions to be established by regulation which would preserve municipal accountability and financial responsibility, such as provisions requiring that:

 (i)a certain percentage of shares always be owned by the municipality;

(ii)meetings of the board of directors or any committees of the board be subject to the >open meeting= provisions of the Municipal Act;

(iii)the articles of incorporation describe the purposes of the corporation, and that the articles cannot be amended without consent of the municipal council;

(iv)the Municipal Freedom of Information and Protection of Privacy Act have (at least limited) application to such corporations;

(v)the municipal auditor have access to the books and records of the corporation, and that such records otherwise comply with the relevant provisions of the Municipal Act;

(vi)municipal assets may not be transferred to the corporation except as permitted by regulation; and

(vii)there be certain statutory clauses to be included in shareholder agreements (such as clauses restricting the transfer and ownership of shares).

 6.It is also submitted that in order for municipalities to deal effectively with local issues, they require the ability to delegate certain non-administrative functions to either a committee or a special purpose local board. This would allow a municipal council to distribute its workload in a manageable yet accountable manner. By way of example, municipalities should be permitted to:

(a)consolidate into a new local board existing local boards which carry on similar activities;

(b)establish committees with the authority to hear and determine final appeals from decisions made pursuant to authority delegated to an official (such as permit appeals); or

 It is recommended that municipalities be permitted to establish local boards to have certain prescribed responsibilities, subject to criteria to be established by regulation, which might include:

 (i)restrictions on the matters for which a local board may be created;

(ii)methods of appointment to the board;

(iii)restrictions on the transfer of assets of the municipality to the board;

(iv)matters pertaining to the financial records of the local board; and

(v)matters pertaining to the conduct of meetings of the local board.

 7.The provisions of sections 114-124 of the proposed Act substantially re-state the provisions of the current legislation respecting BIAs, including the changes introduced by the Fair Municipal Finance Act, 1997 (Bill 106) that, in part, deem BIA levies to be a tax and authorize the Minister to establish classes of properties for the purposes of applying the provisions of the Act respecting BIAs. Section 118 authorizes an annual BIA levy, special charges, maximum and minimum charges but is silent respecting the ability of a municipality to impose an interim levy.

 It is recommended that the proposed Act provide clear authority for municipalities to impose an interim BIA levy.

 8.Section 312 of the proposed Act imposes an obligation on municipalities "required by law to impose a tax for a body" to pay to that body the amount of the taxes collected and, unless otherwise provided any amounts imposed but not collected due to the non-payment of taxes. It is submitted that this provision is extremely broad and has the potential for the province to impose by-law charges against the property tax base for any purpose, and require municipalities to collect such taxes and be responsible for any shortfall in amounts collected.

 It is recommended that the proposed Act be amended to restrict the obligation of a municipality to collect taxes levied to municipal and school board purposes, as is currently authorized. If it is intended that this provision open up the door to allow for taxes to be imposed by law for bodies such as the Greater Toronto Services Board, then, at the very least this provision should clearly provide that the property tax base will not be used as a source of revenue to the government of the Province of Ontario.

 9.Section 402 of the proposed Act contains broad authority for the Province to restrict the powers of municipalities by regulation, allowing this regulatory power to be applied both retroactively and in a different way against different municipalities. In addition, sections 17 and 18 provide additional restrictions on municipal regulatory powers and provide that municipal by-laws will be subordinate to provincial enactments, defined to include legislation, regulation and orders, approvals and licences. These provisions raise a concern that municipal regulation in almost any area could be challenged on the basis that the province has already occupied the field; the proposed Act fails to draw a clear line between provincial and municipal powers that could result in municipal regulation being struck down as the Province occupies almost every field to one extent or another. Examples of potential conflict include smoking in the workplace, noise, dust or other pollution control, municipal purchasing policies such as fair wage, licensing of special rooming houses, etc.

 It is submitted that the regulatory power of the Province provided in the proposed Act is so broad that it should be a sufficient mechanism for the Province to restrict municipal authority where it deems it to be appropriate or necessary. It is submitted that section 17 in particular should be deleted as it causes unnecessary concern that municipal by-laws will be struck down wherever the Province has regulated in the area, even where a field inspector has issued an order or a clerk has issued an approval under a regulation. Additionally, it will be nearly impossible for municipalities to keep track of all orders, licences and approvals issued by provincial staff. One alternative to the proposed section 17 would be to broaden the list of specific areas where municipalities are prohibited from regulating set out in section 18.

 In the alternative, it is submitted that at the very least section 17 should be restricted in its application to include only provincial legislation or regulation and not orders, licences or approvals.