“One person’s trash really can be another person’s treasure.” With these words Justice Scanlan of the Supreme Court of Nova Scotia began his decision on October 2, 2006. The case of Halifax v. Ed DeWolfe Trucking Limited had arisen out of amendments to a Halifax bylaw in 2002, known as the Halifax Regional Municipality Solid Waste Resource Collection and Disposal bylaw.
The changes to the bylaw prohibited the export or removal of solid waste material generated within the Municipality of Halifax, and required such solid waste to be disposed of within Halifax. The sole exception to this prohibition was the ability of the municipality to export solid waste materials to licensed disposal facilities outside Halifax (when the volumes received in Halifax exceeded their disposal capacity). The amended definition of solid waste included household waste, IC&I waste and construction and demolition waste. The bylaw required all waste haulers to deliver IC&I waste to Otter Lake Facility (which is owned by Halifax) and all C&D waste to the only facility licensed to accept such waste in Halifax (which is privately owned and operated).
Tipping fees at the “state of the art” Otter Lake landfill are approximately $115 per tonne. While there was apparently no evidence of tipping fees outside Halifax, lawyers arguing the case referred to fees ranging from $50 to $80. For obvious reasons, private haulers of waste were being drawn to less expensive landfills outside Halifax, resulting in lost revenues for Halifax. Media reports suggest this might have amounted to $11 million annually, so it’s easy to see why Halifax was interested in imposing flow controls in order to keep those tip fees at the Otter Lake Facility. The court had to consider whether municipality had the power to impose its flow control bylaw.
Creating a monopoly
Halifax argued that its waste management strategy treated waste as a “resource” but the court concluded that the real issue was tip fee revenue. Halifax sought maximum revenue from commercial waste in order to reduce its reliance on taxes to pay for waste management operations. One of the arguments the court relied upon in coming to this conclusion is that no evidence was provided to suggest that the city’s $115 tip fee was based on the actual cost of operating the Otter Lake Facility and was, therefore, a form of taxation. The court eventually made its decision on other grounds, but it did note that this apparent municipal taxation may be outside the power of the provincial government to authorize based on constitutional grounds.
Ultimately the decision turned on whether Halifax has the power to create or impose monopolies based on what the court referred to as the “virtual expropriation of personal property or the restriction on export from a municipal region.”
The court didn’t cite any cases in Canada that have endorsed flow control (as it was proposed in the Halifax bylaw), but the court examined a number of cases dealing with the limits of municipal power and concluded that the scope of the bylaw was so broad that it had an impact far outside the city boundaries, and did much more than suggest how waste was to be handled within Halifax.
Most of the decision deals IC&I waste disposal but the court noted the bylaw also created a monopoly for its “chosen C&D operator” where tip fees were totally unregulated. C&D waste haulers would be at the “mercy” of the single certified C&D site (although that would be of no benefit to the municipality). The bylaw would interfere with the right of producers or haulers to select the most cost efficient, environmentally approved site for waste disposal and would further interfere with existing contracts which have lawfully been entered into between haulers and approved disposal sites.
In the end, the court concluded that the provisions in the Municipal Government Act of Nova Scotia do not provide municipalities such as Halifax with the power to create monopolies or to impose flow controls based on such monopolies. The Act only provides the power to municipalities to restrict the disposal of waste to environmentally approved sites. The court suggested that if Nova Scotia “intends to confer power to enact flow controls upon municipalities, it must make a clear unequivocal grant of that power, especially in a situation where it in effect confers authority to create monopolies and expropriate property.” Without such powers, efforts such as the Halifax bylaw are unlawful.
It would be interesting to see whether a similar regime in Nova Scotia or elsewhere with properly conferred provincial authority would withstand a constitutional challenge.
Adam Chamberlain is a certified specialist in environmental law with Aird & Berlis in Toronto, Ontario. Contact Adam at email@example.com