In 2001, the Province of Ontario did what has not been done since 1849. It passed the new Municipal Act.
The Act has been amended countless times but has never received a comprehensive overhaul and redesign. As a result, the current Act is a patchwork of provisions — many of which are outdated — and is over 1,000 pages long.
The new Municipal Act — which comes into effect on January 1, 2003 — is just over 300 pages but the more significant difference is the introduction of a new approach to municipal legislation in Ontario.
The Municipal Act has historically been a detailed, prescriptive statute that creates specific powers for municipalities. Based on the way the existing Act was drafted, if a municipality does not expressly receive authority to do a certain thing or provide a certain service that municipality may not do so. As a result, over 150 years of changes in the expectations that the public has on municipal governments and the services that they provide has resulted in a document that resembles an extremely long shopping list of municipal powers.
When one wishes to find out what powers a municipality has, a detailed review of the Act is required. There have been no guiding principles to assist those attempting to determine the actual powers.
A new approach
The new Municipal Act has three essential concepts that appear set to change the way municipal legislation is created and interpreted. The three concepts are “natural person” powers, “spheres of jurisdiction,” and “governmental” powers.
The “natural person” powers allow councils to have similar authority and flexibility as corporations and individuals. While the “natural person” powers will not set out the types of things that a municipality can do, they will have a great impact on how municipalities can exercise these powers. For example, municipalities will be able to manage much of their administrative responsibility without specific legislative power. They’ll be able to hire personnel, enter into certain types of agreements, and acquire land and equipment. This reduces the number of provisions required in the legislation but perhaps more importantly provides a guiding principle.
The “spheres of jurisdiction” concept grants general authority for 10 areas of service delivery: public utilities; waste management; public highways; transportation systems; culture, parks, recreation, and heritage; drainage and flood control; parking; economic development services; structure, including fences and signs; and animals. The benefit to this approach is obvious. Instead of a specific provision for each particular aspect of an activity that a municipality wishes to undertake, the general “sphere of jurisdiction” covers numerous activities.
An industry specific example would be waste management, which has many aspects. Under the new system, the waste management “sphere of jurisdiction” permits a municipality to conduct collection, transportation, operate transfer facilities, and dispose of waste and a multitude of related activities without requiring specific legislative authority.
On the other hand, there are those that worry municipalities will be able to use the “sphere of jurisdiction” concept to expand the scope of services provided into areas that might be historically the realm of the private sector. While this particular concern is not the stated intent of the government, there are other aspects of the new Act that will encourage municipalities to participate in sectors that perhaps were more the realm of the private sector in the past.
As an aside, the new Act permits municipalities to create companies to carry out certain activities and responsibilities within their areas of jurisdiction. One of the stated reasons for this is the provincial government’s desire that municipalities enter into public private partnerships (PPPs) more frequently in order to share infrastructure costs.
Whether due to the encouragement of the municipalities to participate in PPPs or from expanding “spheres of jurisdiction” the private sector in general and the waste management industry in particular may see an increase in the amount of municipal activity in traditionally private sector fields in the future.
The third key concept in the new Act is the granting of governmental powers to municipalities. In the current Act, provisions that provide municipalities with the ability to act as law-making bodies are numerous and are spread throughout the legislation. The new Act consolidates many of these governmental powers in a more streamlined manner that provides municipalities with more power to act as governments.
Implications for industry
There are many other aspects of this legislation that could also have a significant impact on the waste management industry that space does not allow to be addressed comprehensively in this article. Others, such as the geographic application of the legislation, are more specific in nature but may have significant and broad reaching implications. Until the introduction of the new Act, municipalities were obliged to provide services and take action within their boundaries only. The new Act, on the other hand, allows municipalities under certain circumstances to provide services or “things” outside the municipal boundaries.
The implication of this provision is that a municipality may find itself competing with private sector service providers to provide services in neighbouring municipalities. While one would hope that the expertise and economies of scale and scope provided by private sector entities would maintain a level playing field it is possible that through political arrangements or other tools not available to the private sector municipal waste management service providers could have unfair advantages.
Written by Adam Chamberlain, LL.B. of Power Budd, the Canadian affiliate of Cameron McKenna, an international law and consulting firm. Mr. Chamberlain is based in Toronto, Ontario.