Legal issues in local government

This chapter will provide an overview of the legislative framework under which local governments operate. It will also focus on a variety of legal issues that councils and administrative staff will likely deal with as they go about conducting the business of local government including conflict of interest, by-law development and enforcement, expropriation, and right to Information processes. It should be noted that not every “legal” subject will be covered in this section, but rather those issues that are typically confronted by local governments. 

As noted at the beginning of this manual, this document is provided to local government employees and officials for resource and information purposes only and does not constitute legal advice.  

One of the areas that receives significant attention is conflict of interest. Local government officials, particularly council members, often question whether they or their colleagues are in a conflict of interest and what they should do about it. 

A simple response to this is: “when in doubt, walk out!” If you think you may have a conflict of interest regarding a matter on a council agenda, it is best to declare a conflict and vacate the council chambers until you know for sure. However, if you are certain prior to the meeting that a conflict exists, there are steps to be taken to protect yourself. 

The provisions in place regarding conflict of interest are meant to ensure that council members, members of local boards, and senior appointed officers carry out their public duties in a manner that protects the public interest and prevents personal financial gain resulting from decisions made by local governments. This section will review, in some detail, the important aspects of the Local Governance Act that deal with conflict of interest and how to address situations as they arise. 

The Local Governance Act also indicates that:  

“If a trade union has entered into or is seeking to enter into a collective agreement with a local government or a local board, a member who belongs to or is employed by the trade union has a conflict of interest with respect to any matter relating to the administration or negotiation of the collective agreement.”  (Local Governance Act, 89(3))

There may be some instances where an individual unknowingly has a conflict of interest and inappropriately takes part in a decision. The legislation does make some allowances for this in specific circumstances, but ultimately it would be up to the courts to decide whether the individual unknowingly took part in a decision in which they had a conflict of interest. As the legislation notes: “A member or a senior officer does not have a conflict of interest by reason of a family associate’s interest as described in paragraph (1)(a), (b), (c) or (d) unless the member or senior officer knew or ought reasonably to have known of the family associate’s interest.” Local Governance Act, 89(2) 

This means that a member or a senior officer is in a conflict of interest if they or a family associate stands to gain financially (which includes preventing a financial loss) from a decision to be made by the local government or the local board. The following situation illustrates a conflict of interest: 

The council of the local government of Green Grove is looking to contract out snow removal services. One of the council members owns a company that will be bidding on the job. In this instance, there is a clear conflict of interest as the member of council stands to gain financially if his or her company obtains the contract.

Having a conflict of interest is not, in and of itself, an offence, however, failing to properly recuse oneself from the decision on the matter can constitute an offence.  

There are several steps members or senior appointed officers can take to ensure that they do not violate the legislation. These include: 

Complete the Statement Disclosing a Conflict of Interest. Regulation 2018-52, Form 3

On assuming office members and senior officers must file a statement disclosing any conflict of interest they may have with the clerk of the local government.  The clerk must file a copy of these statements with the Local Governance Commission.  

All the specifics in the disclosure form (prescribed by regulation) do not need to be provided. For example, if we take the sample case noted previously (Awarding a snow removal contract in Green Grove), the council member should specify the name of the general landscaping and snow removal company. They would not have to indicate any specific financial details, but rather that they own a company that may have dealings with the local government. 

Members and senior officers must also ensure that their statement is periodically reviewed and updated. For example, the member owning the snow removal company would need to update his or her statement after also acquiring a small construction firm that may bid on local government projects. 

Some local governments keep copies of this form on hand at the council meeting chambers.  It is a good practice to include a regular council meeting agenda item at the outset of every meeting for declarations of conflict of interest to remind members of their legislative obligations. 

Completed statements must be kept in a file by the clerk of the local government and are available for inspection by the public during regular office hours. (Local Governance Act, 91, 92, 93)

Conflict of interest arising at a council meeting

If a matter arises during a council meeting where a member believes they have a conflict of interest he or she must disclose the conflict of interest and immediately withdraw from the meeting room while the matter is under consideration or put to a vote. This declaration of a conflict of interest must be recorded in the minutes of the meeting. Members who are unsure whether they have a conflict should be prudent and recuse themselves nonetheless. 

The onus lies on the member or senior officer to decide whether they are in a conflict of interest and to take the necessary actions. It is not up to others at the council meeting to deem that the person has a conflict of interest and to ask them to leave the room. If, as a council member or as a senior appointed officer, there is a feeling that another individual has a conflict of interest but does not recognize it, it may be helpful to remind this individual of the legislation. Ideally, this can be done through a private conversation and not during the council meeting proceedings. Perhaps the mayor can provide a general reminder to all council members at the same time, verbally or in written form. It is better to be reminded privately by a colleague than to be challenged, after the matter has been decided, by a citizen or another party who has been disadvantaged by your vote. (Local Governance Act, 91(5))

The legislation also specifies that “a member or senior officer shall not accept any fees, gifts, gratuities or other benefits that could reasonably be seen to influence any decision made by them in carrying out their functions as a member or senior officer.”  

As members who are elected or as staff who are appointed to serve their community, it is critical that they be impartial in their decisions. Accepting gifts or other benefits from third parties can cause major problems for a local government. Members and senior officers must be careful not to accept any personal gifts or benefits from individuals or organizations. (Local Governance Act, 96(a)(b))

Members and senior officers are often privy to information that is sensitive or could be used for personal gain.  

For example:  

A local government is interested in purchasing land for a new park that is owned by a council member’s sibling. Before an offer is made, the member informs their sibling that the local government is interested in buying the property. With this information, the member’s sibling may raise the price of the property. This is a clear example where the member in question used “privileged information” for a family associate’s personal gain.

Another example: 

A council in a closed committee was considering hiring extra staff. If a member of council or a senior appointed officer relays this information to others, it may give them an advantage during the hiring process. This is privileged information that should not be disclosed until the matter is forwarded to a public session of council for ratification.

A conflict of interest may affect the ability of a council to meet quorum requirements. The legislation deals with two situations that may unfold. They are as follows: 

Situation 1 — Council loses quorum but has three members remaining

A council of six members is in place, thus the quorum would be four members. Three individuals find themselves in a conflict of interest on a particular matter and remove themselves from the discussions. This means that only three members would be present to vote and therefore quorum requirements would not be met. However, the legislation provides that as long as the number of members present does not fall below three (in the event that there are conflicts of interest), the remaining members shall be deemed to constitute a quorum. 

Situation 2 — Council loses quorum and has less than three members remaining

In cases where there are less than three members remaining to debate and decide on a matter an application can be made to the Minister of Local Government for an order that would allow them to consider and vote on the matter (or matters) at hand. (Local Governance Act, 94(1)(2)(3))

Failure to comply with sections 91 and 92 of the Local Governance Act can result in an offence categorized as a “Category F” offence under the Provincial Offences Procedure Act. The potential fine ranges from a minimum of $240 to a maximum of $10,200. 

If a member or senior officer does not comply with section 96 of the Local Governance Act (accepting gifts / inappropriate use of position or privileged information) and is found guilty of such an offence in court, the offence is categorized as a “Category H” offence under the Provincial Offences Procedure Act. The fine amount in this instance ranges from a minimum of $500 and a maximum of $20,500. 

Additional penalties may include: 

• ordering the person to resign their office or position on such terms and conditions as the Court prescribes
• prohibiting the person from holding that office or position or any other specified office or position during such period of time as the Court prescribes
• where the contravention has resulted in financial gain to the person or a family associate, ordering the person to return any gain realized thereby in accordance with terms and conditions imposed by the Court
• any other order that the Court considers appropriate in the circumstances. (Local Governance Act, 97(3))

The Department of Environment and Local Government occasionally receives calls from individuals seeking an opinion as to whether their situation (or someone else’s) would be considered a conflict of interest. The Minister of Local Government does not have the authority to adjudicate conflict of interest matters. It is up to the individual to be familiar with the conflict of interest provisions and in necessary seek the advice of a personal lawyer (not the lawyer that serves as the local government’s legal counsel).

The Local Governance Commission established under the Local Governance Commission Act may investigate allegations of conflicts of interest in certain circumstances. All conflict of interest complaints must first be made to the applicable local government or regional service commission. Once the local process has concluded, complaints may be filed with the Local Governance Commission. Section 44 of the Local Governance Commission Act provides that: 

If a matter respecting an alleged conflict of interest cannot be resolved under the Local Governance Act or the Regional Service Delivery Act, a person may request in writing that the Commission investigate the alleged conflict of interest.   

Please note that the Local Governance Commission has a required conflict of interest complaint form that must be used to file complaints. It is available on the Local Governance Commission’s website.

Sections 42 and 43 of the Local Governance Commission Act provide details on the process related to code of conduct and conflict of interest investigations and decisions of the commission members on the same. Section 43 sets out the sanctions that may be imposed by the Commission, should they decide that a breach of the conflict of interest provisions in the Local Governance Act has occurred. (Local Governance Commission Act, 42, 43, 44 and 45)

As stated in section 4 of this manual, no by-law of a local government is valid unless it follows a legislated process defined in Section 15 of the Local Governance Act. A regular or special meeting of council is the only forum in which by-laws of the local government can be introduced and read.  

The Local Governance Act specifies that to be effective a by-law shall: 

1. be sealed with the corporate seal of the local government
2. be signed by the clerk and the mayor or, in the mayor’s absence, the presiding officer of the council who presided at the meeting at which it was made
3. contain a statement that it is made by the council of the local government. (Local Governance Act, 15(1))

Furthermore, to be valid, a by-law must be: 

1. read three times by title
2. read in its entirety in a regular or special meeting of council at least once before third reading by title

To allow for greater efficiency in the conduct of council business, the Local Governance Act also provides for the option of reading a by-law in summary form if the following steps are taken: 

1. A notice has been given in a manner specified in section 70 (of the Local Governance Act), twice a week for two weeks, that 
   1. describes the proposed by-law by title and generally by subject matter
   2. states that the proposed by-law may be examined in the office of the clerk during regular office hours, and on the local government’s website, if the local government has posted it on its website
2. At least 14 days have elapsed between the day on which the notice is first given and the day on which the by-law is to be read for the third time by title.
3. No member of council objects.

A by-law should state whch section of the Local Governance Act gives the local government authority to enact the by-law, as well as the dates of the first, second and third readings and enactment of the by-law.

By-laws must be placed in a by-law registry book and be available for public examination at the clerk’s office (refer to section 75 of the Local Governance Act). It is also an excellent idea to post all by-laws on the local government’s website.

A proposed by-law may be amended at any time prior to third reading by title. It should not, however, be amended to change the intent of originally proposed by- law. If amendments are made prior to the third reading that significantly alter the intent of the original by-law, the process for adopting the by-law should commence again. Members of council should have the opportunity to review and consider any revised provisions carefully before assenting to incorporating them in a by-law. (Local Governance Act, 15(7))

Unless all the members present declare by resolution that an emergency exists, not more than two of the three readings of the by-law by title shall take place at one meeting of the council. (Local Governance Act, 15(6))

Most by-laws require a simple majority for their enactment. However, there are two by-laws allowed under the Local Governance Act that require enhanced majorities for their enactment. They include:  

• By-laws regarding local improvements require at least a two-thirds majority of all the members of council voting in favour for the by-law to be enacted. (Local Governance Act, 126(3))
• By-laws establishing wards require a majority of all council members (and not just majority of members present) to vote in favour for the by-law to be enacted. (Local Governance Act, 45(2))

Municipal by-laws should undergo periodic reviews by both members of council and administration to ensure they capture and reflect the times, the needs of the community it serves and the vision of council. Once a by-law amendment is agreed to by council, the amending by-law enactment would follow the same process as the adoption of a new by-law. 

In some cases, an original by-law would have many amending by-laws attached to the original by-law. When a municipal by-law has several amended sections, it may become challenging to administer and enforce; in such instances consolidation of the by-law is recommended. This means that all the amendments would be incorporated into a new by-law to form one easily readable document. The original by-law and amendments would be repealed by council and noted at the end of the new by-law. (e.g., “By-law 102 A By-law Respecting Noise and Nuisance and all amendments thereto, is hereby repealed.”).  

It is a good practice to maintain consolidated municipal by-laws as amendments happen and incorporate amendment(s) into the original document once the amendment has been enacted. This can be done by incorporating the amendment into the original by-law with a notation either placed at the beginning, side or end of the amended section. 

Another approach would be to state the consolidation in the main title of the by-law. E.g., By-Law UVW, “A By-law Respecting Fees in the Town of Elmsville” (consolidated to include amendment UVW-1). 

In both cases, the amending by-law would be kept in a by-law registry in the Office of the Clerk so that any member of the public may examine it.

A by-law would be repealed (annulled) if a council of a local government decided that a consolidation of amendments into a new by-law was needed or if the by-law was deemed to be outdated or no longer relevant to the peace, order and good governance of the community. 

The Right to Information and Protection of Privacy Act (RTIPPA) allows any person to access records in the custody or under the control of a local government (including, but not limited to records containing that person’s own information), controls the manner in which a local government may collect personal information from individuals and to protect individuals against unauthorized use or disclosure of personal information by public bodies, and allows individuals to request corrections to records containing their personal information. 

Records include information in any form, and includes information that is written, photographed, recorded or stored in any manner, on any storage medium or by any means, including by graphic, electronic or mechanical means. Personal information means recorded information about an identifiable individual.  

RTIPPA does not replace existing (free or paid) procedures for accessing any information normally available to the public. Local governments should strive to accommodate requests for information or correction of personal information outside of RTIPPA as much as possible and should proactively disclose important documents and records on their official websites wherever possible. When looking for public information, RTIPPA is intended to be used as a last resort.  

Please note that detailed information on RTIPPA including forms, latest news and contacts may be found at Information access and privacy.

The head of a public body (in the case of a local government, this is usually the clerk) will reply to a request, in writing, within 30 business days of receiving a request. 

In certain circumstances, the head may need to do the following before responding: 

a) Extend the 30 business day timeframe.  

The head of a local government is permitted to extend the time period for providing the requested information for a maximum of 30 additional business days if: 

• there is not enough detail given in the request to enable the local government to identify the desired record(s). In such a case, the local government will contact the applicant for clarification and the applicant will have 20 business days to respond.  If the applicant does not reply within 20 business days, the request may be considered to be abandoned upon notification to the applicant
• the request includes a large number of records, or responding to the request within the original 30 business day timeframe would interfere unreasonably with the daily operations of the local government
• the information requested includes information relating to a third party, and the head needs more time to determine whether it is appropriate to give access to the third-party information
• the information requested is related to records that are part of a court proceeding

b) Transfer the request to another public body 

A transfer would occur if the head has determined that the records requested: 

• were produced by or for the other public body; 
• were first obtained by the other public body; and/or, 
• are in the custody and control of the other public body. 

The head has 10 business days to transfer the request and to notify an applicant that their request for information has been transferred to another public body. The head of the receiving public body has 30 business days after receiving the request to respond to the applicant. 

If an applicant doesn’t hear back from the local government after sending a request, they have up to 40 business days (from the day the request was sent) after the expiry of the time for responding to the request) to file a complaint to the Ombud regarding the local government’s lack of a response.  

“Expropriate” means to take land without the consent of the owner. It also includes, subject to the Clean Environment Act, diverting or authorizing the diversion of a watercourse where such diversion affects land of an owner other than the person diverting or seeking the authorization to divert the watercourse but does not include the cancellation or suspension of any lease, licence or permit under the Crown Lands and Forests Act or regulations thereto, or the withdrawal or removal, in accordance with that Act and regulations thereto, of any land from a licence made thereunder.

The Lieutenant-Governor in council, a Minister of the Crown, and Local Governments are authorized by legislation to expropriate. This is must be done for public use, such as building roads and/or various types of public facilities, and developing infrastructure (e.g., water and wastewater systems).  

Any person who is directly or indirectly impacted by the property being expropriated has the right to file a notice of objection with the Expropriations Advisory Officer. This means a tenant, mortgage holder, or another party with an interest in the property. 

There are several steps to be taken in order to expropriate land, which may be found in the Expropriation Act. 

For the purpose of carrying out any of its powers or providing any of its services, a local government may expropriate within the meaning of and in accordance with the Expropriation Act, whether the subject matter of the expropriation is inside or outside the territorial limits of the local government. 

A local government shall not expropriate if the subject matter of the expropriation is inside the territorial limits of another local government, and any such purported expropriation is invalid. (Local Governance Act, 184(1) and 184(2))