Author: John Mascarin, Aird & Berlis LLP

In R. v. Greenbaum [1992], the Supreme Court of Canada pronounced, “Municipalities are entirely creatures of provincial statutes.” In case it was lost on anyone, even when the Ontario legislature provided its municipalities with new broad powers in the Municipal Act, 2001, the statute re-enforced that “municipalities are created by the Province of Ontario to be responsible and accountable governments with respect to matters within their jurisdiction.”

Last Dec. 11, the Public Sector and MPP Accountability and Transparency Act, 2014 (Bill 8), received royal assent. When the statute is eventually proclaimed in force, municipalities will, notwithstanding their recognition as responsible and accountable governments, be subject to oversight by the provincial ombudsman. The new statute will allow the Ontario ombudsman to oversee the administration, governance and operation of not just local government, but over the entire “MUSH” sector comprising municipalities, universities, school boards and hospitals.

Subsection 14(1) of the Ombudsman Act will be amended to enable the ombudsman to “investigate any decision or recommendation made or any act done or omitted in the course of the administration of a public sector body and affecting any person or body of persons in his, her or its personal capacity.”

The legislation is a pronounced step backward from advances since Alberta enacted the Municipal Government Act, 1994, and turned the laundry-list model of municipal legislation (that had existed for close to 150 years) on its head, and then-Justice McLachlin militated against the narrow pro-interventionist approach to the review of local decision-making in her minority reasons in the Supreme Court of Canada’s judgment in Shell Canada Products Ltd. v. Vancouver (City).

It is true that calls for the expansion of provincial oversight powers over the MUSH sector have been longstanding and can be traced back to Ontario’s first ombudsman, Arthur Maloney, some 35 years ago. Current ombudsman André Marin has emerged as a vocal advocate for a broader mandate, especially in the municipal sector, where he has submitted that there is an unsustainable quasi-oversight patchwork system in place: “To me, some municipalities are like gangrenous limbs,” Marin said in an interview early last year. In the same article, he noted that he has dealt with scandals of all sorts in Ontario, but finds that municipal mayors and councillors “make provincial politicians look like choirboys.”

If proclaimed, the new statute will provide the ombudsman with vast oversight respecting municipalities in Ontario which will be very interesting given the particularly discernible tension between local governments and Marin (where he has been, since 2008, the default closed-meeting investigator for municipalities).

It was not that long ago that the provincial government enacted the Municipal Act, 2001 which signified a substantial victory for Ontario municipalities advocating for increased recognition of their independence and autonomy. The revisions made in 2006 by the Municipal Statute Law Amendment Act resulted in a further loosening of the shackles of provincial control over municipalities and were hailed at the time as a further advancement towards greater municipal autonomy and independence.

Those amendments added the new Part V.1 -  Accountability and Transparency into the Municipal Act, 2001 to counterbalance the enhanced powers granted to municipalities. Municipalities could establish codes of conduct to govern the ethical behaviour of members of their councils and local boards. Municipalities could also appoint their own integrity officers, including integrity commissioners, auditors general, lobbyist registrars, and municipal ombudsmen.

A large number of municipalities promptly adopted codes of conduct and a significant number appointed integrity commissioners to enforce them. A smaller number of municipalities have also appointed auditors general and ombudsmen and/or have adopted lobbying bylaws.

The question quis custodiet ipsos custodes? - Who will watch the watchmen? - was seemingly answered by the province by providing municipalities with the authority to establish their own rules and to police their own conduct. In essence, municipal governments were recognized as responsible and accountable orders of government.

That message has been confused with the passage of the Public Sector and MPP Accountability and Transparency Act, 2014. The province appears to be retracing its steps and seeking to turn back the clock on municipal legislation reform. As noted by the Association of Municipalities of Ontario, the statute offends the spirit of the Municipal Act, 2001 and its subsequent amendments. With respect to municipalities, the new statute will undoubtedly create duplication, inefficiencies and redundancies. Many municipalities are already reconsidering why they should even be bothered with codes of conduct and integrity officials.

Municipalities should be wary of abdication. A failure to implement their own ethical regimes and to appoint their own integrity officials will render them susceptible to challenge when a complaint is eventually lodged with the Ontario ombudsman. In matters of ethical conduct and integrity it is always better to be proactive than reactive.

John Mascarin is a partner with Aird & Berlis in Toronto. He is a certified specialist (municipal law: local government and land use planning and development) as well as an adjunct professor at Osgoode Hall Law School.
This article originally appeared in the June 12, 2015, issue of The Lawyers Weekly published by LexisNexis Canada Inc.

Disclaimer: The Association of Municipalities of Ontario (AMO) is unable to provide any warranty regarding the accuracy or completeness of third-party submissions. Distribution of these items does not imply an endorsement of the views, information or services mentioned.
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