Municipal - Interpretation. Kroetsch v. Integrity Commissioner for the City of Hamilton
In Kroetsch v. Integrity Commissioner for the City of Hamilton (Div Ct, 2021) the Divisional Court considers the interpretation of powers granted under municipal statutes:
 While municipalities are creatures of statute and they may not exercise any powers besides those prescribed by statute, it is clear that the courts have recognized that the powers given to municipalities under the Municipal Act, 2001 should be interpreted broadly and purposively to allow municipalities to achieve their goals: Fourth Generation Realty Corp. v. Ottawa (City), 2005 CanLII 16568 (On. CA), para. 31.. Croplife Canada v. Toronto (City)
 This principle is reinforced by section 8(1) of the Municipal Act, 2001, which provides that the “powers of a municipality under this or any other Act shall be interpreted broadly so as to confer broad authority on the municipality to enable the municipality to govern its affairs as it considers appropriate and to enhance the municipality’s ability to respond to municipal issues”.
In Croplife Canada v. Toronto (City) (Ont CA, 2005) the Court of Appeal considered a case against a Toronto by-law that regulated pesticides. It started with a useful review of the structure and history of the (then new) Municipal Act, 2001, and an examination of the broadening of the principles of statutory interpretation in municipal law - in particular whether Part II ('General Municipal Powers') and the Part III ('Specific Municipal Powers') required different interpretive approaches, the first broad and the second narrow (they didn't):
History of the Municipal Act, 2001
 The Municipal Act, 2001 received royal assent on December 12, 2001 and came into force January 1, 2003. It was the first overhaul of the old Act and its predecessors in 150 years. The purpose of creating a new Act was to give municipalities "the tools they need to tackle the challenges of governing in the 21st century" (Ontario Legislative Assembly, Official Report of Debates (Hansard), 53 (18 October 2001) at 1350 (Hon. Chris Hodgson)), including more authority, accountability and flexibility so that municipal governments would be able to deliver services as they saw fit.
 One of the ways in which the new Act introduces more flexibility is by giving municipalities two kinds of powers. Part II of the new Act, for the first time, gives municipalities the power of a natural person (s. 8) and as well, ten broad "spheres of jurisdiction" (s. 11) within which municipal councils have wide discretion to enact by-laws. Part III of the new Act gives municipalities specifically defined by-law making powers, as under the old Act.
 Part II of the new Act is entitled "General Municipal Powers". That Part contains not only the two new general powers of a municipality in ss. 8 and 11, but also rules of interpretation. For example, s. 9(1) in Part II provides:
9(1) Sections 8 and 11 shall be interpreted broadly so as to confer broad authority on municipalities, Section 9(1) applies to the s. 11 spheres of jurisdiction contained in Part II, but also to s. 8, which is in Part II but gives municipalities the capacity and powers of a natural person for all purposes under the new Act. Similarly s. 14, which sets out a "conflicts rule" for determining the validity of by-laws that regulate matters already dealt with by federal or provincial legislation, is a rule of general application that applies to any by-law enacted by a municipality, not just to those by-laws enacted under one of the spheres of jurisdiction in Part II. Section 14 provides:
(a) to enable them to govern their affairs as they consider appropriate; and
(b) to enhance their ability to respond to municipal issues.
14. A by-law is without effect to the extent of any conflict with, Part III of the new Act is entitled "Specific Municipal Powers". These include detailed powers to enact by-laws in areas such as highways, transportation, and waste management, although these are also named as spheres of jurisdiction under s. 11. In order to clarify the relationship between the spheres of jurisdiction powers and the specific powers enumerated in Part III, s. 15(1) in Part II provides:
(a) a provincial or federal Act or a regulation made under such an Act; or
(b) an instrument of a legislative nature, including an order, licence or approval, made or issued under a provincial or federal Act or regulation. [page365]
15(1) If a municipality has power to pass a by-law under section 8 or 11 and also under a specific provision of this or any other Act, the power conferred by section 8 or 11 is subject to any procedural requirements, including conditions, approvals and appeals, that apply to the power and any limits on the power contained in the specific provision. Section 130, the provision at issue in this case, is one of the specific powers in Part III and provides:
130. A municipality may regulate matters not specifically provided for by this Act or any other Act for purposes related to the health, safety and well-being of the inhabitants of the municipality. The predecessor to this section, then numbered s. 102, was referred to under the old Municipal Act as the general welfare provision and read:
102. Every council may pass such by-laws and make such regulations for the health, safety, morality and welfare of the inhabitants of the municipality in matters not specifically provided for by this Act and for governing the conduct of its members as may be deemed expedient and are not contrary to law. Section 130 was deliberately left as a specific power and not a sphere of jurisdiction when the new Act was created and passed. The language of the section was amended to remove the reference to morality and the conduct of municipal council members, and the term "welfare" was changed to "well-being". In addition, the words "not contrary to law" were removed, as that condition is now provided in s. 14 of the Act. Most importantly for the purposes of this case, the authority granted by s. 130 now excludes not just matters "specifically provided for by this Act" but also matters "specifically provided for by ... any other Act".
 It is common ground that the Municipal Act, 2001 contains no named specific power to make by-laws regarding the use of pesticides within a municipality, nor is there a sphere of jurisdiction that might encompass such a power. The appellant has two main arguments. First, it says that because s. 9(1) of the new Act directs a broad interpretation of the powers contained in the spheres of jurisdiction granted in Part II, the specific powers in Part III are to be interpreted narrowly. Consequently, the scope of the former general welfare power in s. 102 of the old Act has been pared down to what the appellant [page366] terms a "specific health power" with little or no scope, and certainly without scope to give the city the power to regulate pesticide use within the municipality.
 The appellant's second argument is that by the addition of the words "or any other Act" to the phrase "matters not specifically provided for by this Act", the effect of s. 130 is to prohibit any by-laws on matters the "pith and substance" of which are already the subject of legislation, whether federal or provincial. There is both federal and provincial legislation dealing with pesticides: in the case of the federal Pest Control Products Act, R.S.C. 1985, c. P-9 (the "PCPA"), with the importing, manufacturing, and labelling of pesticides; and in the case of the Ontario Pesticides Act, R.S.O. 1990, c. P.11, with the storage of pesticides and the licensing of commercial applicators and exterminators. The appellant characterizes both acts as legislation regulating the use of pesticides. Consequently, the appellant argues, a municipality cannot use s. 130 to enact any by-law that also regulates the use of pesticides.
Evolution of the Interpretation of the Scope of Municipal By- Law Making Authority
 Historically, the courts interpreted the powers of municipalities to enact by-laws restrictively. The rule they applied was known as "Dillon's Rule" (from the text, Dillon on Municipal Corporations, 4th ed.), which stated that "a municipality may exercise only those powers expressly conferred by statute, those powers necessarily or fairly implied by the expressed power in the statute, and those powers essential to, and not merely convenient for, the effectuation of the purposes of the corporation": Stanley M. Makuch, Neil Craik and Signe B. Leisk, Canadian Municipal and Planning Law, 2nd ed. (Toronto: Thomson-Carswell, 2004) at p. 82. In Verdun (City) v. Sun Oil Co., 1951 CanLII 53 (SCC),  1 S.C.R. 222,  1 D.L.R. 529, Fauteux J. articulated the restrictive approach in this way at p. 228 S.C.R.: "That the municipalities derive their legislative powers from the provincial Legislature and must, consequently, frame their by-laws strictly within the scope delegated to them by the Legisl ature, are undisputed principles."
 However, in the 1990s the Supreme Court of Canada began to move away from Dillon's Rule. The court favoured instead a "benevolent construction" or "broad and purposive" approach that allowed for a more generous interpretation of municipal powers, with a view toward showing deference to, and respect for, the decisions of locally elected officials. [page367]
 The move began with the dissenting reasons of McLachlin J. (as she then was) in Shell Canada Products Ltd. v. Vancouver (City), 1994 CanLII 115 (SCC),  1 S.C.R. 231,  S.C.J. No. 15, where she first identified a more liberal approach to the construction of enabling statutes that was already reflected in such cases as Hamilton (City) v. Hamilton Distillery Co. (1907), 1907 CanLII 1 (SCC), 38 S.C.R. 239; Howard v. Toronto (City) (1928), 1928 CanLII 427 (ON CA), 61 O.L.R. 563,  1 D.L.R. 952 (C.A.); Associated Provincial Picture Houses, Ltd. v. Wednesbury Corp.,  1 K.B. 223,  2 All E.R. 680 (C.A.); and Kuchma v. Tache (Rural Municipality), 1945 CanLII 27 (SCC),  S.C.R. 234,  2 D.L.R. 13. She then observed at p. 244 S.C.R.:
Recent commentary suggests an emerging consensus that courts must respect the responsibility of elected municipal bodies to serve the people who elected them and exercise caution to avoid substituting their views of what is best for the citizens for those of municipal councils. Barring clear demonstration that a municipal decision was beyond its powers, courts should not so hold. In cases where powers are not expressly conferred but may be implied, courts must be prepared to adopt the "benevolent construction" which this Court referred to in Greenbaum, [infra], and confer the powers by reasonable implication. Whatever rules of construction are applied, they must not be used to usurp the legitimate role of municipal bodies as community representatives.McLachlin J. concluded at p. 248 S.C.R.:
It may be that, as jurisprudence accumulates, a threshold test for judicial intervention in municipal decisions will develop. For the purposes of the present case, however, I find it sufficient to suggest that judicial review of municipal decisions should be confined to clear cases. The elected members of council are discharging a statutory duty. The right to exercise that duty freely and in accordance with the perceived wishes of the people they represent is vital to local democracy. Consequently, courts should be reluctant to interfere with the decisions of municipal councils. Judicial intervention is warranted only where a municipality's exercise of its powers is clearly ultra vires, or where council has run afoul of one of the other accepted limits on municipal power. McLachlin J.'s broad and purposive approach to the interpretation of municipal statutes was subsequently adopted and approved by the Supreme Court in several cases, including Nanaimo (City) v. Rascal Trucking Ltd., 2000 SCC 13 (CanLII),  1 S.C.R. 342,  S.C.J. No. 14; United Taxi Drivers' Fellowship of Southern Alberta v. Calgary (City), 2004 SCC 19 (CanLII),  1 S.C.R. 485,  S.C.J. No. 19; and Spraytech, supra.
 At the same time, some provinces, starting with Alberta and now including Ontario, began to enact broader and more flexible enabling statutes for their municipalities. The United Taxi case, supra, arose under Alberta's new Municipal Government Act, S.A. 1994, c. M-26.1, which, like the Ontario Municipal Act, 2001, incorporates the concept of spheres of jurisdiction. [page368] The issue in that case was whether the City of Calgary had the authority under Alberta's new Act to freeze the number of taxi licences it issued. Although he was dealing with the interpretation of broadly worded powers in the Act to pass by-laws to regulate transportation and licences, Bastarache J.'s discussion of the new broad and purposive interpretive approach was not confined to the new form of statute. He stated at para. 6:
The evolution of the modern municipality has produced a shift in the proper approach to the interpretation of statutes empowering municipalities. This notable shift in the nature of municipalities was acknowledged by McLachlin J. (as she then was) in Shell Canada Products Ltd. v. Vancouver (City), 1994 CanLII 115 (SCC),  1 S.C.R. 231, at pp. 244-45. The "benevolent" and "strict" construction dichotomy has been set aside, and a broad and purposive approach to the interpretation of municipal powers has been embraced: Nanaimo, supra, at para. 18. This interpretive approach has evolved concomitantly with the modern method of drafting municipal legislation. Several provinces have moved away from the practice of granting municipalities specific powers in particular subject areas, choosing instead to confer them broad authority over generally defined matters: The Municipal Act, S.M. 1996, c. 58, C.C.S.M. c. M255; Municipal Government Act, S.N.S. 1998, c. 18; Municipal Act , R.S.Y. 2002, c. 154; Municipal Act, 2001, S.O. 2001, c. 25; The Cities Act, S.S. 2002, c. C-11.1. This shift in legislative drafting reflects the true nature of modern municipalities which require greater flexibility in fulfilling their statutory purposes: Shell Canada, at pp. 238 and 245. Finally, in Spraytech, supra, the issue was whether the Town of Hudson, Quebec, had the authority to enact a by-law limiting the non-essential use of pesticides in the town. Section 410(1) of the province of Quebec's Cities and Towns Act, supra, read:
410. The council may make by-laws: Writing for the majority of the Supreme Court, L'Heureux-Dubé J. identified this section as a general welfare provision that supplements the specific grants of power in other sections, and stated the following about such provisions at para. 19:
(1) To secure peace, order, good government, health and general welfare in the territory of the municipality, provided such by-laws are not contrary to the laws of Canada, or of Québec, nor inconsistent with any special provision of this Act or of the Charter;
Section 410 C.T.A. is an example of such a general welfare provision and supplements the specific grants of power in s. 412. More open-ended or "omnibus" provisions such as s. 410 allow municipalities to respond expeditiously to new challenges facing local communities, without requiring amendment of the provincial enabling legislation. There are analogous provisions in other provinces' and territories' municipal enabling legislation: see Municipal Government Act, S.A. 1994, c. M-26.1, ss. 3(c) and 7; Local Government Act, R.S.B.C. 1996, c. 323, s. 249; Municipal Act, S.M. 1996, c. 58, C.C.S.M. c. M225, ss. 232 and 233; Municipalities Act, R.S.N.B. 1973, c. M-22, s. 190(2), [page369] First Schedule; Municipal Government Act, S.N.S. 1998, c. 18, s. 172; Cities, Towns and Villages Act, R.S.N.W.T. 1988, c. C-8, ss. 54 and 102; Municipal Act, R.S.O. 1990, c. M.45, s. 102; Municipal Act, R.S.Y. 1986, c. 119, s. 271. In assessing whether the general welfare power in the Quebec Cities and Towns Act empowered the Town of Hudson to enact its pesticide by-law, L'Heureux-Dubé J. first examined whether there was a specific by-law making power that the town should have used and concluded that there was not, an exercise mandated by the court's 1993 decision in R. v. Greenbaum, 1993 CanLII 166 (SCC),  1 S.C.R. 674,  S.C.J. No. 24.
 Having concluded that there was no specific power in the Quebec's Cities and Towns Act that would allow the town to enact a pesticide control by-law, L'Heureux-Dubé J. had to determine whether the town could use the general welfare power to enact such a by-law. To interpret the general welfare power, she first turned to the Nanaimo case, supra, where the court had approved McLachlin J.'s view in Shell Canada advocating the benevolent construction approach to the implication of municipal powers that are not expressly conferred. L'Heureux- Dubé J. also referred to Sopinka J.'s majority judgment in Shell Canada, which enunciated the test that the municipal enactment had to have been "passed for a municipal purpose". L'Heureux-Dubé J. then quoted the following passage from Greenbaum, supra, at p. 689 S.C.R.:
Municipal by-laws are to be read to fit within the parameters of the empowering provincial statute where the by-laws are susceptible to more than one interpretation. However, courts must be vigilant in ensuring that municipalities do not impinge upon the civil or common law rights of citizens in passing ultra vires by-laws. Applying these principles from Nanaimo, Shell Canada and Greenbaum, L'Heureux-Dubé J. examined the purpose of the Town of Hudson's pesticide by-law. She concluded that its purpose was to address the concerns of the town's inhabitants about the health risks arising from the non-essential use of pesticides and to minimize those risks. That purpose fell "squarely within the 'health' component" of the general welfare power.
 L'Heureux-Dubé J. also observed that to read the general welfare provision to permit the pesticide by-law accords with international law and policy and with the "precautionary principle". She referred to the definition in para. 7 of the Bergen Ministerial Declaration on Sustainable Development (1990) as follows:
In order to achieve sustainable development, policies must be based on the precautionary principle. Environmental measures must anticipate, prevent and attack the causes of environmental degradation. Where there are threats of serious or irreversible damage, lack of full scientific certainty [page370] should not be used as a reason for postponing measures to prevent environmental degradation. Canada had advocated including this principle during the Bergen Conference, and has codified it in several pieces of federal legislation. L'Heureux-Dubé J. concluded that the town's concerns about pesticides fit within the precautionary principle's rubric of preventative action.
(1) The proper interpretive approach
 In his discussion of the proper interpretation of s. 130, the motion judge applied the broad and purposive approach that I have discussed above. The appellant contends that the motion judge erred in so doing.
 The appellant submits that, through its structure and, more particularly, through the interpretive provision in s. 9(1), the Municipal Act, 2001 adopts the broad and purposive approach for the interpretation of the spheres of jurisdiction in Part II, but not for the specific powers in Part III. By applying the generous approach to the interpretation of s. 130, which is found in Part III, the motion judge effectively elevated the general welfare power (which, as noted, the appellant refers to as the "specific health power") to a sphere of jurisdiction, contrary to the purport of the new Act.
 I do not agree with this submission, based on my reading of the language of the new Act and on the development of the new approach to the interpretation of municipal by-law making powers, which I have canvassed above.
 Although s. 9(1) is contained in Part II of the new Act and expressly requires a broad interpretation of the s. 11 spheres of [page372] jurisdiction, it imposes the same requirement for the interpretation of s. 8, the natural person power, which is found in Part II but applies to the entire Act [See Note 2 at the end of the document]. Also, s. 9(1) contains no language that suggests that the broad approach is to be limited to the interpretation of the spheres of jurisdiction and is not to be applied when interpreting other parts or sections of the new Act. In light of the development of the jurisprudence in this area over the last 12 years and the clear adoption by the Supreme Court of a generous approach that accords deference to municipal governments, it would take clear legislative language to return to Dillon's Rule when interpreting those parts of the new Act not contained in Part II: see United Taxi, supra, at para. 11.
 Furthermore, it would be a retrograde step to apply the former, restrictive approach to interpret the balance of the Municipal Act, 2001 outside Part II, when the goal of modernizing the Act, as stated by the Minister of Municipal Affairs at the time, was to give municipalities in Ontario the "the tools they need to tackle the challenges of governing in the 21st century".
 As I discussed above, in the United Taxi case, Bastarache J. did not limit the application of the new approach to the interpretation of powers granted in spheres of jurisdiction. It is also useful to refer to the concurring reasons of LeBel J. in the Spraytech case. He viewed the question in that case to be an administrative law issue applied to the field of municipal governance. In his view, the restrictive interpretation urged by the appellants in that case would have made the general welfare section "an empty shell". The following is his analysis at paras. 53 and 54:
The case at bar raises a different issue: absent a specific grant of power, does a general welfare provision like s. 410(1) authorize By-law 270? A provision like s. 410(1) must be given some meaning. It reflects the reality that the legislature and its drafters cannot foresee every particular situation. It appears to be sound legislative and administrative policy, under such provisions, to grant local governments a residual authority to deal with the unforeseen or changing circumstances, and to address emerging or changing issues concerning the welfare of the local community living within their territory. Nevertheless, such a provision cannot be construed as an open and unlimited grant of provincial powers. It is not enough that a particular issue has become a pressing concern in the opinion of a local community. This concern must relate to problems that engage the community as a local entity, not a member of the broader polity. It must be closely related to the immediate interests of the community within the territorial limits defined by the legislature in a matter where local governments may usefully intervene. In [page373] Shell Canada Products Ltd. v. Vancouver (City), 1994 CanLII 115 (SCC),  1 S.C.R. 231, the Court emphasized the local ambit of such power. It does not allow local governments and communities to exercise powers in questions that lie outside the traditional area of municipal interests, even if municipal powers should be interpreted broadly and generously (see F. Hoehn, Municipalities and Canadian Law:(Original emphasis)
Defining the Authority of Local Governments (1996), at pp. 17-24).
In the present case, the subject matter of the by-law lies within the ambit of normal local government activities. It concerns the use and protection of the local environment within the community. The regulation targets problems of use of land and property, and addresses neighbourhood concerns that have always been within the realm of local government activity. Thus, the by-law was properly authorized by s. 410(1).
 Relying on Toronto (City) v. Goldlist Properties (2003), 2003 CanLII 50084 (ON CA), 67 O.R. (3d) 441,  O.J. No. 3931 (C.A.), at p. 461 O.R., the appellant points to aspects of the legislative history to support its narrow reading of s.130, including the fact that there was consideration given to including "health, safety and well-being of people and protection of property", as well as "the natural environment" as spheres of jurisdiction in Part II, but ultimately that was not done [See Note 3 at the end of the document]. There is also some equivocal discussion in Hansard from when the legislation was before the Standing Committee on General Government about whether the Spraytech decision would apply under the new Act. However, in his 2001/02 Report to the legislature, Ontario's Environmental Commissioner gave the opinion that s. 130 could be viewed as authorizing municipalities to enact pesticide by-laws to protect the health, safety and well-being of their inhabitants. In my view, the legislative history in this case is of little assistance to this court. The fact that s. 130 remains a specific power in Part III of the new Act does not exempt it from the modern interpretive rules discussed above.
 I conclude that absent an express direction to the contrary in the Municipal Act, 2001, which is not there, the jurisprudence from the Supreme Court is clear that municipal powers, including general welfare powers, are to be interpreted broadly and generously within their context and statutory limits, to achieve the legitimate interests of the municipality and its inhabitants. [page374] The trial judge did not err by adopting this approach to the general welfare power in s. 130.