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Municipal - Local Boards. County of Lambton Community Development Corporation v Municipal Property Assessment Corporation et al.
In County of Lambton Community Development Corporation v Municipal Property Assessment Corporation et al. (Div Court, 2023) the Divisional Court considered the central municipal concept of a "local board", here to determine whether a municipal corporation was exempt from taxation under the Assessment Act [s.3(1)(9)] (it wasn't):[1] The appellant, the County of Lambton Community Development Corporation (the “CLCDC”) brought an application seeking a declaration that it was a “local board” as defined by the Municipal Affairs Act, R.S.O. 1990, c. M.46, as amended (the “Municipal Affairs Act”) such that it would be exempt from taxation pursuant to s. 3(1)(9) of the Assessment Act, R.S.O. 1990, c. A.31, as amended (the “Assessment Act”).
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[6] The CLCDC is a not-for-profit community development corporation established by the County of Lambton in 2003 pursuant to the now-repealed “community development corporations” provisions under s. 109 of the Municipal Act, 2001, S.O. 2001, c. 25 (the “Municipal Act”).[1]
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[10] Section 1 of the Municipal Affairs Act defines “local board” as follows:“local board” means a school board, municipal service board, transportation commission, public library board, board of health, police services board, planning board, or any other board, commission, committee, body or local authority established or exercising any power or authority under any general or special Act with respect to any of the affairs or purposes, including school purposes, of a municipality or of two or more municipalities or parts thereof. .....
[12] The application judge rejected CLCDC’s submission that it was a “local board” as defined in s. 1 of the Municipal Affairs Act because it is a “body” that is “exercising power or authority under an Act” (the former s. 109 of the Municipal Act) “with respect to the purpose of a municipality” by facilitating economic development on behalf of Lambton.
[13] The application judge accepted that s. 1 of the Municipal Affairs Act must be read as a whole. However, the application judge ultimately rejected CLCDC’s interpretation of s. 1, finding that CLCDC’s interpretation incorrectly reads the language at the end of the definition in a stand-alone manner, ignoring the specific list of entities at the beginning of the definition.
[14] In concluding that the CLCDC is not a “local board” as defined in s. 1 of the Municipal Affairs Act and therefore not exempt from taxation as prescribed in s. 3(1)(9) of the Assessment Act, the application judge applied the ejusdem generis principle of statutory interpretation to s. 1 of the Municipal Act. Pursuant to this principle of statutory interpretation, where a class of things is modified by general wording that expands the class, the general wording is usually restricted to things of the same type as the listed items.
[15] The application judge held, at para. 69 of the Decision, that CLCDC’s interpretation of s. 1 of the Municipal Affairs Act, as it applied to the term “local board”, incorrectly disregarded the entities listed at the beginning of the definition of “local board”, which entities are dissimilar to the CLCDC.
[16] At para. 71 of the Decision, the application judge also found, “in addition to the principle of ejusdem generis”, that the 29 exempted entities listed under s. 3(1) of the Assessment Act are “clearly and specifically defined” and that “there is no wording that expands the definition of the exemption beyond the referenced heading”. The application judge concluded, at para 72 of the Decision, that “the interpretation suggested by [the CLCDC] would effectively rewrite the legislation as it would create a 30th category of exemption”.
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[25] When rejecting the CLCDC’s interpretation of the phrase “local board” as defined in s. 1 of the Municipal Affairs Act, the application judge applied the Court of Appeal for Ontario decision in Ontario Ombudsman v. Hamilton (City), 2018 ONCA 502 (“Ontario Ombudsman”). The issue in Ontario Ombudsman was whether the Audit Committee and Property Standards Committee of the City of Hamilton were “local boards” within the meaning of the Municipal Act. The definition of “local board” in the Municipal Act is, for all intents and purposes, identical to the definition of “local board” in the Municipal Affairs Act.
[26] At para. 9 of Ontario Ombudsman, quoted by the application judge at para. 65 of the Decision, the Court stated as follows:The Ombudsman’s submissions would have considerable force if the general language at the end of the definition of “local board” stood alone. It does not. That general language follows the identification of several specific entities as “local boards”. As this court recently observed in Schnarr v. Blue Mountain Resorts Limited, 2018 ONCA 313, at para. 52:Where a class of things is modified by general wording that expands the class, the general wording is usually restricted to things of the same type as the listed items (ejusdem generis). [27] In applying this principle, the Court in Ontario Ombudsman, at paras. 10 and 13, held that:[10] All of the named entities in the definition of “local board” provide services which are integral to the day-to-day operation of the business of municipalities. Neither the Audit Committee nor the Standards Committee provide the same type of services.
[13] Applying ejusdem generis to the definition of “local board”, we are satisfied that the general language at the end of the definition does not include entities which cannot be said to carry on the operations of the municipality. The functions of the Audit Committee and the Standards Committee do not fall within that descriptor. They are not local boards. [28] At para. 66 of the Decision, the application judge applied the same principle of interpretation to the facts before him. In my view, he was correct in doing so.
[29] I accept the submission of MPAC that the CLCDC is entirely dissimilar to the entities listed at the beginning of the definition of “local board” in s. 1 of the Municipal Affairs Act, all of which carry on day-to-day operations integral to the business of municipalities. The CLCDC was created to administer and operate the Research Park in partnership with an educational institution, the University of Western Ontario. As the application judge noted, CLCDC is not the economic development entity in the area. That role belongs to the Sarnia Lambton Business Development Corporation. The CLCDC does not provide any core municipal services of the same type as provided by entities such as a school board, a police services board or a planning board.
[30] The CLCDC was incorporated as a community development corporation under s. 109 of the former Municipal Act. However, s. 109(9) of that provision expressly provided that such a corporation could be deemed to be a local board, which would be unnecessary if these corporations were local boards. Subsection 109(8) is also not of assistance, since it provides that these corporations are considered local boards for a different purpose (the purpose of the Municipal Conflict of Interest Act) only if certain criteria are met.
[31] In my view, the application judge was correct in concluding that the CLCDC’s interpretation of “local board” was overly broad and inconsistent with applicable principles of statutory interpretation. The application judge was also correct in following Ontario Ombudsman and in applying the ejusdem generis principle to the definition of “local board” in s. 1 of the Municipal Affairs Act when reaching the conclusion that the CLCDC is not a “local board”.
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