Law Times

Law Times • June 25, 2012 Municipal conflicts of interest a sticky issue Waterloo funding for legal advice among many difficult questions FOCUS S BY GLENN KAUTH Law Times ipal councillor to determine whether they're in conflict," says Eric Davis, an associate at Miller Thomson LLP' "There is no proactive way for a munic- hould Ontario create a province- wide commissioner to handle conflict of interest questions for municipal politicians? in Waterloo, Ont., who practises munici- pal and planning law. Davis' community is currently debat- s office ing the issue of conflicts of interest in rela- tion to the 19-kilometre light-rail transit line planned for the region. According to the Record newspaper, 14 of 41 municipal politicians have declared conflicts over the transit plan. The LRT line, which Davis notes is the largest public works project ever undertaken by Waterloo Region, will run between Conestoga Mall in Waterloo and Fairview Park Mall in Kitchener, Ont. Davis notes the worry is over con- flicts affecting politicians who live close to the line, but with the project run- ning through a large swath of the region, avoiding any connection to it is difficult. Another ground for conflict, he pointed out in a recent article in Municipal World, was from someone who' of a university that might benefit from the LRT line. In response, Waterloo Region politicians recently considered a new policy allowing them to spend up to $5,000 in public funds each year for legal opinions on whether they're in a conflict of interest, the Record reported. The pro- posal sparked debate on both sides, with opponents arguing taxpayers shouldn't have to cover the legal opinions. The issue, then, raises a number of s an employee questions. Should taxpayers cover legal opinions on conflicts of interest? Should there instead be some sort of provincial body or office that can adjudicate such issues? Shari Elliott of Elliott & Elliott in says Elliott, who practises in the area of municipal law. "It' normal realm." But she also sees the value of having a provincewide commissioner for conflicts of s not a major expenditure," s something that's in the interest at the municipal level. That option, says Elliott, would address the varying interpreta- tions of the Municipal Conflict of Interest Act that arise with different judges adjudicating the issues. "If it was the same office giving the deci- sions, it would probably be more consistent," she says, adding the com- missioner would be able to rule on conflict questions before a politi- cian decides whether to declare one. "Councillors should Davis, too, sees the value in having a provincewide body. "Municipally, there's " did uphold the notion of being able to rely on legal advice. "With regard to the the trial government, issue if they remain, especially if they've already made their position known. Another key issue, of course, is defin- judge erred in law by rejecting the relevance and legal effect of good- faith reliance on legal advice received by offi- cials about the scope of their statutory powers," wrote Justice Thomas Cromwell in Fullowka v. Pinkerton' 'If you get your opinion from a lawyer, then you can depend on that,' says Shari Elliott. be able to rely on that decision," she says, noting municipalities would likely fund such an office "in a fair and equal manner. no such person," he says, noting the pro- vincial and federal governments have commissioners for conflicts of interest. The issue, of course, is a very topical in relation to the Giant Mine disaster. "The mining inspectors had been ment of the Northwest Territories' duty of care Ltd., a case that dealt with the govern- s of Canada ing what constitutes a conflict of inter- est at the municipal level. While Elliott notes many towns and cities provide training to councillors often with the help of lawyers, the definition nev- ertheless remains a murky one. That issue came to the fore during the recent inquiry in Mississauga, Ont., in relation to Mayor Hazel McCallion' behalf of her son's business proposal s actions on one for municipal politicians for a num- ber of reasons. In Waterloo, for example, questions of legitimacy arise when so many councillors declare conflicts of interest and then refrain from voting on significant projects like the LRT. But poli- ticians often find themselves in precari- ous positions knowing the municipal- ity in many cases won't cover their legal costs. At the same time, they may not recover their costs even if they win in court. In addition, they may not be sure that they can rely on the legal advice they received in advance when defending themselves in court. As Davis points out, the conservative option is to simply declare a conflict. The only way to truly know if there' Barrie, Ont., doesn't see a problem with reimbursing council lors for such legal opinions. "It' conflict is to not declare one and see what the judge rules should someone bring an application alleging it, he notes. On the question of whether council- s a advised that their jurisdiction did not permit them to close the mine for reasons derived from labour relations issues and criminal activity. Although that advice was wrong, in the context of allegations of negligence against those responsible for regulating mine safety, the fact that this advice was received and acted on cannot be dismissed — as the trial judge did — of being of 'no consequence. goes precisely to the issue of whether the government took reasonable care in deciding not to close the mine. The reli- ance on that advice, in the circumstances of this particular case, met the govern- ment' est is a minefield for municipal politi- cians in several other ways. Questions can arise, according to Elliott, when it comes to councillors serving on separate organizations such as local conservation boards. One solution, she says, is to have alternate councillors available to take a colleague' But the issue of conflicts of inter- s standard of care." a conflict. In that way, they can sit on the board while avoiding potential conflicts and still ensuring the municipality' s place when someone alleges lors can rely on the legal advice they receive, Elliott believes they can. "If you get your opinion from a lawyer, then you can depend on that," she says, point- ing to a 2010 Supreme Court of Canada decision that, while not relating specifi- cally to municipal conflicts of interest, counts, she notes, calling that option "a safe alternative to spending the legal fees." In one case Elliott dealt with, she s vote ' This advice outside council chambers. The act, of course, focuses on conflicts of inter- est arising from how politicians vote at council, but the Mississauga issue raised questions as to whether the province should amend it to specify a broader range of circumstances. Elliott, however, doesn't necessarily see a problem with things as they stand. Noting governments typically write leg- islation in a bare-bones fashion, she says the idea is that case law interpreting it will fill in the blanks. "It' be adaptable and interpreted," she says, adding that's particularly the case with the case law coming out." Davis echoes that sentiment. "It' the rules on conflicts of interest given the diverse scenarios that can arise. "It' so individual, and that's where you get s ficult, if not potentially impossible, to cover every scenario that may arise, says. The act, he notes, aims to discour- s dif- " he age conflicts by municipal politicians in their "official capacities." In his view, this is generally at the council table where politicians actually make their decisions. "The decision made council table is the ultimate decision of the municipality, around the are minutes and official records of coun- cil meetings that document what the politicians did. As for the LRT in Waterloo, Davis " he says, adding there PAGE 11 s meant to advised a councillor sitting on a board to leave the room after declaring a con- flict. "If you have a conflict, get out of the room," she says, noting councillors can influence others who are voting on the Idea would add complexity Continued from page 10 ities in expropriation cases, suggests that affixing an emotional value to an inert entity like property is a "tenuous concept at best." He adds that such losses would be difficult to prove and require psychiatrists or medi- cal experts, thereby increasing the length of hearings. Sean Foran, a partner at WeirFoulds Doumani, who represents public author- LLP and past president of the Ontario Expropriation Association, calls solatium an "interesting concept" but says "we need to be very cautious about importing" such ideas. Foran, who acts both for public expropri- require close examination. "When you start bringing in concepts of be very, very difficult to get these matters resolved before the board, s going to settle expropriation claims and notes defining pain and suffering would involve more sub- jectivity than the current system. For her part, Smit acknowledges those Foran also suggests "it's difficult enough" to " he says. ating bodies and individuals affected by them, says his experience is that authorities "do whatever they can" when planning infrastruc- ture in order to avoid taking private property. In his view, paying additional costs would these personal injury-type damages — home loss, pain and suffering, solatium, whatever you want to call it — coupled with the full indemnity-cost regime, I think it' is why conflicts of interest at the municipal level remain such a sticky issue. LT notes the issue may continue to dog local councillors. Even if they declared a conflict on the overall concept for the LRT, many votes on implementing it are yet to come. The question, according to Davis, is whether they still have to declare conflicts then. The answer, of course, isn't obvious, which issues. But while she says enhanced compen- sation "does not come without difficulties," she believes the obstacles, as shown in other jurisdictions, are "not an insurmountable hurdle. " LT www.lawtimesnews.com

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