Spring 2009 - Reynolds Mirth Richards & Farmer LLP

The Regulation of Inter-Municipal Businesses
and Extraterritoriality of Bylaws Under Section 12 of the MGA
By Nick Parker
In a recent decision, the Court of Appeal of Alberta had to consider the above issues. The case involved a business (“ATS”) in which taxi
operators would pick up passengers from stands held exclusively under contract at the Edmonton International Airport, located in Leduc
County on federal Crown land. ATS is located in, and licensed by, the City of Leduc. Due to the exclusive contract, other cab companies may
drop off passengers and pick up pre-arranged fares at the airport, but they may not wait there for casual fares.
The dropping off of passengers in Edmonton apparently caused the City no concerns. However, ATS also wanted to be able to pick up
passengers in Edmonton and take them to the airport, and began advertising this service. The City’s Chief Licence Inspector found that the
pick up service violated the provisions of an Edmonton licensing bylaw (the “Bylaw”) because ATS did not have the required City licenses. The
Inspector issued an Order, which in essence prevented ATS from brokering taxi pick up inside the City.
ATS claimed that this Order affected its business, and that as its business was located outside of Edmonton, that the Order was beyond the
City’s jurisdiction under s. 12 of the Municipal Government Act. Section 12 limits the applicability of a bylaw to within the boundaries of the
enacting municipality except (a) by agreement with another municipality, or (b) as allowed by another statute.
A majority of the Court of Appeal rejected ATS’ s. 12 argument. The majority held that the Order was not an attempt by the City to apply its
Bylaw outside Edmonton and that the Order did not have that effect. Rather, the Order merely prohibited ATS from arranging or encouraging
taxi operators and passengers to transact business within Edmonton.
The majority reasoned that the conversation that occurs upon a taxi driver picking up a passenger results in an oral contract, and that this
transaction was the carrying on of the taxi business within Edmonton. Further, it was ATS’ business “to arrange for these negotiations and
contracts to happen”, and this amounted to the carrying on of the business of a taxi broker within Edmonton. As such, it was not necessary to
consider if other activities, such as merely driving through or parking in Edmonton, might also constitute carrying on the taxi business within
Edmonton. The end result is that the City has jurisdiction under the Bylaw to make the Order, and the Order could validly apply to ATS.
Although the majority held that the Order did nothing to force Edmonton licensing onto taxi drivers or brokers operating outside of Edmonton,
they did agree with the dissenting justice that there would be logical limits to Edmonton’s efforts to enforce the Bylaw. The majority stated that
“[i]f Edmonton tried to prohibit the mere delivery of passengers into Edmonton by Order, the situation would be very different than the case
at bar”.
By contrast, the dissenting justice (Côté J.A.) could see no legal distinction between allowing the City to ban pick-ups and not allowing the
City to ban drop offs. He therefore foresaw the potential for the City to be able to “kill a brokerage business which is entirely located outside
that City, and is carrying on its management outside, and performs few if any physical acts inside the City”. He said if that were to occur and
other municipalities were to copy the City’s approach then “no one will be able to take any taxi between any point in the City of Edmonton and
the airport, in either direction” because “[i]n theory, each taxi could run to the exact boundary of its licensing municipality and then turn back”
meaning that “a 40-minute ride” “from St. Albert, Fort Saskatchewan or Sherwood Park through the City of Edmonton to the International
Airport” “might require three taxis”.
Justice Côté therefore had to consider what test should apply in discerning the limits of the extraterritorial effects that a bylaw may validly have.
He rejected “a literal physical” test that he saw the majority applying, and instead said the test should look “for the real and substantial centre
of activity or business.” He said this test was consistent with legal precedent and also made sense from a policy perspective. In applying this
test to determine which municipality could properly regulate ATS’ brokerage business, he found that ATS’ “brokerage business has far more
substantial and legitimate connections with either the City of Leduc or the County of Leduc, and the International Airport, than it does with the
City of Edmonton.”
It is noteworthy that the Court of Appeal asked that a copy of both sets of reasons be sent to the Ministers responsible for Municipal Affairs and
for Highways. Lastly, I understand that the ATS will seek leave to appeal to the Supreme Court of Canada.
Province Wide Assessment
Review Board Fees
By Carol M. Zukiwski
Effective January 1, 2009 a new regulation came into effect
that establishes the maximum amount that an Assessment Review Board (“ARB”)
can charge a property owner to file a complaint against the assessment of their property.
Subject to any regulations made by the Minister of Municipal Affairs pursuant to section 484.1 of the Municipal Government Act,
R.S.A. 2000, c. M-26 (“MGA”), a municipality has the authority to set fees payable by persons wishing to file a complaint with the ARB of the
municipality (s.481(1)). The Assessment Complaints Fee Regulation , AR 243/2008 sets out the maximum fees that the ARB can charge a person
to file a complaint, or to be involved as a party or Intervenor in an assessment complaint hearing before an ARB.
The maximum fee structure under the Regulation is as follows:
Class 1 Residential Property in respect of 3 dwellings or fewer $50
Class 1 Residential Property in respect of more than 3 dwellings $650
Class 2 Non- Residential Property $650
Class 2 Farmland $50
Class 3 Machinery and Equipment $650
A further explanation of the Classes of property for assessment purposes is found in section 297 of the MGA.
The Assessment Complaints Fee Regulation has an expiry date of December 31, 2010. The expiry date ensures that the Regulation
is reviewed for ongoing relevancy and necessity. In its December 22, 2008 News Release, Municipal Affairs indicates that the
Assessment Complaints Fee Regulation is the first step in an improved property assessment complaint and appeals system, and
that the fees allow municipalities to recover the costs of administering ARBs and ensure continued access for taxpayers.
A copy of the Assessment Complaints Fee Regulation AR243/08 can be obtained from the
Queen’s Printer.
OHS QuickFact : Client Contact Reports
By Christopher Spasoff
Workplace Health and Safety (“WHS”) will issue a Client Contact Report (“CCR”) whenever they observe a contravention of
the Occupational Health and Safety legislation, or they attend at the scene of a workplace accident. A CCR often contains
Orders, directing the employer to take certain steps or provide certain information to WHS officials. Should a municipality
fail to comply with these Orders, they almost certainly open the door to charges.
Ashley Olsen
Manager
Business Development
RMRF LLP
Phone: 780.497.3329
3200 Manulife Place
10180-101 Street
Edmonton, AB T5J 3W8
e-mail:
aolsen@rmrf.com
Notwithstanding the fact that compliance with CCR Orders is necessary, there is the ability to challenge the Orders, where
there are grounds for believing they were inappropriately issued. Such challenges must be brought within 30 days. If your
municipality is faced with responding to a CCR, make sure you evaluate your right to a challenge. In the event charges
arise out of the contravention or accident leading to the CCR, it may play a part in establishing a successful defence for
your municipality.
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