What becoming a “charter city” could mean for Toronto

On November 5, 2019, an advocacy group called Charter City Toronto announced a proposal to amend the Constitution of Canada to give special protection to Ontario’s cities, beginning with its biggest. Motivated by a desire to insulate Toronto from provincial policy decisions, Charter City Toronto calls for provincial legislation that would expand Toronto’s powers, followed by a single province constitutional amendment that would prevent future provincial encroachments.

Here, we provide a brief overview of the constitutional mechanics and practical implications of the “charter city” proposal. We also explain why it is unlikely to happen — without a change in government at Queen’s Park, at least — as well as its potential unintended consequences.

“[O]ne or more, but not all, provinces”

Section 43 of the Constitution Act, 1982 provides that “[a]n amendment to the Constitution of Canada in relation to any provision that applies to one or more, but not all provinces … may be made by proclamation issued by the Governor General … where so authorized by resolutions of the Senate and House of Commons and of the legislative assembly of each province to which the amendment applies”. Charter City Toronto proposes to use this single province amending formula to allow for the creation of “[c]harter [c]ities” in Ontario, the powers of which Queen’s Park could not unilaterally modify.

Presumably, the section 43 procedure is attractive to Charter City Toronto because any further changes to the Constitution of Canada affecting Toronto’s “charter city” status would require Parliament’s assent; Queen’s Park would not be able to make such decisions on its own. Section 43 has been used most notably in the past to eliminate constitutional requirements for denominational schools in Québec and Newfoundland and Labrador.

In the balance of this blog post, we assume for the sake of argument that Charter City Toronto’s proposed constitutional amendment could, as a legal matter,” be adopted. The question then becomes, would Torontonians be better off as residents of a “charter city”? Here, too, the answer is far from clear.

What a “charter city” would look like

Charter City Toronto calls its proposal a “roadmap”. It is high-level, conceptual and says little about how its goals would be implemented. As a result, the specific effects are also unknown.

The basic concept is that a constitutional amendment would guarantee that Toronto would have exclusive decision-making power over specific areas of government. In other words, some decisions that are now controlled at the provincial level (or subject to provincial oversight) would be under the City of Toronto’s (the “City”) control, and would be difficult or impossible for the province to take back without a subsequent constitutional amendment. Both the term, and concept of a charter city, is used by some American and European cities.

Some of the subject matter areas the proposal includes are control of the size of council, ward boundaries, and elections; city governance; land use planning; streets; housing; and local transit. The proposal would also provide the City with new revenue tools such as borrowing funds or passing sales or income taxes.

At a high level, the risk for any one of these proposals is the same. In theory, Toronto could create a system that is so different from the rest of the province that it could be confusing or inaccessible to stakeholders engaging with the City for the first time. There is also a risk that stakeholders could face systemically different treatment in the Toronto than in other Ontario municipalities, resulting in inequity or unfairness.

However, the Charter City Toronto proposal, in part, seems to be a reaction to specific actions taken by the current Provincial government. For that reason, some of its proposals variously seem to overreach, simply re-state existing laws, and pose risks to the City. They also stand no reasonable chance of being enacted while the current Provincial government is in office.

Elections, Ward Boundaries and Governance

For example, the proposal for the City to control its own elections, size of council, and wards seems to be a reaction to the controversial Bill 5, passed in 2018, which reduced the number of wards Toronto planned to use in its municipal election, 47, to 25 wards, matching the current (2015) federal and provincial riding boundaries within the City limits (and which the City is still challenging—an application for leave to appeal to the Supreme Court of Canada was filed November 15, 2019).

The timing and process for municipal elections are governed by the Municipal Elections Act for all Ontario cities, including Toronto. Toronto had, and still has, authority to decide the size of its council. The only change brought about by Bill 5 was to Toronto’s ward boundaries. Prior to the passage of Bill 5, the City was able to draw its own ward boundaries under provisions which paralleled those in the Municipal Act, 2001. Further, the legislative changes brought about by Bill 5 likely require amendment. As amended, the City of Toronto Act, 2006, requires the City to have ward boundaries that are the same as Ontario’s 2015 provincial riding boundaries. In general, following the decennial census, federal and provincial governments redraw their riding boundaries based on population changes. Thus, following the 2021 census, it is likely Ontario’s ridings will change. So, if a future Ontario government wants to permit any changes to Toronto’s ward boundaries, including if it wants to match Toronto’s wards to future Provincial riding boundaries, a statutory change will be required.

Toronto also already has the ability to change the structure of committees that report to City Council, to delegate certain decisions, and to organize its staff. Since it’s not clear that the proposal contemplates changes to the Mayor’s powers, the process by which Council makes decisions, or the statutory authority of specific City officials (for example the Chief Building Official’s authority to issue building permits) it is not clear what is being proposed.

Land Use Planning and Housing

Under the Planning Act, Toronto, like other municipalities, already has the authority to pass its own official plan and zoning by-laws, and to approve applications to amend the official plan and zoning by-laws. However, decisions must comply with provincial policy, are subject to appeal to a provincial tribunal (the “LPAT”) and the City’s Official Plan must be approved by the Ministry for Municipal Affairs.

The Proposal would eliminate the ministerial approvals and LPAT appeals. Instead, it suggests the City create its own tribunal to hear appeals. The proposal also makes a general statement about not changing laws that apply generally to all municipalities, so presumably, under the Planning Act, provincial policies and plans would still apply.

This part of the proposal may be a reaction to the Minister’s decision in 2019 to significantly amend two secondary plans (part of Toronto’s Official Plan) affecting the rapidly growing downtown core and Yonge-Eglinton areas of the City. The City chose to submit the plans directly to the government for approval under a provision of the Planning Act (section 26) that gave discretion to the Minister to make changes, but did not allow any appeals. Had the City chosen to pass the plans under a process that subjected them to appeals, the Ministry may not have made any changes.

Further, the City has already exercised its authority under the Planning Act to create its own tribunal to hear appeals of consent and minor variance decisions of the Committee of Adjustment (generally these are smaller, less complex planning matters). No other Ontario municipality has taken this approach, and it is not clear if there is a benefit to the City. The City’s tribunal must review the appeals using the same Planning Act tests used by the LPAT and has been set-up to be arm’s-length from City Council. As a result, the decision-making process is not significantly different than for appeals from other municipalities. However, the City is responsible for the cost of operating the tribunal and under the current legislation there is no mechanism for the City to dissolve the tribunal (to send appeals back to the LPAT) or to share the costs with the Province.

Housing presents similar concerns about ‘downloading’. Previous provincial governments made social housing the responsibility of Ontario municipalities and Toronto Community Housing (the City’s social housing agency) has an extensive waiting list, an extensive backlog of maintenance and repairs, and budget constraints.

Streets and Local Transit

The proposal suggests that Toronto have exclusive jurisdiction over its streets and local transit. This may be a reaction to the previous provincial government rejecting the City’s request to impose tolls on the Gardiner Expressway, and to the proposal by the Province to take control of the City’s subway system in order to expand it.

It should be noted that while the previous Provincial Government was not willing to permit tolls, it agreed to provide additional gas tax revenues for road maintenance. It should also be noted that at its October 29-30, 2019 meeting, Toronto’s City Council approved a term sheet to enter into an agreement with the Province to maintain control over its existing subway, and allow the Province to control expansions of the system.

Toronto’s own history suggests that cost-sharing for local infrastructure is a better path than a municipality asserting local control and bearing costs locally. During the 20th century, a number of smaller municipalities amalgamated into larger ones when they could no longer afford to operate. Further, the municipality of metropolitan Toronto (and Ontario’s two-tier municipal system) was established to further the construction and maintenance of infrastructure and facilitate cost-sharing.

Conclusions

It is probably too early to tell what specific implications there might be for residents, businesses, visitors, and other stakeholders if Toronto were to become a “charter city”. It is also unlikely that a constitutional amendment could be passed at all without a significant change in the composition of Ontario’s legislature.

However, even with new revenue tools, it is not clear that some of the changes proposed would benefit the City. Instead, there are elements of the proposal under which the City’s authority would not change, but would be exempted from Provincial control. There are also elements of the proposal that, based on Toronto’s experience, would seem to pose a ‘downloading’ risk to the City; the City could be taking on new obligations that, in the past, have either created difficulties for municipalities or do not have clear benefits.

If you have questions about how the Charter City Toronto proposal could affect your business, please contact one of the authors. We would be pleased to assist you.

Michael Foderick is an associate and Matt Schuman is counsel in McCarthy Tétrault’s Municipal Law Group in Toronto. Byron Shaw is a partner and Adam Goldenberg is an associate in McCarthy Tétrault’s Litigation Group.

Authors