Taxing All TSBP Residents For Oliphant Water System Upgrades Is Illegal (Craig’s 3-11)

My commentaries 3-6 and 3-10 dealt with the Oliphant water system “refurbishing” Fiasco.

This commentary deals with illegality of fees imposed on taxpayers for Oliphant water system upgrades.

What Municipalities can do and what they cannot do is defined by provincial statute, mainly the municipal act.

The Municipal Act contains prohibitions, that is things that the municipality cannot do, and also allowances, that is things that the municipality can do.

Municipal Act Part XII contains both allowances and prohibitions regarding “fees and charges”, with section 391 in part XII indicating what the municipality is allowed to do regarding fees and charges, and sections 393 and 394 indicating what is prohibited.

Whether the municipality can impose taxes on water system non-users for water system upgrades or for operating costs is not explicitly spelled out. It is not specifically listed as allowed, nor is specifically prohibited.

Councillor Bowman report 21-2012 in the October 2nd, 2012 council agenda says:

“Although the provincial mandate is that users of the system are financially responsible for the operating costs, in my opinion, this mandate does not prohibit the municipality from assisting with these costs.”

The first part of Bowman’s claim is correct. The Act says users are financially responsible for the operating costs.

But the second part of Bowman’s assertion is wrong. It is true that charging non-users to assist users is not explicitly on the prohibitions list. But what is also true is that is not on the allowances list either.

And what is most important is that in the context of the purpose of the Act and in the context of the explicit allowances and prohibitions in the Act, it is clear that taxing or charging non-users to subsidize users is not allowed.

Taxing /charging non-users is therefore illegal.

Section 391. (1) of the Act says:

“Without limiting sections 9, 10 and 11, those sections authorize a municipality to impose fees or charges on persons, … (a) for services or activities provided or done by or on behalf of it;”

This is the general allowance section. It allows the municipality to impose fees on persons for services provided.

This has to be taken to mean that the municipality can impose fees or charges on persons for services provided to those persons. There is no other reasonable interpretation.

There is no allowance in section 391 (1) for the municipality to impose fees or charges on persons for services not provided to those persons.

There is no allowance for the municipality to impose taxes on persons not on the water systems for the services they do not receive.

There is an allowance for fees to cover capital cost on persons who will get the service in the future;

Section 391. (1)

Deferred benefit
(2) A fee or charge imposed for capital costs related to services or activities may be imposed on persons not receiving an immediate benefit from the services or activities but who will receive a benefit at some later point in time. 2006, c. 32, Sched. A, s. 163 (2).

Given that the legislators specifically included this “deferred benefit” allowance, if the legislators had wanted to allow a fee for capital costs related to services or activities to be imposed on persons who do not and cannot and will not ever receive the service, they would have said so right in the Act.

But they didn’t say so. So charging non-users for upgrade costs is implicitly, but clearly, and obviously, not allowed.

Nor is charging non-users operating costs allowed.

Also, common sense would say charging non-users is not allowed. We have a user-pay system.

After Councillor Bowman wrote her report 42-2012 I told her that by my careful assessment of the Act she was incorrect, and that her conclusion was wrong.

I asked her to back up her contrary “opinion”, in writing, so that the people of the town could assess the validity of her conclusion (that taxes can be imposed on non-users).

She said she would back up her opinion.

But in spite of several requests on my part she never did back up her opinion.

Councillor Bowman would not even confirm whether she had read Part XII of the Municipal Act.

It seems that council has accepted Councillor Bowman’s unsubstantiated “opinion” as fact, on blind faith, without asking a single question.

Council is illegally imposing taxes of general taxpayers to cover half of the Oliphant upgrade costs.

Council must reverse the decision.


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