Casual Legal: Conflicts of interest
DISCLAIMER: This article is meant to provide information to Alberta Municipalities members only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated. This content is not intended for the general public.
By Ben Throndson
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider
Recent amendments to the Municipal Government Act (MGA) include new conflict of interest provisions in section 170. Before these amendments were made, section 170 only dealt with “pecuniary interests” – financial interests of a non-trivial nature. Now, the new provisions also cover the broader subject of “conflicts of interest,” which helps fill a legislative gap in the MGA.
Before the amendment, municipal councillors were only permitted to abstain from discussion and voting on matters before council in two instances. The first was when the councillor had a pecuniary interest in the matter under discussion. The second was if the councillor was absent from the meeting. Otherwise, a councillor present at the council meeting was obligated to vote on the resolution or bylaw before council or risk disqualification.
This occasionally resulted in a situation whereby individual councillors with a personal (albeit a non-financial) interest in a matter before council would arrange to be “absent” from the meeting to avoid voting on the matter.
To combat this issue, the new amendments have added conflict of interest provisions to section 170. A councillor is deemed to have a conflict of interest in a matter if it could affect a private interest of the councillor or an employer of the councillor, or the councillor knows or should know that the matter could affect a private interest of the councillor’s family.
This raises the further question: what does it mean for a person’s private interest to be affected? Summarized broadly, the MGA states that a person’s private interest is affected by a matter if the matter affects the person directly, or a corporation or partnership in which the person is a shareholder or key member. The courts may yet provide more guidance on how this language is to be interpreted, but it has not yet been judicially considered.
If a councillor believes they have a conflict of interest or a perceived conflict of interest, they may disclose the general nature of that conflict prior to or during any discussion of the matter. If the councillor makes such a disclosure, they may abstain from voting on any question relating to the matter, abstain from any discussion on the matter, or leave the room in which the meeting is being held until the discussion is concluded. The disclosure of the conflict or perceived conflict is to be recorded in the minutes of the meeting.
To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or riskcontrol [at] abmunis.ca (email) to connect with Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.
