Casual Legal: ICFs considered in court

By Ben Throndson
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

Two recent court decisions on Intermunicipal Collaboration Frameworks (ICFs) provide key take-aways for Alberta Municipalities’ member communities.

These frameworks, which must align with the requirements outlined in Part 17.2 of the Municipal Government Act (MGA), are intended to:

• Provide for integrated and strategic planning, delivery and funding of intermunicipal services
• Allocate scarce resources efficiently in the provision of local services
• Ensure municipalities contribute funding to services that benefit their residents.

The first decision confirms there is a limited ability for the Court to review the decision of an arbitrator as it relates to an ICF. For context, the case arose after two municipalities could not agree on an ICF and submitted the matter to binding arbitration. After the arbitrator’s award, one municipality brought a court application for “leave to appeal” the arbitrator’s decision as well as an application for judicial review. The Court noted that under the MGA, the decision of an arbitrator on an ICF cannot be “appealed”, it can only be judicially reviewed on an issue of jurisdiction, i.e., whether the arbitrator had the authority to make the decision he did. The Court also considered whether the Arbitrator’s preliminary ruling on his jurisdiction (rendered in September, approximately four months before his final award in January) could be challenged in the same application for judicial review.

The Court determined that when both the MGA and the Arbitration Act are considered, a “ruling” (on jurisdiction) under the Arbitration Act is distinct from a final “award” under the MGA. Because of this, the challenging municipality was required to bring its application for judicial review of the preliminary ruling on jurisdiction within 30 days of that ruling, as per the timeline set out in the Arbitration Act. It was not entitled to wait to challenge the Arbitrator’s jurisdiction as part of the final award under the timeline and process set out in the MGA. All said, this decision shows the risk of going to arbitration – because of the narrow review processes under the Arbitration Act and MGA, there is a risk the parties will be stuck with the decision of the arbitrator.

The second case speaks to the Minister of Municipal Affairs’ ability to impose an ICF in the case of a lingering dispute between negotiating municipalities. At issue was whether the Minister’s decision that third-party services, such as libraries, were to be excluded from the ICF was reasonable. For context, the two municipalities had successfully collaborated on an ICF, except on whether library services would be included. The Minister exercised his discretion under s 708.412 of the MGA (recently added to the MGA through the Red Tape Reduction Implementation Act (“RTRIA”)) to impose the ICF excluding library services.

The Court determined the Minister’s decision was a reasonable and good faith exercise of discretion to ensure an ICF was created in a timely fashion. The Court noted the purpose and text of Part 17.2 of the MGA was to provide for the identification, delivery, and funding of intermunicipal services. While municipalities might share the cost of third-party services, those services are neither delivered by municipalities nor are they exclusively funded by them. Library services are “unique third-party services” because they are “distinct autonomous corporate entities” under the Libraries Act which control their own budget and negotiate financial contributions directly with other funding partners. Although the imposition of an ICF may seem contrary to the spirit of ICFs, it was consistent with the RTRIA and reducing administrative cost and burden in the case of disputes between municipalities.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or send an 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 send an riskcontrol [at] abmunis.ca (email) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.

DISCLAIMER: This article is meant to provide information 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.