Casual Legal: Municipally controlled corporations
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made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.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 Jeskiret Bains
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider
In Alberta, municipally controlled corporations ("MCCs") are entities established by municipalities to provide services, manage assets, or undertake specific functions on their behalf. The concept and framework for MCCs are outlined in Division 9 of the Municipal Government Act, RSA 2000, c M-26 (“MGA”), which sets the rules for their formation, governance, and operation.
While MCCs are owned or controlled by a municipality, they are separate legal entities. Their activities typically align with the municipalities' strategic goals and public service objectives.
Under Section 75.1(2) of the MGA, a municipal council has the authority to create a MCC if it serves a public purpose and provides a benefit to the municipality. These corporations can take various forms, including for-profit entities, non-profit organizations, or other structures that allow the municipality to carry out functions more efficiently than through direct government action. The MCCs can engage in commercial activities or provide services such as utilities, transportation, or economic development, with the municipality maintaining oversight and control.
The governance structure of a MCC typically includes a board of directors appointed by the municipal council. The board is responsible for the day-to-day operations of the corporation, while the council retains ultimate control, including approving major decisions such as strategic direction, budget, and changes to corporate structure. The relationship between the MCC and the municipality is governed by a variety of agreements, such as operating contracts and service delivery agreements, to ensure transparency and accountability. The MCC's activities must align with municipal objectives, and it must adhere to the principles of good governance, including compliance with financial and reporting standards set by the MGA and other relevant legislation.
In summary, MCCs allow municipalities to manage complex service delivery needs while maintaining public oversight and trust.
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.
