CASUAL LEGAL: Want to Remain on Municipal Council? Pay your taxes!

Want to Remain on Municipal Council? Pay your taxes!

By Taylor Thiesen

Reynolds Mirth Richards Farmer LLP

AMSC Casual Legal Service Provider

A recent case from the Alberta Court of Queen’s Bench demonstrates what can happen when councillors allow their taxes to fall into arrears. In the fall of 2017, a Village election was held. One of the elected councillors subsequently became indebted to the Village, having failed to pay taxes and utilities for approximately two years. When the Village became aware of this issue in 2019, the councillor was advised that he could be disqualified from continuing to serve on Council. Upon learning this, he paid the outstanding amount within about two weeks. He advised the Village he had paid his taxes but was advised he was nonetheless disqualified from remaining on Council. When he disagreed with this position, Council offered him the opportunity to resign, but he refused. The Village then applied to the Court to determine whether the councillor had ceased to be qualified to remain on Council.

Under sections 21 and 22 of the Local Authorities Election Act, a person is not eligible to be nominated as a candidate in a municipal election if they owe the municipality more than $50 in taxes (other than current taxes), or have any other debt to the municipality of over $500 that is in default of more than 90 days. The councillor argued that at the time he was nominated, he did not owe tax arrears to the municipality; it was only after he was elected that his taxes fell into arrears. He argued councillors do not have a continuous obligation to remain eligible for nomination after the nomination period is over.

What the councillor failed to appreciate is that under section 174 of the Municipal Government Act, a councillor is disqualified from council if they were ineligible for nomination when they were nominated, or if they cease to be eligible for nomination. As the Court explicitly stated: “municipal councillors must remain eligible for nomination throughout their tenure.”

Furthermore, the Court noted this was not a situation where it could excuse the councillor’s failure to pay his taxes as an “inadvertent” error and decline to disqualify him. Even if he did not realize that failing to pay taxes would result in his disqualification, this was not a situation where the taxes were late because a cheque was accidentally mailed to the wrong address, or something of that nature. Rather, the councillor knew he had a balance owing and chose not to pay it on time. Accordingly, he was disqualified and removed from Council.

While disqualification and removal from Council is relatively uncommon in Alberta, municipal councillors should take note of this cautionary tale and be well aware of the consequences of failing to pay taxes and utilities.

To access AMSC’s Casual Legal Helpline, AUMA members can call toll-free to 1-800-661-7673 or email casuallegal [at] amsc.ca (casuallegal[at]amsc[dot]ca) and reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please contact riskcontrol [at] auma.ca (riskcontrol[at]auma[dot]ca), or call 310-AUMA (2862) to speak to AUMA’s Risk Management staff. Any Regular or Associate member of the AUMA 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.