The Town of Oakville has taken steps to regulate fine particulate matter air emissions within its municipality. The Health Protection Air Quality By-law 2010-035 (Air By-law) became law on February 1, 2010. It requires all facilities within the geographic limits of the Town that discharge more than 300 kilograms per year of fine particulate matter (defined as airborne particulate matter under 2.5 microns in diameter) to apply for facility-specific approval of their proposed air emissions, regardless of any Provincial certificates of approval they might already have.

The Air By-law is controversial, being the first of its kind in Ontario. It was passed by the Town in response to extensive public lobbying to stop a proposed natural gas electrical generating facility from being located within its municipal boundaries in close proximity to residential areas. The fine particulate matter and other compounds which the Air By-law seeks to regulate are currently not subject to approval limits provincially or federally. If other municipalities follow suit with similar by-laws, companies which are otherwise fully compliant with their provincial approvals may nevertheless be required to close.

Thus far, the Air By-law has not been appealed to the Ontario Municipal Board or through the courts. However, it is worth remembering that by-laws such as this one could face legal challenge on a number of grounds.

First, one might question whether the Air By-law conflicts with provincial legislation. It is rare for municipalities to regulate environmental issues at higher standards than the province. They are only permitted to do so if the by-law does not conflict with provincial legislation.

The test for a conflict between municipal and provincial laws was discussed by the Ontario Court of Appeal in the recent Croplife Canada v. Toronto (City), 75 O.R. (3d) 357 (2005) decision. That case involved a challenge to a City of Toronto by-law that limited the application of pesticides in the City. The court applied the same two-part paramountcy test as has been used by the courts to determine whether a provincial law is inconsistent with a federal law: (1) Can a person simultaneously comply with both provisions? (the impossibility of dual compliance test); and, (2) Does the provision frustrate Parliament’s purpose in enacting its provision? If the answer to both questions is “no”, then there is no conflict. The court in Croplife further explained that had the Parliament or Ontario legislature intended to restrict the regulation of pesticides to the relevant federal or provincial acts, they would have used very clear language to do so.

Second, a by-law like the Air By-law could face legal challenge on the basis that it is ultra vires.

In 114957 Canada Ltee (Spraytech, Societe d’arrosage) v. Hudson (Town), 2001 SCC 40, Justice L’Heureux-Dube found that a municipality had acted within its authority under the Québec Cities and Towns Act in enacting a by-law to regulate pesticides. The CTA provided that the councils could make by-laws:

(1) To secure peace, order, good government, health and general welfare in the territory of the municipality, provided such by-laws are not contrary to the laws of Canada, or Québec.

Query whether Ontario municipal law legislation, which makes no mention of an air approval power, intended to authorize the enactment of an Air By-law which essentially creates a duplicate air approval regime to the one expressly mandated under provincial legislation – the Environmental Protection Act.

Third, one may ask whether a By-law such as this one, arguably enacted to prohibit a particular facility in response to lobbying by the public, can be challenged on the basis of “bad faith.” The concept of bad faith is discussed by the Ontario Court of Appeal in Grosvenor v. East Luther Grand Valley (Township), 2007 ONCA 55 (CanLII). The court described bad faith in these terms:

To say that Council acted in what is characterized in law as “bad faith” is not to imply or suggest any wrongdoing or personal advantage on the part of any of its members. But it is to say, in the factual situation of this case, that Council acted unreasonably and arbitrarily and without the degree of fairness, openness, and impartiality required of a municipal government.

In Equity Waste Management of Canada v. Halton Hills (Town) 1997 CanLII 2742, the same court described bad faith this way:

[b]ad faith by a municipality connotes a lack of candour, frankness and impartiality, it includes arbitrary or unfair conduct and the exercise of power to serve private purposes at the expense of the public interest.

Regardless whether the Air By-law can withstand legal challenge on one of the above grounds, one may reasonably ask why the province has failed to intervene. Ontario vigorously regulates air emissions under Ontario’s Environmental Protection Act and O. Reg. 419/05. It has chosen not to prohibit fine particulate matter emissions. Setting aside the question of whether the regulation of fine particulate matter is desirable, it is clear that permitting municipalities to establish a patchwork of air approval standards across Ontario through Air By-laws such as the one enacted by Oakville, is undesirable from a policy and business perspective. It has the potential to frustrate important provincial policy objectives on the basis of local NIMBYism.