An application for judicial review of a Bylaw passed by the Respondent City of Red Deer to regulate drinking establishments was dismissed. The Bylaw was not ultra vires the Municipal Government Act. The City enacted the Bylaw for municipal purposes and without ulterior motive. The Bylaw did not confer unlimited or illegal power. The Bylaw did not result in a duplication of powers under the Gaming and Liquor Act because that legislation did not address safety concerns that were particular to a specific community. The delegation permitted by the Bylaw was administrative and was therefore legal.

Administrative law – Municipalities – Legislation – By-laws – Ultra vires – Permits and licences – Fees – Judicial review – Compliance with legislation – Powers of delegated authority – Jurisdiction – Standard of review – Correctness

Passutto Hotels (1984) Ltd. v. Red Deer (City), [2006] A.J. No. 1100, Alberta Court of Queen’s Bench, September 5, 2006. September 5, 2006. L.J. Smith J.

The Applicants sought certiorari quashing a bylaw enacted by the City of Red Deer that regulated drinking establishments. The Applicants asserted that the Bylaw was void for three reasons:

1. The purpose of the Bylaw was ultra vires the Municipal Government Act (“MGA”).
2. The licensing imposed by the Bylaw was at tax that was not authorized by the MGA.
3. The Bylaw illegally delegated certain powers to the Inspections and Licensing Manager.

The Court noted that the issues raised by the application all dealt with the jurisdiction of the City to enact the Bylaw. The standard of review was therefore that of correctness.

The court held that, as statutory bodies, municipalities in Alberta have those powers that are expressly given by statute, powers that are necessarily implied or incidental to the impress powers and those that are indispensable to the operation of the corporation. The MGA gave municipalities broad powers to legislate as they saw fit within certain spheres of jurisdiction set out in the Act. Recent jurisprudence from the Supreme Court of Canada also indicated that Courts were to give municipal bylaws a broad and purposive interpretation.

The Court noted that it was not alleged that the Bylaw was invalid on its face. Therefore, the burden of proving that the Bylaw was invalid fell on the Applicant.

The Court held that the Bylaw was not ultra vires the MGA. The evidence established that the City had, for some years, had a concern about its citizens’ safety arising from a conglomeration of drinking establishments in its downtown core. The City had the right under section 3 of the MGA to maintain a safe community and to pass bylaws respecting the safety and protection of people and property, activities in or near public places or places open to the public and business activities and persons engaged in business. The Court held that the City had established that it enacted the Bylaw for municipal purposes and without ulterior motive. Further, the Bylaw did not confer unlimited power or illegal power.

While there was some crossover in the nature of the conditions that could be imposed under the Bylaw, it was not a duplication of the powers under the Gaming and Liquor Act (the “GLA”). The over-arching purpose of each piece of legislation was different. While the GLA required certain conditions to deal generally with safety in licensed businesses, it was not inconsistent if the Bylaw regulated in the same area with stricter conditions to address the peculiar safety issues that arose in the City, as long as those stricter conditions did not compel what the GLA prohibited. There was therefore no proven danger of double-policing which would render the Bylaw invalid.

The license fee imposed under the Bylaw was done in good faith. The bulk of the licensing fees would relate to enhanced policing that was required as a direct result of the operation of the drinking establishments. Section 8(c)(i) of the MGA specifically allowed for the establishment of a fee for the purpose of raising revenue.  The evidence disclosed that the purpose of the revenue raised by the fee was in part due to defray some of the costs of maintaining public order, the need for which arose from the operation of the drinking establishments. The evidence made it plain that the license fee set out by the Bylaw was genuinely related to the operation of the drinking establishments. The license fee imposed under the Bylaw was therefore authorized under the MGA.

Section 203 of the MGA permitted City Council to delegate its powers, except for the power to pass bylaws. In this case, the Bylaw delegated the type of administrative authority that was traditionally permitted. As such, the delegation provided for in the Bylaw was administrative in nature and therefore legal.

The application was dismissed.

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