Prince Edward Island adopts new Municipal Government Act

Perlene Morrison

Prince Edward Island’s municipal legislation is being modernized with the implementation of the Municipal Government Act (the “MGA”). The legislation has now received royal assent and will be proclaimed in force at a future date. The MGA repeals and replaces existing municipal legislation in the Province, including the Charlottetown Area Municipalities Act, the City of Summerside Act, and the Municipalities Act. There are a number of details, however, that must still be worked out by way of regulations. As of this date, a draft of the regulations has not yet been published.

Interpretation of Municipal Powers

Historically, municipal statutes were interpreted strictly. The modern approach is different. It aims to give municipal legislation a broad, purposive, and contextual interpretation. The new MGA embraces this new approach and expressly states that the powers granted to municipalities and their councils are to be interpreted broadly in accordance with the purposes of the legislation. Those purposes are expressly set out in the MGA.

New Bylaws

Many municipalities will have a significant amount of work to do in order to comply with the new legislation. All municipalities will be required to have the following bylaws enacted:

  • election bylaw;
  • procedural bylaw (including conflict of interest rules);
  • records retention and disposal bylaw;
  • emergency management plan bylaw;
  • access to information and protection of privacy bylaw; and
  • procurement bylaw.

The MGA sets time limits for the enactment of these bylaws, although the dates are not yet known because they depend upon when these sections of the MGA are proclaimed into force.

In addition to these new bylaws, it is also necessary for all municipalities to adopt a code of conduct in accordance with the requirements prescribed by the MGA. A bylaw will now be required to authorize any remuneration to a member of council or to a member of committee of council.

New Financial Requirements

The MGA also includes more stringent financial requirements. Municipalities must adopt an operating budget, a capital budget, and a financial plan. A council will only be able to make expenditures that are included in their financial plans, unless the expenditure qualifies as an emergency under the Emergency Measures Act or is ordered to be paid by a court or by the Minister. There are also specific requirements for borrowing funds and for issuing grants or loans, including the requirement to authorize all of those things by bylaw. Financial statements must be prepared in accordance with the MGA and an auditor must be appointed by municipalities.

Restructuring Municipalities

The MGA includes new processes for establishing, restructuring, and dissolving municipalities. Municipalities that are continued, restructured, or established under the legislation will be required to provide fire protection, municipal planning (including an official plan and bylaws), and emergency measures planning. In addition, all municipal offices must be accessible to all members of the public. The MGA also includes more robust rules around conflicts of interest and increases the number of areas where tickets can be issued by municipalities for bylaw infractions.

The MGA also gives significant powers to the Minister, including the power to dissolve a council and appoint an official trustee to act in its place. The Minister can also require audits, inspections, and inquiries. And all of these functions are at the expense of the affected municipality. There is also ministerial authority to withhold funding and to declare a municipality ineligible for funding programs in the event of non-compliance with orders issued by the Minister.

In summary, municipalities in Prince Edward Island will be entering a new era of oversight under the MGA.

Next Steps for Municipalities

With these new expectations and obligations for municipalities, the MGA is clearly encouraging communities to come together. It will be challenging for smaller municipalities to meet these new legislated requirements. And for those municipalities who already have bylaws in place that address these subjects, they will still need to review them to make sure that they satisfy the requirements of the MGA. We encourage municipalities to contact their legal and financial advisors to obtain advice as to what is required in order to comply with the new MGA. While much is unknown as we await publication of the new regulations, it is clear that the MGA, when proclaimed in force, will change the way municipalities carry on business in Prince Edward Island.

If you have any questions about the new MGA, please do not hesitate to contact our municipal government team at Stewart McKelvey in Charlottetown: Perlene MorrisonGeoffrey Connolly, QC, P.Eng. and Jonathan Coady.

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