Will Sandra And Dwight Kill Eddie's Tunnel Dream

Or has Dalton McGuinty already done it because of what he did the other day?

Oh this deal is not so easy for the City to put through.

I am sure that Eddie and Donna Cansfield must have had a nice lunch over it and Eddie's legal people must have talked to the Ontario Government about it. But have they all missed an important point?

Eddie wants to set up something called a Section 203 company under the Municipal Act to take over the assets of the Tunnel and operate it...at least in the beginning. It will be subcontracted almost immediately thereafter. There has to be a deal behind it with someone to finance the US$75M required but that is not being told to us now and may never be told to us poor taxpayers in any detail.

The Council agenda item says that the Regulations under the Municipal Act have to be amended to allow this deal to go forward. Do Sandra and Dwight want to be the sponsors of this so that it can be argued that they are helping a competitor of the Bridge Co. and thereby prejudicing the DRIC process? What happened to "respecting" the process?

Dealing with Section 203 companies, one commentator said:

• "The government has proceeded cautiously with the municipal corporations provisions, but has signalled a willingness to revisit the issue. As a result, very few municipalities have utilized these powers."

The Ministry of Municipal Affairs and Housing may not be too keen on a Section 203 Company either to operate a Tunnel, a non-core function of a municipality, especially when there is competition with the private sector involved. Will Ontario now compromise its position with respect to the Enhancement Project since they would be assisting a Bridge Co. competitor:

• "Policy and Procedure Considerations
  
  The province has no interest in seeing municipalities create taxpayer-subsidized corporations to compete in areas that are well served now by private sector companies, nor to forestall the private-sector playing its traditional role in providing goods and services to Ontario’s communities, their residents and their businesses. Municipalities would focus their attention on core service areas...
  
  Corporations for different service sectors may require specific provisions in the regulations. This is a new tool and it is important to balance the need to protect the public interest with the need to ensure fair competition with private sector businesses...
  
  Corporations delivering essential public services will be required to act within a framework of accountability to councils and the public."

And if no one knows yet Eddie's second deal, how can there be accountability to Council and the public?

What everyone may have overlooked is that the Municipal Act itself may have to be amended, not just a Regulation. In my opinion, the City may not have the legal power to do what it wants to do. Will someone from the Government seek to amend the Act or will a Private Member's Bill be needed.

For the wannabe lawyers amongst you, take a look a this:

The Municipal Act provides

• 2. Municipalities are created by the Province of Ontario to be responsible and accountable governments with respect to matters within their jurisdiction and each municipality is given powers and duties under this Act and many other Acts for the purpose of providing good government with respect to those matters. 2006, c. 32, Sched. A, s. 2.
  
  19. (1) By-laws and resolutions of a municipality apply only within its boundaries, except as provided in subsection (2) or in any other provisions of this or any other Act. 2001, c. 25, s. 19 (1).
  
  The Regulations under the Municipal Act say:
  3. A municipality may use the power to referred to in paragraph 1 of subsection 203 (1) of the Act to establish a corporation only if the municipality by itself, or together with one or more other public sector entities, establishes the corporation and,
  
  (a) the corporation’s purpose is to provide a system, service or thing that the municipality itself could provide; or
  
  (b) the establishment of the corporation is expressly authorized by this Regulation.

The Province would have to provide a regulation that allows the Municipality or the Corporation to be able to carry on business in the US. But that is not enough. The Regulation cannot allow something that is contrary to the Act. The Act would have to be amended as well since the City can only act within its jurisdiction and not in the US. (See Business Corporations Act where the specific extra-territorial power is granted "A corporation has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Ontario to the extent that the laws of such jurisdiction permit. R.S.O. 1990, c. B.16, s. 16.")

What will Sandra and Dwight do? Will they introduce the changes to the Act? Have they been put in an impossible position? Damned by the Star if they don't act...damned by the courts if they do!

But it is all OK now for the Ministers. The pressure is off. No legislation can be passed until after the election

• "legislature was scheduled to sit for another three weeks, Premier Dalton McGuinty announced yesterday Queen's Park would shut down early. "

I sure hope Kwame has Alinda's phone number and that he takes a hard look at their deal before it expires and after the exclusivity period with Eddie ends. If I am right, there can be no deal with Eddie until the fall which may be too late for Kwame and Detroit Council!