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    The Legal Defense Fund

    In 1997, FCM established a Legal Defense Fund to cover the legal costs of defending municipal jurisdiction over rights-of-way management. Since then, the scope of the Fund has evolved and is now a critical tool in advancing the national legal interests of municipalities in a broad range of cases that have implications for the municipal sector.

    The Fund, which covers legal costs incurred by FCM in its role as intervener, has been instrumental in setting important legal precedents on key local issues. It is also used by FCM to obtain proactive legal opinions on emerging policy files of concern to local governments. The Fund is supported by FCM members on a voluntary basis.

    For more information, see our questions and answers below or email info@fcm.ca.

     

    Questions and Answers

    Q: What sort of interventions will the Legal Defense Fund take on?

    The criteria for the use of the Fund include whether a case is in the national interest, whether it is precedent-setting, whether FCM's membership has a relatively unified position on the issue being litigated, and the likelihood of success.

    Q: How does FCM determine whether it will intervene in a municipality’s case?

    Potential cases will be analysed by FCM staff to determine whether they meet the above criteria, in consultation with municipal subject matter experts where appropriate (e.g. the FCM Technical Committee on Telecommunications and Rights-of-Way). Requests for intervention are approved by FCM's Board of Directors, or by FCM's Executive Committee acting on behalf of the Board of Directors for time-sensitive requests.

    Q: Can the Fund be used to cover the legal costs of individual municipalities?

    No, the Fund is only to be used to cover costs incurred directly by FCM related to the application for intervener status on behalf of the broader municipal sector.

    Q: Can the Fund support FCM’s intervention in cases before a provincial court on matters relating to provincial legislation?

    No, the Fund is only to be used for litigation that relates to matters of federal jurisdiction and concern the legal interests of local governments on a national basis.

    Q: Can the Fund be used to support FCM’s intervention in federal–municipal issues that are before the lower courts (i.e. have not yet been appealed to the Supreme Court of Canada)?

    Yes, FCM will consider intervening in exceptional cases of national importance that are before provincial/territorial courts of appeal. The Fund will not, however, support FCM involvement in litigation at the trial (first instance) stage.

    Q: How does the Fund help smaller municipalities?

    When a request for assistance from the Fund is received, FCM convenes a group of experts — representing a cross-section of municipalities of all sizes and regions — to assess the request and provide input. This ensures that all municipal perspectives are taken into account as a collective position is developed. What’s more, the pooling of resources is a very cost-effective way of addressing legal concerns. It provides the municipal sector as a whole with the best legal advice available, at a fraction of the cost of proceeding on an individual basis.
     

    Case Studies

    Constitutional Jurisdiction of Municipalities

    The 2001 decision by the Supreme Court of Canada in the Spraytech v. Hudson case, in which FCM intervened on behalf of the municipal sector, ushered in a new approach to how courts should interpret the legislative authority of municipal councils. In that case, the Supreme Court indicated that courts should show deference to the choices made by local elected officials, in this case the Town of Hudson, Quebec. The Court also indicated that municipal legislative authority should be interpreted broadly and that local rules could coexist with federal regulations.

    Since then, FCM has continued to play an active role, as intervener, in a number of cases where the basic ability of municipalities to use their legislative powers has been at stake. Recent examples include Rogers v. Châteauguay, Windsor v. Canadian Transit Company (both heard by the Supreme Court in 2016) and Hamilton v. Canada Post (Court of Appeal for Ontario in 2016).

    Federal Payments in Lieu of Taxes

    Across Canada, PILT payments account for hundreds of millions of dollars in revenues for a several municipalities. For decades, FCM has negotiated with the federal government on behalf of the municipal sector. In the early 1990s, these efforts led to amendments to the PILT Act and an accompanying Memorandum of Understanding. As a result, federal (tax-exempt) properties were to pay an amount as close as possible to what would be charged if these properties were subject to local taxation.

    Two municipalities — Montreal, Quebec and Halifax, Nova Scotia — in separate appeals to the Supreme Court, sought clarification of the PILT Act in order to bring greater predictability and stability to PILT calculations. FCM intervened in both cases and both resulted in clear victories for the municipal sector, with the Supreme Court unequivocally endorsing FCM's interpretation of the PILT Act.

    Rights-of-Way Management

    The deregulation of the telecommunications sector in 1993 completely changed the ROW environment overnight. A number of new, commercially aggressive providers sought quick access to municipal ROWs to deploy their networks. Through its Technical Committee on ROWs (some 40 legal and technical experts from across the country), FCM has coordinated the municipal sector's response for 25 years: development of best practices, information sharing and active participation in a number of legal cases.

    FCM was the Appellant to the Federal Court of Appeal in the landmark Ledcor case that established the principle that municipalities have the right to recover all incremental costs related to telecommunications activity on their land. FCM also intervened in early cases such as the Edmonton LRT tunnels as well as recent precedent-setting cases: next-generation access agreements (CRTC decision in Hamilton v. Bell), the applicability of general ROW bylaws to federal undertakings (Court of Appeal for Ontario in Hamilton v. Canada Post) and the use of bylaws to grant "consent" under the Telecommunications Act (brought by Calgary and currently before the CRTC).

    Jurisdiction of the Federal Court

    In 2016, FCM intervened at the Supreme Court of Canada in a dispute between Windsor, Ontario and the Canadian Transit Company, the federally regulated corporation that operates the international bridge between Windsor and Detroit. The dispute centered on whether the Federal Court has jurisdiction to determine the applicability of a local property standards bylaw to a federal undertaking.

    FCM intervened to support local access to justice in such cases, arguing that questions of federal-municipal jurisdiction must be decided in the local courthouse by a Superior Court Justice, not by the Federal Court. The Supreme Court of Canada ruled (in a 5 to 4 split) in favour of the City of Windsor, narrowly agreeing with the city and FCM's position. Although others asked to participate in the proceedings, FCM was the only municipal representative granted intervener status by the Supreme Court.
     

    What municipal leaders are saying about the Legal Defense Fund

    The FCM Legal Defense Fund has played a critical role in advancing municipalities' constitutional and legal interests. In 2012, FCM defended the sector's interests in our city's payments in lieu dispute before the Supreme Court of Canada with the federal government regarding the valuation of Halifax's Citadel Hill. After a successful Supreme Court decision, this case was successfully resolved in 2016. The Fund remains a key tool for bringing the national voice to legal disputes and in defending the municipal sector's collective interests.

    Mayor Mike Savage
    City of Halifax, Nova Scotia

    Defending municipal jurisdiction in court is a tall task for municipalities to bear on their own — especially for smaller municipalities. That's why FCM's Legal Defense Fund is such a critical tool. A well-supported Fund is key to defending the legal interests of municipalities of all sizes. FCM is consistently recognized by the courts as the sole national representative of our sector in cases of national importance. We need to continue to support the Fund to ensure that FCM is able to intervene in precedent-setting cases that impact each and every one of us.

    Councillor Lorne Olsvik
    Lac Ste. Anne County, Alberta

    In 2015 FCM defended the municipal sector's interests before the CRTC in our city's rights-of-way dispute with Bell Canada. After a successful decision, the Commission approved the terms and conditions for Bell's access to our right-of-way, and set an important precedent for all municipalities in their dealings with telecom companies. The Fund also supported an intervention in our right-of-way dispute with Canada Post at the Ontario Court of Appeal. FCM's support has proven invaluable in advancing the sector's interests before the courts.

    Mayor Fred Eisenberger
    City of Hamilton, Ontario

    Page Updated: 02/05/2018