Constitutional Entrenchment of Large Canadian Cities via Section 43 Amendment

by Jasmine Law, winner of the 2022 Municipal Law Section Student Essay Contest

1. Introduction

Municipalities are often ground zero for some of today’s most pressing issues, from refugee resettlement, to public health crises, to infrastructure. While many of these issues fall under the purview of the province or belong to federal jurisdiction, they unfold locally against the backdrop of an increasingly diverse municipal landscape. Today’s municipality faces challenges on the frontlines from technological and social changes. For many growing cities, the potentially destabilizing pressure of globalization is also a threat. The fact of the matter is that “the implications of these developments are momentous and have not been given the attention they deserve.”¹ If the “creatures of the province” status quo persists, municipal governments will continue to be severely limited in their autonomy, and unequipped with the proper tools and capacity to effectively plan and prepare for the future.

The academic literature on empowering municipalities and increasing their autonomy is abundant. While there are numerous ideas proposed, all with advantages and disadvantages, I argue that it is time to seriously consider the constitutional entrenchment of municipal authority, especially for large cities, in Canada. While a federal constitutional amendment is nearly impossible and in fact undesirable, the provinces can proceed via section 43 (single province amendments) of the Constitution Act, 1982,to authorize the adoption of charters by large cities. This provides for the ability to create sustainable strategies and other reliable and predictable forms of revenue streams that long-term prosperity demands. Otherwise, Canadian cities are left unable to compete in a globalized world economy and meet the needs of their residents.

Of course, municipalities’ power and autonomy should be increased proportionally in a way that still supports cooperative federalism. However, as I will explain in this paper, there are many factors in support of increased municipal autonomy that outweigh many of the counter-arguments that discount a province-by-province amendment: the global trends of more autonomous city-state actors, the changing urban-rural landscape in Canada, the fact that cities are being constrained in their power to solve local crises, and the existence of supportive constitutional values. Further, municipalities in the United States hold the same position within the federal constitution as in Canada. However, many states implement varying versions of Home Rule and Dillon Rule, with state constitutions authorizing city charters through self-executing provisions. Thus, American research on this front will serve to provide examples throughout this paper and will help frame the discussion of how a similar system could operate in Canada. This paper is intended to start a process whereby the constitutional entrenchment of municipal authority is seriously considered. It is not meant to present a perfect solution, but to examine the feasibility of such an amendment, for the reasons that I have provided above. I intend to address some of the concerns on both sides, recognize that there are other solutions available and address why they are less preferable, and ultimately explain why it is time to consider how a section 43 amendment, especially for provinces with large cities, is a real and tenable solution in the face of economic pressures and urgent social issues.

2. Proposal for Single-Province Constitutional Change to Authorize City Charter Creation

In Canada, municipalities do not have a means of entrenching their status since provinces can amend provincial laws whenever they may desire by majority vote, as long as they do not violate other constitutional laws. In provinces with city charters, these charters are nothing more than ordinary statutes as they are not entrenched. Thus, the question of entrenchment remains fundamental.²

As this paper will make clear, although there are other tools and options available, constitutional amendment will prove to be the most prudent. To begin, section 43 of the Constitution Act, 1982 is used for amendments affecting one or more but not all provinces.³ It requires the consent of the provincial legislature in question, as well as the consent of the House of Commons and Senate. If the Senate does not consent, the amendment may still be adopted if the House approves it for a second time.⁴

I argue that it is best to proceed one province at a time, authorizing city charters in each, particularly in the context of provinces with very large and fast-growing cities like Toronto, using the amending procedure in section 43. A higher population minimum can be used to limit the number of municipalities that can adopt their own charter, like how some US states, such as Nebraska or Arizona, implement Home Rule and allow only certain municipalities to create their own charter while Dillon Rule (the creatures of the province doctrine) presides over the rest, which will be discussed in further detail below. Section 43’s amending formula is a much more manageable threshold compared to the general amending formula, which requires the consent of at least seven provinces that hold 50 per cent of Canada’s population, and it is more workable than a province amending its own constitution via section 45 by a vote of its legislature (without federal or any other kind of approvals), since this section’s power is not yet well understood.⁵

The idea of a section 43 amendment has been proposed by numerous scholars as having some of the most potential for protecting local diversity through the Constitution. Academics have noted that Toronto’s size in particular, when compared to other Canadian municipalities, arguably provides it with an even stronger basis for different constitutional status.⁶ In fact, the Toronto City Charter organization also proposed this very amendment to “enable the creation of Charter Cities in Ontario, spell out the rules for amending any such Charter in the future, and guarantee that changes can only be made with the consent of the city.”⁷ Additionally, there are many American resources available that have examined the use of Home Rule and Dillon Rule in many states, which will serve as useful material to consider how a Canadian version of Home Rule might operate in a given province.

3. Background

3.1 Constitutional Status of Canadian Cities

I begin with some background on the status of cities in Canada. Under section 92 of the Constitution Act,⁸ provinces have exclusive jurisdiction over cities and other municipalities in the province, subject to limited exceptions. As a “creature of the province,” a municipality has no inherent powers, only the ones given to it by the provincial legislature, usually in a statute. A province can thus take away or change any municipal power previously granted, without having to provide much explanation. Given the provinces' exclusive control, the federal government’s power to deal directly with municipalities is limited, unless the province gives permission, which is rare.⁹ However, federal action can sometimes legally impact municipalities if it is exercising some of its exclusive constitutional powers, the more likely ones being the general spending power, the powers of Peace, Order, and good Government, Regulation of Trade and Commerce, Navigation and Shipping and Banking, and more.¹⁰ Overall, this leaves municipalities at the mercy of the province with limited power and flexibility to build fiscal autonomy.

3.2 City Charters and Other Tools of Municipal Empowerment

Charters are a special agreement made between a province and a city, and they will often vary in content depending on the municipality. Generally, though, a city with a charter has its own standalone legislation, as opposed to following the general municipal legislation in that province. The intention behind “charters” is to help cities with their local governance by giving them some more tax-raising abilities and policy autonomy.¹¹ However, even if a statute pertaining to municipal powers “is called a ‘charter’ it does not, on its own, acquire a special status that protects it from interference by subsequent provincial governments.”¹²

It should be noted that over the last two decades, large municipalities across Canada have incrementally received more powers from their provinces, including more revenue streams and additional oversight in areas like infrastructure and housing.¹³ In 2016, for instance, Québec granted Montréal special official status as a metropolis and introduced legislation that gave the city greater autonomy. Montréal gained new authority in housing, heritage preservation, and homelessness, among other things.¹⁴ However, as demonstrated throughout the country, while city charters for Canada’s big cities may provide for some mechanisms that enhance efficiency, they are mostly superficial and do not provide for much more increased autonomy. Charter Cities remain under the same subjective control of provincial legislation as other municipalities in the province.¹⁵ For instance, in 1996, the province of British Columbia signed an agreement with the Union of British Columbia Municipalities recognizing local government, and in 2003, the legislature adopted the Community Charter, which established areas of jurisdiction and revenue streams for municipalities. However, the Charter does not have supreme status and a simple majority vote by the legislature can modify it.¹⁶ Alberta provides another example. After years of negotiation, the province’s largest two cities, Calgary and Edmonton, received a charter in 2018. While Calgary’s new charter contained “44 new authorities, a new fiscal framework with cost-sharing and enhanced revenue tools, more requirements for community input, and a more mature government-to-government relationship between the city and the province,” these powers were threatened after a new provincial government came to power in 2019.¹⁷ Cities are thus at the mercy of the changes in political tide in their provinces.

Further, while provincial governments could possibly constrain their own power by putting in place via a statute a requirement for consultation, they still retain and wield much of the decision-making power when it comes to municipal authority. The story behind the case of Toronto v Ontario is a prime example.¹⁸ In 2018, the province of Ontario slashed the size of City Council in half just over a month before its municipal election by enacting the Better Local Government Act, 2018.¹⁹ The Supreme Court upheld the province’s authority to enact such a legislation, dealing a blow to the idea of municipal autonomy in Canada.²⁰ Ontario had completely disregarded the guarantee promised in the City of Toronto Act, 2006 thatToronto could design its own forms of governance and that city-province consultations would take place prior to any changes.²¹ Indeed, the CITA, via provincial legislation, was meant to confer governmental status to Toronto. Section 1 reads: “The City of Toronto exists for the purpose of providing good government with respect to matters within its jurisdiction, and the city council is a democratically elected government which is responsible and accountable.” Toronto’s municipal government had the power to “determine what is in the public interest for the City” and received many other seemingly expansive powers.²² Though initially celebrated as a positive development for municipal autonomy, the CITA did not actually prevent the province from overriding Toronto’s decisions.²³ Thus, at different times, these Canadian cities were given their own special legislation and were outlined new powers not previously had, but these powers came with limitations and exercising them often required provincial approval in advance. The provinces, as both Ontario and Alberta have done in recent years, are able to unilaterally change the extent of these powers with no enforceable requirement to consult the municipality.²⁴

However, the concept of charters and its emphasis on additional tools and powers remains generally popular for reasons that include economic, infrastructural, and political grounds. There have been some criticisms of the Charter movement voiced by proponents of federalism and that especially with Toronto, the idea of a charter might be problematic given heightened intra-city economic and racial inequalities – Toronto may not be the unified megacity that some have portrayed it to be.²⁵ Though, I would argue it is clear that with limited autonomy and fiscal capacity, the current social issues plagued by cities like Toronto cannot be adequately fixed as it stands currently, anyway. The overall support for charters, particularly with attention to Toronto, prompted the Federation of Canadian Municipalities to endorse a template for general charter-writing,²⁶ and there have been a wide range of proposals envisioning what a Toronto city charter could look like.²⁷

There are, of course, other options that may increase municipal autonomy and decrease interference from other political actors or governments. Stricter legislative language or “manner and form” provisions could limit provinces’ ability to interfere in municipal affairs. For example, self-imposed procedural restraints and requirements could include special parliamentary majorities, such as a two-thirds majority vote or a referendum, which could be required for amending certain pieces of legislation.²⁸ Intergovernmental arrangements could also be strengthened to protect municipal autonomy and stabilize funding. The problem with such arrangements is that these relationships can easily change when different political parties take power, thus these are unpredictable forms of arrangements. Some other fiscal options include reducing provincial taxes by a fixed percentage and allowing the municipalities the right to raise taxes by a similar amount, or giving a fixed percentage of sales taxes to municipalities, or enacting municipal equalization payments, like how the provinces receive them from Ottawa.²⁹

In terms of other kinds of constitutional change, such as the secession amendment and the general amending formula, they are mostly a non-starter and have very low chances of being realized.³⁰ Further, a country-wide approach of entrenching municipalities’ constitutionality may introduce rigidities into local government, depending on different courts’ interpretations. With the vastly different levels of urbanization and diversity across provinces, the legal differentiation among municipalities across Canada would render a federal constitutional change not ideal, and leaving the issue of how to treat municipalities differently to the courts would likely prove problematic.³¹ Besides the non-feasibility of Canada-wide constitutional change, the truth is that these kinds of other tools and forms of empowerment will also go nowhere unless provinces are willing to acknowledge the importance of cities. Thus, it remains necessary to address and consider the question of constitutional change, and the most amenable option in Canada’s political climate is if it is incremental and on a province-by-province basis, through section 43.

3.3 Section 43 Amendments and its Advantages and Pitfalls

Section 43 demonstrates an internal logic that recognizes two essential facts. First, within the Canadian constitution, there is a commitment to local autonomy over local affairs present. This important principle, instilled since 1867, allows provinces to make amendments that directly and only affect them, without having to secure approval from other provinces. Second, section 43 recognizes the diversity in needs and aspirations between provinces and that these differences can vary greatly.³² There have been eight such amendments since section 43’s adoption into the Constitution in 1982.³³

Section 43 is not without its challenges. In the Reference on Senate Reform, the Supreme Court of Canada limited its remarks about Section 43, commenting that “[t]he determination of its scope and of the effects of its interaction with other provisions of Part V…present significant conceptual difficulties.”³⁴ However, after examining its use and language, some recent scholarship has argued positively in favour of section 43 in providing flexibility to Canada’s otherwise rigid and arduous constitutional amendment processes.³⁵ The application of this amending procedure also provides for some flexibility. While it may be advisable and advantageous for the safe passage of an amendment, coordinated action between these three bodies is not required by section 43. The federal Department of Justice has drafted most of the amendments made under section 43, but in 1996, Newfoundland and Labrador set the precedent that the provincial government may act independently of the federal government, rendering the section to be implicitly understood as allowing the three bodies to form independent judgments on each amendment brought before them, of which they may respond to each as they see fit.³⁶ Amendments can thus be initiated by a provincial legislative assembly, the Senate or the House of Commons, which means that representatives from a province have different avenues to ensure that a proposed change they wish to pursue can be considered.

3.4 Comparative Analysis with the United States

Throughout this paper, I will use the United States to illustrate some of the same issues experienced by both countries’ municipalities, and I will pull useful and transferable lessons from those examples to discuss their applicability to Canada. The two nations are similar in that local government in the US is created by the state. The US Constitution’s Tenth Amendment acknowledges that powers “not delegated to the United States,” unless otherwise prohibited by the Constitution, are “reserved to the States respectively, or to the people.”³⁷ The powers granted to the states, and through the states to local governments, are viewed as “a check and balance on federal control.”³⁸ However, while American municipalities have the same constitutional position as their Canadian counterparts, many of the 50 states already constitutionally authorize municipalities to create their own charter. All of these states execute this differently, though, which is the purpose of using the US as an illustration of how a province-by-province amendment in Canada could work for municipal charter creation.

There are two types of governing authority for American local governments: Home Rule or the Dillon Rule. A state which employs both “applies the Dillon Rule to matters or governmental units not accounted for in the constitutional amendment or statute which grants Home Rule.”³⁹ The Dillon Rule doctrine of municipal government maintains that municipalities are merely the "creatures of the province.” Local governments can only legislate in areas that the state government has permitted them to.⁴⁰ This doctrine originated from 19^th century American law, but it made its appearance in Canada in the 1993 decision of the Supreme Court in R v Greenbaum.⁴¹ In Greenbaum, Justice Iacobucci cited a passage which indicated that Dillon’s US-based rule had been adopted in Canada. This rule established that “municipalities are merely delegates of a proper state or provincial government, and thus able to act only if and when expressly authorized by statute.”⁴² Dillon Rule’s influence on Canadian law has been quite substantial, though the jurisprudence following Greenbaum has indicated a general turn away from that doctrine since.⁴³

On the other hand, Home Rule, as the name may indicate, gives “local governments governing authority to make a wide range of legislative decisions that have not been addressed by the state.” Nearly all of the US states have some form of Home Rule, which can be constitutionally entrenched, statutory in others, or a combination of the two, which is often the case.⁴⁴ A Home Rule city “drafts and amends its own charter to establish the scope and manner of service delivery to its residents,” since they “may regulate local matters without interference from the state legislature, provided an action is not expressly prohibited by the state.”⁴⁵ Home Rule charters, either created through constitutional or legislative change by the state, permits local governments to “conservatively pass ordinances as they see fit,” as long as they are not in contravention of other laws. It comes as no surprise that Home Rule has undoubtedly changed over time as our understanding of state-municipal relations changes, and there is significant variation of Home Rule across and even within states:⁴⁶ For instance, “many states that have Home Rule charters only apply Home Rule to certain municipalities…Home Rule in Arizona only applies to cities with a population of at least 3,500 people. In cities with populations fewer than 3,500, or in any county or township, the Dillon Rule applies.”⁴⁷

On the other hand, Nebraska is considered a Dillon Rule state, which means that “cities, villages, and other political subdivisions only have those powers expressly granted to them by the Legislature.”⁴⁸ However, the Nebraska Constitution also prohibits the legislature from passing legislation that deals directly with local laws and recognizes local government’s important role in the system. It also authorizes cities with more than 5,000 residents to organize under Home Rule and adopt a Charter, which must be consistent with and subject to Nebraska’s laws and Constitution. This constitutional provision is self-executing and does not require any action on the part of the Legislature.⁴⁹ Lincoln and Omaha are Nebraska’s only Home Rule cities, perhaps reflective of the understanding that for smaller municipalities, it can make much sense to rely on the state or province for many things or services. Similarly, population minimums are a useful tool that would work in a Canadian version of limited “Home Rule.” Besides Nebraska, 31 states also provide for Home Rule in their state constitutions, 20 of which recognize Home Rule as a self-executing power and 11 that require enabling legislation. Eight states authorize Home Rule by statute and specifically identify the local governments that can use Home Rule.⁵⁰ Moreover, eight states apply the Dillon Rule in very specific circumstances to local entities – Indiana, for example, only applies the rule to townships.⁵¹

When comparing a Canadian charter city to an American charter city, the differences, and in particular the shortcomings of the Canadian system, become clear. American charter cities are broadly more autonomous than their northern counterparts, since Canadian charter cities remain subordinate and subjective to conventional provincial legislation.⁵² Notwithstanding other considerations (such as geographical differences between the US and Canada, for instance), the purpose of this illustration is to demonstrate how the provinces of Canada could also proceed via section 43 to authorize city charter creation similarly to how these states have – by implementing certain safeguard such as population minimums or other specific rules, to make entrenchment more amenable in that province.

4. The Case for a Constitutionally Empowered City

4.1 The Growing Trend of the Metropolis as a Major International Actor

Even with their subordinate status in their respective countries, cities around the world have become enormously important and innovative global players in recent years. These cities participate in the international arena and hold their own: For example, despite the US federal government’s decision to withdraw from the Paris agreement in 2017, New York, Houston, Miami, and San Francisco committed to the climate goals on their own.⁵³ Many of these well-known cities like London, New York and Tokyo are already established in academic scholarship and in popular culture as “world cities” that are regarded as international economic actors and command centres. Academics have recognized that for such cities, “international influences compete with national laws as the cities adopt objectives of ‘best practices’ or ‘good governance models.’”⁵⁴ The world is changing and the “incremental transformation of cities, especially world cities, into international actors has given rise to the hybrid entity of the ‘private city’ where the objective of private economic development drives city power.”⁵⁵ These highly urbanized areas have proven to drive innovation and trade and “hold dense concentrations of human capital that increasingly are required by the knowledge-based economy.”⁵⁶ Cities are therefore key for national and global economic growth as they produce and attract skilled workers and competitive business. In fact, the world’s top 100 cities generate 30 per cent of the world’s global GDP.⁵⁷ In Canada, the nation’s top six metropolitan areas contain almost 50 per cent of the Canadian population and produce nearly half of the country’s GDP.⁵⁸ This rapid urbanization will evidently continue, according to the United Nations. By 2030, the UN predicts that 60 per cent of the world’s population will live in cities.⁵⁹

In the US, it is noted in the academic literature that given the evolving role of local governance, there is an “increasing sense that state oversight is no longer serving the constructive, collaborative role in the state-local legal relationship that it should.”⁶⁰ Cities, counties, and towns have been busy innovating and experimenting with different approaches to economic development, public safety, health, housing, labor and employment, and climate change and environmental protection, which reflects the recent reality that people are looking more often than not at local governments to solve their policy concerns.⁶¹

Meanwhile in Canada and as discussed in a previous section, a variety of governance reforms, tools, and other tricks have been introduced or used as part of efforts to increase municipal autonomy and power, though little improvement has taken place. Such tools include the creation of bodies such as the Federation of Municipalities, city charters, federal gas transfers, specified provincial grants, and more.⁶² Over time Canadian courts have also gone on to occasionally undermine the creatures of the province doctrine in Spraytech, United Taxi and Croplife,⁶³ which can provide important support for political and legislative willpower to give cities additional autonomy,⁶⁴ though the recent case of Toronto v Ontario dealt a blow to that judicial momentum. Nonetheless, the McKinsey Global Institute “has stated that the 21^st century will belong to the cities… We are quite simply witnessing the biggest economic transformation the world has ever seen as the populations of cities expand and enjoy rising incomes – producing a game changing new wave of consumers with considerable spending power.”⁶⁵ Thus, meeting demand from new consumers will be difficult without the proper tools.

4.2 The Urban-Rural Landscape has Changed

The times have simply changed. There is no reason to treat Canadian cities as though we are still in 1867, when 80 per cent of Canadians lived in rural areas, and the provinces needed to unite the large, sparsely populated rural land in order to pool resources, provide good government, and have more power.⁶⁶ Today, 80 per cent of the Canadian population lives in urban areas,⁶⁷ and nearly one in 10 Canadians live in Toronto.⁶⁸ This kind of uneven population growth also gives rise to the major concern of democratic deficit. Due to the nature of electoral district rules often squeezing more people into urban ridings than in rural ridings, the votes of those living in cities are subsequently diluted.⁶⁹ Toronto’s 3,000,000 inhabitants elect one of the largest municipal governments in the country and the city contributes $200 billion annually to Canada’s GDP,⁷⁰ but its residents actually have much less power over their own affairs than the 150,000 people of Prince Edward Island.⁷¹ It is safe to say that Canada’s large cities are mature governments in their own right,⁷² but their ability to govern adequately is largely impeded due to their subservient status in Canada, and large, major cities are getting the short end of the stick in terms of having their needs met.⁷³

4.3 Large Cities are Being Constrained by Their Subordinate Status, Now Exacerbated by Recent Crises

Academics have noted that the scholarship around municipal subordination in the Canadian federal system has made clearer the growing importance of local government. Large cities in particular need to be recognized and given the appropriate authority to meet these new challenges to further bolster Canada’s global position: “In an era that has been deemed as belonging to the metropolis, the big cities of Canada need more political and economic clout.”⁷⁴ And while cities in Canada have accumulated greater responsibilities through “downloading” since the 1980s, cities have not received the needed revenue streams that should come along with it. Downloading, the act of when one government passes on a sphere of governance it normally controls onto a lower level of government, can occur in two ways: “the government mandates that another level of government provide a specific service and does not give compensation for doing so, or the government simply stops providing a service, leaving another level of government to fill the gap.”⁷⁵ As mentioned in a previous section, there is also frustration on the part of cities as provinces only consult the municipalities if and when they want to, despite governing municipal acts in that province.⁷⁶

The example of Toronto is instructive. The province downloaded many responsibilities to the city without adequate revenue sources after amalgamation in 1998, including “the public housing projects owned by the province, and the complete funding of the public transit system, which the province had contributed to for twenty-five years.”⁷⁷ In 2017, instead of granting Toronto’s request for the power to implement tolls on inner-city highways to raise additional funds for transit operations, Ontario increased the city’s financial dependence on provincial transfers by “substituting a (revocable) portion of the provincial gas tax.”⁷⁸ Two years later, the province passed legislation allowing it to take ownership of the Toronto subway system without compensation. The province then promised it would not do so if the city would agree to the four subway lines and extensions that Ontario had planned, even though those additions were “contrary to the city’s long-developed plans and priorities for transit.”⁷⁹ In that same year, the province rejected two of Toronto’s critical urban plans even though years of work and consultation with city residents had already taken place. Instead, the Ontario government went ahead and unilaterally increased the allowable densities in those same areas, while simultaneously “rescinding much of the city’s power to get property developers to pay for community infrastructure and benefits such as parks, libraries, and childcare spaces.”⁸⁰ Additionally, the province was unwilling to permit municipalities’ local efforts to protect greenbelts and moraines and did not allow them to set higher environmental standards.⁸¹

The COVID-19 pandemic has also served as a rude awakening for cities.⁸² The pandemic highlighted and worsened already dire situations, such as poverty and homelessness, in some of Canada’s largest cities.⁸³ In an article by Alexandra Flynn, a law professor specializing in municipal law, municipalities raised concerns about the significant financial impact of the COVID-19 pandemic, as there were reductions in property tax payments (which usually accounted for 70% of municipal budgets), less revenue from the lack of enforcement of parking fees or cancelled fee-paying recreation programs, and halted permits.⁸⁴ Many municipalities used layoffs to reduce operating expenses because they are not able to run deficits like the provincial and federal governments. Municipalities are thus quite limited in their ability to raise revenue and will require provincial bailouts.⁸⁵ Canadian cities advocating for reform with respect to municipal budgets and taxes is not a new subject, but COVID-19 has perhaps provided some of the strongest support in reigniting the conversation.⁸⁶

Rapid urbanization has seen the rise of major urban areas as drivers of economic prosperity, which has underscored the necessity for “urban-municipal independence.” Thus, the lack of municipal autonomy and capacity has become increasingly problematic “in an era of globalization that has introduced new consumer demands that heavily burden local governments.”⁸⁷ The influence of globalization in Canada has uncovered an undeniable reality in which municipal governments are suffering at the hands of a system that often leaves them constrained and restricted. The current approach to municipal authority needs reform and province-by-province constitutional entrenchment of potential charters for large urban centres is the best way to secure increased autonomy for these cities.⁸⁸

4.3.1 Similar Trends in the United States

Provincial or state interference in municipal affairs has been discussed at length in this paper within the context of Canada, such as in the Toronto v Ontario case. Unfortunately, this is not a new phenomenon. Municipalities in the US have also been grappling with this issue, as “states are increasingly violating the spirit of this oversight authority.” For example:

• “At least 25 states currently use their authority to preempt local minimum wage laws while 22 states prohibit local paid sick leave ordinances.”⁸⁹
• “Thirteen states now ban local food and nutrition policies, 10 states prevent local governments from regulating e-cigarettes, and 43 states limit the authority of local governments to regulate firearm safety.”⁹⁰
• “Similar statistics can be found for policies as diverse as civil rights, the environment, and emerging technologies (such as broadband and autonomous vehicles), not to mention core local governance functions such as municipal finance and local elections.”⁹¹

The National League of Cities, an American organization, has also documented a rise in “punitive preemption,” in which states enact laws for the purposes of punishing local governments and officials over differences in policy choices. There are some states that have also enacted statutes that withhold critical funding for municipal governments if they insist on maintaining preempted policies, even going so far as “creating novel avenues of civil liability for cities, exposing individual local officials to removal from office, personal civil penalties, and even potential criminal liability in preemption conflicts.”⁹² These issues have prompted a revisiting of Home Rule in the 21^st century, as will be discussed below, to see what a revised Home Rule could look like in contemporary times. Such American studies and research on municipal autonomy can be used to frame our thinking in the Canadian context, as well.

4.4 Constitutional Values and Flexibility in Modern Times

There are some constitutional principles and values that we must keep in mind for this discussion, as they are in support of enhanced municipal authority. First, constitutions are not meant to be static. Rather, the constitution is a “living tree” and its interpretation is meant to evolve with the times in a way that will facilitate democratic and fair outcomes and new ideas.⁹³ In particular, constitutional flexibility is a value demonstrated around the world: “good local governance is embraced as a political and democratic necessity… in Mexico, South Africa and within the European Union, constitutional frameworks are understood as dynamic, not rigid.”⁹⁴ Canada is lagging behind other nations in appreciating what cities can bring to its country as partners in contemporary governance, and it risks falling farther behind if the resistance to change continues.

Furthermore, the principle of subsidiarity in constitutional law dictates that the level of governance closest to the people should be the most empowered to act.⁹⁵ Recognizing democratically elected city councils and municipal governments through delegating power to them embodies and reflects the principle of subsidiarity.⁹⁶ Constitutional entrenchment of large urban centres also helps ensure that the local diversity within a province is not ignored or lost in larger provincial policy-making. The Supreme Court of Canada has even applied the principles of cooperative federalism and subsidiarity to “characterize municipalities as stewards of the local community.”⁹⁷ The Court explained in Canadian Western Bank v Alberta that “the fundamental objectives of federalism were, and still are, to reconcile unity with diversity, promote democratic participation by reserving meaningful powers to the local or regional level and to foster cooperation among governments and legislatures for the common good,”⁹⁸ though courts are careful to state that “an expansive view of municipal authority must not invent municipal authority where none exists.”⁹⁹

In fact, Kristin Good also posits that it is a logical fallacy that municipalities do not have constitutional status. She argues that the “constitutionality of municipalities and municipal systems is evident insofar as they organize and divide power, advancing important constitutional values in individual communities.”¹⁰⁰ They “allow for responsive local decision-making… and advance the principle of liberty by providing an accountable local decision-making process and by serving as a local check on provincial power.”¹⁰¹ Once the premise that a municipality has a constitutional nature is accepted, the question then becomes how to “secure and formalize municipalities’ place in Canada’s constitutional order,” thus, the act of constituting municipalities itself is an action that reflects and advances democratic and constitutional values.¹⁰² This reinforces the assertion that section 43 amendments for large-city charter authorization would be in line with broader constitutional principles and values. The bottom line is that the legal status of cities as creatures of the provinces is untenable, and the current situation should not be allowed to continue without at least considering the section 43 amendment option.

4.4.1 Re-Examining Home Rule for the 21^st Century

In the US, Home Rule has existed for many decades now. The research coming out of the US on municipal autonomy and empowerment is helpful in framing the discussion going forward on a possible section 43 amendment by a province to allow for charter creation by major cities. In particular, a helpful resource by the National League of Cities and the Local Solutions Support Center provides a comprehensive examination of contemporary Home Rule.¹⁰³ Their study generated a set of four principles to guide the complex legal issues facing municipalities and their future in the modern context: the local authority principle, the local fiscal authority principle, the presumption against state preemption principle, and the local democratic self-governance principle.¹⁰⁴ The study also provides a Model State Home Rule Constitutional Article with commentary and recommendations¹⁰⁵ and recognizes that some states have set “threshold population levels for home rule governments or, in some instances, varied the extent of home rule by population tiers.”¹⁰⁶ Such research can be helpful when considering the intricacies of a section 43 amendment and the rules to be put in place by each province.

Evidently, there are also some benefits and valid supporting reasons for Dillon Rule that are worth acknowledging, such as the retention of power for state government to rein in irresponsible or uncooperative local governments, and to guarantee a certain level of uniformity throughout the state and avoid vastly different policies and codes in each local jurisdiction.¹⁰⁷ Advocates for Dillon Rule argue that this creates a more business-friendly environment, as commonality ensures less red tape for companies to go through. Further, local governments would not be able to implement policies that may be detrimental to neighbouring jurisdictions, which would ensure cross-regional stability. Local governments are encouraged to work on building strong working relationships with the state regardless of which rule is in place, however, this solution, or at least recommendation, while of course true, is too simplistic given that a better working relationship sometimes is not always possible. The earlier section describing the recent issues between Toronto and Ontario are illustrative of this point. Moreover, given the reasons I have listed so far in section 4, many of them rebut the arguments in favour of Dillon Rule regarding business and investment. Furthermore, the origins of Dillon Rule were based on a murky conception of municipal crisis in the US, which indicates a slightly flawed premise. While it is likely that municipal corruption and other similar problems existed in certain cities, Justice John Dillon, whom Dillon Rule is named after and who was a member of the Iowa Supreme Court from 1869-1879,¹⁰⁸ regarded the issue as universal and created a sense of crisis that municipal debts throughout the US added up to a billion dollars.¹⁰⁹ This, he found, justified binding municipalities more to states in order to restrain municipal power, as the state theoretically could provide the necessary oversight and keep municipalities in check. Dillon also believed that state legislatures were less corrupt and more amenable to taxpayer’s interests.¹¹⁰ However, the “crisis” was not exactly as he portrayed.

Thus, Home Rule, as it could be potentially implemented in Canada via section 43 per province, is a workable option and amenable solution for the crises facing cities today, as opposed to the limitations presented by Dillon Rule, essentially, the creatures of the province doctrine. Home Rule can share core principles among different jurisdictions and yet be further customized to suit a geographic area. A section 43 amendment to authorize the creation of city charters for larger urban areas that meet a population minimum is therefore likely to be the most optimal solution in terms of constitutional entrenchment. Large cities would have the autonomy and ability to compete in the global economy while smaller municipalities could remain under “creatures of the province” rule in support of cooperative federalism – similar to how multiple states in the US employ both forms of rule in tandem, like in the example of Nebraska.

5. Conclusion

Canadian cities have become competitive and will continue to become increasingly so in a global market.¹¹¹ These urban regions can attract a high level of foreign investment, which in turn supports job creation, boosts innovation, and increases tax revenue.¹¹² However, while it is clear that some major Canadian cities have the potential to become influential players on the world stage, “these opportunities can be easily squandered if [Canada does not] invest wisely in developing infrastructure and a culture that would attract high quality talent.”¹¹³ The provinces should see that the future – and their future – depends on strong municipalities that are prepared to address some of the world’s biggest crises, like climate change and affordable housing, if cities are given more power to act. It is time to face the truth: the current situation for municipalities, especially large cities in Canada, is no longer a workable option. A section 43 amendment, done one province at a time, with population minimums in place and other safeguards per province, is needed to bring forth a specialized province-by-province authorization of charters for major cities. This paper can serve as the starting point for further research into such an amendment, as I have laid out the premise to do so by providing an overview of some of the most important arguments in favour of such a change: the growing trend of the metropolis as an international actor, the changed urban-rural landscape in Canada, the fact that large cities are being constrained in their ability to serve their residents adequately, and that constitutional values support enhanced municipal autonomy. Further, the US has served as a helpful comparator to frame the analysis and to provide examples to consider going forward, given that Home Rule has existed just south of the border for more than a hundred years. Now is the time to direct serious attention to the constitutional entrenchment of municipal power for the betterment of our cities.

Bibliography

Legislation

Better Local Government Act, 2018, SO 2018, c 11.

Constitution Act, 1867 (UK), 30 & 31 Vict, c 3, s 92, reprinted in RSC 1985, Appendix II No 5.

Constitution Act, 1982, s 43, being Schedule B to the Canada Act, 1982 (UK), 1982, c 11.

US Const amend X.

Jurisprudence

114957 Canada Ltée (Spraytech, Société d'arrosage) v Hudson (Town), 2001 SCC 40.

Canadian Western Bank v Alberta, 2007 SCC 22.

Croplife Canada v Toronto (City), [2005] 75 OR (3d) 357, 254 DLR (4^th) 40 (CA).

Edwards v Canada (Attorney General), [1929] UKPC 86, [1930] 1 DLR 98.

Reference Re Senate Reform, 2014 SCC 32.

R v Greenbaum, [1993] 1 SCR 674, 100 DLR (4^th) 183.

Toronto (City) v Ontario (Attorney General), 2021 SCC 34.

United Taxi Drivers' Fellowship of Southern Alberta v Calgary (City), [2004] 1 SCR 485, 236 DLR (4^th) 385.

Secondary Sources: Articles and Books

Bech-Hansen, Lauren, “The Growing Importance of Municipal Empowerment in the Canadian Federation and the Need for A ‘Big Cities Collective” (2016) 17 Federalism-e 2, online (pdf).

Cao, Lan, “Charter Cities” (2019) 27:3 William & Mary Bill of Rights J 717.

Flynn, Alexandra, “Municipal Power and Democratic Legitimacy in the Time of COVID-19” (2020) The Peter A Allard School of Law, Allard Research Commons (Working Paper).

Flynn, Alexandra, “With Great(er) Power Comes Great(er) Responsibility: Indigenous Rights and Municipal Autonomy” (2021) 34 J L & Soc Pol’y 111.

Good, Kristin R, “The Fallacy of the ‘Creatures of the Provinces’ Doctrine: Recognizing and Protecting Municipalities’ Constitutional Status” (2019) IMFG Papers on Municipal Finance and Governance.

Levi, Ron & Mariana Valverde, “Freedom of the City: Canadian Cities and the Quest for Governmental Status” (2006) 44:3 Osgoode Hall LJ 409.

Richez, Emmanuelle, “The Possibility of Constitutional Amendment for Municipal Empowerment” (forthcoming).

Russell, Jon D & Aaron Bostrom, “Federalism, Dillon Rule and Home Rule” (2016) online (pdf): American City Country Exchange White Paper.

Sewell, John, “Toward City Charters in Canada” (2021) 34 J L & Soc Pol’y 134.

Valverde, Mariana, “Games of Jurisdiction: How Local Governance Realities Challenge the ‘Creatures of the Province’ Doctrine” (2021) 34 J L & Soc Pol’y 21.

Secondary Sources: Reports and Other Documents

Briffault, Richard et al, “Principles of Home Rule for the 21^st Century” (2020), online (pdf): National League of Cities Centre for City Solutions.

City Solicitor, “Powers of Canadian Cities - The Legal Framework” (Toronto, 2001), online (pdf).

Federation of Canadian Municipalities, “Early Warning: Will Canadian Cities Compete?” (2001), online (pdf).

Moore, Travis, “Dillon Rule and Home Rule: Principles of Local Governance” (2020), online (pdf): Legislative Research Office.

Stone, Samuel B, “Home Rule in the Midwest” (2010), online (pdf): Indiana University Public Policy Institute.

Websites

“A ‘Big City Charter’ for Edmonton and Calgary: Explaining the Role of Municipalities in Canada’s Federal Framework” (2018), online: Constitutional Studies.

Brock, Kathy, “Diversity Within Unity: Constitutional Amendments Under Section 43” (1997) 20:1 Canadian Parliamentary Review 23 at 24, online.

Flynn, Alexandra, Nathalie des Rosiers & Richard Albert, “How to Get Cities Out of Their Constitutional Straitjacket” (15 June 2021), online: Policy Options.

Endnotes