As many local governments know, the treatment of fees, charges, expenses and other amounts due and owing to a municipality or regional district can, in some circumstances, be treated and collected in the same manner and with the same remedies as property taxes; if the amount owing remains unpaid on December 31st of the year it falls due, it may be deemed to be taxes in arrear and collected as such. While this represents one of the more effective enforcement measures in a local government’s quiver of remedies, there are limitations and procedures that must be observed.
Section 258 (Special Fees may be Collected as Property Taxes) of the Community Charter is authority for a municipality to collect unpaid fees or other amounts, as property taxes. Although this article deals primarily with municipalities, it must be pointed out that regional districts have similar authority under section 363.2 of the Local Government Act to recover fees, costs and charges as unpaid property taxes, in specific circumstances. The municipal authority reads in part as follows:
“258 (1) This section applies to the following:
(a) fees imposed, under this Act or the Local Government Act, for work done or services provided to land or improvements;
(b) fees imposed under section 196(1)(a) [fire and security alarm systems]
(c) amounts owing that a municipality is entitled to recover for work done or services provided to land or improvements under any other provision of this Act or the Local Government Act that authorizes the municipality to recover amounts in the event of default by a person.
(2) An amount referred to in subsection 1:
(a) may be collected in the same manner and with the same remedies as property taxes, and
(b) if it is due and payable by December 31st and unpaid on that date, is deemed to be taxes in arrears. …”
This provision acts as a useful collection tool for fees and charges that a municipality imposes or amounts that a municipality is entitled to recover for work done or services provided to the land or improvements by the municipality. This includes, for example:
• fees, charges or other amounts owing in relation to water, sewer and other services provided to land, buildings etc.;
• a municipality’s costs for cleaning up an untidy premises authorized under an unsightly premises bylaw;
• removing a retaining wall extending from a property that unlawfully encroaches onto a highway.
Section 17 (Municipal Action at Defaulter’s Expense) provides further authority for a municipality:
“17 (1) The authority of a council under this or another Act to require that something be done includes the authority to direct that, if the person that is subject to the requirement fails to take the required action, the municipality may:
(a) fulfill the requirement at the expense of the person, and
(b) recover the costs incurred from that person as a debt.
(2) [Sections 258 and 259 apply] to an amount recoverable under subsection (1) that is incurred for work done or services provided in relation to land or improvements.
In other words, where a council has authority to require that something be done under the Community Charter or Local Government Act (or any other Act), that authority includes the municipality’s right, where a person fails to take the required action, to fulfill the requirement at that person’s expense and recover those costs in the same manner as unpaid taxes.
Thus, the municipality is entitled to treat that amount as unpaid property taxes and collect that amount as such provided
(a) a bylaw is enacted that specifically requires something to be done or not be done,
(b) a person fails to take the required action and
(c) the municipality is authorized under the bylaw to fulfill that requirement at the expense of the offender and recover the costs of the removal as a debt.
As you can expect, there are numerous examples under the Community Charter that authorize municipalities to impose requirements. (The general authority of a municipality to “require something to be done” comes from section 8, which authorizes councils to, by bylaw, regulate, prohibit and impose requirements in relation to such things as municipal services, public places, public health, protection of the natural environment, animals, buildings and other structures).
However, as some municipalities have recently discovered, the proper steps must be followed and the statutory limits observed, before such authority can be exercised.
First, there must be clear statutory authority to:
(a) charge fees;
(b) require work be done;
(c) carry out the work; and
(d) recover such fees or such costs as unpaid taxes.
Second, there must be a bylaw (or in rare cases, a council resolution) that specifically authorizes the municipality to do those things listed above.
The following is a non-exhaustive list of some of the mistakes that, in our experience, municipalities may make:
• there is no statutory authority for requiring something be done or not be done;
• there is no statutory authority to undertake work or services to land or improvements, or for the municipality to recover costs of such work as unpaid taxes;
• statutory authority exists, but there is no bylaw provision authorizing the municipality to undertake the work or recover fees, charges or costs as unpaid taxes.
Specific examples of where costs are not recoverable as taxes, are a highway encroachment that does not form part of private property (e.g., boulevard garden) or waste deposited on a highway. The removal of the encroachment or waste by municipal workers does not constitute work done or services performed to land or improvements in that the work is not done on land or improvements against which property taxes are assessed; it is work done on a highway with no physical connection to the taxable property.
This Article does not take the place of comprehensive legal advice on the matter, but it is clear that while this remedy can be an effective tool, there are procedures and limitations that local governments must be aware of when considering the recovery of debts due to them.