Coping with Community Mailboxes

The transition from home delivery to community mailboxes by Canada Post has been making headlines across the country.  Many communities, and the local governments that represent them, have expressed opposition to the very concept of the end of home delivery service, and frustration with the manner in which Canada Post is going about the transition.  Some local governments have opted not to oppose the transition entirely, and have taken the path of negotiating agreements with Canada Post to govern the process, while other local governments, and most notably the City of Hamilton, have taken a more combative approach.

The recent case of Canada Post Corp. v. Hamilton (City), 2015 O.N.S.C. 3615, a decision of the Ontario Superior Court of Justice, highlights some of the pitfalls of the stance taken by the City of Hamilton.  The court’s reasons for judgment indicate that there was, for various reasons, a general sentiment of opposition to community mailboxes on the part of council of the City of Hamilton.  As Canada Post attempted to interact with the City to move the transition process forward, and particularly to select some of the 500 total locations proposed, council directed staff to draft a bylaw that would put significant control over the process in the hands of the City.  Council then proceeded to enact such a bylaw.

In essence, the bylaw required Canada Post to obtain a permit for each location of a community mailbox on a City road, through a permit acquisition process that was almost entirely at the discretion of the director of engineering.  Furthermore, the bylaw imposed a permit application fee of $200 which, when multiplied by the 500 proposed locations, amounted to a total fee of $100,000.  On top of that, the bylaw imposed a moratorium of 120 days on the issuance of any permits for community mailboxes, commencing on the date Canada Post paid the $100,000.  The court noted that the purpose of the moratorium was to buy City staff time, so they could create the very standards for permit issuance that were absent from the bylaw itself.

Canada Post brought a legal challenge to the bylaw on numerous grounds, all of which were successful.  The first ground of challenge was that the bylaw was unlawfully vague and uncertain.  It lacked concrete standards, and placed a broad discretion in the hands of the director of engineering.  A person who read the bylaw would not be able to understand what Canada Post was expected to do.  This was enough to satisfy the court that the bylaw was vague and uncertain, and therefore void.

The court then went on to address several other grounds of challenge, all related to principles of constitutional law.  Canada Post is a federally regulated Crown corporation, mandated under the Canada Post Corporation Act to deliver mail service in a “self sustaining” manner. Under the Mail Receptacles Regulation, Canada Post “may install, erect or relocate or cause to be installed, erected or located on any public place, including a public roadway, any receptacle or device to be used for the collection, delivery, and storage of mail”.  The court held that the pith and substance of the City’s bylaw, in other words its essential purpose, was to regulate the affairs of Canada Post.  Since the power to regulate a federal entity rests with the Parliament of Canada, the court held that the City had no jurisdiction to enact the bylaw.  The bylaw did not affect Canada Post’s operations in a merely incidental way, but was aimed directly at them.

The court went on to find that the bylaw had no legal effect under the constitutional doctrine of paramountcy because it conflicted with the Canada Post Corporation Act and the Mail Receptacles Regulation by frustrating their purpose.  Furthermore, because the bylaw would impair the core of the federal power over postal services, the court held that Canada Post enjoyed immunity from the application of the bylaw, under the doctrine of interjurisdictional immunity.  Finally, the court held that Canada Post enjoyed immunity from the bylaw simply by virtue of being an arm of the Crown.

Recent media reports indicate that the City of Hamilton is seeking to appeal the decision.  It remains to be seen whether the City will have any success.  An issue that was not addressed by the court in the Hamilton case is whether Canada Post enjoys any right to use and occupy public property without some form of consent from the property owner, namely the local government. It remains an open question at this point, and it will be interesting to see whether an argument based on property rights is addressed in future litigation.  It is also interesting to note that under the Telecommunications Act, telecommunications companies are entitled to use municipal roadways to accommodate their infrastructure, but that entitlement is tempered by provisions which require the companies to come to terms with the host municipalities, and, failing agreement, gives the CRTC authority to impose terms and conditions in relation to such accommodation.  A similar scheme exists in the Utilities Commission Act of British Columbia.  These statutes do not contemplate a carte blanche right to use public property without consent.

At a more practical level, it should be noted that Canada Post has and will enter into agreements with local governments to govern the transition to community mailboxes.  Canada Post has a standard form of agreement, and it seems to have shown some willingness to agree to a small number of reasonable changes to that agreement, where warranted.  In particular, there has been a willingness to establish criteria regarding the placement of community mailboxes, including certain types of locations that are not permitted at all, as well as payment of a modest administrative charge for each location in lieu of a permit fee.  While not necessarily ideal, the approach of seeking agreement with Canada Post, and therefore a means of holding it to account, may prove more fruitful than the approach taken by the City of Hamilton, unless and until such time as it manages to overturn the lower court’s decision.