Province Introduces Bill 43, Housing Supply Act – If You Don’t Build It, They Will Come

The BC government has introduced Bill 43 – 2022, the “Housing Supply Act” to the legislature, with the stated intention of providing “a framework for housing targets to be established for specified municipalities, and for the minister or Lieutenant Governor in Council to take certain actions if housing targets are not met.” The proposed legislation represents a significant incursion by the Province into local land use and planning authority, and provides the authority for the Province to directly override the decisions of municipal councils, including the power to enact a bylaw in the name of a municipality

According to the Province’s press release, the legislation “enables compliance options as a last resort, should municipalities with the highest need struggle to create the conditions that are necessary to ensure housing gets built”. The use of “struggle” in this context is curious, since it glosses over the real possibility of a direct clash between local priorities and provincial priorities.

Bureaucratic euphemisms aside, Bill 43 sets up a potential showdown between municipal councils and the Province over the very shape and character of communities. No matter the party holding power in Victoria on any given day, the implications of Bill 43 for municipalities are unclear, and much detail about the new regime remains unknown at this time.

What We Know

The Province intends to keep a closer eye on housing development in municipalities. Where it forms the view that a particular municipality isn’t doing enough to facilitate development, the Province can utilize a series of escalating measures under Bill 43 to bring it into compliance. Consultation and persuasion are the name of the game in the initial stages, but if they don’t work, then compulsion may follow.

Bill 43 gives the minister responsible for housing the authority to set “housing targets” for a municipality and, where deemed necessary, to issue specific directives to require the municipality to enact or amend bylaws, or issue or reject permits. If the minister’s directives are not complied with, the Province can then directly enact or amend bylaws, and issue or reject permits in the name of the municipality, despite the municipality’s objections.

Central to the new legislation is the concept of a “specified municipality”, which means a municipality designated as such by Provincial regulation. Designation as a specified municipality is the trigger that exposes a municipality to Bill 43’s regime of escalating measures. Media reports suggest the Province already has an initial list of 8 or 10 municipalities in mind.

Part 2 of Bill 43 allows the Province, by ministerial order, to set “housing targets” for a specified municipality including performance indicators, timelines and reporting requirements. Housing targets must take into account various types of information, including housing needs reports of the municipality (as required under the Local Government Act, Part 14, Division 22), the official community plan, the regional growth strategy, and statistical data concerning community growth and development. The Province is also required to consult with the municipality before issuing a housing target order

Under Part 3 of Bill 43, a municipality subject to a housing target order will be mandated to report to the Province on its progress towards those targets, at whatever interval the Province has prescribed in the order. In addition, the municipality is compelled to receive each progress report at an open meeting, and publish it on the municipality’s web site, and the Province is required to publish it on the web as well, signaling that this process is very much intended to happen in the public eye.

If a municipality fails to meet a housing target in an order, and the Province determines the municipality has not made “satisfactory progress” towards meeting the target, under Part 4 of Bill 43, the Province may appoint an “adviser” to investigate on its behalf, and it may issue a “directive” to the municipality, or it may do both of those things.

An “adviser” under Bill 43 has powers to enter into and inspect a specified municipality, and to demand access to a sweeping range of records and information. In particular, under section 8(2), an adviser may enter a municipal office “at any reasonable time” and, subject to limited exceptions may inspect “any record or system of the specified municipality”. Municipal employees are required to render reasonable assistance, and provide access to records and systems as requested. An adviser then reports to the Province on what additional steps might be needed to achieve the housing target, including ministerial actions.

Whether separately, or in conjunction with recommendations from an adviser, the minister may issue a directive to compel a municipality to enact or amend a bylaw, or to issue or refuse to issue a permit, and the directive may include timelines and reporting requirements, underscoring again the highly public nature of the process.

In the last resort, if a municipality fails to comply with a directive, then under Part 5 of Bill 43 the matter may be escalated to the Provincial cabinet, which may issue an order through the Lieutenant Governor in Council to directly enact or amend the bylaw, or issue or refuse to issue the permit, effectively cutting the municipality out of the process at that point. Such an order will specify a period of time (not greater than two years) during which the relevant bylaw or permit cannot be changed by the municipality.

In addition to its compliance-related aspects, Bill 43 gives the minister power to demand that any municipality (not just one that is “specified”) gather and disclose to the minister information about housing needs in the community. It also requires annual housing needs reports to be forwarded to the minister by specified municipalities as a matter of routine.

Concerns and Implications

At its heart, underneath the provisions that contemplate “asking nicely” first, Bill 43 empowers the Province to change the course of land use planning within municipalities despite their objections, and without their consent. Where two different views of the public interest collide, Bill 43 ensures the Province’s view will ultimately prevail.

Bill 43 does establish what appears to be a stringent test for deciding whether to issue ministerial directives under Part 4, or orders of the Lieutenant Governor in Council under Part 5. Aside from referencing “issuing a directive” or an “making an order” as applicable, the wording of the test is identical in each case. The test, as it relates to directives, is set out in section 11(2):

(2) The minister may issue a directive under subsection (1) to a specified municipality only if satisfied that

(a) the benefit of issuing the directive is greater than the benefit of not issuing it,

(b) no less onerous alternative would result in the specified municipality meeting, or making satisfactory progress toward meeting, a housing target that applies to it, and

(c) issuing the directive is in the public interest.

It’s probably fair to characterize this as a test of “necessity”, but what necessity demands in any given case can vary greatly, depending on one’s point of view, and therein lies the rub: it’s the Province which gets to make the final decision. Moreover, under Part 8 of Bill 43, the Province has largely insulated such decisions from legal challenge by including what are known as “privative clauses”. Those privative clauses provide that, on judicial review of a housing target order, a ministerial directive, or an order of the Lieutenant Governor in Council, the applicable standard of review is “patent unreasonableness”, which means it can only be interfered with or overturned in very narrow circumstances, such as where it has been motivated by bad faith or an improper purpose, based on erroneous or irrelevant information, or has failed to take statutory requirements into account.

Given the degree to which land use planning decisions tend to be policy-driven, involving complex interactions of social, political, economic and environmental factors, among others (which is a big reason why the courts are reluctant to weigh in on them), the net effect is that in the absence of any obvious and serious error, key decisions made by the Province under Bill 43 will be practically unassailable.

Beyond the concern that Bill 43 hints at a revival of the paternalistic approach to local government from pre-Community Charter days, other questions remain unanswered. For instance, the Province has previously suggested that it may legalize secondary suites, and that it may permit up to three dwelling units to be built on lots zoned for single family use. It’s not clear whether those are among the measures the Province intends to push for under Bill 43, or whether different measures are intended, and if so, what are they?

Bill 43 also gives the Province, through an appointed adviser, broad access to records and systems of a specified municipality, with the only exception being for records of closed meetings. The Province is not permitted to publicly disclose records that would be protected under the Freedom of Information and Protection of Privacy Act, but that does not prevent the Province from getting the records and reviewing them, and making use of whatever information they contain.

What stands out as a particular concern is the lack of any clear disclosure exception related to solicitor-client privilege. Subsection 8(3)(c) of Bill 43 contemplates, by referencing “a prescribed matter”, that regulations under Bill 43 may further limit the adviser’s reach into municipal records, and so perhaps matters of privilege will be addressed in that way. Solicitor-client privilege exists to protect the client, and ensures that full and frank legal advice can be obtained without fear of disclosure. Solicitor-client privilege is also constitutionally protected under Canadian law, and so ought to be available as a basis for refusing to disclose records whether the legislation says so or not. It would be helpful if the Province recognized that exception explicitly, to remove any doubt.

Related Amendments to Strata Property Act

Together with Bill 43, the province has also introduced Bill 44 – 2022, the “Building and Strata Statutes Amendment Act, 2022”, which makes various amendments to the Building Officials’ Association Act and the Strata Property Act.

The most notable changes are to the Strata Property Act. Strata developments will no longer be permitted to restrict rental of units, and they will no longer be permitted to impose age restrictions on unit occupants. The only exception is for seniors-only developments, where strata bylaws may require that at least one resident be 55 years old.

What Lies Ahead

Bill 43 will have to make its way through the legislative process, and could possibly see changes before it becomes law. The critical event will be when the Province issues the regulations. Among other things, the regulations should reveal when the legislation will actually come into force, whether the Province intends to provide clarity on unanswered questions in the legislation, such as the scope of record disclosure an adviser may require, and most fundamentally, who the first “specified” municipalities will be.