Municipal Law. Clublink Corporation ULC v. Oakville (Town)
In Clublink Corporation ULC v. Oakville (Town) (Ont CA, 2019) the Court of Appeal considers the standard to be applied when considering whether a by-law is ultra vires:
 Municipalities are creatures of provincial legislation and a municipality’s law-making authority is limited to the powers conferred on it by the provincial legislature: see Toronto (City) v. Ontario (Attorney General), 2019 ONCA 732 (CanLII), at para. 1; Friends of Lansdowne Inc. v. Ottawa (City), 2012 ONCA 273 (CanLII), 110 O.R. (3d) 1, at para. 12. The issue of whether the passing of a particular by-law is within a municipality’s power is therefore, at its core, a question of statutory interpretation. Applying the modern approach to statutory interpretation, “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of [the legislator]”: Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC),  1 S.C.R. 27, at para. 21; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42 (CanLII),  2 S.C.R. 559, at para. 26.
 The interpretive exercise must, however, also be attentive to the important role of municipal governments. As Feldman J.A. observed in Croplife Canada v. Toronto (City) (2005), 2005 CanLII 15709 (ON CA), 75 O.R. (3d) 357 (C.A.), leave to appeal refused,  S.C.C.A. No. 329, the Municipal Act is intended to give municipalities in Ontario “the tools they need to tackle the challenges of governing in the 21st century” and, as a consequence, municipal powers are to be “interpreted broadly and generously within their context and statutory limits, to achieve the legitimate interests of the municipality”: at paras. 34, 37; see also 1298417 Ontario Ltd. v. Lakeshore (Town), 2014 ONCA 802 (CanLII), 122 O.R. (3d) 401, at para. 76, leave to appeal refused,  S.C.C.A. No. 43. The provincial legislator has made clear that it intends for municipal powers to be interpreted broadly by expressly stating as much at s. 8 of the Municipal Act.
 Further, as I mention above, municipal by-laws and resolutions benefit from a presumption of validity. The onus is on the applicant to prove that the enactment falls outside of the municipality’s powers: Ontario Restaurant, at para. 3. Courts require a “clear demonstration” before concluding a municipality’s decision was made without jurisdiction: Friends of Lansdowne, at para. 14.
 In assessing whether a municipality has acted within their statutory authority, it is necessary to have regard both to the stated purpose and actual substance of the impugned instrument. This point was made by Doherty J.A. in Barrick Gold Corp. v. Ontario (Minister of Municipal Affairs and Housing) (2000), 2000 CanLII 16929 (ON CA), 51 O.R. (3d) 194 (C.A.), at para. 59:
Municipalities must, however, do more than conform with the strict letter of the law in order to remain within the boundaries of their lawmaking powers. As indicated in R. v. Greenbaum, supra, the purpose of the provincial enabling legislation also constrains the municipal lawmaking power. In Rogers, The Law of Canadian Municipal Corporations, supra at 1021, it is put this way: I appreciate that Barrick Gold was decided prior to the enactment of the Municipal Act. In my view, however, the foregoing remains an accurate statement of the law. It follows logically from the principle that municipal powers find their source in statutes that are interpreted purposively applying the modern approach. Where the legislator has evidenced its intention to set limits on otherwise expansive municipal authority, municipalities cannot rely on broad grants of power to escape these constraints.
A by-law which is ostensibly within the authority of a council to enact may be set aside or declared invalid if its real purpose and attempt is to accomplish by indirect means an object which is beyond its authority. ... Hence, the court must always ‘in examining a by-law, see that it is passed for the purpose allowed by a statute and that such purpose is not resorted to as a pretext to cover an evasion of a clear statutory duty’.[Emphasis in original.]