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Municipal - Vires. Tiny Township Association of Responsible STR Owners v. Tiny (Township)
In Tiny Township Association of Responsible STR Owners v. Tiny (Township) (Ont CA, 2026) the Ontario Court of Appeal dismissed an appeal, this brought under MA s.273 ['Application to quash by-law'] against a by-law that regulated 'short-term rentals' (STRs) by requiring "STR owners to apply for and obtain an annual licence, restricts how STRs can be used, regulates the duration of rental periods, and caps the total number of days each year that an STR can be rented".
The court considers an ultra vires challenge to a municipal licensing by-law, here regulating STRs:[33] Finally, pursuant to s. 273(1) of the Municipal Act, any person may apply to the Superior Court of Justice to quash a municipal by-law in whole or in part for illegality. If, however, a by-law is passed in good faith, it “shall not be quashed or open to review in whole or in part by any court because of the unreasonableness or supposed unreasonableness of the by-law”: s. 272.
Relevant legal principles in assessing the STR By-Law’s validity
[34] In Auer v. Auer, 2024 SCC 36, 497 D.L.R. (4th) 381, the Supreme Court of Canada set out the principles governing this court’s review of subordinate legislation such as a municipal by-law. A court’s review of a by-law is limited to assessing the reasonableness of the enacting municipality’s interpretation of its statutory power, and not the reasonableness or policy merits of the by-law itself, that is, whether a by-law is “necessary, wise, or effective”: Auer, at paras. 3, 56.
[35] The reasonableness of a municipality’s interpretation of its power is assessed based on the framework in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653. The court must therefore consider whether the enactment decision “bears the hallmarks of reasonableness — justification, transparency and intelligibility — and whether it is justified in relation to the relevant factual and legal constraints that bear on the decision”: Vavilov, at para. 99.
[36] Auer reaffirmed some of the interpretive principles set out in Katz Group Canada Inc. v. Ontario (Health and Long‑Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810. Accordingly:(1) a by-law is presumptively valid;
(2) a by-law must be consistent both with specific provisions of the enabling statute (for our purposes in this appeal, the Municipal Act) and with its overriding purpose or object;
(3) both a by-law and the enabling statute should be interpreted using a broad and purposive approach to statutory interpretation. [37] The presumption of validity does not just mean that the party challenging a by-law has the burden to demonstrate its invalidity. The presumption also “favours an interpretive approach that reconciles the [by-law] with its enabling statute so that, where possible, the [by-law] is construed in a manner which renders it intra vires”: Auer, at para. 37, citing Katz, at para. 25 (emphasis in original).
[38] To overcome the presumption of validity, the Association must demonstrate that the STR By-Law cannot be supported by any “reasonable interpretation” of the Township’s statutory authority: Auer, at para. 39 (emphasis in original). The Municipal Act gives municipalities broad powers to regulate matters of local concern. Provided a municipality acts within its jurisdictional limits, it is accountable to its constituents and not to the courts: Friends of Lansdowne Inc. v. Ottawa (City), 2012 ONCA 273, 110 O.R. (3d) 1, at para. 15.
[39] The determination of whether a municipal by-law is ultra vires is a question of law and the application judge’s decision is subject to a correctness standard: Clublink Corporation ULC v. Oakville (Town), 2019 ONCA 827, 148 O.R. (3d) 558, at para. 39, citing, Cash Converters Canada Inc. v. Oshawa (City), 2007 ONCA 502, 86 O.R. (3d) 401, at para. 20; Friends of Lansdowne, at para. 14. This court must nonetheless defer to the application judge’s factual findings and inferences drawn from those facts: Clublink, at para. 39.
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[42] First, a municipality may enact a licensing scheme for a purpose other than licensing businesses. Section 8(3) of the Municipal Act states that a by-law under ss. 10 and 11 respecting a matter may “provide for a system of licences respecting the matter”. There is no qualification restricting this power to licensing businesses, and the specific licensing powers in s. 151(1) do not limit or derogate from the more general authority conferred by s. 11. In fact, s. 151(5) confirms that a licensing scheme may be enacted for a purpose other than the regulation of a business.
[43] This proposition was confirmed by this court in 2211266 Ontario Inc. (Gentlemen’s Club) v. Brantford (City), 2013 ONCA 300, 307 O.A.C. 34. The appellant club challenged a by-law enacted by the City of Brantford that imposed licensing requirements on the owners and operators of adult entertainment parlours and performers within those facilities. This court upheld the by-law as a valid exercise of the City’s power to license businesses as well as its power to implement a system of licensing in connection with matters relating to health, safety and the well-being of persons in the municipality, and the protection of persons and property: Gentlemen’s Club, at paras. 12-13.
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[47] In sum, the Township has the power under the Municipal Act to implement a licensing scheme with respect to STRs, whether or not STRs meet the definition of businesses, and the Township did so to further valid statutory purposes. This is a complete answer to the Association’s position that the licensing scheme as a whole is invalid.
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[58] The application judge correctly observed that “[t]he role of the court is not to second guess the policy decisions made by the Township” but “to determine whether the by-laws are rationally connected to legitimate municipal objectives.” He found that the STR By-Law is rationally connected to various legitimate purposes, including the regulation of the business of STRs; the promotion of the health, safety and well-being of individuals in the community; the health, safety and well-being of renters; and consumer protection.
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The licensing cap is not ultra vires the Township’s authority respecting economic, social and environmental well-being
[76] The Association argues that the application judge erred in finding that the licensing cap was a valid exercise of the Township’s power to pass by-laws respecting the “[e]conomic, social and environmental well-being of the municipality” under s. 11(2)(5), because the STR By-Law’s preamble does not refer to this purpose.
[77] I disagree. As mentioned earlier, in assessing whether a by-law is intra vires, a court must consider both the by-law’s stated purpose and its actual substance. If a municipality is empowered under the Municipal Act to pass by-laws for a particular purpose, and the record shows that this purpose motivated the by-law’s provisions, the absence of a reference to that purpose in the text of the by-law does not undermine its validity.
[78] The impact of STRs on the economic, social and environmental well-being of the community was clearly a purpose of the licensing regime. In particular, the record shows that the Township was concerned about the impact of unchecked STRs on competition in the area and the availability of affordable housing for the community.
[79] I would therefore reject this ground of appeal. In the balance of paras 40-71 the court walks through it's ultra vires assessment of the by-law under consideration.
. Munir v. Garg
In Munir v. Garg (Ont CA, 2025) the Ontario Court of Appeal denied an interesting appeal, this from a application challenge to an 'Airbnb' municipal bylaw:[1] The appellant rented a three-bedroom townhouse in the Town of Milton (the “Town”) from Mahesh and Shama Garg (the “Gargs”) for a one-year term commencing December 1, 2023. In May 2024, the Gargs discovered that the appellant was listing and renting the property on the Airbnb platform without having obtained a license, as required by the Town’s short-term rental (STR) bylaw.
[2] The Gargs complained to the Town and, on May 28, 2024, the Town issued a compliance order, requiring the appellant to obtain a license or cease operating the STR. The property was also inspected by Milton Fire and Rescue Services (“Milton Fire Services”), pursuant to the Fire Protection and Prevention Act, 1997, S. O. 1997, c. 4. Numerous violations of the Fire Code, O. Reg. 213/07, were identified, as a result of which Milton Fire Services issued a compliance order. (We were advised during the hearing that the appellant had asked that the Fire Services order be reviewed by the Fire Marshall, a process which is still ongoing and which stays enforcement of the compliance order.)
[3] The appellant brought an application seeking a declaration that the STR bylaw was ultra vires on the basis that it exceeded the legislative authority set out in the Municipal Act 2001, S.O 2001 c. 25 (the “Municipal Act”) and was also inconsistent with the Residential Tenancies Act, 2006, S. O. 2006, c. 17 (the “RTA”). He further alleged that the Town and Milton Fire Services had violated his s. 7 and 15 Charter Rights. He sought damages in the amount of $3,980,000.
[4] The application judge found that the Town had the authority under the Municipal Act to enact the STR bylaw, and that there was no conflict between the STR bylaw and the RTA. The application judge also found that the enforcement actions taken against the appellant by the Town and by Milton Fire Services did not violate any of his Charter rights. She awarded costs of $15,504.86 to the Town and Milton Fire Services, and $9,000 to the Gargs, who had been unnecessarily dragged into the litigation.
[5] The appellant has failed to identify any reversible errors in the application judge’s analysis. Instead, he repeats the same arguments he advanced below and simply asserts that the application judge erred in his factual and legal findings.
[6] The factual findings are entitled to deference and we agree with the application judge’s legal analysis that there is no conflict between the STR bylaw and the RTA. Nor is there any basis to conclude that the application judge erred in deciding that the appellant’s Charter rights were not infringed by the Town or Milton Fire Services. .... . 114957 Canada Ltée (Spraytech, Société d'arrosage) v. Hudson (Town)
In 114957 Canada Ltée (Spraytech, Société d'arrosage) v. Hudson (Town) (SCC, 2021) the Supreme Court of in an historic environmental case, considered the vires of a Quebec town by-law restricting pesticide use to non-cosmetic purposes:18 In R. v. Sharma, 1993 CanLII 165 (SCC), [1993] 1 S.C.R. 650, at p. 668, this Court recognized “the principle that, as statutory bodies, municipalities ‘may exercise only those powers expressly conferred by statute, those powers necessarily or fairly implied by the expressed power in the statute, and those indispensable powers essential and not merely convenient to the effectuation of the purposes of the corporation’ (Makuch, Canadian Municipal and Planning Law (1983), at p. 115)”. Included in this authority are “general welfare” powers, conferred by provisions in provincial enabling legislation, on which municipalities can draw. As I. M. Rogers points out, “the legislature cannot possibly foresee all the powers that are necessary to the statutory equipment of its creatures. . . . Undoubtedly the inclusion of ‘general welfare’ provisions was intended to circumvent, to some extent, the effect of the doctrine of ultra vires which puts the municipalities in the position of having to point to an express grant of authority to justify each corporate act” (The Law of Canadian Municipal Corporations (2nd ed. (loose-leaf)), Cum. Supp. to vol. 1, at p. 367).
19 Section 410 C.T.A. is an example of such a general welfare provision and supplements the specific grants of power in s. 412. More open-ended or “omnibus” provisions such as s. 410 allow municipalities to respond expeditiously to new challenges facing local communities, without requiring amendment of the provincial enabling legislation. There are analogous provisions in other provinces’ and territories’ municipal enabling legislation: see Municipal Government Act, S.A. 1994, c. M-26.1, ss. 3(c) and 7; Local Government Act, R.S.B.C. 1996, c. 323, s. 249; Municipal Act, S.M. 1996, c. 58, C.C.S.M. c. M225, ss. 232 and 233; Municipalities Act, R.S.N.B. 1973, c. M-22, s. 190(2), First Schedule; Municipal Government Act, S.N.S. 1998, c. 18, s. 172; Cities, Towns and Villages Act, R.S.N.W.T. 1988, c. C-8, ss. 54 and 102; Municipal Act, R.S.O. 1990, c. M.45, s. 102; Municipal Act, R.S.Y. 1986, c. 119, s. 271.
20 While enabling provisions that allow municipalities to regulate for the “general welfare” within their territory authorize the enactment of by-laws genuinely aimed at furthering goals such as public health and safety, it is important to keep in mind that such open-ended provisions do not confer an unlimited power. Rather, courts faced with an impugned by-law enacted under an “omnibus” provision such as s. 410 C.T.A. must be vigilant in scrutinizing the true purpose of the by-law. In this way, a municipality will not be permitted to invoke the implicit power granted under a “general welfare” provision as a basis for enacting by-laws that are in fact related to ulterior objectives, whether mischievous or not. As a Justice of the Ontario Divisional Court, Cory J. commented instructively on this subject in Re Weir and The Queen (1979), 1979 CanLII 1871 (ON SC), 26 O.R. (2d) 326 (Div. Ct.), at p. 334. Although he found that the City of Toronto’s power to regulate matters pertaining to health, safety and general welfare (conferred by the Municipal Act, R.S.O. 1970, c. 284, s. 242) empowered it to pass a by-law regulating smoking in public retail shops, Cory J. also made the following remark about the enabling provision: “There is no doubt that a by-law passed pursuant to the provisions of s. 242 must be approached with caution. If such were not the case, the municipality could be deemed to be empowered to legislate in a most sweeping manner.”
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21 .... As a result, since there is no specific provision in the provincial enabling legislation referring to pesticides, the by-law must fall within the purview of s. 410(1) C.T.A. The party challenging a by-law’s validity bears the burden of proving that it is ultra vires: see Kuchma v. Rural Municipality of Tache, 1945 CanLII 27 (SCC), [1945] S.C.R. 234, at p. 239, and Montréal (City of) v. Arcade Amusements Inc., 1985 CanLII 97 (SCC), [1985] 1 S.C.R. 368, at p. 395.
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23 Section 410(1) C.T.A. provides that councils may make by‑laws:(1) To secure peace, order, good government, health and general welfare in the territory of the municipality, provided such by‑laws are not contrary to the laws of Canada, or of Québec, nor inconsistent with any special provision of this Act or of the charter. In Nanaimo (City) v. Rascal Trucking Ltd., [2000] 1 S.C.R. 342, 2000 SCC 13, at para. 36, this Court quoted with approval the following statement by McLachlin J. (as she then was) in Shell Canada Products Ltd. v. Vancouver (City), 1994 CanLII 115 (SCC), [1994] 1 S.C.R. 231, at p. 244:Recent commentary suggests an emerging consensus that courts must respect the responsibility of elected municipal bodies to serve the people who elected them and exercise caution to avoid substituting their views of what is best for the citizens for those of municipal councils. Barring clear demonstration that a municipal decision was beyond its powers, courts should not so hold. In cases where powers are not expressly conferred but may be implied, courts must be prepared to adopt the “benevolent construction” which this Court referred to in Greenbaum, and confer the powers by reasonable implication. Whatever rules of construction are applied, they must not be used to usurp the legitimate role of municipal bodies as community representatives. [Emphasis added.] ....
26 In Shell, supra, at pp. 276-77, Sopinka J. for the majority quoted the following with approval from Rogers, supra, § 64.1:In approaching a problem of construing a municipal enactment a court should endeavour firstly to interpret it so that the powers sought to be exercised are in consonance with the purposes of the corporation. The provision at hand should be construed with reference to the object of the municipality: to render services to a group of persons in a locality with a view to advancing their health, welfare, safety and good government. In that case, Sopinka J. enunciated the test of whether the municipal enactment was “passed for a municipal purpose”. Provisions such as s. 410(1) C.T.A., while benefiting from the generosity of interpretation discussed in Nanaimo, supra, must have a reasonable connection to the municipality’s permissible objectives. As stated in Greenbaum, supra, at p. 689: “municipal by‑laws are to be read to fit within the parameters of the empowering provincial statute where the by‑laws are susceptible to more than one interpretation. However, courts must be vigilant in ensuring that municipalities do not impinge upon the civil or common law rights of citizens in passing ultra vires by‑laws”.
27 Whereas in Shell, the enactments’ purpose was found to be “to affect matters beyond the boundaries of the City without any identifiable benefit to its inhabitants” (p. 280), that is not the case here. The Town’s By-law 270 responded to concerns of its residents about alleged health risks caused by non-essential uses of pesticides within Town limits. Unlike Shell, in which the Court felt bound by the municipal enactments’ “detailed recital of . . . purposes” (p. 277), the by-law at issue requires what Sopinka J. called the reading in of an implicit purpose. Based on the distinction between essential and non-essential uses of pesticides, it is reasonable to conclude that the Town by-law’s purpose is to minimize the use of allegedly harmful pesticides in order to promote the health of its inhabitants. This purpose falls squarely within the “health” component of s. 410(1). As R. Sullivan appositely explains in a hypothetical example illustrating the purposive approach to statutory interpretation:Suppose, for example, that a municipality passed a by-law prohibiting the use of chemical pesticides on residential lawns. With no additional information, one might well conclude that the purpose of this by-law was to protect persons from health hazards contained in the chemical spray. This inference would be based on empirical beliefs about the harms chemical pesticides can cause and the risks of exposure created by their use on residential lawns. It would also be based on assumptions about the relative value of grass, insects and persons in society and the desirability of possible consequences of the by-law, such as putting people out of work, restricting the free use of property, interfering with the conduct of businesses and the like. These assumptions make it implausible to suppose that the municipal council was trying to promote the spread of plant-destroying insects or to put chemical workers out of work, but plausible to suppose that it was trying to suppress a health hazard.
(Driedger on the Construction of Statutes (3rd ed. 1994), at p. 53) Kennedy J. correctly found (at pp. 230-31) that the Town Council, “faced with a situation involving health and the environment”, “was addressing a need of their community.” In this manner, the municipality is attempting to fulfill its role as what the Ontario Court of Appeal has called a “trustee of the environment” (Scarborough v. R.E.F. Homes Ltd. (1979), 9 M.P.L.R. 255, at p. 257).
28 The appellants claim that By-law 270 is discriminatory and therefore ultra vires because of what they identify as impermissible distinctions that affect their commercial activities. There is no specific authority in the C.T.A. for these distinctions. Writing for the Court in Sharma, supra, at p. 668, Iacobucci J. stated the principle that:. . . in Montréal (City of) v. Arcade Amusements Inc., supra, this Court recognized that discrimination in the municipal law sense was no more permissible between than within classes (at pp. 405‑6). Further, the general reasonableness or rationality of the distinction is not at issue: discrimination can only occur where the enabling legislation specifically so provides or where the discrimination is a necessary incident to exercising the power delegated by the province (Montréal (City of) v. Arcade Amusements Inc., supra, at pp. 404‑6). [Emphasis added.] See also Shell, supra, at p. 282; Allard Contractors Ltd. v. Coquitlam (District), 1993 CanLII 45 (SCC), [1993] 4 S.C.R. 371, at p. 413.
29 Without drawing distinctions, By-law 270 could not achieve its permissible goal of aiming to improve the health of the Town’s inhabitants by banning non-essential pesticide use. If all pesticide uses and users were treated alike, the protection of health and welfare would be sub-optimal. For example, withdrawing the special status given to farmers under the by-law’s s. 4 would work at cross-purposes with its salubrious intent. Section 4 thus justifiably furthers the objective of By-law 270. Having held that the Town can regulate the use of pesticides, I conclude that the distinctions impugned by the appellants for restricting their businesses are necessary incidents to the power delegated by the province under s. 410(1) C.T.A. They are “so absolutely necessary to the exercise of those powers that [authorization has] to be found in the enabling provisions, by necessary inference or implicit delegation”; Arcade Amusements, supra, at p. 414, quoted in Greenbaum, supra, at p. 695.
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