Summary
This, we would submit, is the same standard as should guide both councillors and municipal staff. They are there to represent and to further the interests of the municipality as a collective entity. They are not there to represent or assist local business, local workers, the ward or other bailiwick by which they were elected or in which they reside, or any other person or entity, or the special interest group or cause of the moment, save and except that they may do so in a manner consistent with these fundamental duties to the municipal corporation for which they serve. It is particularly critical that the exclusivity of staff and council responsibilities be made both express and manifest in relation to the purchasing function. While the directors and officers of a corporation cannot ignore the legal rights of the persons with whom a business corporation deals, the law is quite clear that when the foregoing duties are said to be owed to the "corporation" by that is meant the shareholders of the corporation from time to time. Thus, in the case of a business corporation, there is an undivided duty of loyalty to the corporation, and a clear identification of the corporation with a specific set of stakeholders.
Nevertheless, no comparable certainty of purpose exists in the case of a municipal corporation. Ontario's Municipal Act contains no analogue to subsection 134(1). Instead of directing the council and staff to further one clear purpose, such as the best interests of the municipality, they are variously directed "to be responsible and accountable governments," and "to enhance the municipality's ability to respond to municipal issues." Section 244 of the Act directs the council,On the other hand, it is possible to find quite a bit of case law in which the idea is implicitly rejected, in order to give precedence to the needs or interests of suppliers. The problem is that a provision such as the one set out above simply reinforces that attitude. By placing so much emphasis on supplier interest in its own purchasing bylaw, the municipality reinforces the approach that the courts have taken. Thus, when litigation arises in relation to some aspect of procurement, any court that looks at the municipality's own purchasing bylaw will see clear direction given, not only to take supplier interests into account, but (if the ordering of the section is intended to give any direction) to place fairness to suppliers ahead of the interests of taxpayers.Municipalities are a kind of corporation. It is therefore interesting to compare the responsibilities imposed upon the directors and officers of a business corporation with those that are imposed upon the city council and staff of a municipality. It is particularly critical that the exclusivity of staff and council responsibilities be made both express and manifest in relation to the purchasing function. While the directors and officers of a corporation cannot ignore the legal rights of the persons with whom a business corporation deals, the law is quite clear that when the foregoing duties are said to be owed to the "corporation" by that is meant the shareholders of the corporation from time to time. Section 271(1)(b) of the Municipal Act, 2001 (now repealed) required a municipal procurement policy to specify the goals to be achieved by using each type of procurement process.See the full content of this document
Extract
A House Divided
Municipalities are a kind of corporation. It is therefore interesting to compare the responsibilities imposed upon the directors and officers of a business corporation with those that are imposed upon the city council and staff of a municipality. In the case of the former, subsection 134(1) of the Ontario Business Corporations Act provides that every director and officer of a corporation in exercising his or her powers and discharging his or her duties to the corporation shall,
(a) ac...See the full content of this document
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