1. Conflict of Interest Issues for Councillors
Presented by Michael Coombs
Brownlee LLP
May 11, 2017 1

2. Principles and Intent of Conflict of Interest Rules
Flow from principles of Natural Justice including doctrine of fairness
Underlying principle: Justice should not only be done, but should manifestly and undoubtedly be seen to be done 2

3. Principles and Intent Cont’d
Designed to ensure council members are not being improperly influenced or making decisions based upon improper motives
Prohibits conduct that would undermine public confidence in municipal government
Upholds and promotes good reputation of Municipality and Council Members 3

4. What is a Conflict of Interest?
Common Law conflict of interest
Pecuniary Interest = monetary interest that will affect councillor or various close family members
Non-Pecuniary interest = any other type of interest that may give rise to perception of bias or not having an open mind 4

5. Apprehension of Bias
Where pecuniary interest exists in any form presumption of bias is MANDATORY
Where non-pecuniary interest involved it may give rise to a reasonable apprehension of bias 5

6. Presumption of Bias If it exists – DO NOT VOTE ON MATTER
Avoid any situation where any personal interest and public duty conflict 6

7. Extent of Interest
Extent of Interest does not matter. Conflict exists no matter how trifling the issue. 7

8. Common Law Apprehension of Bias
Pecuniary Interest – if this is found no matter how trifling the council member may be disqualified from seat on council.
Non-Pecuniary Interest- if this is found council member cannot lose seat. Generally, decision is quashed as remedy. 8

9. Common Law Defence of Community of Interest
Interest held in common with peers or public in general
Does not apply to interests which are separate and distinct to the council member 9

10. Conflict of Interest Act
Applies to municipal council members
Restricted to pecuniary interest (direct or indirect)
Other interests giving rise to bias are dealt with under common law remedies 10

11. Direct Pecuniary Interest
Where member of council has a direct personal financial interest 11

12. Indirect Pecuniary Interest
Section 1(3)(a) indirect pecuniary interest if:
Contract
Proposed Contract reasonably likely to be affected by decision
Any other matter that council is concerned 12

13. Private Corporation
Involves above noted issues with private closely held corporation if council member is:
Shareholder;
Officer; or
Director 13

14. Publicly Traded Companies
Involves above noted issues with publicly traded corporation if council member:
Beneficially owns, directly or indirectly, more than 10% of voting shares of corporation (Section 1(2)). 14

15. Partners or Employees
Also extends to council members who may be partners in or employees with a party that had a direct pecuniary interest 15

16. Family Members
Section 2(3) – Any interest of dependant, spouse, son, daughter or other relative deemed to be that of council member.
Only applies if:
Family member lives in same home; and
Council member is aware of the interest 16

17. DISCLOSURE
It’s not enough for a councillor to raise a pecuniary interest the first time it comes up
You must follow disclosure rules each time the matter comes up (ie committee meeting/full council)

18. Disclosure Rules
Disclose the nature and extent of pecuniary interest as soon as meeting starts
Abstain from voting on any question relating to the matter
Abstain from taking part in any consideration or discussion of the matter
Abstain from influencing vote in any way

19. Disclosure Rules (cont’d)
If member absent from meeting or if interest arises after meeting member must disclose pecuniary interest at first opportunity
Where there is a disclosure the disclosure SHALL be recorded in the minutes by secretary treasurer
Safest for member to leave room after disclosure

20. Voidable Contracts
Where failure of member to declare pecuniary interest the matter is not invalidated but is VOIDABLE
Municipality can void decision up to two years from when it was made. Must take steps before two years expires

21. Contravention and Consequences
Voter may apply to Court for ruling on contravention
Application must be made within 3 months of knowledge of violation
Application must state grounds for contravention
Application can only be brought against SITTING member (not former member)

22. Consequences / Punishment for Contravention
Act mandates that seat of member will be declared vacant (removed from council)
Discretion for Court to disqualify member from being a member of ANY council for period not exceeding 5 years
Discretion for Court to impose a fine not exceeding $5,

23. Bona Fide Error
If contravention by bona fide error member not subject to penalties