By-laws passed by council have a significant impact on municipalities. The policies established by council will shape the long-term health and well-being of your community. Most councillors are aware of this role. However, you should also be aware of the various legal limitations on your municipal powers.

Legal considerations on exercising power

A fundamental consideration is the constitutional position of local government. The Constitution Act, 1982 (formerly the British North America Act, 1867) states that provincial governments have the exclusive right to pass laws respecting municipal institutions. Because municipalities are provincial creations, generally they only do what they have been authorized to do by the provincial government. A number of general consequences follow from this:

  • a provincial government may give a municipality only those powers that it may exercise itself within the Constitution’s division of federal and provincial powers
  • generally, a municipal by-law may not override a conflicting provincial statute. A by-law that was valid when passed may become invalid if an overriding provincial statute is later passed
  • if a municipality takes action on something it does not have statutory authority over, or that is not within its authority, the courts could quash the action as being “ultra vires” (beyond the powers of the municipality)

Canadian Charter of Rights and Freedoms

There is another constitutional implication for local government. Part One of the Constitution Act, 1982, contains the Canadian Charter of Rights and Freedoms. The Charter is relevant for federal and provincial levels of government, as well as municipalities, in passing laws and taking other action.

Human Rights Code

The Ontario Human Rights Code provides that every person has a right to equal treatment without discrimination because of race, colour, gender identity, sex, sexual orientation, disability, age and certain other grounds. The code is also relevant for municipalities in passing by-laws and taking other action.

Sources of law

As a councillor, it is important to consider the statutory authority for your actions. The law is complex and you should consult your municipal solicitor whenever any legal issue is in question. However, it is useful to have at least some familiarity with the sources of municipal law, and to try to keep up to date with the ever-changing body of law affecting municipal activity.

Statute law

An important source of law that will affect your municipality is found in the statutes or legislation passed by the provincial government. Here are a few statutes of special importance to municipalities.

Municipal Act, 2001

As previously mentioned, one of the most significant provincial statutes governing Ontario’s municipalities is the Municipal Act, 2001. The Act gives your municipality flexibility to deal with local circumstances and to react quickly to local economic, environmental or social changes. An up-to-date, consolidated version of the Act is maintained on the provincial e-laws website.

Other general acts

There are many other statutes that apply to municipalities but are focused on specific activities, such as the Planning Act, Line Fences Act, Building Code Act,1992, Police Services Act, Fire Protection and Prevention Act, 1997, Safe Drinking Water Act, 2002, Accessibility for Ontarians with Disabilities Act, 2005, Emergency Management and Civil Protection Act, the Municipal Elections Act, 1996, and the Ontario Works Act, 1997. These and most other government of Ontario statutes are available online.

Acts specific to individual municipalities

If your municipality was restructured, it may have its own special Act that establishes particular aspects of its governance or structures (for example, the City of Toronto Act, 2006; the Town of Haldimand Act, 1999; the City of Hamilton Act, 1999; the Town of Norfolk Act, 1999; the City of Ottawa Act, 1999; and the City of Greater Sudbury Act, 1999).

Private acts

A number of private acts have been passed for specific municipalities. The individual municipalities applied for these acts in order to get specific powers not found in the general Acts. These Acts give particular municipalities’ flexibility in the way they deal with issues that are of concern to them.


Regulations are laws made under statutes such as the Municipal Act, 2001 and the Municipal Elections Act, 1996. The power to make regulations is usually given to the Lieutenant Governor in Council or a minister of the Crown.

Regulations often provide further direction as to how certain provisions of acts are to be applied. For example, a regulation made under section 216 of the Municipal Act, 2001 gives more detail on making changes to and dissolving local boards, while a regulation made under the Municipal Elections Act authorizes the use of certain forms during the election period. Most Ontario regulations can be found online.

Federal statutes

There are some federal statutes, like the Canada Mortgage and Housing Corporation Act, which may affect your municipality’s activities.

Administrative law

In addition to statute law, you should also be aware of administrative law. Administrative law generally applies to decisions by boards and tribunals and to the interpretation and exercise of powers given by legislation to bodies other than the legislature.

Boards and tribunals

Boards and tribunals are part of the executive branch of government. They are given authority by statute to make decisions about certain matters.

The Ontario Land Tribunal, for example, holds hearings on such matters as long-term borrowing, land use planning, and boundary adjustments involving territory without municipal organization. Similar bodies that your municipality may deal with include the Ontario Labour Relations Board, the Workplace Safety and Insurance Board, the Assessment Review Board, the Conservation Review Board, and the Landlord and Tenant Board.

The decisions that result from these boards and tribunals form administrative case law that may significantly affect your municipal operations.

Case law

Even if you are aware of the statutes affecting your operations and of relevant administrative law, you still may not have a complete picture of the current law on specific issues. The meaning and scope of statutes are interpreted by various court decisions over the years, and this “case law” is also important.

Municipal powers

The Municipal Act, 2001 and other provincial legislation give all municipalities a variety of powers. These powers fall into various categories:

  • natural person powers
  • broad permissive powers
  • spheres of jurisdiction in a two-tiered system of local government
  • specific powers

The municipal powers set out in many statutes and regulations may be complex. As a result, you are encouraged to seek the advice of staff and your solicitor on specific municipal authority for any proposed action or by-law.

Natural person powers

The Act gives municipal governments natural person powers for the purpose of exercising their authority. Natural person powers give municipalities similar flexibility to that of individuals and corporations in managing their organizational and administrative affairs without the need for more specific legislative authority. These powers may help your municipality hire staff, enter into agreements and acquire land and equipment. For example, if a municipality has authority to establish a public transit system, it may use natural person powers to hire staff and buy buses. It is important to be aware that natural person powers are not an independent source of authority for a municipality to act in a particular area.

Municipalities also have powers that are not available to individuals. For example, municipalities have the ability to regulate or prohibit certain activities, require individuals to do certain things and establish a system of licenses, permits, approvals and registrations. Municipalities also have other essential powers, such as the authority to levy taxes and to enforce municipal by-laws.

Broad permissive powers

The Act provides municipalities with broad permissive powers, giving them flexibility in meeting their communities’ expectations and fulfilling their responsibilities.

A municipality has broad permissive powers to pass by-laws on the following matters:

  • governance structure of the municipality and its local boards
  • accountability and transparency of the municipality and its operations and of its local boards and their operations
  • financial management of the municipality and its local boards
  • public assets of the municipality acquired for the purpose of exercising its authority under this or any other act
  • economic, social and environmental well-being of the municipality, including respecting climate change
  • health, safety and well-being of persons
  • services and things that the municipality is authorized to provide
  • protection of persons and property, including consumer protection
  • animals footnote *
  • structures, including fences and signs footnote *
  • business licensing footnote *

Spheres of jurisdiction in two-tiered systems of local government

In addition to the broad powers described above, municipalities in two-tier systems are provided with spheres of jurisdiction to address the division of powers between upper-tier and lower-tier municipalities.

The spheres of jurisdiction include rules about whether the upper-tier or lower-tier municipality (or both) may pass by-laws within all or part of each sphere, such as economic development services or public utilities. For single-tier municipalities, the spheres of jurisdiction were replaced with broad powers. The table at the end of section 11 of the Act sets out the details of how the spheres of jurisdiction are divided between the upper-tier and lower-tier municipalities.

The spheres of jurisdiction are the powers to pass by-laws regarding the following matters:

  • highways, including parking and traffic on highways
  • transportation systems, other than highways
  • waste management
  • public utilities
  • culture, parks, recreation and heritage
  • drainage and flood control, except storm sewers
  • structures, including fences and signs.
  • parking, except on highways
  • animals footnote *
  • economic development services footnote *
  • business licencing footnote *

For example, in some two-tier municipal systems, waste disposal is assigned exclusively to the upper tier and, as a result, the lower-tier municipalities cannot provide that service. In the case of the “animal” sphere of jurisdiction, the sphere is not assigned to the upper-tiers and therefore only lower-tier municipalities can exercise this power. In other cases, such as the “highways” sphere of jurisdiction, the sphere is assigned non-exclusively to the upper-tiers so both the upper-tier and lower-tier municipalities can exercise the power.

Both upper-tier and lower-tier municipalities can exercise the broad permissive powers where a matter is not dealt with by the spheres of jurisdiction.

Animals, economic development services and business licensing are not broad powers for municipalities in two-tiered systems because they are powers that were divided between upper-tier and lower-tier municipalities before amendments made by the Municipal Statute Law Amendment Act, 2006. For two-tier municipalities, these three powers remain spheres of jurisdiction.

If there is a conflict between the by-laws passed under a sphere by an upper-tier and a lower-tier, the upper-tier by-law will prevail. This conflict rule only applies where both the upper-tier and the lower-tier by-laws are passed under a sphere. In any other circumstance, the upper-tier by-law does not automatically prevail over a lower-tier by-law with which it conflicts – for example, if an upper-tier by-law passed under the broad powers conflicts with a lower-tier by-law passed under the broad powers, there is no rule set out in the Act as to which will prevail.


Powers to license are set out in section 151 and other sections of the Act, including in the broad powers in sections 10 and 11. Municipalities have authority to license many businesses – such as taxicabs, tow trucks, adult entertainment establishments, trailer camps, etc. A municipality may be able to impose conditions on a license.

Generally, municipalities do not have power to require a business license from:

  • a manufacturing or industrial business except to the extent that they are selling products or raw material by retail
  • the sale of goods by wholesale
  • the generation, exploitation, extraction, harvesting, processing, renewal or transportation of natural resources

A municipality may be able to suspend a license for up to 14 days without a hearing if the municipality is satisfied that continuation of the business poses an immediate danger to health or safety of any person or to any property and if the conditions in the legislation are met. A municipality also could possibly suspend – without a hearing and for a period not more than 28 days – a license authorizing a business to operate on a highway or other municipal property for reasons that include:

  • the holding of a special event
  • the construction, maintenance or repair of the property; or pedestrian, vehicular or public safety or public health

Specific powers

Specific powers are any powers given to municipalities, under various Acts, other than the broad permissive powers and the spheres of jurisdiction. Some specific powers are set out in the Municipal Act, 2001. These specific powers granted to municipalities fall into two categories:

  • powers associated with the broad powers or spheres of jurisdiction, dealing with: highways; transportation; waste management; public utilities; culture, parks, recreation and heritage; drainage and flood control; structures including fences and signs; parking; animals; economic development services; health, safety and nuisance; natural environment, etc.
  • powers not associated with the broad powers or spheres of jurisdiction, dealing with a number of areas, including enforcement of by-laws and changes to municipal boundaries

Specific powers are also found in many other statutes such as the Building Code Act, 1992 and the Police Services Act.

Municipal limitations

The Municipal Act, 2001 and other provincial legislation place some limitations on your municipality’s powers. These limitations reflect common-law and provincial government policy. For example, in general:

  • your municipal by-laws cannot conflict with or frustrate the purpose of federal or provincial statutes or regulations or legislative instruments (section 14)
  • the broad permissive powers and the spheres of jurisdiction are subject to procedural requirements (rules) and other limitations existing in specific powers (section 15)
  • except where expressly authorized, a municipality can only exercise its powers within its municipal boundaries
  • the government may, by regulation, further limit certain powers of a municipality (section 451.1)

As well, in a two-tier system, a municipality:

  • is generally prohibited from regulating non-municipal systems under six spheres of jurisdiction – public utilities; waste management; highways; transportation systems; culture, parks, recreation and heritage; and parking (subsection 11(8))
  • is generally prohibited from using a sphere of jurisdiction to regulate services or things provided by the other tier that are authorized under that sphere of jurisdiction (subsection 11(7))
  • cannot pass a by-law under the spheres of jurisdiction or broad permissive powers if the other tier can pass the by-law under a specific power (paragraphs 4 and 5 of subsection 11(4))
  • cannot pass a by-law under the spheres of jurisdiction or broad permissive powers if the other tier has the exclusive power to pass the by-law under the spheres of jurisdiction (paragraphs 1 and 2 of subsection 11(4))

Helpful considerations: section 7

  • As a councillor, you are encouraged to familiarize yourself with the Constitution Act, 1982, the Canadian Charter of Rights and Freedoms and the Human Rights Code.
  • In addition, familiarize yourself with the Municipal Act, 2001. This Act is one of the most significant provincial statutes governing Ontario’s municipalities and gives your municipality flexibility to deal with local circumstances and to react quickly to local economic, environmental or social changes.
  • If your municipality has any private acts, you may want to familiarize yourself with them.
  • Remember that the municipal powers set out in many statutes and regulations may be complex. You are encouraged to seek the advice of staff and your solicitor on specific questions.
  • You are encouraged to understand of the spheres of jurisdiction in two-tiered systems of local government and the implications for upper-tier and lower-tier municipalities.


  • footnote[*] Back to paragraph For two-tier municipalities (municipalities with a county or regional level as well as a local level), these powers are spheres of jurisdiction (areas where municipalities have authority) and not broad permissive powers. These powers are subject to certain rules because of this. Single-tier municipalities have all eleven broad powers. Municipalities in two-tier systems have the first eight broad powers plus the spheres of jurisdiction.