Municipalities in Ontario are often entrusted with broad legislative and administrative powers, including the creation and enforcement of local bylaws. However, the discretion afforded to them in how and when they enforce these by-laws can sometimes give rise to legal disputes.
Residents frustrated by a perceived lack of enforcement may seek legal remedies, commonly through allegations of negligence. Yet, Canadian courts have repeatedly affirmed the protective legal buffer around municipal discretion, balancing the need for public accountability against the operational realities of local governance.
The Scope of Municipal Discretion
By default, municipalities possess wide latitude in choosing how to implement and enforce their by-laws. As courts have emphasized, it is neither practical nor legally required for municipalities to respond to every contravention with the same level of rigour. The nature of municipal governance necessitates prioritization based on available resources, political judgment, and public interest considerations.
The courts decision in Foley v Shamess, 2008 ONCA 588, confirms this principle, holding that a municipality has discretion in determining how it will enforce its by-laws, provided that it acts reasonably and in good faith. Similarly, in Myer Franks Agencies Ltd. v Vancouver (City), 2010 BCSC 1637, the court reaffirmed that the enforcement of a city’s street and traffic bylaw was a matter of policy discretion and not subject to judicial compulsion absent a clear legal duty.
Where Discretion has Limitations
Despite broad protections, municipal discretion is not absolute. There are limited but important circumstances in which a municipality’s failure to act may give rise to liability:
I. i. Mandatory Enforcement Clauses
If the by-law itself mandates enforcement in specific circumstances, the municipality may lose its discretionary shield. Courts may then find an enforceable duty if the failure to act contravenes a statutory requirement.
ii. Bad Faith or Ulterior Motives
Discretion must be exercised in good faith. If a claimant can prove that a municipality acted arbitrarily, capriciously, or with dishonesty, discretion may be overridden. As clarified in Campbell et al. v 2535727 Ontario Inc., 2024 ONSC 157, the onus lies with the plaintiff to demonstrate such misconduct, and the threshold is high.
Establishing Negligence Against a Municipality
While municipalities enjoy broad discretion in how they enforce their by-laws, that discretion is not unbounded. A claim in negligence can succeed where a municipality fails to take reasonable steps to ensure compliance with its own regulatory frameworks and that failure results in foreseeable harm. The courts decision in Metro Taxi Ltd. v City of Ottawa, 2024 ONSC 2725, demonstrates the circumstances under which such a claim may be successful.
The court found that the City of Ottawa had been negligent in its enforcement of its 2012 Taxi By-law during the period in which Uber began operating without a license. Ottawa failed to lay charges, issue compliance orders under section 444 of the Municipal Act, 2001 or pursue injunctions against Uber or its drivers between 2014 and 2016. The court determined that the City’s actions fell below the required standard of care, especially in light of its longstanding regulatory relationship with the taxi industry, described by the court as a kind of “partnership” or “joint venture” in combatting unlicensed operators.
This close relationship gave rise to a duty of care, which was breached by Ottawa’s passive enforcement stance. Importantly, the failure to enforce was found to be an instance of operational negligence, not a protected policy decision, and therefore not immune under section 450 of the Municipal Act, 2001. The case stands as a critical example of how courts will impose liability where municipal discretion is exercised unreasonably, in bad faith, or in a manner that causes direct and foreseeable harm to those who rely on its regulatory oversight.
The Limits and Strengths of Discretion
Municipalities are entrusted with the difficult task of balancing competing demands and limited resources. While courts recognize and uphold their discretion to determine enforcement priorities, they also expect that discretion to be exercised in a reasonable and good-faith manner. Municipal liability may arise in rare circumstances, particularly where enforcement is mandated by the by-law, a bad faith or improper motives has been proven, or the operational actions fall below the standard of care.
However, as has been affirmed through both statute and case law, municipalities are not legally obligated to prosecute every by-law infraction. As noted in R v Joy Oil Co, 1963 CarswellOnt 17, the mere enactment of a by-law does not impose an automatic duty to enforce it. To equate every technical breach with serious violations would undermine the carefully balanced discretion that lies at the heart of local governance.
For plaintiffs contemplating a claim against a municipality for non-enforcement, the road ahead is steep. Unless the facts show more than a mere policy disagreement or dissatisfaction with local priorities, the courts are unlikely to interfere. The message from the judiciary is clear: discretion, when exercised reasonably and in good faith, remains a power of the Canadian municipal system.
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