OFACE OF THE NTEGRTY COMMSSONER SUBMSSONS TO THE …€¦ · Introduction. 4 About the Office of the Toronto ntegrity Commissioner. 4 Bill 68 Is an Important and Positive Step Forward

SUBMSSONS TO THE STANDNG COMMITTEEON SOCIAL POLICY

BILL 68, MODERNIZING ONTARIO’SMUNICIPAL LEGISLA TION A CT, 2017

V&ere JepsonIntegrity Commissioner

City of TorontoApril 10, 2017

OFACE OF THE NTEGRTY COMMSSONER

Biography V&erie Jepson, ntegrity Commissionerfor the City of TorontoMs. Jepson is the Integrity Commissioner for the City of Toronto. In this role she is

responsible for overseeing the Code of Conduct in place for elected and appointed

officials at the City of Toronto. As Integrity Commissioner, Ms. Jepson is responsible for

raising awareness about the Code of Conduct, providing advice about meeting the

standards in the Code of Conduct and carrying out investigations when allegations of

misconduct are made.

From 2007 to 2014, Ms. Jepson was the In-house Counsel to the Integrity

Commissioner for the Province of Ontario. In this position, Ms. Jepson advised the

Ontario Integrity Commissioner on all aspects of her mandate including the conduct of

MPPs, lobbyist registration and disclosure of wrongdoing.

From 2001 to 2007, Ms. Jepson practiced as a litigator in the private sector for law firms

in Calgary and Toronto in a variety of areas of litigation.

Ms. Jepson is a member of the Law Society of Upper Canada and the Law Society of

Alberta. From 2012 to 2015, Ms. Jepson taught Canadian Administrative Law in the

Global Professional LLM program and the Internationally Trained Lawyers Program at

the University of Toronto. Prior to becoming the Integrity Commissioner for Toronto,

Ms. Jepson was an active member of the Ontario Bar Association (OBA) PublicLawyers Section and held various positions on the executive.

Submissions of the Toronto Integrity Commissioner to the Standing Committee onSocial Policy — Bill 68

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Tab’e of Contents

Biography VaIere Jepson, Integrity Commissioner for the City of Toronto 2

Introduction . 4

About the Office of the Toronto ntegrity Commissioner . 4

Bill 68 Is an Important and Positive Step Forward . . 5

What Could Be Improved in Bill 68 6

1 . Indemnification 6

2. Codes of Conduct Should Be Required to Include Provisions about Conflict ofInterest, Including Pecuniary Conflicts of Interest 8

3. Expand the Scope of Remedies Available to Councils to Deal with Code ofConduct Complaints 10

4. Clarification that in Exercising Discretion Whether to Bring an MCIA Matter to Courtthe Commissioner Will Assess Whether the Matter Can Be Resolved by City Council.

11

5. Financial disclosure 12

6. Coming into Force 14

Conclusion 14Appendix 1 City of Toronto Accountability Officers Submissions RegardingIndependence and Information Sharing 16Appendix 2 — Financial Disclosure Comparator Jurisdictions 19

Submissions of the Toronto Integrity Commissioner to the Standing Committee onSocial Policy Bill 68

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IntroductionI am the Integrity Commissioner for the City of Toronto, an appointment I have held

since fall 2014. As Integrity Commissioner I am independent from Toronto City Council

and City administration. These submissions are therefore my views and to the best of

my ability the views of the Office of the Toronto Integrity Commissioner gained over the

past ten years.

There are three reasons why I am appearing today:

. To show support for the policy direction of Bill 68 which will integrate the

Municipal Conflict of Interest Act1 (MCIA) regime with the Code ofConduct/Integrity Commissioner regime, a welcome and overdue development.

. To recommend specific improvements to Bill 68.

. To provide the Committee with context to assist with its work.

About the Office of the Toronto IntegrityCommissionerTogether with the other Toronto Accountability Officers (the Auditor General, the

Lobbyist Registrar and the Ombudsman), the Integrity Commissioner is a part of the

most welldeveloped accountability framework at the municipal level in Canada. The

City of Toronto was the first municipality in Canada to appoint an Integrity

Commissioner in June 2004 prior to the enactment of Part V of the City of Toronto Act,

2OO6 (COTA), which required the appointment of an Integrity Commissioner. Toronto

City Council has demonstrated its commitment to the accountability framework byenacting Chapter 3 of the Toronto Municipal Code, a special bylaw that containssafeguards for independence and expands on the roles and responsibilities of eachaccountability officer.

As provided for in Chapter 3 of the Toronto Municipal Code, the Toronto Integrity

Commissioner is responsible for carrying out the following duties:

. To provide advice to members of Council and local boards on the application ofthe Code of Conduct, City or local board policies with respect to membersconduct and general advice with respect to the MCIA.

. To conduct investigations about whether a member of Council or a local boardhas contravened the Code of Conduct.

1 R.S.O. 1990, C. M50.2 sQ 2006, ci 1 , sched. A.


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While there are many positive aspects of the status quo, there are some significant

shortcoming of the current regime. From the perspective of municipal councillors, the

status quo is fragmented and unnecessarily complex because there are two regimes for

compliance. First, members are bound by the MCIA in relation to pecuniaiyconflicts of

interests. Complaints about pecuniary conflicts of interest are made through

applications to Court. Separately, members are also bound by Codes of Conduct and

can be subject to investigation for failure to comply.

From the perspective of the public, the status quo is inaccessible and cumbersome,

requiring citizens to commence formal court proceedings to raise concerns about

conflicts of interest, and potentially causes confusion about whether to commence a

court application or file an Integrity Commissioner complaint.

Bill 68 will authorize integrity commissioners to provide advice and receive complaints

about code of conduct matters and pecuniary interests. The establishment of a more

cohesive framework is a welcome and necessary step in the evolution of accountabilityframeworks at the local level.

What Could Be Improved in Bill 68?The following additional amendments are necessary to strengthen and support the

general policy objectives of Bill 68.

t hidemnification

I strongly recommended that COTA and the MunicipalAct, 2OO7 be amended to

require municipalities to protect all accountability officers (i.e. integrity commissioners,

ombudsmen, auditors general, lobbyist registrars and open meeting investigators)against risks of pecuniary loss or liability related to the performance of their duties.

Exposure to potential lawsuits and judicial reviews related to the performance of their

duties is a significant risk for accountability officers. This risk could improperly give riseto unreasonable personal liability and/or negatively impact the independence of the

offices. Considering the significant responsibilities that Bill 68 assigns to localaccountability officers, Bill 68 should be clear that municipalities must protect their

accountability officers against risks of pecuniary loss or liability related to theperFormance of their duties, whether or not they are City employees.

5 S.O. 2001 , C. 25.


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determination as to whether the member has contravened section 5, 5.1 or 52 of

that Act.

2. Codes of Conduct Should Be Required to Include Provisions aboutConflict of Interest, Including Pecuniary Conflicts of Interest

It is recommended that Bill 68 prescribe that codes of conduct approved by local

councils must include conflict of interest provisions that are similar in nature and kind to

the conflict of interest provision set out in section 2 of the Members’ Integrity Act, 79948

Since the Honourable Members of this committee are bound by the Members’ IntegrityAct, 7994, you will be familiar with the definition.

To borrow from the esteemed Professor Greg Levine,

Conflict of interest in the public sector is the clash of a private interest with a

public duty. It involves the potential to further private, personal interest at the

expense of fulfilling public duty and acting in the public interest.

Interests may be characterized as private or public, personal or collective,

financial (pecuniary) or social. Interests in conflict of interest law have typically

focused on pecuniary or financial interests, This is likely so because suchinterests are more measurable and more susceptible to evidentiary argumentsand proof than perhaps less tangible interests. Nonetheless . . . private interest

more broadly construed is the growing norm in government ethics law inCanada.9

Again, Justice Cunningham accepted that codes of conduct should include the commonmeaning of conflict of interest, including pecuniary conflicts of interest. JusticeCunningham stated:

Municipal codes of conduct can help to regulate the conflicts of interest of

members of municipal council in a more targeted and flexible manner than canprovincial statutes such as the MCIA.

8 bid. Section 2 provides: “A member of the Assembly shall not make a decision or participate in makinga decision in the execution of his or her office if the member knows or reasonably should know that in themaking of the decision there is an opportunity to further the member’s private interest or improperly tofurther another person’s private interest.”9 Gregory J. Levine, The Law of Government Ethics, Federal Ontario, and British Columbia, 2d. Ed.(Toronto: Canada Law Book, 2015), pp. 9-10 (internal citations omitted).


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Ontario municipalities can adopt codes of conduct covering the same pecuniaryconflicts of interest of members of council and local boards as the MCIA, whileallowing for more flexible enforcement mechanisms and sanctions. Municipalcodes of conduct can go significantly further than the MCIA and be tailored to thetypes of relationships and circumstances that reflect the needs of themunicipality1°

The overall thrust of Bill 68 is to integrate the MCIA regime with codes of conduct andintegrity commissioners. To fully realize the vision of Justice Cunningham, it is essentialthat the new statutory scheme clearly signal that that general conflicts of interest,including pecuniary conflicts of interest, must be addressed in local codes of conduct.

If this issue is not clarified in Bill 68, there is a risk that there will remain a legalambiguity about whether the MCIA “occupies the field” for conflicts of interest and thattherefore, codes of conduct cannot include provisions about conflict of interest at all.This latter interpretation is the reason why some codes of conduct (including Toronto)do not include a general conflict of interest provision. Further, the latter interpretationstill persists even though it was rejected by Justice Cunningham in the MississaugaInquiry.11

Bill 68 presents an impor[ant opportunity to eliminate any ambiguity about this issue. Insum, it is submitted that the Bill be amended to clarify that codes of conduct not onlycan include general conflict of interest provisions but that they must.

As an example, I offer the committee the following legislative amendments to COTA:

Subsection 1 57(3) of the Act is repealed and the following substituted:

Conflict of Interest(3.2) A code of conduct shall include conflicts of interest as a subject matter,including but not limited to conflicts of interest that arise from an interest withinthe meaning of the Municipal Conflict of Interest Act.

Regulations(4) Notwithstanding paragraph (3.1), the Minister may make regulationsprescribing one or more subject matters that the City is required to include in acode of conduct.

10 Cunningham Report at pp. 159-160; see also note 4, supra.11 Ibid.

Submissions of the Toronto Integrity Commissioner to the Standing Committee onSocial Policy Bill 68

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3. Expand the Scope of Remedies Available to Councils to Deal with

Code of Conduct Complaints.

It is recommended that Bill 68 be amended to expand the range of remedies available

to Councils to deal with Code of Conduct complaints. The decision in Magder v. Ford,12

interpreted COTA as authorizing City Council only to impose one of two punitive actions

on a finding of a Code contravention: suspension of pay or a reprimand. The decision

in Magder has had a chilling effect on the ability of commissioners — and therefore

Councils — to fashion remedies responsive to the contraventions. It must beremembered that the ruling in Magderwas a technical application of the powers of a

municipality and made no comment on the policy implications or bona fides of the range

of penalties that should be available to Councils. Further, it must be recalled that Bill 68enhances the procedural protections that must be provided to members of Council (i.e.amendments allowing them to participate) and so the policy concerns in Magder have

been addressed.

I offer the following proposed amendments to section 1 60(5) of COTA:

(5) City council may impose either any of the following penalties or remedial

actions on a member of council or of a local board (restricted definition) if theCommissioner reports to council that, in his or her opinion, the member hascontravened the code of conduct:

1 . A reprimand.2. Suspension of the remuneration paid to the member in respect of his orher services as a member of council or of the local board, as the case maybe, for a period of up to 90 days. 2006, c. 1 1 , Sched. A, s. 1 60 (5).3. Removal from a Council or local board (restricted definition) committeeor, in the case of a local board (restricted definition) removal from anofficer position on the board.4. A direction to apologize or make other amends to an aggrieved party, toCouncil, a local board (restricted definition) or the public.5. Any other action recommended by the Commissioner that is intended toremediate the circumstances.(6) In no circumstances does a City Council have authority to remove amember of Council from office.

1220130NSC 1842.


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4 Clarification that in Exercising Discretion WhethertoBring an MCIAMatter to Court the Commissioner WiN Assess Whether the MatterCan Be Resolved

I recommend that Bill 68 be amended to provide greater clarity about how an IntegrityCommissioner will decide whether to take a matter to Court. It is understood that theoverall objective of Bill 68 is to enable local integrity commissioners and councils toaddress allegations of misconduct against members of Council. It is respectfullyobserved that the provisions, as drafted, create certain ambiguities about how anintegrity commissioner ought to attempt to resolve a complaint that includes anallegation that a member has participated in a decision for which they have a pecuniaryinterest (i.e. an MCIA matter).

The legislation should be clarified to confirm that under the new framework, localintegrity commissioners can resolve all manner of misconduct complaints, includingthose that involve pecuniary interests, with reports and recommendations to Council.Justice Cunningham stated, “Municipal codes of conduct can allow for enforcementoutside the court system and without the associated costs. The sanctions availableunder municipal codes of conduct can also be more varied and less severe than underthe MCIA.”13

I suggest the following brief amendment that would, in my view, clarify the nature of therole played by local integrity commissioners.

Possible amendment to COTA section 160:

Corn pletion(12) Upon completion ofthe inquiry, the Commissioner may, if he or she

considers it appropriate, apply to a judge under section 8 of the MunicipalConflict of Interest Act for a determination as to whether the member hascontravened section 5, 5.1 or 5.2 ofthat Act.

(12.1) In exercising his or her discretion under subsection (12) the Commissionershall consider, among other factors, whether thejibject matter of the inquirycould be appropriately addressed by City Council as a Code of Conduct matter.

Notice to applicant re decision not to apply to judge(13) In the case of an inquiry conducted in respect of an application under

subsection (2), the Commissioner shall advise the applicant if the Commissionerwill not be making an application to a judge.

13 Cunningham Report at p. 160.


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are required to make annual financial disclosures.16 In the absence of legislativeauthority or requirement, the members of the Calgary City Council disclose theirfinancial interests on an annual basis.17

To put Toronto in context with other similarsized municipalities, one can look to theAmerican experience. The four largest U.S. cities all require financial disclosures.Specific examples with citations are set out in Appendix 2 to these remarks.

Toronto is the fourth largest city in North America and has a government that is largerthan many Canadian provinces. This committee can also look, therefore, to theprovincial governments as model jurisdictions.

At the provincial level of government, Ontario has been a leader in requiring electedofficials to make annual disclosures of personal interests to an integrity or ethicscommissioner, first introducing the mandatory disclosure statements in 1988 with thepassage ofthe Members’ Conflict ofinterestAct, 7988.18 This practice is now requiredfor members of the federal Parliament and almost all provincial legislatures.

When one considers the level of direct influence that members of Council have inrelation to a wide variety of decisions, including approvals for development projects andreal property interests, there is no reasonable basis for the lack of personal financialdisclosure obligations for elected officials at the City of Toronto.

Mandatory disclosure of personal financial interests for elected officials is a well-recognized component of any developed accountable government.19 Such systemsprovide appropriate transparency of interests held by public officials, identifying potentialconflicts of interest before they arise. The disclosure system and resulting informationcan provide the public with assurance that elected officials are not susceptible toinappropriate bribes, commissions or profits. Disclosure of this information in atransparent way can help build the trust of citizens in their government.’20 The

Municipalities Act, 1999,S.N.L.1999, C. M-24, s. 210 MunicipalCouncil Conflict of Interest Act, C.C.S.M. C. M255, ss. 9-10

16 The British Columbia Ministry of Justice explains the intent of financial disclosures, “[TJo identity whatareas of influence and possible financial benefit an elected official, nominee or designated employeemight have by virtue of their office, and to ensure the public has reasonable access to the information.’

18 1988, C. 17.1 9

20 Ibid., at p. xi.


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Appendix 1 City of Toronto Accountability Officers’Submissions Regarding Independence andInformation Sharing

Recommendation 1

It is recommended that the City of Toronto Act, 2006 (and the Municipal Act) be

amended to expressly recognize and entrench the following features of independence:

a. That the positions of the Integrity Commissioner, the Lobbyist Registrar, the

Ombudsman and the Auditor General (the Accountability Officers) are independent“Officers of Council” similar in status to the Provincial Officers of the Assembly.

b. That the Office of each Accountability Officer is recognized as an independentinstitution, separate from the City of Toronto, for the purposes of the Municipal Freedom

of Information and Protection of Privacy Act.

c. That Accountability Officers have full control of, and are responsible for, the

management of their Office, independent from City Council and City administration.

d. That the Accountability Officers are appointed for fixed terms.

e. That the Accountability Officers can only be appointed or removed for cause on a

twothirds vote of all Council members.

f. That the Accountability Officers are required to table an annual report before Council.

g. That the Office of each Accountability Officer is subject to an external audit.

Comments

The City of Toronto Act, 2006 (COTA) requires that the each Accountability Officer carryout herwork in an “independent manner” (sections 159(1), 168(1), 171(1) and

178(1 .1)). This means that an Accountability Officer must be free to administer her

office and carry out her duties independently from City Council and City administration.

To recognize and entrench the independence of the Accountability Officers, TorontoCity Council adopted a comprehensive Bylaw (Chapter 3 of the Toronto MunicipalCode, entitled “Accountability Officers”) to establish a framework to address necessarygovernance, policy and support mechanisms required to effectively carry out thefunctions and ensure independence of each Officer. By enacting this Bylaw, TorontoCity Council demonstrated leadership in the area of accountability and the By-law offers

a model that stands apart from other municipalities in Ontario. The Accountability


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Officers By-Law reinforces the fact that the City’s Accountability Officers are separateand independent from the City’s administration and City CouncH and codifies importantprinciples relating to the independence of the Accountability Officers.

The principles of independence and accountability are of sufficient importance to theproper functioning of Accountability Officers that the features outlined in theAccountability Officers By-law ought to be enshrined in the governing legislation.

Recommendation 2

It is recommended that COTA (and the Municipal Act) be amended to empower andrequire the City to protect Accountability Officers against risks of pecuniary loss orliability related to the performance of their duties, whether or not they are Cityemployees.

Comments

Exposure to potential lawsuits and judicial reviews related to the performance of theirduties is a significant risk for Accountability Officers. This risk could improperly give riseto unreasonable personal liability and/or negatively impact the independence of theOffice. The City should be required to protect its Accountability Officers against risks ofpecuniary loss or liability related to the perlormance of their duties, whether or not theyare City employees.

Recommendation 3

It is recommended that section 1 61 of COTA (the secrecy provision) be amended tomake clear that the secrecy provisions in COTA prevail over the Municipal Freedom ofInformation and Protection of Privacy Act and all other provincial legislation.

Comments

Strong and unambiguous confidentiality and secrecy provisions in COTA are necessaryfor the effective functioning of the Accountability Officers. This need for theAccountability Officers to maintain confidentiality and preserve secrecy has underpinnedall of the development work leading to the current accountability framework at the Cityof Toronto. The City Manager’s Report leading to the Accountability Officers By-lawdescribes the importance of confidentiality as follows:

Confidentiality Provisions

Independent officers are required to maintain confidentiality in the course of theirduties and must not disclose information provided to them in confidence.


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Appendix 2 Financial Disclosure ComparatorJurisdictions

, New York City has required financial disclosures since y97523 Disclosures arerequreU annuafly for approximately 8,500 elected officials, empbyees, andcandidates, who must disclose their financial affairs, outside positions andinterests, as well as those of their spouses, domestic partners, and dependentch ild ren 24

. The City of Los Angeles requires elected officials, board members,commissioners, and agency heads to make specific disclosures in addition to thestandard disclosures required for all local government officials upon beingnominated to office, assuming office, annually while holding office, and uponleaving office.25

, The City of Chicago not only requires financial disclosures, but imposes fines onlate filers, publicly discloses their names, and (where applicable) may imposeemployment sanctions.26

. The City of Houston, Texas, requires financial disclosures as part of acandidate’s application to earn a place on a ballot to be elected to municipaloffice.27 City officials must also make annual disclosures.28 The disclosures areconsidered public records and must be maintained for five years.29 All suchdisclosures are considered to supplement disclosures required by state andfederal law.3°

23 1 975_to2O1 2viInjçpçjf.

25 The Los Angeles Ethics Commission provides guidance to city officials at:In addition, the California Fair Political Practices

Commission provides uniform guidance to local government officials state-wide at

26 http://www.cityofchicagoorg/city/en/depts/ethics/provdrs/statements of financialinterests/svcs/sfi.html.27 http://www. houstontx,gov/201 3election/201 3electionpacket.pdf.28 http://wwvhoustontx.gov/2O1 3ection/(1 1)CJIpJ.29 Ibid.30 hffpLwwwoustoptxgçy/compliance/offials. html.


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Documents

OFACE OF THE NTEGRTY COMMSSONER SUBMSSONS TO THE …€¦ · Introduction. 4 About the Office of the Toronto ntegrity Commissioner. 4 Bill 68 Is an Important and Positive Step Forward