A provision of great concern to at least one presenter, Councillor Kevin O'Reilly of Yellowknife, requires that before engaging in any commercial or economic development activity, a municipal government must have a market disruption and conflict of interest policy. The provision further states that municipal governments may not engage in these activities if they would cause a serious adverse effect to existing businesses. There are no such provisions in the existing municipal legislation, and the committee understands there are no such provisions anywhere else in Canada either.
Councillor O'Reilly suggested that this is an "unreasonable and unnecessary intrusion into the affairs of the municipal order of government." He went on to point out that there is already an accountability mechanism in place, as municipal councils go to the polls every three years, and the public reaction will be swift if a council is supporting activities that stifle the private sector.
Councilor O'Reilly also advised committee that these provisions would create serious operational difficulties. It is not clear what municipal governments would have to do in order to satisfy the requirements of the legislation. Bill 25 does not provide definitions of "commercial" or "serious adverse effect." Councillor O'Reilly set out several scenarios that demonstrate the problems these provisions could create. For example, the city typically rents out the swimming pool for children's birthday parties. The privately owned bowling alley is also rented out for birthday parties. Is this market disruption? The city offers a variety of courses. If the city offers an art class or a cooking course, would this be a commercial activity? Would it cause a serious adverse effect on a business that also offers a similar course?
The department has not provided any guidance or draft policies to municipal governments, and was not able to explain the rationale behind these provisions to Councillor O'Reilly's, or to the committee's satisfaction.
The committee wishes to make it clear that it does not support municipal government activities that cause market disruption or compete unfairly against the private sector. It is likely a good practice for municipal governments to have market disruption policies. It may even be necessary for a council's political survival. The committee's difficulty is with placing a requirement for a market disruption policy in legislation, without making it clear what standard a municipal government has to meet in order to comply with the act. It may indeed be impossible to legislate a single standard for market disruption, and definitions for key terms like "commercial" and "serious adverse effect" that would be appropriate for all NWT communities. That is why committee believes the issue of market disruption is best left to local councils, and ultimately to local electorates.
The committee passed six motions during clause-by-clause review of the bill, which have the effect of removing the market disruption policy provisions. The Minister concurred with these amendments.