Regulatory and policy proposals (Phase 2) under the Conservation Authorities Act

Conservation authorities (CAs) play an important role in supporting our communities and ensuring the protection, conservation, and restoration of the environment for the benefit of present and future generations. We are committed to ensuring that CAs are focused on their core mandate, including:

• helping protect people and property from the risk of natural hazards
• conserving and managing CA-owned lands
• legislated roles in drinking water source protection

To implement recent changes made to the Conservation Authorities Act, three new regulations were filed that:

• specify the mandatory programs and services that CAs must provide (Ontario Regulation 686/21 (O. Reg. 686/21): Mandatory Programs and Services)
• set out requirements for transition plans and agreements for programs and services a municipality requests the CA do on its behalf and programs and services a CA decides to adopt to further the purposes of the CAA (Ontario Regulation 687/21 (O. Reg. 687/21): Transition Plans and Agreements for Programs and Services Under Section 21.1.2 of the Act)
• consolidated the ‘conservation area’ regulations into one Minister’s regulation which establishes rules of conduct in conservation areas (Ontario Regulation 688/21 (O. Reg 688/21): Rules of Conduct in Conservation Areas)

To ensure a smooth transition by CAs to the new funding framework by January 1, 2024, we are proposing the next phase of regulatory and policy proposals that would include:

1. A ‘Municipal Levies Regulation’ that outlines details, through a Lieutenant Governor in Council regulation about:
   • the apportionment by CAs of their capital costs and operating expenses to be paid by their participating municipalities through municipal levies
   • CA budgetary matters, including requirements that CAs distribute their draft and final budgets to relevant municipalities and make them publicly available
2. A ‘Determining Amounts Owed by Specified Municipalities Regulation’ that outlines details, through a Minister’s regulation, about the methods available to CAs to determine costs specified municipalities may need to contribute for the CA’s mandatory programs and services under the:
   • Clean Water Act, 2006
   • Lake Simcoe Protection Act, 2008
3. A ‘Fee Classes Policy’ that outlines classes of programs and services, through a Minister’s published list, for which a CA may charge a user fee
4. Complementary regulations to increase transparency of CA operations

The overall proposed approach for these regulatory and policy proposals is to:

• build on what is already working between CAs and municipalities
• build in flexibility where possible
• avoid being overly prescriptive
• recognize differing circumstances at the local level for budget processes due to the range in participating municipalities across CAs and varying revenue streams
• recognize that participating municipalities and CAs have established local budget processes designed to meet the needs of their municipalities

The regulatory and policy proposals are described in the Consultation Guide and are summarized in the four sections that follow.

1. Proposed Municipal Levies Regulation

Current legislation, regulations and provincial policy provide direction to CAs and municipalities on the municipal levies and the annual CA budget process.

Under the Conservation Authorities Act, a CA has the ability to levy the participating municipalities for its operating expenses and capital costs if those costs are not funded by other revenue sources.

The municipal levy provisions under the Act provide that CAs can:

• determine the amount of levy required for expenses/costs
• apportion an amount of the total to each participating municipality as prescribed in regulation

The levy under the Act is a debt due by the participating municipalities to the CA and may be enforced by the CA as such.

We are proposing that the new Municipal Levies Regulation would continue to apply long practiced municipal levy processes that are working well by:

• maintaining consistency with current budget and municipal levy processes
• using and adapting existing voting and apportionment methods and practices set out in current regulations or provincial policy
• leaving the details of the working relationship between CAs and participating municipalities to develop, including coordinating and communicating their fiscal and budgetary timelines and expectations

This will ensure the effective and timely transition of CA operations to the new funding framework. The proposals also include requirements that will increase transparency of the CA budget process.

The proposal includes proclaiming unproclaimed provisions in the Conservation Authorities Act (s. 1 (definition of operating expenses), s. 24, s. 25, s. 26, s. 27, s. 27.1) that provide CAs with the authority to levy participating municipalities to recover capital costs and operating expenses and which outline the processes for a review of the apportionment of those costs, and which authorize CAs to levy specified municipalities. Subsection 40(1) of the Act provides the Lieutenant Governor in Council with the regulatory authority to develop regulations that govern the apportionment of the CA ‘operating expenses’ and ‘capital costs’ and CA budgetary matters, including the process CAs must follow when preparing a budget, the consultations that are required, as well as the rules and procedures governing budget meetings.

We are proposing that the regulation would:

• incorporate the two existing levies regulations (O. Reg. 139/96 “Municipal Levies regulation” and O. Reg. 670/00 “Conservation Authority Levies regulation”) and update as appropriate to the new legislative framework (e.g. by clarifying and including terminology such as ‘general levy,’ and ‘special project levy,’ and by removing ‘matching,’ and ‘non-matching’ levy references)
• incorporate the CA budgetary processes (consultation, notification) as currently set out in regulation and provincial policy (e.g. providing 30 days notice to participating municipalities of the CA meeting to decide on the municipal levy component of the annual budget). Additionally require CAs to publicly post the draft budget to their websites upon its circulation to participating and specified municipalities
• include the two existing voting methods (i.e. ‘one member, one vote’ and ‘weighted vote,’) as set out in current legislation and regulation and the three current methods of apportioning expenses/costs (i.e. modified current property value assessment, agreement of the CA and participating municipalities, and as decided by the CA), while adapting the appropriate use of the apportionment and voting methods to the new categories of programs and services
• as part of the consultation process on the budget with the participating municipalities, conservation authorities would be required to provide a summary of how the CA considered opportunities for self-generated revenue to support the programs and services they provide
• require CAs to provide a copy of the final approved CA budget to the Minister and their participating and specified municipalities and make it available to the public by posting it on their website and by any other means the CA considers advisable

More details on this regulatory proposal can be found in the Consultation Guide

2. Proposed Minister’s Regulation for Determining Amounts Owed by Specified Municipalities

We are proposing to proclaim un-proclaimed provisions in the Conservation Authorities Act (s. 27.2) that enable CAs to levy ‘specified municipalities’ for the mandatory programs and services related to responsibilities under the:

• Clean Water Act, 2006
• Lake Simcoe Protection Act, 2008.

A ‘specified municipality’ is a municipality designated by regulation for a source protection authority/area under the Clean Water Act, 2006 or designated under a regulation of the Lake Simcoe Protection Act, 2008 as a municipality in the Lake Simcoe Region Conservation Authority. However, a specified municipality is not a participating municipality of a CA under the Conservation Authorities Act.

The Conservation Authorities Act provides the Minister with regulatory authority to govern the determination of amounts owed by any of the specified municipalities for the programs and services a CA provides in respect of the Clean Water Act, 2006 and the Lake Simcoe Protection Act, 2008.

We are proposing that the regulation would:

• clearly identify the ‘specified municipalities’ designated under the regulations made under the Clean Water Act, 2006 and the Lake Simcoe Protection Act, 2008;
• identify the methods available for CAs to determine the costs the specified municipalities may need to contribute, including a process for engaging with the specified municipalities, in order to complement the process of consultation with participating municipalities. The proposed apportionment methods include:
  • the modified current property value assessment method for apportionment of the levy of participating and ‘specified’ municipalities under the Lake Simcoe Protection Act, 2008; and
  • all three apportionment methods (i.e., modified current property value assessment, agreement of the CA and municipalities, and as decided by the CA) for the levy of participating and ‘specified’ municipalities for programs and services provided by a CA in respect of the Clean Water Act, 2006.)

More details on this regulatory proposal can be found in the Consultation Guide.

Note: there are currently no anticipated changes in the ongoing provincial funding provided to CAs for the source water protection program under the Clean Water Act, 2006 and protection of Lake Simcoe under the Lake Simcoe Protection Act, 2008

3. Proposal for Minister’s published list of classes of programs and services for which a CA may charge a fee.

We are proposing to proclaim un-proclaimed provisions in the Conservation Authorities Act(ss. 21.2 (1) – (12)), which enables the Minister to:

• determine a list of ‘classes of programs and services’ for which a CA may charge a fee
• publish this list
• distribute this list to each CA

A CA would be able to charge a fee for a program or service only if it is set out in the Minister’s list of classes of programs and services.

The CA members appointed by the participating municipalities would be responsible for determining:

• the amount of the fee
• when it applies

Once the Minister’s list is published, the Conservation Authorities Act would require the CA to:

• update their current fee policy, including the user fee schedule which sets out the list of programs and services for which it charges a fee and the amount charged
• post the fee policy and schedule on their website
• set out a process for the periodic review and update of the fee policy, including rules for giving notice of the review
• determine the circumstances in which a person may request that the CA reconsider a fee that was charged and the procedure applicable to the reconsideration request

The list of classes for the charging of fees captures user fees that are paid by a person or organization who requests a service that they specifically benefit from. This includes use of a public resource (e.g. park access or facility rental) or the privilege to do something (e.g. receive an approval through a permit or an approval to undertake a regulated activity).

We are proposing that for a CA to charge a fee, the user pay principle must apply. The user pay principle applies when a program or service is delivered by a CA to a requestor that is the primary beneficiary of the program or service. This contrasts with CA programs and services that generate a public good or service where the municipal levy is the primary financing mechanism.

The following is a summary of the proposed classes of programs and services for which a CA may charge a fee:

• All mandatory programs and services where the user pay principle is met.
• All Category 2 programs and services (i.e. programs and services a municipality requests the conservation authority to undertake pursuant to a MOU or agreement) where the user pay principle is met and provisions for the charging of fees are set out in the memorandum of understanding or service level agreement between the CA and municipalities for these programs and services.
• All Category 3 programs and services (i.e. programs and services the authority decides to adopt to further the purposes of the Act) requiring a cost apportioning agreement where the user pay principle is appropriate and provisions for charging of fees are set out in the cost apportioning agreement between the CA and participating municipalities for the program and service. However, there are exceptions related to where the cost apportioning agreement is to fund Category 3 park or non-passive recreational programs and services offered by CAs on CA owned or controlled land that are funded in part by the municipal levy (for example, for public access and use (rental) of authority land, facilities and services such as active recreation and equipment rentals) or community relations, information and education as well as product sales. A CA would be able to charge a fee as appropriate in these cases.
• All Category 3 programs and services with no cost apportioning municipal agreement (i.e. no levy required), where the user pay principle is appropriate.

The Minister’s list of classes of programs and services is not meant to capture fees for programs and services that are already enabled under other legislation (e.g. North Bay-Mattawa Conservation Authority may charge a fee to administer on-site sewage systems approvals as prescribed in regulation in the Building Code Act, 1992).

4. Proposal for complementary regulations to increase transparency of CA operations

Complementary regulations are proposed to increase transparency of CA operations. Specifically, for the Minister’s list of fee classes for category 3 programs and services where cost apportioning agreements are in place for a program or service, if the ‘user pay principle is appropriate, we are also proposing to amend the ‘Transition Plans and Agreements for Programs and Services under Section 21.1.2 of the Act’ regulation (O. Reg. 687/21). The amendment would enable participating municipalities and CAs to determine if user fees can be established for programs and services that a CA determines are advisable which can then be included in the cost-apportioning agreements. Requiring CAs and participating municipalities to include provisions in the cost apportioning agreements increases transparency with respect to the use of user fees.

We are also proposing through a Minister's regulation that CAs be required to maintain a Governance section on their website that must include CA membership information, draft and final budgets, agreements between CAs and municipalities for programs and services, meeting schedule, and could include other relevant governance documents, such as strategic plans. The CA would be required to include a notice on their website when the CA amends or enters into a new MOU or other agreement with municipalities and ensure the most up to date version of the agreements are available on the CA’s website. The regulation would provide an exception for agreements that relate to the authority participating in a procurement process or portions of agreements that contain commercially sensitive information. .

More detail on this policy proposal can be found in the consultation guide.

Regulatory impact analysis

Given that the proposals are intended to largely reflect what is currently occurring and set out in current regulation and/or policy, we do not expect that the regulatory and policy proposals would result in any new costs for business. We expect that there will be some minor administrative costs for CAs and municipalities based on the time needed for staff in the short-term to learn about and understand the proposed new regulatory and policy requirements, and for CAs to maintain a Governance section of their website with up-to-date information, such as MOUs, service level agreements or cost apportioning agreements between CAs and municipalities for category 2 and 3 programs and services.