Ontario Court of Appeal Rules on Compatibility of By-laws and Legislation
In its recent decision in Peacock v. Norfolk (County),  81 O.R. (3d), the Ontario Court of Appeal clarified the circumstances in which the “impossibility of dual compliance” test will determine whether or not a by-law conflicts with a Federal or Provincial statute.
Earlier Case Law
The issue of the compatibility of by-laws and statutes was considered by the Supreme Court of Canada in 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town),  2 S.C.R. 241. In that case, a Provincial statute regulated the use of pesticides in the Province of Québec, while a by-law of the Town of Hudson imposed tighter restrictions on their use within the Town’s boundaries. The Town’s by-law was challenged by a number of landscaping companies on the basis that it was, among other things, incompatible with the provincial statute and therefore, ultra vires the Town.
In its decision, the SCC found that there was no conflict between the statute and by-law in question. The Court applied the “impossibility of dual compliance” test, which first arose in a case on Federal – Provincial conflict in Multiple Access Ltd. v. McCutcheon,  2 S.C.R. 161. Essentially, the Court found that, since the by-law imposed more limiting restrictions on the use of pesticides than did the Provincial statute, compliance with both was possible. The general lesson taken from this decision was that, where compliance with a statute does not preclude compliance with a by-law, the two will be able to coexist.
The Exception to the “Impossibility of Dual Compliance” Test
At paragraph 36 of the Spraytech decision, L’Hereux-Dubé J. noted that the usual test of compatibility would not always apply: “Multiple Access also applies to the inquiry into whether there is a conflict between the by law and provincial legislation, except for cases (unlike this one) in which the relevant provincial legislation specifies a different test.”
In Peacock, the Ontario Court of Appeal was faced with interpreting such a different test, namely that set out in s. 61(1) of the Nutrient Management Act which provides: “A regulation [under this act] supersedes a by-law of a municipality or a provision in that by-law if the by-law or provision addresses the same subject matter as the regulation.”
The Issue in Peacock
Since the Legislature explicitly ousted the application of the test from Multiple Access and imposed another test based on the sameness of the subject matter of the by-law and statute, the issues became one of defining the subject matter of the two competing instruments.
The Majority’s Approach to “Sameness” in Peacock
Rouleau J.A., writing for the majority, held that, in determining the subject matter of a statute or by-law, it is necessary to look beyond the instrument’s direct legal effect. Rather, the appropriate inquiry is into the object or purpose of an act or by-law. That is, to ask what the legislation is dealing with and what it is trying to achieve. This can be determined by examining the broad context of the legislation, the problem that is sought to be remedied or the purpose statement contained in the act or by-law. In making this inquiry, the Court noted that the practical or legal effect of a statute is also relevant.
Because the test set out in s. 61(1) of the Nutrient Management Act provided for a comparison of a statute with a either a bylaw or, a provision of a bylaw, the Court undertook the sameness of subject matter analysis with respect to the regulation on the one hand and a single provision of the by-law on the other hand. This will not universally be the approach taken, as it will depend on the scope of the test set out in a given piece of legislation. However, the manner with which the sameness analysis is carried out, within this scope, will remain valid in all cases where the “same subject matter” test is used.