A recent Ontario Divisional Court decision, wpd Sumac Ridge Wind Inc. v. Kawartha Lakes
(City), represents an important precedent for
project developers who are facing opposition from municipalities.
The court held that a municipality's attempt to prevent the
development of a provincially approved wind turbine project by
passing a resolution that prevented its completion was both
ultra vires and an act of "bad faith". The
resolution was accordingly quashed.
Ontario's Ministry of the Environment had granted wpd Sumac
Ridge Wind Inc. a Renewable Energy Approval to construct five wind
turbines within the City of Kawartha Lakes. In order for wpd to
construct the turbines, the company needed to access and upgrade
certain municipal roads. However, Kawartha Lakes was opposed to the
project and, even though the Ministry had approved it, passed a
resolution that said: "... any request by Wpd ... for
use of ... [the road in question] ... to support [the] proposed
wind turbine development [will] be refused...." The
resolution had the effect of preventing the project's
construction. In response, wpd brought an application for judicial
The Court's Ruling
The court quashed the resolution for two reasons. The first was
that the resolution frustrated the purpose of the Ministry's
Renewable Energy Approval. The court held, as a general principle,
that a municipal resolution that frustrates the purpose of a
provincial "legislative instrument" is ultra
vires the municipality and consequently of no force or effect.
Looking specifically at the facts of this case, the court found (i)
that the Ministry's approval to build the wind turbines was a
"legislative instrument", (ii) that the purpose of the
instrument was to "authorize the construction, installation,
and operation" of the wind turbines, and (iii) that Kawartha
Lakes' resolution, which had the effect of preventing the
"the construction, installation, and operation" of the
wind turbines, frustrated the legislative instrument's purpose.
This alone was sufficient reason to quash the resolution.
The court also considered the alternative argument that Kawartha
Lakes, in passing the resolution, had acted in bad faith. The court
held, again as a general principle, that an exercise of municipal
power in bad faith will be quashed. According to the court, a
municipality acts in bad faith when, among other things, it acts
"for an improper purpose". One way in which a
municipality can act for an improper purpose is by acting with the
intent to frustrate a provincial legislative instrument. The court
held that for the following reasons, Kawartha Lakes' resolution
was passed with the intent to stop the wind turbine project, was
thus an exercise of municipal power for an improper purpose, was an
exercise of power in bad faith, and should therefore be
Beginning in early 2011, the Kawartha Lakes rebuffed all of
wpd's efforts to negotiate a Road Users Agreement for access to
Kawartha Lakes failed to express any concerns about wpd's
proposed use of the road in question before the Ministry granted
wpd approval to build the wind turbines in December 2013.
The reasons advanced by the Kawartha Lakes for its refusal to
allow wpd use of road changed over time.
Based on the above, Kawartha Lakes' motivation for the
resolution was ultimately to oppose the wind turbine project, not
to oppose wpd's use of the road.
After the court quashed the resolution, it ordered Kawartha
Lakes to enter into good faith negotiations with wpd that would
lead to the completion of the project.
In the face of mounting municipal opposition to various energy
projects (such as wind projects and oil pipelines), this decision
demonstrates the limits of municipal authority in dealing with
projects under provincial or federal jurisdiction. Also by making a
rare finding of municipal bad faith (in addition to the almost as
rare ultra vires finding), the court has sent a clear
signal that municipalities cannot improperly use their powers to
interfere with the development of a project that has obtained the
necessary provincial and/or federal approvals.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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