The B.C. Government recently enacted the Conflict of
Interest Exceptions Regulation (B.C. Reg. 91/2016) (the
"Regulation"), which seeks to clarify the conflict of
interest rules related to societies and municipally incorporated
corporations. The Regulation comes in response to the concerns
raised by UBCM with respect to the B.C. Court of Appeal decision in
Schlenker v. Torgrimson, 2013 BCCA 9. In this decision,
the Court broadened the interpretation of a pecuniary interest that
will be subject to the conflict of interest provisions of the
Community Charter. We previously wrote a
newsletter on this decision and the significant ramifications
that it has for elected officials who serve as directors of
societies or municipal corporations.
What the Regulation Does
The Regulation adds an additional category of pecuniary interest
that is excepted from the conflict of interest restrictions in
sections 100 to 103 of the Community Charter. To fall
within the category, the pecuniary interest must be one that
relates to a "specified interest", which may be broadly
described as an expenditure of public funds or other benefit
flowing to the society or municipally incorporated corporation (or
This "specified interest" must arise as a result of
two factors. First, the elected official must be appointed to the
board of the entity. Second, the elected official must be
participating in the local government's consideration of the
specified interest whether by simply attending the meeting or by
participating in discussion or voting on the specified interest at
the meeting. If the elected official can establish these two
factors then he or she is not subject to the disqualifying
provisions in the Community Charter.
Possible Remaining Confusion
The Regulation is a positive step forward in providing elected
officials who serve on the board of societies and municipally
incorporated corporations with a way to continue to serve both
positions concurrently without fear of disqualification from
office. However, by going beyond addressing the specific concerns
raised by Schlenker, the Province has left some
uncertainty for elected officials who wish to continue to
participate on the board of non-profit organizations.
Ambiguity in the definition of "entity"
For an elected official to fall within the new exception, he or
she must be on the board of an "entity". This category
includes societies and municipally incorporated corporations
"that provide a service" to the local government. It is
unclear at what point a corporation will be found to be providing
services to the local government. Municipally incorporated
corporations already face hurdles in the incorporation process and
it seems unnecessary to further narrow this category to those that
"provide a service". It is quite possible that
"services" will be broadly interpreted such that the
exception is more widely available. However, absent further
clarification from the Province, there remains uncertainty
regarding the category of corporations to which this exception is
The need to be officially appointed
An elected official must show that he or she was officially
appointed in order to qualify for this excepted category of
pecuniary interest. Often, elected officials volunteer their time
on the board of a non-profit organization without any such official
appointment process. Again, requiring official appointment seems to
be an unnecessary restriction on the availability of the exception.
However, while this remains a requirement, elected officials should
clarify their role by having the local government pass a resolution
acknowledging and appointing them to a society or corporate
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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