A recent Ontario Superior Court decision regarding an application by the London District Catholic School Board1 (LDCSB) has provided some welcome guidance regarding conflicts of interest to trustees whose family members are employed by a school board they serve.
Seven of the eight elected members of the LDCSB asked the Court to rule on their concern that the provisions of the Municipal Conflict of Interest Act2 prevented them from voting on key issues, in particular ratification of collective agreements and approval of the annual budget. Guidance from the Court can be sought where there are fewer than two members with voting rights to make a decision.3 In the present circumstances, all but one of the members of the board of trustees had a sibling, child and/or spouse employed by the LDCSB.
Under the Municipal Conflict of Interest Act a trustee is deemed to have the same interest as a child, parent or spouse who has a direct or indirect pecuniary interest. The Act requires a trustee to disclose any direct, indirect or deemed conflict of interest in writing and refrain from voting, discussing or otherwise attempting to influence the outcome of a matter before the board of trustees.
The Court considered the exemptions to the duty to declare a direct, indirect or deemed conflict of interest, outlined at section 4(k), which includes an ". . .interest of the member which is so remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member." To determine whether the section 4(k) exemption applied, the Court adopted the following test: "would a reasonable elector, being apprised of all the circumstances, be more likely than not to regard the interest of the councilor [/trustee] as likely to influence that councillor's action and decision on the question?".4
The Court noted that the trustees of the LDCSB were not involved in any substantive negotiation or review of its collective agreements; therefore, any potential benefit a trustee could derive from ratification of a collective agreement was so insignificant and remote that no reasonable person would conclude that the trustee's decision-making could be affected by the interest. Similarly, the Court found that the annual budget allocates financial resources to various departments, employing thousands of employees and trustees' were unlikely to derive any financial benefit.
Neither ratification of the collective agreements nor approval of the budgets provide a Trustee with the opportunity to determine employee salaries. Therefore, the trustees could vote on the current and future budgets and collective agreements.
The Court, however, issued two caveats: the ruling applies only to the current trustees, as exemptions must be considered on a case-by-case basis; and trustees are required to identify in writing their potential conflict, and reference to the Court order, but they do not need to recuse themselves.
When considering whether an interest constitutes a conflict that must be declared, a trustee may take into account whether their interest is (a) financial; and (b) so "remote or insignificant in its nature that it cannot reasonably be regarded as likely to influence the member."
In making such an assessment, trustees may be guided by this decision, which held that it is not reasonable to assume that the interest of an employed sibling, adult child, or spouse who is an occasional teacher, will impact a trustee's decision-making on the budget or a collective agreement.
2. RSO 1990, c M.50.
4. adopted from Ferri v. Ontario (Attorney General, 2015 ONCA 683 (CanLII), at para 37
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