SASKATOON -- Saskatchewan’s Ombudsman and Public Interest Disclosure Commissioner defended her office’s handling of municipal conflict of interest complaints in her annual report.

While Mary McFadyen believes council members will almost always take the right steps to deal with their conflicts of interest if they fully understand the situation, “many council members are still woefully misinformed about what it means to be in a conflict of interest,” she wrote in her 2019 report, released Tuesday.

The problem has been compounded by the way the conflict of interest provisions in The Cities Act, The Municipalities Act, and The Northern Municipalities Act, 2010 were worded when they were changed in 2015, she said.

“Many council members still seem to think that the Ombudsman is making up conflict of interest rules – that unless the municipal acts specifically state that a certain set of circumstances is a conflict of interest, they are free to participate in council decisions even though they actually have a conflict of interest.”

She cited an investigation into the Resort Village of the District of Katepwa after receiving a complaint that a council member had a conflict of interest in the council’s discussions and decisions related to granting a 25-year lease of the District’s former landfill site to the adjacent golf club for a nominal rent of $1 and some in-kind contributions.

The council member’s father was a member of the golf club and sat on its board, according to the report.

“We found the council member had a conflict of interest and should not have participated in the discussions and decisions in the matter. However, we found that the council member had an honest, though incorrect belief, that he could participate in these decisions because of the golf club’s status as a non-profit corporation.”

In another case, the R.M. of Enniskillen rejected her recommendations to get some conflict of interest training and comply with the conflict of interest rules in The Municipalities Act in the future. She had found that two council members had a conflict of interest in certain matters before council and did not take steps to deal with them.

She also pointed to a November 2019 Saskatchewan Association of Rural Municipalities resolution, which passed with an 87 per cent majority, saying that she had adopted a “grey area” concept of a conflict of interest and calling for her to be made to adhere to the definition of conflict of interest as it appears in The Municipalities Act.

“In fairness, we acknowledge that section 141.1 of The Municipalities Act has generated a lot of confusion in the municipal sector, as many think it ends there, but that is not what the Act says,” McFadyen said in her report.

She wrote that after she raised the issue with the Ministry of Government Relations, the Miscellaneous Municipal Statutes Amendment Act was brought forward to the Legislative Assembly to change sections to The Municipalities Act, The Cities Act and The Northern Municipalities Act. The bill received second reading March 10.

“These changes should make it clearer that if a council member participates in a council decision to improperly further another person’s private interests, whether or not the person meets the definition of ‘closely-connected person,’ they still have to follow the rules in the Act to avoid their conflict of interest,” she said.

“Nevertheless, there is still a lot of work to do to make sure that municipal council members and their staff understand what constitutes a conflict of interest and what they need to do to deal with the conflict. For all these reasons, we continue to help council members understand their role, our role, and what it means to act in the best interests of their communities.”

A small-town technicality

In another investigation, McFadyen’s office found the mayor of the Northern Hamlet of Black Point was in a conflict of interest when she participated in the council’s decision to hire her cousin, whom she commonly referred to as her sister, to work at the hamlet office.

The mayor had felt that since she was not her sister, she did not have to excuse herself from the decision. She also said that everyone in the community knew of the job opening because the administrator went door to door to drop off the posting, and that her cousin was the only person that showed any interest, according to the report.

Normally, McFadyen would have recommended that council itself decide on the issue, as it would then be accountable to voters - but two of the three council members had a conflict of interest in the matter, as the cousin was now a council member, leaving only one member of council to consider and vote on the recommendation.

In cases where councils lose quorum due to conflicts of interest, the Northern Municipalities Act, 2010 allows councils to apply to the courts to allow the council to make the decision - but in this was untenable, since two members of council would also be in a conflict of interest in the decision to apply to the court, McFayden wrote.

“Therefore, we decided there is no reasonable recommendation we could make that the Black Point council could consider and implement. This is an issue in small communities across Saskatchewan, which we have raised with the Ministry of Government Relations.”

McFadyen had previously investigated a complaint that the hamlet’s council had given themselves an inordinately high remuneration.

The council had not given public notice of the meeting when remuneration was to be discussed, she found.

She recommended that the council adopt a public notice bylaw, repeal the resolutions that increased their remuneration, and that it give public notice of its intention to set the remuneration for its council members.