Catalyst Paper Corporation Appellant v. Corporation of the District of North Cowichan, 2012 SCC 2

SUPREME COURT OF CANADA Citation: Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5 Date: 20120120 Docket: 33744 Between: Catalyst Paper Corporation Appellant and Corporation of the District of North Cowichan Respondent Coram: McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Rothstein and Cromwell JJ. Reasons for Judgment: (paras. 1 to 37) McLachlin C.J. (LeBel, Deschamps, Fish, Abella, Rothstein and Cromwell JJ. concurring) Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5 Catalyst Paper Corporation Appellant v.

Corporation of the District of North Cowichan Respondent Indexed as: Catalyst Paper Corp. v. North Cowichan (District) 2012 SCC 2 File No.: 33744. 2011: October 18; 2012: January 20. Present: McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Rothstein and Cromwell JJ. on appeal from the court of appeal for british columbia Municipal law — Bylaws — Validity — Standard of review applicable to municipal taxation bylaw — What standard of reasonableness requires in context of judicial review of taxation bylaw — Community Charter, S.B.C. 2003, c. 26, s. 197 .

One of C’s four mills is located in the District of North Cowichan on Vancouver Island. C seeks to have a municipal taxation bylaw set aside on the basis that it is unreasonable having regard to objective factors such as consumption of municipal services. The District argued that reasonableness must take into account not only matters directly related to the treatment of a particular taxpayer,

but a broad array of social, economic and demographic factors relating to the community as a whole. The chambers judge upheld thebylaw. The Court of Appeal dismissed the appeal. Held: The appeal should be dismissed. The applicable standard of review is reasonableness. The power of the courts to set aside municipal bylaws is a narrow one,and cannot be exercised simply because a bylaw imposes a greater share of the tax burden on some ratepayers than on others. Thecritical question is what factors the court should consider in determining what lies within the range of possible reasonable outcomes.

Courts reviewing bylaws for reasonableness must approach the task against the backdrop of the wide variety of factors that electedmunicipal councillors may legitimately consider in enacting bylaws, including broad social, economic and political issues. Only if thebylaw is one no reasonable body informed by these factors could have taken will the bylaw be set aside. The fact that wide deference is owed to municipal councils does not mean that they have carte blanche.

Reasonablenesslimits municipal councils in the sense that the substance of their bylaws must conform to the rationale of the statutory regime set up bythe legislature. The range of reasonable outcomes is circumscribed by the purview of the legislative scheme that empowers amunicipality to pass a bylaw. Municipal councils must also adhere to appropriate processes and cannot act for improper purposes. The bylaw falls within a reasonable range of outcomes. The bylaw does not constitute a decision that no reasonable electedmunicipal council could have made.

The District Council considered and weighed all relevant factors. The process of passing the bylawwas properly followed. The reasons for the bylaw were clear and the District’s policy had been laid out in a five-year plan. TheDistrict’s approach complies with the Community Charter, which permits municipalities to apply different tax rates to different classes ofproperty. The Community Charter does not support C’s contention that property value taxes ought to be limited by the level of serviceconsumed. Although the bylaw favours residential property owners, it is not unreasonably partial to them.

Cases Cited Applied: Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; referred to: Thorne’s Hardware Ltd. v. TheQueen, (SCC), [1983] 1 S.C.R. 106; Bell v. The Queen, (SCC), [1979] 2 S.C.R. 212; O’Flanagan v.Rossland (City), 2009 BCCA 182, 270 B.C.A.C. 40; Westcoast Energy Inc. v. Peace River (Regional District) (1998), (BC CA), 54 B.C.L.R. (3d) 45; Canadian National Railway Co. v. Fraser-Fort George (Regional District) (1996), (BC CA), 26 B.C.L.R. (3d) 81; Hlushak v. Fort McMurray (City) (1982), 1982 ABCA 140 , 37 A.R. 149; Ritholz v.

ManitobaOptometric Society (1959), (MB CA), 21 D.L.R. (2d) 542; Canada (Citizenship and Immigration) v. Khosa, 2009 SCC12, [2009] 1 S.C.R. 339; Pacific National Investments Ltd. v. Victoria (City), 2000 SCC 64, [2000] 2 S.C.R. 919; Kruse v. Johnson,[1898] 2 Q.B. 91; Associated Provincial Picture Houses, Ltd. v. Wednesbury Corp., [1948] 1 K.B. 223; Lehndorff United Properties(Canada) Ltd. v. Edmonton (City) (1993), (AB KB), 146 A.R. 37, aff’d (1994), 1994 ABCA 276 , 157 A.R.169; Immeubles Port Louis Ltée v. Lafontaine (Village), (SCC), [1991] 1 S.C.R. 326.

Statutes and Regulations Cited Community Charter, S.B.C. 2003, c. 26, ss. 197, 199(b). District of North Cowichan, Bylaw No. 3385, Tax Rates Bylaw, 2009. Municipal Finance Authority Act, R.S.B.C. 1979, c. 292, s. 14.1(3)(b) [ad. 1983, c. 24, s. 35]. Municipal Finance Authority Act Regulation, B.C. Reg. 63/84. APPEAL from a judgment of the British Columbia Court of Appeal (Newbury, Huddart and Saunders JJ.A.), 2010 BCCA199, 286 B.C.A.C. 149, 484 W.A.C. 149, 5 B.C.L.R. (5th) 203, 318 D.L.R. (4th) 350, 92 R.P.R. (4th) 1, 69 M.P.L.R. (4th) 163, [2010] 7W.W.R. 259, [2010] B.C.J.

No. 700 (QL), 2010 CarswellBC 958, affirming a decision of Voith J., 2009 BCSC 1420, 98 B.C.L.R. (4th)355, 88 R.P.R. (4th) 203, 66 M.P.L.R. (4th) 35, [2010] 7 W.W.R. 220, [2009] B.C.J. No. 2033 (QL), 2009 CarswellBC 2763. Appealdismissed. Roy W. Millen, Joanne Lysyk and Alexandra Luchenko, for the appellant. Sukhbir Manhas and Reece Harding, for the respondent. The judgment of the Court was delivered by [1] The Chief Justice — Catalyst Paper is the largest specialty paper and newsprint producer in western NorthAmerica.

One of its four mills is located in the District of North Cowichan, on the southeastern shore of Vancouver Island. Nearbyforests offer a plentiful supply of wood for Catalyst’s operations, while proximity to the ocean offers cheap transportation of supply andproduct. Labour was historically supplied by small neighbouring communities. Catalyst footed a large portion of the District’s modestproperty tax levy, without demur. [2] In recent decades, the picture has changed. Attracted by the beauty of the Cowichan coast and the benignity of itsclimate, new residents began flocking to the District.

One after another, new subdivisions sprang up. As the population increased, so didthe need for new roads, water lines, schools, hospitals and the usual array of municipal services that accompany urban growth. [3] As more people came to the District, residential property values skyrocketed, while the value of Catalyst’s propertyremained relatively stable.

The District was concerned that taxing residential property at a rate that reflected its actual value relative tothe value of other classes of property in the District would result in unacceptable tax increases to residents, hitting long-term fixed-income residents hard. Instead, the District responded to the demographic shift by keeping residential property taxes low and increasingthe relative tax rate on Catalyst’s property. The total assessed value of residential property in North Cowichan increased 271% between

1992 and 2007, when the mean assessed value of a home in the District reached about $300,000. While residential properties accountfor almost 90% of the total value of property in the District, the taxes payable in respect thereof constitute only 40% of tax revenue. Thetax rate for Class 1 (residential) property in 2009 was set at $2.1430 per $1,000, while the tax rate for Class 4 property (major industry),such as Catalyst’s, was set at $43.3499 per $1,000.

The ratio between residential property and major industrial property was thus 1:20.3— dramatically higher than the 1:3.4 ratio that until 1984 was prescribed by regulation for all municipalities in British Columbia. Therate currently is among the highest in the province. [4] Catalyst, not surprisingly, was unhappy with this state of affairs. Not only is it required to foot a grosslydisproportionate part of the District’s property tax levy, it obtains little in exchange in terms of services. It has its own sewer and watersystems, and its own deep-sea port.

Exacerbating the situation is the fact that in recent years, Catalyst’s operation has been losingmoney. Catalyst cannot pick up its operation and move elsewhere. Its choices are to stay and pay, or to close the mill. [5] To avert this fate, Catalyst has been pressuring the District to lower its tax assessment since 2003. It has hadmodest success. The District has conducted studies into the problem. It accepts that existing Class 4 tax rates in North Cowichan are atundesirable levels. The work of the District’s Property Tax Restructuring Committee, the reports of its financial officer, Mr.

Frame, andthe District’s Financial Plan Bylaw, all recognized that existing Class 4 rates are significantly higher than they should be. As Mr. Frameput it, they “have gotten off track”. [6] Acknowledging the problem, the District has embarked on a gradual program to reduce the rates on Class 4property, has shifted some special costs to residents ($400,000 for a swimming pool), and in 2008 allocated a $300,000 budget reductionto Class 4 alone. This resulted in the property taxes paid by Catalyst declining from 48% in 2007 to 44% in 2008, to the current 37%.

However, for Catalyst, this gradual approach is too little. Having exhausted recourse to the District, its only alternative, it says, is to seekrelief from the courts. [7] This raises the issues of when courts of law can review municipal taxation bylaws and what principles guide thatreview. Catalyst argues that courts can set aside municipal bylaws on the ground that they are unreasonable, having regard to objectivefactors such as consumption of municipal services.

The District of North Cowichan, on the other hand, argues that the judicial power tooverturn a municipal tax bylaw is very narrow; in its view, courts cannot overturn a bylaw simply because it places a disproportionateburden on a taxpayer. [8] The British Columbia Supreme Court (2009 BCSC 1420, 98 B.C.L.R. (4th) 355) and the Court of Appeal (2010BCCA 199, 286 B.C.A.C. 149) upheld the impugned bylaw.

Catalyst now appeals to this Court. [9] I conclude that the power of the courts to set aside municipal bylaws is a narrow one, and cannot be exercisedsimply because a bylaw imposes a greater share of the tax burden on some ratepayers than on others. Analysis A. Judicial Review of Municipal Bylaws [10] It is a fundamental principle of the rule of law that state power must be exercised in accordance with the law. Thecorollary of this constitutionally protected principle is that superior courts may be called upon to review whether particular exercises ofstate power fall outside the law.

We call this function “judicial review”. [11] Municipalities do not have direct powers under the Constitution. They possess only those powers that provinciallegislatures delegate to them. This means that they must act within the legislative constraints the province has imposed on them. If theydo not, their decisions or bylaws may be set aside on judicial review. [12] A municipality’s decisions and bylaws, like all administrative acts, may be reviewed in two ways.

First, therequirements of procedural fairness and legislative scheme governing a municipality may require that the municipality comply withcertain procedural requirements, such as notice or voting requirements. If a municipality fails to abide by these procedures, a decision orbylaw may be invalid. But in addition to meeting these bare legal requirements, municipal acts may be set aside because they falloutside the scope of what the empowering legislative scheme contemplated.

This substantive review is premised on the fundamentalassumption derived from the rule of law that a legislature does not intend the power it delegates to be exercised unreasonably, or in somecases, incorrectly. [13] A court conducting substantive review of the exercise of delegated powers must first determine the appropriatestandard of review. This depends on a number of factors, including the presence of a privative clause in the enabling statute, the natureof the body to which the power is delegated, and whether the question falls within the body’s area of expertise.

Two standards areavailable: reasonableness and correctness. See, generally, Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at para. 55. Ifthe applicable standard of review is correctness, the reviewing court requires, as the label suggests, that the administrative body becorrect.

If the applicable standard of review is reasonableness, the reviewing court requires that the decision be reasonable, havingregard to the processes followed and whether the outcome falls within a reasonable range of alternatives in light of the legislative schemeand contextual factors relevant to the exercise of the power (Dunsmuir, at para. 47). [14] Against this general background, I come to the issue before us — the substantive judicial review of municipaltaxation bylaws. In Thorne’s Hardware Ltd. v.

The Queen, (SCC), [1983] 1 S.C.R. 106, at p. 115, the Court, referring todelegated legislation, drew a distinction between policy and legality, with the former being unreviewable by the courts: The Governor in Council quite obviously believed that he had reasonable grounds for passing Order in Council P.C. 1977-2115extending the boundaries of Saint John Harbour and we cannot enquire into the validity of those beliefs in order to determine the validityof the Order in Council. (See also pp. 111-13.) However, this attempt to maintain a clear distinction between policy and legality has not prevailed. In passing

delegated legislation, a municipality must make policy choices that fall reasonably within the scope of the authority the legislature hasgranted it. Indeed, the parties now agree that the tax bylaw at issue is not exempt from substantive review in this sense. [15] Unlike Parliament and provincial legislatures which possess inherent legislative power, regulatory bodies canexercise only those legislative powers that were delegated to them by the legislature. Their discretion is not unfettered.

The rule of lawinsists on judicial review to ensure that delegated legislation complies with the rationale and purview of the statutory scheme underwhich it is adopted. The delegating legislator is presumed to intend that the authority be exercised in a reasonable manner. Numerouscases have accepted that courts can review the substance of bylaws to ensure the lawful exercise of the power conferred on municipalcouncils and other regulatory bodies (Bell v. The Queen, (SCC), [1979] 2 S.C.R. 212; O’Flanagan v. Rossland (City),2009 BCCA 182, 270 B.C.A.C. 40; Westcoast Energy Inc. v.

Peace River (Regional District) (1998), (BC CA), 54B.C.L.R. (3d) 45 (C.A.); Canadian National Railway Co. v. Fraser-Fort George (Regional District) (1996), (BCCA), 26 B.C.L.R. (3d) 81 (C.A.); Hlushak v. Fort McMurray (City) (1982), 1982 ABCA 140 , 37 A.R. 149 (C.A.); Ritholz v.Manitoba Optometric Society (1959), (MB CA), 21 D.L.R. (2d) 542 (Man. C.A.)). [16] This brings us to the standard of review to be applied. The parties agree that the reasonableness standard applies inthis case.

The question is whether the bylaw at issue is reasonable having regard to process and whether it falls within a range ofpossible reasonable outcomes (Dunsmuir, at para. 47). [17] Where the parties differ is on what the standard of reasonableness requires in the context of this case. This is thenub of the dispute before us. Catalyst argues that the issue is whether the tax bylaw falls within a range of reasonable outcomes, havingregard to objective factors relating to consumption of municipal services, factors Catalyst has outlined in a study called the“Consumption of Services Model”.

The District of North Cowichan, on the other hand, argues that reasonableness, in the context ofmunicipal taxation bylaws, must take into account not only matters directly related to the treatment of a particular taxpayer in terms ofconsumption, but a broad array of social, economic and demographic factors relating to the community as a whole. The critical questionis what factors the court should consider in determining what lies within the range of possible reasonable outcomes. Is it the narrowgroup of objective consumption-related factors urged by Catalyst?

Or is it a broader spectrum of social, economic and political factors,as urged by North Cowichan? [18] The answer lies in Dunsmuir’s recognition that reasonableness must be assessed in the context of the particular typeof decision making involved and all relevant factors. It is an essentially contextual inquiry (Dunsmuir, at para. 64). As stated in Canada(Citizenship and Immigration) v.

Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para. 59, per Binnie J., “[r]easonableness is a singlestandard that takes its colour from the context.” The fundamental question is the scope of decision-making power conferred on thedecision-maker by the governing legislation. The scope of a body’s decision-making power is determined by the type of case at hand. For this reason, it is useful to look at how courts have approached this type of decision in the past (Dunsmuir, at paras. 54 and 57). Toput it in terms of this case, we should ask how courts reviewing municipal bylaws pre-Dunsmuir have proceeded.

This approach doesnot contradict the fact that the ultimate question is whether the decision falls within a range of reasonable outcomes. It simplyrecognizes that reasonableness depends on the context. [19] The case law suggests that review of municipal bylaws must reflect the broad discretion provincial legislators havetraditionally accorded to municipalities engaged in delegated legislation. Municipal councillors passing bylaws fulfill a task that affectstheir community as a whole and is legislative rather than adjudicative in nature. Bylaws are not quasi-judicial decisions.

Rather, theyinvolve an array of social, economic, political and other non-legal considerations. “Municipal governments are democratic institutions”,per LeBel J. for the majority in Pacific National Investments Ltd. v. Victoria (City), 2000 SCC 64, [2000] 2 S.C.R. 919, at para. 33.

Inthis context, reasonableness means courts must respect the responsibility of elected representatives to serve the people who elected themand to whom they are ultimately accountable. [20] The decided cases support the view of the trial judge that, historically, courts have refused to overturn municipalbylaws unless they were found to be “aberrant”, “overwhelming”, or if “no reasonable body” could have adopted them (para. 80, perVoith J.). See Kruse v. Johnson, [1898] 2 Q.B. 91 (Div. Ct.); Associated Provincial Picture Houses, Ltd. v.

Wednesbury Corp., [1948] 1K.B. 223 (C.A.); Lehndorff United Properties (Canada) Ltd. v. Edmonton (City) (1993), (AB KB), 146 A.R. 37(Q.B.), aff’d (1994), 1994 ABCA 276 , 157 A.R. 169 (C.A.). [21] This deferential approach to judicial review of municipal bylaws has been in place for over a century. As LordRussell C.J. stated in Kruse v. Johnson: . . . courts of justice ought to be slow to condemn as invalid any by-law, so made under such conditions, on the ground of supposedunreasonableness. Notwithstanding what Cockburn C.J. said in Bailey v.

Williamson [(1873), L.R. 8 Q.B. 118, at p. 124], an analogouscase, I do not mean to say that there may not be cases in which it would be the duty of the Court to condemn by-laws, made under suchauthority as these were made, as invalid because unreasonable. But unreasonable in what sense?

If, for instance, they were found to bepartial and unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if theyinvolved such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds ofreasonable men, the Court might well say, “Parliament never intended to give authority to make such rules; they are unreasonable andultra vires.” But it is in this sense, and in this sense only, as I conceive, that the question of unreasonableness can properly be regarded.

A by-law is not unreasonable merely because particular judges may think that it goes further than is prudent or necessary or convenient,or because it is not accompanied by a qualification or an exception which some judges may think ought to be there. [Emphasis added; pp.99-100.] These are the general indicators of unreasonableness in the context of municipal bylaws. It must be remembered, though, that what isunreasonable will depend on the applicable legislative framework.

For instance, Lord Russell C.J.’s reference to inequality in operationas between different classes is inapt in the context of many modern municipal statutes, which contain provisions that expressly allow forsuch inequality. Subsection 197(3) of the Community Charter, S.B.C. 2003, c. 26, which allows municipalities to set different tax ratesfor different property classes, is such a provision.

[22] Catalyst argues that Dunsmuir has changed the law and that the traditional deferential approach to the review ofmunicipal bylaws no longer holds. The bylaw, it argues, must be demonstrably reasonable, having regard to objective criteria relating totaxation. The reasonableness standard in Dunsmuir, it says, means that all municipal decisions, including bylaws, must meet the test ofdemonstrable rationality in terms of process and outcome.

It follows, Catalyst argues, that a municipality cannot tax major industrialproperty owners at a substantially higher rate than residential property owners, in order to avoid hardship to long-term or fixed-incomeresidents in a rising housing market. Rather, the municipality should confine itself to objective factors, such as those set forth inCatalyst’s “Municipal Sustainability Model”, in fixing the property tax rates of different classes of property owners. [23] This argument misreads Dunsmuir.

As discussed above, Dunsmuir described reasonableness as a flexible deferentialstandard that varies with the context and the nature of the impugned administrative act. In doing so, Dunsmuir expressly stated that theapproaches to review developed in particular contexts in previous cases continue to be relevant (Dunsmuir, at paras. 54 and 57). Here thecontext is the adoption of municipal bylaws. The cases dealing with review of such bylaws relied on by the trial judge and discussedabove continue to be relevant and applicable.

To put it succinctly, they point the way to what is reasonable in the particular context ofbylaws passed by democratically elected municipal councils. [24] It is thus clear that courts reviewing bylaws for reasonableness must approach the task against the backdrop of thewide variety of factors that elected municipal councillors may legitimately consider in enacting bylaws. The applicable test is this: onlyif the bylaw is one no reasonable body informed by these factors could have taken will the bylaw be set aside.

The fact that widedeference is owed to municipal councils does not mean that they have carte blanche. [25] Reasonableness limits municipal councils in the sense that the substance of their bylaws must conform to therationale of the statutory regime set up by the legislature. The range of reasonable outcomes is thus circumscribed by the purview of thelegislative scheme that empowers a municipality to pass a bylaw. [26] Here the relevant legislation is the Community Charter.

Section 197 gives municipalities a broad and virtuallyunfettered legislative discretion to establish property tax rates in respect of each of the property classes in the municipality, unless limitedby regulation. The intended breadth of the legislative discretion under the current legislative scheme is highlighted by the fact that thegovernment of British Columbia ceased to impose regulatory limits on the ratios between tax rates in

Section 199(

b) of theCommunity Charter allows the Lieutenant Governor in Council to make regulations on the relationships between Class 1 and Class 4 taxrates, and no regulation of this sort has been reintroduced since the repeal of the 1984 regulation, which prescribed a 1 to 3.4 ratiobetween residential and major industry tax rates (B.C. Reg. 63/84, adopted pursuant to s. 14.1(3)(

b) of the Municipal Finance AuthorityAct, R.S.B.C. 1979, c. 292, the predecessor of s. 199(

b) of the Community Charter). Special provisions of the Community Charterrelating to parcel taxation, local area services, business improvement areas, or property value tax exemptions address particular concernsand do not detract from the broad power of British Columbia municipalities to vary rates between different classes of property. [27] Nor does the Community Charter support the contention that property value taxes ought to be limited by the level ofservice consumed.

Section 197 authorizes the imposition of a tax, not a fee. The distinguishing feature between the two is that a taxneed bear no relationship to the costs of the service being provided, while the opposite is true for a fee. The ratio of service consumptionto the different property classes will differ depending on the service.

In light of this, a requirement that municipalities impose propertyvalue taxes having in mind the level of services consumed would prevent municipalities from ever exercising their authority unders. 197(3)(b). [28] Another set of limitations on municipalities passing bylaws flows from the need for reasonable processes. Indetermining whether a particular bylaw falls within the scope of the legislative scheme, factors such as failure to adhere to requiredprocesses and improper motives are relevant. Municipal councils must adhere to appropriate processes and cannot act for improperpurposes.

As Gonthier J. stated for the Court in Immeubles Port Louis Ltée v. Lafontaine (Village), (SCC), [1991] 1S.C.R. 326, “[a] municipal act committed for unreasonable or reprehensible purposes, or purposes not covered by legislation, is void” (p.349). [29] It is important to remember that requirements of process, like the range of reasonable outcomes, vary with thecontext and nature of the decision-making process at issue. Formal reasons may be required for decisions that involve quasi-judicialadjudication by a municipality. But that does not apply to the process of passing municipal bylaws.

To demand that councillors whohave just emerged from a heated debate on the merits of a bylaw get together to produce a coherent set of reasons is to misconceive thenature of the democratic process that prevails in the council chamber. The reasons for a municipal bylaw are traditionally deduced fromthe debate, deliberations and the statements of policy that give rise to the bylaw. [30] Nor, contrary to Catalyst’s contention, is the municipality required to formally explain the basis of a bylaw. Asdiscussed above, municipal councils have extensive latitude in what factors they may consider in passing a bylaw.

They may considerobjective factors directly relating to consumption of services. But they may also consider broader social, economic and political factorsthat are relevant to the electorate. [31] This is not to say that it is wrong for municipal councils to explain the rationale behind their bylaws. Typically, as inthis case, modern municipal councils provide information in the form of long-term plans. Nor is it to say that municipalities performingdecisional or adjudicative functions are exempt from giving reasons as discussed above. B.

Application: Is the Bylaw Unreasonable? [32] To summarize, the ultimate question is whether the taxation bylaw falls within a reasonable range of outcomes. Thismust be judged on the approach the courts have traditionally adopted in reviewing bylaws passed by municipal councils. Municipalcouncils passing bylaws are entitled to consider not merely the objective considerations bearing directly on the matter, but broader social,economic and political issues. In judging the reasonableness of a bylaw, it is appropriate to consider both process and the content of thebylaw. [33] I turn first to process.

Catalyst does not allege that the voting procedures of the District were incorrect; nor does it

allege bad faith. Its contention is rather that the District’s process is flawed because it provided neither formal reasons for the bylaw, nor a rational basis (viewed in terms of Catalyst’s “Consumption of Services Model”) for its decision. This contention cannot succeed. As discussed above, municipal councils are not required to give formal reasons or lay out a rational basis for bylaws. In any event, as the trial judge found, the reasons for the bylaw at issue here were clear to everyone. The District’s policy had been laid out in a five-year plan.

Discussions and correspondence between the District and Catalyst left little doubt as to the reasons for the bylaw. The trial judge found that the District Council considered and weighed all relevant factors in making its decision. If Catalyst has a complaint, it is not with the procedures followed, but with the substance of the bylaw. [ 34 ] This brings us to the content of the bylaw at issue. There can be no doubt that the impact of the bylaw on Catalyst is harsh.

The ratio between major industrial rates and residential rates imposed is among the highest in British Columbia (only two municipalities exceed it) and far outside the pre-1985 norm. In Catalyst’s present economic situation, the consequences are serious — indeed, Catalyst suggests that the industrial rate threatens the continued operation of its mill in the District. [ 35 ] However, countervailing considerations exist — considerations that the District Council was entitled to take into account.

The Council was entitled to consider the impact on long-term fixed-income residents that a precipitous hike in residential property taxes might produce. The Council has decided to reject a dramatic increase and gradually work toward greater equalization of tax rates between Class 4 major industrial property owners and Class 1 residential property owners. Acknowledging that the rates from Class 4 are higher than they should be, the Council is working over a period of years toward the goal of more equitable sharing of the tax burden.

Its approach complies with the Community Charter , which permits municipalities to apply different tax rates to different classes of property. Specifically, nothing in the Community Charter requires the District to apply anything like Catalyst’s “Consumption of Services Model”. Indeed, the compelling submission made by Mr. Manhas, counsel for the respondent, was that it would be “statutorily ultra vires for [the municipality] to impose property value taxes on the basis of consumption alone under section 197(3) (b)” (transcript, at p. 54). The bylaw favours residential property owners, to be sure.

But it is not unreasonably partial to them. [ 36 ] Taking all these factors into account, the trial court, affirmed by the Court of Appeal, concluded that the bylaw fell within a reasonable range of outcomes. I agree. The adoption of the Tax Rates Bylaw, 2009 , Bylaw No. 3385, does not constitute a decision that no reasonable elected municipal council could have made . [ 37 ] I would dismiss the appeal with costs. Appeal dismissed with costs. Solicitors for the appellant: Blake, Cassels & Graydon, Vancouver. Solicitors for the respondent: Young, Anderson, Vancouver.