By John Francis, Bruce Peninsula Press
The Agenda for MNBP Council’s Nov 22 Meeting contains a report from the municipality’s Ethics Commissioner, Howard G Elston concerning an anonymous complaint against Councillor James Mielhausen.
The complaint alleges that Councillor Mielhausen had a conflict of interest when he supported the Blue Heron company’s rezoning application to increase their parking capacity, because Mielhausen’s daughter, Jada, works for Blue Heron.
In his response to the complaint, Councillor Mielhausen stated:
“It is important to note that Jada Mielhausen’s roles as Project Coordinator for the Blue Heron Company are limited to social media marketing, advertising, and motel- and retail-specific inventorying. … [Her] role as Project Coordinator for the Blue Heron Company excludes any involvement in corporate planning, development, or parking-related issues. Further, as an employee of the Blue Heron Company, Jada Mielhausen has executed a confidentiality agreement to not disclose corporate information.
“As such, I believe I have not breached Section 8.2 of the Code.
“I understand that you have also identified a potential conflict under the MCIA Section 3. The indirect pecuniary interest conflict that you’ve outlined is specific to a parent and a child. Specifically, the clause states that “the pecuniary interest, direct or indirect, of a parent or the spouse or any child of the member shall, if known to the member, be deemed to be also pecuniary interest of the member”. Notably, Jada Mielhausen is not considered a “child” per the Province of Ontario. Jada Mielhausen is older than 19 years of age and is no longer a student. As such, she is no longer considered a dependent of mine (or a ‘‘child’’). Based on this criteria, I believe I have not imposed a conflict under the MCIA Section 3.”
Despite this and despite the fact that Jada Mielhausen is a salaried employee, not an owner, at Blue Heron, the Ethics Commissioner found that Councillor Mielhausen had a conflict of interest. A few excerpts from his report:
“Councillor Mielhausen did not disclose a pecuniary interest in the Blue Heron Application at [at the June 28 and July 12 Council Meetings] and proceeded to discuss and vote on the matter.
COMPLAINT AND RESPONSE
On July 19, 2021, I received a complaint (the “Complaint”) that, by failing to disclose an interest in the Blue Heron Application, by participating in the discussion of it, and by voting on it on June 28, 2021 and July 12, 2021, Councillor Mielhausen had contravened section 8.2 of Code of Conduct of the Municipality of Northern Bruce Peninsula (the “Code“). I have also considered whether Councillor Mielhausen has contravened section 5 of the Municipal Conflict of Interest Act, R.S.O. 1990, c. M.50, as amended (the “MC|A”). This report to Council provides my findings and recommendation on the Complaint.
ANALYSIS AND FINDINGS
I will begin with the basic premise of the MCIA, as it applies to these facts. If Jada Mielhausen has a direct or indirect pecuniary interest in the Blue Heron Application, that interest will be deemed to be the interest of her father, Councillor Mielhausen, disqualifying him from participating in the consideration of the Blue Heron Application at Council, unless his participation is excused by one of the exceptions to this rule.
Section 5 of the MCIA states:
‘5 (1) Where a member, either on his or her own behalf or while acting for, by, with or through another, has any pecuniary interest, direct or indirect, in any matter and is present at a meeting of the council or local board at which the matter is the subject of consideration, the member,
(a) shall, prior to any consideration of the matter at the meeting, disclose the interest and the general nature thereof;
(b) shall not take part in the discussion of, or vote on any question in respect of the matter; and
(c) shall not attempt in any way whether before, during or after the meeting to influence the voting on any such question.’
“While the MCIA does not define a “pecuniary interest” it is universally accepted to be a financial or monetary interest. The Blue Heron Application clearly involves a pecuniary interest of the Company. The question then becomes: Does Ms. Mielhausen have a direct or indirect pecuniary interest in the Application?
As an employee of the Company, it is a reasonable assumption that Jada Mielhausen’s job security and her remuneration — pecuniary interests of hers — are maintained or enhanced to some degree when the Company she works for is successful in expanding its businesses, including adding parking. She does not need to be directly involved in or responsible for the matter that is before Council. By way of analogy, this conclusion is supported by the fact that the MCIA identifies the pecuniary interest of a Member’s employer as an indirect pecuniary interest of the Member.
Accordingly, it is my finding that Ms. Mielhausen has an indirect pecuniary interest in the Blue Heron Application.
Section 3 of the MCIA provides that: “For the purposes of this Act, the pecuniary interest, direct or indirect, of a parent or the spouse or any child of the member shall, if known to the member, be deemed to be also the pecuniary interest of the member“.
The MCIA defines “child” as “a child born within or outside marriage and includes an adopted child and a person whom a parent has demonstrated a settled intention to treat as a child of his or her family”.
I note that the definition of a “child” in the MCIA does not impose any age parameters on who is to be considered a “child”. While this may not be consistent with other definitions of a “child‘’applied by the province, I suspect that that is because some other provincial laws use the age of the child to mark the beginning or end of certain rights or obligations, not the end of the love and affection of a parent. For the purposes of identifying familial connections that may induce, or be seen to induce, favouritism or bias on pecuniary matters, the age of the child is irrelevant. A parent’s affection for a child does not diminish with time.
Distinguishing the definition of a “child” in the MCIA on this basis, I find that Jada Mielhausen is a ‘‘child”of Councillor Mielhausen and that she has an indirect pecuniary interest in the Blue Heron Application. By virtue of section 3 of the MCIA, with no suggestion having been made that Councillor Mielhausen did not know of his daughter’s employment at Blue Heron, Ms. Mielhausen’s interest is deemed to be the indirect pecuniary interest of her father, Councillor James Mielhausen.”
Ethics Commissioner Elston notes that “Councillor Mielhausen will be relieved of his obligations under section 5, however, if he can fit under one of the exceptions in section 4 of the MCIA. … [but] in my view, the only possible exception is found in section 4(k): “by reason only of 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”. In the face of the legal fiction that Councillor Mielhausen has the interest of an employee of the Company, the nature of his interest cannot reasonably be regarded as so insignificant that it would not influence him.
By failing to disclose his interest in the Blue Heron Application, and by participating in the discussion about and voting on it on June 28, 2021 and July 12, 2021, I find that Councillor Mielhausen has contravened section 5 of the MCIA.”
Ethics Commissioner Elston quotes from the Code of Conduct for municipal council members:
“iv. Members shall not extend, in the discharge of their official duties, preferential treatment to any individual or organization if a reasonably well-informed person would conclude that the preferential treatment was solely for the purpose of advancing a private or personal interest (4.9).”
The Commissioner continues:
“Based on my findings that Councillor Mielhausen has contravened the MCIA and the Code, it is my recommendation to Council that he be reprimanded.
Although I have the authority to now apply to a judge for confirmation that Councillor Mielhausen has contravened section 5 of the MCIA, I have decided that the infraction, while serious, does not merit the weightier sanctions available to a judge, namely, declaring the member’s seat vacant, disqualifying the member from being a member for not more than seven years, or requiring the member to make restitution to a party that has suffered a loss and, for that reason, I will not be making such an application…”
The Commissioner concludes:
“It is my advice to Council that it should not void the proceedings [of the June 28 and July 12 Meetings]. There has been no final determination on the Blue Heron Application, and Council’s actions to-date — to engage in further consultation with SON, for example – will allow for a better consideration of the merits of the matter, when it is brought back to Council, will not have been in vain.”
In Councillor Mielhausen’s defence, many “reasonably well-informed people” would have noted that Councillor Mielhausen also championed the cause of Blue Heron Company’s competitor, the Bruce Anchor Company, in its parallel application for increased parking. He argued that increased parking for both companies would benefit the community as a whole by reducing traffic and congestion and improving the experience for visitors.
MNBP Council will have to decide at its Nov 22 Meeting whether or not to take action against Councillor Mielhausen.
