Montreal can temporarily bar entrepreneurs from getting contracts, court rules

The Quebec Superior Court ruling against a snow-removal entrepreneur is considered an important test of the city's power to regulate contracts. A Quebec Superior Court ruling has confirmed the city of

The Quebec Superior Court ruling against a snow-removal entrepreneur is considered an important test of the city's power to regulate contracts.

A Quebec Superior Court ruling has confirmed the city of Montreal’s power to temporarily bar entrepreneurs from working on municipal contracts if they violate its rules.

In a 55-page decision, Judge Jeffrey Edwards has ruled against snow-removal entrepreneur Serge Mainville, who had contested the provisions of Montreal’s contract management bylaw that allow it to declare contractors ineligible to work for the city under contracts or subcontracts for a period of time if they’re found to breach the rules. Mainville launched the challenge after Montreal added his name to its register of ineligible contractors for five years following an investigation and recommendation by the city inspector general’s office in 2022.

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“The legislator has left it to the municipalities to determine their own contract management framework aimed at ensuring integrity in the awarding and execution of contracts, first by adopting a contract management policy, then by the adoption of a bylaw on this subject,” the judge says in the ruling, dated July 28.

“This is a clear desire of the legislator to grant municipalities broad tools to fight against corruption, rigging and manipulation of calls for tenders and in the performance of awarded contracts in order to promote the improvement of practices of contract awarding at the municipal level.”

The judge concludes that Montreal had the legal authority to enact the measures in its contract management bylaw that allow it to bar an entrepreneur from contracts for a period of time and had the authority to declare Mainville ineligible to obtain city contracts for five years. The judge also says the city carried out the process to put Mainville on its list of ineligible contractors in a fair manner.

The judgment orders Mainville to pay the city’s legal costs. He has 30 days from the date of receiving the formal notice of judgment to decide whether to seek leave to appeal.

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Mainville’s lawyer, Alain Chevrier, said on Thursday he’s waiting for instruction from his client on whether to appeal. He added that he had not yet received the formal notice of the judgment in the post.

The city, meanwhile, said it won’t comment on the ruling.

Mainville had argued there was no legal basis for the city’s resolution declaring him ineligible for five years because Montreal doesn’t have the jurisdiction to disqualify contractors in its bylaw. The city argued its enabling power comes from the Cities and Towns Act.

The judge sided with the city.

“On its very face, the implementation by a municipality of a system to exclude or disqualify a person from contracts for a temporary period is in line with the objectives of the legislator,” the ruling says. Since 2018, the Cities and Towns Act obliges all Quebec municipalities to adopt a bylaw with contract management rules.

The ruling also notes “the meticulous and structured nature” of the report by the Montreal inspector general (BIG) on Mainville and his company, adding that it’s “in direct line with the mission conferred by the legislator” on the BIG.

Last year’s investigation by the BIG concluded that Mainville and his then-company, Entreprises K.L. Mainville (EKLM), had allowed Louis-Victor Michon, a past contractor who was disqualified by the city for five years, to work on the execution of EKLM’s municipal snow-removal contracts despite his ineligibility.

The BIG report said EKLM subcontracted its snow removal work to Excavation Bromont Inc., a company that on paper was owned by Daniel Girard but in practice was controlled by Michon through a clandestine agreement between the two men.

Michon had been disqualified for five years in 2016 in a separate investigation by the BIG. The BIG concluded at the time that Michon had engaged in collusive activities by offering $100,000 to a competitor to not participate in a public call for tenders for a municipal contract. Michon denied engaging in collusion and claimed he was reimbursing a loan.

The 2022 BIG report on EKLM said Mainville was fully aware of Michon’s ineligibility to work on Montreal contracts. The BIG cancelled the two Montreal contracts that had been awarded to EKLM.

Last week’s judgment says Mainville did not dispute the facts and conclusions of the BIG report.

However, Mainville’s lawyer told the Montreal Gazette his client has always denied knowing that Michon secretly controlled Excavation Bromont.

“It was a deduction by the inspector general,” Chevrier said, adding that Mainville was denied the right to tell his version to the city’s comptroller general, who reflected on the sanctions to be imposed.

Following the BIG report, Mainville sold his shares in EKLM and resigned from the company. The company now operates under the name Valosphère Environnement Inc.

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