Executive Summary: Key Legal and Evidentiary Issues

• Dispute over whether a business operated partially within municipal boundaries is subject to local licensing bylaws

• Determination of municipal jurisdiction over water-based commercial activity on a river passing through town limits

• Challenge to municipal authority based on the doctrine of federal paramountcy without proper constitutional notice

• Application of modified test for interlocutory injunctions under the Municipal Act, 2001

• Analysis of whether business activity via an online platform and dock access constitutes operation “within” the town

• Consideration of geographic boundaries under the Territorial Division Act to define municipal reach

Facts and procedural background

Lake Simcoe Jet Ski Rentals Ltd., operating as Wasaga Jet Ski Rentals (WJSR), was granted a business licence by the Town of Wasaga Beach in May 2024 to rent personal watercraft from 72 Main Street, a property abutting the Nottawasaga River. In mid-2025, following several regulatory and safety concerns, including alleged violations of the licence conditions, the Town, in conjunction with the Ontario Provincial Police and Transport Canada, initiated enforcement action against WJSR. By July 3, 2025, the Town revoked WJSR’s licence.

Despite the revocation, WJSR continued to operate from the same location and incurred further charges for operating without a valid licence. In response, the Town filed an application seeking a court order under section 440 of the Municipal Act, 2001, to restrain WJSR from conducting business in contravention of the Town’s by-law. An interlocutory injunction was also requested to stop the business pending the full hearing of the application.

WJSR countered that its operations had shifted entirely to federal waterways, specifically the Nottawasaga River and Georgian Bay, and that all business transactions occurred online. It argued that the Town’s licensing by-law was inapplicable due to federal paramountcy, and thus ultra vires the Town's jurisdiction. However, it failed to serve constitutional notice under section 109 of the Courts of Justice Act to the Attorneys General of Canada and Ontario, as required when constitutional validity is contested.

Legal findings and analysis

Justice Speyer ruled that WJSR continued to operate its business at least partly within the Town. Access to the company’s floating dock was facilitated via stairs attached to the land at 72 Main Street. Even though the business promoted itself as operating solely online, the physical point of departure and return for customers remained within the Town’s geographic area. The court relied on section 3(2) of the Territorial Division Act, 2002 to confirm that the Town’s jurisdiction extended to the middle of the Nottawasaga River, as it abutted both riverbanks.

The court also found that WJSR’s argument of federal paramountcy could not be adjudicated due to the procedural failure to provide notice under the Courts of Justice Act. Therefore, the by-law remained valid and enforceable for purposes of this motion.

Applying the modified test for statutory injunctions under section 440 of the Municipal Act, the court held that a strong prima facie case existed. Since WJSR was operating without a licence in breach of the by-law and no exceptional circumstances were shown to justify withholding relief, the interlocutory injunction was granted.

Outcome

The court ordered that WJSR must cease and refrain from operating its business without a licence in the Town of Wasaga Beach, including on the Nottawasaga River, until the full application is heard. The Town succeeded in securing interim injunctive relief to enforce its business licensing regime.