Richmond Hill (Town) v. Elginbay Corporation, 2016 ONSC 5560
CITATION: Richmond Hill (Town) v. Elginbay Corporation, 2016 ONSC 5560
DIVISIONAL COURT FILE NO.: 59/15
DATE: 20160906
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, NORDHEIMER & C. HORKINS JJ.
BETWEEN:
THE CORPORATION OF THE TOWN OF RICHMOND HILL
Appellant
– and –
ELGINBAY CORPORATION, ZAMANI HOMES (RICHMOND HILL) LTD., HAULOVER INVESTMENTS LIMITED, MONTANARO ESTATES LIMITED, WILLIAM and YVONNE WORDEN, ROBERT SALNA and SALNA HOLDINGS INC. and ONTARIO MUNICIPAL BOARD
Respondents
- and -
THE CORPORATION OF THE TOWN OF OAKVILLE, THE CORPORATION OF THE CITY OF MISSISSAUGA, THE CORPORATION OF THE CITY OF MARKHAM and THE CORPORATION OF THE CITY OF VAUGHAN
Interveners
B. Kussner, S. Rouleau & A. Alyea, for the appellant
I. Kagan, D. Winer, A. DeGasperis & C. Facciolo, for the respondents, Elginbay Corporation and Zamani Homes (Richmond Hill) Ltd.
J. Streisfield, for the respondents, Haulover Investments Limited, Montanaro Estates Limited, William and Yvonne Worden, Robert Salna and Salna Holdings Inc.
S. Floras, for the respondent, Ontario Municipal Board
N. Chandra, for the intervener, The Corporation of the Town of Oakville
R. Doumani & L. Dean, for the intervener, The Corporation of the City of Mississauga
A. Wilson-Peebles, for the intervener, The Corporation of the City of Markham
B. Engell, for the intervener, The Corporation of the City of Vaughan
HEARD at Toronto: August 24, 2016
NORDHEIMER J.:
[1] This is an appeal by the Corporation of the Town of Richmond Hill (the “Town”), pursuant to leave granted on April 19, 2016, from the decision of the Ontario Municipal Board issued on January 15, 2015. In the decision, the OMB approved the Town’s proposed policies contained in section 3.1.8 of the Town’s Official Plan relating to the conveyance of parkland to the Town as a condition of land development pursuant to s. 42 of the Planning Act, R.S.O. 1990, c. P.13. In its approval, however, the OMB directed that the Town’s use of the alternative requirement under s. 42(3) of the Planning Act would be subject to an overall cap of 25% of the land proposed for development. It is that aspect of the OMB decision that gives rise to this appeal. I should note that each of the four intervener municipalities supported the Town’s position in this appeal.
Background
[2] Under s. 42 of the Planning Act, the council of a local municipality may pass a by-law requiring that, as a condition of the development or redevelopment of land, land be conveyed for park or other public recreational purposes. Section 42(1) authorizes such conveyance in an amount not exceeding 2% of the land for industrial or commercial development or not exceeding 5% of the land in the case of all other development, including residential.
[3] In the case of residential development, s. 42(3) also authorizes a local municipality, by by-law, to impose an alternative requirement at a specific rate set by the Legislature – namely, one hectare for each 300 dwelling units proposed “or at such lesser rate as may be specified in the by-law”.
[4] Section 42(6) further provides that the municipality may require that all or part of a parkland conveyance requirement be satisfied by the payment of cash equivalent to the value of the land to be conveyed, rather than requiring the conveyance of the land itself. This is commonly referred to as “cash-in-lieu”. Through recent amendments to the Planning Act, s. 42 was amended to specify a different statutory maximum where the municipal council opts for the payment of cash-in-lieu – namely, “one hectare for each 500 dwelling units proposed or at such lesser rate as may be specified in the by-law”.
[5] The fact that s. 42 refers to the municipality acting through by-laws is of some importance, since not all by-laws are subject to appeal to the OMB. The Planning Act provides which types of municipal by-laws passed under its various provisions are subject to a statutory right of appeal to the OMB. For example, all zoning by-laws authorized under s. 34 of the Planning Act may be appealed to the OMB. In contrast, there is no right of appeal to the OMB, for example, in the case of a site plan control by-law under s. 41 of the Planning Act. Similarly, in the case of s. 42, the Planning Act does not provide any right of appeal in respect of a parkland conveyance by-law passed under that section. Instead, rights of appeal to the OMB are limited to disputes respecting the value of the land for purposes of determining the quantum of a cash-in-lieu payment.
[6] The Planning Act imposes one statutory precondition that must be met before a municipal council can have recourse to the alternative requirement under s. 42(3). The precondition is that there must be “an official plan in effect in the local municipality that contains specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement” – see s. 42(4).
[7] An official plan is a document that sets out the goals, objectives and policies of the municipality with respect to the development of lands within the municipality. Although an official plan is a legal document, it is not a statute and does not itself have the force of law. The policies in an official plan are implemented and brought into legal effect through various types of by-laws. These include zoning by-laws passed under s. 34 or, in the case of parkland conveyance, by-laws passed under s. 42. The Planning Act does provide, however, under s. 24, that all municipal by-laws must conform with the official plan.
[8] In July 2010, the Council of the Town adopted a new Official Plan for the Town. The Official Plan was subsequently appealed to the OMB by numerous parties. Since that time, the Official Plan has been substantially approved by the OMB, and the unapproved portions (including section 3.1.8) have been the subject of successive hearings typically held on an issue-by-issue basis.
[9] Section 3.1.8 of the Official Plan sets out policies related to the provision of land for parks and other public recreational purposes throughout the Town. It includes, among other things, specific policies dealing with the conveyance of lands, or cash-in-lieu, as a condition of development or redevelopment of land, and the rates at which such conveyances may be authorized by by-law pursuant to s. 42.
[10] In particular, section 3.1.8 provides that for residential development, the amount of land or cash-in-lieu would be the greater of (i) 5% of the land proposed for development and (ii) up to one hectare of land for each 300 dwelling units proposed for residential development, as may be specified by by-law in accordance with s. 42(3) of the Planning Act.
[11] Apart from the dispute respecting the 25% cap, there is no issue between the parties that section 3.1.8, as ultimately approved by the OMB, contains “specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement” in accordance with s. 42(4) of the Planning Act.
[12] A preliminary motion was argued before the OMB in 2012, where the Town asserted that in exercising its jurisdiction to consider and approve official plan policies dealing with the use of the alternative requirement under s. 42(4) of the Planning Act, the OMB did not have the jurisdiction to impose a cap or to reduce the alternative requirement authorized by s. 42(3). While I will return to this preliminary motion later, I note now that, in a decision rendered on November 5, 2012, the OMB concluded that under s. 42(4) it had jurisdiction to determine not only whether the alternative requirement could be used by the Town, but also the specific rate the alternative requirement should be set at, and whether it should be less than the statutory rate of one hectare per 300 dwelling units.
[13] The Town subsequently sought leave to appeal to this court from the November 2012 decision under s. 96 of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28. However, on May 14, 2013, the Town’s motion for leave to appeal was dismissed as premature, on the basis that any appeal from the OMB’s decision should only be heard at the conclusion of the entire hearing, and after a decision had been rendered on the actual parkland policies, so as to avoid a bifurcation of the proceedings.
[14] The hearing of the appeals before the OMB relating to section 3.1.8 took place over several months in 2013 and 2014. On the hearing of the appeals respecting section 3.1.8, the respondents (who were the appellants before the OMB) took the position that the Town was required to justify its use of the alternative requirement, and its specific quantum, as a matter of official plan policy. The respondents asked the OMB to impose on the Town – through the policies to be approved under section 3.1.8 of the Official Plan – a range of alternative rates, including some which were less than the alternative requirement of one hectare per 300 units. In addition, the respondents asked the OMB to impose a specific overall cap on the amount of land that the Town could require for dedication – namely, a maximum of 15% of the area of the land proposed for development. The Town maintained its position that the OMB did not have jurisdiction to direct the rate that the Town could use for the alternative requirement. The Town also submitted that, if the OMB did have the jurisdiction, it ought not to impose a cap on the alternative requirement, since such a cap would be contrary to the intent of the Planning Act and would not permit the Town to satisfy its identified parkland needs.
[15] The OMB issued its decision on January 15, 2015. In its decision, the OMB accepted the Town’s position on all of the issues that remained in dispute between the parties, other than the issues related to the alternative requirement under s. 42(3).
[16] On the alternative requirement itself, the OMB accepted the Town’s position that it should not approve policies imposing a rate that is less than the one hectare per 300 units prescribed by s. 42(3) of the Planning Act. The OMB also approved the format and wording of the policies as advocated by the Town, or as settled between the parties. However, the OMB allowed the appeals, in part, by requiring the Town to implement a policy that imposed an overall cap on its parkland dedication requirements equivalent to 25% of the area of any site to be developed, or its cash-in-lieu equivalent.
[17] It is the OMB’s imposition of a cap of 25% on the parkland dedication requirements that gives rise to this appeal.
Issues
[18] The order granting leave to appeal set out two questions of law to be placed before the panel hearing the appeal. Those two questions are:
(a) Did the Ontario Municipal Board err in law by determining that it had the authority to modify Policy 3.1.8 of the Town of Richmond Hill Official Plan by approving a policy which imposes a lower maximum alternative requirement than “1 hectare per 300 dwelling units”?
(b) If the answer to question #1 is no, did the Board err in law in modifying Policy 3.1.8 by capping the alternative requirement based on a percentage of the land area to be developed, rather than the number of units to be developed?
[19] The principal issue that underlies these two questions is the OMB’s interpretation of s. 42 of the Planning Act and, in particular, its conclusion that s. 42(4), either alone or in conjunction with s. 17(50), authorized the OMB to impose a cap as part of its approval of the policies of the municipality, relating to the alternative requirement, that are required to be part of the municipality’s official plan. All of the parties agree that the standard of review applicable to the issue of the OMB’s interpretation of the Planning Act is one of reasonableness.
[20] It is helpful to any analysis of the issues raised to begin with a statement of the principle that applies to any statutory interpretation exercise. The parties appear to agree on that principle. It is set out in a number of decisions of the Supreme Court of Canada including Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559 where Iacobucci J. said, at para. 26:
In Elmer Driedger’s definitive formulation, found at p. 87 of his Construction of Statutes (2nd ed. 1983):
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
Driedger’s modern approach has been repeatedly cited by this Court as the preferred approach to statutory interpretation across a wide range of interpretive settings: [citations omitted]
[21] The next step is to set out the principle relating to how that exercise of interpretation, when undertaken by an administrative tribunal, is to be reviewed by a court. The approach that the court is to take is set out in McLean v. British Columbia (Securities Commission), 2013 SCC 67, [2013] 3 S.C.R. 895 where Moldaver J. said, at para. 40:
The bottom line here, then, is that the Commission holds the interpretative upper hand: under reasonableness review, we defer to any reasonable interpretation adopted by an administrative decision maker, even if other reasonable interpretations may exist. Because the legislature charged the administrative decision maker rather than the courts with “administer[ing] and apply[ing]” its home statute (Pezim, at p. 596), it is the decision maker, first and foremost, that has the discretion to resolve a statutory uncertainty by adopting any interpretation that the statutory language can reasonably bear. Judicial deference in such instances is itself a principle of modern statutory interpretation. [emphasis in original]
[22] However, in conducting its review, the court must also be conscious of what Moldaver J. said earlier, at para. 38:
It will not always be the case that a particular provision permits multiple reasonable interpretations. Where the ordinary tools of statutory interpretation lead to a single reasonable interpretation and the administrative decision maker adopts a different interpretation, its interpretation will necessarily be unreasonable – no degree of deference can justify its acceptance [citations omitted]. In those cases, the “range of reasonable outcomes” [citation omitted] will necessarily be limited to a single reasonable interpretation – and the administrative decision maker must adopt it.
[23] It is also helpful at this early stage to set out the precise wording of the relevant portions of s. 42 of the Planning Act that are central to the issues raised here. The relevant portions of the section are:
(1) As a condition of development or redevelopment of land, the council of a local municipality may, by by-law applicable to the whole municipality or to any defined area or areas thereof, require that land in an amount not exceeding, in the case of land proposed for development or redevelopment for commercial or industrial purposes, 2 per cent and in all other cases 5 per cent of the land be conveyed to the municipality for park or other public recreational purposes.
(3) Subject to subsection (4), as an alternative to requiring the conveyance provided for in subsection (1), in the case of land proposed for development or redevelopment for residential purposes, the by-law may require that land be conveyed to the municipality for park or other public recreational purposes at a rate of one hectare for each 300 dwelling units proposed or at such lesser rate as may be specified in the by-law.
(4) The alternative requirement authorized by subsection (3) may not be provided for in a by-law passed under this section unless there is an official plan in effect in the local municipality that contains specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement.
[24] What may be taken from the plain wording of s. 42 is that a municipality has the authority, as a starting point, to require the developer of a property to convey to the municipality a portion of the lands proposed to be developed for the purpose of using those lands for parks or other public recreational purposes. The section imposes a maximum proportion of the lands that the municipality can require be conveyed as a condition of allowing the development to proceed – 2% in the case of commercial or industrial developments and 5% in all other cases, including residential developments.
[25] Section 42(3) then provides an alternative to that starting point in the case of residential developments. The alternative, rather than requiring a percentage of the lands to be conveyed, permits the municipality to require an amount of land be conveyed that is based on the density of the proposed development. The wording of s. 42(3) is slightly different than the wording of s. 42(1). Rather than clearly setting a maximum, the wording of s. 42(3) sets a presumptive rate, that is, one hectare for each 300 dwelling units proposed but then permits a municipality to prescribe a lower rate. There is, in my view, no practical difference between the two. Both provisions establish a ceiling that municipalities may not exceed.
[26] Regardless of which alternative is adopted by the municipality, two things are clear. One is that the municipality can decide which of the alternatives it will employ and the rate, up to the legislated maximum, it will require from a developer. The other is that the mechanism, by which the municipality decides both the alternative and the rate to be used, is the passing of a by-law. There is no disagreement between the parties here that such a by-law is not a by-law that is subject to any right of appeal to the OMB. In other words, the municipality’s decision on its use of the alternative requirement, as reflected in the by-law, is not something that the Legislature decided should be the subject of an appeal to the OMB.
[27] The single condition applicable to the alternative requirement, provided by s. 42(3), is that the alternative requirement cannot be used by a municipality unless that municipality has an official plan that sets out the policies that will guide the municipality’s use of the alternative requirement. The precise wording of s. 42(4) on this point bears repeating:
…unless there is an official plan in effect in the local municipality that contains specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement.
[28] The respective positions of the Town and the respondents can be stated simply.[^1] The Town says that the rate used in the alternative requirement must be set by by-law, as set out expressly in s. 42. That by-law is not appealable to the OMB. Consequently, the OMB does not have any jurisdiction to review a municipality’s decision as to the rate that the municipality will employ or to modify the rate chosen. The respondents say that the rate to be employed by a municipality is a necessary part of the municipality’s policies dealing with the use of the alternative requirement and, therefore, the OMB has the jurisdiction to approve or modify the rate chosen by virtue of its powers under s. 17(50) of the Planning Act.
[29] I turn now to the wording of s. 42(4). The section expressly refers to policies. The word “policy” has a known meaning. For example, one dictionary definition of “policy” is “a course or principle of action adopted or proposed by an organization”.[^2] Policies are like guidelines. They are intended to provide some guidance to interested parties as to the general approach that will be used by an organization when it comes to its consideration of a particular issue. Policies are not rigid rules that command a certain result. They are also not formulas or equations into which data can be entered and a result certain obtained. Policies serve to outline, in broad strokes, how a body expects to approach a given topic. There is a difference between policy and action. Similarly, there is a difference between policy and decision-making.
[30] The decision of the OMB clearly interpreted s. 42(4) as requiring the rate for the alternative requirement as a necessary element of the Town’s Official Plan and its related policy regarding the Town’s use of the alternative requirement. The decision thus gave the OMB the power to modify the Town’s policy by imposing a cap on the amount that the Town could require from developers. In understanding how the OMB came to its decision, it is necessary to begin with the OMB’s November 2012 decision, when this issue was first raised.
[31] In that November 2012 decision, the OMB reached certain conclusions. For one, it found that s. 42(3) “does not preclude” a municipality from including policies in its official plan that provide an “alternative parkland dedication rate” (para. 13). Putting aside whether including a set rate in an official plan is properly characterized as a “policy”, the OMB’s conclusion is factually correct. There is nothing in s. 42(3) that precludes a municipality from deciding, on its own, to include in its official plan a specific rate, or maximum rate, that it will require under s. 42(3). Indeed, a municipality could, presumably, include a great deal of information in its official plan as to how it will utilize the authority given to it under s. 42(3). But the fact that a municipality may voluntarily choose to include a specific rate does not answer the question whether the statute gives the OMB the authority to compel a municipality to do so as a condition of obtaining approval of its official plan, which is what the OMB’s decision in this case does.
[32] In the course of its November 2012 decision, the OMB relied on the guidelines of the Ministry of Municipal Affairs and Housing on this subject, as amended in 1981, and the fact that those guidelines say that “[m]unicipalities should consider establishing a range of rates for different types of development”. I note two things from those guidelines. One is that they simply suggest that different rates should be “considered”, not that they should be pre-set. The other is that the consideration of a range of rates should be undertaken by the municipality. It does not suggest that it should be undertaken by the OMB. In any event, insofar as administrative interpretations in informational pieces may be relevant to the statutory interpretation question, I note that, notwithstanding the more than forty year existence of the alternative requirement, no Provincial document has ever suggested that the rate must form part of a municipality’s official plan.
[33] The November 2012 decision goes on to point out that the OMB has, in the past, approved official plans that contained policies that stipulated the alternative rate that a municipality would require under s. 42(3). That said, the OMB did note that the issue that is now raised, that is the right of the OMB to impose a rate as part of its approval of a municipality’s official plan, was a novel one (para. 22). In reaching its conclusion on this issue, though, the OMB appears to draw from the fact that some municipalities had, in the past, included specific rates in their official plans, as a basis for its conclusion that ss. 42(3) and (4) permits the OMB to compel a municipality to include specific rates. I say that the OMB appears to reach that result because it does not do so expressly in its November 2012 decision. In fact, all that the OMB ultimately concluded in its November 2012 decision was (para. 26):
Simply put, when read together, s. 42(3) and s. 42(4) do not say that a specific rate cannot be identified in an official plan.
[34] That conclusion, of course, does not establish that the OMB has authority under those subsections, to impose a rate. The fact that a municipality may choose to include a specified rate in its official plan does not carry with it the concomitant requirement that a municipality must include a specified rate in its official plan, failing which the OMB may require it. In other words, just because a municipality voluntarily includes a specified rate (or specified maximum rate) in its official plan, does not axiomatically carry with it a conferral of authority on the OMB to require a specified rate to be included in every official plan – or at least every official plan that the OMB decides should contain such a specified rate.
[35] Put simply, the fact that there have been occasions in the past where municipalities have decided to include specified rates in their official plans, that the OMB then subsequently approved, does not address whether the legislation in question authorizes the OMB to require such a specified rate.[^3] In any event, the evidence on this point is equivocal. As the OMB noted in its January 2015 decision (paras. 25-26), while some municipalities have, in the past, put the precise alternative parkland dedication rates in their official plans, many others have adopted the same approach as the Town did here, that is, setting out the rate from s. 42(3) in their official plans, but then providing for a lesser rate in the necessary by-law.
[36] In order to answer the question regarding the reasonableness of the OMB’s interpretation of the statute, one must return to the precise wording of s. 42. Both s. 42(1) and s. 42(3) refer expressly to the municipality establishing “by by-law” the rate that will be charged to a developer. Neither subsection refers to the rate being set by the OMB nor, as earlier mentioned, does the OMB have any right of review over the contents of the by-law. Further, neither subsection requires that the rate to be charged be included in the municipality’s official plan. The subsections mention only the by-law. Further, s. 42(4) does not contain any express requirement that the rate to be charged by a municipality must be included in its official plan. Had the Legislature intended that the rate to be charged by municipalities to developers under s. 42(3) was a necessary component of each municipality’s official plan, it would have been a simple matter to have so provided in s. 42(4). By way of just one example, the tail end wording of s. 42(4) could have been:
…contains specific policies dealing with the provision of lands for park or other public recreational purposes and the use of the alternative requirement including the rate that the municipality will require under that alternative.
[37] No such wording appears in the subsection. Indeed, the plain wording of s. 42 leaves the decision as to the rate to be applied in each instance to the municipality to decide by by-law. The only condition on that authority is that the municipality must have, in its official plan, policies relating to the alternative requirement. As I have already said, policies are not specific action items. They are general guidelines providing a broad overview of how the municipality will approach its task.
[38] The failings that I have identified in the reasoning undertaken by the OMB in its November 2012 decision traverse into its ultimate decision. In its January 15, 2015 decision, the OMB refers to the wording of s. 42(4) and then says (para. 27):
Surely the policies addressing the “use of the alternative requirement” should include some direction on the components of that alternative requirement.
[39] The OMB follows that statement by hypothesizing on what might be included in a policy and the tension that exists between the desire for certainty by developers and the need for flexibility by municipalities. The OMB concludes on this issue by saying (para. 27):
I conclude that as a minimum the parkland policies must include a sufficient level of detail to provide some level of certainty with respect to the magnitude of the parkland requirement. The policies need not meet a standard of precision such that they are overly prescriptive, become unworkable and therefore would be subject to routine amendment.
[40] At this point, it appears that the OMB has still not decided whether s. 42(4) gives it authority to actually set a rate that a municipality must adhere to when having recourse to the alternative requirement. Certainly the statement that a policy must include a sufficient level of detail coupled with the statement that the policy need not meet a standard of precision does not answer the question. Rather, those two statements seem only to identify the tension that exists, and to which I just referred, but leave the central issue very much unresolved.
[41] Unfortunately, in the very next paragraph of the OMB’s reasons, and with no further analysis, the OMB concludes (para. 28):
Where there is no agreement between a municipality and its stakeholders, the extent to which the Board should go in fixing a particular rate will depend on the quality of the evidence, the planning merits and rationale provided to support a particular rate and most importantly, an assessment of what constitutes the correct balance between the competing interests.
[42] There are two serious flaws in this conclusion. The first is that the conclusion assumes that the OMB has the authority to “fix” a particular rate. Yet the reasons do not provide any explanation as to how that authority is derived from s. 42(4), or otherwise, under the Planning Act. The route taken from the stated tension between certainty and flexibility, to the conclusion that the OMB can fix a rate, is left unidentified. Indeed, it appears to be much less of a route and much more of a leap. It could be argued that the goal of certainty underlies the OMB’s interpretation of the statute to accord this power to itself. That justification, however, would ignore the salient fact that there is certainty under the existing provisions found in ss. 42(1) and (3), both of which provide a maximum amount that a municipality may require from a developer. Developers therefore know, with certainty, their maximum exposure under either of those subsections.
[43] The respondents attempt to fill the hole in the OMB’s reasoning through reliance on s. 17(50) of the Planning Act. Section 17(50) reads:
On an appeal or a transfer, the Municipal Board may approve all or part of the plan as all or part of an official plan, make modifications to all or part of the plan and approve all or part of the plan as modified as an official plan or refuse to approve all or part of the plan.
[44] With respect, s. 17(50) does not aid in the analysis of the proper interpretation of s. 42. Unquestionably, s. 17(50) gives authority to the OMB to approve, reject, or modify, an official plan. That authority presumes, however, that the official plan is engaged. Section 17(50) does not assist in determining whether a municipality must include in its official plan the rate it intends to use for the alternative requirement.
[45] The second serious flaw is that the OMB has now effectively taken onto itself the task of fixing individual rates in individual municipalities through the guise of its authority to review an official plan. The OMB purports to assume this authority notwithstanding that the two subsections plainly assign that task to municipalities to be undertaken by way of individual by-laws.
[46] In my view, the interpretation of s. 42(4), implicitly adopted by the OMB, is unreasonable on the face of the plain wording of s. 42. I say implicitly because the interpretation is adopted without any visible foundation or analysis. The OMB then uses this interpretation to conclude that it has authority to insert into any municipality’s official plan the specific rate, or a specific cap, governing that municipality’s exercise of its statutory authority to use the alternative requirement. In particular, it reads into the very general language of s. 42(4) a specific authority that appears, on its face, to be inconsistent with the intent of ss. 42(1) and (3). It effectively abrogates the role that the Legislature clearly intended municipalities would perform and instead bestows that role onto itself. And in doing so, the OMB finds authority to establish a maximum rate for the alternative requirement that is different from the maximum provided by the Legislature in the statute. As this case amply demonstrates, this interpretation allows the OMB to prohibit a municipality from charging a rate that is within the parameters set out in the legislation, but which does not accord with the view that the OMB takes of what the municipality should do.
[47] The modern principle of statutory interpretation, and the concomitant deference to the interpretation adopted by an administrative tribunal, rests on the prerequisite that there exists “a statutory uncertainty” thus giving rise to the possibility of competing reasonable interpretations. There is no statutory uncertainty here nor did the OMB point to one. Rather, the OMB appears to have adopted a statutory interpretation solely for the purpose of allowing it to regulate the municipality’s exercise of its authority under s. 42.
[48] The approach taken by the OMB is not only unreasonable on the plain wording of the legislation, it is inconsistent with the role that it is intended that municipalities will play in deciding individual planning decisions that affect their citizens, one of which, that is the rate for the alternative requirement, the Legislature clearly left to them. As many courts have held in recent times, the powers given to municipalities are to be interpreted “broadly and generously within their context and statutory limits, to achieve the legitimate interests of the municipality and its inhabitants” – see Croplife Canada v. Toronto (City) (2005), 2005 15709 (ON CA), 75 O.R. (3d) 357 (C.A.), at para. 37 and Friends of Lansdowne Inc. v. Ottawa (City) (2012), 2012 ONCA 482, 111 O.R. (3d) 1 (C.A.), at para. 24.
[49] It is also inconsistent with other statutory provisions regarding the role of municipalities including under s. 1.1 of the Planning Act that provides:
The purposes of this Act are
(f) to recognize the decision-making authority and accountability of municipal councils in planning.
Similarly, s. 8(1) of the Municipal Act, 2001, S.O. 2001, c. 25 reads:
The powers of a municipality under this or any other Act shall be interpreted broadly so as to confer broad authority on the municipality to enable the municipality to govern its affairs as it considers appropriate and to enhance the municipality’s ability to respond to municipal issues. [emphasis added]
[50] The unreasonableness of the OMB’s interpretation, and the problems that flow from it, are clearly revealed by the decision that the OMB made in this particular case regarding the cap. In arriving at its decision to impose a 25% cap on the appellant’s use of the alternative requirement, the OMB referred to the evidence before it and said (para. 45):
Mr. Smith was also fair in acknowledging that the cash-in-lieu generated at a cap of 30% would bare[sic] a close relationship to the Town’s estimated parkland needs (as adjusted by Ms. Gillezeau, Exhibit 44).
[51] I note, in passing, that Mr. Smith was an expert witness for one of the respondents, not for the appellant. However, notwithstanding his evidence on this point, and its reference in the decision, the OMB concluded that the cap should be set at 25%, without citing any evidence that would support that number as the appropriate cap. While I appreciate that there was some evidence before the OMB that the Town had, in the past, adopted rates for developments that equated to a cap of 25%, not only do the reasons of the OMB not make reference to that evidence as a justification for the level of cap it decided to impose, the reasons also do not address whether the Town’s past practice was the appropriate practice for the future. In that regard, the reference to this evidence, earlier in the OMB’s January 2015 decision, points out that the 25% cap as used by the Town dates back to 1990. There would appear to be no dispute that development issues for the Town have changed significantly in the last twenty-five years.
[52] Instead, the OMB simply fixed the 25% number and then concluded that the appellant’s policies in its official plan “coupled with the addition of a revised policy direction that includes a 25% cap” would be approved (para. 46). I reiterate what I have said before: the imposition of a 25% cap (or any other cap for that matter) is not, with respect, a “policy direction”. It is the imposition of a fixed rate that unnecessarily fetters the discretion of the municipality to make its own decision on the appropriate rate that should apply for the implementation of the alternative requirement within its boundaries. Further, the imposition of a fixed rate cap is manifestly inconsistent with the legislative scheme set up under s. 42 that plainly intends to give that decision-making power to the individual municipality and not to the OMB.
[53] I should mention two other issues to which the OMB made reference in the course of its January 2015 decision and that may be seen as motivating its conclusion to adopt an interpretation that would give it the authority to impose a cap. One is the fact that any by-law passed by a municipality under s. 42 is not appealable to the OMB. Since the OMB cannot control the contents of the by-law, it appears that the OMB decided to adopt an interpretation of the section that would permit it to exercise that control through its right to approve the official plan. It must be taken that the Legislature, in adopting the procedure that it did in s. 42, intended not to have the OMB review each municipality’s by-law. Given that apparent intent, the OMB cannot adopt an interpretation of the statute for the purpose of doing indirectly what the Legislature prohibited it from doing directly. That reality alone demonstrates the unreasonableness of the interpretation that the OMB adopted.
[54] The other issue is that the OMB expressed some concern that, if the maximum rate under s. 42(3) was applied by the Town, it would operate as a disincentive to high-density residential development. That concern is a legitimate one for the OMB to consider given its role in the overall process, especially ensuring that municipal policies do not conflict with Provincial policies. However, no matter how legitimate that concern may be, it does not operate to alter the plain wording of the statute, nor does it serve to provide authority to the OMB to impose conditions where that authority cannot otherwise be found in the plain wording of the statute.
[55] Further, if the OMB was taking it upon itself to impose a cap on the Town as a way of ensuring that any such concern regarding high-density development would not materialize, with respect, it overstepped its role under the legislative scheme, for the reasons that I have already set out. It also ignored the evidence that was before it, and which it purported to accept, that the Town has no intention of “killing” high-density development; that any issue in this regard could be addressed through the by-law (and any subsequent revisions to it) and that the Town had indicated its willingness to be flexible on the issue of the alternative rate. All of that evidence would suggest that there was no pressing requirement for a cap in order to ensure that the Town’s policy was in harmony with Provincial policy. Indeed, and contrary to the respondents’ submissions, the OMB never made any express finding that a cap was necessary to avoid a conflict between the Town’s policies and Provincial policies.
[56] My conclusion regarding the OMB’s interpretation of the statute does not mean that the OMB has no role to play in the overall application of the alternative requirement by an individual municipality. Clearly, the Legislature intended that municipalities would be required to have policies on their use of the alternative requirement included in their official plans. It follows that the role of the OMB is to ensure that those policies are appropriate and effective and that they accord with Provincial policies. To that end, there are clearly aspects of those policies that the OMB can consider and rule upon. Indeed, some of those aspects are identified in the OMB’s November 2012 decision, where it said (para. 24):
Accordingly, the Board can freely consider the planning evidence presented to it by all parties and on that basis, it can approve, modify, delete or add to policies dealing with, for example: the need for an inter-connected parks and urban open space system; the criteria governing the imposition of cash-in-lieu of parkland dedication; the types of land which are eligible to be dedicated as parkland; or the criteria governing dedication in the cases of development for both residential and commercial purposes.
[57] The fact that the OMB has a role to play in approving the policies of municipalities as required under s. 42(4) does not carry with it the conclusion that the OMB’s role is all encompassing, or extends to everything that may be included in, or related to, those policies. The actual carrying out of a municipality’s plan, and its use of the alternative requirement, is not a matter of policy. It is a matter of implementation through the required by-law. Consequently, there are limits to the authority, or reach, of the OMB when it comes to this issue.
[58] If the OMB had a legitimate concern regarding how the actual implementation of the Town’s policy might impact on high-density development, it could have imposed some qualifying language on the Town’s official plan, as it did when it came to the issue of a sliding scale. On that issue, the OMB simply gave a direction to the Town to consider a sliding-scale in its by-law. The OMB could similarly have given a direction to the Town that it must, in its by-law, ensure that the implementation of its policies regarding the use of the alternative rate do not offend, or conflict with, Provincial policies. Alternatively, the OMB could have said that the Town’s implementation of its polices through its by-laws must not unduly restrict high-density development. The fact is that the OMB had available to it any number of policy directives that it could have placed on the Town and remained within its proper legislative authority. What the OMB could not do is adopt an unreasonable interpretation of its statutory authority and thereby accord to itself the right to impose a cap on the Town’s use of a mechanism expressly granted to municipalities by the Legislature.
Conclusion
[59] I would answer the first question of law in the affirmative. Consequently, the second question of law does not fall to be answered.
[60] The appeal is allowed. The OMB’s approval, insofar as it requires the appellant to modify Policy 3.1.8.3(a) by stipulating that in no case shall the amount of land required to be conveyed for park or other public recreational purposes exceed the equivalent of 25% of the land proposed for development, is set aside. The matter is remitted back to the OMB for its further determination in accordance with these reasons.
[61] If the parties cannot agree on the appropriate disposition of the costs of the appeal and of the motion for leave to appeal, they may file written submissions. The appellant shall file its submissions within fifteen days of the date of the release of these reasons and the respondents shall file their submissions within ten days thereafter. The submissions of each party shall not exceed ten pages in length. No reply submissions shall be filed without leave of the court. There will be no award of costs either in favour of, or against, any of the interveners.
NORDHEIMER J.
SACHS J.
C. HORKINS J.
Date of Release:
CITATION: Richmond Hill (Town) v. Elginbay Corporation, 2016 ONSC 5560
DIVISIONAL COURT FILE NO.: 59/15
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, NORDHEIMER & HORKINS JJ.
BETWEEN:
THE CORPORATION OF THE TOWN OF RICHMOND HILL
Appellant
– and –
ELGINBAY CORPORATION and others
Respondents
REASONS FOR JUDGMENT
NORDHEIMER J.
Date of Release:
[^1]: When I refer to the respondents here, and after, I do not include the Ontario Municipal Board which is only a respondent in this appeal by statutory right. The OMB maintained a neutral position on the central issue in the appeal.
[^2]: Concise Oxford English Dictionary (12th edition, eds. Angus Stevenson and Maurice Waite, Oxford University Press)
[^3]: I note that it was acknowledged before us that, in none of those cases, did the OMB ever raise, lower or otherwise modify the rate adopted by the municipality.