Court File and Parties

CITATION: Ajax (Town) v. Pickering (City), 2018 ONSC 3622

OSHAWA COURT FILE NO.: DC-17-1038

DATE: 20180612

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

Town of Ajax

Applicant

– and –

City of Pickering, Pickering Developments (Squires) Inc., Pickering Developments (Bayly) Inc., Pickering Developments (401) Inc. and Region of Durham

Respondents

COUNSEL:

R.A. Biggart, for the Applicant

C. Loopstra and M. Joblin, for the Respondent, City of Pickering

P. Foran and D. Neligan, for the Respondents, Pickering Developments (Squires) Inc., Pickering Developments (Bayly) Inc., Pickering Developments (401) Inc.

C. Boyd, for the Respondent, Region of Durham

HEARD: April 12 and 20, 2018

REASONS FOR DECISION re: application for leave to appeal

CHARNEY J.:

Introduction

[1] This is an application for leave to appeal to the Divisional Court pursuant to s. 96(1) of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28.

[2] The Town of Ajax (Ajax) seeks leave to appeal to the Divisional Court from the decision of the Ontario Municipal Board (OMB) dated July 7, 2017. At issue is the approval by the OMB of By-law 7404/15 (the By-law) passed by the City of Pickering (Pickering) on January 19, 2015, to permit Pickering Developments[^1] to build a major tourist destination on approximately 90 hectares of vacant land (the lands). The proposed development would include a casino, hotels, a convention centre, a performing arts centre, an outdoor amphitheatre, cinemas, a restaurant plaza, a waterpark, a community recreation centre, a fitness centre and offices.

[3] No development can occur on the major tourist destination until certain conditions (identified by three “holding symbols” – H-1, H-2 and H-3) are met. These conditions require a Transportation Impact Study and the implementation and construction of major infrastructure improvements related to vehicular traffic.

[4] The By-law is, therefore, only the first step in terms of planning approvals, and the holding symbols add restrictions that do not exist currently for the as-of-right development.

[5] The lands are within Pickering but located adjacent to Ajax. Ajax opposes the proposed development, and, pursuant to s. 34(19) of the Planning Act, R.S.O. 1990, c. P.13, appealed Pickering’s passage of the By-law to the OMB. Following an 18 day hearing, the OMB approved the By-law substantially in accordance with the By-law that had been passed by Pickering Council.

[6] The OMB identified its role in the hearing as follows (at para. 13):

The matter before the Board to decide in this hearing is whether the By-law passed by the City to allow for major tourist destination employment uses on the subject lands is consistent with and conforms to the requisite planning documents and whether it represents good planning.

[7] Pickering takes the position that Ajax’s opposition to the By-law is based on the fact that Pickering and Ajax are competing for a single casino that is to be located in either Pickering or Ajax. This competition is referenced by the OMB, which notes (at para. 12) that the OMB has no jurisdiction with respect to the specifics of a casino approval, since those approvals are determined by the Ontario Lottery and Gaming Corporation.

[8] Suffice it to say that the possible motives of Ajax in opposing the By-law and seeking leave to appeal are not relevant to my legal analysis of the test for leave to appeal.

Test for Leave to Appeal

[9] An appeal lies from the Ontario Municipal Board to the Divisional Court, but only with leave of the Divisional Court, and only on a question of law.

[10] The test for leave to appeal has three components: (1) the proposed appeal raises a question of law; (2) the question of law is of sufficient importance to merit the attention of the Divisional Court; and (3) there is good reason to doubt the reasonableness of the decision under review: Union Gas Limited v Municipal Property Assessment Corporation, 2016 ONSC 7128, at paras. 3 – 11; Train v. John Weir, et al., 2012 ONSC 5157, at paras. 4 – 6; The Kensington Foundation v. Municipal Property Assessment Corporation et al., 2013 ONSC 7694, at para. 13.

[11] It is significant that the test for leave to appeal requires the court to consider whether there is good reason to doubt the “reasonableness” of the decision under review, as opposed to the “correctness” of that decision. In Train, Lauwers J. (as he then was), stated, at paras. 6 and 7:

The advent of Dunsmuir obliges the court to take into account the reasonableness standard even in deciding applications for leave to appeal…

The Supreme Court requires reviewing courts to keep in mind two basic things. The first is that the Legislature’s choice to confer decision making power in a particular area on a tribunal must be respected. The second is that the right decision is often not glaringly obvious, and the tribunal’s expertise and “field sensitivity” in making the decision must also be respected. The reasonableness principle is set out in Dunsmuir at para. 47:

Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.

Grounds for Seeking Leave to Appeal

[12] Ajax raises eight questions of law which it argues are of sufficient importance to merit the attention of the Divisional Court, and for which there is good reason to doubt the reasonableness of the OMB’s decision to approve the By-law:

i. Whether the OMB erred by refusing to have regard to the information and material before Ajax Council and the decision of Ajax Council to appeal and oppose City of Pickering By-law 7404/15, as required by s. 2.1 of the Planning Act?

ii. Whether the OMB erred in law in refusing to acknowledge that Ajax Council is a protector of the public interest?

iii. Whether the OMB erred in law by failing to consider and assess evidence related to the traffic impacts upon local roads owned and controlled by Ajax as well as the effects that approval of the By-law are projected to have upon the planned transportation network within Ajax generally?

iv. Whether the OMB erred in law when it misinterpreted and misapplied Ontario Regulation 545/06?

v. Whether the OMB erred in law when it misinterpreted and misapplied s. 15 of the City of Pickering’s Official Plan?

vi. Whether the OMB erred in law when it misinterpreted and misapplied s. 34(10) of the Planning Act when it relied upon the concept of “pre-zoning” to approve the By-law?

vii. Whether the OMB erred in law when it misinterpreted and misapplied s. 24 of the Planning Act?

viii. Whether the OMB erred in law when it misinterpreted Pickering’s Official Plan policies for “Prestige Employment” and the policies for “Neighbourhood 4: Brock Industrial” in relation to ancillary retail use.

[13] I will consider each of these grounds for leave to appeal in turn.

[14] For the reasons that follow, the application for leave to appeal is dismissed.

Issue 1 - Whether the OMB erred by refusing to have regard to the information and material before Ajax Council and the decision of Ajax Council to appeal and oppose City of Pickering By-law 7404/15, as required by [s. 2.1](https://www.canlii.org/en/on/laws/stat/rso-1990-c-p13/latest/rso-1990-c-p13.html#sec2.1_smooth) of the [Planning Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-p13/latest/rso-1990-c-p13.html)?

[15] Section 2.1(1) of the Planning Act provides:

2.1 (1) When an approval authority makes a decision under subsection 17 (34) or the Tribunal makes a decision in respect of an appeal referred to in subsection 17 (49.7) or (53), 22 (11.3), 34 (26.8) or (29), 38 (4) or (4.1), 41 (12.0.1), 51 (39), (43) or (48) or 53 (19) or (27), it shall have regard to,

(a) any decision that is made under this Act by a municipal council or by an approval authority and relates to the same planning matter; and

(b) any information and material that the municipal council or approval authority considered in making the decision described in clause (a).

[16] The OMB interpreted s. 2.1(1) of the Planning Act as requiring the OMB to have regard to the decision of the municipal council that enacted the by-law under consideration, and the information and material that was before that municipal council. In this case, the relevant municipal council is the City of Pickering, because it is the council that adopted the by-law being reviewed by the OMB.

[17] Ajax had argued before the OMB that s. 2.1 also directs the OMB to have regard to the decision of the Ajax Town Council to oppose the By-law and to appeal the passage of the By-law to the OMB.

[18] The OMB rejected Ajax’s interpretation of s. 2.1 of the Planning Act as being inconsistent with the plain reading of s. 2.1. Since Ajax had no jurisdiction over the planning instrument under consideration, it is not the municipal council referenced in s. 2.1. The OMB held that its obligation to “have regard to” the decision of the municipal council under s. 2.1 referred to the decision of Pickering to enact the By-law, and not the decision of Ajax to oppose and appeal the By-law.

[19] In any event, the OMB noted that it conducted an 18 day hearing to consider Ajax Town Council’s appeal, and had regard to all of the arguments, information and material brought to its attention by counsel for Ajax during the course of the hearing.

[20] In my view there is no reason to doubt the reasonableness of the OMB’s interpretation of s. 2.1 of the Planning Act. I agree with the OMB that its interpretation of s. 2.1 is consistent with the plain reading of s. 2.1, which is intended as a direction to the OMB to “have regard to” the decision, information and material considered by the municipal authority whose decision (in this case the By-law) is under review by the OMB.

[21] Moreover, given that the OMB considered all of the arguments advanced by Ajax during the 18 day hearing, it is not clear to me what practical difference Ajax’s interpretation would make in this case. Ajax was responsible for presenting its appeal to the OMB, and although it is unhappy with the result, there is no suggestion that Ajax was denied the opportunity to fully present its case. Ajax protests that the hearing of an appeal is not equivalent to “having regard to” the decision of a municipal council, but provides no real explanation as to how the latter is superior to the former, or how the decision process would have been different if the OMB “had regard to” the decision of Ajax to appeal, rather than hearing the merits of the appeal over an 18 day period.

[22] Accordingly, the first ground of appeal does not, in my view, meet the test for leave to appeal.

Issue 2 - Whether the OMB erred in law in refusing to acknowledge that Ajax Council is a protector of the public interest?

[23] This second argument is closely related to the first. Ajax submits that its decision to oppose the Pickering By-law should be given the same weight as Pickering’s decision to pass the By-law, because both Ajax Council and Pickering Council, as elected public bodies, represent the public interest. Ajax argues that, as a public body, it should not be treated the same as a private interest litigant (such as a retailer or developer) challenging the By-law, and that the OMB focused on the public interest of Pickering but ignored the public interest of Ajax.

[24] The OMB rejected this argument, stating, at para. 22:

[A]t first instance it is the City [of Pickering] that is primarily responsible for the protection of the public interest on planning instruments within its jurisdiction. The Town [of Ajax] has not demonstrated that the City has neglected the public interest by enacting the subject law. Now upon appeal, it is the [Ontario Municipal] Board who is charged with responsibility to determine whether the By-law is in the public interest.

[25] As indicated above, Ajax appealed the By-law to the OMB on February 11, 2015, pursuant to s. 34(19) of the Planning Act. At the date of the appeal, subsections 34(19) and (19.0.1) provided:

Appeal to O.M.B.

(19) Not later than 20 days after the day that the giving of notice as required by subsection (18) is completed, any of the following may appeal to the Municipal Board by filing with the clerk of the municipality a notice of appeal setting out the objection to the by-law and the reasons in support of the objection, accompanied by the fee prescribed under the Ontario Municipal Board Act:

1. The applicant.

2. A person or public body who, before the by-law was passed, made oral submissions at a public meeting or written submissions to the council.

3. The Minister.

Same

(19.0.1) If the appellant intends to argue that the by-law is inconsistent with a policy statement issued under subsection 3 (1), fails to conform with or conflicts with a provincial plan or fails to conform with an applicable official plan, the notice of appeal must also explain how the by-law is inconsistent with, fails to conform with or conflicts with the other document.

[26] Ajax has the right to appeal by virtue of falling into subs. 34(19) 2: “a person or public body who, before the by-law was passed, made oral submissions at a public meeting or written submissions to the council”. The legislation did not (and, since its amendment in 2017, still does not) distinguish between “a person” and “a public body” who brings an appeal to the OMB.

[27] As a neighbouring municipality, Ajax’s interest in zoning amendments passed by Pickering is protected by its ability to participate in Pickering’s public process and, like any other participant, to file an appeal (previously to the OMB, and since 2017 to the Local Planning Appeal Tribunal). There is nothing in any of the legislation referred to by Ajax to suggest that a municipal appellant has any greater rights or status than any other appellant.

[28] The issue arises because the OMB has expressed scepticism in previous cases when an appellant with a commercial interest in the outcome purported to advance “public interest” arguments in the appeal, see Zellers Inc. v. Leamington (Town), 1999 CarswellOnt 4270 (OMB) at p. 4: “It is the Board’s view that the first defender of the public interest of local matters should be the municipal Council and upon appeal, the Board.” The OMB concluded in that case that there was no apparent land-use planning ground to justify Zellers’ appeal and that Zellers’ appeal was made for the purpose of delay. Accordingly, the OMB used its authority under s. 34(25) of the Planning Act to dismiss Zellers’ appeal without a hearing.

[29] Section 34(25) of the Planning Act is not relevant to the present appeal since a full hearing was held to consider all of Ajax’s objections.

[30] The issue of whether Ajax was advancing the public interest of its residents is, in my view, a red herring in the context of this decision. The OMB held a hearing and considered each of Ajax’s arguments on their merits. Ajax’s professed public interest role during the hearing before the OMB is not a legal issue that could affect either the OMB’s process or analysis.

[31] There is no reason to doubt the reasonableness of the OMB’s decision on this issue, and this issue does not meet the test for leave to appeal.

Issue 3 - Whether the OMB erred in law by failing to consider and assess evidence related to the traffic impacts upon local roads owned and controlled by Ajax as well as the effects that approval of the By-law are projected to have upon the planned transportation network within Ajax generally?

[32] Ajax argues that the proposed major tourist destination will require changes to the road network within Ajax, including changes to roads that are owned and controlled by Ajax. The OMB approved the By-law even though Ajax owns two portions of Church Street that are projected to be widened for the first phase of the major tourist destination to function.

[33] Ajax indicates that it has no intention of widening either portion of Church Street that it owns and controls. The planning policies of Ajax in relation to that area of the Town (known as Pickering Village, even though it is in Ajax and not Pickering) is to preserve and maintain “its feeling as a pedestrian friendly and walkable site”.

[34] Ajax argues that the OMB erred in law, resulting in an unreasonable decision, when it failed to recognize that the major tourist destination could not be constructed in accordance with the By-law if Ajax refused to widen its portions of Church Street. Ajax argues that in the face of opposition from Ajax, Pickering was obliged to demonstrate how the development could be constructed absent the local road widening controlled by Ajax.

[35] The OMB concluded that Ajax’s potential refusal to support the By-law by widening the road within its jurisdiction was not a sufficient basis to refuse the By-law.

[36] The OMB reviewed the evidence provided in Pickering’s Urban Transportation Study, which identified what levels of traffic, based on development intensity, would require network or infrastructure improvements. These improvements are laid out in the Urban Transportation Study and are tied to the lifting of the holding symbols.

[37] The OMB also considered the evidence submitted by Ajax, which expressed the concern that many of the identified improvements are not possible to implement and that this could lead to problems and increased levels of infiltration on local Ajax roads.

[38] The OMB preferred the evidence of Pickering, which is not a ground of appeal under the Ontario Municipal Board Act.

[39] In this regard the OMB concluded that the suggestion that the proposed improvements will “ruin” the village feel of the historic Pickering Village (at para. 177) “is not supported given that this would mirror the condition on the opposite side of the intersection and would reduce congestion”.

[40] In addition, the OMB noted that it remains possible that the ultimate road infrastructure improvements that will be provided are different than what was presented in the Urban Transportation Study.

[41] Ajax’s position really comes down to the proposition that it was unreasonable for the OMB to approve a By-law that was opposed by Ajax, given the possibility that Ajax will refuse to agree to the required infrastructure improvements within its jurisdiction. The OMB found that this was not a sufficient reason to refuse the By-law (at para. 180): “The Board’s task is to evaluate the planning merits of the By-law. The Board is not persuaded that the Town’s refusal to agree to infrastructure improvements and the cost of the work is linked to the merits of the By-law.”

[42] Pickering acknowledges that the developers take the risk that Ajax will continue to be uncooperative in making necessary road improvements as the proposed development moves forward through the site plan stage. There is, however, no jurisprudence to support Ajax’s position that its opposition and potential recalcitrance is sufficient reason for the OMB to refuse the By-law. There is nothing in the legislation that gives a municipality a veto over development in a neighbouring municipality that may have incidental effects on traffic within its boundaries. The OMB considered Ajax’s evidence and objections and decided that they were not sufficient to deny approval to the By-law.

[43] The OMB’s conclusion on this issue strikes me as one that “falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law”. To the extent that this raises a question of law, I have no good reason to doubt the reasonableness of the decision on this point, which falls squarely within the OMB’s expertise. Accordingly, this issue does not meet the test for leave to appeal.

Issue 4 - Whether the OMB erred in law when it misinterpreted and misapplied [Ontario Regulation 545/06](https://www.canlii.org/en/on/laws/regu/o-reg-545-06/latest/o-reg-545-06.html)?

[44] This question is more accurately stated as whether the OMB erred in law when it interpreted the interaction between sections 34(10.1) and (10.3) of the Planning Act and Schedule 1 of Ontario Regulation 545/06?

[45] Section 34(10.1) of the Planning Act provides:

Prescribed information

(10.1) A person or public body that applies for an amendment to a by-law passed under this section or a predecessor of this section shall provide the prescribed information and material to the council.

[46] Also relevant are sections 34(10.2) and (10.3), which provide:

(10.2) A council may require that a person or public body that applies for an amendment to a by-law passed under this section or a predecessor of this section provide any other information or material that the council considers it may need, but only if the official plan contains provisions relating to requirements under this subsection.

(10.3) Until the council has received the information and material required under subsections (10.1) and (10.2), if any, and any fee under section 69,

(a) the council may refuse to accept or further consider the application for an amendment to the by-law; and

(b) the time period referred to in subsection (11) does not begin.

[47] Schedule 1 of O. Reg. 545/06: Zoning By-laws, Holding By-laws And Interim Control By-laws under Planning Act, R.S.O. 1990, c. P.13 (Schedule 1, Regulation 545/06) sets out the information and material to be provided in an application under s. 34(10.1) of the Planning Act. The Schedule lists 32 items. Ajax contends that the proponent, Pickering Developments, failed to comply with items 20 and 21:

20. Whether any buildings or structures are proposed to be built on the subject land.

21. If the answer to section 20 is yes, the following information for each building or structure:

(a) the type of building or structure; and

(b) in metric units, the setback from the front lot line, rear lot line and side lot lines, the height of the building or structure and its dimensions or floor area.

[48] Ajax argues that when Pickering Developments filed its application under s. 34 of the Planning Act, it failed to provide any information as to whether any buildings or structures were proposed to be built on the subject lands, or any information as to the type of building or structure or any of the other information required by s. 21(b).

[49] Ajax argues that notwithstanding the proponent’s failure to submit the required information, Pickering deemed the application complete and approved the By-law. The OMB, in turn, approved the By-law absent this required information.

[50] Ajax argues that buildings and structures are “proposed to be built” on the subject lands: the proposed development would include a casino, hotels, a convention centre, a performing arts centre, an outdoor amphitheatre, cinemas, a restaurant plaza, a waterpark, a community recreation centre, a fitness centre and offices. Ajax argues that the By-law should not have been considered without this information as required by Schedule 1 of Regulation 545/06. The OMB’s interpretation of these provisions permits Pickering Developments to avoid its disclosure obligations and permits approval of the By-law without examining the size and location of buildings proposed to be built on the site.

[51] The OMB held, at para. 115,

[I]t is entirely within the City’s discretion to determine if they are satisfied with the content of the application when the application is deemed complete; and Council is not obliged to request any or all of the prescribed information set out in the regulation, nor is it obliged to request any or all of the information that is set out in its Official Plan.

[52] In reaching this decision the OMB followed the decision in McGregor v. Rival Developments Inc. (2003), 2003 CarswellOnt 2991. In that case a single judge, sitting as the Divisional Court to decide a leave to appeal application under s. 96 of the Ontario Municipal Board Act, denied a third party’s application for leave to appeal a decision of the OMB. The third party had argued that the proponent’s application should not have been deemed complete as all the prescribed information had not been provided. Ross J. rejected this argument as a ground for leave to appeal, stating, at para. 18:

With regard to the completeness of the application, in respect of the “prescribed information” mentioned in subsection (10.1), subsection (10.3) provides that the completeness of the application is a matter within the jurisdiction of council. Council is given discretion. It may refuse to accept the application or having accepted the application it may refuse to further consider it. These subsections make no reference to the Board having the authority to decide that the application is defective and as a result, council cannot act on it.

[53] I agree that s. 34(10.3) gives council the discretion to accept and consider an application even if council has not received all the information and material required under s. 34(10.1). Subsection 34(10.3) provides that the council “may refuse” to accept and consider an application, and “may” is permissive (Novoa v. Molero, 2007 ONCA 800 at para. 11). The provision does not have mandatory language. For example, it does not state that the council “shall refuse” or “may not accept or consider” an incomplete application.

[54] The permissive language in s. 34(10.3) means that sections 34(10.1) to (10.3) exist for the benefit of the council. Council has the right to refuse to consider an application until the council believes that it has sufficient information to consider and decide the application. The applicant (like Pickering Developments) has the right to appeal a decision to refuse to hear an application under s. 34(10.5), but there is no right given to third parties (like Ajax) to appeal a decision by the council (Pickering) to proceed with an application.

[55] This analysis was sufficient for the OMB to dispose of the question of whether Pickering could consider the application even if all the information set out in Schedule 1 of Regulation 545/06 was not provided. In my view the OMB’s decision on this point is consistent with the plain wording of the Planning Act and the only case that was referred to me on this point.

[56] In addition, the OMB noted that s. 20 of Schedule 1 of Regulation 545/06 requires an applicant to indicate whether any buildings or structures are proposed to be built, and s. 21 is only engaged if the answer to s. 20 is yes. The OMB found (at para. 118): “based on the plain reading of the regulation, the information prescribed in s. 21 was not required as there are no buildings proposed within the subject By-law”.

[57] No buildings or structures can be built under the impugned By-law unless several conditions are met. Section 7 of the By-law provides that until the Holding Provision (H-1) is lifted, the lands shall not be used for any purpose other than those uses permitted by s. 6 of the By-law. Section 6 permits only: outdoor recreation uses without buildings or structures, preservation and conservation of the natural environment, soil and wildlife, or existing lawful uses, located on the land or in existing buildings or structures. The By-law is designed so that the information regarding buildings contemplated by s. 21 of Schedule 1 of Regulation 545/06 will be provided as part of the process for removing the H-1 Holding Symbol from any lands designated as Major Tourist Destination. All arrangements and site plans are subject to “the satisfaction of the City of Pickering”.

[58] In this regard, the OMB stated, at para. 119:

The Board agrees with the City’s submission that the subject By-law is similar to a pre-zoning of land such as is found in a municipal comprehensive zoning by-law. Similar to a pre-zoning by-law, the Board finds that the information regarding building locations was not required, and therefore there is no issue with the prescribed information not being provided to Council under O. Reg. 545/06.

[59] These are all planning issues within the expertise of the OMB, and the OMB is entitled to considerable deference with respect to its interpretation of the Planning Act.

[60] For these reasons, there is no good reason to doubt the reasonableness of the OMB’s interpretation of the interaction between ss. 34(10.1) and (10.3) of the Planning Act and Schedule 1 of Ontario Regulation 545/06, and this issue does not meet the test for leave to appeal.

Issue 5 - Whether the OMB erred in law when it misinterpreted and misapplied s. 15 of the City of Pickering’s Official Plan?

[61] This issue is closely related to issue 4. Ajax argues that even if s. 34(10.3) of the Planning Act makes the completeness of the application a matter within the discretion of council, section 15.3 of Pickering’s Official Plan removes that discretion from the council.

[62] Section 15.3 of Pickering’s Official Plan provides:

15.3 City Council shall not accept an application for an official plan amendment, zoning by-law amendment, …until the following has been submitted to the City:

(b) any information or materials prescribed by statute and regulation;

(f) all required studies set out in Section 15.5 for an official plan amendment, zoning by-law amendment…

[63] Ajax argues that s. 15.3(b) means that an application to amend a zoning by-law cannot be considered to be complete until all of the information under Schedule 1 of Regulation 545/06 has been provided.

[64] Pickering counters that s. 15.3(b) must be read together with s. 15.4, which provides:

City Council shall require all of the matters set out in Sections 15.3, 15.5A and/or 15.5B to be completed to the satisfaction of the City respecting the scope and complexity appropriate to the application prior to the City deeming the application complete… (Emphasis added)

[65] In addition, s. 15.5 requires a long list of materials and studies prepared by qualified experts “as scoped or expanded as a result of the presubmission consultation”.

[66] At the hearing before the OMB, witnesses for each of the parties (Gary Muller for Ajax, Ross Pym for Pickering, and Paul Lowes for Pickering Developments) gave “evidence” on the question of whether the By-law complied with ss. 15.3 and 15.5 of Pickering’s Official Plan.

[67] Mr. Pym explained why Pickering did not require two of sixteen studies (the Vibration Study and the Railway Corridor Safety Study) at that stage of the development.

[68] The OMB reviewed their evidence at paras. 101 to 113, and preferred the evidence of Pym and Lowes to that of Muller. It appears that some of the “evidence” provided by each of these witnesses (on this issue and on other issues) encroached on legal argument.

[69] When the OMB states that it preferred the evidence of Pym and Lowes, it is really preferring the interpretation of the Official Plan that underscored their evidence, rather than Muller’s interpretation of that document. To the extent that the decision related to the interpretation of the Official Plan, I agree with Ajax that it is a question of law that is subject to appeal.

[70] That said, in my view, read as a whole, the Official Plan, consistent with the Planning Act, permits the council to decide on the adequacy of the studies presented. The OMB’s decision on this point, like its decision with respect to issue 4, appears reasonable and this issue does not meet the test for leave to appeal.

Issue 6 - Whether the OMB erred in law when it misinterpreted and misapplied [s. 34(10)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-p13/latest/rso-1990-c-p13.html#sec34subsec10_smooth) of the [Planning Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-p13/latest/rso-1990-c-p13.html) when it relied upon the concept of “pre-zoning” to approve the By-law?

[71] Ajax argued before the OMB that the performance standards that deal with tall buildings, minimum separation distances between buildings on site, between industrial facilities and sensitive uses, and other standards were not set out in the By-law, and that this was contrary to s. 3.8(b) of the City Official Plan that authorizes City Council to:

[Z]one lands designated Employment Areas for one or more purposes as set out in Table 8, and in so doing will apply appropriate performance standards, restrictions and provisions…

[72] The OMB held, at paras. 122 - 123:

[T]he Urban Design Guidelines and Site Design Performance Standards will provide for more comprehensive standards than currently exist. The Board finds this to be a more appropriate approach for a by-law such as this which is described as a pre-zoning by-law for a large site…

The Board finds that the performance standards within the By-law are appropriate for this stage of the approval process and as such conform with s. 3.8 of the City Official Plan, particularly given that additional provisions will be determined as part of the subsequent Master Development Agreement.

[73] Ajax seeks leave to appeal on this point, arguing that the OMB’s approach is wrong in law because the Planning Act does not speak of the concept of, nor contain the words, “pre-zoning”. The By-law, as presently drafted, does not indicate how large the proposed hotel, stadium, or waterpark will be, or where any of these facilities will be located. Ajax argues that Pickering cannot circumvent the Official Plan’s requirement for “appropriate performance standards” by relying on the non-existent concept of “pre-zoning” or “pre-zoning by-law”, and the OMB erred in law in permitting this.

[74] Pickering argues that the Planning Act does not require a municipality to know the size of buildings and structures that may be built prior to zoning land for a particular use. The Planning Act gives municipalities broad discretion as to how they regulate land use through zoning by-laws, and there are no specific or minimum requirements as to the content of a zoning by-law in the Planning Act.

[75] While the Planning Act does not use the term “pre-zoning” the concept is inherent in s. 36 of that Act, which permits the municipality to pass a “holding provision by-law” in its zoning by-laws. Section 36(1) provides:

36 (1) The council of a local municipality may, in a by-law passed under section 34, by the use of the holding symbol “H” (or “h”) in conjunction with any use designation, specify the use to which lands, buildings or structures may be put at such time in the future as the holding symbol is removed by amendment to the by-law.

[76] Pickering argues that the use of holding symbols to specify future, conditional use of land is “pre-zoning”. Section 15.16 of the Pickering Official Plan expressly contemplates this process. Section 15.16 states:

City Council may pass zoning by-laws incorporating holding provisions as provided in the Planning Act to specify the use to which lands, buildings, or structures may be put at some time in the future, providing,

(a) the holding symbol (H) is used only in the following instances:

(i) when certain details of development have not yet been determined …

[77] In addition, Pickering points to s. 14.5.2 the Durham Region Official Plan, which is binding on Pickering and Ajax. This provision confirms that the term “pre-zone” is used to describe the use of holding by-laws. Section 14.5.2 provides:

14.5.2 In accordance with the provisions of the Planning Act…the Council of an area municipality is encouraged to prezone land using the holding symbol “H” or “h”, in conjunction with any use category, and indicate the use to which the lands, buildings or structures may be put at such time in the future as the holding symbol is removed by amendment to the by-law.

[78] The OMB’s reference to “a pre-zoning by-law” appears to be a reference to the use of that term in the Durham Region Official Plan. The use of that term does not establish “good reason to doubt the reasonableness of the decision under review”. Read in the context of the entire decision, the reference to a “pre-zoning by-law” is consistent with the use of a holding provision by-law referenced in s. 36 of the Planning Act, and is not in conflict with either the Pickering’s Official Plan or the Durham Region Official Plan. Ajax has not provided any conflicting case law to support its position on this issue. In my view, this issue does not meet the test for leave to appeal.

Issue 7 - Whether the OMB erred in law when it misinterpreted and misapplied [s. 24](https://www.canlii.org/en/on/laws/stat/rso-1990-c-p13/latest/rso-1990-c-p13.html#sec24_smooth) of the [Planning Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-p13/latest/rso-1990-c-p13.html)?

[79] In order to lift the “H-3” holding symbol, a new partial interchange will have to be constructed on Highway 401 at Church Street in Ajax. Section 9(2)(c) of the By-law provides:

The “H-3” Holding Symbol shall not be removed from the lands designated “MTD” on Schedule I attached hereto, until such time as:

(c) Appropriate arrangements and/or agreements have been made between the Owner of the lands and the relevant agency having jurisdiction, to the satisfaction of the relevant agencies (being the City of Pickering, the Region of Durham and/or the Province of Ontario) for the construction of a new partial interchange on Highway 401 at Church Street, including all financial and Environmental Assessment matters.

[80] Section 24(1) of the Planning Act provides:

24 (1) Despite any other general or special Act, where an official plan is in effect, no public work shall be undertaken and, except as provided in subsections (2) and (4), no by-law shall be passed for any purpose that does not conform therewith.

[81] Ajax argues that it was the duty of the OMB, when considering whether to approve a by-law, to make sure that it conforms with the Official Plan. In this case neither the Region of Durham nor the Town of Ajax make reference to, or have listed as a goal or objective, an interchange at Church Street and Highway 401 within Ajax. In fact, Ajax Council had passed a resolution specifically objecting to the concept of an interchange at Church Street and Highway 401, prior to the OMB hearing.

[82] The OMB rejected this argument on the basis that the decision to construct an interchange at Church Street and Highway 401 is within the jurisdiction of the government of Ontario, not the municipality, and therefore does not require authorization through a municipal official plan.

[83] The OMB noted that the term “public work” is defined in s. 1 of the Planning Act as:

“public work” means any improvement of a structural nature or other undertaking that is within the jurisdiction of the council of a municipality or a local board;

[84] The OMB interpreted this definition as meaning within the legislative jurisdiction of the council, and concluded that the interchange was within the jurisdiction of the Ontario Ministry of Transportation and not within the jurisdiction of Ajax, Durham, or Pickering. Accordingly, the proposed interchange is not a “public work” within the meaning of s. 24 of the Planning Act.

[85] Indeed, the Durham Region Official Plan states, at s. 11.3.7:

[T]hese [400 series] highways are under the jurisdiction of the Ministry of Transportation, which has sole responsibility for such matters as standards, design criteria and widening requirements.

[86] A similar provision recognizing Ministry of Transportation jurisdiction over provincial highways appears at s. 4.18 of the Pickering Official Plan.

[87] The By-law does not purport to authorize the construction of a Highway 401 interchange, but indicates that the H-3 holding symbol will not be removed until arrangements have been made for the construction of the interchange.

[88] Ajax acknowledges that the Ontario Ministry of Transportation determines where interchanges at 400 series highways will be located, but argues that this is irrelevant to the decision the OMB was called upon to make when applying s. 24 of the Planning Act.

[89] At the end of the day, the merits of this ground to appeal depend on whether there is good reason to doubt the reasonableness of the OMB’s interpretation of s. 24 of the Planning Act.

[90] In my view, the OMB’s interpretation of s. 24 of the Planning Act, which is based on the definition of “public work” in s. 1 of that Act, is reasonable, and I am not persuaded that there is any basis to doubt the OMB’s decision in this regard. Accordingly, this issue does not meet the test for leave to appeal.

Issue 8 - Whether the OMB erred in law when it misinterpreted Pickering’s Official Plan policies for “Prestige Employment” and the policies for “Neighbourhood 4: Brock Industrial” in relation to ancillary retail use.

[91] This final ground of appeal also relies on s. 24 of the Planning Act, which prohibits undertaking any public work or the passage of any by-law that does not conform to the official plan.

[92] The subject site is designated as “Prestige Employment” in Pickering’s Official Plan and is also identified as being within “Neighbourhood 4: Brock Industrial”. As such, Ajax argues, the site is subject to the policies in the Official Plan because the proponent did not seek an Official Plan Amendment when filing its Rezoning Application.

[93] Table 8 of section 3.8 of Pickering’s Official Plan sets out the “Permissible Uses” for Prestige Employment areas. These uses include “retail sales as a minor component of an industrial operation”.

[94] In contrast, the By-law provides for “Retail Sales, Ancillary” as one of the Permitted Support Uses in s. 5(3)(ix) of the By-law.

[95] “Retail Sales, Ancillary” is defined in s. 4(42) as:

A retail store use which is associated with, but clearly subordinate to, a permitted Principal or Secondary Use.

[96] Section 4(42) imposes a maximum gross leasable area of 15 percent of the building, and a maximum gross leasable area of 500 square metres per ancillary retail sales use.

[97] Ajax argues that the By-law approved by the OMB permits significant retail without any requirement that it be “a minor component of an industrial operation”. This, Ajax argues, is inconsistent with the plain wording of the Official Plan.

[98] The OMB rejected this argument. Again, the OMB heard evidence from Messrs. Pym (for Pickering), Lowes (for Pickering Developments) and Muller (for Ajax). Much of this “evidence” really amounted to legal argument in my view, but all parties proceeded on that basis and no objection was taken. While the OMB received this testimony as “evidence”, to the extent that it relates to the interpretation of the Official Plan, it is more accurately characterized as legal argument. Either way, the OMB was free to accept whichever interpretation it preferred provided the interpretation chosen was “within a range of possible, acceptable outcomes which are defensible in respect of the facts and law”.

[99] The OMB preferred the interpretation advanced by Messrs. Pym and Lowes, finding that the intention of the phrase “retail sales as a minor component of an industrial operation” in an official plan is “meant to address the changing nature of retail, which saw retailing arise in warehouses where the sales are the primary function”. Therefore the inclusion of “ancillary” retail as a permitted use in the By-law is not inconsistent with the intent of the Official Plan. The OMB stated, at para. 139:

The Board accepts the evidence of Mr. Pym and Mr. Lowes in that the stated provision is typically provided in official plans to limit retail in warehouse-type forms in employment lands. The intent of the provision is to limit retail so that it is ancillary to the primary use. The Board finds that Mr. Muller is incorrectly attempting to restrict ancillary retail to ‘industrial’ use, which is not the intent of the Official Plan.

[100] The Board concluded that the restrictions in s. 4(42) of the By-law “appropriately limit retail to ancillary use, which is the intent of the City Official Plan policies”. Accordingly, the OMB found that the inclusion of ancillary retail was a permitted use in the By-law and was not contrary to the Official Plan.

[101] The Official Plan does not define the term “industrial operation”, and counsel have not provided me with a definition. Counsel for Pickering directed me to s. 14.1 of the Pickering Official Plan, which sets out the City policy on the interpretation of the Pickering Official Plan. Subsection 14.1(g) provides:

City Council interprets and instructs others as follows in interpreting the Pickering Official Plan;

(g) permitted uses in this Plan are listed as examples of the general range and type of uses that may be allowed; specific uses not listed, but determined by Council to be similar to and generally consistent with the listed uses may also be permitted through the zoning by-law.

[102] Ajax’s submissions on this application for leave to appeal did not address this general interpretative provision or its effect on the more literal, narrower interpretation proffered by Ajax and Mr. Muller.

[103] Section 14.1(g) is intended to give the City some flexibility in the interpretation of the Official Plan, and is consistent, in my view, with the purposive approach adopted by the OMB. The issue is whether “a retail store use which is associated with, but clearly subordinate to, a permitted Principal or Secondary Use” is generally consistent with “retail sales as a minor component of an industrial operation”. The OMB concluded that the purpose of s. 5(3)(ix) of the By-law was “similar to and generally consistent with” the purpose of s. 3.8 of the Official Plan: to limit retail so that it is ancillary to the primary use.

[104] Given the interpretation policy set out in s. 14.1(g) of Pickering’s Official Plan, it is my view that the “purposive interpretation” of s. 3.8 the Official Plan adopted by the OMB was within the range of possible acceptable outcomes, and there is no basis to doubt the reasonableness of its decision in this regard. Accordingly, this issue does not meet the test for leave to appeal.

Conclusion

[105] For the foregoing reasons, the application for leave to appeal to the Divisional Court from the decision released by the Ontario Municipal Board on July 7, 2017 concerning Case No. PL150145, is dismissed.

[106] If the parties are unable to agree on costs, each respondent may file written submissions on costs within 25 days of the release of this decision. Such submissions are to be limited to 3 pages each plus costs outline. The applicant may file a responding submission, limited to 5 pages, 15 days thereafter.

Justice R.E. Charney

Released: June 12, 2018

[^1]: Pickering Developments is a group of companies comprised of Pickering Developments (Squires) Inc., Pickering Developments (Bayly) Inc., and Pickering Developments (401) Inc.