Niagara Escarpment Hearing Office

Bureau des audiences sur l’escarpement du Niagara

ISSUE DATE: November 09, 2018

CASE NO.: 18-018

PROCEEDING COMMENCED UNDER section 25(8) of the Niagara Escarpment Planning and Development Act, R.S.O. 1990, c. N.2, as amended

Appellant: 2362302 Ontario Inc.

Respondent: Niagara Escarpment Commission

Subject of appeal: Refusal of a Development Permit Application to sever a new lot containing an existing 2 storey single dwelling and to retain the remnant parcel as an Agricultural Purposes Only lot

Reference No.: H/R/2015-2016/342

Property Address/Description: Part Lots 19 & 20, Concession 2, NDS

Municipality: City of Burlington

Upper Tier: Regional Municipality of Halton

NEHO Case No.: 18-018

NEHO Case Name: 2362302 Ontario Inc. v. Ontario (Niagara Escarpment Commission)

Heard: September 10 and 11, 2018 in Milton, Ontario

APPEARANCES:

Parties	Counsel
2362302 Ontario Inc.	Herman Turkstra and Anna Toumanians
Niagara Escarpment Commission	Sunny Zhai
Regional Municipality of Halton	David Germain

REPORT DELIVERED BY MARLENE CASHIN AND JUSTIN DUNCAN

REASONS

Background

12362302 Ontario Inc. (“Appellant”) submitted development permit application H/R/2015-2016/342 (“Application”) to the Niagara Escarpment Commission (“NEC”) on January 13, 2016. The Appellant proposed to sever, from a parent lot with an area of 41.72 hectares (“ha”) (“Subject Property”), a new 0.83 ha lot that would contain an existing two-storey single dwelling, and to retain the remnant parcel as an Agricultural Purposes Only lot (“APO lot”). The Subject Property is located at Part Lots 19 and 20, Concession 2, City of Burlington (“City”), Regional Municipality of Halton (“Region”). The land proposed to be severed is designated Escarpment Rural Area (“ERA”) in the Niagara Escarpment Plan (“NEP”).

2On March 23, 2018, the NEC refused the Appellant’s Application for the following reasons: the proposal conflicts with the Lot Creation policies of the ERA and applicable Lot Creation Development Criteria of the NEP; the proposed development is not consistent with the 2014 Provincial Policy Statement (“PPS”) provisions; and Region staff does not support the proposal. The Notice of Decision of the NEC, containing the reasons for refusal, is attached as Appendix 1 of this Report.

3On April 6, 2018, the Appellant appealed the NEC’s decision to refuse the Application under s. 25(8) of the Niagara Escarpment Planning and Development Act (“NEPDA”) to the Niagara Escarpment Hearing Office (“NEHO”).

4A Pre-hearing Conference (“PHC”) was held by telephone conference call on June 21, 2018, at which time the NEHO Hearing Officer granted Party status to the Region.

5On September 10 and 11, 2018, the hearing of the appeal took place in Milton, Ontario.

Issue

6The issue is whether the NEC’s decision to refuse the Appellant’s Application was correct. Generally, in considering this question, the Hearing Officers are required to consider whether a proposed development accords with the policies of the NEP, the PPS and any applicable official plans (in this case the Region’s Official Plan (“Regional OP”) and the City’s Official Plan (“City OP”)).

7During the hearing, there was no dispute raised about the Application being in conformity with the City’s OP. The main areas of dispute centred on the policies contained in the NEP, the Regional OP, and the PPS. More specifically, in consideration of the evidence and submissions received at the hearing, the Hearing Officers find that in order to resolve this appeal, the following matters in dispute must be resolved:

1. Can the residence on the Subject Property be considered to have been rendered surplus due to a farm consolidation?

2. To what extent should policies requiring that a proposed surplus residence be built and occupied for not less than 10 years and that an application for severance of the surplus residence be made within two years of the date the lands were acquired as part of a farm consolidation be applied in this instance?

3. To what extent does a settlement agreement previously reached between the Appellant and the City on an appeal before the Ontario Municipal Board have any relevance to an examination of the NEC’s decision?

Excerpts of the NEP, the PPS, the Regional OP are attached as Appendix 2 of this Report.

Evidence of the Parties

8On behalf of the Appellant, Paul Paletta and Dana Anderson provided evidence. Ms. Anderson was qualified to provide opinion evidence in the area of land use planning. On behalf of the NEC, Michael Baran was qualified to provide opinion evidence in the area of land use planning with a particular expertise in the NEP. On behalf of the Region, Joe Nethery was qualified to provide opinion evidence in the area of land use planning.

Evidence of the Appellant

Paul Paletta

9Mr. Paletta testified that he, his father and his two brothers are the shareholders of the Appellant (also known as Paletta International Corporation), which owns the Subject Property. He explained that he built the house on the proposed severed lot and that the house was built for him to live in.

10Mr. Paletta provided information about his family company, explaining that it is one of the largest farming operations in the Region, with over 3,000 acres of land owned and actively farmed, and that the current company is the successor to the original company that purchased the Subject Property in 1970. He testified that the Subject Property was purchased to be used as part of the family farming operation and has been used as part of that operation since 1970. He explained that the Subject Property is currently leased by another farmer for cultivation but the property remains part of the Paletta International land holdings.

11At the time of purchase, Mr. Paletta explained, there was a farmhouse on the Subject Property, which was in disrepair and demolished as a result. He explained that a shed/garage also existed on the Subject Property when purchased and that it continues to exist and is used for the storage of personal items, including a boat. He explained the company could have qualified for a severance at that time, but his father, who was then running the company, decided to take down the house because it was in the middle of the lot and a severance would have involved a long driveway and a lot creation in the middle of the field.

12Mr. Paletta testified that he understood it was always his father’s intention to demolish the old farmhouse and replace it with a house on another part of the property, for one of his children. Eventually, Mr. Paletta said, it was agreed that he (Paul Paletta) would build a house there, and that the concept of severing land from the farmland for building the home was always the family’s intention.

13Mr. Paletta said the company first intended to apply for a severance prior to 2009, and were advised that the severance would be opposed by the City. At the time, he said, the company also owned development lands in the urban area of the City, and there was disagreement between the company and the City on the development of the urban lands. After much discussion, he said, the company reached an agreement with the City that settled an Ontario Municipal Board hearing that included a “term” that the City would support the company’s application to sever a lot on the Subject Property as part of a settlement agreement reached with the City.

14Mr. Paletta testified that he believes that if he had built a house on the Subject Property in 2009, he would have qualified for a severance under the NEP that was in force at that time. However, he said, he was not ready to build a house in 2009. Mr. Paletta testified that, by 2015, he was in a position to build the house, but had to deal with the fact that the Subject Property is owned by Paletta International.

15In 2015, Mr. Paletta explained, the Appellant applied for the severance that the City had agreed to support in 2009. However, in order to obtain a severance, there had to be a house on the Subject Property. Mr. Paletta said that he was confident the City would support the severance because it had been agreed to. However, he said, he understood that the final approval authority for the severance was the NEC.

16Mr. Paletta testified that in 2014, he applied for a development permit to build the house and the permit was granted by the NEC. He explained that he started building his home in May 2015 and construction was finished in 2016. In other words, he said, the house is there today because construction was approved by the NEC.

17Mr. Paletta explained that he felt he could not move into the house when it was completed, because it was on land that was not owned by him, and therefore would not be treated as his principal residence for tax purposes, as the entire farm was still owned, as it had been since 1970, by the family company.

18Mr. Paletta testified that, as it appeared that the severance would take some time, he rented out the house on the Subject Property and purchased another home as his principal residence.

19Mr. Paletta stated that the problem today is that the house, which he built and paid for, is on land owned by Paletta International. This, he said, has caused him great stress. If he could buy the entire Subject Property, he said, he would have land that is of no use to him. He said, in any case, the family company would not agree to sell him the whole property.

20Mr. Paletta testified that even if he could purchase the entire farm and sell it back to the company, because of the “10-year rule” contained in the NEP, he would have to wait another six years, until 2025, to apply for the severance. On the other hand, he explained his understanding was that, because of the “two-year rule” contained in the NEP, he could not acquire title until 2024.

21Mr. Paletta said that he understands that he could apply for a severance in 2025, and the severance would meet the policies of the NEP, as they exist today. However, he said, he understands that NEP policy could change again before 2025.

22Mr. Paletta testified that the company bought the Subject Property to add it to the other farms owned by the company. There is no question, he said, about the purpose of the purchase being to consolidate the company farming operations when it was acquired.

23Mr. Paletta explained that in his view, there is no question that there was a house on the farm that was “surplus” to farming operations and that the house has been replaced by the house he built. He said that he cannot sell the house because technically he does not own the underlying land. From his point of view, Mr. Paletta said, he is simply replacing a house on the farm for the original farmhouse and he is caught up in time frames that seem to have no connection to protecting the Niagara Escarpment.

24Mr. Paletta testified that he understands there are two options, as set out in his witness statement, as follows:

[t]he severance can be approved, or it can be refused. If the severance is approved, the house will still be there and the rest of the farm will be farmed. If the severance is refused, the house will still be there and the rest of the farm will be farmed. In other words, there will be no difference on the ground between the two options.

As part of the settlement with the City, the remaining farm lands can never have a house built on it. The family farming corporation has agreed that it will place a permanent restriction on title to the remaining farm land so that a second house can never be built on the remaining lands.

I cannot see that there will be any impact on any part of the escarpment if the severance is granted. The only difference will be that I can own the house I built.

25In cross-examination, Mr. Paletta explained that the original residence on the Subject Property was demolished in the late 1980s.

26In cross-examination, Mr. Paletta acknowledged that, when the NEC approved the development permit for the construction of the new residence on the Subject Property, no reference was made by him that he would later apply for a severance on the Subject Property.

27Mr. Paletta also explained in cross-examination that some of the properties owned by his family have houses on them and that some are vacant.

Dana Anderson

28Ms. Anderson provided testimony regarding the history of the Subject Property, the Appellant’s applications and Mr. Paletta’s construction activities on the Subject Property. She also provided details of her site visit and the documents she reviewed in relation to her being retained to provide advice and testimony on the Application to the NEC and the appeal to the NEHO.

29Ms. Anderson summarized her evidence contained in her witness statement describing the Subject Property and surrounding area, which was undisputed by the other parties. In her witness statement she explained that:

The Subject Lands are located on the north side of No. 1 Side Road, just east of Cedar Springs Road in the City of Burlington. The lands have a gentle sloping topography consisting primarily of cultivated agricultural fields. The Subject Lands contain three tributaries of Grindstone Creek, as well as an isolated woodlot at the northwest corner.

An existing single detached dwelling is located close to the southwest corner of the lot, and an existing barn/driveshed is centrally located and set back approximately 275 meters from No. 1 Side Road. A FM radio tower and equipment structure are located near the rear of the Subject Lands.

Lands to the north of the Subject Lands are comprised primarily of agricultural uses, with woodlots scattered throughout the agricultural fields. The Camisle Golf Course is located to the north of the Subject Lands.

The area to the east of the Subject Lands is comprised of agricultural uses, as well as a number of small creeks and tributaries.

The area to the south of the Subject Lands is comprised of agricultural uses, as well as woodlot coverage. A number of single detached homes line the south side of No. 1 Side Road.

The area to the west of the Subject Lands is a mixture of agricultural uses, single detached residences, and woodlots.

30Ms. Anderson’s opinion was that the Application refused by the NEC is for the severance of a surplus farm dwelling. She explained that the existing house is a habitable farm residence and the proposed remnant lot is an APO lot that has been historically and is currently used for farming. She explained that, should the Application be approved, no new development will be permitted on the remnant lot and no changes are proposed to the existing house.

31Ms. Anderson acknowledged that the timeline for the farm consolidation and the Application do not fit within the timing metrics of two of the criteria that are to be considered in relation to the creation of a lot for a surplus farm residence under the development criteria in Part 2 of the NEP. However, it was her opinion that strict adherence to all criteria is not required given the policy construct of the NEP. It was her opinion that the relevant question is whether the Application will create adverse impacts that are contrary to the intent of the NEP. It was her opinion that the Application will have the impact of simply creating a line on the property for the purpose of conveyancing and that the severed part of the Subject Property will continue to be used for residential purposes while the remnant part will continue to be used exclusively for agriculture. It was her opinion that the criteria of the NEP and Regional OP for lot creation should be applied in a flexibly permissive manner.

32Ms. Anderson testified that the assessment of the Application under the sections of the NEP should be considered in the context and circumstances surrounding the Subject Property, and that the criteria to be considered in creating a surplus lot are not to be strictly applied, but considered within a permissive scope. Farming operations, she opined, are not static and cannot be expected to follow strict timing requirements for when and how farm residences are replaced and when applications for severance may be made. Ms. Anderson opined that official plan policies are written with language that is to be interpreted for their intent, and that similarly, the scope and the meaning of language in a plan such as the NEP must be considered when determining the plan’s intent.

33Ms. Anderson referenced the introductory section of the NEP that explains how the NEP is to be read. Provincial plans, she opined, provide directions for policies to ensure that Provincial interests are met, and that, in the NEP, the direction is to ensure that development is compatible with the Niagara Escarpment.

34Ms. Anderson explained that the NEP is structured in parts, with Part 1 containing the Land Use Policies, and the land use designations and polices providing how land “shall” be used. These policies, Ms. Anderson said, are therefore mandatory in their intent and must be interpreted as such.

35Ms. Anderson testified that in her opinion, Part 2 of the NEP, on the other hand, provides Development Criteria which “should” be carried out and should be read in conjunction with Part 1. She said that in her opinion, the intent of the Development Criteria is that they are directive and generally require compliance unless proven otherwise on good planning grounds. In the assessment of the current Application, she opined that consideration of the development criteria should be interpreted in the context of principles of good planning.

36Ms. Anderson explained that the proposed severed lot should be evaluated with consideration of how the intent of the policies of the NEP are met, how the Application impacts the surrounding area and how the Application, in that context, addresses the applicable land use planning policies. It was her opinion that the Application, when evaluated in this context, is consistent with the PPS, meets the intent of the applicable NEP, Regional and local planning policies, and should have been approved.

37Ms. Anderson reviewed several of the sections of the PPS that apply to the Application. As the Subject Property is identified as being located within a Prime Agricultural Area under the PPS, she highlighted the sections with respect to the protection of prime agricultural areas for long-term use set out in s. 2.3 of the PPS. Ms. Anderson also referenced s. 2.3.4.1(c) of the PPS relating to lot creation in prime agricultural areas. It was her opinion that the requirements of s. 2.3.4.1(c) had been met by the Application by ensuring the new lot was limited in size and by requiring that the remnant lot will be an APO lot. Ms. Anderson also explained that the PPS does not impose a timing limitation on the creation of new lots in prime agricultural areas.

38Ms. Anderson also explained that it was unclear as to why s. 1.1.4.2 of the PPS was referenced in the NEC Staff Report, dated February 15, 2018 (“Staff Report”) as the section relates to the creation of new growth which the severance, in her opinion, will not promote.

39Overall, in relation to the PPS, it was Ms. Anderson’s opinion that the Application was consistent with the policies contained in the PPS.

40Ms. Anderson then reviewed the applicable provisions of the NEP in some detail. She began by explaining that the Subject Property is designated ERA and Escarpment Natural Area but that the proposed severed lot would be entirely ERA.

41Ms. Anderson referenced the NEP definitions for an “Agricultural Purposes Only Lot”, “Residence surplus to a farm operation” and “Farm Consolidation”. She explained that, based on these definitions, consolidation does not need to be of adjacent properties but that consolidation needs to bring properties into the same operation. It was her opinion that the proposed remnant lot conforms to the definition of an APO lot as defined in the NEP.

42Next, Ms. Anderson reviewed the policies contained in s. 1.5 of the NEP. In reviewing s. 1.5.3, it was her opinion that the uses proposed on the severed and remnant lots are permitted uses.

43Ms. Anderson then reviewed policy 1.5.4, the lot creation policy, of the NEP. She explained that in these circumstances, it is s. 1.5.4.7 that is applicable. Section 1.5.4.7 provides that:

1.5.4 New lots may be created, subject to conformity with the provisions of this section, the applicable policies in Part 2, Development Criteria, and official plans and, where applicable, zoning by-laws that are not in conflict with the Niagara Escarpment Plan.

7. The severance of a lot with a residence that has been rendered surplus to an agricultural operation as a result of a farm consolidation is permitted, subject to the policies found in Section 2.4 and Section 2.8 of this Plan that apply to such a severance and the associated APO lot created by this severance.

44In reviewing s. 1.5.4.7, Ms. Anderson opined that it requires that s. 2.4 and s. 2.8 “should be” considered, but that strict conformity is not required.

45Ms. Anderson reviewed the development criteria contained in s. 2.4.20 and s. 2.4.22 of the NEP. It was her opinion that the majority of the criteria are met or do not apply. She explained that, but for the criteria requiring occupation of a surplus residence for a period of 10 years (s. 2.4.22(f)) and requiring that an application for severance be made within two years of farm consolidation (s. 2.4.22(g)), the Application otherwise meets the NEP development criteria. It was Ms. Anderson’s opinion that the intent of these criteria is to preserve farming operations on vacant lands.

46Ms. Anderson explained that, had the Application to sever been made in 2006 when the development permit was approved for the construction of the residence on the Subject Property, it would have been permitted. Ms. Anderson further explained that, if the original residence had not been demolished in the 1980s, it could have been replaced at any time.

47In testifying that the development criteria in s. 2.4.22 ought to be applied flexibly, she referenced a development permit approved for a development in relation to a winery where s. 2.4.22(g) had not been met (“Cave Springs Permit”).

48Overall, in relation to the NEP, Ms. Anderson opined that the Application conformed to its policies.

49Ms. Anderson then explained that the Subject Property is designated Agricultural Area and Natural System in the Regional OP.

50Ms. Anderson explained that s. 99 of the Regional OP sets out policies that apply to lands designated Agricultural Area. She explained that s. 99(3) directs that as much agricultural land be maintained as possible for existing and future farm use and that s. 99(5) is intended to ensure that fragmentation of agricultural lands be reduced and that farm consolidations be promoted. Ms. Anderson also referenced s. 101(1.2), which prohibits the creation of new lots in the Agricultural Area designation for residential purposes except in Hamlets and Rural Clusters, but opined that this section does not apply, as the Application is in relation to a residence surplus to a farming operation and not a new residential lot creation.

51Ms. Anderson also referenced Regional OP Amendment No. 46 (“ROPA 46”), which resulted in the 10-year and two-year rules for severance applications mirroring the development criteria of the NEP being incorporated into the Regional OP. It was her opinion that, similar to the application of these criteria under the NEP, they should be applied flexibly and contextually.

52Ms. Anderson explained that the Subject Property is designated Escarpment Rural Area in the City OP, and that the City OP does not permit new lot creation for development in this designation. However, she explained that City staff had communicated that the Application was not considered lot creation for the purpose of development as it involved an existing dwelling. It was her opinion that the overall objectives of the designation have been met by the Application. She explained that the City staff supported the Application subject to a condition of the NEC permit that the Applicant enters into a restrictive covenant agreement for the APO lot.

53Ms. Anderson also reviewed the comments on the Application from the other consulted agencies, including Conservation Halton, the Ministry of Natural Resources and Forestry (“MNRF”), and the Ministry of Agriculture, Food and Rural Affairs (“OMAFRA”), and explained that they had no concerns with the application.

54In conclusion, Ms. Anderson opined that the most important consideration here is context and the need to maintain land uses that are compatible. It was her overall opinion that there would be no adverse impacts to the Escarpment resulting from the Application and that the Application is consistent with the PPS, maintains the intent of the NEP and is consistent with local plans.

55In cross-examination, Ms. Anderson acknowledged that the Application to sever was made within weeks of construction being completed of the new residence on the Subject Property.

56In cross-examination, Ms. Anderson acknowledged that the severance does not facilitate a farm consolidation that occurred approximately 46 years ago. She explained that she is not maintaining that is the case in these circumstances.

57Ms. Anderson also acknowledged in cross-examination that the original house and the new residence are at different locations on the Subject Property and that they are not similar in size. She acknowledged that between 1987 and 2016 that there was no residence on the Subject Property at all. However, it was her opinion that a 30-year gap in replacing the residence was a reasonable time period where the intent of the Paletta family was always to replace the house and provide it to a family member.

58In relation to the Cave Springs Permit, Ms. Anderson acknowledged that the application to sever was made concurrent with the farm consolidation process and that the development permit approving the severance facilitated a conditional agreement of purchase and sale resulting in farm consolidation.

59Ms. Anderson acknowledged in cross-examination that NEP s. 1.5.4 renders conformity with local plans, including the Regional OP, mandatory. Ms. Anderson explained that ROPA 46 was not in effect at the time the Application was made, but acknowledged that previous to ROPA 46 coming into effect the Appellant could not have obtained approval for a severance under the Regional OP, which was previously more restrictive.

60In re-examination, Ms. Anderson explained that the proposed remnant APO lot is continuing to be used as part of an ongoing consolidated farm operation.

61In response to questions posed by the Hearing Officers, Ms. Anderson explained that the 0.83 ha severed lot is considered minimal in size in order to meet setback and private servicing requirements.

Evidence of the NEC

Michael Baran

62Mr. Baran testified on behalf of the NEC, with the Staff Report authored by him forming the main basis of his evidence.

63Mr. Baran provided clarification and additional information to that provided by Ms. Anderson regarding the Subject Property and its history. He agreed that the Subject Property is designated as both ERA and Escarpment Natural Area in the NEP, with the proposed residential lot located entirely within the ERA.

64Mr. Baran testified that Development Permit 10865/H/R/14-15/228 (Paletta International Corporation) was issued by the NEC in April 2015 to construct a two storey, single dwelling, private sewage disposal system and driveway, on the Subject Property, and the dwelling of approximately 5,000 square feet in floor area was built. He explained that the applicant did not disclose to the NEC, before or during the review of that application, any intent to apply to sever a lot containing the dwelling from the rest of the Subject Property at a later date.

65Mr. Baran explained that he conducted a site visit and surmised that the original dwelling was located in the south portion of the central cluster of old farm buildings on the Subject Property and that this cluster is fairly distant from the newly constructed dwelling. He explained that the NEC has no records relating to the demolition of the original dwelling but that if the demolition occurred in 1987 the demolition could have qualified for an exemption from the need to obtain a development permit if the dwelling was less than 1,001 square feet in floor area and if it was not designated as a heritage building.

66Mr. Baran testified that the current Application was submitted to the NEC on January 13, 2016. He stated that a site-specific amendment application was also submitted during the Co-ordinated Provincial Plan Review to remove the Subject Property from the NEP (Co-ordinated Review File UA 37, Paletta - 2161 No. 1 Sideroad). The NEC recommended that the site-specific amendment application be refused, which it subsequently was in 2017.

67Regarding APO lots, Mr. Baran explained that Niagara Escarpment Plan Amendment PC 172 08 (“Amendment”) was approved by the Minister of Natural Resources and Forestry in March 2011, to introduce policies to permit and govern the creation of new lots for agricultural purposes only, and to update and harmonize the agricultural and farm policies of the NEP with those introduced through the Greenbelt Plan and the PPS in 2005. He noted that the objective of the Amendment was to encourage farming and to promote the creation of larger, more viable agricultural lots, in order to protect the agricultural land base within the NEP Area. Mr. Baran explained that the provision for severing surplus farm dwellings required a comprehensive set of policies to ensure consistency with the Purpose and Objectives of the NEPDA. He explained that since 2011, there have been no changes to the APO lot policies of the NEP.

68Mr. Baran provided the Hearing Officers with the NEC Amendment Position Report, which contains comments from municipalities, OMAFRA and the Ministry of Municipal Affairs and Housing, among other authorities, which recommended that the NEC consider more rigorous policies than originally proposed, in order to provide sufficient checks and balances, thereby preventing any abuse of the future APO policy provisions. Mr. Baran noted that many of those recommendations were subsequently considered and balanced in the drafting of the Amendment, and that the NEP's APO policies remain unchanged in the current 2017 version of the NEP.

69To begin his review of the specific policies of the NEP, Mr. Baran acknowledged that the language of various policies contain either compulsory language (i.e., by use of the word “shall”) or non-compulsory flexible language (i.e., by use of the work “should”). However, it was his evidence that the policies of both Part 1 and Part 2 must be met by reading the specific language of each section. He explained that Ms. Anderson’s evidence was the first time he has ever heard it suggested that the policies contained in Part 2 of the NEP need not be strictly applied.

70Mr. Baran then reviewed the Purpose and Objectives of the NEP and confirmed that an APO lot, as proposed in the current Application, in order to sever the recently built residence from the current parcel, is generally a permitted use in the ERA, and is defined in the NEP as:

The agricultural lot that is the remnant created following the severance of another lot containing a residence that is rendered surplus when associated with a farm consolidation. The permitted uses on APO lots are limited in accordance with the policies of this Plan.

71Mr. Baran noted that a “residence surplus to a farm operation” and “farm consolidation” are defined respectively in the NEP as:

An existing habitable farm residence that is rendered surplus as a result of a farm consolidation (Provincial Policy Statement, 2014).

The acquisition of additional farm parcels to be operated as one farm operation.

72It was Mr. Baran’s opinion that the dwelling on the Subject Property does not meet this definition. He explained that s. 2.4.20(a) of the NEP generally discourages lot creation in prime agricultural areas and, by operation of s. 2.4.20(b), lot creation is only permitted by the strict criteria set out in s. 2.4.22. It was his opinion that the specific, carefully crafted, criteria in s. 2.4.22(f) and (g) requiring habitation for a period of 10 years and an application to be made within two years from the date of consolidation, have not been met by the Appellant.

73Mr. Baran acknowledged that although certain criteria in s. 2.4.22 have been met, there is no flexibility to deviate from criteria (f) and (g) and that there are no other policy routes contained in the NEP by which the proposed severance can proceed.

74Mr. Baran also referred to s. 1.5.4.1, explaining that only a single severance is permitted from an original township lot. He explained that there have already been two severances from the original township lot at this location and that s. 1.5.4.1 has already been exceeded as a result.

75Concerning the PPS, Mr. Baran opined that s. 2.3.4.1, which discourages lot creation in prime agricultural areas, has not been met as the residence at issue does not meet the exception of a residence made surplus to a farm consolidation set out in s. 2.3.4.1(c).

76In terms of impact, Mr. Baran explained that if the severance were allowed, a precedent could be set that could serve as a catalyst for future applications, potentially resulting in a proliferation of conveyable residential lots that would not otherwise meet the NEP's Lot Creation policies. He estimated that there could be in the range of several hundred lots in the area similarly situated to the Subject Property.

77In cross-examination, Mr. Baran explained that he is now aware of the minutes of settlement entered into between the City and the Appellant but he explained that he has no knowledge of the background that led to the settlement being reached and that he was unaware of their existence when he authored the Staff Report. He explained that he had addressed the minutes of settlement during the meeting of the NEC where the Application was considered where he pointed out that the City had explicitly recognized in the minutes of settlement that the NEP and the Regional OP would need to be complied with.

78In cross-examination, Mr. Baran acknowledged that, although the 10-year and two-year rules contained in s. 2.4.22 are absolute requirements, they have been applied flexibly by the NEC in the past.

79In cross-examination, Mr. Baran explained that he could not agree that the severance will not impact the NEP area as there remained the possibility that severances will fragment agricultural lands that will lead to the potential for environmental damage.

80In response to a question by the Hearing Officers, Mr. Baran explained that the APO lot creation policies were a relaxation of the previous NEP policy that precluded lot creation and that the purpose of the policy change was to provide flexibility to farmers to provide a tool to facilitate farm consolidations.

Evidence of the Region

Joe Nethery

81Mr. Nethery testified that he was not employed by the Region when the Application was filed, during the review process, or when the appeal was filed, but became involved shortly thereafter as the Region made the decision to seek party status in the matter and he then began preparing for the hearing. At that time, he said, he reviewed the Application and applicable policies and conducted his own analysis of the proposal, including a roadside survey of the Subject Property and the surrounding area in July and August of 2018.

82Mr. Nethery testified regarding the history of the proposal, noting that review of the Application was placed on hold pending the completion of the Province’s review of the NEP and that during that process, the Applicant had sought, unsuccessfully, to have the Subject Property removed from the NEP area.

83Mr. Nethery drew attention to the Region’s comments on the Application, provided to the NEC in a letter dated June 21, 2017. The letter, he explained, raised the following issues:

• The new dwelling not being a residence surplus to a farming operation
• Maintenance of as much as possible lands for existing and future farm use
• Reducing fragmentation of lands suitable for agriculture and providing for their consolidation
• Prohibiting the creation of new lots on lands designated Agricultural Area for residential purposes (except in Hamlets or Rural Clusters)
• Directing non-farm uses to lands designated Urban Area or within a Hamlet or Rural Cluster
• Lack of a Minimum Distance Separation Formulae calculations to determine compatibility with existing agricultural uses

84Mr. Nethery explained that decisions of a municipal council or government agency (such as the NEC) in respect of the exercise of any authority that affects a planning matter (such as an NEC development permit) are required by s. 3(5) of the Planning Act to be consistent with policy statements issued by the Province and any Provincial Plans, and that the definition of “Provincial Plans” in the Planning Act includes the NEP.

85Regarding the PPS, Mr. Nethery drew the Hearing Officers’ attention to Part III of the introductory section of the PPS, which indicates that the policies of the PPS “represent minimum standards,” and that planning authorities “may go beyond these minimum standards to address matters of importance to a specific community, unless doing so would conflict with any policy of the Provincial Policy Statement.”

86Mr. Nethery explained his understanding that although the council of a municipality may establish policies that adopt stricter standards than those contained within the PPS, policies cannot be more permissive than the PPS. In his view this provincial policy framework is relevant to the history behind the surplus farm dwellings issue in the Region and the adoption of ROPA 46.

87Mr. Nethery also referenced s. 2.3.4.1 of the PPS, which describes the circumstances in which new lots can be created in prime agricultural areas. Only subsection (c), in his opinion, is relevant to this hearing. It states as follows:

Lot creation in prime agricultural areas is discouraged and may only be permitted for:

c) a residence surplus to a farming operation as a result of farm consolidation, provided that:

i) the new lot will be limited to a minimum size needed to accommodate the use and appropriate sewage and water services; and

ii) the planning authority ensures that new residential dwellings are prohibited on any remnant parcel of farmland created by the severance. The approach used to ensure that no new residential dwellings are permitted on the remnant parcel may be recommended by the Province, or based on municipal approaches which achieve the same objective…

88While other terms in that section are defined in s. 6 of the PPS, Mr. Nethery explained that “a residence surplus to a farming operation” is the key definition. He testified that there is no specific definition of farm consolidation within the PPS, which in his opinion allows a broad interpretation as to whether or not this circumstance represents a “farm consolidation”. To the extent that the Appellant has consolidated the subject lands with a single farm operation that may exist across its holdings, this represents, in Mr. Nethery’s opinion, a process of joining this farm operation into one whole unit, and subject to confirmation by the Appellant that the subject lands have been consolidated in this way and that an appropriate restriction would be placed on the remnant parcel, in his opinion, the Application appears to be consistent with this policy.

89Mr. Nethery testified regarding s. 2.3.4.3 of the PPS which states, “[t]he creation of new residential lots in prime agricultural areas shall not be permitted, except in accordance with section 2.3.4.1(c)”. In Mr. Nethery’s opinion, given that the requirements of subsection (c) can be met, this prohibition is moot for this Application.

90Mr. Nethery then reviewed s. 2.3.3.3 of the PPS which states, “[n]ew land uses, including the creation of lots, and new or expanding livestock facilities shall comply with the minimum distance separation formulae.” Given that the Application proposes to create a new lot, in Mr. Nethery’s opinion, the Minimum Distance Separation (“MDS”) I formula (for new residential lots and uses) applies to this Application.

91Mr. Nethery testified that from his analysis of the PPS, s. 1.1.5.9 and s. 2.3.3.3 require compliance with applicable MDS calculations to demonstrate consistency with the PPS, and that a corresponding Regional OP policy requiring compliance with MDS is found in s. 101(1.7). He explained that the cumulative intent of these policies and the Regional OP Guideline is to avoid issues of compatibility when approving new, non-farm development within the Region’s Agricultural System.

92Mr. Nethery testified regarding two MDS reports he prepared as part of his analysis of the Application. However, he noted that the Appellant did not submit a calculation as part of the proposal, and stated that he is not aware of any active livestock use of the barn on the property. Considering that, he said, compliance with the MDS I formula cannot be determined, as not enough information is available to make that determination. Therefore, in his opinion, consistency with the PPS and conformity with the Regional OP have not been demonstrated.

93Mr. Nethery testified that for many years, severances related to residences surplus to farming operations were not permitted by the Region. However, ROPA 46, recently adopted by the Region, was the result of a process initiated by a private request for a Regional OP amendment by the Halton Region Federation of Agriculture. Mr. Nethery explained that the former Regional OP policy in place at the time the Application was made was more restrictive. The current policy, introduced through ROPA 46, is now more permissive and provides potential for lot creation provided certain criteria are met. Mr. Nethery noted that the Appellant did not make submissions in the amendment process, nor did it appeal ROPA 46. He explained that ROPA 46 came into effect on February 16, 2018.

94Mr. Nethery explained that s. 66(2) of the Regional OP had previously required lots to be consolidated and that the introduction of s. 66(3) provides flexibility for farmers to consolidate operations.

95As the Appellant does not propose to consolidate adjoining lots, Mr. Nethery opined that the Application does not conform to s. 66 of the Regional OP as it existed before the adoption of ROPA 46.

96As a result, Mr. Nethery explained that the Appellant would need to rely on s. 66(3) with policy specific to “residences surplus to a farm operation” and four new definitions each relevant to the Application: “abutting”; “agricultural purposes only”; “farm consolidation”; and “residences surplus to a farm operation”. The addition of a definition of “farm consolidation” to support the new s. 66(3), Mr. Nethery said, reinforces his opinion on the policy distinction between consolidation of lots and farm consolidations.

97In Mr. Nethery’s opinion, while the Application may conform with several of the criteria of s. 66(3) and some of the criteria do not apply in this context, the Application does not conform to criteria s. 66(3)(g)(i), (ii) and (iii). A portion of a chart provided in Mr. Nethery’s witness statement provides his reasoning as follows:

s. 66(3)	Policy	Analysis
g)(i)	The application for severance of the surplus residence must occur within two (2) years of the date that the lands were acquired as part of a farm consolidation.	Does not conform: my understanding is that the lands were acquired by the applicant prior to 2013 (NEC staff report says 1970). Criterion matches NEP policy in Section 2.4.22(g).
g)(ii)	Lot creation is to be undertaken in accordance with the policies of the Niagara Escarpment Plan.	Does not conform: I rely on the opinions of NEC staff on this policy—in particular, noting Sections 1.5.4.6 (one or more severances from the original township lot previously granted) and 1.5.4.7 (lot creation criteria in Section 2.4.22) are identified as not satisfied by the application.
g)(iii)	The proposed surplus residence has been built and occupied for not less than ten (10) years, at the time of the application for severance.	Does not conform: discussed in detail below. Criterion matches NEP policy in Section 2.4.22(f).

98Mr. Nethery explained that the intent of s. 66 is to prevent the loss of productive agricultural lands through the creation of estate lots from vacant lots. He opined that in considering the flexible application of s. 66(3) consideration should be given to the continuity of use, location and size of the residence at issue. It was his opinion that the Appellant’s application goes beyond the potential for flexibility given the length of time since a residence has been in use on the Subject Property and the 225 m change in the location of the residence. It was Mr. Nethery’s opinion that the new residence represented a significant change on the Subject Property itself before consideration is even given to the potential for severance of a lot.

99In conclusion, it was Mr. Nethery’s opinion that the Application does not meet the policy of the Regional OP both pre- and post- ROPA 46.

100In cross-examination, Mr. Nethery acknowledged that there was no specific policy in the Regional OP or the NEP that requires consideration of continuity of use.

101In terms of the purpose of the NEP generally, Mr. Nethery acknowledged that it is to protect the natural environment. He also acknowledged that if the severance is not approved the house and the barn will remain on the Subject Property.

102Mr. Nethery also acknowledged that, if the Hearing Officers were satisfied that a consent should be approved, a condition of approval could be the completion of a MDS assessment.

103Mr. Nethery acknowledged in cross-examination that within the narrow construct of considering this lot on this land, a restrictive covenant requiring that the remnant lot remain an APO lot would protect those lands for agricultural purposes with the assumption that a public body is available to continually monitor activity on the Subject Property. It was his opinion that the development permit process is also a desirable vehicle for ensuring protection of agricultural lands.

104In re-examination Mr. Nethery explained for clarification purposes that the MDS I formula applies when a new lot is created, while the MDS II formula applies when an agricultural operation is being created.

Reply Evidence of Appellant

105Mr. Paletta was recalled to provide reply evidence. He explained that the existing barn/shed on the Subject Property is in poor shape and that it should probably be torn down. He explained that it cannot be used for a livestock operation. Finally, he explained that the proposed remnant parcel remains important to his family business and that it will remain part of the operation.

Submissions of the Parties

Appellant’s Submissions

106By way of summary, the Appellant submitted that there is not a lot of disagreement about the underlying facts of this case. The Appellant submitted that the NEC improperly treated the NEP and Regional OP similar to a zoning by-law or legislation, requiring strict interpretation and application rather than flexible policy documents, which are to be read flexibly as a whole. The Appellant submitted that approval of the Application will not change anything on the ground but would allow Mr. Paletta to purchase the severed lot from the Appellant and occupy his home as was always intended by his family.

107Relying on the opinion of Ms. Anderson, the Appellant submitted that the Application requires consideration of the NEP policies and their intent. The Appellant submitted that the purpose of the NEP is to protect the NEP area and to balance protection against development. The Appellant submitted that none of the planners provided evidence of an impact resulting from the Application. Further, the Appellant submitted that Mr. Nethery could not give a better way to protect the APO lot than the restrictive covenant proposed by the Appellant as part of its Application.

108The Appellant provided a series of authorities to the Hearing Officers submitting that the NEP and the Regional OP are not to be read as legislation but that the interpretation of these documents is a question of law (Niagara River Coalition v. Niagara-on-the-Lake (Town), 2010 ONCA 173 (ON CA), Niagara (Municipality) v. Ontario (Ministry of Municipal Affairs and Housing), [2009] OJ No. 5093 and Nelson Aggregate Co. (Re), [2010] OERTD No. 58 (“Nelson”)).

109The Appellant submitted that the proposed Application, when evaluated in this context, is consistent with the PPS and maintains the intent and purpose of the NEP, Regional and local planning policies, and should have been approved by the NEC.

110The Appellant submitted that the NEC erred in treating the NEP like legislation instead of policy. It submitted that, although the severance does not strictly conform to the policies relating to the timing of applications for severance, as long as the NEP’s overarching intent is met, it is an acceptable outcome. The Appellant submitted that the house exists and was constructed with an NEC permit, and the Applicant has agreed to a restrictive covenant. Therefore, the severance makes no difference except that the house can be sold separately while the company can retain a parcel for agricultural use. There will not be a single detrimental impact if the severance is allowed, the Appellant submitted.

111The Appellant submitted that, if the NEC has no discretion to depart from the provisions contained in the NEP in certain circumstances, that is the end of the story, but if discretion is allowed, “this is surely an appropriate circumstance”.

112The Appellant conceded that the NEP and the Regional OP two-year and 10-year rules cannot be met and that if these documents are to be read strictly then the appeal must be dismissed. However, the Appellant submitted that if there is room for discretion then the evidence of the planners becomes helpful and Ms. Anderson’s evidence should be preferred and the severance should be granted.

113The Appellant submitted that the Regional OP could be changed any time, and therefore the safest way to ensure that no house is ever built on the proposed remnant lot is to allow for a restrictive covenant to be signed by the Appellant as a condition of the severance by the NEC. Regarding the minutes of settlement reached with the City for the creation of an APO lot as a condition of a severance approval, the Appellant urged the Hearing Officers to give it some weight in assessing the context of the application.

114In conclusion, the Appellant requested that the Hearing Officers recommend approval to the Minister of Natural Resources and Forestry which, it submitted, would protect the APO lot in perpetuity for agricultural purposes.

NEC Submissions

115The NEC’s submissions covered four areas: the context for the decision; application of Part 1 and Part 2 of the NEP; the issue of discretion; and the issue of impact.

116The NEC began its submissions by setting out the statutory context of the case, including relevant caselaw. The NEC first referred the Hearing Officers to Goodhue v. Niagara Escarpment Commission 2007 CarswellOnt 9646 (“Goodhue”) at para. 78, for the proposition that Hearing Officers have no jurisdiction to relax the NEP’s requirements when considering a Development Permit application, as follows:

There is no provision allowing decisions on Development Permits to be made on compassionate or other grounds that are not in accord with the NEP. Changes to, and reviews of, the NEP itself are to be made in processes designed for that purpose…

117The NEC submitted that the situation in the current case is similar to that in Colling v. Niagara Escarpment Commission, 2000 CarswellOnt 8534 (“Colling”), where “no impact of severance” was argued. There, the Hearing Officer (at para. 16) referenced an earlier attempt to sever the property, where Ontario Municipal Board Member A.J.L. Chapman in an oral decision had said in part: “[t]he case for the respondents is put on really no other ground than on compassionate grounds, on the basis of, the house is there; recognize it as a fact of life, and treat this as an unusual case and have some compassion”. In Colling, the Hearing Officer upheld the decision of the NEC to refuse the application to sever, holding at para. 22:

Reluctantly, while I sympathize with the Appellant’s personal and financial circumstances, these are not reasons to permit a severance. The severance is not permitted under the new lots policies of the Escarpment Rural Area designation and further would not be in compliance with the development criteria for new lot creation. Further, neither the City nor the Region support the application.

118The NEC submitted that the NEP, while not a zoning by-law, has detailed provisions and is to be strictly applied as it provides very strict guidance for where things can or cannot happen on Niagara Escarpment lands. In reliance on Goodhue, the NEC submitted that the NEP contains structured discretion within its specific language.

119The NEC, based on the evidence of Mr. Baran, submitted that MDS compliance is not relevant in this Application.

120Regarding the settlement between the Appellant and the City, the NEC submitted that all the City said was that it would not object to the issuance of a Development Permit (subject to a Restrictive Covenant Agreement). It is still up to the NEC to decide whether a permit should be approved, the NEC submitted, and Mr. Paletta testified that he understood at all times that the NEC, not the City, was the decision-maker.

121The NEC, regarding Ms. Anderson’s assertion that Part I of the NEP is mandatory but Part II is only to be “considered” because the introduction uses the word “should”, submitted that is not the correct way to read the NEP, and that Part I and Part II are not distinguished from each other in this regard. The NEC relied on Mr. Baran’s testimony that Part I and II apply equally, and that you must first read Part I to see if the proposal is a permitted use and then apply the criteria outlined in Part II. There has never been any suggestion, the NEC submitted, that Part II should be afforded “less weight” or “more flexibility”.

122The NEC directed the Hearing Officers to the Appellant’s Book of Authorities for the Nelson case, at paras. 27 and 28, referencing Renchko v. Niagara Escarpment Commission, [2008] O.E.R.T.D. No. 32 for the process of how to read the NEP, where the Hearing Panel said, Part I is “to be read in conjunction with Part 2”. Based on these cases, the NEC submitted, conformity with Part II is mandatory.

123The NEC submitted that, if there is discretion to exercise, the Hearing Officers should exercise it to confirm the NEC’s decision. The Appellant knew or ought to have known that there would be a problem with severing a part of the property, the NEC said, and Mr. Paletta has confirmed that he knew that the decision was to be made by the NEC.

124The NEC submitted that the planners in this case have been asked to speculate on whether the proposal would pass muster if it had been one day more than two years or 10 years less two days, etc. However, the NEC submitted, these examples are so totally out of the range of the facts that the Hearing Officers have to actually consider in the situation before them as to be nonsensical as well as merely speculative.

125The demolished house equals the new house is the argument of the Appellant, the NEC said. However, there are three key reasons why the two houses are not connected, the NEC submitted: (1) the decades-wide gap between the existence of the two houses; (2) the disparate sizes of the houses; and (3) the different locations of the houses (the old one being in the middle of the Subject Property, and the new one being in a far corner of the lot).

126Regarding the impact of the proposal to sever a portion of the property, the NEC submitted that the impact of this severance has already happened and reminded the Hearing Officers that the maximum density for the lots in this area has been reached. The NEC submitted that, the Appellant suggests that there is a right to build a house on your land and there is nothing wrong or improper about that, but the NEP seeks to maintain the natural land, so the NEP tries to seek a balance, and we can see that balance reflected in the APO policies. Although the APO policies allow for houses to be built, there is a discouragement against severance, the NEC submitted. As well, the APO policy is only one of the criteria that everyone in this area has to meet, as fragmentation is against the objectives of the NEP. The NEC submitted that the decision in this case must send a clear message that you cannot build a house on a piece of land and expect that you can sever another portion of the lot.

127The NEC said it is not taking a position on whether or not there is discretion to depart from the provisions of the NEP in some circumstances, but submitted that, in this situation, the specific facts of the case are so far removed from the relevant provisions of the NEP, the Hearing Officers should choose not to exercise any discretion to recommend allowing the severance.

Region’s Submissions

128By way of summary, the Region submitted that the minutes of settlement between the City and the Appellant are irrelevant and not binding on the NEC, the Region and certainly not the NEHO on this appeal.

129The Region submitted that the Hearing Officers must consider that Ontario has a policy-led land use planning regime and that it is not enough for the Appellant to say that there will be no impact. It was submitted that, without policy supporting the goals of the NEP and the Regional OP, every agricultural lot could transition into residential estate lots. The Region submitted that the only option available to the Appellant is an amendment to the NEP.

130Further, the Region submitted that there is nothing contained in the relevant policy documents that allow the Appellant’s intent to be considered as a factor.

131Regarding the 10-year and two-year rules, the Region submitted that the Appellant does not request that they be flexibly applied but, rather, that they be ignored completely. The Region submitted that Ms. Anderson acknowledged that conformity with the Regional OP is required by the NEP and that the uncontradicted evidence of all three planners was that conformity was not possible.

132With respect to the Cave Springs Permit, the Region submitted that since severance and consolidation were simultaneous in that case it was reasonable to flexibly apply the two-year rule contained in the NEP. On the other hand, in this situation, the Region submitted, there is no causal link between the consolidation and the surplus house creation. It was submitted that the house was specifically built for the purpose of being severed at a later date.

133Finally, the Region, referring to the case of Halimar v. Toronto, (1998) 37 OMBR 443, submitted that where official plan language contains a clear, firm and unambiguous prohibition there is no opportunity to apply that prohibition flexibly. The Region submitted that the language of the NEP and the Regional OP at issue in this appeal is clear and unambiguous and should be applied.

134The Region requested that the decision of the NEC to refuse to allow the severance be confirmed.

Reply Submissions of the Appellant

135In reply submissions, the Appellant submitted that in their submissions the NEC and Region conceded that discretion in the application of the policies of the NEP and the Regional OP is allowed. The Appellant submitted that, as a result, this case is one where the purpose and objectives of the NEP should be read as a whole.

136With regard to the potential for the Application setting a precedent, the Appellant submitted that the Hearing Officers could address that issue by simply setting out the clear merits of this particular case in their report following the hearing, and state that this decision is not intended to serve as a precedent.

Analysis and Findings

137There is no disagreement amongst the parties about the NEP designation applicable here. The proposed severed lot is designated ERA.

138Similarly, there is no disagreement about the history of use and development on the Subject Property. The Subject Property was acquired in approximately 1970 by a family business now incorporated as the Appellant. There is no dispute that the Subject Property was purchased as part of a farm consolidation. At the time the Subject Property was acquired, there was a cluster of farm buildings centrally located on the property which included a residence and a small barn structure (also referred to as a shed or garage during the hearing).

139Although there was some debate as to the specific date, it is not disputed that sometime after 1987 the residence was demolished as it was dilapidated and unusable. Mr. Paletta applied for and was granted a development permit by the NEC in 2015 to construct a new dwelling on the Subject Property approximately 255 m southwest of the original residence. The new residence fronts on No. 1 Sideroad. Construction of this new dwelling was completed in 2016. The Appellant then applied for a development permit to sever a lot from the Subject Property containing the new residence.

140As outlined above, the following main matters are in dispute:

1. Can the residence on the Subject Property be considered to have been rendered surplus due to a farm consolidation?

2. To what extent should policies requiring that a proposed surplus residence be built and occupied for not less than 10 years and that an application for severance of the surplus residence be made within two years of the date that lands were acquired as part of a farm consolidation be applied in this instance?

3. To what extent does a settlement agreement previously reached between the Appellant and the City on an appeal before the Ontario Municipal Board have any relevance to an examination of the NEC’s decision?

141In considering the evidence and submissions, the Hearing Officers begin by finding that the minutes of settlement reached between the Appellant and the City have no relevance to the main issue that requires resolution by the Hearing Officers. The relevant part of the minutes of settlement simply provides that the City will not oppose the Appellant seeking a severance on the Subject Property. The City did not appear at the hearing. Most importantly, the minutes provide that the settlement reached with the City does not absolve the Appellant from the obligation of meeting any policy requirements contained in the NEP or the Regional OP. The Hearing Officers agree with this last point, which the parties to the minutes of settlement agreed to. The Appellant cannot contract out of its obligation to meet the policy requirements of the NEP or the Regional OP.

142Turning to the remaining two matters, the Hearing Officers will consider each question in the context of the applicable policy framework contained in the NEP, the Regional OP and the City OP.

Residence on the Subject Property

143The question of whether the residence on the Subject Property can be considered surplus to an agricultural operation as a result of a farm consolidation is relevant to the determination of whether the proposed lot creation is a permitted use under the NEP, whether the Application is consistent with the PPS, and whether the Application conforms to the Regional OP.

144In the ERA designation, the NEP provides, at s. 1.5.4.7, that:

1.5.4 Lot Creation

New lots may be created, subject to conformity with the provisions of this section, the applicable policies in Part 2, Development Criteria, and official plans and, where applicable, zoning by-laws that are not in conflict with the Niagara Escarpment Plan.

7. The severance of a lot with a residence that has been rendered surplus to an agricultural operation as a result of a farm consolidation is permitted, subject to the policies found in Section 2.4 and Section 2.8 of this Plan that apply to such a severance and the associated APO lot created by this severance.

145Additionally, the following two definitions contained in the NEP are of relevance to this question:

Farm consolidation: The acquisition of additional farm parcels to be operated as one farm operation.

Residence surplus to a farm operation: An existing habitable farm residence that is rendered surplus as a result of a farm consolidation (Provincial Policy Statement, 2014).

146The PPS provides, at s. 2.3.4.1(c) that:

2.3.4.1 Lot creation in prime agricultural areas is discouraged and may only be permitted for:

c. a residence surplus to a farming operation as a result of farm consolidation, provided that:

1. the new lot will be limited to a minimum size needed to accommodate the use and appropriate sewage and water services; and

2. the planning authority ensures that new residential dwellings are prohibited on any remnant parcel of farmland created by the severance. The approach used to ensure that no new residential dwellings are permitted on the remnant parcel may be recommended by the Province, or based on municipal approaches which achieve the same objective

147The Subject Property is identified as Agricultural Area and Regional Natural Heritage System under the Regional OP. The lot proposed to be severed is entirely within the Agricultural Area. Section 99 of the Regional OP speaks to the objectives of the Agricultural System as follows:

99. The objectives of the Agricultural System are:

(1) To recognize agriculture as the primary activity and land use in the Agricultural System.

(2) To preserve Prime Agricultural Areas, as shown on Map 1E, and prime agricultural lands.

(3) To maintain as much as possible lands for existing and future farm use.

(4) To protect farms from incompatible activities and land uses which would limit agricultural productivity or efficiency.

(4.1) To promote normal farm practices and to protect the right to farm.

(5) To reduce the fragmentation of lands suitable for agriculture and provide for their consolidation.

148The Regional OP also provides specific policy at s. 66(3) in relation to surplus residences as follows:

66. Subject to other policies of this Plan, applicable Local Official Plan policies and Zoning Bylaws, and policies of the applicable Provincial Plan, new lots may be created:

(3) for an existing residence surplus to a farm operation as a result of a farm consolidation in the Agricultural System identified on Map 1E, provided that:

a) a minimum of one (1) farm residence is maintained as part of the consolidated farm operation;

b) the residence surplus to a farm operation is habitable on the date of the application for severance and meets the local municipal standards for occupancy;

c) the applicant owns and operates the farm operation for a minimum of 3 years, as demonstrated through Land Title and Farm Business Registration Number;

d) as a condition of the severance the retained farm lot shall be either:

[i] merged on title with an adjacent farm lot if abutting, or

[ii] zoned to Agricultural Purposes Only (APO) to prohibit new dwellings in perpetuity, if non-abutting;

e) the lot associated with the residence surplus to a farm operation, shall be:

[i] limited in size to the minimum area needed to accommodate private servicing on the property, in keeping with the policies of this Plan; and

[ii] an existing use, built and occupied, since December 16, 2004;

f) the retained farm lot, created as a result of the severance, shall:

[i] be a minimum size of 20 hectares, if non-abutting; and

[ii] be in compliance with the Minimum Distance Separation Formulae; and

[iii] not be further severed, except as permitted by other policies of this Plan or relevant Provincial Plans; and

g) notwithstanding the policies of 66(3) c, d[ii], and e [ii], for lands in the Niagara Escarpment Plan Area outside of the Escarpment Natural Area and Mineral Resource Extraction Area, lot creation for a residence surplus to a farming operation is subject to the following criteria:

[i] the application for severance of the surplus residence must occur within two (2) years of the date that the lands were acquired as part of a farm consolidation;

[ii] lot creation is to be undertaken in accordance with the policies of the Niagara Escarpment Plan; and

[iii] the proposed surplus residence has been built and occupied for not less than ten (10) years, at the time of the application for severance.

149In considering the evidence and in reading the NEP, PPS and Regional OP policies as a whole in relation to farm consolidations and surplus residences, the Hearing Officers find that the residence at issue in this appeal has not been rendered surplus as a result of a farm consolidation as contemplated by these documents.

150Firstly, in considering the evidence, the Hearing Officers find that the new dwelling on the Subject Property cannot be considered equivalent to the original dwelling that existed in 1970 and which was demolished sometime after 1987.

151The new dwelling is located at a very different location on the Subject Property, which is relevant in considering the policy of the NEP. If the dwelling had been reconstructed at approximately the same location, even if an application had been made that met contemporary timing policy requirements, the Appellant would not qualify for a severance as it would have led to the creation of a keyhole lot in the center of the Subject Property. This is discouraged by the development criteria contained at s. 2.4.22(c) of the NEP since it would interfere with the use of surrounding lands for agricultural purposes.

152Furthermore, between 15 and 30 years have elapsed between the time of demolition of the original dwelling and the construction of the new dwelling. Although Mr. Paletta and Ms. Anderson explained that it was the Paletta family’s ongoing intent to provide a dwelling at some time for a member of their family, this intent must be considered in light of the applicable policy and its intent. The policy of the NEP, and similarly the Regional OP, is focused on land use and the Hearing Officers find that intent of an applicant or their particular needs or desires is not particularly relevant to an examination of the policy context.

153Additionally, the Hearing Officers note that there was no dispute of Mr. Baran’s evidence that the new residence is larger than the original dwelling, most likely five times the size, although Mr. Nethery’s documents indicated that the original dwelling could have been approximately half the size of the new dwelling. Although the Hearing Officers recognize that construction of the new dwelling was permitted through issuance of a development permit, relevant is the lack of communication with the NEC that the Appellant intended to subsequently apply for a severance.

154In the result, the Hearing Officers find, in considering the location and timing evidence, that it cannot be said that the original dwelling and the new dwelling are the same or equivalent dwellings for the purpose of analyzing the Application.

155Secondly, the Hearing Officers find that the intent of the policies of the NEP, and similarly the policies of the Regional OP, are to provide flexibility to farmers to sever residences that, coincident with a farm consolidation, become surplus to that operation. There is a clear temporal component to the policies of the NEP and the Regional OP, notably the requirement to seek a severance within two years of consolidation. The Hearing Officers find that the intent of the temporal requirements is two-fold: to generally discourage severances on the one hand but, on the other hand, to promote consolidation of farm operations to ensure viable agricultural operations continue to exist by allowing farmers to sell existing residences that they do not need as part of their farming operation.

156The undisputed evidence of Mr. Paletta was that it was always his family’s intent to rebuild the dwelling on the Subject Property and to allow a family member to live in it.

157However, approximately 48 years have now elapsed since farm consolidation occurred. There was no evidence led indicating that the severance would assist with the consolidation or how the severance of a dwelling would promote consolidation. Nor was there any evidence that lack of a severance would lead to dissolution of the operation. To the contrary, Mr. Paletta confirmed that the Subject Property is important to the Appellant’s operation and is intended to continue to remain part of it.

158Combining these considerations with the Hearing Officer’s finding that the new dwelling is not equivalent to the dwelling that existed at the time of consolidation, the Hearing Officers find that the Application does not relate to a residence that has been rendered surplus to an agricultural operation as a result of a farm consolidation. As a result, the Hearing Officers find that the severance proposed by the Application is not a permitted use under s. 1.5.4.7 of Part 1 of the NEP.

159Also necessarily flowing from this finding, the Hearing Officers find that the Application is not consistent with the PPS or the Regional OP.

The 10-year and Two-year “rules”

160Although it is strictly unnecessary for the Hearing Officers to consider the question of whether the timing criteria contained in s. 2.4.22 of the NEP and mirrored in s. 66(3)(g) of the Regional OP need to be met, the Hearing Officers find that it would be helpful to make findings on this matter.

161Part 2 of the NEP provides that Permitted Uses may be allowed, subject to Development Criteria contained in Part 2. Most relevant in this instance is s. 2.4.22 of Part 2 which provides that:

22. The lot associated with the residence that has been rendered surplus to an agricultural operation through a farm consolidation may be severed provided the following criteria are met:

(f) the proposed surplus residence has been built and occupied for not less than ten (10) years, at the time of the application for severance;

(g) the application for severance of the surplus residence must occur within two (2) years of the date that the lands were acquired as part of a farm consolidation;

162Here, it is conceded by the Appellant that the existing residence has not been occupied for 10 years and an application has not been made to sever the lot within two years of farm consolidation. The request has been made to allow some flexibility in the application of the rules and the Appellant submits that the only impact will be lines on a map and that there has been no evidence of adverse environmental impact that can be attributed to the proposed severance.

163However, the Hearing Officers find that the intent of s. 2.4.22 of the NEP and s. 66(3)(g) of the Regional OP is not to ensure that no environmental harm will occur but, rather, to provide a minimal window within which severances can occur with the intent being to protect the integrity of agricultural lands and to minimize fragmentation of such lands. The Hearing Officers accept the evidence of Mr. Baran and Mr. Nethery that there are many properties in the NEP area and in the Region where a dwelling could be constructed and then severance applied for after the fact in an “end run” around the policies contained in the NEP and the Regional OP, even if this was not the Appellant’s intent. The Hearing Officers find that the NEP and the Regional OP policies at issue on this appeal are aimed at minimizing the potential for fragmentation of agricultural lands that could result if approvals of severances like that sought in the Appellant’s Application are approved. In reading the NEP as a whole, and considering the objectives of the NEP set out in s. 8 of the NEPDA, the Hearing Officers find that the intent of the NEP goes beyond ensuring environmental protection but also includes protection of various aspects of the Escarpment, including maintaining and enhancing the open landscape character of the area which would be impacted if agricultural fragmentation were to occur. As agencies indicated in commenting on the Regional OP and the NEP APO lot policies when they were initially drafted, the major concern was to limit the proliferation of residence-only lots in agricultural areas.

164The parties in their evidence and submissions variously referred to a development permit granted by the NEC in relation to the Cedar Springs Winery. In reviewing the Cedar Springs Permit, the Hearing Officers find that the situation in that instance was much different than the Application before them on this appeal. There, the application was to allow a severance of an existing original dwelling that would be rendered surplus if a consolidation were to occur. The NEC permitted the severance prior to consolidation, thereby flexibly applying the two-year rule to allow severance before an agreement of purchase and sale was finalized. The Hearing Officers find that situation to be in keeping with the intent of the NEP and s. 2.4.22 to ensure that severance occurs fairly coincident with, and be a vehicle to, promote farm consolidation. The Cedar Springs situation was one where flexible application of the two-year rule was reasonable in that the two-year rule could have been met but for the issue of the timing of a pending consolidation. Further, the severance in that case assisted with the process of consolidation, which was contingent on the approval of a severance.

165The Hearing Officers find that the development criteria in Part 2 of the NEP, in particular the timing requirements of s. 2.4.22(f) and (g), have not been met by the Application. Furthermore, the Hearing Officers find that the Application does not conform to the timing policies contained in the Regional OP. This is not a situation, similar to Cedar Springs, where compliance will become possible. Similarly, the Hearing Officers find that the 10-year and two-year timing requirements are clear and unambiguous requirements which loosened previously more restrictive policy and which should be capable of being met on an application to sever in the ERA designation given the important policy objectives these criteria are intended to achieve as set out above.

166In conclusion therefore, the Hearing Officers find that the Application does not accord with the policies of the NEP, is not consistent with the PPS and does not conform to the Regional OP. The Hearing Officers find that the residence currently located on the Subject Property has not been rendered surplus as a result of a farm consolidation and further, even if it could be considered surplus, the Application was not made in accordance with the timing requirements for a severance contained in Part 2 of the NEP or s. 66(3) of the Regional OP.

167Based on the foregoing, the Hearing Officers find that there was nothing incorrect in the NEC’s decision to refuse to conditionally approve the proposed development in the particular circumstances of this case.

DECISION

168The Hearing Officers have found that the proposal to sever, from a parent lot with an area of 41.72 ha, a new 0.83 ha lot that would contain an existing two-storey single dwelling, and to retain the remnant parcel as an Agricultural Purposes Only lot, located at Part Lots 19 & 20, Concession 2, City of Burlington, Regional Municipality of Halton, is not a Permitted Use, and it does not accord with relevant NEP Development Criteria and Objectives, the PPS or the Regional OP. Therefore, the Hearing Officers conclude that the decision of the NEC dated March 23, 2018, to refuse to grant a conditional approval for Development Permit Application H/R/2015-2016/342, was correct and should not be changed. The NEC’s decision is therefore confirmed pursuant to s. 25(12) of the NEPDA. The appeal is dismissed.

Appeal Dismissed

NEC Decision Confirmed

“Marlene Cashin”

MARLENE CASHIN HEARING OFFICER

“Justin Duncan”

JUSTIN DUNCAN HEARING OFFICER

Appendix 1 – NEC Notice of Decision refusing Development Permit Application No. H/R/2015-2016/342

Appendix 2 – Relevant Provisions of the Niagara Escarpment Plan, Provincial Policy Statement and Region of Halton Official Plan

If there is an attachment referred to in this document, please visit www.elto.gov.on.ca to view the attachment in PDF format.

Niagara Escarpment Hearing Office A constituent tribunal of Environment and Land Tribunals Ontario Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248