Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

CORRECTION NOTICE

OLT CASE NO.:

OLT-22-002571

(Formerly) DC210001

DECISION ISSUE DATE:

August 10, 2022

CORRECTION NOTICE ISSUE DATE:

August 16, 2022

RE: Alphabet Self Storage Victoria Inc. v. Hamilton (City)

Correction to: Appearances Section – counsel representing the municipality

Originally:

Corrected to:

City of Hamilton

Patrick MacDonald

City of Hamilton

Michael Kovacevic

“Euken Lui”

EUKEN LUI

ACTING REGISTRAR

Ontario Land Tribunal

Website: olt.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248

The Conservation Review Board, the Environmental Review Tribunal, the Local Planning Appeal Tribunal and the Mining and Lands Tribunal are amalgamated and continued as the Ontario Land Tribunal (“Tribunal”). Any reference to the preceding tribunals or the former Ontario Municipal Board is deemed to be a reference to the Tribunal.

Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

ISSUE DATE:

August 10, 2022

CASE NO(S).:

OLT-22-002571

(Formerly) DC210001

PROCEEDING COMMENCED UNDER subsection 22(1) of the Development Charges Act, 1997, S.O. 1997, c. 27, as amended

Appellant:

Alphabet Self Storage Victoria Inc.

Subject:

Development Charges By-law No. 19-142

Municipality:

City of Hamilton

OLT Case No.:

OLT-22-002571

Legacy Case No.:

DC210001

OLT Lead Case No.:

OLT-22-002571

Legacy Lead Case No.:

DC210001

OLT Case Name:

Alphabet Self Storage Victoria Inc. v. Hamilton (City)

Heard:

In writing

APPEARANCES:

Parties

Counsel

City of Hamilton

Patrick MacDonald

Alphabet Self Storage Victoria Inc.

Bruce Engell

Chantal deSereville

DECISION DELIVERED BY R.G.M. MAKUCH AND ORDER OF THE TRIBUNAL

BACKGROUND

1This is an appeal pursuant to s. 22(1) of the Development Charges Act (“DCA”), by Alphabet Self-Storage Victoria Inc. (“Appellant”) against the City of Hamilton’s (“City”) Audit, Financial Administration Committee (“AFA”) decision, which upheld the City’s decision to impose a development charge (“DC”) in the amount of $924,705.00 for the development of the property known municipally as 391 Victoria Avenue as a self-storage facility (“Development”). The City in its calculation of the DC owing for the Development, interpreted self-storage facilities as a non-industrial development under the in-force 2019 Development Charge By-law (“DCBL”) and was therefore ineligible for the City’s industrial DC rate. (As explained below, the 2019 Development Charge By-law is the Development Charge By-law applicable to the Development based on the timing of the Building Permit application and for the remainder of this Decision, “2019 DC By-law” and “DCBL” may be used interchangeably.)

2The parties agree that if the City had applied the industrial rate to the Development, a credit available under the DCBL would have entirely off-set the DCs owing for the Development.

3In July 2017, the Appellant inquired with the City as to whether it would incur any DCs for the Development. In response, representatives of the City informed the Appellant that because the proposed self-storage facility is considered an “Industrial Development” under the City’s then-in-force 2014 DCBL, there would be no development charges owing for the Development.

4On November 20, 2018, counsel for the Appellant wrote to the City describing the Appellant’s proposed development of the property and inquiring about the need to pay DCs, amongst other things. On December 3, 2018, City staff confirmed no DCs would be triggered. This communication was accurate at the time it was being provided as DC By-law No. 14-153 (“2014 DC By-law”), which was still in force, provided self-storage facilities the reduced rate applicable to industrial developments.

5The City enacted DC By-law No. 19-142 (“2019 DC By-law”) on June 12, 2019, which among other things, amended the definition of Industrial Development by removing the reference to “mini-storage”. The re-worded definition of “Industrial Development” in the 2019 DC By-law still expressly includes a building used for “storing” something and a “warehouse”. Like the 2014 DC By-law, the definition in the 2019 DC By-law similarly clarifies that the express inclusion of “warehouse” in the definition does not restrict the generality of the definition as a building used for storing something.

6The City’s 2014 DC By-law defined “Industrial Development” to include: “a building or structure used, designed or intended for use for, or in connection with, (i) manufacturing, producing, processing, storing or distributing something”.

7In respect of the calculation of the DC for the Appellant’s Development, the following facts are not in dispute:

• The applicable Building Permit is Permit 19-136210.

• The Building Permit was applied for on July 23, 2019 and was issued on November 15, 2019.

• The applicable Development Charge By-law is the 2019 DC By-law.

• The development at 391 Victoria Avenue North is within the City’s Combined Sewer System.

• At both July 23, 2019 and November 15, 2019, the applicable DC rate per industrial square foot in the Combined Sewer System per the 2019 DC By-law is $10.99 per square foot.

• At both July 23, 2019 and November 15, 2019, the applicable DC rate per non-industrial square foot in the Combined Sewer System per the 2019 DC By-law is $18.02 per square foot.

• The amount of square feet being converted from manufacturing to self-storage is 143,418 square feet.

• In addition, there was a net demolition of 7,600 square feet of manufacturing gross floor area (“GFA”) of the same building in the 5 years preceding the issuance of Building Permit 19-136210.

• There is only this one building on site at 391 Victoria Avenue North.

• The facility was used as an industrial manufacturing use, namely a canning factory, and was converted to self-storage without enlargement.

8The Tribunal, at the Case Management Conference held on November 19, 2021, set down the matter to be heard by video conference on January 31, 2022. Since then, the parties have agreed that the matter could be decided by the Tribunal on the basis of the written submissions filed.

9The materials before the Tribunal upon which it relies for the hearing of the appeal consists of:

• Agreed Statement of Facts dated November 2021;

• Joint Book of Documents dated November 2021;

• Appellant’s Book of Authorities dated November 2021;

• Appellant’s Written Submissions dated November 15, 2021;

• City’s Written Argument dated December 10, 2021; and

• Appellant’s Reply dated December 20, 2021.

ISSUE

10The sole issue to be determined by the Tribunal is whether a self-storage facility is an “Industrial Development” within the meaning of the 2019 DC By-law.

THE APPELLANT’S CASE

11The Appellant argues that the City’s interpretation of self-storage facilities as a non-industrial development and therefore ineligible for the City’s industrial DC rate is wrong because the DCBL defines “Industrial Development” as a building used for “storing” something and that storage uses would obviously include uses such as warehousing and mini-storage facilities. The 2014 DC By-law definition provided the following to that general language:

Without limiting the generality of the foregoing, industrial development also includes a building used as a commercial greenhouse which is not an agricultural use as defined herein, a warehouse, and a mini-storage facility.

12The Appellant maintains that the evidence shows that in or about 2017, the Appellant began the process of acquiring the Property, which is designated Industrial under the Official Plan and zoned M6 Light Industrial under the City’s in-force zoning by-law. The Appellant’s plan was to refit the Property as a self-storage facility (Development), since self-storage facilities were a permitted use in the M6 Light Industrial Zone.

13On July 23, 2019, the Appellant applied to the City for a building permit for the Development. On October 24, 2019, the City notified the Appellant that it was required to pay $924,705.00 in DCs to obtain the building permit. The Appellant paid the DCs under protest and the City issued the building permit. On January 21, 2020, the Appellant filed a complaint to the City pursuant s. 20 of the DCA (“DC Complaint”).

14The 2019 DC By-law defines “Industrial Development” as:

…a building used, designed or intended for use for, or in connection with,

(i) manufacturing, producing, processing, storing or distributing something;

(ii) research or development in connection with manufacturing, producing or processing something;

(iii) retail sales by a manufacturer, producer or processor of something they manufactured, produced or processed, if the retail sales are at the site which the manufacturing, production or processing takes place;

(iv) office, administrative, clerical, management, consulting, advisory or training purposes, if they are carried out with respect manufacturing, producing, processing, storage or distributing of something, and, in or attached to the Building used for that manufacturing, producing or processing, storage or distribution; and

(v) any use inside the Urban Area that would, except for its location inside the Urban Area Boundary, be considered an Agricultural Use under this By-law.

Without limiting the generality of the foregoing, for the purpose of this Bylaw, Industrial Development also includes a warehouse, a Hanger, an Artist Studio and a Production Studio but not a Communications Establishment.

15As buildings used for “storing” something, self-storage facilities clearly fall within this definition according to the Appellant.

16The Appellant argues that under the City’s 2019 DC By-law, both a credit and the industrial rate apply such that if the City had recognized that self-storage meets the definition of Industrial Development in the DC By-law, no DCs would have been owing for the Development. While the City correctly applied the credit to the Development, it failed to apply the industrial rate, deciding that self-storage facilities are not an “Industrial Development” under the City’s 2019 DC By-law.

17The Appellant places substantial reliance on the City’s amendment of the definition of “warehouse” in its zoning by-law in 2018, which expressly includes a “mini-storage facility”. The definition of “Warehouse” in Zoning By-law No. 05-200 now reads as follows:

“Warehouse”

Shall mean the use of building or structure, or part thereof, for the bulk storage or distribution of goods to industrial, commercial or institutional business users or other wholesalers, but shall not include the retailing of goods to the general public. A Warehouse may include a Mini Storage Facility but shall not include a Waste Management Facility, Salvage Yard or Towing Establishment.

18Furthermore, the definition of “Industrial Development” includes a “warehouse” and while “warehouse” is not defined in the DCBL, the City’s Zoning By-law makes it clear that a “warehouse” includes a “mini-storage” facility and the definition of “Industrial Development” in the DCBL provides that the generality of the definition is not to be restricted by the express inclusion of “warehouse” as an example of an industrial use under that by-law. Self-storage is also a permitted use in the industrial zone under the City’s Zoning By-law. As the Property is zoned industrial, self-storage facilities are permitted on the Property as an industrial use.

19The Appellant further argues that there is no principled justification for the City’s position that self-storage is not an industrial development, and the City’s interpretation is simply not supported by the wording of the Zoning By-law.

20With respect to the sub-committee’s recommendation to exclude self-storage from the industrial rate in February 2019, this recommendation came near the outset of the process for developing a new DC By-law and occurred prior to the preparation of the Background Study and all of the public meeting processes undertaken by the City. The Appellant alleges that following the completion of that process, there is no evidence that Council in fact implemented that recommendation when it passed the 2019 DC By-law on June 12, 2019. There is no reference to this recommendation in the by-law, nor is there any evidence that the recommendation resurfaced in any of the City’s documents after February 2019.

21With respect to the North American Industry Classification System (“NAICS”), the Appellant argues that there is no reference to the NAICS in the 2019 DC by-law. The only reference to the NAICS in any of the City’s documents is in a footnote on a Schedule to the 2019 DC Background Study. Moreover, there is no industrial category in the NAICS, nor is there any obvious grouping of an industrial set of industries in that document.

22Counsel for the Appellant cites jurisprudence on the law of statutory interpretation and suggests that it is trite law that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the lawmaker. According to the Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 SCR 27 (“Rizzo”) at para. 21, and Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (“Vavilov”), at paras. 118 and 121, legislative meaning can be understood only by reading the language chosen by the legislature in light of the purpose of the provision and the entire relevant context.

23According to the Appellant, the foregoing approach to statutory interpretation includes several interpretive presumptions, including the “presumption of consistent expression”, which presumes that similar words used across statutes by the same government have the same meaning, unless explicitly stated otherwise.

24The Appellant also maintains that it is also presumed that each word in a statute has meaning, and that if an item is excluded from a provision where one would expect it to be included, then the legislature intended to exclude that item. According to the Ontario Court of Appeal in Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc., 2019 ONCA 508 at paras. 64 and 65, this presumption of “implied exclusion” arises where an item is not listed despite an expectation of express mention generated by the context, wording, and purpose of the statute.

25The case law is clear according to counsel for the Appellant that statements of lawmakers external to the statute, such as records of debates or discussions, are not determinative of legislative meaning, as legislative meaning can be discerned only from a holistic assessment of the wording of the statute in its entire relevant context. In fact, the Supreme Court of Canada has found that a lawmaker’s apparent intent will not prevail if the text of the statute does not support the lawmaker’s desired interpretation. According to the Supreme Court, statutory interpretation is concerned with discovering not only the intent that the lawmaker was pursuing, but also the intent the lawmaker ultimately expressed in the text of the statute. (Rizzo, Vavilov and R. v. Daoust, 2004 SCC 6 (“Daoust”) at para. 44).

26Similarly, the Superior Court of Justice in Municipal Parking Corporation v. Toronto (City), 2009 CanLII 65385 (ON SC) (“Municipal Parking Corporation”) at para. 33 held that the intention of municipal council is expressed by what it enacts, not by the expressions of individual councillors before or during debate on the by-law, whether within the course of a council meeting or elsewhere.

27Moreover, legislative interpretation is not a factual matter to be decided by the opinions of municipal staff or council. Statutory interpretation is a question of law to be decided by the administrative adjudicator alone. The Ontario Court of Appeal in Niagara River Coalition v. Niagara-on-the-Lake (Town), 2010 ONCA 173 (“Niagara River Coalition”) at paras. 43 and 44 was clear that where the interpretation of a document is a question of law, the factual opinions of witnesses on the interpretation of that document are irrelevant to the adjudicator’s determination. The Court in Niagara River Coalition emphasized that when the drafters of a legal document fail in their purpose, others cannot subsequently fill in the gaps with factual opinions.

28Previous versions of legislation can constitute part of the relevant context for statutory interpretation; however, the Supreme Court of Canada has cautioned against using the history of a clearly drafted statute as a basis for disregarding its meaning (Daoust, supra).

29The Appellant maintains that an assessment of the wording of the by-law in its entire relevant context, including the planning scheme of the municipality and the purpose of the DCA, demonstrates that self-storage is an “Industrial Development” within the meaning of the 2019 DC By-law because self-storage facilities fit squarely within the clear wording of the definition. The DC By-law defines “Industrial Development” as:

..a building used, designed or intended for use for, or in connection with,

(i) manufacturing, producing, processing, storing or distributing something;

(ii) research or development in connection with manufacturing, producing or processing something;

(iii) retail sales by a manufacturer, producer or processor of something they manufactured, produced or processed, if the retail sales are at the site which the manufacturing, production or processing takes place;

(iv) office, administrative, clerical, management, consulting, advisory or training purposes, if they are carried out with respect manufacturing, producing, processing, storage or distributing of something, and, in or attached to the Building used for that manufacturing, producing or processing, storage or distribution; and

(v) any use inside the Urban Area that would, except for its location inside the Urban Area Boundary, be considered an Agricultural Use under this By-law.

Without limiting the generality of the foregoing, for the purpose of this Bylaw, Industrial Development also includes a warehouse, a Hanger, an Artist Studio and a Production Studio but not a Communications Establishment.

30In addition, the definition explicitly includes a “warehouse”, which, by any common definition, includes self-storage facilities.

31Furthermore, while the 2019 DC By-law does not define “warehouse”, in 2018, approximately one year prior to the enactment of the 2019 DC By-law, the City amended the definition of “warehouse” in its Zoning By-law to include a “mini-storage facility”. The definition of “warehouse” in the Zoning By-law now reads as follows:

“Warehouse”

Shall mean the use of building or structure, or part thereof, for the bulk storage or distribution of goods to industrial, commercial or institutional business users or other wholesalers, but shall not include the retailing of goods to the general public. A Warehouse may include a Mini Storage Facility but shall not include a Waste Management Facility, Salvage Yard or Towing Establishment.

32The presumption of consistent expression dictates that when the City uses “warehouse” in the DC By-law, without definition, it is presumed to mean the same as when it uses “warehouse” in its Zoning By-law, particularly when applied to the same property. There is nothing in the DC By-law to indicate a different intent. Neither the Zoning By-law nor the DC By-law define mini-storage facility or distinguish between mini-storage facilities and other forms of warehouses. Likewise, nowhere in the DC By-law does it say that mini-storage facilities do not fall within the definition of Industrial Development. Given the presumption of consistent expression, there was no need for the DC By-law to expressly list self-storage as an industrial development, because there is a presumption that the DC By-law’s definition of warehouse is the same as that contained in the zoning by-law.

33In addition, self-storage, unlike “Communications Establishment”, is not listed as a use explicitly excluded from the definition. Evidently, the definition expressly lists any excluded uses that would otherwise fall within the definition. Given the clear wording of the definition, the exclusion of self-storage facilities from the definition would require explicit wording to that effect.

34The purpose and scheme of a DC by-law under the DCA also informs its proper interpretation according to the Appellant. Pursuant to s. 2 the DCA, the purpose of a DC By-law is to raise revenue for the growth-related capital costs resulting from development. There is no evidence that self-storage facilities result in different capital costs than other types of warehouses. In fact, the Property is zoned industrial under the City’s zoning by-law, and self-storage, like other warehouses, is a permitted use in the industrial zone. There is no principled reason to treat self-storage facilities any differently in the DC by-law.

35Neither the February 19, 2019 recommendation of the City’s Development Charges Stakeholder sub-committee, nor the change in the By-law’s wording from 2014 to 2019, have the effect of excluding self-storage from the definition of “Industrial Development” in the 2019 DC By-law according to the Appellant.

36The Appellant maintains that the wording of the By-law simply does not give effect to the sub-committee’s recommendation. The sub-committee’s recommendation, combined with the broadness of the definition of “Industrial Development”, generates an expectation that had the drafters of the By-law intended to give effect to that recommendation, they would have done so explicitly, like they did with “Communications Establishment”. While the sub-committee may have desired to exclude self-storage from the definition, the wording of the By-law does not accomplish this exclusion. Council ultimately speaks through its by-laws, and there is no evidence in the By-law of any exclusion of self-storage from the definition of “Industrial Development”.

37Similarly, the change in language from the 2014 to the 2019 DC By-law does not exclude self-storage from the definition of Industrial Development. Prior to the enactment of the 2019 DC By-law, the City added “mini-storage” to the definition of “warehouse” in its Zoning By-law. Since the definition of “Industrial Development” in the 2019 DC By-law includes a “warehouse”, and given the presumption of consistent expression, self-storage already fit squarely within the definition of “Industrial Development”, so there was no need for the drafters of the 2019 DC By-law to expressly list self-storage in the definition.

38With respect to the City’s position that the classification of “self-storage” in the NAICS is relevant to the definition of “Industrial Development” in the City’s 2019 DC By-law, the Appellant argues that there is no reference to the NAICS in the DCBL. The only reference to the NAICS in any of the relevant documents is in a footnote at Schedule 11 of the DC Background Study. Schedule 11 of the DC Background Study is used only to project the total expected growth of the City over the forecast time period. It does not address anything else.

39“Self-storage” is found within code 53 of the NAICS. While Schedule 11 to the DC Background Study places code 53 within a non-industrial category, this categorization by the authors of the Background Study is entirely arbitrary: there is no “industrial” category within the NAICS codes, nor is there any obvious grouping of an industrial set of codes. Moreover, code 53 in the NAICS includes uses which are obviously industrial uses, such as:

a) 532410 Construction, transportation, mining, and forestry machinery and equipment rental and leasing; and,

b) 532490 Other commercial and industrial machinery and equipment rental and leasing.

Clearly, a property which is used to store and maintain construction cranes and all their associated parts is an industrial use yet it falls within code 53 of NAICS, just as self-storage uses do.

40There is also no evidence that the City ever used the arbitrary categories in Schedule 11 to the DC Background Study to determine the DC rates for industrial and non-industrial development, nor is there any evidence that the City’s rates for industrial and non-industrial development would be any different if the authors of the Background Study had classified code 53 as “industrial” in Schedule 11. Notably, the Background Study does not propose or calculate different DC rates for industrial and non-industrial development.

41The Appellant argues that the tenuous connection between the NAICS codes and the DC rates cannot override the clear wording of the DC By-law and cannot be used to impose a meaning that is not supported by the words of the by-law. The NAICS codes have no relevance to the wording of the By-law, and it would be both unfair and non-sensical to require readers of the By-law to comb through an unrelated document to discern the By-law’s true meaning.

42Accordingly, the Appellant seeks an order of the Tribunal:

1. that self-storage facilities are an “Industrial Development” within the meaning of the City’s DCBL No. 19-142; and

2. that the City refund the $924,705.00 to the Appellant.

THE CITY’S CASE

43The City maintains that in calculating the DCs owing for the Development, it interpreted self-storage facilities as a non-industrial development ineligible for the City’s industrial DC rate and that contrary to the submissions of the Appellant, the City did not err in not applying the industrial DC rate to the Development.

44The City argues that the basis of the Appellant's case, which is that the categorization of uses in the City’s Zoning By-law No. 05-200 determines the categorization of uses in the City’s DCBL No. 19-142 is flawed. Under the DCA, the basis for the content of a DC by-law is a DC background study. There is nothing in the DCA that creates any relationship between a DCBL and a zoning by-law. The preparation of a DC background study and DCBL go hand-in-hand, and in terms of process and legislative requirements are entirely separate from the preparation of a zoning by-law.

45The most relevant document for guidance for interpretation of a DCBL is the DC background study that forms the basis of the DCBL according to the City and a zoning by-law is irrelevant to the interpretation of a DCBL. There is no legislative basis for connecting the two. The DC Background Study that applied to DCBL No. 19-142 did not categorize self-storage facilities as an industrial use, it categorized self-storage uses as a commercial use.

46During the 2019 DC review process, changes were recommended to the policies as it related to the discretionary discount for industrial developments, as well as other types of developments such as production studios and self-storage facilities. During this review process, it was determined by the City that the prior 2014 policy was to be refined to remove the discretionary discount for self-storage facilities.

47On February. 27, 2019 Council, pursuant to recommendations from the DC Stakeholders sub-committee, Minutes and recommendations from the AFA conveyed its intended treatment of self-storage for the 2019 DC By-law and directed staff to not provide the industrial rate for self-storage facilities or hotels and that the 2019 DCBL provide the industrial rate for film, production and artists’ studios.

48The Draft DC Background Study prepared by Watson & Associates Economists Ltd. and draft 2019 DC By-law were released to the public on March 13, 2019.

49On April 18, 2019, the AFA held the statutory public meeting required by s. 12 of the DCA in order to receive comments on the proposed 2019 DC By-law. No comments were received from the Appellant.

50On June 12, 2019, the 2019 DC By-law came into effect after full compliance with the legislated public process according to the City.

51The DC Background Study which was completed in accordance with s. 10 of the DCA in order for Council to pass the 2019 DCBL is a study that consolidates the March 13, 2019 Background Study, a May 15, 2019 Addendum 1 Report, and a June 10, 2019 Addendum 2 Report.

52The 2019 DC By-law creates two types of DCs - residential and non-residential. The non-residential DCs were calculated based on a total non-residential calculation as opposed to being calculated on a differentiated rate for various types of non-residential developments (e.g., industrial versus commercial versus institutional). In other words, the 2019 DC By-law is based on Residential and Non-Residential rates.

53On July 23, 2019, the City received Building Permit application 19-136210 to convert a portion of the existing industrial building to a self-storage facility. Accordingly, the 2019 DC By-law applied to the calculation of DCs and the application of credits.

54On November 15, 2019, the City issued Building Permit 19-136210 after DCs were paid in the amount of $924,705.00.

55The Appellant has not raised any objection to the square footage used in the calculations or to the calculation of the DC. Simply put, their complaint is that their use of the Property has been incorrectly characterized. In other words, the City did not categorize their use of self-storage as an industrial development and as a result, they did not receive the credit provided for an industrial redevelopment/conversion.

56The 2019 DC By-law provides both for a demolition credit in s. 30 and a redevelopment/conversion credit in s. 31.

57Both types of credits were calculated for the Appellant and applied against the DCs that were calculated by staff. The DCs calculated by staff used the non-residential rate and did not apply the discount for industrial development. If the discount for industrial development had been applied, then the amount of DCs payable by the Appellant would be zero.

58As required by the DCA, the 2019 DC Background Study included estimates of the increased need for municipal services arising from different types of development.

59Schedule 11 of the 2019 DC Background Study contained estimates of the employment-to-population ratio in various employment sectors for the years 2006 to 2016. Schedule 11 grouped the various employment sectors by their corresponding code in the NAICS.

60Schedules 9a to 9c of the 2019 DC Background Study categorized the City’s employment growth forecast for the years 2019 to 2031 utilizing the same categories as Schedule 11.

61Chapter 6 of the 2019 DC Background Study employed the data from Schedule 9c to estimate the increased need for services arising from Residential and Non-Residential development.

62The 2019 DC Background Study did not distinguish the need for services arising from Industrial and Non-Industrial development, but it is possible to determine this from the information in the study.

63The 2019 DC Background Study did not propose or calculate different DC rates for Industrial and Non-Industrial development.

64In Rizzo, supra, the Supreme Court of Canada held that statutory interpretation cannot be based on the wording of the legislation alone and quoted Professor Elmer Driedger in his book “The Construction of Statutes” (2nd ed. 1983) at para. 21:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and the grammatical an ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of Parliament.

65At paras. 22 and 23, the Supreme Court further stated:

I also rely upon s. 10 of the Interpretation Act, R.S.O. 1980, c. 219, which provides that every Act “shall be deemed to be remedial” and directs that every Act shall “receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit”. Although the Court of Appeal looked to the plain meaning of the specific provisions in question in the present case, with respect, I believe that the court did not pay sufficient attention to the scheme of the ESA, its object or the intention of the legislature; nor was the context of the words in issue appropriately recognized.

66The City submits the scheme and context of the 2019 DC By-law is the DCA, its requirements for the passing of the 2019 DC By-law and Council’s actions, directions and decisions in respect of the passing of the 2019 DCBL.

67The City also submits that the Appellant’s have misapplied the Municipal Parking Corporation case to this matter. The City maintains that Council’s direction to staff on February 27, 2019 was to not provide the industrial rate for self-storage facilities. Council’s direction is a clear and unequivocal expression of the intent of Council. It is not a debate on a matter nor the view of a single councillor; it is the result of the debate as a whole. It is the direction of Council to staff regarding the 2019 DC By-law and accordingly should be accorded more weight than that of legislative or by-law debate and is therefore distinguishable from Justice Aston decision in Municipal Parking Corporation, which applies to the expressions of individual councillors before and after debate on a by-law not in respect of the expressions of Council as a whole. To suggest that Council’s expression or direction of its intent on February 27, 2019 is irrelevant, ignores the scheme of the DCA and the principles of interpretation set out by the Supreme Court of Canada in Rizzo. Further, if the Tribunal were to ignore Council’s express intent, it would be substituting its views in place of Council’s, which is what Justice Aston said is not for the Court to decide.

68DCs are a form of taxation and any exemption from the obligation to pay taxes must be expressly provided by statute (University Health Network v. Ontario (Minister of Finance), 2001 CanLII 8618 (ON CA) at paras. 31 to 33 and 36).

69When a definition is so broad that it results in ambiguity the ordinary meaning may not be helpful and interpretation of the by-law, the Tribunal must look to the purpose and intent of the by-law. In Airport Self Storage Ltd. v. Durham (Regional Municipality) 2004 CarswellOnt 5552 (“Airport Self Storage”), the Ontario Municipal Board (“OMB”) (the predecessor of this Tribunal) stated:

This Board finds that the initial statement in the definition of retail uses in By-law 50-99, is so broad as to require judgment. Applying judgement can result, in some circumstances, in ambiguity of meaning. Thus, the ordinary meaning of these words is not helpful. This is why, the Board presumes, there was a need to include a list of uses as clarification. The list included in the definition is a recognition that there may be some uses for which there would be a debate on whether they are properly considered “retail uses” or not...

The Board must therefore look to the purpose and intent of the enactment. The Board refers to the statement cited by Dredger and Sullivan on the ‘Construction of Statutes’, from Lord Tindal in the Sussex Peerage Case:

If the words of the statue are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do, in such case, best declare the intention of the lawgiver. But if any doubt arises from the terms employed by the legislature, it has always been held a safe means of collecting the intention, to call in aid the ground and cause of making the statue, and to have recourse to the preamble... and “the mischiefs which the Act intended to redress”…

70The City argues that the Board’s decision in Airport Self Storage is consistent with the Supreme Court’s decision in Rizzo para. 21 wherein the Court held:

Today there is only one principle or approach, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense with the scheme of the Act, the object of the Act, and the intention of Parliament.

71The DCA by its language requires that there be a nexus between a DCBL and the DC background study which supports it. The DCs imposed by a DC by-law must be supported by the DC background study underlying the DC by-law according to the City.

72The City further argues that where there is ambiguity in a DCBL, the Tribunal must look to the DC background study underlying the DCBL to resolve the ambiguity. There should be a general correspondence between the calculations and the ultimate charge accorded any particular use.

73The purpose of the DCA and the 2019 DCBL is to permit municipalities to impose development charges against land to pay for increased capital costs required because of increased needs for services arising from development of the area to which the by-law applies.

74The purpose of the DCA and the 2019 DC By-law are not to implement, regulate or create planning policy. The planning scheme of a municipality is governed by a separate legislative and policy scheme including: the Planning Act, the Provincial Policy Statement, other Provincial Plans, and a municipality’s official plan.

75The DCA provides for the entire statutory context for the passing of a DC by-law and regard to other legislation and by-law is unnecessary.

76The City submits that there is no provision in the DCA to have regard, conform to, or be consistent with language in a municipality’s zoning by-law or any other planning instruments regarding the definition or classification of uses or the interpretation of a DC by-law. The City agrees that the DCA does require that DCs be charged for development that involve various planning approvals.

77The DCA does not provide, in any of the matters that must be considered or done prior to the enactment of a DCBL, that the planning scheme of the municipality be considered. Clearly, the passage of a DC by-law is not linked to the adoption an official plan or zoning by-law.

ANALYSIS AND FINDINGS

78The Tribunal has carefully considered the evidence before it, as well as the submissions of counsel and finds that the appeal should be dismissed for the reasons that follow.

79The Tribunal agrees with the City’s argument that an examination of the wording of the 2019 DC By-law in its entire relevant context, including the purpose of the DCA, the 2019 DC Background Study and the 2019 DC By-law, demonstrates that self-storage in not an “Industrial Development” within the meaning of the 2019 DC By-law.

80The 2019 DC By-law creates two types of DCs - residential and non-residential. It does not create an industrial DC, but rather provides for a reduced rate or partial exemption for “Industrial Development”.

81“Industrial Development” is defined in subsection 1(oo) of the 2019 DCBL and does not expressly include self-storage or mini-storage as a form of “Industrial Development”. It is apparent that the main purpose for this definition is to provide for a reduction or partial exemption of the non-residential DCs.

82The 2014 DC By-law explicitly identified self-storage facilities as a use that will pay the reduced rate that is applicable to industrial developments. The 2014 DC By-law identified self-storage facilities separately from “warehouse” or “storing” uses. In the same sentence, hotels were also identified in the 2014 DC By-law as being an identified use that will pay the reduced rate that is applicable to industrial developments.

83The 2019 DCBL does not, however, explicitly list self-storage facilities as being included within the definition of “Industrial Development”.

84A comparison of the definition of “Industrial Development” in both the 2014 DCBL and the 2019 DCBL shows that the definition is the same in both by-laws except for the inclusionary statement at the end of the definition. In the 2019 DC By-law, mini-storage is removed. Subsection 1(oo) reads as follows:

“Industrial Development” means a building or structure used, designed or intended for use for, or in connection with, …

Without limiting the generality of the foregoing, for the purpose of this Bylaw, Industrial Development also includes a warehouse, a Hangar, an Artist Studio and a Production Studio but not a Communications Establishment.”

85The Tribunal finds that the removal of the mini-storage and the inclusion of “Artist Studio and a Production Studio, but not a Communications Establishment”, clearly illustrates the implementation of Council’s intent expressed in its February 27, 2019 direction: that the 2019 DCBL not provide the industrial rate for self-storage facilities or hotels; and, that it provide the industrial rate for film, production and artists’ studios.

86In both the 2014 and 2019 DCBLs, mini-storage and self-storage are the same uses and by removing mini-storage from the list of identified uses that pay the reduced industrial rate, the need to explicitly identify the uses in the DCBL was no longer needed because these were no longer receiving a discretionary reduction/partial exemption.

87Likewise, Council’s direction that the 2019 DCBL identify film, production and artists’ studios as identified uses that will pay the reduced industrial rate required these uses to be explicitly identified in the 2019 DCBL because these uses do not fall under the industrial category in Schedule 11.

88It is clear to the Tribunal based on the materials before it that the City has consistently treated mini or self-storage as a use that requires explicit identification to be included within the definition of “Industrial Development”. If Council had intended that it fall within the definition of “Industrial Development” and “storing”, it would not have made a statement saying it was included.

89The excerpt of the Council Minutes for February 27, 2019 supports the City’s submission that because the 2019 DC By-law is a taxing by-law and the main purpose of the definition is to provide a reduction or exemption, there should be an express inclusion of self-storage uses within the definition of Industrial Development, given that the 2014 DC By-law contained an express inclusion of self-storage as being included within the definition of “Industrial Development”. On February 27, 2019, Council for the City directed staff to no longer provide the industrial rate for self-storage in the 2019 DC By-law. Furthermore, the DC Background Study does not consider self-storage to be an industrial use.

90Self-storage and hotels were identified in the 2014 DC By-law as being an identified use that will pay the reduced industrial rate because they are not industrial uses but were being provided the reduced rate in the 2014 DC By-law. Subsection 1(w) of the 2014 DC By-law states:

(w) “industrial development” means a building used, designed or intended for use for, or in connection with,

(i) manufacturing, producing, processing, storing or distributing something;

Without limiting the generality of the foregoing, for the purpose of this Bylaw, Industrial Development also includes a warehouse, a Hanger, an Artist Studio and a Production Studio but not a Communications Establishment.

91Section 10 of the DCA requires that before passing a development charge by-law, council for a municipality shall complete a development charge background study with the results of that study to form the basis for the content of a DCBL.

92The Tribunal agrees with the City’s submission that given the broad definition of “Industrial Development” in the 2019 DC By-law and the ambiguity associated therewith, the DC Background Study underlying the DCBL should be reviewed in order to resolve this ambiguity. There should be a general correspondence between the calculations and the ultimate charge accorded any particular use.

93The Tribunal notes that the 2019 DC Background Study non-residential growth forecast (Appendix A, Schedule 9a to 9c) is based on major industry sectors including industrial, commercial/population related and institutional uses which serve as input into the non-residential DC calculations. The major industry sector categories presented in Schedule 9 are based on aggregate 2-digit NAICS industry sectors provided through Statistics Canada, as summarized in Schedule 11. The main categories identified include:

1. Primary Industry Employment;

2. Industrial and Other Employment;

3. Population Related Employment; and

4. Institutional.

94It is also noted that the categorization of different types of development or uses in the 2019 DC By-law is based on the categorization found in the 2019 DC Background Study, which categorizes development through Schedule 11.

95The categorization of uses in Schedule 11 is based on the NAICS. There is no need to look outside the DC Background Study to assess how self-storage is categorized within the 2019 DC By-law.

96In Airport Self Storage, the OMB recognized the relevance of Statistics Canada Industrial Classifications including NAICS in the interpretation of DC by-laws but did not consider, nor apply, zoning by-law definitions.

97The evidence before the Tribunal is that NAICS is a comprehensive system encompassing all economic activities and has a hierarchical structure. In Schedule 11 of the 2019 DC Background Study, Transportation and Warehousing uses with NAICS Sector Codes 48 to 49 fall within the category which relates primarily industrial land supply and demand. However, Real Estate and Rental and Leasing uses with NAICS Sector Code 53 fall within the category which primarily relate to population growth within the City.

98Statistics Canada states that NAICS Sector 53 Real Estate and Rental and Leasing comprises:

establishments primarily engaged in renting, leasing or otherwise allowing the use of tangible or intangible assets. Establishments primarily engaged in managing real estate for others; selling, renting and/or buying of real estate for others; and appraising real estate, are also included.

99In the NAICS, self-storage is not listed within a general sector, it is found within subsector 531130 – Self-storage mini-warehouses which is part of Sector 53 - Real estate and rental and leasing.

100Sector 53 is further divided into the following subsectors: 53 - Real estate and rental and leasing, 531 - Real estate, 5311 - Lessors of real estate, 53113 - Self-storage mini-warehouses, and 531130 - Self-storage mini-warehouses.

101The NAICS describes subsector 531130 (Self-storage mini-warehouses) as follows:

This Canadian industry comprises establishments primarily engaged in renting or leasing space for self-storage. These establishments provide secure space (rooms, compartments, lockers, containers or outdoor space) where clients can store and retrieve their goods.

Illustrative example(s)

• mini-warehouse rental or leasing

• real estate investment trusts (REITs), operating self-storage and mini-warehouses

All examples

Exclusion(s)

• providing coin-operated locker services (See 812990 All other personal services)

• providing warehousing services that include the handling of client's goods (See 4931 Warehousing and storage)” (emphasis added)

102The Tribunal notes that warehousing uses are explicitly excluded and differentiated from self-storage.

103NAICS Sector 53 and therefore NAICS subsector 531130 - Self-storage mini-warehouses is captured within the commercial/population related major industry sector category, in accordance with Schedule 11 of Appendix A, and reflected in the commercial GFA forecast presented in Schedule 9 of the 2019 DC Background Study, and should be accordingly subject to full non-residential DC rate unless the 2019 DC By-law expressly provides otherwise, which it does not.

104Other types of storage, for example warehousing, are classified differently than self-storage in NAICS and treated differently in the 2019 DC By-law. Transportation and Warehousing Codes 48 to 49 describe the Transportation and Warehousing Sector.

105Nowhere within the NAICS Transportation and Warehousing Sector Codes 48 to 49 and the subsectors is self-storage identified. Under Code 4931, there is a list of storage and warehousing codes. Self-storage is not recognized by NAICS as within industrial warehouse and storage categories which makes sense when it is categorized in Code 53 - Real estate and rental and leasing.

106The Tribunal notes that all of the above reflects the nature of self-storage use. As a use, it is not related to an industry such as manufacturing, processing or production. Rather, self-storage leases space to others for storage of items not related to the industrial activities of the owner of the property or any industrial activity on the property. It is clear to the Tribunal that NAICS subsector 493110 - General Warehousing and Storage is the subsector which would apply to the reference in the 2019 DC By-law definition of “Industrial Development” to “storing or distributing something”.

107Furthermore, the NAICS describes subsector 493110 - General warehousing and storage as:

This Canadian industry comprises establishments primarily engaged in operating public and contract general merchandise warehousing and storage facilities. These establishments handle goods in containers, such as boxes, barrels and drums, using equipment such as forklifts, pallets and racks. They are not specialized in the handling of a particular type of good.

Illustrative example(s)bonded warehouse, general merchandise public storage (except self-storage)

All examples

Exclusions

• cold storage service (See 493120 Refrigerated warehousing and storage)

• farm product storage (See 493130 Farm product warehousing and storage)

• household goods storage (See 493190 Other warehousing and storage)

• warehousing, self-storage (See 531130 Self-storage mini-warehouses)”

It is noted that self-storage is explicitly excluded from General Warehousing and Storage use. It is not even found within the same main industry sector.

108The same exclusion is found in the category 493120 - Refrigerated warehousing and storage.

109It is evident to the Tribunal that there is a clear distinction in the NAICS between the industrial use of warehousing and storage and the commercial use of self-storage.

110This distinction is reflected in Schedule 11, Appendix A of the 2019 DC Background Study NAICS Sector Codes 48-49 and therefore all subsectors within that sector, such as NAICS 493110 - General Warehousing and Storage, are captured within the industrial land and supply category, and reflected in the industrial GFA forecast presented in Schedule 9 of the DC Background Study. In accordance with the definition of “Industrial Development”, which includes “warehouse” and “storing”, they are subject to a reduction or partial exemption non-residential DC rate unless the 2019 By-law expressly provides otherwise, which it does not.

111That distinction between warehousing and storage uses as industrial uses, versus self-storage as commercial use, is recognized in the 2019 DC Background Study and then in the 2019 DC By-law by not making an exception in the definition of “Industrial Development” to include self-storage as Industrial Development as was done in the 2014 DC By-law. It is the Tribunal’s view that the intent in the 2019 DC By-law to exclude self-storage from Industrial Development is clear, not only as a result of Council’s direction, but also within the 2019 DC Background Study that forms the basis of the 2019 DC By-law.

112It is noted that not all uses are individually identified and categorized within the 2014 and 2019 DC By-laws. For instance, the 2019 DC By-law does not individually identify self-storage use nor does it individually identify hotel use. The Tribunal is satisfied for the purpose of this Decision, that there is no need to individually identify every type of use since Schedule 11 categorizes all uses and where Council has chosen to provide discretionary reductions of the applicable DC rate, the uses are highlighted within the 2019 DC By-law.

113The evidence shows that Council’s intended treatment of self-storage for the 2019 DC By-law was provided through the direction to staff at Council’s meeting of February 27, 2019. That direction was to not provide the industrial rate for self-storage and the manner in which this direction was accomplished was by removing the inclusion of self-storage facilities from the definition of “Industrial Development”.

114The Tribunal agrees with the City’s submission that the DCA does not require that a DCBL have regard to, conform to, or be consistent with language in a municipality’s zoning by-law or any other planning instruments regarding the definition or classification of uses or the interpretation of a DCBL. The DCA does, however, provide in s. 2(2) that a municipality may impose DCs on development requiring the approval of planning instruments and/or approvals under the provisions of the Planning Act.

115The Tribunal notes from the evidence before it that the 2019 DC By-law contains its own definitions of uses and other terms which are independent of, do not refer to and are not in many cases consistent with, the Zoning By-law. The 2019 DC By-law does not define or treat uses in the same way as the Zoning By-law. For instance, “Agriculture” is defined in the Zoning By-law and “Agricultural Use” is also defined in the 2019 DC By-law. These definitions are different and contain different exclusions. “Place of Worship” is also defined differently in both by-laws with the 2019 DC By-law excluding elements found in the Zoning By-law definition. There are a number of uses that are defined in the Zoning By-law but not defined in the 2019 DC By-law.

116The Tribunal agrees with the City’s submission that the decision in Vavilov, supra, para. 117, regarding the statutory interpretation principle that the legislature is presumed to use language such that the same words have the same meaning both within a statute and across statutes, is of limited value to the matter before the Tribunal and should not be applied given the context, statutory scheme and lack of a relation between the scheme of DC legislation implemented through the 2019 DC By-law and the scheme of planning legislation implemented through the Zoning By-law. It is not unusual for the same language to have different meanings in different by-laws in a municipality. Clearly the differences between the 2019 DC By-law and the Zoning By-law indicate that the presumption does not apply to the 2019 DC By-law when compared to Zoning By-law. The Tribunal agrees with the City’s submission that the DCA does not require, in any of the matters that must be considered or done prior to the enactment of a DCBL, that the planning scheme of the municipality be considered. The enactment of a DCBL is clearly not linked to the adoption of an official plan or zoning by-law, which are unrelated planning schemes and of no relevance to matters related to the DCA.

117The evidence also shows that together with Council’s direction and removal of the reference to self-storage facilities in the definition of “Industrial Development”, Schedule 11 within the 2019 DCBL Background Study categorizes all uses. There is therefore no need to refer to the Zoning By-law to determine how the 2019 DC By-law treats self-storage facilities, given that the basis of the 2019 DC By-law is the 2019 DC Background Study. The 2019 DC Background Study uses the NAICS to categorize uses, which shows self-storage facilities as being within category “53 - Real estate and rental and leasing”, which is not an industrial category.

118The Tribunal finds that extraneous sources for interpretation such as the Zoning By-law are not relevant to the categorization of uses in DC By-law 19-142. The evidence was that the zoning by-law does not form the basis of the categorization of uses in the 2019 DC Background Study and there is no foundational basis to use the zoning by-law, especially in light of what actually does form the basis of the categorization of uses in the 2019 DC By-law, namely the NAICS and the 2019 DC Background Study.

119Accordingly, the Tribunal finds that:

(a) self-storage facilities are not “Industrial Development” within the meaning of DCBL 19-142;

(b) the amount of the DC was correctly determined; and

(c) DC By-law 19-142 was correctly applied by the Municipality.

ORDER

120The appeal by Alphabet Self-Storage Victoria Inc. is hereby dismissed.

“R.G.M. Makuch”

r.g.m. makuch

VICE-CHAIR

Ontario Land Tribunal

Website: www.olt.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248

The Conservation Review Board, the Environmental Review Tribunal, the Local Planning Appeal Tribunal and the Mining and Lands Tribunal are amalgamated and continued as the Ontario Land Tribunal (“Tribunal”). Any reference to the preceding tribunals or the former Ontario Municipal Board is deemed to be a reference to the Tribunal.