Ontario Land Tribunal
Tribunal ontarien de l’aménagement du territoire
ISSUE DATE: June 06, 2023
CASE NO(S).: OLT-22-004635
PROCEEDING COMMENCED UNDER subsection 22(1) of the Development Charges Act, 1997, S.O. 1997, c. 29.
Applicant/Appellant: Regional Municipality of Durham
Subject: Appeal of refusal
Description: Development charges paid in protest for the Beaverton supportive housing project.
Property Address: 121 Nine Mile Road (Beaverton Supportive Housing)
Municipality/UT: Brock/Durham
OLT Case No: OLT-22-004635
OLT Lead Case No: OLT-22-004635
OLT Case Name: Region of Durham v. Brock (Township)
Heard: May 1 and 2, 2023 by video hearing
APPEARANCES:
Parties
Counsel
Regional Municipality of Durham
D. Baker
Township of Brock
B. Ruddick
A. Whyte
DECISION DELIVERED BY S. TOUSAW AND ORDER OF THE TRIBUNAL
Link to Order
Introduction
1The Regional Municipality of Durham (“Region”) appealed to the Tribunal under s. 22(2) of the Development Charges Act (“DCA”) on the failure of the Township of Brock (“Township”) to address the Region’s complaint to the Development Charge (“DC”) paid under protest by the Region for its Supportive Housing Facility (“SHF”) now under construction at 121 Nine Mile Road, Beaverton (“site”).
2The Tribunal’s authority arises from the DCA s. 24(4) which places the Tribunal ‘in the municipality’s shoes’ of s. 20(6) related to addressing the complaint. The Tribunal “may dismiss the complaint or rectify any incorrect determination or error” [s. 20(6)] found in relation to applying the DC By-law.
3This Decision is based on the detailed legal submissions of counsel, founded on the factual and opinion evidence received from four witnesses.
4The Tribunal qualified: for the Region, Gary Muller, Registered Professional Planner (“RPP”) in land use planning; and for the Township, Robin Prentice, RPP in land use planning, and Andrew Mirabella, Professional Land Economist in land economics, with experience in DC background studies and draft by-laws. The Tribunal also received factual evidence for the Region from Alan Robins, Chartered Professional Accountant.
5The crux of this issue is whether the SHF is subject to the DC provision for residential uses under the Township’s DC By-laws Nos. 2880-2019 and 2881-2019 (together, the “DCBL”).
Contextual Facts
6On the evidence of the witnesses and the submissions of counsel, the Tribunal accepts as fact, the following findings, which were undisputed.
- The Region is a “municipality” as referenced in the DCA.
- The Region owns this site.
- The Region will own and operate the SHF to provide supportive housing and related services.
- The SHF will include: a “hub” with dining and gathering facilities for residents, visitors and service providers; 10 overnight bedrooms; and 37 suites, each with its own washroom and small kitchen.
- The 37 suites constitute a residential use.
- Suite occupants will be subject to an occupancy agreement, enabling residency for up to four years and obligating participation in on-site services. A goal of the facility and its programs is to transition residents to longer-term forms of housing.
- The Region paid under protest a DC of $464,757.00 pertaining to the 37 suites.
Positions and Findings
7The Region contends that the DCA exempts a municipality from paying a DC where the site is owned by and used for the purposes of a municipality. Thus, the Region argues that the DCBL s. 22(2) that purports to require a DC for housing provided by the Region is not enforceable and should not be used in the calculation of this DC. With this inoperative provision of the DCBL removed from consideration, the Region argues it is exempt from a DC for this SHF, which is owned and operated for the purposes of the Region. To the Township’s suggestion that the Region is raising a constitutional argument, the Region responds that the Township is a municipality and as a creature of the legislation, must comply with it. The Region asserts that the Tribunal has the authority to properly interpret and apply the DCBL.
8The Township responds that the rationale for the DCA is that ‘growth pays for growth’ and the occupants of these residential units will result in the need for services like any other form of residential development. The Township asserts that the Tribunal’s authority rests in the DCBL alone and should not extend to the DCA when considering a complaint. The potential non-applicability of a section of the DCBL was a matter for potential appeal when the DCBL was passed and is not for consideration through a complaint. A suite in the SHF is for the exclusive use of its occupant(s) and constitutes a residential apartment that attracts a DC. The Township concludes that the Tribunal cannot amend the DCBL and may only assess its implementation to arrive at the DC applied to the Region. The Township asserts that the DCBL does not conflict with the DCA.
9The DCBL provision at issue is s. 22 (emphasis added):
22 (1) The following categories of institutions are hereby designated as being exempt from the payment of development charges: …
(b) buildings or structures owned by and used for the purposes of the Township, the Region, or their local boards; …
(2) The exemption referred to in this paragraph 20(1)(b) does not apply to the development for residential uses of lands owned by:
(a) the Region or any local board thereof; or
(b) any corporation owned, controlled or operated by the Region.
10The exemption noted by DCBL s. 22(1)(b) is highlighted by the Region to utilize the same wording from the DCA s. 3 noted below, those words being “owned by and used for the purposes of the” Township or Region for which a DC does not apply. The Township agrees but goes on to emphasize s. 22(2) where it asserts that residential uses are expressly excluded from the exception, such that a DC applies to the 37 residential units on this site.
11On the issue of the reference in s. 22(2) to “20(1)(b)” the Tribunal accepts the Township’s argument that it is a mistake or typographical error intended to refer to s. ‘22(1)(b)’. The Tribunal finds that the reference to “this paragraph” refers to s. 22 to which this provision intends to further refine, despite, again, that the wording could be improved or corrected to read ‘… referred to in section 22(1)(b) …’ The Tribunal finds that this poorly written subsection is not, in itself, grounds for not considering it in this complaint case.
12The DCA s. 3 states:
3 No land, except land owned by and used for the purposes of a municipality …, is exempt from a development charge by reason only that it is exempt from taxation under section 3 of the Assessment Act.
13In other words, land uses that may be exempt from paying property taxes are not necessarily exempt from paying a DC. One exception, however, is a municipality. Here, the Region argues it is exempted by the DCA itself, which must be found to override the Township’s DCBL. The Township responds that the provisions of the Assessment Act (“AA”) remove the alleged exemption from the Region.
14The AA s. 3 sets out land types that are exempt from taxation, with the following ss. 9 cited here with the Township’s focus underlined:
3(1) All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:
3(1)9. … land owned by a municipality, including an upper-tier municipality,
a public commission or a local board as defined in the Municipal Affairs Act. The land is not exempt if occupied by a tenant who would be taxable if the tenant owned the land …
15The AA s. 1(1) defines “tenant” as:
“tenant” includes an occupant and the person in possession other than the owner;
16The foregoing provisions impose an exception to the exemption. The Region, as an upper-tier municipality, is exempt from municipal taxation, except where its land is occupied by a tenant who would be taxable if the tenant owned the land.
17The Parties referred to the principles of statutory interpretation as reiterated by the Supreme Court of Canada in para. 26 of Bell ExpressVu Limited Partnership v. Rex, 2022 SCC 42, [2002] 2 SCR 559:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
18First, on jurisdiction, the Tribunal finds that it has the authority to render a Decision on this question of the interplay and applicability of the DCA and the DCBL in this case. Jurisdiction is addressed by s. 8 of the Ontario Land Tribunal Act:
8 (1) The Tribunal has exclusive jurisdiction in respect of all matters in which jurisdiction is conferred on it by this or any other Act.
(2) The Tribunal has authority to hear and determine all questions of law and fact with respect to all matters within its jurisdiction, unless limited by this or any other Act.
19In a complaint case, the Tribunal’s role is to assess the applicability of the DCBL to arrive at the correct calculation of a DC. If the Tribunal finds that a DCBL provision is not applicable in a particular case, it does not result in that provision’s removal from the by-law, just that it is not applied in the case at hand. For the reasons set out next, the Tribunal finds that s. 22(2) of the DCBL does not apply in this case.
20To the interplay of the AA and the DCA, the Tribunal finds that in this case, one need not refer to the AA and its application of taxation to determine what land use might be exempt from DCs under the DCA. The Tribunal finds that DCA s. 3 achieves two outcomes: it clarifies that if a land use is not subject to taxation, it may still be subject to a DC; and directly relevant here, it exempts municipal land that is owned and used for the municipality’s purposes. A Decision is required here under the DCA, not the AA.
21The Tribunal finds, on a plain and ordinary reading of DCA s. 3 and in accordance with the object and intent of the DCA, that land is exempt from a DC if municipally owned and used. On the factual evidence, this site is owned by the Region and the provision of supportive housing is a Regional program, thus constituting a municipal purpose under DCA s. 3.
22To put another way, DCA s. 3 stipulates that being exempt from taxes does not mean one is also exempt from a DC. However, it does not say the opposite: that not being exempt from taxes means that one is subject to a DC. A residential use may be subject to taxation under the AA but remains exempt from a DC under the DCA. For this reason, the Tribunal does not accept para. 54 and 81 of the Township’s written submission.
23As a result, the Tribunal finds that it need not ascertain whether an occupant of one of the 37 suites would constitute a “tenant” under the AA. That issue relates to taxation which is not before the Tribunal here. The Tribunal finds that the Township’s argument represents an inappropriate ‘jump’ from the AA to the DCA. Under the terms of the AA, even if the persons occupying the suites were considered tenants, such conclusion has no bearing on the effect of DCA s. 3. They may or may not be tenants for the purposes of taxation, but the Region remains exempt from a DC under DCA s. 3.
24In the event that this Decision is found incorrect regarding the applicability of the AA here, the Tribunal clarifies that it accepts the evidence of Mr. Robins and would not consider the suite occupants as tenants in the usual sense. The Tribunal acknowledges that such persons may appear to live and occupy the suites as tenants, but this site will contain a supportive housing facility intended to “bring inside” homeless persons and provide them with necessary transitional housing and social supports. Occupants will not be subject to a lease, but are anticipated to abide by an occupancy agreement, including accessing beneficial services from the Region relevant to an occupant’s needs. Common facilities for eating, gathering and receiving supports will be available to, and used by, the occupants. The Tribunal accepts the Region’s argument that such functional arrangement and occupancy is similar to a retirement residence, which the Region operates on this same site.
25In addition, DCA s. 4.2(2) now expressly exempts a non-profit housing development from a DC. While this SHF may not meet the relevant definitions for a non-profit entity, the Tribunal heard that the Region’s program will result in cost, not profit. Thus, the Tribunal finds consistency under the DCA between its findings here for the Region and other potential suppliers of similar housing.
26Mr. Mirabella agreed that the DCA supersedes a municipal by-law such that an exemption in the DCA would apply even if not found in the DCBL. He agreed that DCA s. 4.2(2) would now exempt non-profit housing from a DC. The Tribunal applies this logical conclusion to find that DCA s. 3 negates DCBL s. 22(2) as it applies to this case only.
27The Tribunal finds that DCBL s. 22(2), as it applies to the Region in this case, is ultra vires and thus, not applicable in the calculation of a DC. A statutory exemption cannot be overridden by an implementing municipal by-law. In the absence of applying this provision, DCBL s. 22(1)(b) prevails which exempts the Region from a DC. The Tribunal accepts the Region’s position that DCBL s. 34 anticipates the possibility for an invalid provision by retaining the remainder of the DCBL in force. In this case, DCA s. 3 will prevail, leading the Tribunal to rectify the incorrect determination or error in the application of the DCBL.
28The Tribunal considered the legal cases provided by the Parties and finds that the Decision here is supported by, and does not conflict with, the Parties’ cited sections of those cases. In particular, the Tribunal finds that it holds the authority under the OLTA and the DCA to render this Decision. The correct application of the DCBL is to not apply s. 22(2) in this case.
29The Tribunal finds that the DC was incorrectly determined. The correct DC is $0.00 applicable to the 37 suites within the Region’s SHF. The Region’s DC paid under protest must be returned from the Township, plus applicable interest.
ORDER
30The Tribunal Orders that the appeal is allowed and no Development Charge is payable to the Township of Brock by the Regional Municipality of Durham for its Supportive Housing Facility at 121 Nine Mile Road, Beaverton.
31The Tribunal further Orders that the Township of Brock reimburse the Regional Municipality of Durham the Development Charge it paid under protest, plus interest at a rate agreeable to the Parties.
“S. Tousaw”
S. tousaw
VICE-CHAIR
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.