Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

Issue Date: February 20, 2025

Case No(s).: OLT-22-004100

Proceeding Commenced Under section 18(5) of the Aggregate Resources Act, R.S.O. 1990, c. A.13.

Referred by: Ministry of Natural Resources and Forestry

Appellant: Lafarge Canada Inc.

Description: Application to Transfer Licence

Reference Number: Aggregate License #3748

Property Address: Part W1/2 Lot 21, Concession 9, Geographic Township of Vespra

Municipality/UT: Springwater/Simcoe

OLT Case No.: OLT-22-004100

OLT Lead Case No.: OLT-22-004100

OLT Case Name: Lafarge Canada Inc. v. Northern Development, Mines, Natural Resources and Forestry (Ministry)

Proceeding Commenced Under section 18(5) of the Aggregate Resources Act, R.S.O. 1990, c. A.13.

Referred by: Ministry of Natural Resources and Forestry

Appellant: Lafarge Canada Inc.

Description: Application to Transfer Licence

Reference Number: Aggregate License #15788

Property Address: Part W1/2 Lot 21, Concession 9, Geographic Township of Vespra

Municipality/UT: Springwater/Simcoe

OLT Case No.: OLT-22-004101

OLT Lead Case No.: OLT-22-004100

Heard: November 20 - 25, 2023 by video hearing

Appearances

Parties Counsel/Representative*

Lafarge Canada Inc. Kim Mullin Bogdan Artus

Ministry of Natural Resources and Forestry Zachary D’Onofrio

Jeanor Enterprises Inc. Barry Dusome* Tim Byers*

Decision Delivered by David Brown and Order of the Tribunal

Link to Direction

Introduction

1The matter before the Tribunal concerns a referral for a hearing from the Minister of Natural Resources and Forestry (the “Minister”) of the proposed transfer of two licences issued pursuant to the Aggregates Resources Act, R.S.O. 1990, c. A.8 (“ARA”), under Licence No. 3748 and Licence No. 15788 (the “Licences”).

2Jeanor Enterprises Inc. (“Jeanor”) owns two abutting parcels of land located at 3545 George Johnston Road (Simcoe County Road 28) which are aggregate pits referred to as the Sass Pit (the north site) and the Sass Pit Expansion (the south site) (together “the Pits”). The Licences, which permit the extraction of aggregate from the Pits, are currently issued to Lafarge Canada Inc. (“Lafarge”). Lafarge had an agreement with Jeanor to permit access to the Pits to extract aggregate which expired in 2019 (“Extraction Agreement”). Lafarge and Jeanor have not been able to negotiate terms for an extension or a new agreement and, as a result, no aggregate has been extracted from the Pits since the expiration of the Extraction Agreement. The matter was described as a “stalemate” by the Parties as Jeanor owns the lands and cannot extract the remaining aggregate and Lafarge holds the Licences to extract the aggregate but cannot access the Pits.

3Jeanor made an application to the Ministry of Natural Resources and Forestry (“MNRF”) pursuant to s. 18 of the ARA requesting the Licences be transferred from Lafarge to Jeanor. The Minister, having reviewed the application, proposed to grant the application and transfer the Licences. The Minister served notice to Lafarge of the proposal as required by s. 18(4). Lafarge does not consent to the proposed transfer and requested a hearing before the Tribunal as provided for in s. 18(5). The Minister, having received a request for a hearing from Lafarge, referred the matter to the Tribunal for a hearing pursuant to s. 18(6).

4The Parties’ Experts agree that the Licences should be transferred as the ability to exercise the permissions inherent in the Licences is consistent with the Provincial Policy Statement, 2020 (“PPS 2020”) and the Provincial Planning Statement, 2024 (“PPS 2024”). However, the Parties do not agree that compensation for the economic value of the Licences should be included as a condition of the transfer of the Licences.

5With the consent that the transfer of the Licences should occur, the Tribunal finds that the issues identified in the Issues List prepared by the Parties ultimately turns on one question, does the Tribunal have the authority to direct financial compensation for the economic value of a licence when considering a transfer of a licence pursuant to s. 18(8) of the ARA. Section 18 outlines the authority of the Minister to transfer a licence upon application and in the case of a contested transfer that is referred by the Minister to the Tribunal. Section 18(8) of the ARA sets out the powers of the Tribunal wherein it states, “The Tribunal may direct the Minister to carry out or rescind his or her proposal.”

6Lafarge’s position is that the Licences have an economic value for which, they submit, they should be compensated for as part of the transfer of the Licences, and failing to consider the value of the Licences as part of the transfer will have negative implications on the broader aggregate market in the Province of Ontario (“Province”). Lafarge is seeking compensation from Jeanor as a condition of the transfer of the Licences in the amount of $518,000.

7Jeanor is requesting compensation from Lafarge for the financial impact that they have experienced since 2019 as they have been unable to access the aggregate available within the Pits. Jeanor is also seeking payment of the costs to be incurred for the rehabilitation of the Pits in the amount of $240,000 plus the costs of the relocation of a topsoil berm (“Berm”) from the neighbouring lands for use in the rehabilitation works in the amount of $150,000.

8The MNRF submits that the Tribunal does not have the jurisdiction to attach conditions to the transfer of a licence. The MNRF takes the position that any economic value of the Licences or any compensation with respect to the transfer of the Licences is a matter to be negotiated between Lafarge and Jeanor and does not concern the MNRF and should not be a consideration of the Tribunal.

Background and Context

9The MNRF first issued a licence for the Sass Pit on October 6, 1983, under the Pits and Quarries Control Act (“PQCA”) at which time the MNRF was provided a copy of an agreement between Allan G. Cook Limited (“A. G. Cook”) and Jeanor permitting A. G. Cook to enter onto the lands owned by Jeanor for the purpose of extracting aggregate. Jeanor submitted that aggregates were extracted from the Sass Pit prior to the 1983 licence dating back to at least 1975.

10Lafarge acquired A. G. Cook in 1989. The PQCA was replaced by the ARA in 1990 and the licence issued under the PQCA was grandfathered and re-issued under the ARA as Licence No. 3748. Licence No. 3748 was transferred to Lafarge on December 30, 1993. On July 25, 1995, Lafarge was issued Licence No. 15788 permitting the extraction of aggregate from the Sass Pit Expansion.

11Copies of the Licences and associated Site Plan drawings (“Site Plans”), approved by the MNRF, were submitted for the Tribunal’s review. The Site Plans included amendments and overrides that have been approved over the life of the Licences.

12The MNRF advised that a licence issued under the ARA does not expire. A licence is tied to the life of the aggregate pit such that when an aggregate pit or quarry extraction has concluded and the site has been rehabilitated, as required by the licence, the licence is then surrendered to the MNRF. It was noted that the MNRF does have the authority to suspend or revoke a licence. The MNRF confirmed that the Licences are currently neither suspended nor revoked.

13The Parties presented the following witnesses to provide expert opinion evidence in their respective fields for the Tribunal’s consideration:

a. Brian Zeman, a Registered Professional Planner (“RPP”), was qualified as an expert in the area of Land-Use Planning with a specialization in Aggregate Resource Planning on behalf of Lafarge.

b. Peter Macaulay, a Certified Professional Accountant, was qualified as an expert in the area of Forensic Accounting and Damages Quantification on behalf of Lafarge.

c. James Bakker, an Aggregate Resource Coordinator with the MNRF, was qualified as an expert in the area of ARA Compliance and Approvals on behalf of the MNRF.

d. Steven Strong, a Senior Policy Advisor, Land-Use Planning and Aggregates Section with the MNRF and a Member of the Ontario Professional Planners Institute and the Canadian Institute of Planners, was qualified as an expert in Land-Use Planning with a specialization in Environmental Planning and Aggregate Resource Planning and Management on behalf of the MNRF.

e. Andrew Topp, a Geoscientist licensed with Professional Geoscientists Ontario (“PGO”), was qualified as a Geoscientist to provide expert opinion evidence on behalf Jeanor.

f. William Fitzgerald, a Geologist licensed with PGO, was qualified as a Geologist with experience in Aggregate Resources matters and Quaternary Geology to provide expert opinion evidence on behalf of Jeanor.

14In addition to their viva voce evidence, each of the Experts provided Witness Statements filed as exhibits with the Tribunal.

15An Agreed Statement of Facts was filed with the Tribunal and endorsed by the Experts from each Party confirming, amongst other matters, their agreement that the Licences should be transferred as the proposed transfer is consistent with the Mineral Aggregate Policies contained in the PPS 2020 and upholds the purposes of the ARA.

16Subsequent to the conclusion of the Hearing, the Province introduced the PPS 2024 with an in-effect date of October 20, 2024. The PPS 2024 replaced the PPS 2020, and the PPS 2024 carried forward the Mineral Aggregate Policies from the PPS 2020. Section 4.5.2.1 of the PPS 2024 states, “As much of the mineral aggregate resource as is realistically possible shall be made available as close to markets as possible.” The Parties confirmed that no further submissions were required as a result of the introduction of the PPS 2024.

Legislative Framework

17The purposes of the ARA are set out in s. 2 of the ARA:

2 The purposes of this Act are, (a) to provide for the management of the aggregate resources of Ontario;

(b) to control and regulate aggregate operations on Crown and private lands;

(c) to require the rehabilitation of land from which aggregate has been excavated; and

(d) to minimize adverse impact on the environment in respect of aggregate operations.

18The provisions of the ARA dealing with the transfer of a licence are set out in s. 18 of the ARA. The relevant subsections are referenced below:

Transfer of licence

18(1) On application, the Minister may transfer a licence.

No Consent

18 (4) If the Applicant does not have the licensee’s consent to the transfer, the following rules apply:

1. If the Minister proposes to transfer the licence, he or she shall forthwith serve notice of the proposal on the licensee, with reasons.

Entitlement to hearing

18 (5) An applicant or licensee who is served with notice under subsection (3) or (4) is entitled to a hearing by the Tribunal if the applicant or licensee, within 30 days after being served, serves the Minister with a notice that a hearing is required.

Powers of Tribunal

18(8) The Tribunal may direct the Minister to carry out or rescind his or her proposal.

19The Tribunal also derives authority from the Ontario Land Tribunal Act, 2021 (“OLTA”) and in particular s. 8 and s. 9 which state:

JURISDICTION AND POWERS

Exclusive jurisdiction

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.

Same

8(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.

Orders

9(1) The Tribunal has authority to make orders or give directions as may be necessary or incidental to the exercise of the powers conferred on the Tribunal under this or any other Act.

Conditions

9(2) The Tribunal may include in an order conditions that it considers fair in the circumstances, including a condition that the order comes into force at a future fixed time or on the performance of terms imposed by the Tribunal.

Interim orders

9(3) The Tribunal may make an interim order without notice if it is of the opinion that it is necessary to do so, but no such order shall be made for any longer time than the Tribunal may consider necessary to enable the disposition of the proceeding.

Relief

9(4) Unless another Act specifies otherwise, the Tribunal may, as it considers to be appropriate,

(a) make an order granting all or part of the relief applied for; or

(b) make an order granting relief that is additional to or different from the relief applied for.

Submissions and Analysis

20In consideration of the question of whether the Tribunal has the authority to direct financial compensation for the economic value of a licence when considering a transfer of a licence pursuant to s. 18(8) of the ARA, the Tribunal separates the question into three components:

1. Does a licence have economic value and if so, what is the quantum of that economic value?

2. Does the Tribunal have the jurisdiction to attach a condition directing financial compensation for the economic value of a licence when considering the transfer of a licence under s.18(8) of the ARA? and

3. If the answers to parts 1 and 2 are yes, should the Tribunal attach a condition to the transfer of the licence directing the payment of compensation?

21Since the introduction of the ARA in 1990, the Tribunal or its predecessors, the Ontario Municipal Board (“OMB” / “Board”) and the Local Planning Appeal Tribunal (“LPAT”), have received six referrals from the Minister of proposed licence transfers which do not have the consent of the licensee, with this matter being the seventh.

22The Board has considered and issued Decisions resolving five of those matters with the sixth referral currently pending before the Tribunal. The Parties referenced four of the Board’s Decisions and further referenced a Decision of the LPAT dealing with a Motion initiated by the LPAT to determine a jurisdiction matter. The five Decisions are:

1. Schneider Sand & Gravel Ltd. V Seip, 1995 CarswellOnt 4995, 32 OMBR 343 (“Schneider”)

2. Maniplex Investments West Carleton (Township) Pit Application (re), (1997) OMBD No. 1166 (“Maniplex”)

3. Penderson Aggregates Ltd., Re, 2008 CarswellOnt 5048 (OMB) (“Pederson”)

4. Lillie v. West Carleton (Township), 1999 CarswellOnt 5297 (“Lillie”)

5. 1386146 Ontario Inc. v. Ontario (Natural Resources and Forestry), 2020 CanLII 97259 (ON LPAT) (“Brillinger”)

23There are two further decisions issued by the OMB with respect to contested licence transfers that were not referenced during the Hearing and as such have not been included in the list above.

24The Tribunal finds that the Licences have economic value, however, the Tribunal did not quantify that value for the reasons set out below. Further, the Tribunal finds that it does not have authority to attach a condition to its Order in this instance as the consideration of the economic value of the Licences is not incidental nor necessary when exercising the powers of the Tribunal under s. 18(8) of the ARA.

1. Does a licence have economic value and if so, what is the quantum of that economic value?

Overview of the Tribunal Jurisprudence

25The Board has consistently concluded that a licence issued pursuant to the ARA has an economic value, however, the quantum of the economic value and the method by which it is determined is unique to each of the cases considered.

26In Schneider at paragraph 19, the Board found, “…The resource has no exchange value without an extraction licence.” The Board then found that transfer of the licence means the applicant, being the landowner in this instance, will not have incurred “the expenses ordinarily necessary to gain a licence yet will be able to reap the benefits of the remaining resource.” The Board, in paragraph 20, agreed that this would not be fair and found, “To ignore the economic value of the licence is to trivialize the process by which the licence is granted. The Board finds that the licence has value, a value that is some function of the resource and the value added by the applicant for the licence.” The Board advanced the premise that the value of the licence is informed, at least in part, by the remaining resource available to extract.

27The Board ultimately recommended in Schneider, that the Minister transfer the licence and the transfer be accompanied by a “financial consideration nominally set at $3,000.00” paid by the applicant, being the landowner, to the licensee.

28The Board in Maniplex similarly concluded that a licence has value and in paragraph 24, adopting the conclusions in Schneider, held “that a licence has value and that compensation is part of the merit of the transfer.” The Board described the challenges in determining the amount of compensation to be assigned and ultimately arrived at an amount of $280,000.00 to be paid by the landowner to the licence holder. This figure represents a combination of administrative costs incurred or avoided relating to the transfer and the value for the remaining aggregate.

29In Pederson, the Board did not expressly explore the issue of economic value of the licence separate from the consideration of compensation. The Board accepted the premise that there is an economic value attached to a licence and focused on what would be an appropriate compensation. The Parties settled the matter prior to the conclusion of the Hearing. The Board endorsed the Settlement and therefore the Board did not determine the quantum of the compensation payable.

30In paragraph 6 of Lillie, the Board found that “…the Board’s role is relatively small, it simply exists to help the Minister resolve disputes, …” The Board ultimately concluded that any compensation to be awarded should be restricted to “administrative rights” under the ARA and recommended a compensation in the amount of $750 to be paid by the landowner to the licence holder. A unique consideration in the Lillie decision is that the landowner was also required to enter into a contract with the municipality to provide aggregate for a road to be constructed and that contract had an estimated value of $46,000.00.

31The Tribunal notes an inconsistency between the decisions of the OMB with respect to methods of calculating the compensation required by the OMB as a condition of the transfer.

Overview of the Evidence

32Mr. Strong proffered that a licence is a privilege that allows a license holder to extract aggregate and benefit from the revenue generated by offering the resource to the aggregate market. The Tribunal finds that this position supports that a licence has an inherent economic value.

33It was the opinion of Mr. Zeman, that one of the factors to consider in determining the value of the Licences is the amount of aggregate remaining in the Pits and whether it warrants extraction. Mr. Zeman and Mr. Fitzgerald each proffered that there remains a viable aggregate resource to be extracted within the Pits and they were in agreement that the amount of remaining aggregate is 910,524 tonnes.

34Mr. Fitzgerald, in his Witness Statement, included a report that he prepared dated February 1, 2015, wherein he proffered that the royalty value of aggregate is generally between $0.46 and $0.86 per tonne (based on 2012 values). The report proposed a “reasonable royalty per tonne” for the in situ, un-consolidated, fine-grained aggregate is between $0.50 and $0.75 per tonne. Mr. Fitzgerald contended that, based on past sales of licensed aggregate pits, a reasonable bulk value of aggregate is estimated to be 25% of the anticipated royalty value of the aggregate. Accordingly, he estimated that the royalty value of the remaining bulk aggregate in the Pits is $195,763 based on the high end of the royalty range. Mr. Fitzgerald acknowledged that processing and extraction costs and the proximity to the market impact the value of the resource. He further acknowledged that the bulk value per tonne of the aggregate is much higher than the royalty value.

35Mr. Fitzgerald was the only witness that proffered opinion evidence with respect to value of the remaining aggregate, albeit it was a royalty value and not a market value. Unfortunately, these values were based on 2012 market values (according to his report) and no current values were proffered for the consideration of the Tribunal. While these values were of little assistance to the Tribunal in determining the current economic value of the Licences, the consideration of a royalty value approach to assigning an economic value supports the position that the economic value of the Licences is related to the remaining aggregate and the financial return realized when the aggregate is offered to the aggregate marketplace.

36The Tribunal acknowledges and notes that a royalty is separate from the operating expenses incurred during the extraction of the aggregate resource. The quantum of the royalty is based on the remaining aggregate and is a function of the profit realized on a per-tonne basis when the processed aggregate resource is offered to the aggregate marketplace.

37Mr. Zeman proffered that a comparator for determining the economic value of a licence is the cost of securing a new licence and he reviewed the process required to obtain a licence of extract aggregate under the current policy regime of the ARA. He testified that the current licence application process is comprehensive, costly, and lengthy. Mr. Zeman reviewed the numerous reports required and the extensive consultation process involved in the submission of an application. He proffered that currently, the timeline to secure the required approvals for the issuance of a licence is approximately 5 years. In the likely event of an appeal to the Ontario Land Tribunal (“OLT”), the process is lengthened by approximately a further two years. He proffered that the costs associated with securing a licence range between $1.25 Million to $1.5 Million with the cost at the higher end of the range where an appeal to the OLT occurs.

38It was noted that the subject lands have been disturbed with the prior extraction, the land use designation permitting an aggregate extraction pit use is in place, the site access is constructed, and the haul routes have been determined. Mr. Zeman proffered that these components of the licensing process would not have to be addressed with a new licence application and that could reduce the costs and the timeline. Accordingly, he opined that the cost of securing a new licence for the subject lands would be in the range of $600,000 and $900,000, again with the higher end of the range applicable with an OLT appeal. Mr. Zeman noted that a new licence application would likely attract additional requirements that were not required at the time of the original approvals of the Licences.

39Mr. Zeman submitted that a further consideration of the economic value of the Licences is the costs of rehabilitation. He advised that the Site Plans set out the required rehabilitation works required upon completion of the aggregate extraction. Based on the rehabilitation plan, Mr. Zeman initially estimated the cost to rehabilitate the Pits would be $232,000. Mr. Zeman later agreed that the rehabilitation costs could be as high as $240,000.

40Mr. Topp identified a number of other matters that he proffered would require considerable expense to rehabilitate and that those costs must also be considered when determining the amount of compensation payable in connection with the proposed transfer of the Licences. Mr. Topp acknowledged that the matters he identified were not matters the MNRF determined as being in non-compliance with the Licences nor were they related to the rehabilitation of the Pits as required by the Licences.

41Mr. Macaulay undertook a review of the proposed transfer of the Licences to provide a quantum of “Reasonable Compensation” for the economic value of the Licences in connection with the transfer. Mr. Macaulay compared the costs incurred should Jeanor apply for a new licence against the costs avoided by Jeanor should the Licences be transferred. He relied on the evidence of Mr. Zeman for the costs of securing a new licence and the costs associated with rehabilitation. He further assessed the carrying costs, such as property taxes and mortgage interest, that would be incurred during the time required to secure the approval of a new licence.

42Mr. Macaulay opined that reasonable compensation payable for the Licences would range between $1.22 Million and $2.16 Million. The difference between the low and high end is dependent on the time required to secure a new licence and the inclusion of an OLT appeal. He proffered that the amount of the remaining aggregate was not a factor in his consideration of the economic value of the Licences as the amount of aggregate had no impact on the costs incurred relating to the application process for a new licence.

43Mr. Macaulay asserted that the benefits of the transfer, with the known costs and requirements, when contrasted with the risks associated with an application for a new licence, are significant and warrant consideration. The risks could include additional costs and restrictions associated with some, or all, of the following: groundwater monitoring and reporting, a noise audit, new operating restrictions, a dust control management plan, enhanced rehabilitation requirements, a traffic impact study, and improvements to the site access. Mr. Macaulay proffered that the value is closer to the higher end of the range as the risks avoided are significant.

44The MNRF contends that the scenarios used by Mr. Macaulay to arrive at a value for the Licences were not practical scenarios. The evidence of Mr. Bakker was that a licence does not expire and once the extraction of aggregate has been exhausted and the pit has been rehabilitated, the licence is then surrendered to the Minister. The Minister may revoke a licence if the operator is in breach of the terms of the licence, which is not the case with the Licences, or the licence may be suspended by the Minister, which again not the case with the Licences. The application for a new licence for the Pits is not a scenario that would reasonably occur in this situation.

Analysis of the Submissions

45The Tribunal finds that the Licences have an economic value. Further, the Tribunal finds that the economic value of the Licences is informed by the amount of aggregate remaining within the Pits and not the costs associated with the acquisition of a new licence.

46The Tribunal considered the uncontradicted evidence of Mr. Zeman and finds his testimony on the costs of the current licence application process is a reasonable assessment of the current costs and process. The Tribunal also considered Mr. Macaulay’s uncontradicted evidence and his characterization of the costs that would be avoided by Jeanor, with the transfer of the Licences during the time required to process a new licence under the current context, is reasonable. Notwithstanding the testimony of Messrs. Zeman and Macaulay, the Tribunal prefers the evidence of Mr. Fitzgerald and finds that the economic value of the Licences is directly tied to the amount of aggregate remaining within the Pits. Any economic value for the Licences should be calculated in a manner similar to which royalties are administered and applied on a per-tonne basis of the remaining aggregate.

47In the previous decisions of the OMB, the Board focussed on compensation for the value of the licence and in so doing employed a host of different methods and conclusions for assigning a value for the licence or a compensation it deemed appropriate.

48The Tribunal does not dispute that there is an economic value in the Licences nor is there a dispute that the costs of securing a licence are significant. The Tribunal finds that the evidence proffered in that regard is credible and accepts that the costs associated with obtaining a licence could be as high as $900,000 for a pit comparable to the Pits on the subject lands.

49However, the Tribunal finds that cost is not the same as economic value. Mr. Macaulay testified that the economic value was not impacted by the quantity of the remaining aggregate as the licence approval process was the same for any aggregate pit, regardless of the volume aggregate to be extracted. The Tribunal does not agree with this conclusion. The Tribunal notes that as the aggregate is removed from a pit over the lifespan of a licence, the value of a pit will decrease over that time proportionate to the remaining aggregate, and similarly the economic value of the licence which permits the extraction of the aggregate will also decrease until a pit is fully extracted.

50The Tribunal is being asked to consider costs of obtaining a new licence and the costs to rehabilitate the Pits as the sole basis for the determination of the economic value of the Licences. The Tribunal questions why only these costs (the acquisition of the Licences and the rehabilitation of the Pits) are to be considered as proffered by the witnesses for Lafarge and Jeanor. If the Tribunal is to consider these costs, should it not consider all costs related to those matters arising from the requirements of the Licences. In this instance, such costs could include matters such as: land acquisition, specifically a lease for lands on which the extraction is to occur in this instance; licence application costs, which Mr. Zeman provided the Tribunal with a detailed analysis; carrying costs, which Mr. Macaulay described for the Tribunal; preparing the land for extraction including constructing a new access, clearing the land, and constructing berms; installation of a scale, dust control measures, and water level monitoring equipment; and, once the pit is fully extracted, the rehabilitation costs which were described by Mr. Zeman and Mr. Topp.

51When considered in this context, the Tribunal finds that the costs of acquiring a licence is only one of many costs associated with operating an aggregates pit as is the cost associated with the rehabilitation of the Pits. The consideration of only the rehabilitation costs does not inform the economic value of the Licences. Further, the costs itemized can fluctuate significantly depending on the specific pit and the amount of aggregate to be extracted. The Tribunal finds that the fluctuation of costs reinforces that the economic value is more appropriately related to the quantity of the aggregate and the exchange value to be realized upon offering the resource to the aggregate market.

52The Tribunal finds that these costs do not reflect an “economic value” of the Licences. The economic value is a function of the quantity and quality of the aggregate resource and the financial benefit that is realized by its extraction as permitted by the Licences. Mr. Fitzgerald proffered this position in his submissions, however, provided outdated values and did not ultimately recommend an economic value.

53The Board stated in Schneider that the resource has no exchange value without an extraction licence. The Tribunal finds that the inverse also applies, in that an extraction licence with no access to the aggregate resource has no exchange value. It is only when the extraction licence and the access to the resource are combined, that an economic value for both the licence and the resource are realized. At this time, neither Party possesses both the Licences and access to the Pits.

54Member Smith, in Maniplex came to a similar conclusion that the value of a licence is tied to the remaining aggregate where in paragraph 37 she stated, “Had I a reliable and valid estimate of the net present value of the aggregate, then I would consider allocating to Maniplex compensation equivalent to 17 percent of that value.” The exchange value of the remaining aggregate was not available to the Board, and thus the Board explored other means to calculate a value of compensation to be awarded.

55In consideration of the submissions and the previous findings of the OMB, the Tribunal finds that a licence has an economic value. Further, the Tribunal finds that the economic value is a function of the exchange value realized from the sale of the aggregate resource on the open market and is not a reflection of the costs incurred in the acquisition of the licence or the operation of an aggregates pit. The Tribunal was not provided with a current market value for the remaining aggregate and therefore was not able to determine what would be an appropriate economic value to be assigned to the Licences.

Rehabilitation

56The matter of the rehabilitation of the Pits was the subject of considerable testimony at the Hearing and, as such, warrants a specific response. The submissions from Lafarge and Jeanor proffering that the costs associated with the rehabilitation of the Pits should be considered as setoffs against the economic value of the Licences were considered. The Parties agreed that the cost to rehabilitate the Pits would be $240,000.00. No other setoffs were identified as referenced by the Tribunal in paragraph [50] above.

57It was suggested by Jeanor that, should the Licences be transferred, Lafarge is “avoiding” the rehabilitation costs. The MNRF advised the Tribunal that Licences require progressive rehabilitation, being the rehabilitation of lands that have been extracted while the balance of the pit is still in operation. The Tribunal finds that the costs associated with preparing the Pits for extraction would be similarly avoided by Jeanor with the transfer of the Licences and these costs would be comparable to those incurred with rehabilitation.

58Mr. Topp raised the prospect that the costs associated with rehabilitation can be reduced through the importation of excess soils subject to the provisions of Ontario Regulation 406/19. The Tribunal finds that reducing rehabilitation costs is a matter for the licence holder to consider at the time of final rehabilitation and has no impact on the transfer of the Licences nor the economic value of the Licences.

59The Tribunal finds that rehabilitation works form part of the required works under the Licences, and they are anticipated costs associated with operating an aggregate pit in the same manner that site clearing or constructing haul roads would be considered. Should the rehabilitation costs be considered, then it stands to reason that all costs incurred in the operation of an aggregates pit should be considered. The Tribunal was only asked to consider the rehabilitation costs, separate from any other costs, as a setoff against the economic value of the Licences and the Tribunal finds that rehabilitation costs are not a consideration in the determination of the economic value of the Licences.

60The Tribunal acknowledges that the OMB has previously considered rehabilitation costs as a setoff against the compensation being requested in connection with a licence transfer. It is noted that with one exception, being the Maniplex decision, the OMB did not ultimately consider rehabilitation costs in its determination of the compensation award.

Relocating the Off-Site Berm

61Mr. Topp, in his Witness Statement and his viva voce testimony, referenced the Berm located on the adjacent lands to the west of the Sass Pit Expansion lands. He proffered that Lafarge placed the topsoil on the neighbouring lands during the clearing of the lands in preparation for excavation. Mr. Topp opined that the Berm was in contravention of the Licences and proffered that the topsoil contained within the Berm is required for the rehabilitation of the Pits. He submitted it will be necessary to relocate the Berm on to the Subject Lands so that it will be available for the ultimate rehabilitation of the Pits. He estimated the cost to relocate the Berm would be $150,000.00.

62Jeanor is also requesting that they be compensated for the costs associated with the relocation of the Berm.

63The MNRF has not identified the Berm or its location as an issue of non-compliance with respect to the Licences.

64The Tribunal finds that neither the costs associated with the relocation of the Berm as proffered by Mr. Topp nor the requirement for the topsoil contained within the Berm for rehabilitation impact the merits of the proposed transfer. Accordingly, the Tribunal will not require compensation for the relocation of the Berm as a condition of the proposed transfer.

2. Does the Tribunal have the jurisdiction to attach a condition directing financial compensation for the economic value of a licence when considering the transfer of a licence under [s.18(8)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a8/latest/rso-1990-c-a8.html#sec18subsec8_smooth) of the [ARA](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a8/latest/rso-1990-c-a8.html)?

65The issue of jurisdiction to attach a condition requiring the compensation for the value of a licence in a licence transfer was considered by the LPAT in Brillinger. The LPAT concluded that it did not have jurisdiction to consider financial compensation under s. 18(8) of the ARA¹. The LPAT’s Decision was appealed by the licence holder to the Ontario Divisional Court (the “Divisional Court”). The Divisional Court dismissed the Appeal on the grounds that the appeal was premature, and the matter was remitted back to the LPAT². Paragraph 40 of the Divisional Court’s decision stated,

“Accordingly, the appeal is dismissed as it is premature. The matter is hereby remitted back to the Tribunal to complete the matter without prejudice to the appellant’s ability to argue this ground of appeal once the entire matter is decided by the Tribunal. It is possible that this ground of appeal will ultimately fail. It is possible that this ground of appeal will succeed. Given this latter possibility, I encourage the Tribunal to determine an economic value for the aggregate licence irrespective of its jurisdictional holding in case it ultimately becomes a relevant consideration.”

66As the appeal was dismissed, it is the Tribunal’s position that Brillinger is still in effect. It is noted the past decisions of the Tribunal are not binding on the Tribunal in the consideration of future appeals.

67Notwithstanding the LPAT’s findings in Brillinger, even if it is ultimately determined that the LPAT erred in its conclusion in that case, this Panel of the Tribunal finds that it does not have the authority to consider the imposition of a condition that would require compensation for the economic value of a licence in a licence transfer proposal pursuant to s. 18(8) of the ARA. The Tribunal finds that the consideration of the economic value of the licence is neither incidental nor necessary when exercising the powers of the Tribunal as set out in s. 9 of the OLTA for the reasons that follow.

68The Tribunal is a statutory administrative tribunal and as such has no inherent jurisdiction³. An administrative tribunal derives its authority from two sources, the first being the express grants of jurisdiction under its enabling pieces of legislation being the ARA and the OLTA in this instance; and the second being the operation of the Doctrine of Jurisdiction by Necessary Implication⁴.

69The modern rule of statutory interpretation directs that the words of the legislation conferring jurisdiction on an administrative tribunal must be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the legislation, the object of the legislation, and the intention of legislature⁵. The Legislation Act, 2006 similarly requires that all legislation be interpreted as remedial and “be given such large, and liberal interpretation as best ensures the attainment of its objects."^{6 7}

Jurisdiction under the OLTA and the ARA

70In this matter, the Tribunal’s express power is found in s. 18 (8) of the ARA. The Tribunal also derives authority from s. 8 and s. 9 of the OLTA.

71Section 8(1) of the OLTA provides the Tribunal with the exclusive jurisdiction to determine the matter at issue. The matter at issue is whether the Tribunal should direct the Minister to carry out or rescind the proposed transfer of the Licences as authorized by s. 18(8) of the ARA. Section 8(2) of the OLTA authorizes the Tribunal to determine all matters within its jurisdiction, unless limited by the OLTA or any other Act.

72Mr. D’Onofrio contends that the ARA limits the Tribunal’s jurisdiction and directed the Tribunal to other sections of the ARA where the Minister and/or the Tribunal were expressly given the authority to attach conditions to a decision noting that s. 18(8) specifically omits such authority. He referenced s. 11(8) of the ARA where it sets out that when a new licence is issued the Tribunal may “direct the Minister to issue the licence … subject to any additional conditions specified by the Tribunal.” Section 12.2 provides that the Minister may “attach such conditions to the licence as he or she considers necessary.” He noted that s. 30 and s. 37 also include such similar authority.

73Mr. D’Onofrio contends that had the Legislature intended to grant the Tribunal the authority to attach a condition they would have included such direction.

74The LPAT arrived at a similar conclusion in Brillinger where at paragraph 95, the LPAT also reasoned the Legislature granted the Tribunal different powers depending on the type of ARA appeals, itemizing the four types of appeals under the ARA:

1. Appeals of Applications for a Licence (s.11(8))

2. Appeals of Amendment to Licence and Site Plans (s.13(8))

3. Appeals of Transfer of Licence (s.18(8)); and

4. Appeals of Revocation of Licence (s.20(8)).

75The appeals provided for in s.11(8) and s.13(8) of the ARA, authorize the Tribunal to either add conditions or vary the proposal. The other two appeals set out in s.18(8) and s.20(8) of the ARA, did not include the powers to attach conditions and the Tribunal found that it was confined to directing the Minister to carry out or rescind the transfer proposal or the revocation.

1996 Revisions to the [ARA](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a8/latest/rso-1990-c-a8.html)

76Mr. D’Onofrio submitted that at the time of the Schneider and Maniplex decisions, the ARA had significant differences in terms of the authorities relating to the transfer of licences.

77When the OMB considered the Schneider and Maniplex contested licence transfers, s. 21 of the ARA addressed licence transfers as follows:

21 (1) The Board shall hold a hearing on a matter referred to it under section 11, 20 or 60, and the applicant or licensee, the Minister and such other persons as the Board specifies shall be parties to the hearing.

(2) A hearing by the Board shall be conducted in accordance with the rules, practices and procedures as determined by the Board under the Ontario Municipal Board Act, except that section 95 of that Act does not apply.

(3) The Board shall, at the conclusion of a hearing under this section, make a report to the Minister setting out its findings and its recommendations as to the issue involved and shall send a copy of its report to each party to the hearing. (emphasis added)

(4) After considering the report of the Board, the Minister may take such action as the Minister considers appropriate and shall serve notice of the decision and the reasons therefor upon the other parties to the hearing and upon any municipality served under subsection 11 (1) or 20 (4), as the case may be.

(5) The decision of the Minister is final. 1989, c. 23, s. 21.

78With the enactment of the Aggregate and Petroleum Resources Statute Law Amendment Act, 1996, S.O. 1996, c. 30, which received Royal Assent in 1996, s. 21 of the ARA was repealed and at the same time, s. 18 of the ARA was amended. Specifically, s. 18(8) was amended as follows:

18 (8) The Board may direct the Minister to carry out or rescind his or her proposal.

79Section 18(8) is substantially the same today, with exception of the reference to “Board” having been replaced with “Tribunal”.

80Prior to the 1996 revisions to the ARA, the Board’s role was to provide recommendations to the Minister, with the Minister then taking such action as he or she considered appropriate with the final decision in respect to the transfer resting with the Minister. The 1996 amendments changed the ARA such that the final decision rests with the Tribunal, and the Tribunal provides direction to the Minister to carry out or rescind the proposed transfer.

81Mr. D’Onofrio contended that the Tribunal now has a narrower scope than that of the Board in Schneider and Maniplex. He submitted that the current ARA provides specific authority to the Tribunal to direct the Minister to carry out the proposed transfer or direct the Minister to rescind their proposal and not transfer the Licences. He further submitted that the ARA does not authorize the Tribunal to direct the Minister to carry out their duty subject to a condition.

82The ARA contains examples of authority where the Minister may attach conditions and Mr. D’Onofrio cited the principle of implied exclusion⁸, based on the premise that the Legislature chooses the words it includes in a statute purposefully. If words are present in one section of a statute but omitted from another, it indicates that the Legislature intentionally meant to omit them.

The Doctrine of Jurisdiction by Necessary Implication

83Ms. Mullin directed the Tribunal to Pierre v. McRae, 2011 ONCA 187 at paragraph 32, where the Court of Appeal for Ontario held:

The legislature’s silence, however, does not automatically mean the coroner lacks the power to inquire into the representativeness of a jury roll. The court must examine the Coroners Act [page 330] to determine whether the legislature intended the coroner to have this power by necessary implication. A statutory tribunal, such as the office of the coroner, has not only those powers expressly granted by its enabling statute, but, as well, by implication, all the powers needed to accomplish its statutory mandate…

84Ms. Mullin submitted that the Tribunal does not automatically lack the power to impose a condition as a result of the Legislature’s silence with respect to directing compensation and must determine whether the Tribunal has the power by necessary implication.

85Lafarge acknowledged that neither the ARA nor the OLTA expressly authorize the Tribunal to address matters of compensation, however, Ms. Mullin submitted that if the Tribunal finds it does not have explicit jurisdiction, it has jurisdiction through the Doctrine of Jurisdiction by Necessary Implication. The Supreme Court in the case ATCO Gas & Pipeline Ltd v Alberta (Energy & Utilities Tribunal), 2006 SCC 4 (“ATCO”) at paragraph 51, states:

[T]he powers conferred by an enabling statute are construed to include not only those expressly granted but also, by implication, all powers which are practically necessary for the accomplishment of the object intended to be secured by the statutory regime created by the legislature[.]

86The Supreme Court enumerated the circumstances when the Doctrine of Jurisdiction by Necessary Implication⁹ may be applied as follows:

1. When the jurisdiction sought is necessary to accomplish the objectives of the legislative scheme and is essential to the statutory body fulfilling its mandate;

2. When the enabling act fails explicitly to grant the power to accomplish the legislative mandate;

3. When the mandate of the tribunal is sufficiently broad to suggest a legislative intention to implicitly confer jurisdiction;

4. When the jurisdiction sought is not one which the tribunal has dealt with through use of expressly granted powers, thereby showing an absence of necessity; and

5. When the legislature did not address its mind to the issue and decide against conferring the power on the tribunal.

87Ms. Mullin submits that each of these circumstances is met and she submitted:

1. The power to award compensation is necessary to accomplish the ARA’s objective of providing for the management of aggregate resource of the Province, and the provincial interest in ensuring close to market access to aggregates;

2. Section 18 of the ARA fails to explicitly grant direct compensation;

3. The mandate of the Tribunal is broad, with exclusive jurisdiction in respect of matters conferred upon it and the authority to determine all questions of law relevant to the matters within its jurisdiction;

4. The Tribunal has not dealt with the jurisdiction through the use of express powers since the early 2000’s and since that time the Tribunal, in Brillinger, concluded that it did not have such express powers; and

5. There is no evidence that the Legislature turned its mind to the issue and decided not to give this authority to the Tribunal. While the ARA was amended in 1996 to remove the power to make recommendations to the Minister on a licence transfer, there is nothing to suggest that was done deliberately to deprive the Tribunal of jurisdiction to direct compensation.

Analysis of the Submissions

88The Tribunal’s accepts the MNRF position that the Legislature ‘addressed its mind’ to the issue of the type of relief the Tribunal could grant under the ARA and, depending on the appeal, granted different powers for different appeals. However, it is also noted that the Tribunal is the appeal body identified in the ARA and, as such, it is implicit that the authorities included in the OLTA are available to the Tribunal.

89The Tribunal agrees that the Minister does not have the authority to impose a condition on a licence transfer request. However, the Tribunal does not agree that it is therefore without the authority to consider a condition. The ARA names the Tribunal as the authority to consider the referral of the Minister’s proposal and the Tribunal has the authority to impose a condition as provided for in s. 9(2) of the OLTA. Had the Legislature wished to prevent the imposition of a condition, as Mr. D’Onofrio has suggested, the statute could have included a limitation as is present in s.18(9) of the ARA where the Legislature specifically provides that, “Section 23 of the Ontario Land Tribunal Act, 2021 and section 21.1 of the Statutory Powers Procedure Act do not apply to an order or decision of the Tribunal under this section.” The Legislature was obviously aware of the powers of the Tribunal contained in s. 23 of the OLTA and it stands to reason they would have also been aware of the other powers contained in s. 9 of the OLTA. The Legislature chose to include a limitation in s. 18(9) of the ARA with respect to s. 23 of the OLTA and did not chose to include such a limitation with respect to the powers under s. 9 of the OLTA in s. 18(8) of the ARA.

90As such, it is the Tribunal’s finding that s. 18(8) of the ARA does not expressly limit the authorities of the Tribunal as provided for in the OLTA. The OLTA provides the Tribunal the jurisdiction to determine the matter at issue (s. 8(1)) and the authority to make orders or give directions as “may be necessary or incidental to the exercise of the powers” (emphasis added) conferred on the Tribunal (s. 9(1)). Section 9(2) of the OLTA provides the Tribunal with authority to include in an order such conditions “that it considers fair in the circumstances” (emphasis added). While s. 18(8) of the ARA does not explicitly contemplate the Tribunal’s jurisdiction to attach conditions, the ARA contains no limitations which prevent the Tribunal from exercising its “exclusive jurisdiction in respect of all matters in which jurisdiction is conferred on it” (s. 8(1) of the OLTA) and making such an order “as may be necessary or incidental to the exercise of the powers conferred upon the Tribunal” (s. 9(1) of the OLTA) by the ARA in s. 18(8).

91The Tribunal finds that the authority to include a condition to an Order is authorized by the powers contained in s. 9(1) and s. 9(2) of the OLTA and should the Tribunal exercise that jurisdiction, the Tribunal must find that the condition is fair in the circumstances to attach such condition.

Is a condition requiring compensation necessary or incidental to the exercise of the powers of the Tribunal?

92That leaves the Tribunal to address what it considers a threshold question when making an Order as authorized under s. 9(1) of the OLTA. Is the Order, including a condition requiring compensation of the economic value for a licence in a licence transfer, necessary or incidental to the exercise of the powers of the Tribunal?

93In consideration of this question, the Tribunal reviewed the previous OMB decisions and notes that the Board, at paragraph 17 of Schneider, described the issue of compensation for licence transfers as “an issue of equity”. Further, at paragraph 20, the Board agreed with the licence holder that a transfer without compensation “…would not be fair”. In paragraph 22, the Board advanced the proposition, that “where a licence held by a licensee in good standing, is to be transferred without the consent of the licensee, compensation to balance the gains and losses of economic value between parties is warranted as part of the consideration of the merit of the transfer”.

94The Tribunal does not agree with the previous findings of the Board and finds that attaching a condition requiring compensation for the economic value of the licence to a licence transfer under s. 18(8) of the ARA is not incidental nor necessary when exercising the powers of the Tribunal under s. 9(1) of the OLTA for the reasons that follow.

95The Tribunal accepts the submissions of the MNRF that the requirement of compensation in a licence transfer proposal is not necessary to accomplish the ARA’s purpose of providing for the management of aggregate resources in the Province. It is the MNRFs responsibility to manage the aggregate resources in the Province, which it does, in large measure, through granting licences that permit the extraction of the aggregate resources in the Province and setting the terms and conditions on which such licences are to be exercised. Ensuring that the licence is utilized for the purpose for which it is intended is part of the MNRF’s management obligation. The remaining purposes set out in s. 2 of the ARA are related to the oversight of individual aggregate operations throughout the Province.

96The proposition from Schneider that “equity”, “fairness”, or “matter of principle”, none of which are found in the ARA, are to be considered on the merit of a transfer is without foundation. The Tribunal reviewed the PPS 2024 and reviewed the purposes of the ARA and finds no reference or inference to the consideration or equity, fairness, or the matter of principle raised as a consideration for the transfer of a licence. The Tribunal was not directed to any provision or policy that set out that the Province, the Minister, or the Tribunal is required to consider the equity or fairness as it related to the management of aggregate resources, the issuance of an aggregate licence which permits the extraction of aggregates, or the transfer of such a licence.

97The Tribunal prefers the submissions of the MNRF and finds that the MNRF is not responsible for negotiating extraction agreements, nor is it an approval authority for such agreements. Parties that are willing to incur the considerable expense of obtaining a licence without securing the necessary extraction rights do so at their own peril. The Tribunal does not have the jurisdiction to alter the arrangement, or lack thereof, between parties. Should the parties in an extraction agreement not address the financial implications of the expiration of the agreement, it is not the Province’s nor the Tribunal’s role to step in as arbiter. Contractual disputes and damage claims arising out of private agreements between a landowner and a licence holder is not within the mandate of the ARA and is outside the jurisdiction of the Minister and the Tribunal.

98Accordingly, the Tribunal finds that, while the Tribunal has the authority under s. 9(1) of the OLTA to make orders or give directions necessary or incidental to the exercise of the powers conferred to the Tribunal, the consideration of the economic value of a licence when contemplating the merits of a licence transfer application pursuant to s. 18(8) of the ARA is not necessary nor incidental to the exercise of the powers of the Tribunal in this instance.

99Further, when a landowner and a licence holder negotiate an agreement to permit the extraction of aggregate and fail to address the financial implications of the expiration of the agreement, the Tribunal finds that, in consideration of the merits of the transfer, it is not necessary for the Tribunal to remedy any shortcomings in that agreement. The imposition of a condition addressing compensation for the economic value of the licence would be such a remedy.

100As set out above, the Tribunal finds that the consideration of directing compensation for the economic value of a licence is not necessary or incidental in the determination of the merits of the transfer of the Licences in this instance. Nonetheless, the submissions with respect to the Doctrine of Jurisdiction by Necessary Implication from Lafarge are addressed below.

101The Legislature, through the ARA, established a framework within which the aggregates industry operates. There was no evidence put before the Tribunal to suggest that the mandate or purpose of the ARA includes financial consideration as part of a licence transfer or for the issuance of a licence for that matter. Section 2 of the ARA clearly sets out that one of the purposes of the ARA is to provide for the management of the aggregate resources in the Province. The purpose of the ARA and the MNRF’s role is discussed in paragraph [95] of this Decision.

102The Supreme Court set out that the five conditions enumerated in paragraph [86] for the application of the Doctrine of Jurisdiction by Necessary Implication are conjunctive and must be met by including ‘and’ after the fourth condition.

103The Tribunal does not find that the jurisdiction to impose a condition requiring compensation for the economic value of an aggregate licence is necessary to accomplish the objectives of the legislative scheme nor is it essential to the Tribunal to fulfill its mandate. The purposes set out in the ARA do not suggest that the Province, the Minister, or the Tribunal have any role to play in the business arrangements between landowners and licence holders. The Tribunal finds that the first condition in paragraph [86] is not met and therefore the application of the Doctrine of Jurisdiction by Necessary Implication to establish the Tribunal’s authority is not applicable.

3. Should the Tribunal attach a condition to the transfer of the licence directing the payment of compensation?

104Notwithstanding the finding that the Tribunal does not have the authority to attach a condition as set out above, the Tribunal will address the question of whether a condition directing compensation should be attached to an order directing the transfer of the Licences.

105Lafarge submits that they should be compensated for the investment that they have made in the acquisition of the Licences. The Tribunal notes that Lafarge has been in possession of the Licences for over 20 years and has been able to extract aggregate from the Pits during much of that time. It is a reasonable expectation that Lafarge has recovered their investment over the period that they have held the Licences.

106Jeanor submits that they should be compensated for the loss of income they have experienced since 2019, when the extraction agreement expired, the costs associated with the rehabilitation of the Pits and the costs associated with the relocation of the Berm from the abutting lands. Jeanor provided no evidence to the Tribunal to support their claim for the loss of income since the expiration of the Extraction Agreement. The Tribunal considered the costs associated with the rehabilitation of the Pits and the relocation of the Berm previously in this decision.

107As set out above, the Tribunal finds that the consideration of compensation for the economic value of a licence is not necessary or incidental to the exercise of the powers of the Tribunal under s. 18(8) of the ARA and s. 9(1) of the OLTA. Notwithstanding s. 9(2) of the OLTA includes authority to the Tribunal to attach a condition, the Tribunal does not find that attaching a condition requiring the payment of compensation is required as discussed above.

108The Tribunal acknowledges that it has concluded that a licence has an economic value and is not discounting this consideration. In Lillie, at paragraph 6 below, the Board determined its role is relatively small and drew the conclusion that any compensation, beyond administrative matters, is a matter over “which the courts have jurisdiction expertise.”

Thus the Board's role is relatively small, it exists simply to help the Minister resolve disputes, not to play any large role in management of the resource. In Decision No. 0002 [now reported 38 O.M.B.R. 113], the Board decided it should not attempt to duplicate processes which the courts have jurisdiction expertise. Although personal licenses might not be thought of to attract compensation on their transfer, the Schneider and Maniplex cases have established that some of the “value added” by the licensee may be available by order of the Board [see Maniplex Investments v. 115967 Canada Inc., Board File No. PL968535, N. Smith, August 28, 1997]. In my opinion, any compensation ordered by the OMB should be restricted to administrative rights acquired under the Aggregates Resources Act, or payments made under that Act, for which the Courts will not award a remedy.

109The Tribunal finds that the request for compensation for the economic value of the Licences from Lafarge and the request for compensation for lost income from Jeanor are requests from the Parties seeking compensation for economic loss. Lafarge is seeking compensation for future economic loss, whereas Jeanor is seeking compensation for past economic loss.

110Jeanor’s request for compensation for lost revenue is based on a contractual dispute and damage claim arising out of a private agreement between the landowner, Jeanor, and the licence holder, Lafarge. Resolving this matter is not within the mandate of the ARA and is clearly outside of the jurisdiction of the Minister and the Tribunal.

111In a similar context, the Tribunal determines that the economic value that Lafarge is proposing be assigned to the Licences is to compensate Lafarge for the loss of potential future revenue that the Licences represent. Had the current matter before the Tribunal been framed as Lafarge seeking compensation for the economic loss resulting from the transfer of the Licences, the Tribunal would clearly find that this determination is outside of the purposes of the ARA, outside of the jurisdiction of the Minister, and outside of the jurisdiction of the Tribunal. The determination of financial loss or damages is the purview of the Courts, a conclusion similar to that which the Board made in the Lillie decision.

Impact on the Aggregates Industry in Ontario

112Mr. Zeman proffered that, should the Tribunal grant the proposed transfer without compensation to Lafarge in recognition of the economic value of the Licences, the decision could result in “disorder in the marketplace.” He submitted that numerous aggregate sites in Ontario operate under an agreement with a landowner similar to the arrangement that Jeanor and Lafarge previously enjoyed. If a landowner could let an agreement expire, not renew an agreement, and acquire a licence through a transfer without any cost, he contended that it would create undesirable consequences for the management of the resource.

113Mr. Strong proffered that he does not see an impact on the broader aggregate market resulting from the contested transfer without the consideration of compensation. He advised that there were 122 licence transfers processed by the MNRF in 2022 and he estimated that there have been over 1,000 transfers since the introduction of the ARA in 1990 with very few of the transfer proposals being challenged.

114Mr. Strong reiterated that the MNRF does not get involved in the financial considerations of private companies like the two other Parties in these proceedings and is unaware of what compensation, if any, has been paid in respect to the many other transfers granted by the Minister. Further, Mr. Strong opined that compensation is not a land use planning matter.

115The submissions of Lafarge, that should the Tribunal not require compensation for the economic value of the transferred Licences will have a negative impact on the aggregate market, were not supported by any tangible evidence other than the speculation proffered on behalf of Lafarge.

116The Tribunal finds that the disparate compensation awards of the prior OMB decisions have created the uncertainty that Lafarge is purporting. The Board applied compensation amounts ranging from a few hundred dollars to $280,000.00, in one instance, and the manner in which these values were calculated varied widely. In paragraph 6 of Lillie, the Board found that the Board’s role is “relatively small” and that “it exists simply to help the Minister” in the resolution of disputes.

117It is further noted that the Board stated “This recommendation would also serve the very valuable purpose of alerting others…of the pitfalls of licences based upon contingent lease arrangements…” in Schneider, at paragraph 26, where it states:

This recommendation would also serve the very valuable purpose of alerting others, first, of the pitfalls of licences based upon contingent lease arrangements, and secondly to the prospect that if a transfer is to be compelled, value will be attached to the transfer. In such cases, the parties should be prepared to negotiate freely for a compensation agreement, and if unsuccessful, may wish to make the question of compensation a matter for the Board to adjudicate upon proper evidence when an application of this kind is made under the Aggregate Resources Act.

118The Board recognized that licences which are contingent on lease agreements can be problematic. The Board continued by stating that compensation would be considered should a matter be brought before the OMB, however, the Tribunal notes that the provisions of the ARA in effect at the time were different than those in effect today. Notwithstanding, the warning issued by the Board clearly establishes a caution to the industry of the risk associated with a licence based on a lease agreement, which is, in this instance, the Extraction Agreement.

119The Tribunal concludes that the industry has been made aware of the risks in securing a licence contingent upon a lease agreement and therefore attaching or not attaching a condition requiring compensation will not affect the market as suggested by Lafarge. The Tribunal notes that this caution has been in place for over 25 years and notwithstanding that, the Tribunal is being asked to consider the merits of the transfer of a licence that was contingent on a lease agreement that is not currently in effect. In Schneider, the Board recommended that the nominal value of $3,000.00 be paid to the licence holder by the landowner. The Schneider decision, and the amount of compensation assigned under a different legislative regime, does not support the argument that not assigning compensation in the amount requested by Lafarge will have an impact on the aggregate market.

Summary and Conclusions

120The Tribunal has considered the evidence proffered and finds that a licence issued pursuant to the ARA has an economic value. All the Parties were in general agreement with this conclusion. The OMB has consistently arrived at a similar conclusion in its past decisions when dealing with contested licence transfers, however, there has not been consistency in the past decisions with respect to the manner in which economic value or compensation was to be determined.

121In the consideration of economic value, the Tribunal was asked to consider the costs incurred in acquiring a new licence and the costs avoided by the requestor of the Licences as a basis for determining the economic value. The Tribunal finds that these costs do not reflect an “economic value” of the Licences. It is the conclusion of the Tribunal that the Licences have no discernible economic value without access to the aggregate resource. It is only when the Licences and the aggregate resources are in the possession of the same party, such that the resource can be extracted from the Pits and exchanged on the aggregate market, that an economic value can be realized. The Board, in Schneider and again in Maniplex, touched on this finding, however, the consideration was not pursued any further than making the observation. In Maniplex, the Board specifically noted that it was not provided with the evidence required to calculate the value of the remaining aggregate resource. The Tribunal finds that the economic value of the Licences is a function of the exchange value of the remaining aggregate in the Pits.

122The Tribunal further finds that while s. 9(2) of the OLTA authorizes the Tribunal to attach a condition to an order, s. 9(1) of the OLTA must first be addressed and it is the finding of the Tribunal that the consideration of the economic value of a licence is neither necessary nor incidental to the exercise of the powers conferred on the Tribunal under s. 18(8) of the ARA.

123As a result of the findings with respect to the imposition of a condition requiring the payment of compensation, the Tribunal concludes that the calculation of the economic value is not required for the disposition of this matter. However, in light of the Divisional Court decision with the respect to the Brillinger matter, the Tribunal notes that it is unable to make a determination of the economic value associated with the Licences as a current market value of aggregate resources was not provided to the Tribunal by either Lafarge or Jeanor. The Tribunal did consider submissions pertaining to past sales of aggregate pits including the licence that permitted the extraction of the aggregate, where a percentage of the exchange value, similar to a per-tonne royalty amount, was applied to the remaining quantity of aggregate as a basis for a valuation of the licence.

124A licence is a privilege granted by the Province. A privilege that allows its holder to extract aggregate and realize an economic benefit from its sale on the open market. If a licence is not being utilized, because the landowner and the licence holder cannot come to an agreement to allow the extraction of the aggregate resource, regardless of the reason, it is incumbent on the Minister, upon an application for a transfer, to consider a transfer that reunites the licence with the resource, thus making the resource available to the aggregate market. The Tribunal finds that making the aggregate resource in the Pits available to the market fulfills the purposes of the ARA and the role of the MNRF in the management of the aggregate resources in the Province.

125The purposes of the ARA are to provide for the management of the aggregate resources in Ontario, control and regulate aggregate operations, require the rehabilitation of lands after extraction, and minimize impacts on the environment. The role of the MNRF is to implement the ARA. The Tribunal accepts the position of the MNRF that it is not the Minister’s role, nor that of the MNRF, to get involved in the business dealings of operators and property owners apart from the issuance of a licence and the enforcement of the conditions of the licence. The Tribunal’s role, as was found in Lillie, is relatively small and simply exists to help the Minister resolve disputes.

126In consideration of the merits of the proposed transfer, the Tribunal finds that the current valid Licences can implement the policy direction set out in the PPS 2024 and they are not being utilized. The proposed transfer will unite the Licences with the aggregate resource, consistent with the policy direction of the PPS 2024.

127The inability or unwillingness of Lafarge and Jeanor to enter into a new extraction agreement creates a situation which effectively leaves the aggregate resource stranded, and the Tribunal finds that this is not in the public interest. The Tribunal does not have the jurisdiction to resolve or remedy a failed business agreement between parties.

128The Tribunal finds that the Licences should be transferred as the proposed transfer is consistent with the PPS 2024. The Tribunal further finds that the transfer of the Licences represents good resource management and supports the purposes of the ARA.

Order

129THE TRIBUNAL ORDERS THAT the Minister of Natural Resources and Forestry is directed to carry out the transfer of Licence No. 3748 and Licence No. 15788 to Jeanor Enterprises Inc.

“David Brown”

DAVID BROWN MEMBER

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.

Footnotes

1. 1Brillinger, paragraph 102
2. 21386146 Ontario Inc. v. 2520650 Ontario Inc., 2022 ONSC 5277
3. 32684360 Ontario Ltd. v. Kingston (City), 2021 CanLII 15101 (ON LPAT) at paragraph 32.
4. 4Pierre v. McRae, 2011 ONCA 187 at paragraph 32 and ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board), 2006 SCC 4, at paragraph 50.
5. 5Rizzo and Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), 1998 CarswellOnt 1, [1998] 1 SCR at paragraph 21
6. 61386146 Ontario Inc. v. Ontario (Natural Resources and Forestry), 2020 CanLII 97259 (ON LPAT) at paragraph 23
7. 7Legislation Act, 2006, S.O. 2006, c.21, Sched. F, s. 64(1)
8. 8University Health Network v. Ontario (Minister of Finance), 2001 CanLII 8618, par. 30-31
9. 9ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board), 2006 SCC 4, par.73,