Ontario Land Tribunal

Tribunal ontarien de l’aménagement du territoire

ISSUE DATE: March 06, 2025

CASE NO(S).: OLT-22-003419 (Formerly MM170072)

PROCEEDING COMMENCED UNDER subsection 18(5) of the Aggregate Resources Act, R.S.O. 1990, c. A. 8, as amended

Referred by: Ministry of Natural Resources and Forestry

Objector: 1386146 Ontario Inc.

Applicant: 2520650 Ontario Inc.

Subject: Application for a licence transfer – applicant does not have licensee’s consent to transfer

Property Address/Description: Lot 9, Concession 4, Geographic

Municipality/UT: Whitchurch-Stouffville/York

OLT Case No.: OLT-22-003419

Legacy Case No.: MM170072

OLT Lead Case No.: OLT-22-003419

Legacy Lead Case No.: MM170072

OLT Case Name: 1386146 Ontario Inc. v. Ontario (Natural Resources and Forestry)

Heard: June 10 to 14, 2024 by video hearing

APPEARANCES:

Parties

Counsel

1386146 Ontario Inc.

Steven C. Ferri Christopher Lee Mandy Ng

2520650 Ontario Inc.

David White

Ministry of Natural Resources and Forestry

Zachary D’Onofrio

DECISION DELIVERED BY DAVID BROWN AND F. LAVOIE AND ORDER OF THE TRIBUNAL

Link to Order

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 Licence No. 6531 (the “Licence”), issued pursuant to the Aggregate Resources Act, R.S.O. 1990, c. A.8 (“ARA”), for an aggregate pit that has been dormant for over two decades.

22520650 Ontario Inc. (the “Applicant”) owns the lands on which the pit is located (the “Licensed Lands”) and has made an application to the Ministry of Natural Resources and Forestry (“MNRF”) pursuant to s. 18(8) of the ARA, requesting the transfer of the Licence from 1386146 Ontario Inc. (“Licensee” / “1386146”) to the Applicant. The Licence permits the extraction of aggregates from the Licensed Lands.

3The Licensed Lands are located on the west side of Warden Avenue, south of Bloomington Road, and are known municipally as 13602 Warden Avenue. The Licensed Lands are zoned Employment Extraction in the Town of Whitchurch-Stouffville Zoning By-law No. 2010-001-ZO which permits a Pit or Quarry and a Mineral Aggregate Operation.

4The Minister served notice to the Licensee, as required by s. 18(4) of the ARA, of the Minister’s proposal to grant the proposed transfer. The Licensee does not consent to the proposed transfer and requested a hearing before the Tribunal pursuant to s. 18(5) of the ARA. The Minister referred the matter to the Tribunal as required by s. 18(6) of the ARA.

5The Applicant and the Licensee previously had an agreement that permitted the Licensee to enter onto the Licensed Lands to extract aggregate (“Extraction Agreement”). The Extraction Agreement expired in 2003 and the two Parties have been unable to negotiate a new agreement to allow for the continued extraction of aggregate from the Licensed Lands.

6The MNRF records confirm that no aggregate has been extracted from the Licensed Lands since 2001.

7The Parties agreed that the Licence should be transferred, however, the Parties did not agree on whether that transfer should include a condition requiring the payment of compensation to the Licensee.

8The Applicant’s position is that the Licence without access to the Licensed Lands has no value. The Applicant further contends that the aggregate resource on the Licensed Lands has no value without the Licence which permits the extraction of the aggregate resource. It is only when a Licence holder has access to the aggregate resource that any value in either the Licence or the aggregate can be realized. The Applicant submits that any value assigned to the Licence needs to consider the balancing of gains and losses of each Party and to take into consideration off-sets of costs incurred which the Licensee has failed to consider. The Applicant submits that once these matters are considered, there is no compensation owing to the Licensee and the Licence should be transferred.

9The Licensee submits that the Ontario Land Tribunal Act, 2021, S.O. 2021, c. 4 Schedule 6 (“OLTA”) provides the Tribunal with the exclusive jurisdiction to consider all matters conferred upon it by the ARA. Further, the OLTA provides the Tribunal with the authority to make orders or give directions and to include conditions that it considers fair in the circumstances. The Licensee contends that the Licence has a value that can best be determined by considering the costs incurred should a new licence be requested for the Licensed Lands. The Licensee submits that the costs of such an application would be between $750,000.00 and $950,000.00.

10The Licensee requests the Tribunal to direct the Minister to rescind the proposal to grant the transfer of the Licence or, in the alternative, grant the transfer subject to the Applicant providing compensation to 1386146 in the amount of $750,000 for the value of the Licence.

11The MNRF’s position is that the ARA does not provide the Tribunal the authority to attach conditions to the transfer of a licence pursuant to s. 18(8) of the ARA. Section 18(8) states, “The Tribunal may direct the Minister to carry out or rescind his or her proposal,” where the Minister has either proposed granting or refusing the requested transfer. The MNRF contends that the ARA does not provide the Tribunal the power to modify the proposal by way of condition. The ARA simply provides the Tribunal the power to direct the Minister to carry out or rescind the proposal. The MNRF requests the Tribunal to direct the Minister to proceed with the transfer of the Licence.

12With the conditional agreement of the Parties that the Licence should be transferred, the remaining issue before the Tribunal is whether the Tribunal has the jurisdiction to direct financial compensation for the economic value of a licence when considering a contested proposal to transfer a licence authorized under s. 18(8) of the ARA.

13The question of jurisdiction to consider financial compensation was the subject of a Motion initiated by the Tribunal’s predecessor, the Local Planning Appeal Tribunal (“LPAT”) in this matter. The LPAT held it did not have the jurisdiction to consider financial compensation under s. 18(8) of the ARA.¹ The Licensee appealed the Jurisdiction Decision to the Ontario Divisional Court (“Divisional Court”). The Divisional Court dismissed the Appeal as premature and remitted the matter back to the Tribunal without prejudice to the Licensee’s ability to argue this ground of appeal once the entire matter was decided. It held it could not provide meaningful appellate review without reasons which explained why the Tribunal departed from previous Ontario Municipal Board (“OMB” / “Board”) decisions which had considered financial compensation when dealing with licence transfers. In addition, the Divisional Court held that without a substantive decision on the licence in question, a reviewing court could not assess the legal correctness of the Tribunal’s balance of policy and fact. The Divisional Court “encouraged” the Tribunal to determine the economic value for the aggregate licence irrespective of its jurisdictional holding.²

14The Tribunal, having considered the submissions of the Parties, finds that the Licence has an economic value, however, the Tribunal did not quantify that value for the reasons that follow. 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 Licence is not incidental nor necessary when exercising the powers of the Tribunal under s. 18(8) of the ARA.

BACKGROUND AND CONTEXT

15The Licensed Lands were first licensed on August 14,1972 under the Pits and Quarries Control Act (“PQCA”) at which time the Licensed Lands comprised a larger land holding that included the adjacent lands to the south for a total licensed area of 33.5 hectares (“ha”). The original licence was issued by the MNRF to Gormley Sand and Gravel Limited.

16The PQCA was replaced by the ARA in 1990 and the licence issued under the PQCA was “grandfathered”. The “grandfathered” licence was re-issued under the ARA as Licence No. 6531 to Essroc Canada carrying on business as Gormley Aggregates. The new ARA required revised site plans to be filed with the MNRF. The revised site plans were approved on May 24, 1994.

17The Licence was transferred to St. Lawrence Cement Inc. on April 19, 1997, and then transferred to 1386146 on November 9, 2001. The licensed area was revised at that time and reduced to 33.4 ha.

18On August 30, 2004, the Licence was further revised reducing the licensed area from 33.4 ha to 11.46 ha. The MNRF interpreted this reduction in the licensed area as a “partial surrender” of the Licence. Corresponding notes and revisions were made to the ARA site plans by the MNRF officials (the “Site Plans”) to the reflect the changes to the Licence and the Licensed Lands. The revisions included an amendment to permit extraction to a depth of 1.5 metres above the water table. The lands removed from the licensed area were rehabilitated back to original grade and included the removal of the internal haul road, the removal of the Warden Avenue access, and removal of the scale house. Copies of the Site Plans (three pages) were filed with the Tribunal.

19An Agreed Statement of Facts (“ASF”) was filed with the Tribunal endorsed by Steven Strong, Senior Policy Advisor, Land-Use Planning and Aggregates Section at the MNRF, Debra Walker, a Registered Professional Planner (“RPP”) on behalf of the Licensee, and Phillipe Hébert, a Real Estate Appraiser with a specialization in properties licensed under the ARA, on behalf of the Licensee, confirming their agreement that the Licence should not be revoked and the aggregate resources on the Licensed Lands should be utilized.

20The ASF also included an overview of the ownership of 1386146 noting that in 2017, Giuseppe Lamanna acquired the corporation. Of note, no extraction agreement was in place in 2017 when 1386146 was acquired by Mr. Lamanna.

21The Provincial Policy Statement, 2020 (“PPS 2020”) identifies the protection and supply of close to market mineral aggregate resources to be a matter of provincial interest. After the hearing concluded, the Provincial Planning Statement, 2024 (“PPS 2024”) came into effect on October 20, 2024, replacing the PPS 2020. The PPS 2024 carried forward the mineral aggregate resources policies from the PPS 2020, with Policy 4.5.2.1 of the PPS 2024 stating, “As much of the mineral aggregate resource as is realistically possible shall be made available as close to markets as possible.”

22The Parties advised that the policy change to the PPS 2024 does not impact the opinions proffered by their respective Experts as the applicable policies remained unchanged.

ISSUES

23The jurisdiction issue having been remitted back to the Tribunal by the Divisional Court, the Tribunal has determined that there are three components to the question which must to be addressed:

Does a licence have an economic value and if so, what is the quantum of that economic value;
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;
If the above components are both answered in the affirmative, should the Tribunal attach a condition to the transfer of the Licence directing the payment of compensation for the economic value of the Licence?

LEGISLATIVE FRAMEWORK

24The purposes of the ARA are set out in s. 2 of the ARA which states:

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;

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

25 Section 18 of the ARA addresses the transfer of licences. The relevant subsections are set out 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:

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.

26The Tribunal also derives authority from the OLTA, 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

27The Parties presented the following witnesses to provide expert opinion evidence in their respective fields for the Tribunal’s consideration:

a. Debra Walker, an RPP, was qualified as an expert in the area of Land-Use Planning with a specialization in aggregate resource development and aggregate resource management policy on behalf of the Licensee.

b. Phillipe Hébert, a Real Estate Appraiser, was qualified as an expert in the valuation of properties licensed under the ARA, on behalf of the Licensee.

c. Quinn Moyer, a qualified expert in the area of the management of aggregate resources, aggregate site operations, and the licensing of aggregate sites, on behalf of the Licensee.

d. Steven Strong, Senior Policy Advisor, Land-Use Planning and Aggregates Section at the MNRF, a qualified expert in the field of land use planning with specific knowledge in environmental planning and aggregate and resources planning and management, on behalf of the MNRF.

28The Tribunal considered a Motion on the qualifications of certain witnesses called with respect to this matter and issued its decision on April 9, 2024 (“Qualification Motion”)³. The Tribunal, in the Qualification Motion, qualified Mr. Moyer to provide opinion evidence as an expert in the area of the management of aggregate resources, aggregate site operations, and the licensing of aggregate sites. The Tribunal also qualified Mr. Strong to provide opinion evidence as an expert in the field of land use planning with specific knowledge in environmental planning and aggregate and resources planning and management.

29Further, in the Qualification Motion, the Parties agreed that Harold Brillinger and Bill Kester “were not experts and would only provide factual and contextual evidence.”

30In addition to their viva voce evidence, each of the Experts provided Witness Statements filed as exhibits with the Tribunal. Messrs. Brillinger and Kester each submitted written statements and the Applicant filed a book of photographs with the Tribunal, which, subject to numerous redactions, were reviewed and considered by the Tribunal.

31The Parties submitted that, since the introduction of the ARA in 1990, there have been six proposals from the Minister of contested licence transfers referred to the Tribunal or its predecessors for adjudication, with this matter being the seventh. Five of the referrals from the Minister were resolved by the OMB and the Tribunal issued a decision with respect to the sixth matter after the conclusion of this Hearing.

32The Tribunal was referred to, and considered, four of the decisions rendered by the OMB which have dealt with the matter of a contested licence transfer under the ARA. The decisions are:

Schneider Sand & Gravel Ltd. v. Seip, 1995 CarswellOnt 4995, 32 OMBR 343 (“Schneider”)
Maniplex Investments West Carleton (Township) Pit Application (Re), [1997] OMBD No. 1166 (“Maniplex”)
Penderson Aggregates Ltd., Re, 2008 CarswellOnt 5048 (OMB) (“Pederson”)
Rump v. Lillie (No.2), 1999 CarswellOnt 5297 (OMB) (“Lillie”)

33The Tribunal notes an inconsistency in the decisions of the OMB with respect to methods of calculating the compensation for the value of the licences by the OMB that were payable as a condition of the transfer. These decisions will be discussed further below.

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

34The Tribunal first considered the question of whether a licence issued by the MNRF to permit the extraction of aggregate on privately owned lands has an economic value in the context of a licence transfer under s. 18(8) of the ARA and what is the quantum of the economic value.

Overview of the Jurisprudence of the Tribunal

35The OMB, in the four decisions referenced above, consistently concluded that a licence issued pursuant to the ARA has an economic value. The quantum of that economic value and the method by which it is determined was unique to each of the cases considered by the Board.

36In 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.

37The 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.

38The 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 represented a combination of administrative costs incurred or avoided relating to the transfer and the value for the remaining aggregate as set out in paragraph 43 of the Decision.

39In 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.

40In 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.

41The Tribunal observes that the Board has assigned a value ranging from $750 in one instance to as high as $280,000 in another matter. The Tribunal finds that there is no consistency in the decisions of the OMB with respect to methods of calculating the compensation required a condition of the transfer. However, the OMB consistently held a licence issued under the ARA has an economic value.

Overview of the Evidence

42Mr. Strong proffered that the Licence is a privilege that allows the Licensee to extract aggregate and benefit from the revenue generated from offering the resource to the aggregate market. The Tribunal finds that this opinion supports the premise that a licence has an inherent value.

43Mr. Moyer explained that a landowner and a prospective licence applicant will enter into an Extraction Agreement, also referred to as a Royalty Agreement, as it reduces the upfront costs associated with acquiring a licence for an applicant as there is no land acquisition costs. He further explained that the typical Extraction Agreements between a landowner and a prospective licensee require that the prospective licensee is responsible for all costs associated with the acquisition of the licence, payment of property taxes, compliance with the requirements of the licence and the MNRF approved site plan, and any requirements of the municipality. The landowner typically has no financial obligations related to the acquisition of a licence.

44An Extraction Agreement will establish the amount payable, referred to as a royalty, to the landowner by the licensee calculated on a per-tonne bases of aggregate extracted. Mr. Moyer proffered that these values are typically based on the market value rates for the specific type and quality of the aggregate being extracted.

45Ms. Walker, in her Witness Statement, proffered that “one of the factors in determining compensation is the value of the remaining resource.” Ms. Walker calculated the amount of the remaining aggregate on the Licensed Lands is 1,931,000 tonnes. The area surrounding and including the Licensed Lands is mapped by the Province of Ontario (“Province”) as a selected sand and gravel deposit with secondary significance based on the Aggregate Resource Inventory Paper 179 for York Region further supporting that the Province has identified the area and the resource available in the Province.

46Ms. Walker submitted that a further factor in consideration of the value of the Licence is the cost of obtaining a new licence for the replacement of the Licence. Ms. Walker opined that the costs associated with the acquisition of a new licence are $750,000.00. In the event that the Minister refers the licence application to the Tribunal, an occurrence which Ms. Walker suggested is common, the costs would increase to $950,000.00.

47Ms. Walker proffered that the ARA licensing process is comprehensive, costly, and lengthy. The process requires pre-consultation, detailed site investigations, installation and monitoring wells and equipment, scientific analysis, technical studies, extensive agency, public and Indigenous consultation to be completed by an applicant and after this work has been undertaken an application may be referred to the Ontario Land Tribunal. The licensing process can take up to 7 years to complete.

48Mr. Hébert proffered that the “contributory value” estimate for the Licence is $750,000.00 subject to “Extraordinary Limiting Conditions and Extraordinary Assumptions” which he described as:

a. No site visit was completed;

b. Transferability of the Licence; and

c. Reliance on the Assessment of Aggregate Reserve by Ms. Walker and her firm.

49In his Witness Statement, Mr. Hébert stated that “Licences are valued based on the replacement cost of a licence with consideration for the quantity and quality of the material in reserve, its overall utility and marketability, its locational elements, and local and regional supply and demand factors, as these would influence the level of financial risk operators are willing to take when pursing [sic] an aggregate licence.”

50Mr. Hébert reviewed the definition of Market Value as defined by the Canadian Uniform Standards of Professional Appraisal Practice and proffered that the definition also applies to the contributory value of the Licence. He proffered that implicit in the definition of Market Value is the consummation of a sale where:

a. The buyer and seller are motivated;

b. Both parties are well informed and acting in their own best interests;

c. A reasonable time on the open market has passed;

d. Payment is made; and

e. The price represents the normal consideration for the property sold.

51Mr. Hébert, in his Witness Statement opined that, “Presuming the aggregate licence is associated with a commercially viable aggregate reserve, the market value of the licence remains the same, regardless of access or right to extract, although value may only be realized when access, and right to extract is granted.”

52It was the opinion of Mr. Hébert that the value of the Licence is not affected by the existence of an Extraction Agreement, remediation works, or any such set-offs. He reiterated that so long as the resource is viable, the Licence has value. However, he conceded that the value of the Licence is only realized when access to the viable resource is available.

53The Applicant contends that the Licensee and its predecessors have utilized the Licence to extract 65% of the total aggregate that was available on the lands originally licensed for extraction. The current Licensed Lands are significantly reduced from the originally licensed lands and the Applicant submits the current Licensed Lands represents 35% of the original licensed lands and therefore the remaining aggregate resource available is only 35% of the aggregate that was originally licensed for extraction. The Licensee has not taken this into account in their assessment of the values they have proposed.

54Further, the Applicant submits that the costs of acquiring the Licence, when originally acquired, were very different from the costs that would be incurred in the current ARA policy regime. The Applicant contends that the Licensee has not given consideration to this difference in their calculations.

Analysis of the Submissions

55The Tribunal finds that the Licence has an economic value and further, the Tribunal finds that the economic value of the Licence is informed by the quantity of the remaining aggregate within the Licensed Lands.

56The OMB has long recognized that a licence has an economic value as set out in the prior decisions referenced by the Parties. However, as noted previously, there is no consistency in the manner in which the Board arrived at such a value, or the compensation amounts payable.

57The Tribunal considered the uncontradicted evidence of Ms. Walker and Mr. Hébert, both of whom testified that the economic value is a function of the aggregate resource to be extracted with the benefit of the Licence and the financial gain realized from the sale of the aggregate on the open market. Notwithstanding, Ms. Walker and Mr. Hébert focused their attention on the quantifiable costs associated with the acquisition of a new licence and did not ultimately provide any conclusions to the Tribunal with respect to the function of the remaining aggregate and the current market value of same for the determination of the economic value of the Licence. While Mr. Hébert initially testified that the value of the Licence was independent of the resource, he admitted on cross-examination that the “value may only be realized when access, and right to extract is granted.”

58Mr. Hébert described the value of the Licence as a “contributory value” which he explained is the amount by which a single component of an asset influences its total value. Mr. Hébert’s testimony and evidence made numerous references to the relationship between the Licence and the aggregate resource, however, his conclusion of the economic value of the Licence focused solely on the administrative costs associated with the acquisition of a licence. The Tribunal accepts the evidence of Mr. Hébert as described, save and except his conclusion, and finds that the market value of the aggregate resource is determinant of the economic value of the Licence, but only when the Licence and the access to the aggregate resource are both accessible to the same party. Mr. Hébert proffered that the remaining aggregate does not impact the contributory value of the Licence, except when there is no aggregate remaining. The Tribunal rejects this opinion and finds that the economic value of a licence will diminish proportionally as the aggregate it allows to extract is extracted. Following the premise advanced by Mr. Hébert, a licence would have an economic value of $750,000 whether it permits the access to 10 million tonnes or 10,000 tonnes. Further, the Tribunal finds that Mr. Hébert’s evidence is incomplete as he did not proffer an opinion on why a well informed and motivated buyer, as described in his Market Value definition, would pay $750,000 for an aggregate licence without access to aggregate.

59The Board touched on the concept that the quantity of the remaining aggregate is germane to the calculation of the economic value in Schneider, where the Board notes that the value of a licence is some function of the resource and the value added by the applicant for the licence.⁴ The distinction noted in this conclusion by the Board is that the value is in the licence holder bringing the licence together with the aggregate when the landowner and the licence holder are different parties. Following this premise, the greater the volume of the aggregate available, the greater the economic value that the Licence adds when brought by the Licensee, as it provides access to a greater financial return establishing a direct correlation between the remaining aggregate and the economic value of the Licence.

60The Maniplex decision explored the value of the quantity of the remaining aggregate in paragraph 37 where the Board Member states, “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.”⁵ As this estimate was not available, as stated in the Decision, the Board explored other means to calculate a value of compensation to be awarded.

61The Tribunal acknowledges that the costs associated with the process of acquiring a licence are significant, however, the Tribunal finds that such costs are not an accurate reflection of the economic value of the Licence. There is a difference between the costs of acquiring a licence and the economic value that a licence unlocks in the sale of the aggregate resource on the aggregate market.

62The Tribunal finds that the economic value of the Licence is a function of the market value of the aggregate resource of which the Licence permits extraction. The determination of the economic value of the Licence separate from the aggregate will not result in an accurate economic value or contributory value as described by Mr. Hébert.

63The extraction of an aggregate resource requires two permissions, the ARA licence from the Province and the landowner’s permission to access the aggregate. Without both permissions, no extraction and sale of an aggregate resource can occur, and no financial benefit can be realized. A financial benefit from the sale of the aggregate resource can only be realized if the Licence is in the possession of the party that has access to the aggregate resource.

64The Tribunal, in considering the submission of Mr. Moyer, understands that the current market rate of royalties payable for the aggregate resource on the Licensed Lands would be based on the market value of the remaining aggregate resource taking into consideration the quality and the quantity of the remaining aggregate resource.

65The Tribunal finds that the determination of the economic value of the Licence should take a form similar to that of a royalty, being calculated on a per-tonne basis of the remaining aggregate resource to be extracted. Calculating an economic value as a percentage of the market value of the remaining aggregate would more accurately reflect true economic value of the Licence. The Tribunal finds that this consideration would result in an economic value for the Licence that reflects the quality and quantity of the remaining aggregate resource at the time of the transfer. This approach would reflect an economic value that is not impacted by the revisions to the Licence that have reduced the area of the Licensed Lands addressing the concerns raised by the Applicant.

66The Tribunal was not provided a current market value for the remaining aggregate within the Licensed Lands by the Parties during the proceedings, nor was the Tribunal provided with a scale of royalty payments that could be applied to the remaining aggregate.

67Notwithstanding the Divisional Court’s encouragement that the Tribunal determine the economic value for the aggregate licence irrespective of its jurisdictional holding⁶, the Tribunal is unable to determine an economic value of the Licence as current market value for the remaining aggregate resource was not provided for the Tribunal’s consideration.

Current State of Licensed Lands

68The Applicant presented Messrs. Brillinger and Kester who reviewed multiple photographs of the Licensed Lands and suggested that the current state of the Licensed Lands will require extensive work to re-establish an aggregate extraction operation and these costs should be considered as a set-off against any payment that may be required in connection with the proposed transfer.

69Mr. Strong proffered that the current state of the Licensed Lands is not unusual for a site that has been dormant for the past 20 years. He confirmed that the MNRF has not identified any compliance issues that prevent the transfer from occurring.

70The Tribunal finds that costs incurred in the preparation of the lands for extraction of aggregate is not a factor that impacts the proposed transfer of the Licence. The Tribunal finds that these costs would be the typical costs incurred with the establishment and operation of an aggregates pit.

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?

71As referenced above in paragraph [13], the question of the Tribunal’s jurisdiction to consider financial compensation under s. 18(8) of the ARA was recently considered in the Jurisdiction Decision and further by the Divisional Court. Though the Divisional Court dismissed the appeal as premature, it did so without prejudice to the appellant’s ability to argue this ground of appeal again (Jurisdiction Appeal at para 40):

40 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.

72In the Tribunal’s view, since the Divisional Court dismissed the Jurisdiction Appeal, the Jurisdiction Decision still stands. In the Jurisdiction Decision, the Tribunal had already decided it does not have jurisdiction to attach a condition to a licence transfer under s. 18(8) of the ARA. However, if the Tribunal is wrong that the Jurisdiction Decision has already decided the question of jurisdiction in this matter, this Panel also finds it does not have the jurisdiction to attach a condition to a licence transfer under s.18(8) of the ARA, for the reasons that follow.

Overview of Submissions

73The Tribunal was referred to Giofam Investments Inc. v. Simcoe (County), 2018, CarswellOnt 10319, 2018 ONSC 3923 in which the Ontario Superior Court of Justice references the modern principle of statutory interpretation from the Supreme Court of Canada and states at paragraph 59;

Today there is only principle or approach, namely, the words of an Act are to be read in their entire context, in the grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of parliament. This is the recognized starting point in interpreting statutory, by-law or other types of legislation. … In other words, the courts must consider and take into account all relevant and admissible indicators of legislative meaning. After taking these into account, the court must then adopt an interpretation that is appropriate. An appropriate interpretation is one that can be justified in terms of (a) its plausibility, that is, its compliance with the legislative test; (b) its efficacy, that is, its promotion of the legislative purpose, and (c) its acceptability, that is, the outcome is reasonable and just.

74Mr. Lee, Counsel for the Licensee, submitted that the ARA is remedial and is intended to secure a social benefit. The purpose of the ARA includes the management of aggregate resources and the control and regulation of aggregate operations. Section 18(5) of the ARA gives an applicant or licensee served with notice of the proposal by the Minister the entitlement to a hearing before the Tribunal, and in doing so, Mr. Lee contends that the intent of the legislation is to confer broad discretion on the Tribunal to resolve the Appeal.

75Mr. D’Onofrio, Counsel for the MNRF, submitted that the Tribunal, being a statutory body, may only exercise the powers granted to them through statute. The ARA states explicitly the circumstances where the Minister or the Tribunal have the authority to attach conditions or vary proposals. The principle of implied exclusion is based on the premise that the Legislature chooses the words it includes in a statute purposefully. Mr. D’Onofrio directed the Tribunal to University Health Network v. Ontario (Minister of Finance)⁷ wherein the Ontario Court of Appeal found that if words are present in one section of a statute but omitted from another, it indicates that the legislature intentionally meant to omit them. Mr. D’Onofrio contends that the authority to attach a condition to vary the proposal is not included in s. 18(8) of the ARA.

76Mr. Lee submitted that a liberal interpretation of the ARA and the OLTA gives the Tribunal jurisdiction to grant the transfer of the Licence and the authority to attach a condition requiring the payment of compensation. The OMB in Giofam Investments Inc. v. Kawartha Lakes (City)⁸, found that Ontario Municipal Board Act (“OMBA”) in s. 36 and s. 37 (now the OLTA s. 8 and s. 9) and s. 11 and s. 12 of the ARA grant the authority to the Board to impose conditions on a licence transfer. Mr. Lee submitted that the Board has interpreted the authority of the OMBA to allow for the imposition of a condition and he contends that the jurisprudence carries forward to the Tribunal and demonstrates the appropriate authority to attach a condition as contemplated by legislation. Mr. Lee contends that this is consistent with a just and fair outcome.

77Mr. D’Onofrio submitted that the current ARA came into force in 1996 and changed the Tribunal’s role from one of reviewing facts and making a recommendation to the Minister to that of directing the Minister to proceed with or rescind a proposed transfer. He contends that the Tribunal’s role is narrower than when the Board was considering Schneider and Maniplex.

78Mr. D’Onofrio submitted that the Tribunal does not have an explicit power to vary the Minister’s order and that the Tribunal could then only get such power through the Doctrine of Jurisdiction by Necessary Implication as referenced in ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board)⁹. The Supreme Court of Canada (“SCC”) in Canada (Human Rights Commission) v. Canada Liberty Net, 1998 CanLII 818 (SCC), [1998] 1 SCR 626 at paragraph 18 set out that reading in a remedial power can only be done if the power is “a necessary incident to any of the Tribunal’s functions or powers.” Further, he contends that had the Legislature intended for the Tribunal to have the authority to attach a condition, it would have included such authority as it has done in other sections of the ARA where jurisdiction is given to the Tribunal.

79Mr. Lee submitted that applying the Doctrine of Jurisdiction by Necessary Implication referred to in ATCO¹⁰, is not required in this instance, as the Tribunal has the authority under OLTA. However, he contends that should the Doctrine of Jurisdiction by Necessary Implication be applied to support the jurisdiction, the tests set out by the Supreme Court are met, in that an objective of the ARA is to provide for the management of aggregate resource in Ontario. The broad mandate of the Tribunal is to hear appeals pursuant to the ARA, make orders as may be necessary or incidental to the exercise of its powers, including conditions it considers fair, and there is no evidence that the Legislature decided against conferring the power to order conditions upon a Minister’s proposal to transfer a licence.

Analysis and Findings

The ARA was different when Schneider and Maniplex were decided

80At paragraph 82 of the Jurisdiction Decision, the Tribunal explained that when the OMB decided Schneider and Maniplex, it was permitted to make a recommendation to the Minister.

81Both Schneider and Maniplex are decisions where the referrals of contested licence transfers were governed by the now repealed s. 21 of the ARA as it appeared in 1990 (“1990 ARA”):

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.

(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.

(emphasis added)

82Section 21 of the 1990 ARA was repealed with the enactment of the Aggregate and Petroleum Resources Statute Law Amendment Act, 1996, SO 1996, c 30. At the same time, s. 18 of the ARA was amended. Germane to this appeal was the addition s. 18(8) that read, “The Board may direct the Minister to carry out or rescind his or her proposal.”

83Subsection 18(8) has since changed twice: “Board” was replaced with the “Local Planning Appeal Tribunal”, which was subsequently replaced with “Tribunal”. In its current form, subsection 18(8) of the ARA reads, “The Tribunal may direct the Minister to carry out or rescind his or her proposal.”

84The Tribunal finds that the legislative changes which amended the Board’s role from providing holistic recommendations to the Minister to a role where it can merely “green light” or “red light” the Minister’s proposal, entirely explain why this Tribunal must depart from Schneider and Maniplex.

The Tribunal is not bound by its own decisions

85Furthermore, even if the ARA had not been so fundamentally altered, this Tribunal is not bound by its own or predecessors’ decisions. It is a well-accepted principle of administrative law that stare decisis does not apply to administrative tribunals (TransCanada Pipelines Ltd v. Beardmore (Township), 2000 CarswellOnt 1072 (ONCA) at para 129). Requiring this Tribunal to explain why it did not follow its own previous decisions is an error of law. This Tribunal is not a court of law.

The Tribunal cannot rely on equity to require compensation

86Neither is this Tribunal a court of equity. The OMB at paragraph 17 of Schneider described the issue of compensation for licence transfers as “an issue of equity”. Further, at paragraph 20, the OMB agreed with the licence holder that a transfer without compensation “…would not be fair”. The Tribunal cannot award compensation by ignoring its governing statutory provisions, even if it believes it will produce unfair and unjust consequences.

87It appears that this is precisely what the OMB did in Schneider at paragraph 22, when it held, citing no authority for this 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”.

88At paragraph 21 of Schneider, the OMB speculated what lessors and lessees of ARA licensed lands might do if compensation were not required in transfers. It concluded that this potential uncertainty would not be consistent with the purposes of the ARA:

21 Furthermore, the Board believes that there may be important practical consequences that must be considered. Permitting an "automatic" transfer to the landowner after the lease has expired could have far-reaching undesirable implications for many current lessees and perhaps ultimately for the public. Some lessors of lands on which valid licences are held by others may decide not to renew their leases. Instead there may be some incentive to letting the lease lapse so that they can then keep the balance of the resource and gain the licence by "automatic transfer" from the current licensee for the mere price of an application fee. This and other possible consequences could yield uncertainty in the management of the resource that would not be consistent with the purposes of the Aggregate Resources Act, under Section 2, and with stated Ministry policy to maintain adequate supplies of the resource and protect the public's interest in an orderly marketplace for materials.

89These speculative concerns are counterbalanced with the uncontroverted fact, in the matter at hand, that no extraction has occurred on the Licensed Lands for over two decades. The Tribunal finds the purpose of providing for the management of the aggregate resources of the Province is undermined where, as in this case, the current licence holder is no longer able to extract the resource for which they hold their licence.

90The Tribunal rejects the proposition from Schneider that “equity”, “fairness”, or “matter of principle”, all of which are notably absent from the ARA, should be considered at all on the merit of a transfer. Sophisticated parties that go through the considerable expense of obtaining an ARA licence without securing the necessary rights to extract do so at their own peril. The Tribunal does not have the jurisdiction to alter the deal, or lack thereof, between parties.

The Tribunal’s authority under the ARA and the OLTA

91In 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.

92 Subsection 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.

93The MNRF 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) of the ARA specifically omits such authority. Mr. D’Onofrio 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 of the ARA also include such similar authority.

94The MNRF submits that had the Legislature intended to grant the Tribunal the authority to attach a condition they would have included such direction.

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

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

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

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

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

96The 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 in the Jurisdiction Decision found that it was confined to directing the Minister to carry out or rescind the transfer proposal or the revocation.¹¹

97The Tribunal 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 Legislature named the Tribunal as 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.

98The 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, and this differs from the findings of the Tribunal in the Jurisdiction Decision.

99The 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 the MNRF suggests, 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 the Legislature would have also been aware of the other powers contained in the OLTA including the powers in s. 9. The Legislature chose to include a limitation in s. 18(9) of the ARA with respect to s. 23 of the OLTA and chose not to include such a limitation with respect to the powers under s. 9 of the OLTA in s. 18(8) of the ARA.

100As such, it is the Tribunal’s finding that s. 18(8) of the ARA does not expressly limit the authority 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).

101The 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?

102That 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?

103As set out in paragraph [90] of this decision, the Tribunal rejects the previous findings of the Board and finds that the considerations of “equity”, “fairness”, or “matter of principle” are notably absent from the ARA. The Tribunal 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.

104The Tribunal agrees with the MNRF’s submission 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 MNRF’s 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.

105The Tribunal reviewed the PPS 2024 and reviewed the purposes of the ARA and finds no reference or inference to the consideration of 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, or the transfer of such a licence.

106The 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 neither 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 are not within the mandate of the ARA and are outside the jurisdiction of the Minister and the Tribunal.

107Accordingly, 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.

108Further, 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.

109As 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.

110Having determined the ARA and OLTA do not empower the Tribunal with the jurisdiction to add conditions on compensation for the licence, the Tribunal will now address the Licensee’s submissions with respect to the Doctrine of Jurisdiction by Necessary Implication.

The Doctrine of Jurisdiction by Necessary Implication Does Not Apply

111The 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 [105] of this Decision.

112The Licensee submits that if the Tribunal finds it does not have explicit jurisdiction, it has jurisdiction through the Doctrine of Jurisdiction by Necessary Implication. The Licensee referred the Tribunal to the test from ATCO at paragraph 73, and explained the Supreme Court held that the Doctrine of Jurisdiction by Necessary Implication may be applied under any of the five circumstances identified. When reviewing the five circumstances, the Licensee submitted that a matter need only meet one of the circumstances listed to apply the Doctrine indicating that the list included an “or” following the penultimate circumstance. The Tribunal reviewed ATCO and found that the list of circumstances was separated by “and” following the penultimate circumstance which results in a very different implication.

113Paragraph 73 of ATCO reads as follows:

73 The City seems to assume that the doctrine of jurisdiction by necessary implication applies to “broadly drawn powers” as it does for “narrowly drawn powers”; this cannot be. The Ontario Energy Board in its decision in Re Consumers’ Gas Co., E.B.R.O. 410-II/411-II/412-II, March 23, 1987, at para. 4.73, enumerated the circumstances when the doctrine of jurisdiction by necessary implication may be applied:

[when] the jurisdiction sought is necessary to accomplish the objectives of the legislative scheme and is essential to the Board fulfilling its mandate;
[when] the enabling act fails to explicitly grant the power to accomplish the legislative objective;
[when] the mandate of the Board is sufficiently broad to suggest a legislative intention to implicitly confer jurisdiction;
[when] the jurisdiction sought must not be one which the Board has dealt with through use of expressly granted powers, thereby showing an absence of necessity; and
[when] the Legislature did not address its mind to the issue and decide against conferring the power upon the Board.

(emphasis added)

114At paragraph 25, the Divisional Court in the Jurisdiction Appeal also unambiguously explained that these conditions all needed to be met:

25Necessary implication may be acquired when the following conditions are met:

(a) the jurisdiction sought is necessary to accomplish the objectives of the legislative scheme and is essential to the Board fulfilling its mandate;

(b) the enabling act fails to explicitly grant the power to accomplish the legislative objective;

(d) the jurisdiction sought must not be one which the Board has dealt with through use of expressly granted powers, thereby showing an absence of necessity; and

(e) the legislature did not address its mind to the issue and decide against conferring the power upon the Board.

ATCO Gas & Pipelines Ltd., at para. 73.

115The Tribunal finds that Doctrine of Jurisdiction by Necessary Implication as articulated by the Supreme Court requires that the five circumstances identified are conjunctive and must all be met by including ‘and’ after the fourth circumstance.

116The Tribunal finds that the jurisdiction to impose a condition requiring compensation for the economic value of an aggregate licence is not 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 of the five conditions of the Doctrine of Jurisdiction by Necessary Implication set out in paragraph [113] 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?

117Notwithstanding the finding that the Tribunal does not have the authority to attach a condition as set out above, if the Tribunal is wrong on that issue, the Tribunal would still not exercise its discretion in this case.

118The Licensee submits that they should be compensated for the investment that they have made in the acquisition of the Licence. The Tribunal notes that 1386146 acquired the Licence over 20 years ago and, except for a brief period between 2001 and 2003 during which no aggregate was extracted, 1386146 has not had access to the Licensed Lands. 1386146 was acquired by the current owner in 2017, at which time there was no Extraction Agreement in place.

119The OMB in Lillie determined the Board’s role is relatively small and draws the conclusion that any compensation should be restricted to administrative matters as set out at paragraph 6 below:

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.¹²

120Mr. Strong submitted 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.

121The Tribunal concludes that Gormley Sand and Gravel Limited would have incurred administrative costs at the time of application for the original licence and further costs at the time of the issuance of the Licence under the ARA with the preparation of the Site Plans. St. Lawrence Cement Inc. acquired the Licence through a transfer in 1997 and then, in 2001, transferred the Licence to the Licensee. The Licensee offered no evidence it incurred any administrative costs associated with the issuance of the Licence. Further, the Licensee proffered no evidence of the price paid for the acquisition of the Licence when it purchased 1386416.

122The request for compensation for the economic value of the Licence could be more accurately described as the Parties are seeking compensation for the loss of revenue. Should the transfer be granted, the Licensee stands to lose the potential income from the sale of the remaining aggregate resource and the Applicant has not realized any income from the royalties from the sale of the remaining aggregate for the past 20 years. Replacing the term ‘economic value’ with the term ‘economic loss’, a different and possibly more accurate context is created. Should the current matter before the Tribunal be framed as the Licensee is seeking compensation for the economic loss as a result of the transfer of the Licence, the Tribunal finds that the matter falls squarely within the purview of the Courts. The Tribunal finds that this determination of economic loss or damages is outside of the scope of the ARA, outside of the jurisdiction of the Minister, and outside of the jurisdiction of the Tribunal. The OMB came to a similar conclusion in Lillie where it is noted that, “the Board decided it should not attempt to duplicate processes which the courts have jurisdiction expertise.”¹³

123The Tribunal finds that the inability of the Licensee and the Applicant to resolve their differences with respect to the renewal or extension of the Extraction Agreement or the negotiation of a consensual transfer of the Licence is a matter that is outside of the jurisdiction of the Tribunal.

124The Tribunal finds, as the Board did in Lillie, that an award of compensation arising from a contested licence transfer is a matter in which the Tribunal “should not attempt to duplicate processes which the courts have jurisdiction expertise.”

Impact on the Aggregates Industry in Ontario

125Ms. Walker proffered that should the Tribunal grant the proposed transfer without compensation to Licensee recognizing the economic value of the Licence that the decision could result in “uncertainty in the marketplace.”

126Mr. Moyer proffered that it is common practice for aggregate licence applicants to secure site access before pursuing a licence for a site. He testified that a responsible operator evaluates the asset in the aggregate resource and the costs associated with its extraction as the basis for negotiating the terms of an Extraction Agreement with a landowner. He explained that renewals of the Extraction Agreement are part of that negotiation. Parties would know the terms of the agreement including the royalty amounts payable and the length of agreement. He noted that agreements are typically for 20 years and renewals are based on business relationships.

127Mr. Strong proffered that he does not anticipate an impact on the broader aggregate market resulting from the contested transfer without the consideration of compensation. He advised that there have been approximately 450 licence transfers processed by the MNRF since 2020 and he estimated that there have been over 1,000 transfers since the introduction of the ARA in 1990. He advised that he is aware of five other applications for transfer that have been contested and referred to the Tribunal during this time. Mr. Strong noted that this is the only contested transfer that he is aware of where the Licensee acquired the Licence without access to the aggregate resource.

128Mr. Strong reiterated that the MNRF does not get involved in the financial considerations of private companies.

129The Tribunal finds that the submissions of the Licensee that not requiring compensation to be paid as part of a contested licence transfer will have a negative impact on the greater aggregate market is not borne out in the evidence. Mr. Moyer’s testimony that it is his practice to include renewal and arbitration clauses in the agreements he negotiates reflects the evolution of the aggregate industry and the Tribunal finds that this is a more accurate representation of the evolving aggregate market and Extraction Agreements.

130The Tribunal finds that the disparate compensation awards of the prior OMB decisions has not established a consistent baseline on which licence holders and landowners can rely when considering a contested licence transfer. The Board applied compensation amounts ranging from a few hundred dollars to over $200,000, in one instance. Further, the manner in which these values were calculated varied widely.

131In 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.

132The Tribunal also noted that the Board issued a caution at paragraph 26 of Schneider, 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.

133The 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.

134The 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 the Licensee. 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 1386146 will have an impact on the aggregate market.

CONCLUSIONS

135The Tribunal has considered the evidence proffered and finds that the Licence has an economic value. The Parties agreed at the onset of the Hearing that the Licence has an economic value. 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.

136The Tribunal was asked by the Licensee to value their licence, granted half a century ago and acquired by them two decades ago, as the cost to acquire a licence today. The Licensee offered no explanation why the cost of acquiring a new licence under the current policy regime is appropriate in valuing a licence from 1972. Neither did the Licensee explain why they chose not to present any evidence as to the price they paid themselves for the Licence when they acquired 1386146.

137In the consideration of economic value, the Tribunal was asked to consider the costs incurred in acquiring a new licence and the contributory value subject to the extraordinary limiting conditions and assumptions 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 Licence. It is the conclusion of the Tribunal that the Licence has no discernible economic value without access to the aggregate resource. It is only when the Licence is in the possession of the Party that has the access to aggregate resource, such that the resource can be extracted and exchanged on the aggregate market, that an economic value can be realized.

138The 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 Licence is a function of the exchange value of the remaining aggregate on the Licensed Lands.

139The Tribunal further finds that while s. 9(2) of the OLTA authorizes the Tribunal to attach a condition to an order, the Tribunal finds that 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.

140As 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.

141Despite being asked to arrive at an economic value in the Jurisdiction Appeal, the Tribunal is unable to make a determination of the economic value associated with the Licence as a current market value of aggregate resources was not provided to the Tribunal. The Tribunal accepts the evidence of the Licensee’s Experts where they proffered that the quality and the quantity of the remaining aggregate informs the economic value of the Licence. The Tribunal, having considered this evidence, finds that the economic value to be assigned to the Licence would most appropriately be determined by assigning a value on a per-tonne basis to the remaining aggregate similar to a royalty value. The resultant value would accurately reflect the quantity and the quality of the aggregate current at the time of the transfer of the Licence.

142The Tribunal finds that the purpose of the ARA is a relevant consideration in these proceedings. Section 2(a) of the ARA relates to the aggregate market in the Province and a purpose of the ARA is to provide a framework for the aggregate industry ensuring the availability of aggregate resources across the Province. The current licence transfer framework contained in the ARA has been in existence since revisions to the ARA that occurred in 1996, a period of time approaching 30 years as of the date of this Decision.

143The PPS 2024 directs that “As much of the mineral aggregate resources as is realistically possible shall be made available as close to markets as possible.” A licence has been issued by the MNRF that permits the extraction of a viable resource that is in close proximity to the Greater Toronto Area market and due to the impasse between the Applicant and the Licensee with respect to access to the Licensed Lands, this aggregate resource has not available to the market for over 20 years.

144A 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, 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. The Tribunal finds that making the remaining aggregate resource on the Licensed Lands available to the market, through the transfer of the Licence, fulfills the purposes of the ARA and the role of the MNRF in the management of the aggregate resources in the Province.

145Neither the Tribunal nor the Province is responsible to resolve the failed business dealings between the two Parties. The inability of the Parties to resolve their differences has stranded an aggregate resource for over 20 years and the Licence is not being utilized for the purpose for which it was issued where a viable aggregate resource exists. The Tribunal finds that this situation is not in the public interest and does not fulfill the purpose of the ARA as the Licence was issued to allow the extraction of the aggregate to service the marketplace and this is not currently occurring.

146The approval of the transfer of the Licence to the Applicant will reunite the aggregate resource with the Licence and allow for the extraction of the aggregate resource making it available to the market fulfilling the purpose of the ARA as supported by the policies of the PPS 2024.

147Accordingly, the Tribunal finds that the Licence should be transferred from 1386146 to the Applicant and directs the Minister to carry out the proposed transfer.

ORDER

148THE TRIBUNAL ORDERS THAT the Minister of Natural Resources and Forestry is directed to carry out the transfer of Licence No. 6531 to 2520650 Ontario Inc.

“David Brown”

DAVID BROWN

MEMBER

“F. Lavoie”

F. LAVOIE