City of Toronto v. Goldlist Properties Inc. et al.; Regional Municipality of Ottawa-Carleton et al., Intervenors

City of Hamilton v. Goldlist Properties Inc. et al.; Regional Municipality of Ottawa-Carleton et al., Intervenors

[Indexed as: Toronto (City) v. Goldlist Properties Inc.]

67 O.R. (3d) 441

[2003] O.J. No. 3931

Docket No. C38589

Court of Appeal for Ontario

O'Connor A.C.J.O., Morden and Sharpe JJ.A.

October 14, 2003

Administrative law -- Boards and tribunals -- Jurisdiction -- Ontario Municipal Board -- Board having limited jurisdiction to determine whether by-law amending official plan illegal and void -- Board having jurisdiction to consider whether official plan amendment an official plan within meaning of Planning Act -- Ontario Municipal Board Act, R.S.O. 1990, c. O.28, s. 35 -- Planning Act, R.S.O. 1990, c. P.13, s. 17.

Planning -- Official plan -- Jurisdiction of Ontario Municipal Board -- Board having limited jurisdiction to determine whether by-law amending official plan illegal and void -- Board having jurisdiction to consider whether official plan amendment an official plan within meaning of Planning Act -- Ontario Municipal Board Act, R.S.O. 1990, c. O.28, s. 35 -- Planning Act, R.S.O. 1990, c. P.13, s. 17. [page442]

Planning -- Official plan -- Municipality having jurisdiction to include in official plan provisions to encourage new rental housing production and to preserve existing rental housing -- No conflict with provincial legislation -- Tenant Protection Act, 1997, S.O. 1997, c. 24 -- Planning Act, R.S.O. 1990, c. P.13, ss. 2, 16, 17.

In 1999, the City of Toronto approved an amendment ("OPA 2") to its official plan, which established a series of policies aimed at preserving, maintaining and replenishing the supply of rental housing throughout the City. Several property owners, developers and associations of owners of rental residential property, including Goldlist Properties Inc. ("Goldlist"), appealed the adoption of OPA 2 to the Ontario Municipal Board ("OMB"). The OMB found that OPA 2 was illegal and invalid on the grounds that: (1) it was outside the powers conferred upon the City by the Planning Act; and (2) it conflicted with the Tenant Protection Act. The City appealed to the Divisional Court. The Divisional Court held that the OMB lacked jurisdiction to rule on the legality of OPA 2 and that OPA 2 was a valid exercise of the City authority to enact an official plan. The Divisional Court also ruled that the OPA 2 did not conflict with the Tenant Protection Act. Goldlist and others appealed.

Held, the appeals should be dismissed with costs.

Section 35 of the Ontario Municipal Board Act confers on the OMB authority to hear all questions of law or of fact with respect to matters within the OMB's jurisdiction. While the OMB does not have the free-standing jurisdiction of a court to determine that a by-law approving an official plan is invalid, it does have the power to make decisions necessarily incidental to carrying out its responsibilities when deciding official plan appeals under s. 17 of the Planning Act. It is within the OMB's jurisdiction in a proceeding to decide the boundaries of its jurisdiction in that proceeding. Before it could consider OPA 2 on its planning merits, the OMB necessarily had the jurisdiction to consider whether OPA 2 was an "official plan" within the meaning of the Planning Act. Contrary to the decision of the Divisional Court, the OMB had the jurisdiction to rule on the legality of OPA 2. The OMB had jurisdiction, for the purposes of determination to deal with the appeal under s. 17 of the Planning Act, to decide whether the document before it was an official plan.

The Board, however, erred in concluding that the City did not have the authority to enact OPA 2. In this regard, the standard of review for the OMB's decision is correctness, and the Divisional Court, and not the OMB, was correct in concluding that the City had the authority to include in its official plan policies designed to ensure an adequate supply of rental housing by limiting the demolition of residential rental properties and the loss of rental units through conversion to condominium ownership. To determine what may be included in an official plan, reference must be made to the Planning Act as a whole, and the power to enact an official plan is not limited to purely physical aspects of land use planning and may include provisions designed to limit or control the conversion or demolition of rental housing.

The OMB also erred in concluding that OPA 2 was invalid on the ground that it conflicts with the Tenant Protection Act. The Tenant Protection Act had replaced the Rental Housing Protection Act, and the OMB drew the wrong inference that the repeal of the Rental Housing Protection Act signalled that municipalities should be precluded from adopting policies akin to those that had been in the repealed Act. The legislative history was clear that by repealing the Act, the government did not intend to limit the capacity of municipalities to adopt official plan policies aimed at protecting rental properties. Further, the OMB erred by applying the wrong test for determining whether there is a conflict between the [page443] enactments. A conflict rendering a by-law invalid arises only when one enactment compels what the other forbids. Assuming a matter falls within municipal competence, a municipality is free to establish policies and standards more restrictive than those established by provincial legislation. It was clear that the restrictions on conversions or demolition imposed on the owners of rental properties as a result of OPA 2 did not conflict with the legal protections afforded tenants under the Tenant Protection Act.

APPEAL from an order of the Divisional Court (Blair R.S.J., Day and Marchand JJ.) (2002), 2002 62445 (ON SCDC), 58 O.R. (3d) 232 setting aside a decision of the Ontario Municipal Board.

Cases referred to 114957 Canada Ltée (Spraytech Société d'Arossage) v. Hudson (Town), [2001] 2 S.C.R. 241, 200 D.L.R. (4th) 419, 171 N.R. 201, 19 M.P.L.R. (3d) 1, 2001 SCC 40; Bele Himmel Investments Ltd. v. City of Mississauga, [1982] O.J. No. 1200 (QL), 13 O.M.B.R. 17 (H.C.J.); Bell Canada v. Canadian Telephone Employees Assn., 2003 SCC 36, 227 D.L.R. (4th) 193, 306 N.R. 34, 2003 C.L.L.C. Â230-021, [2003] S.C.J. No. 36 (QL) (sub nom. Bell Canada v. Canada (Human Rights Commission)); Bell ExpressVu Ltd. Partnership v. Rex, [2002] 2 S.C.R. 559, 100 B.C.L.R. (3d) 1, 212 D.L.R. (4th) 1, 287 N.R. 248, [2002] 5 W.W.R. 1, 93 C.R.R. (2d) 189, 18 C.P.R. (4th) 289, 2002 SCC 42, [2002] S.C.J. No. 43 (QL); Canadian Pacific Ltd. v. Matsqui Indian Band (1995), 1995 145 (SCC), 85 F.T.R. 79n, [1995] 1 S.C.R. 3, 122 D.L.R. (4th) 129, 177 N.R. 325; Country Pork Ltd. v. Ashfield (Township) (2002), 2002 41578 (ON CA), 60 O.R. (3d) 529, 31 M.P.L.R. (3d) 1, 9 R.P.R. (4th) 182 (C.A.), affg (2001), 18 M.P.L.R. (3d) 1 (Ont. S.C.J.); Cuddy Chicks Ltd. v. Ontario (Labour Relations Board), 1991 57 (SCC), [1991] 2 S.C.R. 5, 81 D.L.R. (4th) 121, 4 C.R.R. (2d) 1, 3 O.R. (3d) 128n, 122 N.R. 360, 91 C.L.L.C. Â14,024, 47 O.A.C. 271; Douglas/Kwantlen Faculty Assn. v. Douglas College, 1990 63 (SCC), [1990] 3 S.C.R. 570, 77 D.L.R. (4th) 94, 2 C.R.R. (2d) 157, 91 C.L.L.C. Â17,002, [1991] 1 W.W.R. 643, 52 B.C.L.R. (2d) 68, 118 N.R. 340; Equity Waste Management of Canada Corp. v. Halton Hills (Town) (1997), 1997 2742 (ON CA), 35 O.R. (3d) 321, 40 M.P.L.R. (2d) 107 (C.A.), revg (1995), 22 M.P.L.R. (2d) 167 (Ont. Gen. Div.), supp. reasons (1994), 1995 7182 (ON SC), 22 O.R. (3d) 796, 27 M.P.L.R. (2d) 123 (Gen. Div.); Multiple Access Ltd. v. McCutcheon, 1982 55 (SCC), [1982] 2 S.C.R. 161, 138 D.L.R. (3d) 1, 44 N.R. 181, 18 B.L.R. 138; North York Twp. (Re), 1960 97 (ON CA), [1960] O.R. 374, 24 D.L.R. (2d) 12 (C.A.); Ottawa (City) v. Ontario (Attorney General) (2002), 2002 42018 (ON CA), 64 O.R. (3d) 703, [2002] O.J. No. 2501 (QL) (C.A.), affg [2001] O.J. No. 552 (QL), 146 O.A.C. 46 (Div. Ct.); Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, 36 O.R. (3d) 418n, 154 D.L.R. (4th) 193, 221 N.R. 241, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 C.L.L.C. Â210-006 (sub nom. Ontario Ministry of Labour v. Rizzo & Rizzo Shoes Ltd., Adrien v. Ontario Ministry of Labour); Shell Canada Products Ltd. v. Vancouver (City), 1994 115 (SCC), [1994] 1 S.C.R. 231, 88 B.C.L.R. (2d) 145, 110 D.L.R. (4th) 1, 163 N.R. 81, [1994] 3 W.W.R. 609, 20 M.P.L.R. (2d) 1; Village of Forest Hill v. The Municipality of Metropolitan Toronto, 1958 87 (ON CA), [1958] O.R. 254, 14 D.L.R. (2d) 136 (C.A.) Statutes referred to Condominium Act, 1998, S.O. 1998, c. 19, s. 9 Municipal Act, R.S.O. 1990, c. M.45, s. 136 Ontario Municipal Board Act, R.S.O. 1990, c. O.28, ss. 34-36, 37(a), 57, 94(1) Planning Act, R.S.O. 1990, c. P.13, ss. 1.1, 2, 3, 16, 17, 33, 38(4), 51(24) Rental Housing Protection Act, 1986, S.O. 1986, c. 26 Tenant Protection Act, 1997, S.O. 1997, c. 24 Authorities referred to Driedger, E.A., Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983) Ontario, Legislative Assembly, Official Report of Debates (Hansard), 189 (12 May 1997) (Hon. Al Leach) [page444] Ontario, Legislative Assembly, Official Report of Debates (Hansard), 38 (6 April 2000) (Brian Coburn) Sullivan, R., and E.A. Driedger, Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham: Butterworths, 2002)

Robert G. Doumani, for appellants Kenneth-Sheppard Limited, Fair Rental Policy Organization and Greater Toronto Apartment Association. Andrew Weretelnyk and Roberto Zuech, for respondent, City of Toronto. James M. Canapini, for intervenor, City of Ottawa. Art Zuidema, for intervenor, City of Hamilton. Leslie McIntosh, for respondent, Ontario Municipal Board.

The judgment of the court was delivered by

[1] MORDEN and SHARPE JJ.A.: -- This appeal involves the jurisdiction of the Ontario Municipal Board ("OMB") to rule on the legality or validity of a municipal by-law and the authority of a municipality to include in its official plan policies designed to ensure an adequate supply of rental housing by limiting the demolition of residential rental properties and the loss of rental units through conversion to condominium ownership.

Facts

[2] The City of Toronto's Official Plan Amendment No. 2 ("OPA 2"), approved in April 1999, established a series of policies aimed at preserving, maintaining, and replenishing the supply of rental housing throughout the newly amalgamated City. OPA 2 restricts "the demolition of residential property and the conversion of rental units to condominium, and/or freehold, by discouraging the conversion of rental units to equity cooperative, and by encouraging new rental housing production." Among the policies included in OPA 2 are restrictions on conversion unless the vacancy rate for rental accommodation exceeds a specified limit and requirements for the replacement of demolished rental units when considering redevelopment applications involving demolition of existing rental properties.

[3] Under the Planning Act, R.S.O. 1990, c. P.13, these official plan policies become relevant when a proposed development does not conform with the existing zoning restrictions or official plan, and a zoning change or official plan amendment is required. The [page445] policies of OPA 2 also apply when an owner seeks to convert rental residential property to condominium ownership. The combined effect of the Condominium Act, 1998, S.O. 1998, c. 19, s. 9 and the Planning Act, s. 51(24), is to require the municipality, when considering a proposed conversion, to have regard to whether the conversion conforms to the official plan.

[4] The City adopted OPA 2 because of its concern about the adequacy of the rental housing supply. When OPA 2 was adopted, over 50 per cent of the City's residents depended upon rental housing. The vacancy rate was under 1 per cent and virtually no affordable rental housing was being constructed. OPA 2 continued policies found in the official plans of the former Cities of Toronto, East York, Etobicoke, North York and York that dealt with the conversion of rental units to condominiums, and of the former Municipality of Metropolitan Toronto's official plan policy that encouraged new rental housing and the preservation and maintenance of existing rental housing.

[5] The City of Hamilton intervened before the OMB and the City of Ottawa intervened before the Divisional Court to support the validity of OPA 2. Both intervenors have official plan policies similar to OPA 2 motivated by like concerns for the preservation and enhancement of an adequate supply of rental housing for their residents.

[6] The adoption of OPA 2 followed an important change in provincial legislation governing the conversion of rental properties to condominium ownership. In 1986, the province enacted the Rental Housing Protection Act, 1986, S.O. 1986, c. 26 ("RHPA"), which required approval for the demolition, conversion, renovation, or severance of rental properties by municipal councils on the basis of certain specified criteria. The municipal approval required by the RHPA was in addition to any approvals that might be required under the Planning Act. Both before and after the enactment of the RHPA, several municipalities, including Toronto, North York and Scarborough, had official plan policies dealing with the conversion of rental properties to condominiums. The RHPA was repealed and replaced by the new scheme established by the Tenant Protection Act, 1997, S.O. 1997, c. 24 ("TPA"), proclaimed in force in June 1998. The TPA introduced a package of protections to individual tenants in the event of demolition, conversion, or repair requiring vacant possession. These protections generally consist of notice, compensation, security of tenure and rights of first refusal.

[7] In June 1999, several property owners, developers and associations of owners of rental residential property appealed the adoption of OPA 2 to the OMB. On a preliminary motion, decided [page446] before it engaged in any review of the planning issues, the OMB ruled that it had jurisdiction to rule on the legality of OPA 2. The OMB found that OPA 2 was illegal and invalid on the two grounds: (1) that it falls outside the powers conferred upon the municipality by the Planning Act, and (2) that it conflicts with the Tenant Protection Act.

[8] The City of Toronto appealed the OMB's decision to the Divisional Court. The Divisional Court held that the OMB lacked jurisdiction to rule on the legal validity of OPA 2 and that OPA 2 was a valid exercise of the City's authority to enact an official plan. The Divisional Court rejected the argument that OPA 2 conflicts with the Tenant Protection Act and accordingly upheld the legality and validity of OPA 2.

[9] The appellants urge this court to reverse the judgment of the Divisional Court and restore the decision of the OMB ruling that it had jurisdiction to rule on the legal validity of OPA 2 and that OPA 2 is illegal and invalid. The appellants also seek leave to appeal the Divisional Court's award of costs in favour of the respondents.

Issues

1. Does the OMB have jurisdiction to rule on the legal validity of OPA 2?

2. If the OMB does have jurisdiction, what is the appropriate standard of review on appeal from its decision to the Divisional Court?

3. Does the City of Toronto have the authority to enact OPA 2?

4. Does OPA 2 conflict with the Tenant Protection Act?

5. There is also before us a motion by the appellants for leave to appeal the Divisional Court's award of costs against them in favour of the City of Toronto and the City of Hamilton and the amounts of costs fixed and, if leave be granted, an appeal from the award and, alternatively, from the amounts fixed.

Analysis

Issue 1: Does the OMB have jurisdiction to rule on the legal validity of OPA 2?

[10] The facts relating to how this issue came before the OMB are set forth briefly in para. 7 above. The notices of appeal to the OMB raised several issues. It is sufficient to say that two of them [page447] raised planning policy objections to OPA 2. One of them was based on the objection that OPA 2, wrongly, had retroactive application to existing applications for condominium conversions or rental housing demolitions. The remaining objection was based on the ground that:

The policies are in direct contravention of the thrust, direction, spirit and intent of the Tenant Protection Act (TPA), are beyond the City's jurisdiction and are inappropriate, improper and illegal.

[11] Goldlist Properties Inc., Kenneth-Sheppard Limited and A.J. Green Ltd. brought a preliminary motion to the OMB. The notice of motion contains the following:

The Motion deals with the validity of Official Plan Amendment No. 2 of the former Municipality of Metropolitan Toronto and related amendments to the local Official Plans (collectively "OPA 2"). The Motion also addresses the applicability of OPA 2 to certain classes of applications. The Motion will not deal with the merits of OPA 2.

Specifically the Motion is for:

1. An order that OPA 2 is illegal and beyond the competence of the City to adopt and that consequently the Board has no jurisdiction to approve it regardless of its merits . . .

[12] The OMB held that it had jurisdiction to entertain the motion and concluded its reasons on the merits of the motion as follows:

In conclusion, the Board orders:

1. that OPA 2 is illegal and invalid and is therefore not approved; . . .

[13] The most relevant provisions in the Planning Act bearing on the right of appeal to the OMB and its basic powers on an appeal are ss. 17(24) and 17(50) respectively, which read as follows:

17(24) If the plan is exempt from approval, any person or public body may, not later than 20 days after the day that the giving of written notice under subsection (23) is completed, appeal all or part of the decision of council to adopt all or part of the plan to the Municipal Board by filing with the clerk of the municipality a notice of appeal.

(50) On an appeal or a transfer, the Municipal Board may approve all or part of the plan as all or part of an official plan, make modifications to all or part of the plan and approve all or part of the plan as modified as an official plan or refuse to approve all or part of the plan.

[14] The following is a brief summary of the reasons of the Divisional Court for concluding that the OMB did not have jurisdiction to decide the motion: [page448]

(1) While the OMB recognized that it did not have a general power to determine the legal validity of by-laws it erred in making exactly such a determination, separately and discretely from a consideration of the planning merits of OPA 2.

(2) The OMB "erred in concluding that it was 'necessary and incidental' to its determination of whether the by-law should be approved on Planning Act principles, for it to determine the validity of the by-law".

(3) Related to (2), the OMB erred in reasoning from the Supreme Court of Canada decisions in Cuddy Chicks Ltd. v. Ontario (Labour Relations Board), 1991 57 (SCC), [1991] 2 S.C.R. 5, 81 D.L.R. (4th) 121, and Douglas/Kwantlen Faculty Assn. v. Douglas College, 1990 63 (SCC), [1990] 3 S.C.R. 570, 77 D.L.R. (4th) 94 that it had the power to order that OPA 2 is illegal and invalid.

(4) [58] The City's competence to adopt Official Plan policies by by-law is not a matter within the OMB's jurisdiction. Its jurisdiction is to approve, modify and approve, or refuse to approve the Official Plan amendment based upon the planning principles underlying the Planning Act. Put another way, neither the Planning Act nor the Ontario Municipal Board Act, nor the Municipal Act . . . , give the OMB a supervisory jurisdiction over the legislative competency of municipalities. The Board is given supervisory jurisdiction, in this context, over their municipal planning competence

(Emphasis in original)

(5) There are legal avenues for challenging the validity of a by-law adopting an official plan:

(a) An application under s. 136 of the Municipal Act, R.S.O. 1990, c. M.45 which enables the court to "quash the by-law in whole or in part for illegality";

(b) Section 94(1) of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28 gives the OMB the authority to state a case in writing to the Divisional Court upon any question of law.

(6) [63] Significantly, however, that Act goes on to specify that the Board's approval is to be withheld where litigation is pending regarding the validity of the by-law in question. Section 57 of the Ontario Municipal Board Act stipulates that:

The Board shall not grant or issue any approval or certificate under this or any other general or special Act in respect of any municipal affair or matter, while the same or the validity thereof is called in question in [page449] any pending action or proceeding or by which it is sought to quash any by-law of a municipality relating thereto.

[Emphasis in original]

[15] In our respectful view, the Divisional Court erred in holding that the OMB lacked jurisdiction to consider whether the by-law adopting OPA 2 was authorized by the Planning Act. Put shortly, we think that the Board necessarily had the jurisdiction to consider whether OPA 2 was an "official plan" within the meaning of the term in the Planning Act before it could consider the document on its planning merits. The OMB, acting under s. 17 of the Planning Act, particularly s. 17(50), had no jurisdiction to approve a document that was not an official plan. We stress that the Board does not have a free- standing jurisdiction, as a court does, to determine that a by-law is invalid. Its power is confined to making decisions necessarily incidental to carrying out its responsibilities under s. 17 of the Planning Act.

[16] Before elaborating upon the foregoing, we should deal with a particular attack on the OMB's decision on jurisdiction made by some of the respondents. It is based on the fact that the decision was made on a motion to it and not as part of the appeal under s. 17(24). This argument is supported by the submission that s. 17(45) of the Planning Act establishes the only mechanism relating to summary disposition of a planning issue by way of a motion and that, accordingly, it may be inferred that the legislature deliberately excluded the power to allow an appeal on a motion. Section 17(45) reads:

17(45) Despite the Statutory Powers Procedure Act and subsection (44), the Municipal Board may dismiss all or part of an appeal without holding a hearing on its own motion or on the motion of any party if,

(a) it is of the opinion that,

(i) the reasons set out in the notice of appeal do not disclose any apparent land use planning ground upon which the plan or part of the plan that is the subject of the appeal could be approved or refused by the Board,

(ii) the appeal is not made in good faith or is frivolous or vexatious, or

(iii) the appeal is made only for the purpose of delay;

(b) the appellant did not make oral submissions at a public meeting or did not make written submissions to the council before the plan was adopted and, in the opinion of the Board, the appellant does not provide a reasonable explanation for having failed to make a submission;

(c) the appellant has not provided written reasons with respect to an appeal under subsection (24) or (36); [page450]

(d) the appellant has not paid the fee prescribed under the Ontario Municipal Board Act; or

(e) the appellant has not responded to a request by the Municipal Board for further information within the time specified by the Board. 1996, c. 4, s. 9.

[17] We think that these arguments are based on an overly technical view of what the Board, in substance, did. As we have said, one of the issues raised on the appeals to the OMB was the question whether OPA 2 was authorized by the Planning Act. It was open to the Board to hold a hearing on this issue first, as part of the appeal, before considering other issues raised. This is in substance what it did. Its decision on this question made it unnecessary for it to go forward with hearing the balance of the appeal. This is a practice that is followed, in appropriate circumstances, in courts in cases where a decision one way on a particular issue is dispositive of the whole proceeding.

[18] The Divisional Court held, in effect, that only the courts have jurisdiction to deal with the validity of by-laws and, as is indicated above, referred to an application to quash under s. 136(1) of the Municipal Act and the stating of a case by the OMB under s. 94 of the Ontario Municipal Board Act. These provisions read, respectively:

136(1) The Superior Court of Justice upon application of a resident of the municipality or of a person interested in a by-law of its council may quash the by-law in whole or in part for illegality.

94(1) The Board may, at the request of the Lieutenant Governor in Council, or of its own motion, or upon the application of any party, and upon such security being given as it directs, state a case in writing for the opinion of the Divisional Court upon any question that, in the opinion of the Board, is a question of law.

(2) The Divisional Court shall hear and determine the stated case and remit it to the Board with the opinion of the court thereon.

[19] We accept, of course, that these provisions confer jurisdiction on the courts to decide the validity of by-laws. This does not, however, mean that the courts necessarily have the exclusive jurisdiction to consider issues of this nature in the circumstances of a case such as the present one. We shall, shortly, consider this further.

[20] As we indicated in para. 14(6) above, the Divisional Court also relied upon s. 57 of the Ontario Municipal Board Act to indicate that the Ontario Municipal Board had no jurisdiction to consider whether OPA 2 was an official plan. Section 57 is set forth in para. 14(6). [page451]

[21] Section 57 goes no further than providing that in the circumstances mentioned in that section, the Board's approval is to be withheld where litigation is pending regarding the validity of the by-law in question. It does not speak to the case where there is no such litigation.

[22] The Divisional Court made no reference to the powers conferred on the Board by the Ontario Municipal Board Act with respect to questions of law. These powers are conferred by s. 35, which we set forth in the context of ss. 34 to 37(a):

34. The Board for all purposes of this Act has all the powers of a court of record and shall have an official seal which shall be judicially noticed.

35. The Board, as to all matters within its jurisdiction under this Act, has authority to hear and determine all questions of law or of fact.

36. The Board has exclusive jurisdiction in all cases and in respect of all matters in which jurisdiction is conferred on it by this Act or by any other general or special Act.

37. The Board has jurisdiction and power,

(a) to hear and determine all applications made, proceedings instituted and matters brought before it under this Act or any other general or special Act and for such purpose to make such orders, rules and regulations, give such directions, issue such certificates and otherwise do and perform all such acts, matters, deeds and things, as may be necessary or incidental to the exercise of the powers conferred upon the Board under such Act;

[23] With respect to s. 35, we think it is implicit that one matter within the Board's jurisdiction to decide in a proceeding, for the purpose of carrying out its mandate, is the scope of its jurisdiction in that proceeding. We have indicated that its power in this regard is not exclusive. Nor is it final. We shall, in the next part of these reasons, address the question of the standard of appellate review of the Board's decisions on its own jurisdiction.

[24] There are practical reasons supporting this view of the Board's power. One is based on expedition. Waiting for the decision of the Divisional Court on a stated case, or of a court on an application, may involve delay. Also, in cases like the present, the Board has had considerable experience in dealing with official plans and what they typically include or do not include. This would, undoubtedly, be of some assistance in ruling on the outer legal boundaries of what may be included in an official plan.

[25] The recent judgment of this court in Ottawa (City) v. Ontario (Attorney General) (2002), 2002 42018 (ON CA), 64 O.R. (3d) 703, [2002] O.J. No. 2501 (QL) (C.A.), affg [2001] O.J. No. 552 (QL), 146 O.A.C. 46 (Div. Ct.) is particularly apposite on the question of the OMB's [page452] jurisdiction. In Ottawa, the Ontario Energy Board had stated a case for the opinion of the Divisional Court under s. 32 of the Ontario Energy Board Act, S.O. 1998, c. 15, Schedule B, which is substantially the same as s. 94 of the Ontario Municipal Board Act. It is not necessary to relate all of the facts in Ottawa. It is sufficient to note that the Divisional Court, on the motion of the Attorney General, quashed the stated case and that one of the reasons for the court's decision was that "the Board stated a case which, in effect, asked if a regulation is valid and has no jurisdiction to do so."

[26] The Divisional Court's full reasons on this issue were as follows [at para. 4]:

Thirdly, further, the board has no jurisdiction to state a case asking if a regulation is valid. It has attempted to justify its approach by analogising with respect to two Charter cases: Cuddy Chicks Ltd. v. Ontario (Labour Relations Board), 1992 107 (SCC), [1992] 2 S.C.R. 5 and Cooper v. Canada (Human Rights Commission), 1996 152 (SCC), [1996] 3 S.C.R. 854 that it is not questioning the validity of the regulation, but rather only whether it has to apply it. The case before us is not a Charter case. In any event this seems to be a distinction without a functional difference. The board's jurisdiction under section 96 of the Ontario Energy Board Act is restricted to determining whether the proposed transmission line is in the public interest. When the board asks this court to determine the "applicability", but in substance the validity of the regulation, it is exceeding its jurisdiction as a creature of statute. Therefore, the court has no jurisdiction to decide the validity of the regulation within the context of this stated case.

[27] Goudge J.A., for the court, dealt with this issue as follows [at paras. 37-40]:

The third issue is whether the Divisional Court was correct to quash the stated case on the basis that the Board was really asking if O. Reg. 365/00 was valid and had no jurisdiction to state such a case.

With respect, I think that the Divisional Court erred in characterizing the question posed in the stated case as a request that the Court determine the validity of the regulation. The stated case poses the more limited question of whether the regulation is to be applied by the Board in hearing applications under s. 92 of the Act or whether, as asserted by the appellant, it is inconsistent with the Act and therefore not to be applied.

The stated case does not seek a determination of whether the regulation is valid for all purposes. It simply asks whether the regulation is effective to determine the boundary of the Board's jurisdiction. In stating the case the Board seeks the assistance of the Divisional Court in defining the Board's jurisdiction in s. 92 applications, following the making of O. Reg. 365/00. The question posed is one which the Board could put to itself and equally one it could put to the Divisional Court by way of stated case. As Lamer C.J. said in Canadian Pacific Ltd. v. Matsqui Indian Band, 1995 145 (SCC), [1995] 1 S.C.R. 3 . . . at pp. 25-6:

It is now settled that while the decisions of administrative tribunals lack the force of res judicata, nevertheless tribunals may embark upon [page453] an examination of the boundaries of their jurisdiction. Of course, they must be correct in any determination they make, and courts will generally afford such determinations little deference.

In short, I think the question posed did not seek to determine the validity of O. Reg. 365/00, but was a question which the Board could state and the Divisional Court had the jurisdiction to answer.

(Emphasis added)

[28] This clearly states that the Ontario Energy Board had jurisdiction to decide the boundaries of its own jurisdiction and, also, could seek the assistance of the Divisional Court on this question.

[29] Also, the stated case did not seek a determination of whether the regulation was "valid for all purposes". Neither, in the present case, should the OMB's decision be regarded as determining the validity of the by-law that adopted the official plan "for all purposes" but, rather, only for the purpose of deciding the Board's jurisdiction.

[30] We further note, as emphasized in para. 27 above, that the court said:

The question posed is one which the Board could put to itself and equally one it could put to the Divisional Court by way of stated case.

[31] In the present case, the respondents submit that, although the OMB could have, indeed, should have, stated a case to the Divisional Court on the question of its jurisdiction, it could not itself decide the question. This is contradicted by the reasons in Ottawa.

[32] We think that the foregoing is sufficient to determine the question of the OMB's jurisdiction but, before concluding, we think that we should deal, briefly, with certain earlier decisions of this court that are submitted to be germane to the issue.

[33] The first, in time, is Village of Forest Hill v. The Municipality of Metropolitan Toronto, 1958 87 (ON CA), [1958] O.R. 254, 14 D.L.R. (2d) 136 (C.A.). We do not think that it resolves the question in favour of the respondents. The court held that a provincial statute that vested judicial power in the Ontario Municipal Board to decide the question of the validity of a by- law, a power that the court found not to be incidental to its administrative function, was unconstitutional. In the present case, the power to decide the question of law is incidental to its power to determine the limits of its jurisdiction in the case before it.

[34] The next decision, in time, is Re North York Twp., 1960 97 (ON CA), [1960] O.R. 374, 24 D.L.R. (2d) 12 (C.A.). The court in this case, as one of several issues decided, held that the OMB had erred in its interpretation of a provision in the Planning Act, 1955. The decision is much-cited for a statement in the reasons, at p. 384 [page454] O.R. that "the Board has no power to deal with the validity or otherwise of a by-law". Soon after this, however, the court said, at p. 384 O.R.:

As no by-law passed under the Act became effective until it had received the board's approval it is obvious that quite a wide field was left to the board as to matters which it was entitled to review. Among these, of necessity, must have been a consideration of the intent and purpose of the Act and, so far as this might be a consideration of law, it was nevertheless one which the board was entitled to exercise as incidental to its administrative functions. It is my opinion that the board, notwithstanding its words, sought to do no more than that on this occasion and was acting within its powers.

(Emphasis added)

[35] This appears to draw the distinction between the Board dealing with the validity of a by-law as a free-standing issue, which it cannot do, and making a decision on a question of law as incidental to its administrative functions, which it can do.

[36] The other two decisions are Equity Waste Management of Canada Corp. v. Halton Hills (Town) (1997), 1997 2742 (ON CA), 35 O.R. (3d) 321, 40 M.P.L.R. (2d) 107 (C.A.) and Country Pork Ltd. v. Ashfield (Township) (2002), 2002 41578 (ON CA), 60 O.R. (3d) 529, 9 R.P.R. (4th) 182 (C.A.). We do not think that either of them is determinative of the issue of the OMB's jurisdiction in the present case.

[37] The appellants submit that the Divisional Court erred in not considering Equity Waste Management, which, they submit, stands for the proposition that, in exercising its jurisdiction to review an interim control by-law, the OMB could decide the question of the legality of the by-law. The main issue before the court was a contest relating to which tribunal, the OMB under s. 38(4) of the Planning Act, or the Superior Court in an application under s. 136(1) of the Municipal Act, had jurisdiction to review the interim control by-law. Laskin J.A., for the court, held that both tribunals had jurisdiction and that, in the circumstances of the case at hand, the judge who heard the application did not err in exercising jurisdiction to deal with the by-law under s. 136(1) of the Municipal Act.

[38] The respondents submit that Laskin J.A.'s decision goes no further than holding that the kind of legality of the by-law over which the OMB had jurisdiction was illegality in the form of bad faith related to the planning principles relevant to the case at hand. The appellants submit that the decision stands for the proposition that the Board could consider questions of legality, generally, in exercising its power under s. 38(4) of the Planning Act. To decide the issue before the court, whether the OMB had exclusive jurisdiction to review the interim control by-law, it was not necessary for Laskin J.A. to deal generally with the [page455] scope of the Board's jurisdiction and we do not think that Equity Waste Management should be read as dealing with all aspects of this question.

[39] The same reasoning applies to the bearing of the judgment in Country Pork. In this case, Borins J.A., for the court, interpreted Equity Waste Management for the purpose of resolving, once again, an issue relating to whether the review of an interim control by-law should be before the OMB under s. 38(4) of the Planning Act or before a judge under s. 136(1) of the Municipal Act. He held that a person attacking an interim control by-law did not have an unfettered choice between an appeal to the OMB and an application to quash the by-law.

[40] What makes Country Pork relevant for consideration in the present case is Borins J.A.'s reference, at paras. 29 to 31 in his reasons, to the reasons of the Divisional Court in the case before us as part of his delineation of the respective spheres of the OMB and the court. He quoted from the Divisional Court's reasons that are set forth in para. 14(4) of our reasons respecting the lack of the Board's "supervisory jurisdiction over the legislative competence of municipalities" (emphasis added). We do not think that his reasons dispose of the issue before this court, which is whether the OMB had jurisdiction, for the purpose of determining its jurisdiction to deal with the appeal under s. 17 of the Planning Act, to decide whether or not the document before it was an official plan.

[41] We conclude this part of our reasons with a reference to a passage in the reasons for judgment of the Supreme Court of Canada in Bell Canada v. Canadian Telephone Employees Assn., 2003 SCC 36, [2003] S.C.J. No. 36 (QL), which was released after the appeal before us had been heard. It relates to the power of the Canadian Human Rights Tribunal under the Canadian Human Rights Act, R.S.C. 1985, c. H-6 to determine the validity of guidelines (which were held by the court to be "a form of law, akin to regulations" (para. 37)) made by the Canadian Human Rights Commission. In para. 47, McLachlin C.J and Bastarache J. said for the court:

The Tribunal can, and indeed must, refuse to apply guidelines that it finds to be ultra vires the Commission as contrary to the Commission's enabling legislation, the Act, the Canadian Charter of Rights and Freedoms and the Canadian Bill of Rights. The Tribunal's power to "decide all questions of law or fact necessary to determining the matter" under s. 50(2) of the Act is clearly a general power to consider questions of law, including questions pertaining to the Charter and the Canadian Bill of Rights: see Cooper v. Canada (Human Rights Commission), 1996 152 (SCC), [1996] 3 S.C.R. 854. No invalid law binds the Tribunal. [page456]

Issue 2: If the OMB does have jurisdiction, what is the appropriate standard of review on appeal from its decision to the Divisional Court?

[42] We have little difficulty in concluding that, even if it could be said that s. 16(1) of the Planning Act (which, as we shall discuss in the next part of these reasons, loosely defines an official plan) is a provision with respect to which the Board could be said to have expertise from the standpoint of planning principles (which would lead to a deferential standard of review), on the matter of the Board interpreting this provision for the purpose of determining the scope of its jurisdiction, the relevant standard of review is correctness. In this regard, we refer to para. 27 above, which contains as part of Goudge J.A.'s reasons in Ottawa (City) v. Ontario (Attorney General), a portion of the judgment of the Supreme Court of Canada in Canadian Pacific Ltd. v. Matsqui Indian Band, 1995 145 (SCC), [1995] 1 S.C.R. 3, 122 D.L.R. (4th) 129, at pp. 25-26 S.C.R.

[43] It is even clearer with respect to the Board's decision on the question of whether OPA 2 was in conflict with the Tenant Protection Act, which is issue 4 in this appeal, that the standard is correctness. The Board's expertise is not engaged in interpreting a statute of general application.

Issue 3: Does the City of Toronto have the authority to enact OPA 2?

[44] The Planning Act, s. 16(1)(a) provides that an official plan "shall contain goals, objectives and policies established primarily to manage and direct physical change and the effects on the social, economic and natural environment of the municipality or part of it . . ." (emphasis added). Apart from certain procedural matters dealt with in s. 16(1)(b), the Planning Act contains no other statements relating to the contents of an official plan, nor does it contain any other specific provisions defining or limiting what can or must be contained in an official plan.

[45] The appellants' central argument is that the conversion of a rental property is not a "physical change" within the meaning of s. 16(1)(a). They submit that OPA 2 focuses on changes in nature of tenure rather than on "physical change" and, because the permitted land use remains the same after conversion, there is no change capable of being reached by an official plan. The municipality, say the appellants, cannot address the social issue of a perceived shortage of affordable rental housing through its official plan absent some actual physical change to [page457] which the official plan can attach. While the demolition of a rental building amounts to physical change, the appellants contend that demolition control is dealt with explicitly and exhaustively by s. 33 of the Planning Act.

[46] The OMB found that the City lacked the authority to enact OPA 2 as the power to do so was not expressly conferred by the Planning Act and that "any broad power conferred by the province on a municipality that may on the face appear to be general and vague should not be construed to mean unrestrained and wide power for a municipal council to legislate." The OMB was strongly influenced by its opinion that OPA 2 essentially reclaimed the same approval powers formerly available to municipalities under the RHPA that had been repealed by the TPA, a point we address as the next issue.

[47] The Divisional Court found that the OMB had erred in law in finding that the City lacked the legal authority to adopt OPA 2. Day J., writing for the court on this issue, held that "the enabling provisions of s. 16(1) of the Planning Act, in the spectrum of their broadness, would clearly include the impugned by-law, particularly in light of s. 2(j) of the Planning Act."

[48] For the following reasons, we do not accept the appellants' arguments and affirm the decision of the Divisional Court on this issue.

[49] We turn first to the specific wording of s. 16(1)(a) of the Planning Act. By the terms of s. 16(1)(a), an official plan shall deal primarily with physical change. Section 16(1)(a) does not say that the official plan shall only deal with physical change. A second and related point is that s. 16(1)(a) is framed in mandatory terms and specifies what an official plan "shall contain". Section 16(1)(a) is cast in terms of the minimum requirements for an official plan, not the outside limits. It does not list heads of power or the subjects that may be addressed by the official plan. There are unquestionably limits to what a municipality may include within its official plan, but the wording and scope of s. 16(1)(a) indicate that those limits cannot be determined solely by a literal application of its terms. To determine what may be included in an official plan, as distinct from what must be included by virtue of s. 16(1)(a), reference must be had to the Planning Act as a whole. In this regard, it is important to bear in mind that the purpose of an official plan is to set out a framework of "goals, objectives and policies" to shape and discipline specific operative planning decisions. An official plan rises above the level of detailed regulation and establishes the broad principles that are to govern the municipality's land use planning generally. As explained by Saunders J. in [page458] Bele Himmel Investments Ltd. v. City of Mississauga, [1982] O.J. No. 1200 (QL), 13 O.M.B.R. 17 (H.C.J.), at para. 22, p. 27 O.M.B.R.:

Official plans are not statutes and should not be construed as such. In growing municipalities such as Mississauga, official plans set out the present policy of the community concerning its future physical, social and economic development.

In our view, it is essential to bear in mind this legislative purpose when interpreting scope of authority to adopt an official plan. The permissible scope for an official plan must be sufficient to embrace all matters that the legislature deems relevant for planning purposes.

[50] Another significant feature of s. 16(1)(a) is that, contrary to the submission of the appellants, management of "the social, economic and natural environment of the municipality" are explicitly mentioned as necessary elements of the official plan. While this phrase must be read in light of the requirement that the official plan be primarily concerned with the management and direction of physical change, it hardly supports the appellants' contention that the power to enact an official plan must be strictly limited to the purely physical aspects of land use planning.

[51] As the Supreme Court of Canada recently reaffirmed, in Bell ExpressVu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42, at para. 26, quoting E.A. Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87, the words of any statute "are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament". When one moves from the confines of s. 16(1)(a) to the broader context of the Planning Act as a whole, one finds considerable added support for the argument advanced by Toronto and the intervenors for the authority of a municipality to include in its official plan provisions designed to limit or control the conversion or demolition of rental housing.

[52] In this regard, s. 1.1 defining the purposes of the Planning Act, s. 2 specifying the matters to which municipalities are to have regard when carrying out their duties and s. 3 dealing with ministerial policy statements are significant. Among the purposes of the Act specified in s. 1.1 are:

(b) to provide for a land use planning system led by provincial policy;

(c) to integrate matters of provincial interest in provincial and municipal planning decisions;

. . . . . [page459]

(f) to recognize the decision-making authority and accountability of municipal councils in planning.

[53] This statement of legislative purpose makes it clear that the Act is concerned with the broad policies to govern land use planning and the integration and implementation of provincial interests at the local level through the municipal councils exercising their local authority. In s. 2, the legislature specifies some of the "matters of provincial interest" to which municipalities "shall have regard" and among these are "(j) the adequate provision of a full range of housing". Section 2 is closely linked to s. 3, which allows the Minister, with the approval of the Lieutenant Governor in Council, to issue policy statements "on matters relating to municipal planning that in the opinion of the Minister are of provincial interest". The current Provincial Policy Statement (1997) issued under the authority of s. 3 of the Planning Act makes specific reference to the need to plan for a full range of housing:

1.2.1(c) Provision will be made in all planning jurisdictions for a full range of housing types and densities to meet projected demographic and market requirements of current and future residents of the housing market area by:

c. encouraging housing forms and densities designed to be affordable to moderate and lower income households; . . .

Under the heading "Implementation/Interpretation", the Policy states:

Nothing in this policy statement is intended to prevent planning authorities from going beyond the minimum standards established in specific policies, in developing official plan policies and when making decisions on planning matters, unless so doing would conflict with any other policy.

[54] A ministerial policy statement cannot, of course, confer powers that the legislature has withheld. But here, the legislature has explicitly directed municipalities to pay heed to ministerial policy statements on a broad range of subjects, including "the adequate provision of a full range of housing", in the exercise their statutory powers.

[55] In our view, given the overall framework of the Act and the purpose of official plans, this specific legislative directive that the municipality should address the adequate provision of a full range of housing provides strong statutory support for the City's authority to adopt OPA 2. The legislature and the Minister have both made it clear that attending to the housing needs of its residents is a matter requiring the attention of the municipality in the exercise of its statutory powers related to land use planning. It follows, in our view, that when defining the planning "goals, [page460] objectives and policies" that are to govern its planning decisions, a municipality is entitled to include "goals, objectives and policies" related to ensuring an adequate supply of rental housing.

[56] We see no merit in the appellants' submission that the city has no capacity to adopt policies concerning the demolition of buildings beyond those spelled out in s. 33 of the Planning Act dealing with demolition control area by-laws and demolition permits. We see nothing in s. 33 to suggest that it is intended as an exhaustive statement of permissible regulation by the municipality. OPA 2 does not create a regulatory regime that competes or conflicts with the specific provisions of s. 33. To the extent OPA 2 deals with the demolition of buildings, it does so from a perspective quite different and distinct from s. 33.

[57] We are fortified in our reading of the scope of the City's authority with respect to OPA 2 by recent jurisprudence that has emphasized the importance of enhancing local decision- making and avoiding narrow and technical readings of municipal powers. In 114957 Canada Ltée (Spraytech, Société d'Arrosage) v. Hudson (Town), 2001 SCC 40, [2001] 2 S.C.R. 241, 200 D.L.R. (4th) 419, at para. 21, the Supreme Court of Canada stated that the courts should accord municipal powers a liberal and benevolent interpretation, and that only in the clearest of cases should a municipal by-law be held to be ultra vires, and approved the dictum of McLachlin J. in Shell Canada Products Ltd. v. Vancouver (City), 1994 115 (SCC), [1994] 1 S.C.R. 231, 110 D.L.R. (4th) 1, at para. 19"barring clear demonstration that a municipal decision was beyond its powers, courts should not so hold."

[58] We would resolve this issue in favour of the respondent.

Issue 4: Does OPA 2 conflict with the Tenant Protection Act?

[59] The OMB found that OPA 2 was also invalid on the ground that it conflicts with the TPA. In the OMB's view, OPA 2 is inconsistent with the significant change in provincial policy brought about by the repeal of the RHPA and the enactment of the TPA. The OMB found that "the province has been occupying the legislative field involving residential tenants and tenancy" and that as provincial policy had shifted from the protection of rental units and municipal controls under the RHPA to the protection of the rights of tenants under the TPA, municipalities were precluded from reverting to policies akin to those that formerly existed under the RHPA. The OMB found that OPA 2 "was at cross purpose or in conflict with" the TPA and that "in both timing and content" the impugned policies of OPA 2 "are but a reclaim by the city of the municipal powers that have been otherwise repealed by the Ontario Legislature". [page461]

[60] The Divisional Court disagreed and held that the OMB had erred in concluding that that there was an invalidating conflict between OPA 2 and the TPA. Writing for the court on this issue, Day J. relied on statements made by the Minister of Municipal Affairs and Housing upon the introduction of the TPA that municipalities would retain authority to have official plan policies restricting the conversion of rental buildings to condominiums. Day J. followed Spraytech, at paras. 36 to 39, and applied the "impossibility of dual compliance" test and held that "[a]s a general principle, the mere existence of provincial (or federal) legislation in a given field does not oust municipal prerogatives to regulate the subject matter."

[61] For the reasons that follow, we agree with the conclusion reached by the Divisional Court.

[62] By repealing the RHPA and introducing the TPA, the legislature removed the RHPA restrictions on conversion of rental buildings and introduced the TPA scheme of rights for individual tenants. The purpose of the TPA is, as its title suggests, the protection of the rights of tenants, not the enhancement of the rights of property owners or developers. The TPA confers no positive rights on property owners or developers with respect to the conversion or demolition of rental buildings. The TPA is silent on the subject of whether a municipality may, through its planning process, introduce its own regulations or controls in this area. Accordingly, as a simple matter of statutory interpretation, we see nothing in the TPA that precludes the city from including in its official plan policies aimed at restricting the conversion or demolition of rental buildings.

[63] To the extent that there is any ambiguity on the point, we agree with Day J. that the legislative history was admissible to resolve the issue: see E.A. Driedger and R. Sullivan, Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham: Butterworths, 2002), at pp. 497-500; Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, 154 D.L.R. (4th) 193, at para. 31 per Iacobucci J.:

. . . in my opinion, the use of legislative history as a tool for determining the intention of the legislature is an entirely appropriate exercise and one which has often been employed by this Court (see, e.g., R. v. Vasil, 1981 46 (SCC), [1981] 1 S.C.R. 469, at p. 487; Paul v. The Queen, 1982 179 (SCC), [1982] 1 S.C.R. 621 at pp. 635, 653 and 660).

[64] The legislative history is clear that by repealing the RHPA scheme providing for controls at the municipal level and introducing the tenants rights package under the TPA, the government did not intend to limit the capacity of municipalities to adopt official plan policies aimed at protecting the rental properties from [page462] conversion. Indeed, the government made it clear that the TPA would not eliminate or limit the authority of municipalities to control conversions of rental properties. On the first reading of the TPA in the legislature, the government's summary stated: "Municipalities maintain the ability to have official plan policies restricting the conversion of a rental building to a condominium." During the legislative debate (Hansard, 12 May 1997), the Minister of Municipal Affairs and Housing, Al Leach, explicitly stated that the intent of the TPA was not to remove the authority municipalities have with respect to adopting official plan policies restricting the conversion of rental units to condominiums:

. . . [W]hile we are changing the Rental Housing Protection Act, we have made no changes whatsoever to the authority of municipalities to adopt official plan policies restricting condominium conversions. Municipalities can still discourage condominium conversions through their official plan policies that exist in the present city of Toronto if they feel a conversion is not in the best interests of their community.

[65] More recently (Hansard, 6 April 2000), Brian Coburn, Parliamentary Assistant to the Minister of Municipal Affairs and Housing, reiterated this policy on behalf of the Ministry:

Bill 96 [the TPA] allows municipalities to use their official plan policies to manage conversions and demolitions in the best interests of their constituents. Through that planning exercise, they have the ability to forecast and protect their communities and design for future growth.

[66] In our view, the appellant's argument that the repeal of the RHPA and the enactment of the TPA reflected a legislative intention to eliminate regulatory authority at the municipal level is flatly contradicted by the legislative history.

[67] We also agree with the Divisional Court that the OMB erred by applying the wrong test for determining whether there is a conflict between OPA 2 and the TPA. The OMB rendered its decision prior to the release of the Supreme Court of Canada's judgment in Spraytech. That decision makes it clear that, assuming the matter falls within municipal competence, a municipality is free to establish policies and standards more restrictive that those established by provincial legislation. This means that, contrary to the OMB's decision, by enacting legislation dealing with one aspect of a matter, the legislature does not necessarily pre-empt an otherwise valid municipal by-law dealing with the same matter. Spraytech establishes a strict "impossibility of dual compliance" test, derived from Multiple Access Ltd. v. McCutcheon, 1982 55 (SCC), [1982] 2 S.C.R. 161, 138 D.L.R. (3d) 1, to determine whether there is a conflict between a municipal by-law and provincial legislation. A conflict rendering a by-law [page463] invalid arises only when one enactment compels what the other forbids. On this test it is clear that restrictions on conversion or demolition imposed on the owners of rental properties as a result of OPA 2 do not conflict with the legal protections afforded tenants under the TPA.

[68] Accordingly, we would resolve this issue in favour of the respondent.

The Motion for Leave to Appeal Costs

[69] The appellants move for leave to appeal the Divisional Court's award of costs against them in favour of the City of Toronto and the City of Hamilton and the amounts of costs fixed and, if leave be granted, appeal from the award and, alternatively, from the amounts fixed. The court fixed the City of Toronto's costs in the amount of $75,000 and the City of Hamilton's costs in the amount of $12,000. In our view, it was appropriate for the Divisional Court to award these costs against the appellants. Further, we do not think that there is a principled basis upon which we can properly interfere with the amounts of the awards. Accordingly, we would not grant leave to appeal.

The Costs of this Appeal

[70] We think that it is appropriate that the Cities of Toronto, Hamilton and Ottawa should have their costs of this appeal payable by the appellants. We fix the amounts of these costs as follows: $40,000 (Toronto), $12,000 (Hamilton) and $12,000 (Ottawa).

Disposition

[71] For the reasons we have given, we would dismiss these appeals with costs as set forth above.

Appeal dismissed with costs.