Company Limited, 2010 ONSC 801

DIVISIONAL COURT FILE NO.: 155/08

DATE: 20100204

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

ferrier, McCOMBS AND swinton JJ.

B E T W E E N:

JAMES W. McCUTCHEON, STEPHEN & CHRISTINE SADLER, HARMEET & TAMMY SINGH, SUSAN & OWEN JONES, and CORPORATION OF THE TOWN OF AURORA

Appellants

• and -

WESTHILL REDEVELOPMENT COMPANY LIMITED

Respondent

• and -

EARTHROOTS COALITION

Intervenor

Rodney V. Northey, for the Individual Appellants

Roger Beaman, for the Town of Aurora

Michael J. McQuaid, Q.C. and John M. Buhlman, for Westhill Redevelopment Company Limited

Stan Floras¸ for the Ontario Municipal Board

Hugh Wilkins, for Earthroots Coalition

HEARD at Toronto: January 4 and 5, 2010

SWINTON J.:

Overview

[1] This appeal arises from the refusal of the Ontario Municipal Board (“OMB”) to order a joint board under the Consolidated Hearings Act, R.S.O. 1990, c. C.29 (“CHA”). There are two major issues on this appeal: whether the OMB had jurisdiction to order a joint board and, if it did, whether it had discretion pursuant to s. 24(2) of the CHA to refuse to make such an order.

The Consolidated Hearings Act

[2] The CHA provides for a joint board established by the Chairs of the OMB and the Environmental Rights Tribunal (“ERT”) in certain circumstances where multiple hearings are required. Section 2 deals with the application of the Act, stating:

This Act applies in respect of an undertaking in relation to which more than one hearing is required or may be required or held by more than one tribunal under one or more Acts set out in the Schedule or prescribed by the regulations.

[3] Pursuant to s. 3(1), the proponent of an undertaking to which the Act applies shall give written notice to the Hearings Registrar. Subsection 3(3) provides for an application to the Divisional Court to require a proponent to give the notice. However, that subsection is to come into effect on a day to be named by the Lieutenant Governor by proclamation. Although the legislation was enacted in 1981, no such day has been proclaimed.

[4] As a result, the transitional provisions in s. 24 are operative. They provide,

24(1) This Act does not apply in respect of an undertaking in relation to which, before the day referred to in section 3, a hearing has been commenced under an Act set out in the Schedule or prescribed by the regulations.

(2) Despite subsection (1), the tribunal holding the hearing mentioned in subsection (1), upon application with notice by a party to the proceedings, may order the proponent of the undertaking to give to the Hearings Registrar the written notice mentioned in subsection 3(1).

[5] Among the Acts listed in the Schedule to the CHA are the Environmental Assessment Act, R.S.O. 1990, c. E.18 (“EAA”), the Ontario Water Resources Act, R.S.O. 1990, c. O.40 (“OWRA”) and the Planning Act, R.S.O. 1990, c. P.13.

Factual Background

[6] Westhill Redevelopment Company Limited (“Westhill”) has proposed a development in the Town of Aurora near the intersection of Leslie Street and Bloomington Road. The development is to consist of an 18-hole golf course, a clubhouse and a residential condominium comprising 75 dwellings situated on a common element roadway. The proposed site, comprising two parcels of land west and east of Leslie Street, is situated on the Oak Ridges Moraine.

[7] Westhill appealed to the OMB the refusal or neglect of the Town of Aurora to enact proposed amendments to its Official Plan and to the applicable zoning by-law. These applications are made under the Planning Act. As well, Westhill seeks OMB approval of a proposed plan of condominium under the Condominium Act, 1998, S.O. 1998, c. 19 and a proposed plan of subdivision under the Planning Act.

[8] The Westhill lands are not served by municipal sewers and water. Therefore, new infrastructure will be required, which will include the following:

1. a new privately owned and operated communal sanitary system to be implemented, such that waste water from the clubhouse and residential community is collected, treated and safely disposed of;

2. a new privately owned and operated communal water supply system, including source, treatment and distribution for the clubhouse and residential development; and

3. on site stormwater management facilities for treating the runoff associated with the clubhouse, the clubhouse parking lot, and the residential development.

As well, Westhill proposes a golf cart crossing through an underpass under Leslie Street and road improvements to Leslie Street.

[9] In accordance with O. Reg. 345/93, Westhill undertook an environmental planning process under the EAA as set out in Section A.2.9 of the Municipal Engineers Association Class Environmental Assessment for Municipal Projects (“Class EA”). The Class EA was established by the Minister of the Environment on October 4, 2000 and extended for a further five years, with amendments, on September 11, 2007.

[10] Westhill followed the “integrated approach” to the Class EA, which recognizes the desirability of coordinating the planning process and approvals under the EAA and the Planning Act. Once an A.2.9 Class EA is properly and satisfactorily processed in conjunction with Planning Act applications before the OMB, an approval by the OMB fulfills the requirements of the Class EA under the EAA for the project.

[11] As stated in A.2.9, “Integration with the Planning Act”,

Projects or Master Plans which are subject to the Municipal Class EA may also, either on their own or as part of an application, require approval under the Planning Act. This Class EA recognizes the desirability of co-ordinating or integrating the planning processes and approvals under the EA Act and the Planning Act, as long as the intent and requirements of both Acts are met. This integration will result in streamlining the planning and approvals process and improved environmental protection.

Accordingly, for a project or Master Plan which would otherwise be subject to this Class EA and which:

i) comes into effect or receives approval under the Planning Act, R.S.O. 1990, c. P.13 as amended by the Land Use Planning and Protection Act, 1996; and

ii) meets the intent of the Class EA by fulfilling the requirements as outlined in this section,

then that project is considered to be a Schedule A under the Municipal Class EA, i.e. pre-approved. The proponent may therefore proceed to construct the project upon its coming into effect or approval of the application under the Planning Act.

[12] The OMB notes in its decision of September 16, 2009 that Westhill has processed its Class EA from the inception to Stage 4 in a five stage process, and a Notice of Study Completion was posted in public on November 7, 2007.

The CHA Application

[13] The individual appellants are all residents and owners of lands abutting the proposed development site. They all have wells on their lands, and they are particularly concerned about the impact of the development on the surface and groundwater resources in the Oak Ridges Moraine. The Moraine is protected by the Oak Ridges Moraine Conservation Act, 2001, S.O. 1991, c. 31 (“Moraine Act”), and the Westhill development is subject to the transitional provisions of that Act.

[14] Pursuant to s. 24(2) of the CHA, the appellants made an application before the OMB for a joint board. The Town of Aurora supported their application.

[15] For the CHA to apply, there are three requirements set out in s. 2:

1. there must be more than one hearing required;

2. the hearings must be held by more than one tribunal;

3. the hearings must be under an Act listed in the schedule to the CHA.

[16] The appellants argued that a consolidated hearing should be ordered because of the possibility of hearings under the OWRA in addition to the matters before the OMB. Certificates of Approval will be required under s. 53 of the OWRA for the sewage works and stormwater management facility, and a permit to take water will be required under s. 34 of the OWRA. These approvals may require a hearing before the ERT for one of two reasons: because the Director refers the matter to the ERT in advance of a decision under the s. 53 certificate applications pursuant to s. 55 of the OWRA, or because the applicant appeals a Director’s decision under either s. 34 (the water permit) or s. 53 (the sewage certificates) pursuant to s. 100.

[17] The application was refused by the OMB on March 26, 2008. It found that the establishment of a joint board would likely necessitate the adjournment of the hearing, scheduled to commence April 7, 2008 and would probably result in a longer and more expensive hearing to the proponent and the public.

[18] The OMB also found that the environmental benefit which the appellants sought would be achieved by the province through the Class EA process. The OMB stated that there was evidence the Class EA process was being followed. As well, the proponent would be required to obtain necessary approvals under the OWRA.

[19] The OMB also took note of its responsibility to consider evidence of environmental considerations and to consider matters of provincial interest under s. 2 of the Planning Act and provincial plans such as the Oak Ridges Moraine Conservation Plan.

The First Appeal

[20] An appeal lies to this Court from a decision of the OMB on a question of law with leave of the Court (s. 96(1) of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28). Leave was granted by Himel J.

[21] In its factum for the appeal, Westhill challenged, for the first time, the jurisdiction of the OMB to order a joint board in relation to its development. On June 23, 2009, another panel of the Divisional Court remitted the issue of jurisdiction to be determined by a panel of the OMB differently constituted from the original panel.

[22] On September 16, 2009, the OMB found that it did not have jurisdiction to order a joint board because of regulations under the CHA and the OWRA.

[23] Leave to appeal was granted by Dambrot J., although he queried whether leave was required. He also ordered the two appeals be heard together.

The Issues

[24] There are four issues on this appeal:

1. What is the appropriate standard of review?

2. Did the OMB have jurisdiction to order a joint board?

3. Did the OMB err in law in finding it had discretion whether to order a joint board pursuant to s. 24(2) of the CHA?

4. Did the OMB err in law in refusing to order a joint board?

Issue No. 1: What is the appropriate standard of review?

[25] The issue of the OMB’s authority to order a joint board, given the regulations under the CHA and OWRA, is a true question of jurisdiction – that is, a question concerning the statutory authority of the Board to decide a particular matter. This issue of jurisdiction is subject to review by this Court on a correctness standard (Dunsmuir v. New Brunswick, 2008 SCC 9 at para. 59).

[26] With respect to the interpretation given to s. 24(2) of the CHA – that is, whether the OMB has the discretion to order a joint hearing - the standard of review is also correctness. While the courts have applied a standard of reasonableness to questions of law that engage the expertise of the OMB in planning matters (London (City) v. Ayerswood Development Corp. (2002), 2002 3225 (ON CA), 167 O.A.C. 120 (C.A.) at 122-23), the interpretation of the CHA does not engage the specialized expertise of the OMB in planning matters. Rather, it requires the OMB to interpret a procedural statute that applies to more than one board.

[27] The OMB submits that the court should review its exercise of discretion on a standard of reasonableness, as Dunsmuir makes it clear that decisions based on policy or the exercise of discretion are likely to be reviewed on that deferential standard (at para. 53). I agree with this submission of the OMB. However, I note that an appeal from a decision of the OMB lies to this Court only on a question of law. Therefore, if the OMB has discretion whether to order a joint board, this Court has no authority to intervene in its decision unless the appellants have shown there has been an error of law.

Issue No. 2: Did the OMB have jurisdiction to order a joint board?

[28] This question requires a close examination of the regulations under the CHA and the OWRA. I shall begin with the OWRA.

The OWRA Regulation

[29] Pursuant to s. 53 of the OWRA, new or existing sewage works specified in s. 53(6.1) require the approval of a Director. Pursuant to s. 54, the Director must require an ERT hearing where the sewage works extend beyond one municipality. However, pursuant to s. 55(1), the Director may require an ERT hearing if the sewage works are established or extended within a municipality.

[30] O. Reg. 207/97, made under the OWRA, is entitled “Sewage Works Subject to Approval Under the Environmental Assessment Act”. Section 1 states:

A sewage works is exempt from subsections 54(1), (2), (3) and (10) and subsections 55(1), (2) and (3) of the Ontario Water Resources Act if it is or forms part of an undertaking that,

(a) is subject to section 5 of the Environmental Assessment Act; or

(b) is exempt from section 5 of the Environmental Assessment Act under s. 15.1 of that Act.

[31] In the present case, Westhill’s proposed sewer works would be subject to a referral to the ERT by the Director pursuant to s. 55(1) through (3) of the OWRA unless the exemption in the regulation applies.

[32] Section 5 of the EAA requires a proponent of an undertaking, as defined, to apply to the Minister of the Environment for approval to proceed with the undertaking. An environmental assessment under Part II of the EAA is a requirement for approval. This is known as an “individual environmental assessment”.

[33] Section 15.1(1) provides that s. 5 does not apply “with respect to a proponent who proceeds with an undertaking in accordance with an approved class environmental assessment”. However, pursuant to s. 15.1(2), s. 5 applies if the Minister makes an order under s. 16 of the Act requiring the proponent to comply with Part II before proceeding with the proposed undertaking.

[34] Westhill argues that it is exempt from a hearing under s. 55 of the OWRA because an approved class environmental assessment process is underway. Therefore, s. 1(b) of the regulation applies. Accordingly, there is no possible ERT hearing under s. 55 that could be consolidated with the OMB hearing under the CHA.

[35] The appellants argue that Westhill’s sewage works are not exempt under the regulation because Westhill has not yet completed the Class EA process. Pursuant to s. 15.1(1), Westhill is exempt from s. 5 of the EAA only insofar as it proceeds with the undertaking “in accordance with” an approved Class EA. In other words, completion of the Class EA process is an essential pre-condition to Westhill having any authority to proceed with its development. Until the Class EA is completed, s. 15.1(1) confers no exemption from the OWRA on Westhill.

[36] The appellants are correct in stating that Westhill cannot proceed with its project until it has the necessary approval from the OMB that the project has fulfilled the requirements of the Municipal Class EA. However, that does not prevent Westhill’s project from claiming the exemption in s. 1(b) of the OWRA regulation for the project.

[37] When s. 1 of the regulation is read as a whole, it is evident that the Legislature intended to exempt undertakings from s. 55 referrals under the OWRA when they were in the process of an environmental assessment under the EAA – either under the individual assessment stream (s. 1(a)) or under the Class EA stream (s. 1(b)). The apparent object is to have the issues relating to the sewers determined in the applicable EA process, rather than in a hearing before the ERT under the OWRA.

[38] Therefore, the OMB correctly held that it had no jurisdiction to order a joint board under the CHA because of a possible s. 55 referral. There can be no hearing under s. 55 of the OWRA with respect to Westhill’s project, given the ongoing Class EA under the EAA.

The CHA Regulation

[39] The three approvals necessary under the OWRA (the permit to take water, the storm sewer certificate of approval and the sewage works certificate of approval) could be appealed by Westhill pursuant to s. 100(4) of the OWRA. Based on s. 8 of Regulation 173, R.R.O. 1990, under the CHA, Westhill argues that the potential appeals are all exempt from the CHA and, therefore, the OMB lacked jurisdiction to order a joint board.

[40] Section 8 of the regulation provides,

An undertaking to which,

(a) a hearing described in Column 1 of the Schedule to this Regulation is or may be required; and

(b) no other hearing under one of the Listed Acts, other than a hearing described in Column 2 of the Schedule opposite the first described hearing, is or may be required,

is exempt from section 2 of the Consolidated Hearings Act.

[41] The Schedule contains the following chart:

SCHEDULE

Item	Column 1	Column 2
1.	Section 50 of the Planning Act	Section 45 of the Planning Act
2.	Any hearing	Any hearing on an appeal or other review of a decision made in connection with the hearing referred to in Column 1
3.	A hearing under the Ontario Water Resources Act, except subsections 54 (1), 55 (1) and 74 (4) and a hearing under the Environmental Protection Act, except subsections 30 (1), 32 (1) and 36 (1)	Hearings by the Ontario Municipal Board and hearings by tribunals following which a decision may be made that may be appealed to the Ontario Municipal Board

[42] The appellants argue that the word “a hearing” in item 3 under column 1 means a hearing in the singular. At issue here are multiple s. 100 hearings that are possible under the OWRA, and so there is no exemption from the regulation. In support of their argument, they point out that the words “hearings” is used in column 2 with respect to item 3. Therefore, they argue, “hearing” in column 1 must be a single hearing.

[43] In my view, the OMB was correct in concluding it had no jurisdiction with respect to the s. 100 appeals because of s. 8 of Regulation 173.

[44] If one starts with the words in item 3, column 1, it appears that the Legislature intended to exempt some, but not all hearings under the OWRA, from the CHA. Hearings under ss. 54(1), 55(1) and 74(4) of the OWRA are not exempted by the words of item 3, column 1, and they continue to be subject to consolidation.

[45] However, other hearings under the OWRA are to be exempted – provided that no other hearing under a listed Act is required except hearings by the OMB or hearings by a tribunal whose decision may be appealed to the OMB. Thus, a hearing under s. 100(4) of the OWRA is exempt if there is no other hearing required except a hearing or hearings by the OMB.

[46] That is the situation with respect to the Westhill undertaking, where there are potential appeals from a Director’s decision on applications for certificates of approval or permits to take water and no other hearing required except a hearing by the OMB, which is listed in column 2.

[47] The appellants argue that “hearing” must mean one hearing. However, “hearing” in item 3 can mean “hearings”, as s. 67 of the Legislation Act, 2006, S.O. 2006, c. 21 provides that words in the singular include the plural.

[48] Moreover, s. 64 (1) of the Legislation Act provides that an Act shall be given such “fair, large and liberal interpretation as best ensures the attainment of its objects”. That subsection also applies to a regulation “in the context of the Act under which it is made and to the extent that the regulation is consistent with that Act” (s. 64(2)).

[49] The appellants argue that any exemption should be given a narrow construction, as they submit that the exemptions should be minimized in order to meet the objective of the CHA – namely, to avoid a multiplicity of hearings. However, the CHA itself contemplates that there will be exemptions from the Act, since it only applies to the Acts in the Schedule or to tribunals prescribed by the regulations.

[50] The CHA expressly permits regulations exempting any undertaking or class of undertakings or hearings or class of hearings from the application of the Act (s. 19(1)(e)). Therefore, the OMB did not err when it stated that the CHA and the regulations should be read as a whole, and a fair, large and liberal interpretation should be given to both the Act and the exemptions (Reasons on jurisdiction, p. 5). It is not inconsistent with the CHA’s objectives if the exemption respecting the OWRA is read to include s. 100(4) hearings, as exemption of specified hearings is consistent with the objectives of the Act.

[51] In its reasons on the issue of jurisdiction, the OMB considered the policy reasons for exempting s. 100 appeal hearings from consolidation under the CHA. It recognized that the extent, size and intensity of an undertaking must first be determined through the OMB hearing before applications are made for the technical permit to take water and the certificates of approval (Reasons, p. 8). The Joint Board has also recognized the importance of determining the principle of development before a proponent applies for its technical approvals under the OWRA (Re: Nelson Aggregate Co., Office of Consolidated Hearings, Case No. 08-030, October 29, 2009, pp. 28-30).

[52] Therefore, the OMB correctly found that it had no jurisdiction to order a joint board because of the possible hearings under s. 100 of the OWRA, given s. 8 of the regulation.

Issue No. 3: Did the OMB err in law in finding it had discretion whether to order a joint board pursuant to s. 24(2) of the CHA?

[53] Westhill submits that this issue is moot, given our conclusion on jurisdiction. While our finding with respect to the OMB’s jurisdiction does not require us to determine this issue, we do so, as this was the basis for the initial appeal and the granting of leave.

[54] The appellants argued that the OMB erred in failing to recognize that the application of the CHA is mandatory, and that the OMB has no discretion under s. 24(2) of the Act to refuse to order a joint board. In particular, they rely on the words of s. 2 of the Act.

[55] The appellants also argued that the OMB failed to apply Ontario (Joint Board under Consolidated Hearings Act) v. Ontario Hydro (1993), 11 C.E.L.R. (N.S.) 135 (Div Ct.). They submit that the OMB erred by imposing pre-conditions on the application of the CHA.

[56] In my view, the OMB correctly determined that it had discretion whether to order a joint board pursuant to s. 24(2). Section 2 of the Act was not determinative of the issue before the OMB. By the terms of s. 24(1), the CHA does not apply to an undertaking in respect to which a hearing has been commenced before the day referred to in s. 3. The Act does not apply to the Westhill development, since a hearing before the OMB commenced before the day referred to in s. 3 of the CHA. As noted earlier in these reasons, no proclamation has been issued under s. 3(4) of the Act to set that date.

[57] Pursuant to s. 24(2), the tribunal holding the hearing “may” order the proponent to give notice to the Hearings Registrar. The appellants argue, in effect, that “may” means “shall”. However, “may” usually connotes a discretion, and the Legislature elsewhere in the CHA has used “shall” where it intends something to be mandatory – for example, ss. 3, 4, 5, 7, 9, 12, 17, 20, 21, and 22.

[58] The appellants submit that discretion only permits the OMB to refuse to order a joint board where the hearing before it is complete. That interpretation is inconsistent with the language of s. 24(4), which expressly states that s. 24(2) does not apply if the hearing has been completed. This suggests that the OMB has discretion to consider other factors than the completion of the hearing under s. 24(2).

[59] While the appellants submit that the OMB erred in failing to follow Ontario Hydro, that case is not determinative of the application before the OMB. The issue there was whether Ontario Hydro could require a joint board before there was compliance with all the steps required before hearings could take place under the relevant statutes. This required interpretation of the words “may be required” in s. 2 of the CHA. The Divisional Court was not required to address the interpretation of s. 24(1) or s. 24(2).

[60] The Court held that a referral to a joint board could be made if there was a possibility of a hearing under the Acts designated under the CHA (at para. 16). It rejected the argument that the joint board had no jurisdiction until prehearing requirements in the designated Acts were satisfied (at para. 22). The Court noted that “[t]he joint board has authority to replicate statute specific pre-hearing rights through its procedural and deferral powers and its authority to determine a matter without a hearing” (at para. 23).

[61] The Ontario Hydro case does not assist in the interpretation of s. 24(2) of the CHA. In the present case, the OMB, in its initial decision, did not impose pre-conditions to the exercise of its jurisdiction. Rather, it exercised its discretion, based on a number of considerations, and refused to order a joint board. In my view, the OMB did not err in finding that it had a discretion whether to order a joint board under s. 24(2) of the CHA.

Issue No. 4: Did the OMB err in law in refusing to order a joint board?

[62] The OMB made a determination as to whether a joint board should be ordered in the circumstances, given that the planning applications and the Class EA were both before it for approval. The appellants have identified no error of principle by the OMB in the exercise of its discretion under s. 24(2), and therefore, there is no basis for interference by this Court with the Board’s decision not to order a joint board.

Conclusion

[63] The appellants and the intervenor, Earthroots, are concerned about the volumes of water to be taken and the implications of the development for the vulnerable Oak Ridges Moraine. They fear that the issues they want to raise will not be adequately addressed before the OMB.

[64] Clearly, environmental issues, including the impact of the development on the Moraine, will be before the OMB when it considers Westhill’s applications. The OMB is required to consider environmental issues in making land use decisions. For example, s. 2 of the Planning Act requires the OMB, in carrying out its responsibilities under the Act, to have regard to matters of provincial interest, including the protection of ecological systems. Pursuant to s. 3(5), its decisions must conform with policy statements of the Minister and provincial plans in effect. Moreover, the OMB has the power to impose conditions relating to environmental issues as part of its approval under the Planning Act.

[65] The impact of this development on the Oak Ridges Moraine is clearly an important issue for the OMB to consider. The Oak Ridges Moraine Conservation Plan is one of the named plans in the Planning Act to which effect must be given (s. 1(1)). The introduction to that Plan, enacted by O.Reg. 140/02 on April 22, 2002, states,

The Oak Ridges Conservation Plan is an ecologically based plan established by the Ontario government to provide land use and resource management direction for the 190,000 hectares of land and water within the Moraine. The decisions of provincial ministers, ministries and agencies made under the Planning Act or the Condominium Act, 1998 or in relation to a prescribed matter, are required to conform with this Plan.

[66] Section 9 of the Moraine Act directs municipalities to bring their official plans and zoning by-laws into conformity with the Plan, and s. 7 requires that all decisions made by municipal and provincial planning authorities must conform with the Plan. This includes the OMB when it makes decisions on development applications.

[67] While the appellants and Earthroots would prefer the participation of the ERT in decisions affecting this development, the Legislature has chosen to administer the Moraine Act and the Moraine Plan under the processes established by the Planning Act and the Condominium Act. It has chosen the OMB as the final authority respecting compliance in respect of planning and environmental resources management, subject to any special review the Minister may undertake through his or her powers under s. 18.

[68] For these reasons, the appeals are dismissed.

[69] The OMB and the intervenor do not seek costs. If the remaining parties cannot agree on costs, they may make written submissions, through the Divisional Court office, within 30 days of the release of this decision.

Swinton J.

Ferrier J.

McCombs J.

Released: February 4, 2010