CITATION: Toronto District School Board v. Ontario, 2021 ONSC 4348
DIVISIONAL COURT FILE NO.: 112/18
DATE: 20210617
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Pattillo, Penny and Kurke JJ.
BETWEEN:
THE TORONTO DISTRICT SCHOOL BOARD, Applicant
– and –
HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO, Respondent
Scott Rollwagen for the Applicant
Emtiaz Bala for the Respondent
Chris Barnett for the Intervenor, The Building Industry and Land Development Association
HEARD by video conference at Toronto: March 25, 2021
PENNY J.
Overview and Issues
[1] This is an application for judicial review. The applicant, Toronto District School Board, is seeking an order quashing as ultra vires clauses 10(2)(i) and (ii) of Ontario Regulation 20/98 promulgated under the Education Act. The Act permits the applicant to pass bylaws imposing educational development charges (“EDCs”) on new development to assist in the acquisition of land for new schools required because of the new development. The impugned regulations restrict the availability of EDCs to circumstances where the school board does not have board-wide surplus capacity within existing schools. The applicant has board-wide surplus capacity and, therefore, is precluded by the impugned regulations from raising funds for new school development by means of EDCs. The applicant asserts that the impugned regulations are ultra vires the authority granted to the Lieutenant Governor in Council by the Act because they undermine the fundamental purpose of the regime permitting EDCs.
[2] There are only two issues:
(1) the test for quashing a regulation on the basis of vires; and
(2) whether the impugned regulations are ultra vires the LGIC.
Legislative Provisions in Issue
[3] The power to impose EDCs is found in s. 257.54(1) of the Education Act, R.S.O. 1990, c. E.2:
If there is residential development in the area of jurisdiction of a board
that would increase education land costs, the board may pass by-laws for the
imposition of education development charges against land in its area of jurisdiction undergoing residential or non-residential development.
[4] Section 257.54 (6) provides that:
Conditions
The imposition of an education development charge by a board is subject to the prescribed conditions.
[5] O. Reg. 20/98 prescribes the central condition on the use of EDCs in issue in this case. Section 10 states, in relevant part:
The following conditions are prescribed, for the purposes of subsection 257.54 (6) of the Act, as conditions that must be satisfied in order for a board to pass an education development charge by-law…
- At least one of the following conditions:
i. The estimated average number of elementary school pupils…exceeds the total capacity of the board to accommodate elementary school pupils throughout its jurisdiction …
ii. The estimated average number of secondary school pupils … exceeds the total capacity of the board to accommodate secondary school pupils throughout its jurisdiction …
The Applicant’s Argument
[6] Of central importance to the applicant’s argument in this case is the underlying purpose of the EDC regime under the Act. This purpose, the applicant argues, is most directly informed by the decision of the Supreme Court of Canada in Ontario Home Builders’ Association. v. York Region Board of Education, 1996 164 (SCC), [1996] 2 SCR 929. While, ordinarily, regulations benefit from a presumption of validity, the provisions of the Act concerning EDCs exist in a unique legal context. The constitutional authority of provincial legislatures to authorize school boards to levy EDCs was addressed by the Supreme Court in Ontario Home Builders’ Association. That case concerned a constitutional challenge to what were formerly called development charges in a regime established under the Development Charges Act.
[7] The applicant developers in Ontario Home Builders’ Association challenged the EDC regime then in place on the basis that it was an unconstitutional indirect tax. A majority of the Supreme Court of Canada found that this development charge regime was a form of indirect taxation because, unlike traditional land taxes (which are presumptively direct taxes), EDCs are directed at development and, as such, impose a burden that is intended to be transferred on by the initial chargee of the tax. At paras. 47 to 49 of his majority judgment, Iaccobucci J. wrote:
In the case at bar, an EDC may at first blush seem to bear the characteristics of a land tax in that it is, in the words of the enabling legislation, imposed "on land undergoing residential and commercial development". Further, the failure to pay the EDC results in the charge being placed on the tax roll in respect of a specific parcel of land. In many respects, the EDC scheme is a novel scheme of taxation which involves features of both direct and indirect taxation.
However, in my view, EDCs are not true land taxes in the traditional sense. The purpose of the EDC scheme is not taxation of land, but rather, taxation imposed in order to defray the costs of infrastructure necessitated by new residential development. As McKeown J. of the Divisional Court noted at p. 510"[t]he land can sit forever without attracting tax if no development is undertaken". While the EDC collection mechanism is linked to land, it is not the ownership of land qua land that is the object and purpose of the tax, but rather, the costs of infrastructure associated with new development upon land. The assessment of the tax is not based upon the value of the land, but rather, is based on the impact development will have in terms of creating a need for educational services. Although the "categories approach" articulated in Fairbanks may be of some relevance on other facts, it is my view that in the instant appeal, it is of no application. Rather, the incidence of the EDCs must be determined according to Mill’s formulation, as discussed above.
As I see it, the general tendency of the EDCs is to be passed on to the ultimate purchaser of the new building. The vast majority of new development is undertaken by developers, who benefit from economies of scale when undertaking multi-unit building projects, and who have every intention of selling the new buildings and homes. As Carthy J.A. stated at p. 110 for the Court of Appeal below, “common sense therefore says that the tendency will be to pass the cost along”. It is true that in certain instances, the ultimate owner of a new home will also have been the builder, and thus will have paid the EDC directly. However, this is not sufficient to dislodge the general tendency of the tax. Indeed, the legislation itself is indifferent as to who actually bears the cost of an EDC: it is the person applying for a building permit from whom the tax is collected, whether this be the developer or the ultimate homeowner. This is a further indication of indirectness:
There are situations where actual payment of a tax is required of one person for administrative convenience but where it is obvious that the tax is really directed at another ascertained person. These situations differ from traditional indirect taxes such as customs and excise where the ultimate incidence of the taxes is a matter of indifference to the legislature. [Professor La Forest, supra, at p. 86]
In a sense, EDCs are imposed in the course of manufacture on the commodity to be sold, that is, the new house or building. Most of the charge payers, the majority of whom are developers, intend to trade in the commodity, that is to sell the newly constructed buildings. It follows, in my view, that EDCs cling as a burden to new buildings when they are brought to market. Accordingly, EDCs constitute indirect taxation and are ultra vires provincial competence under s. 92(2).
[8] However, critically for the applicant’s argument, the EDC regime at issue in Ontario Home Builders’ Association was nevertheless found to be within the constitutional competence of the Legislature of Ontario because it was ancillary to a valid regulatory scheme for the provision of educational facilities as a component of land use planning. Thus it could be properly characterized as a “regulatory charge” rather than a “tax”. Central to the purpose identified by the Court in Ontario Home Builders’ Association was the chief objective of the EDC regime, which was to ensure that growth paid for itself. Again, Iaccobucci J. wrote, at paras. 65 - 67:
65 As noted above, the Act is one component of a comprehensive regulatory framework governing land development in Ontario, comprised of at least nine different statutes: the Building Code Act, R.S.O. 1990, c. B.13, the Environmental Assessment Act, R.S.O. 1990, c. E.18, the Environmental Protection Act, R.S.O. 1990, c. E.19, the Fire Marshals Act, R.S.O. 1990, c. F.17, the Municipal Act, R.S.O. 1990, c. M.45, the Ontario Municipal Board Act, R.S.O. 1990, c. O.28, the Ontario Water Resources Act, R.S.O. 1990, c. O.40, the Planning Act, R.S.O. 1990, c. P.13 and the Conservation Authorities Act, R.S.O. 1990, c. C.27. While the regulatory scheme of which EDCs are only a small part is clearly very complex, the complexity is necessitated by the very scope of the matter regulated — urban planning. It is only to be expected that a variety of provincial actors would be involved in the various phases of the scheme's operation. However, this fact does not serve to invalidate the regulatory nature of the scheme. In my view, the appellants impose an artificial and rigid distinction between the school board and the municipality. This distinction fails to reflect the true nature of the regulatory framework.
The construction of schools is a legitimate and crucial component of modern land use planning, schools being an essential element in the creation of successful, dynamic and democratic communities. The legislature of Ontario clearly takes the view that the cost of educational facilities made necessary by new land development should be taken into account in the land development approval process. For example, the Planning Act expressly provides that the “adequate provision. . . . .of educational facilities” and the “adequacy of school sites” are factors to be taken into account in land use planning (see ss. 2(i), 51(24)(a) and (j)). The Act itself authorizes municipalities to impose development charges not only for education but also for water mains, sewers, roads, libraries, parks and recreational facilities. The common theme is that new development should bear the costs of infrastructure necessitated by the new development. Further, just as the gravel excavators in Allard benefitted from the regulatory scheme in terms of road improvements, so too do the developers receive a considerable benefit from the EDC scheme: a development with adequate amenities. The presence of adequate school facilities clearly contributes to the marketability of a new home.
For the foregoing reasons, it is my opinion that EDCs are properly adhesive to the province's planning and development regime, and accordingly, are intra vires the province of Ontario pursuant to ss. 92(9), (13) and (16) of the Constitution Act, 1867.
[9] The Court’s majority reasons in Ontario Home Builders’ Association place central emphasis on the objective of requiring new growth to participate in paying for the amenities—including available and accessible public education—that give value to such development. In this sense, the objective of requiring growth to pay for itself is not just one element of the inspiration for legislation—it is the key to the constitutional validity of that legislation.
[10] The power under which the impugned regulations were promulgated is now contained in s. 257.54(6) of the Act. That subsection merely permits the Lieutenant Governor in Council to prescribe “conditions” on the imposition of a development charge by a board. It does not authorize regulations that entirely prohibit the enactment of such by-laws in the face of a need for growth-related land acquisition that would otherwise justify an EDC.
[11] The applicant takes the position that the purpose of the power to authorize EDCs is stated clearly in s. 257.54 of the Act and was affirmed in the decision of the Supreme Court of Canada in Ontario Home Builders’ Association. Section 257.54 clearly permits a board to levy EDCs where residential development within the area of jurisdiction of the board would increase education land costs. The legislation is intended to provide a means by which ‘growth should pay for growth’.
[12] The power to enact regulations is a species of delegated legislation. If the purposes of the subordinate legislation are contrary to, or extraneous to the purposes of the governing legislation, the subordinate legislation will be invalid as not having been authorized by the governing legislation.
[13] It is insufficient that the Act merely authorizes the Lieutenant Governor in Council to impose “conditions” on the authority to levy EDCs. Examples of the kinds of conditions contemplated by the authorizing legislation are apparent in paragraphs 1 and 3 of section 10 of the Regulation. These are bona fide procedural or ‘gate-keeping’ provisions that serve the purpose of the governing legislation by ensuring consistency in how EDCs are enacted.
[14] The impugned regulations, however, have nothing to do with achieving the purpose of the EDC regime. The impugned regulations serve behaviour modification objectives that are alien to the overriding purpose of requiring growth to pay for itself. Forcing boards to consolidate or close schools in sub-areas that may experience temporary surplus capacity does nothing to further the applicant’s land acquisition needs in sub-areas where there is a need for additional land because of development-related growth. This is particularly the case since, depending upon the political climate surrounding school closures, it may not even be possible to comply with the apparent incentives (the elimination of surplus capacity within a board before building new schools) behind the impugned regulations.
[15] The applicant submits that the result of the impugned regulations is acute in a large jurisdiction like the TDSB which has local, growth-occasioned land acquisition needs within a broader area that, overall, also has a surplus of available spaces. Under the scheme created by the impugned regulations, developers who build new residential developments in such areas get the benefit of “free” infrastructure, at least to the extent of being excused from what would otherwise have been a requirement to bear the cost of education land acquisition occasioned by additional growth.
[16] Under the impugned regulations, boards are compelled to accommodate growth occasioned by development, rather than the other way around. This reality turns the EDC regime upside-down and detaches it from the principal justification—growth paying for itself—that preserved the predecessor EDC regime from being set aside as an unconstitutional indirect tax.
[17] Whatever may be the limits on judicial review of subordinate legislation, they do not embrace a circumstance such as this one, where specific terms of subordinate legislation so undermine the court-sanctioned purpose of a legislative scheme that they impair the constitutional validity of that scheme.
[18] Accordingly, the applicant submits, the impugned regulations are ultra vires as fundamentally undermining a basic purpose of the governing legislation.
Analysis
The Test for Quashing Regulations as Ultra Vires
[19] The leading authority on when a regulation may be quashed as ultra vires is Katz Group Canada Inc. v Ontario, 2013 SCC 64. The core principles are summarized below.
[20] A successful challenge to the vires of regulations requires that they be shown to be inconsistent with the objective of the enabling statute or the scope of the statutory mandate.
[21] It is necessary to ascertain the scope of the mandate conferred by Parliament, having regard to the purpose(s) or objects(s) of the enactment as a whole. The power-conferring language must be taken to be qualified by the overriding requirement that the subordinate legislation accord with the purposes and objects of the parent enactment read as a whole.
[22] Regulations benefit from a presumption of validity. This presumption has two aspects: it places the burden on challengers to demonstrate the invalidity of regulations, rather than on regulatory bodies to justify them; and, it favours an interpretative approach that reconciles the regulation with its enabling statute so that, where possible, the regulation is construed in a manner which renders it intra vires. Both the challenged regulation and the enabling statute should be interpreted using a broad and purposive approach consistent with the well-settled approach to statutory interpretation generally.
[23] Judicial review of regulations on the basis of vires is restricted to the grounds that they are inconsistent with the purpose of the statute or that some condition precedent in the statute has not been observed. This inquiry does not involve assessing the policy merits of the regulations to determine whether they are necessary, wise, or effective in practice. The motives for their promulgation are irrelevant. Nor is judicial review an inquiry into the underlying political, economic, social or partisan considerations or whether the challenged regulations will actually succeed at achieving the statutory objectives. In order to succeed on such an application, the applicant must show that the impugned regulations are “irrelevant”, “extraneous” or “completely unrelated” to the statutory purpose. Although it is possible to strike down regulations as ultra vires on this basis, it would take an “egregious case” to warrant such action”: Katz at paras. 24 – 28.
[24] The Ontario Court of Appeal articulated the method of review in Wildlands League v Ontario (Lieutenant Governor in Council), 2015 ONSC 2942 (Div Ct), aff’d 2016 ONCA 741at para. 88:
The foundational question is whether the regulation is ultra vires such that it is
inconsistent with the purpose of the Act. This inquiry necessitates an understanding of the express regulation-making authority in the context of the enabling statute as a whole and the statutory scheme the legislature adopted to achieve that purpose. As Katz Group instructs, the court is to look at the terminology of the enabling provision, qualified by the overriding requirement that the regulation accord with the purposes and objects of the parent enactment read as a whole.
[25] On the basis of Katz and Wildlands, therefore, I conceive of the analytical exercise in this case as requiring the answer to three questions:
Are the impugned regulations consistent with the statutory grant of authority?
Are they consistent with the object, purpose and scheme of the enabling statute? and
Are they consistent with Ontario Home Builders’ Association?
Whether the Impugned Regulations are Ultra Vires
Are the impugned regulations consistent with the statutory grant of authority?
[26] The statutory grant of authority is at s. 257.54(1) and (6) of the Education Act. If there is residential development in the area of jurisdiction of a board that would increase education land costs, the board may pass by-laws for the imposition of education development charges against land in its area of jurisdiction undergoing residential or non-residential development. However, the imposition of an education development charge by a board is subject to prescribed conditions. The impugned regulations constitute a “condition” on the imposition of EDCs. The applicant does not contest this.
Are the impugned regulations consistent with the object, purpose and scheme of the enabling statute, apart from a consideration of Ontario Home Builders’ Association?
[27] In Wildlands, para. 90, the Court of Appeal stated that legislative purpose must be determined by looking at the whole statute:
The “statutory purpose” branch of the vires analysis, however, does not focus only on the legislative aim, goal or objective of the statute, but requires an examination of the scheme the legislature adopted to achieve that goal. “Purpose” here means the “perspective within which a statute is intended to operate” and “the policy and objects of the Act…determined by construing the Act as a whole… Determining the purposes and objects of an Act in the context of a vires review therefore entails an examination of the scheme or approach that is adopted in order to achieve the legislative goal.
[28] The EDC regime was established in 1989 by the now-repealed Development Charges Act. It set out specific circumstances under which school boards could raise funds for new schools. Even then, some of the restrictions on eligibility, collection and use of EDCs included:
• the maximum amount of an EDC was limited by the level of provincial grant;
• capital costs associated with existing schools, or the building of schools for existing pupils currently accommodated in portables or sent by bus to distant schools, could not be defrayed through revenues raised by EDCs; and
• Ministerial approval was required for new school facilities, construction costs, and to withdraw any funds.
[29] Education was historically funded by both provincial grants and taxes set by local school boards. As Iacobucci J. observed in Ontario Home Builders’ Association at paras. 24-25, this approach “resulted in unequal funding as between urban and rural boards, owing to the differences in local assessment wealth” which caused the government to move “toward a new funding scheme that emphasized equality,” whereby “those school boards with a richer assessment base, whether public or separate, receive a smaller provincial grant”.
[30] The legislative framework governing the financing of education changed again shortly after Ontario Home Builders’ Association was decided. In 1997, Ontario passed Bill 160, the Education Quality Improvement Act, 1997 (“EQIA”), which amended the Education Act “to create a new governance and funding model for all school boards in Ontario, including both public and separate (denominational) boards.”
[31] The EQIA further pushed education funding from a local model to a provincial one by increasing financial oversight and restricting the power of school boards to tax and spend. The changes, which took effect in 1998, were described by Iacobucci J. in Ontario English Catholic Teachers’ Assn. v Ontario (Attorney General), 2001 SCC 15:
• to address a disparity of revenues between school boards, both between urban and rural boards and between separate and public boards, the EQIA allocates funds on a per-pupil basis;
• the EQIA “removes the ability of school boards to set property tax rates for education purposes, and centralizes this taxation power in the hands of the Minister of Finance;
• The EQIA limits the power of school boards to control their budgets and expenditures; and
• The EQIA allows the Minister to take control of a school board temporarily if financial problems arise.
[32] When the EQIA took effect in 1998, it eliminated the most significant way that school boards could raise their own revenue (i.e., taxes). EDCs remained, but these were curtailed by the legislative changes that took effect alongside the EQIA. When the Development Charges Act was repealed, the provisions governing EDCs were transferred to Part IX of the Education Act. A new regulation was created, O. Reg 20/98, and EDCs were further restricted in two notable ways:
(i) EDCs could not fund construction costs, only land and site preparation; and
(ii) EDCs could not be imposed by school boards that maintained excess capacity in their existing schools.
[33] The Education Act is comprehensive legislation that covers nearly every aspect of publicly-funded schools, such as discipline, nutritional standards, and teacher evaluations. The provisions governing school funding, including EDCs, are located at Part IX of the Act, which is entitled “Finance”. The Act, as a result of its scope and diversity, contains multiple purposes.
[34] The Finance section governs the manner in which public education is funded. As noted earlier, the power to impose EDCs is in s. 257.54(1):
If there is residential development in the area of jurisdiction of a board
that would increase education land costs, the board may pass by-laws for the
imposition of education development charges against land in its area of jurisdiction undergoing residential or non-residential development.
[35] The Act imposes many restrictions on this power. For instance, EDCs may not be imposed on development that enlarges existing dwellings or on certain industrial lands. The school board must hold a public meeting, conduct a review of EDC policies, and complete an EDC background study that includes estimates of projected students and costs. The Local Planning Appeal Tribunal may order the repeal or amendment of an EDC by-law. The Act also contemplates that this power will be further limited by regulation. Section 257.54 (6) provides that:
Conditions
The imposition of an education development charge by a board is subject to the prescribed conditions.
[36] As also noted earlier, O. Reg. 20/98 prescribes the central condition on the use of EDCs in issue in this case. Section 10 states, in relevant part:
The following conditions are prescribed, for the purposes of subsection 257.54 (6) of the Act, as conditions that must be satisfied in order for a board to pass an education development charge by-law…
- At least one of the following conditions:
i. The estimated average number of elementary school pupils…exceeds the total capacity of the board to accommodate elementary school pupils throughout its jurisdiction …
ii. The estimated average number of secondary school pupils … exceeds the total capacity of the board to accommodate secondary school pupils throughout its jurisdiction …
[37] There are, however, additional restrictions on EDCs imposed by O. Reg 20/98. The regulation excludes construction costs from the permissible uses of EDC revenue, requires Ministerial approval for new student projections, identifies the manner in which the EDC rate is calculated, and defines classes of exempt properties.
[38] The evidence is not contested that TDSB has over 65,000 excess spaces. In 2018, it had 49 schools at under 50% capacity and another 41 schools at under 60% capacity. There were two high schools at 30% capacity.
[39] Several reasons have been identified for why the TDSB has excess capacity. Most of the secondary school stock was built on the assumption that the vast majority of secondary students would attend public high schools. That assumption changed with the introduction of full funding for the Catholic system. Also, the abolition of Grade 13 added to the problem.
[40] A 2015 review of the TDSB articulated several problems associated with excess capacity:
• Learning - program delivery in the secondary school panel can become problematic when enrollment drops below 700 students;
• Safety - empty spaces in buildings also create safety concerns; and
• Finances - each of the schools has a principal, teaching, staff and support staff, and all the buildings have to be equipped, heated, lit and maintained. Underutilization creates a drain on the rest of the system.
[41] Based on this overview of the scheme of the Act, I agree with the respondent’s submission that at least one important goal of the Act is to deliver high-quality public education. Efficient education funding is clearly a means by which that purpose is attained. The provisions governing EDCs are located in Part IX of the Act, entitled “Finance.” This section addresses education funding (e.g., per pupil grants, EDCs, etc.). One hallmark of the “Finance” section and the regulations created in respect of Part IX are the restrictions and oversight mechanisms on the use of education funds.
[42] For instance, the Act requires school boards to produce budget estimates, appoint an auditor and audit committee, and provide financial statements to the Minister. Boards cannot run a deficit unless authorized by the Minister or regulation. The Minister can impose a Financial Recovery Plan on boards that run unauthorized deficits, and when doing so, investigate their financial affairs and “give any directions to the board that he or she considers advisable to address the financial affairs.”
[43] Similarly, the Act authorizes regulations that create restrictions and oversight on the use of funds. For example, regulations may be made prescribing accounting standards, limiting debt, “governing the borrowing of money,” imposing conditions on investments, creating financial recovery plans, and restricting the use of revenue.
[44] There are many regulations that govern education financing, including:
• O. Reg. 361/10 requires that boards establish audit committees whose functions include financial oversight;
• O. Reg. 41/10 imposes conditions on boards entering into price hedging agreements, investments and borrowing for permanent improvements;
• O. Reg. 444/98 imposes restrictions on boards proposing to sell, lease or grant easements on real property; and
• O. Reg. 193/10 imposes restrictions on the use of certain types of funding, such as school renewal funding, temporary accommodation funding, and how money from the sale of property can be used.
[45] I do not read the impugned regulations as being materially different than other provisions in the Act and its regulations which impose control and oversight over school board finances. One purpose of the “Finance” section of the statutory scheme is to ensure that education funds are well spent. The impugned regulations have the same function. They restrict the ability of boards to buy land for new schools if they simultaneously have underutilized schools elsewhere in their jurisdiction. The impugned regulations compel these boards to make their case directly to the province if they seek funding for new schools, which, the evidence shows, the TDSB has been granted in some cases.
[46] Further, this system mirrors the increased levels of financial oversight brought in by the EQIA and the slow movement away from a system where a significant portion of education was funded locally (e.g., taxes set by school boards) to one which is now largely funded by the province.
[47] For these reasons, I would find that the impugned regulations are consistent with the object, purpose and scheme of the Act.
Are the impugned regulations unconstitutional under the analysis in Ontario Home Builders’ Association?
[48] This question is the centrepiece of the applicant’s challenge to the impugned regulations. The applicant argues that, by de-linking the availability of EDCs from specific developments in specific school catchment areas, the respondent has rendered the EDC scheme incapable of qualifying for the “regulatory charge” exception to the prohibition against a province levying an indirect tax relied on by the majority in Ontario Home Builders’ Association. This, it says, shows that the impugned regulations are completely inconsistent with the underlying purpose for creating EDCs under the Act (i.e., to operate as ‘regulatory charges’ under which ‘growth pays for growth’).
[49] I am unable to agree with the applicant’s argument on this point. Ontario Home Builders’ Association does not establish: a) an unconditional right to levy EDCs as long as “growth pays for growth”; or that, b) the EDC regime was intended to apply irrespective of whether a board maintains empty or underutilized schools in other neighbourhoods within the board’s jurisdiction. Ontario Home Builders’ Association ruled that EDCs are constitutional, even though otherwise an indirect tax, because they maintain a “meticulous” focus on recouping costs: EDCs only tax growth (through new building permits) and are only used to pay for growth (new schools required by that new growth). The “meticulous” focus of EDCs was achieved by the conditions on their use, collection and eligibility. Those conditions, as Iacobucci J. emphasized, rendered EDCs constitutional by focusing revenues derived from new development on new rather than existing students.
[50] The flaw in the applicant’s argument is that s. 257.54(1) of the Act, including the conditions imposed by O. Reg. 20/98 promulgated under s. 257.54(6), maintains the “meticulous” focus described by Iacobucci J. It continues to limit the collection of EDCs to new development and limits the use of EDCs to the acquisition of school lands to serve new students in the area of the new development.
[51] The impugned regulations limit the board’s eligibility to impose EDCs, to be sure, but the additional conditions do not affect the constitutional validity of EDCs as defined in s. 257.54. They merely limit the availability of imposing what would otherwise be a valid regulatory charge to those boards which do not have unutilized capacity in other, existing schools. This is entirely consistent with the object, purpose and scheme of the Act and the constitutional justification for these charges established in Ontario Home Builders’ Association. EDCs still permit growth to pay for growth but can be levied for that purpose only when growth in school capacity is actually required within the area served by a board.
Conclusion
For these reasons, the application for judicial review is dismissed.
Costs
[52] The parties agree there would be no costs of the application. It is so ordered.
Penny J.
I agree _______________________________
Pattillo J.
I agree _______________________________
Kurke J.
Released: June 17,2021
CITATION: Toronto District School Board v. Ontario, 2021 ONSC 4348
DIVISIONAL COURT FILE NO.: 112/18
DATE: 20210617
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Pattillo Penny and Kurke JJ.
BETWEEN:
THE TORONTO DISTRICT SCHOOL BOARD, Applicant
– and –
HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO, Respondent
REASONS FOR JUDGMENT
Released: June 17, 2021