SOSNA J.:

INTRODUCTION

[1] The moving party, Giofam Investments Inc. (“Giofam”), seeks an order granting leave to the Divisional Court to appeal the Ontario Municipal Board (“OMB”) decision dated July 24, 2017: Giofam Investments Inc. v. Kawartha Lakes (City), (2017), 1 O.M.B.R. (2d) 48 (the “Decision”).

[2] Giofam contends the OMB erred by holding it has jurisdiction to order that Giofam conduct future maintenance or contribute to the costs of a 16 km haul route (the “Haul Route”) that falls geographically within the responding party and municipality—the County of Simcoe (“Simcoe”)—for the duration of their proposed quarry’s operation.

[3] Giofam submits that the Decision contains numerous errors that provide more than sufficient reason to doubt its correctness. It argues the Decision raises questions of law of sufficient importance to merit the Divisional Court’s attention.

[4] Simcoe submits that the OMB made no error in its findings and accordingly seeks a dismissal of Giofam’s leave to appeal.

FACTUAL AND PROCEDURAL BACKGROUND

[5] In 2008, Giofam applied to the Ministry of Natural Resources and Forestry (MNRF) for a “Class ‘A’ Quarry Below Water” licence (the “Licence Application”). This licence would permit Giofam to extract aggregate material from below the established groundwater table in a proposed new quarry to be located at 657 Monck Road (the “Quarry”), in the former Township of Dalton (“Dalton”) in the City of Kawartha Lakes (“Kawartha”).

[6] Giofam also applied to Dalton and Kawartha for Official Plan and Zoning By-law Amendments (the “Planning Applications”) to further permit the Quarry. The Planning Applications included a traffic impact study of the six-and-a-half (6.5) km route within Kawartha’s jurisdiction, over which Giofam’s products would be transported to market.

[7] Giofam and Kawartha entered into an agreement. Giofam agreed to construct lanes to access the Quarry and build a specific and quantifiable improvement to an open right-of-way to accommodate proposed truck traffic to the Quarry. Kawartha supported the Planning Applications.

[8] Subsequently, Simcoe—a neighbouring County to Kawartha—filed a letter of objection with the MNRF under the Aggregate Resources Act, R.S.O. 1990, c. A.8, as amended by the Aggregate Resources and Mining Modernization Act, 2017, S.O. 2017, c. 6 (“ARA”). The objection letter requested that a licence for the Quarry not be issued until Giofam entered an agreement for future improvement and continuing maintenance of the Haul Route (the “Haul Route Condition”).

[9] As a result, the MNRF referred both the Licence and Planning Applications to the OMB pursuant to the ARA’s section 11—section 11(5) grants the MNRF this power to refer ARA application issues to the OMB, while ss. 11(7) and 11(8) grant the OMB the power to jointly hear applications for instruments under the Planning Act, R.S.O. 1990, c. P.13 along with directing the MNRF on ARA applications. (Also, Giofam appealed the Planning Applications to the OMB because of Kawartha’s failure to make a decision about them.)

[10] In November 2016, the OMB scheduled hearings to resolve all these issues together.

[11] Except for Simcoe’s Haul Route Condition issue, the parties settled every issue concerning the Licence and Planning Applications before the hearings.

[12] On March 16, 2017, the OMB heard submissions by Giofam and Simcoe about whether it has jurisdiction to impose the Haul Route Condition. In its Decision, the OMB held:

it has jurisdiction and authority to direct a licensee to either undertake maintenance and repairs directly or to contribute to such maintenance and repair costs, and that this obligation is to remain in place for the aggregate operation’s lifetime;
in these circumstances, it would be appropriate and in the public interest to ensure that Giofam contributes to the Haul Route’s maintenance and repair; and
failing agreement between the parties on the quantum and timing of payment for such costs to be attributed to Giofam, the OMB would resolve them.

THE LAW

[13] An appeal lies from the OMB to the Divisional Court with the leave on a question of law: section 96(1) of the Ontario Municipal Board Act, R.S.O. 1990, c. O.28 (OMBA).

[14] As the court held in Mod-Aire Homes Ltd. v. Bradford (Town) (1990), 1990 CanLII 6990 (ON SC), 72 O.R. (2d) 683 at para. 31, the party moving for leave to appeal has the burden of establishing the following:

the proposed appeal raises a question of law;
there is good reason to doubt the correctness of the decision of the OMB with respect to the question of law raised (but see paras. 15-17 below); and
the question of law raised is of sufficient general or public importance to merit the attention of the Divisional Court.

[15] The Applicant must establish all three to substantiate its leave application. Regarding the second criteria, however, the proper standard of review was set in London (City) v. Ayerswood Development Corp., 2002 CanLII 3225 (ON CA), [2002] O.J. No. 4859 (Ont. C.A.) at para. 7 as

one of either correctness or reasonableness, depending on the nature of the particular question of law. Questions of law that engage the specialized expertise of the [OMB], such as the interpretation of its own statute, attract a standard of reasonableness. Questions of law that are of general application for which the [OMB] has no special expertise are reviewed on a standard of correctness.

[16] Courts have held that deference should be given to decisions of specialized tribunals—particularly here, the OMB—in the area that legislation entrusted to them: Whiteley, Re, 2012 ONSC 6445, 316 O.A.C. 41 at paras. 4, 7-8, 16 & 18.

[17] In this case, all questions of law submitted by Giofam concern the OMB’s specialized expertise, thus the standard of review is reasonableness.

THE MOVING PARTY’S POSITION

[18] Giofam submits that the OMB’s interpretation of the following ARA provisions, applicable regulations and policies, and other relevant statutes—like the Municipal Act, 2001, S.O. 2001, c. 25—are questions of law, so the Decision’s correctness/reasonableness is open to serious debate:

Section 12 of the ARA (about matters the MNRF must consider in licence applications, particularly s. 12(1)(h)—“main haulage routes and proposed truck traffic”);
O. Reg. 244/97 under the ARA (about fees relating to haul routes);
The MNRF’s Policy A.R. 4.00.02 (about considering haul route conditions in the aggregate permit process);
Sections 36 and 37 of the OMBA (which mirror powers established by ss. 11(5) and 12(1) of the ARA);
Policies 1.1.1, 1.1.4.1(e) and 1.1.5.5 of the Provincial Policy Statement, 2014 (policies about Planning Act licensing considerations);
Section 394(1)(e) of the Municipal Act (prohibiting Simcoe from entering an agreement on tonnage fees);

[19] Giofam also submits that the OMB erred in the following:

The Decision’s paragraphs 37-38 & 54 findings that the Quarry will result in an increased need for maintenance and repair of the Haul Route.

[20] Finally, Giofam submits that these questions of law are sufficiently important to merit the Divisional Court’s attention, given its implications for the aggregate industry.

ANALYSIS

Question 1: Did the OMB wrongly interpret section 12 of the ARA?

[21] Giofam submits that the OMB erred by finding it has authority to fix a schedule for fees and maintenance cost repairs on a proponent, pursuant to s. (12)(1)(h) of the ARA. The OMB held in its Decision at para. 18:

In reading the ARA as a whole, it is clear that the intent of the legislature was to confer broad discretion on the [OMB] to consider the potential for adverse effects of a proposed quarry prior to making a decision on an application for a licence. In particular, no limitations are placed on the [OMB]’s examination of a haul route in s. 12(1)(h) other than a direction to focus on “main haulage routes”.

[22] Section 12(1)(h) states:

12(1) In considering whether a licence should be issued or refused, the Minister or the [OMB] shall have regard to,

(h) the main haulage routes and proposed truck traffic to and from the site.

[23] Giofam concedes that s. 12(1) requires also considering the effects of the proposed Quarry on (a) the environment, (b) nearby communities, (e) groundwater, and (f) agricultural resources. Giofam argues, however, that those provisions become irrelevant in assessing any Haul Route Condition.

[24] Giofam submits that the main principle of statutory interpretation is to read an Act’s words in the entire context and their grammatical and ordinary sense, harmoniously with the Act’s scheme and object and Parliament’s intention.

[25] The maxim of statutory interpretation—“know a thing by its associates”—dictates that unclear words should be given whatever meaning makes the most sense, given the context in which the words reside.

[26] In s. 12(1)(h), the Ontario legislature specifically combined “main haulage routes and proposed traffic to and from the site” together as a consideration. This association clarifies that the consideration of a proposed main haulage route involves the ability of that route to accommodate proposed vehicular traffic to and from the proposed site.

[27] The legislature did not see fit to specifically mention any other issues regarding the main haulage routes, including the future maintenance of them. If the legislature intended to include other specific matters related to main haulage routes, it would have set those out. Anything omitted in the list is implicitly meant to be excluded.

[28] Giofam further argues that the ARA does not grant the OMB any ability to fix a schedule for fees and maintenance or to order that a proponent pay fees. Section 67(1) states that:

67(1) The Lieutenant Governor in Council may make regulations,

(f.3) governing any fees or payments that are or may be required to be paid under this Act, including prescribing the amounts of the fees or payments or the method of determining those amounts and prescribing the persons to whom they shall be paid and the times at which, or within which, they shall be paid;

(f.5) requiring and governing the disbursement to the Crown in right of Ontario, to municipalities or two other prescribed persons or entities portions of any fees or royalties paid under this Act.

[29] Giofam submits that fees imposed under s. 67(1)(a) established under O. Reg. 244/97 (the “Regulation”) are not specifically related to road works. As such, the ARA contains no provision permitting the OMB to impose fees on proponents to pay for road works.

Finding 1: The OMB made no error in interpreting s. 12

[30] Section 11(8)1 of the ARA allows the OMB, on referral of a licence application, to add “any additional conditions specified by the [OMB]”. Section 12, as reviewed above, partly sets out those matters that the OMB is to consider in granting a licence application: the environment, nearby communities, groundwater, agricultural resources, et cetera.

[31] I find that Giofam’s narrow interpretation—that each subsection of s. 12 stands alone, including s. 12(1)(h), should be interpreted exclusively—is inconsistent with a full reading of ss. 11 and 12.

[32] The OMB reasonably found that each subsection of s. 12(1) should be reviewed holistically. Many of these provisions overlap, for example (b) and (h)—the former considering impact on neighbouring municipalities, and the latter considering haul and traffic routes “to and from” a quarry. Section 12(1) does not limit how the OMB should consider the Haul Route Condition issue, specifically on the issue of traffic to and from the quarry site.

[33] I find the OMB can only make a reasoned and balanced decision about issuing a licence by interpreting the subsections collectively.

[34] Further, contrary to Giofam’s submission, the OMB did not find it had authority to fix a schedule for fees and maintenance costs. The OMB asked only that the parties negotiate an equitable contribution. Thus, the OMB neither fixed nor established any fee for road works by relying on the ARA’s provisions.

Question 2: Did the OMB err in interpreting the Regulation?

[35] The Ontario Aggregate Resources Corporation (TOARC) is the vehicle that, pursuant to the Regulation, collects per tonne fees from quarry and pit operators, and distributes them to upper and lower-tier host municipalities and the province.

[36] The Regulation establishes a trust—the Aggregate Resources Trust (the “Trust”)—to collect fees from every licensee. Those fees are based on the tonnage of aggregate that is removed from a pit or quarry site every year. The funds are disbursed in percentages to the following entities (ss. 2 & 3 of the Regulation):

the local municipality in which the site is situated;
the county or regional municipality in which the site is situated;
the Trust, for rehabilitation and research; and
the remainder to the Crown.

[37] Giofam and Simcoe agree that, through TOARC, the Ontario legislature established a level of fees to be charged to proponents. Municipalities may use those fees for improvements to haul routes.

[38] Giofam submits, however, that this scheme is the only source of funding for haul routes pursuant to the ARA. Accordingly, Giofam contends that the OMB erred and exceeded its authority when it held in the Decision at para. 21:

Nothing in the [Regulation] specifically limits the ability of other municipalities to seek a condition of licence approval that would ensure the entire haul route is upgraded and maintained. Similarly the [Regulation does] not constrain or limit the powers of the [OMB] set out in the ARA in any way.

[39] Giofam contends that the Regulation does not provide the OMB with any powers over funding road works. If the legislature intended non-host municipalities to receive funds for road works related to truck traffic servicing a quarry located in another municipality, it would have set out other specific matters—for example, fees for a non-host municipality—related to those routes. The legislature has not done so.

[40] In summary, Giofam submits the OMB is not the appropriate authority to seek through the back door what Simcoe cannot obtain through the front.

Finding 2: The OMB did not err in interpreting the Regulation

[41] Other than general payments to a host municipality pursuant to the Regulation, there is no specific requirement to charge a fee for upgrading and maintaining an identified haul route.

[42] Contrary to Giofam’s submission that the legislature’s failure to specifically mention fees means it intended that funding be excluded from consideration, I find that if the legislature intended to remove all discretion in this way, it would have expressly stated so in the ARA as opposed to the Regulation, or at a minimum stated so clearly in the Regulation alone.

[43] In this case, the OMB did not impose a “fee”, but held that a non-host municipality—whose ratepayers will be underwriting the cost to upgrade and repair a transportation network for the benefit (at least partly) of a specific user—be reimbursed, in an equitable amount for those costs.

[44] In making that determination, the OMB relied on the combination of the “other condition” powers granted by the ARA s. 11(8), together with the general categories of items set out in s. 12 (haul routes and impact on neighbouring municipalities).

[45] To sum, the OMB reasonably interpreted the Regulation regarding TOARC fees. It made no error in determining that the TOARC funds, only paid to a host municipality with no specific use itemized, did not conflict with the ARA’s authority to order compensation for upgrading and maintaining a haul route in a neighbouring municipality.

Question 3: Did the OMB err in law by referring to, misapprehending, and relying on the MNRF’s Policy A.R. 4.00.02 in the absence of Policy A.R. 2.00.03?

[46] Policy No. A.R. 4.00.02 sets out policy for “Aggregate Permit Conditions/Site Plan Notes”. It reads in part as follows: “Conditions relating to haulage routes may be considered in some instances, however, in general, the applicant should negotiate road use and maintenance matters with the appropriate road authority outside the permitting process.”

[47] The “Haul Routes” subheading’s paragraph c) states: “[t]he control of haul routes is to be limited to providing instructional signage on site. The construction, maintenance and upgrading of external (off-site) haul routes are not to be regulated under the ARA”.

[48] Policy No. A.R. 2.00.03 set out policy for “Licence Conditions/Site Plan Notes”. It reads in part as follows:

One of the purposes of the [ARA] is to minimize adverse impact on the environment in respect of aggregate operations. On-site operations and the transportation of aggregate products from a site may result in a number of negative impacts to both municipal roads and residents who live in the vicinity of the pit and/or quarry or along the haul routes.

[49] The subheading “Haul Routes” reads in part as follows:

The regulation of haul routes is a matter that may be considered for license conditions … only after careful consideration of the following criteria:

c) The control of haul routes is to be limited to directions and designation of routes. The construction, maintenance and upgrading of external (off-site) haul routes are not to be regulated under the ARA. However, the provision of a turning lane or acceleration lane associated with entrances/exits may be considered.

[50] Giofam submits that the OMB erred by failing to acknowledge the following in its Decision:

A.R. 4.00.02 concerns aggregate permit conditions. As Giofam applied for an aggregate licence and not a permit, this is not the correct policy for the OMB to consider;
Instead, A.R. 2.00.03 addresses conditions for an aggregate licence and is the correct policy for the OMB to consider; and
Both policies state that “[t]he construction, maintenance and upgrading of external (off-site) routes are not to be regulated under the ARA”.

[51] Giofam contends that the OMB did not reference and/or misinterpreted the relevant policy regarding licence conditions (A.R. 2.00.03). That policy is clear that the construction, maintenance and upgrading of external (off-site) haul routes are not to be regulated under the ARA.

[52] Thus, the OMB erred when it held the following in its Decision at para. 30:

Overall therefore, the [OMB] finds that the ARA requires it to have regard to the main haulage routes and proposed traffic to and from the Giofam quarry site as part of that consideration, the [OMB] has the power to direct a licensee to either conduct maintenance and repairs directly or to contribute towards the costs of the municipality to achieve the same result. Furthermore, as explained further below, the [OMB] finds that its powers go beyond merely directing that a haul route is adequate at the time of licensing but that the haul route remain adequate during the lifetime of the operation.

[53] Giofam submits the OMB had no evidence before it to support this interpretation. The interpretation runs counter to a clear reading of A.R. 4.00.02 and A.R. 2.00.03. Thus the OMB erred in law and misinterpreted the ARA policy/ies in arriving at its Decision. This misinterpretation/misreading was critical to the OMB’s finding which directed a proponent’s future maintenance of a haul route was regulated under the ARA.

Finding 3: The OMB did not err in law regarding A.R. 4.00.02

[54] In addition to considering A.R. 4.00.02 and 2.00.03, the OMB also considered Policy No. A.R. 2.01.10, setting policy for “Matters to be Considered in Issuing/Refusing a Licence”.

[55] Its subheading (b)—“Effect of the operation on nearby communities”—states in part: “[m]atters which may impact nearby communities can include: noise, dust, vibration, truck traffic, and surface water and groundwater impacts”.

[56] Its subheading (h)—“Main haulage routes and proposed traffic to and from the site”—reads in part as follows:

A review of the potential impacts should also include comments from municipalities and the public.

Have regard to any municipal or Ministry of Transportation (MTO) comments respecting existing traffic patterns, additional traffic, road conditions, dust/noise, safety, alternate routes, and other potential traffic implications and other potential traffic implications.

[57] Both A.R. 2.00.03 and A.R. 2.01.10 deal with licence applications. Giofam argues that the ARA provides no mechanism to enforce road upgrade and maintenance conditions. These ARA policies, however, serve to explain the legislature’s intentions about what the broad language of the ARA and Regulation should cover.

[58] Accordingly, the policies underline that no conflict exists between the Regulation, which provides a fee to a host municipality for general purposes, and the jurisdiction to order compensation to a “neighboring municipality” for the impact on its roads by the increased traffic that the licensee caused.

[59] I find the OMB’s reasoning is consistent with the modern principle of statutory interpretation set out in Neighbourhoods of Windfields Ltd. Partnership v. Death, [2008] O.J. No. 3298 (Ont. S.C.) at paras. 34-5:

The modern principle of statutory interpretation was developed by Elmer Driedger in the first edition of the Construction of Statutes. As stated by Driedger and approved by the Supreme Court of Canada,

Today there is only principle or approach, namely, the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of parliament.

This is the recognized starting point in interpreting statutory, by-law or other types of legislation. In the fourth edition of the Driedger text, the following is added to the original statement:

In other words, the courts must consider and take into account all relevant and admissible indicators of legislative meaning. After taking these into account, the court must then adopt an interpretation that is appropriate. An appropriate interpretation is one that can be justified in terms of (a) its plausibility, that is, its compliance with the legislative text; (b) its efficacy, that is, its promotion of the legislative purpose, and (c) its acceptability, that is, the outcome is reasonable and just.

[citations omitted.]

[60] Historically, the OMB has routinely either approved or ordered owners and municipalities to enter haul route agreements.

[61] In Ontario (Ministry of Natural Resources), Re, 2012 CarswellOnt 10693, the OMB signed off on an agreement involving a non-host, third-party municipality: “A Haul Route Agreement (Exhibit # 81) has been executed by MAQ and the Counties of Grey and Simcoe. The [OMB] has no concerns with respect to these matters.”

[62] In Sanderson v. Ryerson (Township), 2016 CarswellOnt 10394 at para. 9, where no progress had been made on a haul route agreement, the OMB ordered the parties that “with 28 days’ notice, any one of them may put forward a Motion to have the [OMB] re-convene the hearing to make a ruling on the haul route matter”.

[63] In D.D.S. Investments Ltd. v. Toronto (City), 2010 ONSC 1393, [2010] O.J. No. 1229 at para. 39, the court observed that

[t]he [OMB] is a specialized tribunal that makes decisions every day about matters that are outside the normal expertise of the court. As such, deference is owed to its decisions unless those decisions concern matters outside of its area of expertise or those decisions are unreasonable.

[64] I find the OMB’s reasons as set out in para. 30 above are entirely reasonable.

Question 4: Did the OMB err in law in interpreting the OMBA ss. 36 and 37?

[65] The OMB held in its Decision at para. 25:

The [OMB] finds that ss. 36 and 37 of the [OMBA] mirror and reinforce the powers established by ss. 11(5) and 12(1) of the ARA in this context. Upon referral by the [MNRF] of Giofam’s ARA licence application to the [OMB], the [OMB]’s jurisdiction to consider and resolve issues relating to the main haul road to be used by Giofam crystallized and became exclusive.

[66] Section 36 of the OMBA states:

Jurisdiction exclusive

36 The [OMB] 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.

[67] Section 37(a) states:

General jurisdiction and powers

37 The [OMB] 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 [OMB] under such Act.

[68] Section 11(5) of the ARA states:

Referral to Local Planning Appeal Tribunal

(5) The Minister may refer the application and any objections arising out of the notification and consultation procedures that are prescribed or set out in a custom plan to the [OMB] for a hearing, and may direct that the [OMB] shall determine only the issues specified in the referral.

(Section 12(1) of the ARA was quoted and reviewed above in paragraph 22.)

[69] Giofam submits that, pursuant to s. 37 of the OMBA, the OMB can only exercise the powers conferred upon it by an Act that it has powers to make. The OMB’s finding is therefore predicated on an incorrect assumption that the ARA permits the OMB to make the order that it did.

[70] Giofam argues that the OMB’s incorrect interpretation of the ARA led to their incorrect finding that the OMBA allows it exclusive—or any—authority over funding road works in the case of an ARA licence application.

[71] Further, Giofam submits that any power the OMB has is limited. Section 11(8) of the ARA allows the Minister of the MNRF to refuse to impose any condition specified by the OMB if the Minister thinks that condition is inconsistent with the ARA’s purposes. Section 11(8) states:

Powers of Local Planning Appeal Tribunal

(8) The following rules apply if an application is referred to the [OMB]:

The [OMB] may hold a hearing and direct the Minister to issue the licence subject to the prescribed conditions and to any additional conditions specified by the [OMB], but the Minister may refuse to impose an additional condition specified by the [OMB] if he or she is of the opinion that the condition is not consistent with the purposes of this Act.

[72] Thus, Giofam submits, the OMB’s jurisdiction is not exclusive, is subject to the Minister’s jurisdiction over conditions, and does not extend to conditions which are not permitted under the ARA and/or other legislation.

Finding 4: The OMB did not err in law in interpreting the OMBA ss. 36 and 37

[73] A full reading of the ARA ss. 11-12 establishes that it delegates to the OMB the Minister’s power to review, deliberate upon, and set conditions for specified matters concerning licence or permit applications under the ARA. The ARA sets no limitations on that power that would prohibit the Haul Route Condition imposed by the OMB. The OMB’s jurisdiction pursuant to ss. 11 and 12 is exclusive.

[74] Pursuant to s. 11(8), where the Minister refers an aggregate application to the OMB (as at bar), the OMB “may hold a hearing and direct the Minister to issue the license subject to the prescribed conditions and to any additional conditions specified by the [OMB]”.

[75] I find that by combing the OMBA ss. 36 and 37 with the ARA ss. 11 and 12, as enacted by the legislature, grants the OMB wide powers to determine all questions under the ARA.

[76] Lastly on this issue, Giofam submits that the OMB does not have “exclusive jurisdiction” because s. 11(8) of the ARA allows the Minister to refuse a condition specified by the OMB if he or she concludes it is “not consistent with the purposes of the Act”.

[77] I find the authority in s. 11(8) is consistent with no more than the ability to appeal a question of law to the courts. If the Minister decided to refuse a condition ordered by the OMB because it was “not consistent with the purposes of the Act” that decision would be subject to judicial review. This does not detract from the exclusivity of the OMB’s review power or the application of “reasonableness” to that review.

[78] To quote again from D.D.S. Investments at para. 39, “deference is owed to [the OMB’s] decisions unless those decisions concern matters outside of its area of expertise or those decisions are unreasonable”.

[79] I find no error in law in the OMB’s interpretation of the OMBA.

Question 5: Did the OMB err in law in interpreting Policies 1.1.1, 1.1.4.1(e) and 1.1.5.5 of the Provincial Policy Statement, 2014 (the “PPS Policies”)?

[80] The OMB’s decision held in part at paras. 28 and 29:

It could very well be argued that licencing under the ARA and approval of planning instruments that necessitate the use of roads in the County could be characterized as a “planning matter” under s. 3(5) of the Planning Act, which necessitates consistency with the PPS. …

Assuming that consistency with the PPS is required in this context, the policies of the PPS articulate a public interest in ensuring both an adequate supply of aggregate resources (policy 2.5) but also the public interest in ensuring the resiliency of municipal infrastructure long term (for example, see: policies 1.1.1 and 1.1.4.1(e) and 1.1.5.5). The [OMB] also finds that a reading of the PPS strongly suggests that one of the intentions behind ensuring the resiliency of municipal infrastructure, including road systems, is to ensure that aggregate resources can be accessed over the long term.

[81] PPS 1.1.1 states that “[h]ealthy, liveable and safe communities are sustained by” a list of eight factors including “a) promoting efficient development and land use patterns which sustain the financial well-being of the Province and municipalities over the long term”.

[82] PPS 1.1.4.1 states that “[h]ealthy, integrated and viable rural areas should be supported by” nine factors including “e) using rural infrastructure and public service facilities efficiently”.

[83] PPS 1.1.5.5 states that “[d]evelopment that is compatible with the rural landscape and can be sustained by rural service levels should be promoted”.

[84] Giofam submits that the OMB erred by using these PPS Policies to support its conclusion at para. 53 that

[t]he OMB has the power to either require that Giofam undertake maintenance and repairs directly or contribute towards the maintenance costs incurred by [Simcoe] to ensure that an adequate haul route exists.

[85] Giofam argues that inherent in the OMB’s finding is that these PPS Policies support the imposition of an obligation on (private) licensees to fund the maintenance and repair of municipal infrastructure. Giofam submits that the PPS Policies do not reasonably allow for such an interpretation, and that the OMB lacked any evidence before it to support one.

Finding 5: The OMB did not err in law in interpreting the PPS Policies

[86] At paras. 28 and 29, quoted above in paragraph 80, the OMB reasonably found that that ARA consideration of land-use planning matters (ARA s. 12(1)(g)) also brings the PPS Policies into consideration. The PPS Policies reviewed above promote both the resource [the aggregate] while protecting the municipal infrastructure that transports the product to market.

[87] Contrary to Giofam’s submission that the OMB erred by holding that private licensees have an obligation to fund maintenance and repair of municipal infrastructure, similar funding is established by other legislation. Although inapplicable to aggregate producers whose licences are issued provincially, the Development Charges Act, 1997, S.O. 1997, c. 27 allows municipalities to charge industrial land developers and industries who establish new facilities to assist in the expansion of transportation services.

[88] There was specific and uncontradicted evidence before the OMB that heavy trucks—like those serving Giofam’s facility—cause disproportionate wear and tear on Simcoe’s roads. Thus, consistent with the PPS Policies and ARA, the OMB’s findings in its Decision at para. 53 quoted above were reasonable.

[89] I find no error in the OMB’s reasoning and findings.

Question 6: Did the OMB err in law in interpreting s. 394(1)(e) of the Municipal Act?

[90] The OMB held at paras. 47-8 of its Decision:

In reviewing the Municipal Act provisions set out above, the [OMB] finds that although there are certain limitations in the Act constraining the by-law making power of [Simcoe], there is nothing in the Municipal Act that specifically or necessarily constrains the powers of the [OMB] that are otherwise established under the ARA and other legislation.

The Municipal Act does not constrain the power of the [OMB] to direct the Minister to issue a licence under the ARA, subject to a condition requiring upgrading and maintenance costs or the payment of reasonable costs which would achieve a similar effect. The question of whether [Simcoe] has the power to enter a haul route agreement is secondary to this question. The [OMB] finds that it has the power to impose a condition of licence and would necessarily have the power to fix a schedule for fees and maintenance costs.

[91] Section 394(1)(e) of the Municipal Act states:

Restriction, fees and charges

394 (1) No fee or charge by-law shall impose a fee or charge that is based on, is in respect of or is computed by reference to,

(e) the generation, exploitation, extraction, harvesting, processing, renewal or transportation of natural resources.

[92] Giofam submits that the OMB granted Simcoe powers that Simcoe does not have, when it ordered that Giofam enter an agreement with Simcoe to pay fees based on the transportation of aggregate from the Quarry.

[93] As such, the OMB’s interpretation of s. 394(1)(e) conflicts with the ARA’s legislative scheme: municipalities lack power to impose fees on a proponent to maintain or repair a haul route.

Finding 6: The OMB did not err in interpreting s. 394(1)(e) of the Municipal Act

As previously reviewed, ARA provisions cannot be used to enforce a condition relating to upgrading or maintaining a haul route. But there is no restriction on the parties’ ability to negotiate an agreement, as directed by the OMB and which can be enforced as other contracts through courts. If the parties cannot reach an agreement, the OMB can issue an order which can be enforced as part of the planning approvals or through the OMBA, ss. 48, 50(1), and 51:

General powers

48 The [OMB] may order and require any person or company, corporation or municipality to do forthwith or within or at any specified time, and in any manner prescribed by the [OMB], so far as is not inconsistent with this Act, any act, matter or thing that such person, company, corporation or municipality is or may be required to do under this Act, or under any other general or special Act, or under any regulation, order, direction, agreement or by-law, and may forbid the doing or continuing of any act, matter or thing that is in contravention of any such Act or of any such regulation, order, direction, agreement or by-law.

Duty to execute works ordered by Board

50 (1) When the [OMB], in the exercise of any power vested in it, by any order directs any structure, appliances, equipment, works, renewals or repairs to be provided, constructed, reconstructed, altered, installed, operated, used or maintained, it may order by what person, company, corporation or municipality interested or affected by such order, as the case may be, and when or within what time, and upon what terms and conditions as to the payment of compensation or otherwise, and under what supervision the same shall be provided, constructed, reconstructed, altered, installed, operated, used or maintained.

Board’s powers upon default in obeying order

51 If default is made by a person, company, corporation or municipality in the doing of any act, matter or thing, that the [OMB] has authority under this or any other general or special Act, to direct and has directed to be done, the [OMB] may authorize such person as it may see fit to do the act, matter or thing, and in every such case the person so authorized may do such act, matter or thing, and the expense incurred in the doing of the same may be recovered from the person, company, corporation or municipality in default as money paid for and at his, her or its request, and the certificate of the [OMB] of the amount so expended is conclusive evidence thereof.

[94] Section 394 of the Municipal Act regulates the by-law-making power to make fees and services charges concerning the transportation of “natural resources”. The OMB’s Decision did not to impose any fee and/or service charge by-law, as Giofam submits.

[95] Relying on ss. 12(1)(b) and (h) of the ARA, and ss. 8(1), 11(1), 28(1), and 35 of the Municipal Act, the OMB found that—in addition to the powers granted by its s. 394—it also had the jurisdiction to require as a condition that the operator Quarry contribute to the upgrading and/or ongoing maintenance of a non-host haul route.

[96] Sections 8(1), 11(1), 28(1), and 35 of the Municipal Act read as follows:

Scope of powers

8 (1) The powers of a municipality under this or any other Act shall be interpreted broadly so as to confer broad authority on the municipality to enable the municipality to govern its affairs as it considers appropriate and to enhance the municipality’s ability to respond to municipal issues.

Broad authority, lower-tier and upper-tier municipalities

11 (1) A lower-tier municipality and an upper-tier municipality may provide any service or thing that the municipality considers necessary or desirable for the public, subject to the rules set out in subsection (4).

Jurisdiction

28 (1) Except as otherwise provided in this Act or under section 8 of the Public Transportation and Highway Improvement Act or in a by-law passed under this Act, a municipality has jurisdiction or joint jurisdiction, as the case may be, over the following highways:

All highways over which it had jurisdiction or joint jurisdiction on December 31, 2002.
All highways established by by-law of the municipality on or after January 1, 2003.
All highways transferred to the municipality under this Act, the Public

Transportation and Highway Improvement Act or any other Act.

Restricting common law right of passage

35 Without limiting sections 9, 10 and 11, a municipality may pass by-laws removing or restricting the common law right of passage by the public over a highway and the common law right of access to the highway by an owner of land abutting a highway.

[97] The OMB found that it had jurisdiction to require as a condition that an operator of a quarry contribute to the upgrading and/or ongoing maintenance of a non-host haul route. The OMB further found it was open to and within its jurisdiction to hear evidence about—and determine—fair and equitable terms, should an agreement not be reached.

[98] Lastly, in coming to this finding, the OMB relied on evidence that Giofam had negotiated with Kawartha for upgrading and ongoing maintenance of the to-be-opened public road intended to service the Quarry. The OMB also accepted the uncontradicted evidence in the affidavits of Paul Murphy—Simcoe’s Engineering Technician—which Simcoe tendered to establish wear and tear that Giofam’s vehicles would likely cause.

[99] This aspect of the OMB’s decision is one of mixed fact and law and is closed to appeal. Even were it subject to review, the OMB’s finding is within the range of acceptable outcomes.

Question 7: Did the OMB err by finding the Quarry would cause a need for increased maintenance and repair of the Haul Route?

[100] The OMB held in its Decision at paras. 37-8, and 54:

A project with a lifetime of approximately 94 years, using some of the heaviest vehicles on the road, will result in the need for increased maintenance and repair. …

… the evidence is clear that Giofam's use of the haul road will necessitate increased maintenance and repair to ensure that an adequate haul route exists for the life of the project.

The evidence tendered by [Simcoe] was clear and uncontested as to when costs would likely be incurred for road maintenance.

[101] Giofam submits these findings are in error, arguing that the OMB lacked evidence that Giofam’s use of the Haul Route will necessitate future maintenance and repair.

Finding 7: The OMB made no error on the evidence before it

[102] As previously reviewed, on a motion for leave to appeal to the Divisional Court, the moving party must show the proposed appeal raises a question of law.

[103] The above OMB findings are findings of fact. They raise no question of law. They are not subject to review and will not be considered in this application for leave to appeal.

SUMMARY

[104] As detailed above in paragraphs 13-17, for Giofam to succeed on a motion for leave to appeal to the Divisional Court, it must establish all three of the following criteria:

a pure question of law; this cannot be a question of fact or mixed fact and law;
a reason to doubt the OMB Decision’s reasonableness, where the question—as in this case—involves the OMB’s special expertise;
sufficient general or public importance to merit the Divisional Court’s attention.

[105] The OMB carefully reviewed and considered its jurisdiction to withhold its final order on Giofam’s licence, to allow the parties to determine the equitable share that each should bear for the Haul Route’s direct repair and future maintenance.

[106] As held in British Columbia (Securities Commission) v. McLean, 2013 SCC 67, [2013] 3 S.C.R. 895 at para. 40:

The bottom line here, then, is that the Commission holds the interpretative upper hand: under reasonableness review, we defer to any reasonable interpretation adopted by an administrative decision maker, even if other reasonable interpretations may exist. Because the legislature charged the administrative decision maker rather than the courts with “administer[ing] and apply[ing]” its home statute (Pezim, at p. 596), it is the decision maker, first and foremost, that has the discretion to resolve a statutory uncertainty by adopting any interpretation that the statutory language can reasonably bear. Judicial deference in such instances is itself a principle of modern statutory interpretation.

[107] The OMB’s decision to withhold Giofam’s licence as above involved a thorough and balanced assessment of the operative statutes, acts, and regulations with which it has specific expertise and is accorded deference. Policy papers also familiar to the OMB were reviewed to help make harmonious its interpretation of the different statutes and provide insight into the legislative objective of getting a private operator’s product to market over infrastructure that Simcoe’s taxpayers are required to maintain.

[108] The Decision clearly falls within a range of possible, acceptable outcomes, which are defensible in respect of facts and law: Richmond Hill Naturalists v. Corsica Developments Inc., 2013 ONSC 7894, [2013] O.J. No. 5996 at para. 25.

[109] Lastly, although Giofam has not met its onus to establish that the Decision raises either a pure question of law or a serious doubt to its reasonableness, this matter’s importance goes beyond the parties in this case and extends to operators of pits and quarries and municipalities whose roads are used to move products to market. Accordingly, I find that the third criteria for leave to appeal is met.

[110] Since all three criteria must be established, but I found Giofam did not meet the first two, and for all the above reasons, Giofam’s application for leave to appeal is dismissed.

[111] If the parties cannot agree on costs, they may make written submissions. First, Simcoe’s counsel shall deliver submissions by August 3, 2018. Then within fifteen (15) days of receipt of those submissions, Giofam’s counsel shall deliver submissions. Within five (5) days of receipt of those submissions, Simcoe’s counsel may deliver a brief reply. All submissions, with proof of service, must be filed with the trial coordinator at Oshawa. The trial coordinator may accept a party’s submissions, if not on time, with the consent of the other party. When the filing of submissions is complete, the trial coordinator shall forward all of them to me, as one package, for consideration.

The Honourable Mr. Justice Alexander Sosna

DATE RELEASED: June 22, 2018

Giofam Investments Inc. v. Simcoe (County), 2018 ONSC 3923

Case Summary