Development Charges Cannot Result in Subsidy or be Collected for Conservation Authorities
In 2012 Halton Region passed a Development Charge By-law that reduced the number of classifications for residential units. Specifically, the By-law eliminated the distinctions between different sizes of apartments and multiple dwellings. According to the Region this was done to make administration of the Development Charge By-law easier. The By-law also introduced a new charge to benefit the Halton Region Conservation Authority.
The Development Charge By-law was appealed by the Hamilton-Halton Home Builders’ Association to the Ontario Municipal Board. The effect of the new by-law, according to the Home Builders, was that smaller apartments and multiples would subsidize larger ones. The Home Builders pointed out that size differentiation exists to account for the differing demands larger and smaller units place on infrastructure as a result of their occupancy rates.
The Ontario Municipal Board sided with the Home Builders, citing the Development Charges Act anti cross-subsidization rule. The rule prevents one use having a lower charge that is made up for by a higher charge on another use. The Board also addressed housing affordability and the impact of the By-law, stating, “Development charges, by their very nature, add to the cost of housing. The home purchaser pays those costs and to assert anything to the contrary is a fiction.”
It was also argued by the Home Builders that the Conservation Authority portion of the development charge was outside the purview of the Development Charges Act. The Board sided with the Home Builders on this issue as well. The Act only allows municipalities or a local board to impose charges. The Board confirmed that conservation authorities simply are not a municipality or local board. The fact that the Region funds much of the work of the Conservation Authority was not enough to overcome the legal reality that conservation authorities are independent bodies.
The Region sought leave to appeal the OMB decision to the Divisional Court, which was granted. On appeal, the decision of the Board was upheld. The Court found that the Board did not commit an error of law, and that its decision was reasonable. The Court further commented that the reasoning of the Board was transparent, justifiable and intelligible.
The Divisional Court Decision is here: http://canlii.ca/t/gs1qz
The Leave to Appeal Judgement is here: http://canlii.ca/t/gmc81
The OMB Decision is here: https://www.omb.gov.on.ca/e-decisions/dc120006-may-05-2015-1.pdf