Toronto City Council has passed a resolution to move ahead with adding all major application types to the online application submission portal by the end of this year. The pilot project started with site plan control applications and is now working on zoning amendment applications. The City’s C2K team is hoping for a full public launch in early to mid-2021.
Davies Howe LLP looks forward to working with its clients to assist in the virtual filing of more complex and additional types of land use applications in this new virtual era.
New Regulation Released for Community Benefits Charges and Parkland Regulation under the Planning Act
On September 18, 2020, Ontario Regulation 509/20 came into force under the Planning Act to support the implementation of community benefits charges (CBCs) and parkland regulation (found here). This starts the two-year transition period for municipalities to implement the new framework.
CBCs are to be implemented under the “new” section 37 of the Planning Act and will give municipalities the ability to fund various community services not otherwise covered by development charges. This new Regulation provides additional details to section 37 of the Planning Act by outlining the requirements of a municipal community benefits strategy, development exclusions, maximum charge percentage, notice requirements for passing CBC By-laws, minimum interest rate rules, appraisal report timelines and municipal reporting requirements. This Regulation supports the Housing Supply Action Plan created through More Homes, More Choice Act, 2019 (Bill 108) as well as the COVID-19 Economic Recovery Act, 2020 (Bill 197).
Exclusions from Community Benefit Charges (s.1)
The Regulation expands on section 37(4)(e) of the Planning Act by expressly excluding long-term care homes, retirement homes, universities and colleges, memorial homes, clubhouses or athletic grounds of the Royal Canadian Legion, hospices and non-profit housing from CBCs.
Community Benefits Strategy (s.2)
Section 37(9) of the Planning Act requires the municipality to prepare a CBC strategy. Section 2 of this Regulation outlines the requirements of the strategy as including the following:
- estimates of the anticipated amount, type and location of development and redevelopment with respect to which CBCs will be imposed;
- estimates of the increase in the need for facilities, services and matters attributable to the anticipated development and redevelopment to which the CBC By-law would relate;
- identify the excess capacity that exists in relation to the facilities, services and matters referred to in clause (b);
- estimates of the extent to which an increase in a facility, service or matter referred to in clause (b) would benefit existing development;
- estimates of capital costs necessary to provide the facilities, services and matters referred to in clause (b); and
- identify capital grants, subsidies and other contributions made to the municipality or that the council of the municipality anticipates will be made in respect of the capital costs referred to in clause (e).
Maximum Charge (s.3) and Appraisals (s.6)
Section 3 of the Regulation establishes the prescribed maximum rate for a CBC under subsection 37(32) of the Planning Act as 4%, meaning that the CBC payable in any particular case cannot exceed 4% of the value of the land as of the valuation date.
The owner of land proposing to develop a site can provide the municipality with an appraisal of the value of the site if they are of the view that the CBC exceeds what is legislatively permitted. Similarly, a municipality can provide the owner of the land with an appraisal if it disputes the owner’s appraisal. If the appraised values are within 5% of each other, the municipality must refund to the owner the difference between the amount of the CBC and the higher of the appraised values. If the appraised values differ by more than 5%, a third appraisal is prepared. The Regulation establishes the following timeframes of these appraisals:
- If the owner disagrees with the charge, they pay the charge under protest and provide the municipality with an appraisal of the value of the land within 30 days;
- If the municipality disputes the owner’s appraisal report, they must provide the owner with their own appraisal within 45 days;
- If these appraisals differ by more than 5%, the owner can select an appraiser from the municipal list of appraisers who will then provide an appraisal within 60 days.
Municipality Reporting Requirements (s.7)
Municipalities are required to prepare and make available to the public annual reports that identify the balances of the CBC special account and the Parkland special account. The Regulation states that these reports must include details on the amounts spent, how capital costs not funded from the special account were funded, the amount borrowed from the account and the interest accrued on this amount.
Please contact us if you have any questions as to how this Regulation may apply to you and your development project.
On September 4, 2020, a staff report was released by the City of Toronto presenting draft inclusionary zoning Official Plan and Zoning By-law amendments for the purpose of public consultation.
Inclusionary zoning is a tool for municipalities to require new development or redevelopment to maintain a certain portion of residential units as affordable housing. As contemplated in Bill 108, the applicability of inclusionary zoning is limited to Protected Major Transit Station Areas (PMTSAs). These PMTSAs must be adopted by Council and approved by the Minister of Municipal Affairs and Housing.
Key components of the draft amendments include geographic application, the affordability period and the amount of units set aside. Geographically, inclusionary zoning will apply to areas defined as strong and moderate market areas within PMTSAs, as set out in this map.
The draft instruments require that 3-10% of the total residential gross floor area in a development be set aside as affordable housing for 99 years. The specific percentage is dependent on whether the development is in a strong or moderate market and the type of development. This range is currently being reviewed by City Planning to determine whether it can be increased. The City’s Planning and Housing Committee recommended increasing the range to 10-30% of the total residential gross floor area in a development. The matter will be considered by City Council on September 30, 2020 and final recommendations are targeted to be brought before the Committee in 2021. These requirements will be secured by agreements under subsection 35(2) of the Planning Act and will be registered on title.
Exemptions to Inclusionary Zoning
The Provincial Regulation 232/18 provides exemptions from inclusionary zoning, including where the proposed development contains fewer than 10 residential units. The draft Zoning By-law provides the following additional exemptions:
- Development or redevelopment within the Downtown Secondary Plan or Central Waterfront Secondary Plan containing:
- Less than 100 residential units; and
- Less than 8000 square metres of residential gross floor area
- Development or redevelopment outside the Downtown Secondary Plan or Central Waterfront Secondary Plan containing:
- Less than 140 residential units; and
- Less than 10,000 square metres of residential gross floor area
- Development or redevelopment owned and operated by certain “non-profit housing providers”; or
- Portions of development or redevelopment containing residential care homes or institutional student residences.
Notably, the proposed transition provisions in the draft Zoning By-law Amendment provide that it will not apply to a building or structure for which a complete application for a building permit, zoning by-law amendment, minor variance or site plan approval was filed prior to January 1, 2022. Minor variance applications are also excluded if based on a building permit application submitted before January 1, 2022.
Unprecedented yet Contemplated: Awarding Costs in Expropriation
Shergar Development Inc v Windsor (City), Ontario Court of Appeal, 2020
On August 4, 2020 the Ontario Court of Appeal upheld the Divisional Court’s decision that costs can be awarded to the expropriating statutory authority under section 32 of the Expropriations Act (the “Act”) for settlement offers that were unreasonably rejected. Generally, cost awards are based on the amount of the section 25 offer made by the expropriating authority and are at the Tribunal’s discretion. This decision expands the Tribunal’s ability to apply costs awards.
The Respondent, the City of Windsor (“Windsor”), expropriated the Appellant, Shergar Development Inc.’s (“Shergar”) lands along the Detroit River in Windsor creating two issues for the Ontario Court of Appeal:
- Whether the Divisional Court erred in finding that the reasonableness standard applies; and
- Whether the wording “the amount offered by the statutory authority” in section 32 of the Act refers to an offer made by Windsor that was not made under section 25 of the Act.
The Ontario Court of Appeal upheld the Divisional Court and the Ontario Municipal Board’s decision finding that Shergar’s interpretation is inconsistent with the text, scheme and public policy objectives of the Act. The Court found that the decision was reasonable, and section 32 of the Act does refer to a subsequent offer made by an expropriating authority as well as an offer made under section 25 of the Act.
The case has a history that has spanned 22 years. Shergar acquired the Subject Lands from the Canadian Pacific Railway Company (CPR) in 1995. Windsor expropriated the Lands for completion of a waterfront project in 1998. Shergar caused months of delay by not granting Windsor access to the Lands. Windsor offered compensation to Shergar and CPR jointly, in accordance with section 25(1) of the Act, for $500,000. Even after Shergar’s counsel advised that they would accept the offer, Shergar refused to cooperate causing further delay. This resulted in this section 25 offer being withdrawn.
Shergar then participated in Federal litigation against Windsor and after receiving unfavourable outcomes, commenced an expropriation arbitration in 2013. In 2015, Windsor made another offer to Shergar equivalent in value to $1,208,155 (“the 2015 Offer”), which Shergar did not accept. A proceeding was started under the Ontario Municipal Board to determine the amount of compensation. The Board determined that Shergar’s interest in compensation was only $266,832. However, the Board still awarded Shergar the costs of the proceeding causing Windsor to seek a rehearing on interest and costs. The Board then concluded that the most recent offer constituted the amount offered by the statutory authority and granted costs in favour of Windsor following the date of the 2015 Offer. Shergar appealed this decision to the Divisional Court. The Divisional Court found the Board’s interpretation reasonable. Shergar further appealed to the Ontario Court of Appeal.
The Court of Appeal awarded the Board’s decision significant deference. They dismissed the appeal finding that the Board interpreted the Act correctly. The Court (and the Board before it) focused on determining the legislative intent of section 32 of the Act by looking at the text, the scheme and the public policy objectives.
Text of the Act
First, the wording of section 32 refers to “the amount offered” by the statutory authority. It does not refer explicitly to section 25 as Shergar argued. This is contrasted with other sections of the Act that do refer explicitly to section 25. The Court concludes that if the legislature had intended this narrow application of section 32, they would have done so explicitly as is the case for sections 26 and 33(1).
Second, section 32 applies to both expropriation and injurious affection cases whereas section 25 only refers to “expropriating authority”, defined as a person empowered to expropriate land. This is contrasted with the wording “statutory authority” in section 32 which is defined as a person empowered by statute to expropriate land or cause injurious affection. Because section 32 refers to both expropriation and injurious affection and does not specify that they be treated differently, the Court states that it is illogical to interpret “the amount offered by a statutory authority” in section 32 as referring to section 25 offers only.
Scheme of the Act
Shergar’s interpretation is also inconsistent with the process contemplated by the Act. A section 25 offer must be made within 3 months of registration of a plan under section 9 of the Act and this is often too soon for an expropriating authority to fully understand the property’s market value. The expropriating authority should be afforded some measure of costs protection where it makes an increased, fair offer and the claimant refuses to accept it. The expropriating authority should also be able to be compensated for related damages when the claimant refuses to accept the offer and elects instead to proceed with unnecessary arbitration.
Public Policy Objectives of the Act
Lastly, Shergar uses Dell Holdings to make a public policy argument. The Court agrees that the Act is remedial and should be interpreted broadly and liberally, however, this is not the only policy objective of the Act. The remedial nature of the Act does not in itself rule out cost consequences for refusals of reasonable offers. Another objective of the Act is to encourage settlement of claims as early a stage as possible. These objectives are not incompatible.
The Court emphasizes that an innocent party whose property is taken must be fully compensated and the party will not generally have to bear costs for reasonably disagreeing with the amount offered for that taking, even where the offer exceeds the ultimate award by a considerable margin. However, at the very least, there must be a potential for adverse cost consequences where the claimant forces a wholly unnecessary proceeding or otherwise acts unreasonably.
The objective of full and fair compensation cannot be divorced from the objective of the efficient resolution of claims. Shergar’s interpretation would permit the prospect of an unreasonable claimant delaying proceedings, running up legal costs, and wasting the Board’s resources, safe in the knowledge that unreasonable refusals of subsequent offers cannot adversely affect its entitlement to legal costs.
While Shergar submits that awarding costs against a claimant in an expropriation proceeding is a new and undesirable precedent, it has always been contemplated that a claimant who unreasonably refuses an offer of settlement may be ordered to pay costs to a statutory authority (This is seen 44 years ago, in Rotenberg).
The Court of Appeal found that Shergar inexplicably refused an offer equivalent to $1,208,155 when their interest was limited to $266,832. Shergar also frustrated and delayed the determination of the issue of the appropriate compensation to be awarded to the subject lands. The Court ruled that this conduct is worthy of censure. Shergar’s actions resulted in significant delay and frustration, wasting the Board’s valuable time.
On July 21, 2020, and just prior to the legislature rising for its summer recess, the Provincial government passed the recently introduced COVID-19 Economic Recovery Act (“Bill 197”) which represents a step towards Ontario’s plan for growth, renewal and economic recovery made necessary due to the ongoing pandemic. Bill 197 is an omnibus bill which proposes to amend 20 statutes and was introduced by Premier Ford who described it as necessary to “rebuild the Province and get people back to work”.
Several of the statutes to be amended will be of particular interest to those in the municipal and land development sector and include the Building Code Act, the Planning Act, the Development Charges Act, the Municipal Act, the Ministry of Municipal Affairs and Housing Act, the City of Toronto Act and the Environmental Assessment Act.
A brief summary of some of the Bill 197 highlights is provided below.
Building Code Act
- Provisions of the Building Code Act are amended granting regulation making authority to the Minister of Municipal Affairs and Housing (the “Minister”) and no longer the Lieutenant Governor in Council;
- The Minister may make regulations by adopting documents by reference;
- The intent of these amendments is to streamline parts of the building codes to harmonize them intraprovincially and to enable the Province to respond faster to construction sector needs.
In 2019, the Province, through the passage of the More Homes, More Choice Act (“Bill 108”) and the Plan to Build Ontario Together Act, proposed significant amendments to the Planning Act as it related to community benefits and development charges (“DC”) and its parkland dedication regime. However, these changes were not brought into force. Bill 197 now rolls back many of Bill 108’s would-be changes, for example:
Community Benefits Charges (CBC’s)
- Sections 37 and 37.1 of the Planning Act are repealed and replaced, including the current section 37 agreement process;
- A CBC can not be imposed, amongst others, on development or redevelopment applications that have fewer than five storeys, fewer than 10 residential units, redevelopment that proposes to add fewer than 10 residential units to an existing building or structure, and other developments as are prescribed;
- A CBC can be imposed for public recreational purposes, provided that the capital costs for same are not also being charged pursuant to a development charge by-law under the Development Charges Act e. no double dipping;
- A local municipality can impose a CBC by-law and only one such by-law may be in effect in a municipality at a time;
- A CBC by-law must be subject to public consultation and is appealable to the Local Planning Appeal Tribunal (the “Tribunal”);
- The maximum CBC payable cannot exceed a yet-to-be prescribed percentage of the value of land as of the valuation date, which may be paid under protest;
- The current system by which municipalities obtain parkland (and not the system proposed by Bill 108) will be generally maintained particularly in relation to the alternative parkland rate that applies to higher density residential development;
- Public consultation is required prior to passing a by-law that sets an alternative parkland dedication rate which still cannot be set at a rate greater than one hectare for each 300 dwelling units proposed where land is to be conveyed or one hectare for each 500 dwelling units for payments in lieu;
- An alternative parkland dedication by-law can be appealed to the Tribunal. Limits have also been imposed on the Tribunal’s decision-making powers which make clear that the Tribunal cannot amend the by-law so as to increase the alternative parkland rate or payment in lieu required; and
- Existing parkland dedication by-laws will expire two years after these changes come into force.
- Bill 197 expands Ministerial power as it relates to “specified land”, which is generally defined as land other than land in the Greenbelt Area (which includes areas covered by the Oak Ridges Moraine Conservation Plan, areas covered by the Niagara Escarpment Plan and areas described in the regulations made under the Greenbelt Act, 2005);
- The Minister will have enhanced order-making powers to:
- Confirm that site plan control does not apply to all or part of the specified land;
- Address inclusionary zoning and require the provision of affordable housing;
- Require an owner of land to enter into agreements with a municipality related to, amongst other things, conditions required for the approval of a development project as well as the drawings and plans related to same.
Development Charges Act
Bill 197 expands the list of services for which a DC can be imposed from the list that had been furnished in Bill 108. The expanded list now includes, amongst others:
- By-law enforcement and court services;
- Services related to public health and emergency preparedness;
- Child care and early years programs; and
- Housing services.
Bill 197 rolls back some amendments first proposed by Bill 108 and does not permit the charging of a DC for the acquisition of lands for parks. Double dipping of charges for services as between the Development Charges Act and the Planning Act is not permitted.
The proposed amendments permit services to be included in classes, whereas they were previously grouped into categories. Existing DC by-laws that include certain services can remain in force for up to two years.
Ministry of Municipal Affairs and Housing Act
Bill 197 formally establishes a Provincial Land and Development Facilitator (the “Provincial Facilitator”). The functions of the Provincial Facilitator are to advise and make recommendations to the Minister in respect of land use and other matters, including, but not limited to, Provincial interests.
Municipal Act and the City of Toronto Act
Bill 197 amends the Municipal Act and the City of Toronto Act by repealing existing rules and enabling municipal Clerks and Councils to amend procedural by-laws as they relate to electronic participation. Bill 197 permits members of Council, committees and local boards to participate electronically in meetings which may be open or closed to the public and to be counted for the purpose of determining a quorum. This dispenses with the need to be physically present at a particular venue. In essence, Bill 197 makes the temporary measures implemented to respond to the COVID-19 emergency permanent.
Council members, in accordance with processes established by the municipal Clerk, will be able to appoint a proxy Councillor to act on their behalf during a meeting by voting, questioning or speaking. Specific rules apply with respect to the appointment of a proxy Council member.
Bill 197 also sets out rules relating to the fulfillment of temporary council vacancies under section 267 and 268 of the Municipal Act and prohibits Councillors who have declared a pecuniary interest from appointing a proxy with respect to the item(s) in question.
Many of the Bill 197 amendments referred to above came into force upon Royal Assent, which occurred on July 21, 2020. Certain amendments to the Development Charges Act and Planning Act will not come into force until a date to be identified by proclamation.
The team at Davies Howe would be delighted to answer any questions you may have pertaining to the Bill 197 amendments and how they may affect your current and future development projects.
On July 2nd, the Tribunal released a Video Hearing Guide that applies to all electronic hearing events. Though the Guide may be changed without notice, suggesting it is a work in progress, it sheds much needed light on how video hearings should be conducted.
While the guidelines contain a series of best practices and preparation tips for successfully using video conferencing technology, perhaps the most important thing to remember is that participants in a video hearing should treat the process with the same decorum and gravity they would an in-person hearing.
Video hearings may be independently directed from the LPAT, or requested by a Party or Parties in a proceeding. However, not every case is suitable for a video hearing, and Parties are able to object to a request for one.
Video hearings will be normally made accessible to the public, and individuals may obtain hearing details on request from the assigned Tribunal case coordinator.
Tribunal video hearings will be generally conducted using GoToMeeting. All participants in a video hearing should review the best practices contained in the Guide to prepare as best as possible for the conduct of an orderly hearing.
Due to the ongoing COVID-19 outbreak and associated Emergency Order, the Local Planning Appeal Board (“LPAT”) is continuing operations, though in a modified format.
The LPAT is not currently scheduling hearings of new appeals, though we understand it is working toward that objective. In contrast, the LPAT is scheduling video and hybrid hearings for certain ongoing matters.
Aside from the telephone conference calls, which have long been used by the LPAT to address procedural aspects of a case, the LPAT has now held some hearings via video conference. Video conferences are exclusively digital and take place through a video conference provider, such as GoToMeeting.
Hybrid hearings have both a physical and digital element. The Tribunal Member, witness giving evidence, witnesses’ counsel and cross-examining counsel are all in one room, up to a set maximum occupancy. Another room, or rooms, are used as overflow space for other counsel or witnesses expecting to give evidence that same day. All others, such as registered participants or members of the public, are able to attend via a livestream video conference.
Based on emergent practice, there are several factors the LPAT will consider in assessing the suitability of holding a virtual or hybrid hearing. For virtual hearings, the degree of public interest and number of participants is a key consideration. Additionally, the complexity of the issues and associated importance of in-person evidence, in assessing the credibility of a witness, is also a consideration for virtual hearings. Other typical factors include the convenience of the format, its probable efficiency, accessibility (e.g. to the internet) and the risk of prejudice arising from the hearing format. Similar factors apply to hybrid hearings, with the added need to have suitable hearing space available.
While we understand that the LPAT is looking at how in person hearings can be resumed, we do not anticipate the return of more regular in-person hearings until Ontario has moved further along in the reopening process and most likely not until sometime in 2021.
As for a return to “business as usual” at the LPAT, it’s too soon to tell whether the digital practices will be discarded altogether or whether we can look forward to a new, more digital, era.
To date, the Toronto Local Appeal Body (“TLAB”) has postponed all hearings and suspended all filing deadlines between March 16, 2020, through to and including August 14, 2020. As a result, the TLAB will reschedule those hearings that were postponed. It is expected that the rescheduled hearings will follow the typical timelines provided for in the TLAB’s Rules of Practice and Procedure.
As a general rule, the TLAB has suspended, and will not schedule any hearing events, including electronic hearings. The exceptions are settlement hearings, single party variance only appeals, and electronic hearings where the parties agree and the presiding Panel Member overseeing the matter consents.
When requesting an electronic hearing, Parties and Participants will be asked to complete a survey that assesses the technological capacity of attendees. Where attendees have the technological means to engage in an electronic hearing, in our experience, the electronic hearing will likely be scheduled.
Upon resumption of regular service, those with postponed hearings will be issued a new Notice of Hearing setting out the procedural steps that must be completed before the Hearing date.
It should be noted that the TLAB may make exceptions where compelling circumstances warrant; however, we anticipate such circumstances to be very rare.
On June 15, 2020, the Province amended O.Reg. 149/20, which provides for the suspension of various Planning Act timelines for the duration of the Declaration of Emergency, via amending O.Reg. 278/20. This amendment will come into force on June 22, 2020, and serves to terminate the suspension of timelines in O.Reg. 149/20 effective on that date. Any timelines that did not end prior to March 17 are only suspended until June 22, 2020; in other words, the clock stopped running on March 17, 2020 and will resume on June 22, 2020, resulting in a ‘pause’ of 97 days.
Decision notices for most Planning Act instruments, including Official Plans and Official Plan Amendments, Zoning By-laws and Zoning By-law Amendments, Plans of Subdivision, Consents, and Community Planning Permits, given on or after February 26, 2020 and before April 15, 2020 are deemed not to have been completed. Any such decision notices and decision notices not yet sent out for decisions made on or after March 2, 2020 and before April 15, 2020 must be given no later than 15 days after June 22, 2020.
Decision notices with respect to Minor Variance applications that were made on or after February 26, 2020 and before April 15, 2020 must be given no later than ten days after June 22, 2020 irrespective of whether notice has already been effected. The 20-day appeal period in s. 45(12) of the Planning Act is expanded to be 20 days after receiving (or re-receiving) the notice.
Interim Control By-laws (“ICBLs”)
The expiry date of ICBL’s that were in effect on March 17, 2020 and had not been repealed prior to April 15, 2020 has been extended by the number of days between March 17, 2020 and June 22, 2020, or 97 days. Similarly, if an ICBL was in effect on March 17, 2020 and does not expire before June 22, 2020, the by-law is deemed to remain in effect after the day it would otherwise expire for a period of 97 days.
On June 17, 2020, The Province announced the creation of a new cluster of tribunals – the “Ontario Land Tribunals”, effective July 1, 2020.
Marie Hubbard has been appointed Executive Chair of the “Ontario Land Tribunals”, which includes the following adjudicative tribunals:
- Board of Negotiation
- Conservation Review Board
- Environmental Review Tribunal
- Local Planning Appeal Tribunal
- Mining and Lands Tribunal
This change essentially restores the prior cluster of tribunals known as the “Environment and Land Tribunals Ontario (“ELTO”) with the exception of the Assessment Review Board. The team at Davies Howe will continue to monitor legislative and regulatory changes as they relate to land use planning and development.