



COURT OF APPEAL FOR ONTARIO

CITATION: Richmond Hill (Town) v. Elginbay Corporation, 2018
    ONCA 72

DATE: 20180129

DOCKET: C63421 and C63422

MacFarland, Watt and Benotto JJ.A.

BETWEEN

The Corporation of the Town of Richmond Hill

Respondent

and

Elginbay Corporation,
    Zamani Homes (Richmond Hill) Ltd.
,
Haulover Investments Limited
,
    Montanaro Estates Limited, William and
Yvonne Worden
, Robert Salna and
Robert
    Salna Holdings Inc.
, and Ontario Municipal Board

Appellants

Earl A. Cherniak, Q.C., Cynthia Kuehl, Ira T. Kagan,
    David Winer and Alexandra DeGasperis, for the appellants Elginbay Corporation
    and Zamani Homes (Richmond Hill) Ltd.

Jeffrey E. Streisfield, for the appellants Haulover
    Investments Limited, Yvonne Worden and Robert Salna Holdings Inc.

Barnet H. Kussner and Kim Mullin, for the respondent the
    Corporation of the Town of Richmond Hill

Stan Floras, for the respondent the Ontario Municipal
    Board

Robert G. Doumani, for the intervener the Corporation of
    the City of Mississauga

Nadia Chandra, for the intervener the Corporation of the
    Town of Oakville

Andrea Wilson-Peebles, for the intervener the
    Corporation of the City of Markham

Bruce Engell, for the intervener the Corporation of the
    City of Vaughan

Heard: September 26 and 27, 2017

On appeal from the judgment of the Divisional Court
    (Justices Harriet E. Sachs, Ian V.B. Nordheimer and Carolyn J. Horkins), dated
    September 6, 2016
,
with reasons
    reported at 2016 ONSC 5560, 133 O.R. (3d) 686, reversing in part a decision of
    the Ontario Municipal Board (Vice Chair Jan de Pencier Seaborn) dated November
    5, 2012, with reasons reported at (2012), 74 O.M.B.R. 236.

MacFarland
    J.A.:

[1]

These are appeals, with leave, from a decision of the Divisional Court,
    overturning in part a decision of the Ontario Municipal Board (OMB or the
    Board) where, as part of its approval of the Official Plan (OP) for the
    Town of Richmond Hill (the Town), it imposed a 25 per cent cap on the
    alternative parkland dedication requirement proposed by the Town. The key issue
    on appeal is whether the Divisional Court erred in concluding that the OMBs
    decision imposing the cap was unreasonable. The answer to this question turns
    on the interpretation of s. 42 of the
Planning Act
, R.S.O. 1990, c. P.13,
    in particular ss. 42(3) and (4).

[2]

As I will explain, I see no reason to interfere with the Divisional
    Courts decision and thus would dismiss the appeal.

A.

BACKGROUND

(1)

Statutory Context

[3]

The purposes of the
Planning Act
are set out in s. 1.1 of the
    Act. They include:

(b) to provide for a land use planning system led by provincial
    policy;

(c) to integrate matters of provincial interest in provincial
    and municipal planning decisions;

(f) to recognize the decision-making authority and
    accountability of municipal councils in planning.

[4]

Under s. 2, the OMB shall have regard to a list of 18 matters of
    provincial interest in carrying out its responsibilities under the
Planning
    Act
. These matters include the provision of cultural and recreational
    facilities, and the provision of affordable housing.

[5]

When the OMB m
akes a decision under the
Planning
    Act
that relates to a planning matter, s.
    2.1(1)(a) mandates that it shall have regard to

any decision that is made under this Act by a
    municipal council  and relates to the same planning matter.

[6]

Section s. 3(5) of the
Planning Act
provides as follows:

A decision of the council of a municipality
, a
    local board, a planning board, a minister of the Crown and a ministry,
board
,
    commission or agency of the government,
including the

Municipal Board
,
    in respect of the exercise of any authority that affects a planning matter,

(a)
shall be consistent with the policy
    statements
issued under subsection (1) that are in effect on the date of
    the decision; and

(b)
shall conform with the provincial plans
that are in effect on that date, or shall not conflict with them, as the case
    may be. [Emphasis added.]

[7]

In accordance with s. 3(5), OMB and municipal decisions affecting
    planning matters must be consistent with Provincial Policy Statement 2014
    (PPS), which sets out the overall provincial policy for regulating land use
    and development. They must also conform to any applicable provincial plans - in
    this case, the Growth Plan for the Greater Golden Horseshoe (Growth Plan). In
    its submissions before this court, the OMB describes the PPS and the Growth
    Plan as being at the apex of [the] planning hierarchy, by virtue of their
    mandatory imposition directed by subsection 3(5).

[8]

Section 42 is at the heart of this appeal.
[1]
It permits a municipality to pass a by-law that requires developers, as a
    condition of development or redevelopment of land, to convey land to the
    municipality for use as parkland or for other public recreational purposes, or
    to pay cash instead of conveying land (cash-in-lieu).

[9]

Under s. 42(1), a municipality may require a conveyance of land not
    exceeding five per cent of the residential land being developed. Section 42(3)
    permits a municipality, as an alternative to s. 42(1), to require a conveyance
    of residential land at a rate of one hectare for each 300 dwelling units
    proposed or at such lesser rate as may be specified by by-law. Section 42(4),
    which is key to this appeal, imposes the following precondition for adopting an
    alternative requirement under s. 42(3):

The alternative requirement authorized by subsection
    (3) may not be provided for in a by-law passed under this section unless there
    is an official plan in effect in the local municipality that contains specific
    policies dealing with the provision of lands for park or other public
    recreational purposes and the use of the alternative requirement.

[10]

Thus,
    before providing for an alternative requirement in a by-law, a municipality
    must have an OP in effect containing specific policies dealing with the
    provision of parkland and the use of the alternative requirement.

[11]

An
    OP must contain, among other things, the 
goals,
    objectives and policies established primarily to manage and direct physical
    change
:
Planning Act
, s. 16(1)(a). An OP is not in effect
    until it has been approved by an approval authority (in this case, the
    Regional Municipality of York). If the approval authority fails to give notice
    of a decision on the OP within the requisite time period, any person may appeal
    the OP to the OMB under s. 17(40) of the
Planning Act
.  Under s.
    17(50), the OMB has the following powers on an appeal:

On an appeal or a
    transfer, the Municipal Board may approve all or part of the plan as all or
    part of an official plan, make modifications to all or part of the plan and
    approve all or part of the plan as modified as an official plan or refuse to
    approve all or part of the plan.

[12]

Policies
    in an OP are implemented through various types of by-laws. Under s. 24 of the
Planning
    Act
, all by-laws must conform to the OP.

[13]

While
    an OP may be appealed to the OMB, it is significant that the
Planning Act
does not provide any right to appeal a parkland conveyance by-law under s. 42.

(2)

Chronology and Decisions Below

[14]

In
    July 2010, the Town adopted a new OP. Section 3.1.8. of the OP set out the
    Towns parkland dedication policies. Among other things, it provided that the
    required parkland conveyance for residential developments was the greater of
    (1) five per cent of the proposed development, and (2) one hectare per 300
    dwelling units proposed.

[15]

Numerous
    parties appealed the Towns OP. They challenged the Towns parkland dedication
    policies as set out in s. 3.1.8. of the OP and, in particular, the policy
    dealing with the Towns use of the alternative requirement under s. 42(3).

(a)

Preliminary Motion  2012 OMB Decision

[16]

The
    Town argued a preliminary motion before the OMB in 2012. It sought a
    determination that it was not required to justify the use of its alternative
    parkland dedication rate (i.e., one hectare per 300 dwelling units proposed) as
    it was a rate prescribed by s. 42(3) of the
Planning Act
.

[17]

The
    Town was not successful on its motion:
(2012),
    74 O.M.B.R. 236.
The OMB summarized its conclusion:

The Board finds that s. 42(3) of the Act does not preclude a
    municipality from including (or the Board approving, on appeal) policies in an [OP]
    that provide for an alternative parkland dedication rate. The Boards
    conclusion in this regard is based on the evidence and submissions provided in
    respect of the Towns own review of its parkland dedication policies, Ministry
    of Municipal Affairs and Housing (MMAH) Guidelines, precedent, and the
    Boards jurisdiction to consider [OP] policies that are under appeal. The Board
    has considered the detailed argument presented by the Town and responding
    parties and finds that the planning rationale for policy 3.1.8, including s. 3.1.8.2.a.ii
    [setting out the alternative parkland dedication rate] is an appropriate issue
    for the hearing.



The Board finds that to conclude that the use of an alternative
    rate can be explored at a hearing, but not the specific rate would  serve no
    useful purpose and unduly restrict the ability of [those challenging s. 3.1.8.]
    to test the planning rationale for the Towns policies as they relate to
    parkland dedication.

[18]

And
    finally:

If the position taken by the Town is adopted, then there would
    be no ability or discretion for any municipal Council to set a specific rate in
    its [OP]. The Board would effectively be directing that specific rates in [OPs]
    run afoul of s. 42 of the Act. Yet, some municipalities have chosen to set out
    alternative rates in both their [OPs] and implementing by-laws. In those
    instances, would municipalities be required to amend their [OPs] and remove
    specific rates? In the Boards view, the Town is urging the Board to adopt an
    unduly restrictive interpretation of the Act which would result in limiting
    what can be included in the parkland dedication policies of any [OP]. The
    provisions of s. 42 of the Act are not that restrictive.
Simply put, when
    read together, s. 42(3) and s. 42(4) do not say that a specific rate cannot be
    identified in an [OP]. The Board will not read such a restriction into the Act
    and thereby limit the flexibility of municipalities to determine what detail
    they wish to provide at the [OP] level
. [Emphasis added.]

[19]

The
    Town sought leave to appeal that decision, pursuant to s. 96 of the
Ontario
    Municipal Board Act,
R.S.O. 1990, c.
    028
(OMBA), but the Divisional Court dismissed the leave motion
    as premature: 2013 ONSC 2252, 76 O.M.B.R. 363.

(b)

Appeal of s. 3.1.8.  2015 OMB Decision

[20]

The
    appeals related to s. 3.1.8. proceeded before the OMB over a number of months. The
    OMB accepted the Towns position on all of the issues that remained in dispute
    between the parties other than the issue of the alternative requirement.

[21]

The
    Town proposed some modifications to s. 3.1.8., which included policies on a
    number of issues related to parkland dedication  for example, land uses exempt
    from any conveyance/cash-in-lieu requirement; lands not accepted as part of
    land dedication and factors to be considered in determining whether all or part
    of a conveyance could be satisfied by a payment of cash-in-lieu. Notably, the
    Town proposed modifications to s. 3.1.8.a.ii. as follows:

For residential
development
the greater of the
    following:

5% of the land proposed for residential
    development; or

up to
1 hectare of land for each 300
    dwelling units proposed for
residential
development,
as may be
    specified by by-law in accordance with section 42(3) of the
Planning Act
.
    [Underlining added to indicate changes this provision.]

[22]

The Board articulated the positions of the parties as follows:

The focus of these appeals is
    the use of the alternative requirement (also referred to as the alternate
    rate) as a condition of residential development. The difference between the
    parties revolves around whether the Towns OP should specify not only the first
    component of the alternate rate of 1 hectare (ha) of land for each 300
    dwelling units proposed)  but go further and include policies which prescribe
    a second component of the alternate rate, referred to as a lesser rate. The
    alternative requirement and any lesser rate must be specified in a by-law
    pursuant to s. 42(3) of the Act and the Town has a parkland dedication by-law
    in effect for this purpose. However, the Act also stipulates that the
    alternative requirement may not be provided for in a by-law unless there is an [OP]
    in effect that contains specific policies dealing with the provision of lands
    for park or other public recreational purposes and the use of the alternative
    requirement (s. 42(4)).
The parties have divergent positions on the level
    of detail required in the [OP] setting out these specific policies and the
    use of the alternative requirement. [Those challenging s. 3.1.8.] submitted
    that there is evidence to support a lesser rate and the details should form
    part of the Towns OP. Otherwise, the stipulation of a lesser rate (if any)
    would be left to the parkland dedication by-law, for which there is no right of
    appeal under the Act.
[Emphasis added.]

[23]

In
    addition to arguing about the level of detail to be included in the OP, those
    challenging s. 3.1.8. argued that the proposed alternative requirement would
    discourage high-density development and threaten affordable housing  both
    important goals of the PPS and the Growth Plan.
[2]
They proposed a sliding scale and a cap on the amount of land required to be
    conveyed.

[24]

The
    OMB noted the Towns desire for flexibility (which the Town argued it had
    through its parkland dedication by-law), whereas the developers who challenged
    s. 3.1.8. sought more certainty with respect to the costs associated with
    providing parkland whether by dedication or cash-in-lieu. The Board concluded
    that as a minimum the parkland policies must include a sufficient level of
    detail to provide some level of certainty with respect to the magnitude of the
    parkland requirement. It went on to note that the extent to which the Board
    should go in fixing a particular rate will depend on the quality of the
    evidence, the planning merits and rationale provided to support a particular
    rate and most importantly, an assessment of what constitutes the correct
    balance between the competing interests.

[25]

The
    OMB was not prepared to require the Town to include a detailed sliding scale as
    part of its policies in relation to parkland dedication rates. It instead added
    the following language to s. 3.1.8.3.:

a.

For residential
development
,
    the Town may specify in a by-law enacted pursuant to section 42(3) of the
Planning
    Act
, a sliding scale for parkland dedication requirements, having regard to
    the proposed size of dwelling units, types of dwelling units, density of the
    development and/or the number of occupants per dwelling unit. [Italics in
    original.]

[26]

The
    OMB then went on to consider whether a cap ought to be imposed. The Board
    concluded that a cap would have the effect of providing sufficient policy
    direction at the OP level with respect to the magnitude of any parkland
    dedication. On the basis of the evidence before it, the OMB concluded:

A cap at 25% provides some room for the Town to implement a
    sliding scale by by-law and provides some certainty for landowners that is not
    reflected in the Towns proposed 3.1.8.3 which reflects the maximum alternative
    requirement of up to 1 ha per 300 units.

In my view the policies as modified by the Town, coupled with
    the addition of a revised policy direction that includes a 25% cap and an
    acknowledgement that a sliding scale may be implemented by by-law, provides
    both transparency and guidance going forward. This approach is consistent with
    the requirements of the PPS, conforms to the Growth Plan (and other applicable
    provincial plans) and strikes a balance between the competing interests.

[27]

The
    OMB ordered that the underlined words, imposing a cap on the amount of land to
    be conveyed, be added to s. 3.1.8.a.ii.:

ii. up to 1 hectare of land for each 300 dwelling
    units proposed for residential
development
, as may be specified by
    by-law in accordance with section 42 (3) of the
Planning Act
,
provided
    that in no case shall the amount of land required to be conveyed for park or
    other public recreational purposes exceed the equivalent of 25% of the land
    proposed for
development
. [Italics in original; underlining added.]

[28]

It
    is this cap that was at issue before the Divisional Court and is at issue on
    these appeals.

(c)

Appeal from OMB  2016 Divisional Court Decision

[29]

The
    Town was granted leave to appeal to the Divisional Court on two questions of
    law: 2016 ONSC 1673. The two questions were as follows:

1. Did the [OMB] err in law by
    determining that it had the authority to modify Policy 3.1.8 of the Town of
    Richmond Hill [OP] by approving a policy which imposes a lower maximum
    alternative requirement than 1 hectare per 300 dwelling units?

2. If the answer question #1 is no, did
    the Board err in law in modifying Policy 3.1.8 by capping the alternative
    requirement based on a percentage of the land area to be developed, rather than
    the number of units to be developed?

[30]

A
    unanimous panel of the Divisional Court answered the first question in the
    affirmative and accordingly there was no need for it to answer the second
    question.

[31]

All
    of the parties agreed that the applicable standard of review was that of
    reasonableness.

[32]

The
    Divisional Court described the issue before it in the following language:

The principal issue  is the OMBs interpretation of s. 42 of
    the
Planning Act
and, in particular, its conclusion that s. 42(4),
    either alone or in conjunction with s. 17(50), authorized the OMB to impose a
    cap as part of its approval of the policies of the municipality, relating to
    the alternative requirement, that are required to be part of the municipalitys
    [OP].

[33]

A
    municipality, the court noted, had two options for residential developments:
    the five per cent default rate or the alternative requirement. In the courts
    view, two things were clear from the legislation. First, a municipality can
    decide which of the alternatives it will employ and the rate, up to the
    legislated maximum, it will require from the developer. Second, the mechanism
    by which the municipality decides both the alternative and the rate to be used
    is the passing of a by-law  a by-law which is not subject to any right of
    appeal to the OMB.

[34]

The
    court noted that, under s. 42(4), the only pre-condition to the use of the
    alternative requirement is that the municipality must have an OP that sets out
    the policies that will guide its use of the alternative requirement. Policies,
    stated the court, serve to outline, in broad strokes, how a body expects to
    approach a given topic. They are not rigid rules, formulas or equations. There
    is a difference between policy and decision-making.

[35]

The
    court identified two flaws in the OMBs ultimate decision that it could fix a
    particular rate.

[36]

First,
    the OMB had assumed that it had the authority to fix a particular rate, but
    provided no explanation of the source of that authority.  While those
    challenging s. 3.1.8. were attempting to fill the OMBs gap in reasoning with
    s. 17(50) of the
Planning Act
, that provision did not assist them:

Unquestionably, s.
    17(50) gives authority to the OMB to approve, reject, or modify, an [OP]. 
    That authority presumes, however, that the [OP] is engaged.  Section
    17(50) does not assist in determining whether a municipality must include in
    its [OP] the rate it intends to use for the alternative requirement.

[37]

The
    second flaw in the OMBs decision was that the OMB had effectively taken unto
    itself the task of fixing individual rates in individual municipalities through
    the guise of its authority to review an OP:


[I]t reads into the very general language
    of s. 42(4) a specific authority that appears, on its face, to be inconsistent
    with the intent of ss. 42(1) and (3).  It effectively abrogates the role
    that the Legislature clearly intended municipalities would perform and instead
    bestows that role onto itself.  And in doing so, the OMB finds authority
    to establish a maximum rate for the alternative requirement that is different
    from the maximum provided by the Legislature in the statute.

[38]

The
    Divisional Court concluded that there was no statutory uncertainty and, indeed,
    the OMB had not pointed to one. Accordingly, there was no possibility of
    competing reasonable interpretations. The OMBs interpretation was unreasonable.

[39]

While
    the OMB could not impose a rate, it still had a role in the application of the
    alternative requirement by an individual municipality. The OMB, the court noted,
    is required to ensure that municipal policies regarding the alternative
    requirement are appropriate, effective and accord with provincial policies.

[40]

In
    this case, if the OMB had a legitimate concern about how the implementation of
    the Towns policy might affect high-density development, it could have given a
    direction to the Town that the Towns implementation of its by-law must not
    unduly restrict high-density development.

[41]

The
    Divisional Court set aside the OMBs decision to impose the 25 per cent cap and
    remitted the matter to the OMB.

B.

DISCUSSION

(1)

The Parties on the Appeal

[42]

There
    are two groups of appellants on these consolidated appeals. The first group,
    the Haulover appellants, includes Haulover Investments Ltd., Yvonne Worden and
    Robert Salna Holdings Inc. The second group, the Elginbay appellants, includes
    Elginbay Corporation and Zamani Homes (Richmond Hill) Ltd. I will refer to the
    Haulover appellants and the Elginbay appellants collectively as the
    Appellants.

[43]

The
    Town is the respondent on this appeal. The OMB, which has a statutory right to
    participate in this appeal, is also a respondent but its submissions are limited
    to its jurisdiction, role and mandate under the
Planning Act
, and the
    applicable standard of review.

[44]

Finally,
    four municipalities were granted intervener status: the City of Vaughan, the
    City of Markham, the Town of Oakville and the City of Mississauga. Each of the
    interveners supports the Towns position.

(2)

Standard of Review

[45]

As
    noted above, the standard of review was never in question before the Divisional
    Court. All parties agreed that the standard was reasonableness; where the
    parties parted ways was on the application of that standard.

[46]

As
    will be made clear in my discussion below, I am satisfied that, contrary to the
    Appellants submissions, the Divisional Court did not fail to accord the OMBs
    decision sufficient deference. In my view, there is no reason to interfere with
    the Divisional Courts conclusion that the OMBs decision was unreasonable.

[47]

The
    Divisional Court referred to the Supreme Courts decision in
McLean v.
    British Columbia (Securities Commission)
, 2013 SCC 67, [2013] 3 S.C.R. 895.
     At para. 33, the Supreme Court noted:

[T]he resolution of unclear
    language in an administrative decision makers home statute is usually best
    left to the decision maker.  That is so because the choice between
    multiple reasonable interpretations will often involve policy considerations
    that we presume the legislature desired
the administrative decision
    maker
 not the courts  to make.  Indeed, the exercise of that
    interpretative discretion is part of an administrative decision makers
    expertise. [Italics in original.]

[48]

But
    the Supreme Court went on, at para. 38, to state:

It will not always be the case that a
    particular provision permits multiple reasonable interpretations.
Where
    the ordinary tools of statutory interpretation lead to a single reasonable
    interpretation and the administrative decision maker adopts a different
    interpretation, its interpretation will necessarily be unreasonable
 no
    degree of deference can justify its acceptance.  In those cases, the
    range of reasonable outcomes will necessarily be limited to a single
    reasonable interpretation  and the administrative decision maker must adopt
    it. [Citations omitted; emphasis added.]

[49]

As
    I have noted, the Divisional Court concluded that there was no statutory
    uncertainty giving rise to the possibility of competing reasonable
    interpretations.

(3)

No Jurisdiction to Impose Cap/ Set Rate

(a)

Interpretation of ss. 42 and 17(50) of the
Planning Act

[50]

The
    Appellants submit that the Divisional Court erred in interpreting s. 42 and effectively
    ignoring s. 17(50) of the
Planning Act
.

[51]

In
    particular, the Elginbay appellants submit that the Divisional Court erred (1) in
    concluding that the OMB was limited to providing general guidance, given the
    requirement in s. 42(4) that no by-law can be passed unless there is an OP in
    effect with specific policies on the use of the alternative requirement, and
    (2) in finding that s. 17(50) does not provide the OMB with jurisdiction to cap
    the maximum alternative requirement below the statutory maximum.

[52]

Similarly,
    the Haulover appellants submit that the Divisional Court erred (1) in finding
    that the language of s. 42 was limited to only one single reasonable
    interpretation and that s. 17(50) was not relevant to the interpretive
    exercise, and in failing to afford the OMB judicial deference as it was
    required to do, and (2) in failing to appreciate that the municipalitys role
    in respect of OP policy was limited to that of proposing OP policy whereas
    approval of that policy is for the exclusive jurisdiction of the OMB by virtue
    of s. 17(50).

[53]

Together,
    the Appellants argue that the Divisional Courts interpretation up-ends the
    legislated planning hierarchy. They say that the role of the OMB is clear given
    that s. 42(4) of the
Planning Act
requires that an OP be in effect and
    that the OP have specific policies. An OP must be approved by an approval
    authority, such as the OMB, before it can be in effect. To be approved, the OP
    must comply with provincial policies, including the PPS, and while s. 2.1(1) of
    the
Planning Act
requires that the OMB have regard for the decisions
    of a municipality, it is required to ensure that a municipalitys OP is
    consistent with provincial policy. In the Appellants submission, the
    requirement that an OP be in effect prior to any by-law being passed indicates
    that the legislature intended for there to be OMB scrutiny, including scrutiny
    of the rate, at the OP approval stage.

[54]

I
    do not accept these submissions.

[55]

I
    begin with the trite observation that the OMB is a creature of statute: it can
    do only what the legislature has empowered it to do through various statutory
    provisions. And the converse of that of course is that it cannot do what it has
    not been empowered to do or do that which has been given by legislative
    authority to another.

[56]

Thus,
    as the OMBs jurisdiction is a matter of statutory interpretation, it will be
    helpful here to set out the relevant parts of s. 42:

(1)
As a
    condition of development or redevelopment of land, the council of a local
    municipality may, by by-law applicable to the whole municipality or to any
    defined area or areas thereof, require that land in an amount not exceeding, in
    the case of land proposed for development or redevelopment for commercial or
    industrial purposes, 2 per cent and in all other cases 5 per cent of the land
    be conveyed to the municipality for park or other public recreational
    purposes.



(3)
Subject to
    subsection (4), as an alternative to requiring the conveyance provided for in
    subsection (1), in the case of land proposed for development or redevelopment
    for residential purposes, the by-law may require that land be conveyed to the
    municipality for park or other public recreational purposes at a rate of one
    hectare for each 300 dwelling units proposed or at such lesser rate as may be
    specified in the by-law.

(4) The alternative
    requirement authorized by subsection (3) may not be provided for in a by-law
    passed under this section unless there is an official plan in effect in the
    local municipality that contains specific policies dealing with the provision
    of lands for park or other public recreational purposes and the use of the
    alternative requirement.

[57]

Before
    turning to these provisions, the Divisional Court reviewed the proper approach
    to statutory interpretation. As has been oft repeated, the words of an Act are
    to be read in their entire context and in their grammatical and ordinary sense
    harmoniously with the scheme of the Act, the object of the Act, and the
    intention of Parliament:
Bell ExpressVu Ltd. Partnership v. Rex
, 2002
    SCC 42, [2002] 2 S.C.R. 559, at para. 26, citing Elmer A. Driedger in the
Construction
    of Statutes
,
2nd ed. (Toronto:
    Butterworths, 1983).

[58]

Applying
    this approach, the Divisional Court first looked at the words used by the
    legislature in s. 42 and made the following observation:

Both s. 42(1) and s. 42(3) refer expressly to the municipality
    establishing by by-law the rate that will be charged to a developer. Neither
    subsection refers to the rate being set by the OMB nor does the OMB have any
    right of review over the contents of the by-law. Further, neither subsection
    requires that the rate to be charged be included in the municipalitys [OP].
    The subsections mention only the by-law. Further s. 42(4) does not contain any
    express requirement that the rate to be charged to a municipality must be
    included in its [OP]

Indeed the plain wording of s. 42 leaves the decision as to the
    rate to be applied in each instance to the municipality to decide by by-law.

[59]

The
    only proviso to this authority bestowed on the municipality is found in s.
    42(4)  there must be an OP in effect in the municipality and it must contain
    specific policies dealing with the provision of lands for park or other public
    recreational purposes and the use of the alternative requirement.

[60]

Section
    42(1) provides the default rate for residential development: the municipality
    may by by-law require a developer of residential land to convey land in an
    amount not exceeding five per cent to the municipality for parkland. That is a
    specific power given to the municipality, which it is authorized to implement
    by by-law  a by-law not appealable to the OMB.

[61]

If
    one then moves to s. 42(3), the alternative to s. 42(1) is proposed. It is not
    a standalone section but part of s. 42 and it says that, as an alternative to
    conveying, for park purposes, five per cent of the land to be developed, the
    by-law that s. 42 (1) authorizes the municipality to make and that is not
    appealable to the OMB may require that land be conveyed  at a rate of one
    hectare for each 300 dwelling units proposed or at such lower rate as may be
    specified in the by-law. Again, the section clearly speaks of the rate  whether
    5 per cent or one hectare per 300 units or less  being specified by by-law. In
    my view, the OMB effectively interpreted s. 42(3) as if it read or at such
    lesser rate as may be specified in the OP, which is at odds with the clear
    wording of s. 42(3).

[62]

The
    Appellants make much of the fact that s. 42(4) refers to specific policies
    and not simply policies. The suggestion is that specific policies must
    include the specific alternative parkland dedication rate to be imposed. On my
    reading, the wording of s. 42(4) does not support that interpretation.

[63]

Section
    42(3) uses the word rate twice: at a
rate
of one hectare for each 300
    dwelling units and at such lesser
rate
as may be specified in the
    by-law (emphasis added). In contrast, s. 42(4) does not use the word rate. Instead
    it mandates that the OP include 
specific policies
dealing with the
    use of the alternative requirement (emphasis added).

[64]

As
    a matter of statutory interpretation, it is presumed that the legislature uses
    words in a consistent way: Ruth Sullivan,
Statutory Interpretation
,
    2nd ed. (Toronto: Irwin Law Inc., 2007), at p. 167. Thus, the same words are
    presumed to have the same meaning, and, conversely, different words are presumed
    to have a different meaning.

[65]

Had
    the legislature intended that the municipality include the rate in its OP one
    would have expected it to have used the word rate in s. 42(4). By way of
    example, as the Divisional Court suggested, the words including the rate that
    the municipality will require under that alternative could have been added to
    the end s. 42(4). Instead, while the legislature chose to qualify the use of
    the word policies with the adjective specific, it failed to specify that
    the rate was a necessary component of the specific policies.

[66]

The
    Appellants make the point that the OP containing the specific policies must be
    in effect, which means that the OP must have been approved by an approval
    authority. They rely on the OMBs general approval/ modification /rejection
    powers when matters come before the Board by way of appeal to give it authority
    to impose the rate under s. 42(3). In particular, they point to s. 17(50), which
    I repeat for ease of reference:

On an appeal or a transfer, the
    Municipal Board may approve all or part of the plan as all or part of an
    official plan, make modifications to all or part of the plan and approve all or
    part of the plan as modified as an official plan or refuse to approve all or
    part of the plan.

[67]

Admittedly,
    the OMB has broad powers on appeal to approve, modify or refuse to approve all
    or part of an OP under s. 17(50). The Appellants also point to the OMBs powers
    under other sections, such as ss. 35, 36 and 88 of the OMBA:

35.
The Board, as
    to all matters within its jurisdiction under this Act, has authority to hear
    and determine all questions of law or of fact.

36.
The Board 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.

88.     U
pon any
    application to the Board, the Board may make an order granting the whole, or
    part only, of the application, or may grant such further or other relief in addition
    to, or in substitution for, that applied for as to the Board may appear just
    and proper as fully in all respects as if the application had been for such
    partial, other, or further relief.

[68]

In
    light of these provisions, there can be no question that for matters within its
    jurisdiction the OMB has very broad powers. In my view, however, none of these
    provisions bestows jurisdiction on the OMB to set the rate under s. 42(3).

[69]

As
    a matter of statutory interpretation, there is a presumption of coherence  it
    is presumed that the provisions of legislation are meant to work together as
    part of a functional whole: Ruth Sullivan,
Sullivan on the Construction of
    Statutes
, 6th ed. (Markham, Ont.: LexisNexis Canada Inc., 2014), at §11.2.
    As Professor Sullivan explains, [t]he parts are presumed to fit together
    logically to form a rational, internally consistent framework.

[70]

In
    this case, we have s. 42, which deals with the conveyance of land for park or
    recreational purposes and which falls under Part V entitled Land Use Controls
    and Related Administration.

[71]

Section
    17(50) falls under Part III of the
Planning Act
, which is entitled
    Official Plans. It is a more general provision, setting out the OMBs powers
    on appeal (or transfer) of an OP.

[72]

An
    interpretation that best reconciles these provisions is one that gives meaning
    to both. In my view, the Appellants proposed interpretation does the opposite.
    It gives to the OMB the power to set the rate, even though s. 42 provides that
    where a municipality determines to use the alternative requirement that it will
    do so by way of a by-law that is not appealable to the OMB.

[73]

In
    contrast, the Divisional Courts interpretation gives effect to both
    provisions. It respects the legislative direction that the rate under s. 42(3)
    be a matter for the municipality, and also the requirement under s. 42(4) that
    there be an OP in effect that contains specific policies dealing with the use
    of the alternative requirement. Its interpretation maintains a role for the OMB
    in reviewing an OP that includes specific policies relating to parkland
    dedication. For instance, as the OMB acknowledged in its November 2012 decision,
    it could examine policies dealing with issues such as the need for
    inter-connected parks and urban open space system; the criteria governing the
    imposition of cash-in-lieu of parkland dedication; the types of land that are
    eligible to be dedicated as parkland; and the criteria governing dedication in
    the cases of development for both residential and commercial purposes.

[74]

This
    interpretation, which recognizes the role of municipalities and the role of the
    OMB, helps resolve a tension recognized by the Divisional Court. On the one
    hand, municipalities desire flexibility and the ability to change the by-law
    rate without the need for an onerous and costly OP amendment process. On the
    other hand, developers desire certainty as to their exposure under s. 42. While
    developers may take issue with the maximum set by s. 42(3), they have certainty
    in knowing their maximum exposure, which is prescribed by s. 42.

[75]

The
    Appellants contend that this interpretation turns the planning hierarchy on its
    head. They describe the PPS and the Growth Plan as being the apex of the
    planning hierarchy since an OP must comply with applicable provincial policy
    statements and conform to growth plans, and a municipalitys by-laws must
    conform to its OP.

[76]

To
    the contrary, the Divisional Courts decision respects that the legislature is
    at the very apex of that hierarchy. The legislature has given the exclusive
    authority to the municipality to determine whether it will use the default rate
    or the alternative requirement and the rate, up to the legislated maximum, it
    will employ and the only proviso to the use of the latter is that there be an
    OP in effect containing specific policies dealing with the provision of
    parkland and the use of the alternative rate.

[77]

The
    OMB also submits that an interpretation of s. 42 that allows it to cap the
    statutory rate is necessary for it to ensure consistency and conformity with
    provincial policies and growth plans and, in particular, those that deal with
    intensification and affordable housing. But to suggest that the OMB is the only
    entity with a duty to ensure such compliance ignores s. 3(5) of the
Planning
    Act
, which imposes the same obligation on municipalities.

(b)

OMBs Approval Powers v. Powers of Municipality

[78]

The
    Elginbay appellants raise a further issue: did the Divisional Court err in
    determining that the OMBs powers were different and lesser than the Towns
    adoption powers respecting the Towns OP such that the Town alone could
    self-impose a specific parkland dedication rate? They submit that it is a
    long-standing principle of planning law that the OMB can make any decision that
    the Town is authorized to make.

[79]

The
    Haulover appellants similarly argue that if a municipality can ask for a cap
    through the adoption of its OP then so can the OMB as the approval authority
    pursuant to s. 17(50) and s. 88 of the OMBA.

[80]

The
    Appellants refer to a number of decisions on this point, including
Mississauga
    Golf and Country Club Ltd. (Re)
, [1963] 2 O.R. 625 (C.A.), and
Cloverdale
    Shopping Centre Ltd. v. Township of Etobicoke
, [1966] 2 O.R. 439 (C.A.).

[81]

In
Mississauga Golf
, the golf and country club applied to the Toronto City
    Council and requested it to amend the citys OP and a zoning by-law so as to
    change the designation of certain lands from residential to commercial.  The
    City refused the clubs application. The matter went to the OMB and then came
    to this court on a stated case. One of the questions before this court was
    whether the OMB had the jurisdiction to make an order directing amendment of
    the by-law in terms other than those applied for, creating a classification not
    provided for in the zoning by-law. It was argued that the OMB was limited to
    dismissing the appeal or directing that it be amended in accordance with the
    country clubs request for amendment to the municipal council. This court
    rejected that argument, at pp. 629-630:

In the circumstances
    prevailing, s. 30(19) gives the Board power to "direct that the by-law
    (the zoning by-law) be amended in accordance with its order". These words
    coupled with the very broad provisions of s. 87 of the
Ontario Municipal
    Board Act
leave no doubt that the Board in acting pursuant to s. 30(19) is
    not fettered as the appellant submits here.
On the appeal to the Board, the
    Board is exercising an original jurisdiction and may direct the council to do
    anything a council could have done in dealing with the application to it, even
    if this departs from the strict terms of the relief requested in the
    application.




In exercising the
    powers conferred on it under s. 30(19) of the
Planning Act
, the Board
    has jurisdiction to direct that amendments be made to the zoning by-law other
    than those sought in the application for amendment made to the municipal
    council provided that such amendments so directed are otherwise within the
    competence of the municipal council acting under s. of the
Planning Act
even if such direction entail a zoning designation not theretofore provided in
    the zoning by-law. [Emphasis added.]

[82]

This
    case is distinguishable. It involved a challenge to a zoning by-law appealable
    to the OMB, which is not the case here, and dealt with the question of whether
    the OMB could grant relief even if this departs from the strict terms of the
    relief requested in the application, which is not in issue in this case.

[83]

Cloverdale
involved an appeal from a decision of the OMB allowing an amendment to the OP
    for the Township of Etobicoke. One of the issues before this court was the
    OMBs jurisdiction to approve the amendment. The court described the issue, at
    p. 448:

Under these various provisions it, of course, falls to be
    determined, as the very crux of the matters in issue in this appeal, whether
    the functions of the Municipal Board in determining the question of an
    amendment to an [OP] proposed by council are precisely those of the Minister
    when the matter has been referred to the Board by the Minister under s. 34 or
    whether those functions are different in their nature and, perhaps, as a
    corollary to this consideration, whether the functions of the Board are
    different in their nature when considering an amendment to an [OP] proposed by
    council (ss. 12, 14(1)) as contrasted with an amendment proposed by some entity
    other than council (s. 14(3), (4), (5)), and again, whether the functions of
    the Board when considering an original zoning by-law or a by-law amending a
    zoning by-law (s. 30(9), (10); are different from those when considering a
    proposal to amend a zoning by-law (s. 30 (19)) by some entity other than
    council.

[84]

Based
    on its interpretation of the relevant provision, this court concluded that the
    Boards duties were the same as those of the Minister and that the duties of
    the Board when considering a zoning by-law enacted by council or a zoning
    by-law amending proposal emanating from a private entity were identical. The
    court also concluded that the Boards powers to modify an OP were broad.

[85]

This
    courts decision in
Cloverdale
turned on an interpretation of the
    statutory provisions in question. The case did not involve the interpretation
    of s. 42 or any provision similar to s. 42.

[86]

More
    generally, the Appellants argument on this point fails to recognize that as a creature
    of statute, the OMB stands in the shoes of the municipality only with respect
    to matters within the OMBs own statutory jurisdiction. In other words, the
    Boards power to act as the original decision maker could have acted does not
    confer on the OMB the power to interfere in specific circumstance where the
    legislature has limited its ability to do so.

(c)

OMBs Decision Was Unreasonable

[87]

In
    conclusion, I agree with the Divisional Courts conclusion that the OMBs
    interpretation of s. 42 was unreasonable. The OMB erred in concluding it could take
    unto itself, as part of its statutory power to consider OP appeals, an authority
    that that the legislature has specifically given to municipalities. By adopting
    an unreasonable interpretation of s. 42, the OMB did indirectly what the
    legislature prohibits it from doing directly  namely, compelling the Town to
    limit itself to a rate which is less than the statutory prescribed rate.

(3)

Additional Guidance

[88]

The
    Appellants submit that the Divisional Court failed to give the OMB the guidance
    it requested. In my view, the reasons of the Divisional Court speak for
    themselves and no additional guidance should be necessary. The OMB will carry
    out its duties as it has always done but do so without exceeding its authority
    by imposing a cap below the ceiling prescribed by s. 42(3) or otherwise
    dictating the rate. In para. 58 of its reasons, the Divisional Court offered
    suggestions that the OMB might consider in its review of alternative
    requirement policies.

C.

DISPOSITION OF APPEALS

[89]

For
    these reasons, I would dismiss the appeals.

[90]

I
    would order the Elginbay appellants to pay costs to the Town in the amount of
    $20,000 and the Haulover appellants to pay costs to the Town in the amount of
    $14,000. These costs, which include costs of the leave motions and appeals,
    include disbursements and HST. The interveners sought no costs and none are
    awarded. No costs are payable by or to the OMB.

Released: January 29, 2018 (D.W.)

J. MacFarland J.A.

I agree. David Watt J.A.

I agree. M.L. Benotto J.A.





[1]

Section 42 has recently been amended but those amendments
    post-date the decisions under appeal and so they are not in issue in these
    appeals.



[2]

It is argued that the greater the density, the greater the
    land value. Since cash-in-lieu is determined by the parcels fair market value,
    an increase in density drives an increase in the amount of cash-in-lieu payable
    and produces a result whereby sites with greater density pay more cash-in-lieu
    per unit. This, it is argued, has a negative impact on intensification and
    affordable housing.


