Richmond Hill and Parkland Dedication: Is the Municipality Entitled to Deference on the Alternate Requirement?

In 2010 the Town of Richmond Hill (the “Town”) adopted a new Official Plan. That Official Plan was the subject of a number of appeals, including appeals of Policy 3.1.8. Policy 3.1.8 provides that the dedication of land/cash-in-lieu for parks or other public recreational purposes required by the Town for new residential development shall be determined as the greater of 5% of the land proposed for residential development or up to 1 hectare of land for each 300 dwelling units.

This wording was designed to track the wording of section 42 of the Planning Act (the “Act”), which provides that a municipality may, by by-law, establish an alternate requirement for a parkland conveyance of land “at a rate of one hectare for each 300 dwelling units or at such lesser rate as may be specified in the by-law” (42(3)) (emphasis added).  In order to establish that alternate rate the municipality must have “an official plan in effect …that contains specific policies dealing with the provision of lands for parks or other public recreational purposes and the use of the alternate requirement” (42(4)). There is no right of appeal to the Ontario Municipal Board (“OMB” or “Board”) under the Act from a by-law passed under section 42.  

The use of the alternate rate is important for municipalities for whom, in the context of modern high density development, “the standard 5% requirement is likely insufficient to satisfy the actual parkland needs generated by the proposed development either on-site or off-site”[1]. For landowners, the alternate rate can result in significant per/unit costs. Through the appeals of Policy 3.1.8 the landowners sought, from the Board, the inclusion of a specific “lesser rate” in the form of a sliding scale or a cap on the amount of land required to be conveyed.

The Ontario Municipal Board: Assuming Jurisdiction over the Parkland Rate

In a preliminary decision issued on November 5, 2012 regarding a motion brought by the Town over the ability of the OMB to assume jurisdiction over the alternate or lesser rate, the Board concluded that it had the jurisdiction to determine whether the alternative rate could be used by the Town and that it could set the specific rate at which the alternative rate should be set.

At the OMB hearing that followed on this issue, the Town again took the position that a municipality may choose to include a lesser rate in its official plan policies concerning parkland dedication; it cannot however be compelled to do so. The OMB could not impose a specific alternate/lesser rate as that ability is solely within the jurisdiction of the Town under the wording of the Act.

The appellants took the position that the alternate rate set out in Policy 3.1.8 would create significant negative impacts on affordability and intensification as higher densities created a higher parkland requirement. In their view, the Policy should include specific details on the alternate requirement (sliding scale/cap as a lesser rate) to provide certainty for developers and to achieve the Provincial objectives of promoting residential intensification and affordable housing.

In its decision released on 15 January 2015 (PL110189), the OMB determined 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”[2], and set the alternate rate, in the context of a  balance between competing interests, at 25%.

In coming to this conclusion, the Board was influenced by the evidence presented by the appellants “[underscoring] the utility of an alternate rate”[3].  In reviewing that evidence, which supported a cap of 15% to negate the need for a sliding scale, as well as the past practice of the Town in limiting the cap on the parkland ask to 25% and the current practices of other municipalities in capping the quantum of parkland dedication, the OMB found that the (compromise) cap of 25% would “reduce the dedication obligation to a range that is substantially lower than the cash-in-lieu estimated under a rate of 1 ha per 300 units”[4].

While the Board did not require that a sliding scale be used, it ordered that Policy 3.1.8 be amended to stipulate “first, that a sliding scale may be specified by by-law; and second, 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”[5].

The Divisional Court: The Town Has Jurisdiction

This Decision of the Board on this matter was appealed to the Divisional Court (the “Court”) by the Town. In its Decision released on 6 September 2016 (Richmond Hill (Town) v. Elginbay Corporation, 2016 ONSC 5560) the Court relied on a plain reading of section 42 of the Act and overturned the OMB Decisions granting the OMB jurisdiction over these matters.

The Court found that the wording of section 42 made two things clear: (1) a municipality can decided which of the alternatives it will employ and the rate (to the legislated maximum), and (2) the mechanism for this is the passing of a by-law that is not subject to any right of appeal to the OMB[6]. The OMB, according to the Court, does not have the ability under that wording to review the contents of the by-law or to set a specific rate in the municipal official plan[7]. The Court found that, in assuming for itself this jurisdiction, the OMB had “effectively taken onto itself the task of fixing individual rates…through the guise of its authority to review an official plan…notwithstanding that the two subsections plainly assign that task to municipalities”[8].

Moreover the Court, which emphasized the deference the courts take to municipal decisions, was critical of the OMB for abrogating “the role that the Legislature clearly intended municipalities would preform”[9]. This emphasis on the role of municipalities in the planning approvals process will have repercussions beyond the issue of parkland dedication.

The finding of the Court is summed up when it states, at paragraph 48 of the Decision, “The approach taken by the OMB is not only unreasonable on the plain wording of the legislation, it is inconsistent with the role that it is intended that municipalities will play in deciding individual planning decisions…”.

Conclusion

On its face, the wording of section 42 of the Act provides municipalities with the power to set an alternate rate for parkland dedication purposes. The reference to the need for official plan policies around the alternate requirement in section 42(4) and the compelling evidence on an appropriate lesser rate produced by the appellants in the Policy 3.1.8 appeals demonstrated that this jurisdiction is not as obvious as it might seem. This could have followed the same interpretive route as section 37 of the Act regarding density/height bonusing which also involves significant costs for landowners.  

The decisions of the OMB and the Court represent a stark contrast on this issue of jurisdiction and interpretation. As the landowners are going to appeal the decision of the Court the last say on the power of municipalities to set the alternate requirement for parkland is yet to be heard. Stay tuned on this important issue.