Parkland Dedication Regime: Not a Generalized Revenue Tool

In two recent decisions, the Ontario Land Tribunal confirmed that the individual and fact-specific context of an application factors heavily on the reasonableness of a condition requiring parkland dedication, or cash in lieu (“CIL”). These rulings make clear that parkland dedication is not a generalized revenue tool for municipalities and is not intended to be imposed on every proposal that could be classified as development or redevelopment.

The decisions—The Bruce Trail Conservancy v Mono (Town)[1] (“Bruce Trail”) and James-Umana v North Dumfries (Township)[2] (“James-Umana”)—both challenged the reasonableness of a CIL condition. The context and type of application were different in each matter, but the Tribunal’s analyses had a similar tenor. Together, these cases provide an opportunity for commentary about the scope of the parkland dedication regime and what kind of proposal ought to trigger the imposition of parkland dedication or CIL.

This article first reviews the parkland dedication regime as set out in the Planning Act.[3] It then summarizes each decision before concluding with a brief case commentary.

The Parkland Dedication Regime

The parkland dedication regime set out in the Planning Act permits a municipality to impose conditions for the taking of land for parks, or CIL. The purpose of the parkland provisions is to ensure that parkland is provided to serve population growth caused by lot creation through subdivision, consent, or by development or redevelopment.[4]

A municipality may choose to impose parkland dedication or CIL under section 42, with valuation assessed as of the day before the day the building permit is issued:

42(1) Subject to subsection (1.1), 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.[5]

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(6) If a rate authorized by subsection (1) applies, the council may require a payment in lieu, to the value of the land otherwise required to be conveyed.

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(6.4) For the purposes of subsection (4.19), (6), (6.0.1) and (6.2), the value of the land shall be determined as of the day before the building permit is issued in respect of the development or redevelopment …[6]

Alternatively, a municipality can choose to impose parkland within a proposed plan of subdivision pursuant to subsections 51.1(1) and (3), as follows:

51.1(1) Subject to subsection (1.1), the approval authority may impose as a condition to the approval of a plan of subdivision that land in an amount not exceeding, in the case of a subdivision proposed for commercial or industrial purposes, 2 per cent and in all other cases 5 per cent of the land included in the plan shall be conveyed to the local municipality for park or other public recreational purposes or, if the land is not in a municipality, shall be dedicated for park or other public recreational purposes.[7]

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(3) If the approval authority has imposed a condition under subsection (1) requiring land to be conveyed to the municipality and subsection (2) does not apply, the municipality may require a payment in lieu, to the value of the land otherwise required to be conveyed.[8]

Any conditions imposed on the approval of a plan of subdivision must also satisfy subsection 51(25). The conditions must be reasonable, having regard to the nature of the development proposed for the subdivision, as follows:

51(25) The approval authority may impose such conditions to the approval of a plan of subdivision as in the opinion of the approval authority are reasonable, having regard to the nature of the proposed development proposed for the subdivision, … [9]

Bruce Trail: Public Body Exempt; Consent Created Parkland

In Bruce Trail, the appellant, the Bruce Trail Conservancy (“BTC”), filed an application for consent to sever an existing parcel to create a new lot on lands designated almost entirely Escarpment Natural, with some Escarpment Protection, under the Niagara Escarpment Plan.[10] The retained lot was intended to be used by BTC for the continuation of the Bruce Trail (“Retained Lot”). BTC intended to provide public access to the Retained Lot and connect this area to the main Bruce Trail network. BTC intended to sell the severed portion (“Severed Lot”), including the existing residential dwelling, for use as a residential property.[11]

The Committee of Adjustment for the Town of Mono (“Town”) approved the consent, subject to a number of conditions, including a CIL parkland payment equivalent to 5% of the Severed Lot:

Payment of Parkland Levy to the Town in an amount equivalent to 5% of the accepted appraised land value for the approved lot, pursuant to the Planning Act, to the sole satisfaction of the Town Treasurer (“Parkland Levy”).

BTC appealed only the Parkland Levy, arguing that the imposition of CIL in this case was contrary to the intent of the Planning Act, the Provincial Planning Statement, 2024 (“PPS”), and the Niagara Escarpment Plan (“NEP”), and it did not conform to regional or local Official Plans. BTC also argued that the applicable zoning by-law provided an option to exempt the BTC from parkland obligations due to being listed as a “public body.”[12]

BTC took the position that the Parkland Levy was not reasonable in this case because the consent did not create an increased demand for additional parkland. It submitted that the Retained Lot represents far more parkland which would be available for public use, while not requiring the need for additional services and facilities.[13] BTC argued that the parkland provisions in the Planning Act are not to be treated as a general revenue stream to be applied to every proposal.[14]

The Town argued it was not reasonable, or in the public interest, to exempt BTC from parkland obligations. Further, the Town argued that the approved severance was new development and placed added costs on the Town for services, maintenance, and increased demand on public recreational facilities. It was the Town’s position that the Parkland Levy was reasonable.[15]

The Tribunal engaged in a context-specific analysis and found that BTC was a “public body” with a mandate to complete a public trail. From this perspective, imposing CIL was unreasonable. Since there were no dwellings proposed, the Tribunal agreed that the proposal did not create new or added pressure for parkland:

[63] The Tribunal also finds that “having regard to the nature of the proposed development” is significant in determining the reasonableness test within the Act. Given that an existing dwelling exists on the severed lot, approval of this consent does not create new or added pressure on the Town for additional parkland or other services. This is confirmed in the testimony of Ms. Heaton who indicated that no additional parkland is required in the Town.

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[79] The Tribunal, in considering the evidence and oral testimony, prefers the position put forward by Planner Smith related to good planning. In particular, the Tribunal concurs with Planner Smith’s analysis which suggests that it is unreasonable to apply Parkland Levy against a consent that does not create any additional pressure on the Town to provide more parkland and, in fact, provides additional parkland itself as an organization recognized in provincial and local planning policies with this mandate.

The Tribunal scrutinized the Town’s position that extending the trail would significantly increase demand on recreational services:

[92] … The Tribunal concurs with the submissions from the Counsel for the Appellant that there was no convincing evidence that an increased usage of the Bruce Trail would result in any substantive increase in costs to the Town. The majority of the evidence presented by the Town was based on projections and opinion, not established fact.

The Tribunal was ultimately persuaded by the position of BTC. The Parkland Levy failed to comply with the Planning Act, was not consistent with the PPS, did not conform with the applicable Official Plans, and was not good planning, nor in the public interest. The Tribunal found that the Parkland Levy was not reasonable in this case and ordered that it be removed as a condition to the approval of the consent.

James-Umana: Historical CIL was Relevant

In James-Umana, the appellant sought to develop an undeveloped lot (“Lot”) within an existing subdivision with four single-detached dwelling units on separate lots along an internal private condominium road. To permit the proposed development, the appellant sought an application for Draft Plan of Condominium (“DPC”) and an associated application to amend the zoning by-law (“ZBA”). The Township of North Dumfries (“Township”) approved the DPC, subject to conditions, and approved the ZBA. [16]

The appellant appealed only the parkland condition:

That the Owner provide an appraisal of the land subject to the Plan of Condominium, prepared by a qualified appraiser to the satisfaction of the Township, and that the Owner pay the calculated cash-in-lieu (“CIL”) of parkland to the Township in accordance with Sections 42(7) and 51.1 of the Planning Act (“Act”) for the three additional lots created through the Plan of Condominium (“Parkland Condition”)

The historical context was important in this case. The Lot was originally created as one lot within a larger subdivision registered in February 1987. It was agreed by the parties that CIL was paid for the whole subdivision at that time, calculated based on 5% of the entire subdivision (“Original CIL”).[17]

Among other arguments, the appellant took the position that the Parkland Condition was not reasonable because CIL for the Lot was previously paid by way of the Original CIL. The appellant argued that the Lot was already subject to the requirements to pay CIL through conditions of approval of the original subdivision. She argued, because the Original CIL was valued on the basis of percentage, there was no notional allocation of units made to the Lot at that time. Therefore, any increase in the density of the Lots was irrelevant and the Parkland Condition was effectively “double-dipping.” In the appellant’s view, the Parkland Condition was not reasonable, relevant, necessary, or equitable.[18]

The Township argued that the Parkland Condition was reasonable because the proposed development created three additional lots which would increase demand on, and cost of, the park system.[19]

The Tribunal found that the DPC did not constitute development or redevelopment, and consequently, that section 42 did not apply.[20] The Tribunal conducted its analysis pursuant to section 51.1.

Factoring heavily in the Tribunal’s discussion was the fact that the density remained the same as the original subdivision. The Tribunal found that there had been no demand on the Township’s park system, because the Lot was previously undeveloped. Effectively, the Tribunal found that the DPC did not cause an increase in demand to justify the imposition of additional CIL. The Tribunal’s findings are summarized in the passage below:

[23] The Tribunal accepts the submissions of the Appellant as the Subject Lands has already provided CIL for parkland through the original subdivision. Moreover, the Subject Lands have not been developed since their creation. The Tribunal does not accept the submissions of the Township relating to the increased burden of the park system through the development of the DPC as the Proposed Development does not contemplate a higher density than the previously developed portion of the original subdivision. Moreover, the Subject Lands CIL for parkland was provided through the original subdivision and the Subject Lands have sat undeveloped, therefore suggesting that once developed the Subject Lands will start to utilize the Township’s park system. The Tribunal therefore finds that the Parkland Condition is not reasonable and should not form part of the DPC conditions.

The Tribunal agreed with the appellant, allowed the appeal, and ordered that the Parkland Condition be struck.

Takeaway: Parkland Regime is Responsive to Established Need

Taken together, the Tribunal analyses in Bruce Trail and James-Umana confirm that parkland contribution or CIL is a nuanced and context-specific exercise. It is not a generalized condition to be applied to every proposal that could be classified as development or redevelopment. The characteristics of the application, the history of the subject lands, and the nature of the proposal, could all be relevant and important elements of the analysis.

These decisions suggest that the Tribunal will closely scrutinize a municipality’s claim that a proposal causes an increased demand for parkland. In Bruce Trail, no new dwellings were proposed and the Town failed to demonstrate how the continuation of the trail network would result in increased demand on municipal services.[21] In James-Umana, the Tribunal accepted that the Original CIL was paid on the basis of percentage and therefore did not contemplate density.[22] In both cases, the Tribunal was not persuaded that there was an increase in demand to justify the imposition of parkland obligations. These decisions exemplify that the parkland regime is not a generalized revenue tool for municipalities, but rather, a mechanism that is responsive to increased demand for parkland or CIL based on established fact.

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