In its decision in Richmond Hill (Town) v Elginbay Corporation, 2016 ONSC 5560 the Ontario Divisional Court noted that in order for a tribunal's statutory interpretation to be entitled to deference, there must have been a "statutory uncertainty." Where no such uncertainty exists, the tribunal's interpretation will not be afforded deference.
This case arose in the context of a municipal planning issue. Pursuant to s. 42 of the Planning Act, a municipality may pass a by-law requiring a developer – as a condition for land development – to convey land for parks or other recreational purposes, or to pay cash-in-lieu of such a conveyance. In 2010, Richmond Hill's town council exercised this power, adopting a standard formula to calculate the amount that condominium developers were required to pay the municipality in lieu of creating parkland to accompany new developments. In 2015, the Ontario Municipal Board ("OMB") imposed on the cap on the application of this standard rate (equivalent to 25% of the area of any site to be developed or its cash-in-lieu equivalent). The Town of Richmond Hill appealed the OMB's decision.
At issue on appeal was whether the OMB had the authority to impose a cap on the municipality's alternative parkland dedication. Applying a reasonableness standard of review, the Ontario Divisional Court determined that the OMB had overstepped its jurisdiction. The OMB's decision was inconsistent with municipalities' broad powers to make "individual planning decisions that affect their citizens" (para 48). The OMB had unnecessarily fettered the discretion of the town to make its own decision to set the alternative rate, contrary to Parliamentary intent as expressed in the Planning Act (para 52).
Furthermore, the Divisional Court concluded that the OMB's statutory interpretation of the Planning Act was "unreasonable on the face of the plain wording of s. 42" (para 46). The Board's interpretation, the Divisional Court found, "effectively abrogates the role that the Legislature intended municipalities would perform and instead bestows that role onto itself" (para 45-46). The Court further noted at para 47:
[47] The modern principle of statutory interpretation, and the concomitant deference to the interpretation adopted by an administrative tribunal, rests on the prerequisite that there exists "a statutory uncertainty" thus giving rise to the possibility of competing reasonable interpretations. There is no statutory uncertainty here nor did the OMB point to one. Rather, the OMB appears to have adopted a statutory interpretation solely for the purpose of allowing it to regulate the municipality's exercise of its authority under s. 42. [Emphasis added]
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