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Municipal - Planning (3). Humberplex Developments Inc. v. Ontario (AG)
In Humberplex Developments Inc. v. Ontario (AG) (Div Court, 2024) the Divisional Court dismissed a JR, here of "O.Reg. 382/19, which amended O.Reg. 303/19: Transition for Planning Act Appeals" under the Local Planning Appeal Tribunal Act, 2017 (LPATA) on ultra vires grounds. "The amending regulation reimposed the more restrictive procedural regime that previously applied to appeals of municipal planning decisions heard by the Ontario Land Tribunal (the “Tribunal”). Under the amending regulation, the more restrictive regime was reimposed only on appeals solely by third party appellants."
Here the court sets out the complex interplay of planning statutory and regulatory amendments involved:[8] By way of legislative background, the LPATA came into force on April 3, 2018, pursuant to the Building Better Communities and Conserving Watersheds Act, 2017, S.O. 2017, c. 23 (“Bill 139”). The LPATA was Schedule 1 to Bill 139. Prior to that time, appeals of municipal planning decisions, including approvals of official plan amendments, were by way of de novo appeal to the Ontario Municipal Board (the “OMB”). The participants in those appeals had the benefit of fulsome procedural rules similar to those that applied in court proceedings.
[9] Bill 139 amended the Planning Act and replaced the OMB with the LPAT, with revised substantive and procedural rules for municipal planning appeals: see Craft Acquisitions Corp. v. Toronto (City), 2019 ONSC 3636, 146 O.R. (3d) 407 (Div. Ct.), at paras 8-9, 113-120. The effect of the revised regime (the “Bill 139 regime”) was to “significantly change the role of the Tribunal” to entail “a very substantial investigative function, as opposed to the purely quasi-judicial function performed by the OMB”: Craft, at para. 116. The Bill 139 regime included more restrictive procedural rules for participants in the appeal process other than the Tribunal.
[10] Under the Bill 139 regime, the Tribunal had the power to examine a party or other person making a submission to the Tribunal, to require that party or person to produce evidence, and to require a party to produce a witness for examination by the Tribunal: see LPATA, ss. 40-42. Parties or persons other than the Tribunal (including municipalities, Planning Act applicants and third party appellants) could not adduce evidence or call witnesses on their own initiative, and time limits on oral submissions were authorized: LPATA, s. 42(3). This process provided greater authority to the Tribunal to direct evidence and procedure for planning appeals than was the case prior to Bill 139.
[10] Under the Bill 139 regime, the Tribunal had the power to examine a party or other person making a submission to the Tribunal, to require that party or person to produce evidence, and to require a party to produce a witness for examination by the Tribunal: see LPATA, ss. 40-42. Parties or persons other than the Tribunal (including municipalities, Planning Act applicants and third party appellants) could not adduce evidence or call witnesses on their own initiative, and time limits on oral submissions were authorized: LPATA, s. 42(3). This process provided greater authority to the Tribunal to direct evidence and procedure for planning appeals than was the case prior to Bill 139.
[11] On September 3, 2019, after the applicants’ planning appeals had been filed but before they were scheduled for a hearing, the More Homes, More Choice Act, 2019, S.O. 2019, c. 9 (“Bill 108”) came into effect. Schedules 9 and 12 of Bill 108 amended the Planning Act and the LPATA to (among other things) expand the grounds for planning appeals and introduce a new procedural regime for those appeals (the “Bill 108 regime”). As was the case under the Bill 139 regime, official plan amendments and zoning by-law approvals could still be appealed by “third parties”, that is, entities other than the Planning Act applicant (that made the amendment application) and the municipality (that approved the application). However, the LPATA amendments in Bill 108 repealed ss. 38-42 of the LPATA, having the effect of removing the previous prohibition on the ability of parties to certain planning appeals to call witnesses and removing the time limits on oral submissions: see Bill 108, Sched. 9, ss. 4(3), 9.
[12] Bill 108 also amended the LPATA to provide the Attorney General with the authority in s. 43.1 to make regulations providing for transitional rules for planning appeals commenced before, on or after Bill 108’s effective date: LPATA, s. 43.1(1). A regulation made under that provision was permitted, without limitation, to determine which classes of appeals would continue to follow the Bill 139 regime and which classes would proceed under the new Bill 108 regime: LPATA, s. 43.1(2)(a).
[13] Effective September 3, 2019, the Attorney General made O. Reg. 303/19: Transition for Planning Act Appeals, which set out transitional provisions for the conduct of different classes of Planning Act appeals, depending on the time period in which the appeals were filed and whether an appeal on the merits had been scheduled. Under s. 1(1)5 of that regulation, an appeal would be determined pursuant to the new Bill 108 regime if the appeal was commenced before September 3, 2019 and a hearing on the merits was not scheduled by that date. O. Reg. 303/19 addressed the procedure for appeals but did not alter the expanded grounds for appeal in Bill 108.
[14] By letter to applicants’ counsel dated September 18, 2019, the Tribunal advised that the applicants had the opportunity to provide new notices of appeal of the official plan amendments within 20 days, failing which the appeals would proceed under the prior provisions: see O. Reg. 174/16, as amended by O. Reg. 296/19: Transition Matters – General, s. 28. On October 8, 2019, the applicants submitted new notices of appeal to the Tribunal.
[15] After O. Reg. 303/19 came into effect, several municipalities (including Vaughan) and the Toronto and Region Conservation Authority (the “TRCA”) wrote to the Attorney General, expressing concern about the application of the Bill 108 regime to planning appeals filed under Bill 139 and not yet scheduled for a merits hearing. The Attorney General included letters from those bodies in his “Record of Decision” before the court on this judicial review application. The municipalities requested that the Bill 139 regime continue to apply to appeals of municipally approved planning applications where those appeals were filed by third parties under Bill 139. In a letter to the Attorney General, Vaughan’s Interim City Manager explained their concern:O. Reg 303/19 as currently enacted has the unintended and undesired effect of substantially delaying the final approval of development applications by allowing third parties (not the applicant) who appealed the Council approval, to restart the appeal process and not be bound by the Bill 139 regime. Not only does this “restart” substantially lengthen the final approval of development, but it also substantially increases the cost (in both dollars and staff time) to the municipal taxpayers in defending their Council’s decision to approve the development. Further, there is a lack of fairness and deference to [local] decision making inherent in those circumstances where a decision made by Council in the context of one planning regime, Bill 139, is then reviewed on appeal in the context of a new and different planning regime, Bill 108. None of this is in the greater public interest. [16] Effective November 15, 2019, the Attorney General made O. Reg. 382/19, which amended O. Reg. 303/19. Under ss. 1(1.1) and (1.2) of the amended regulation, the Bill 139 regime would continue to apply to certain appeals filed prior to September 3, 2019 that had not been scheduled for a merits hearing by November 15, 2019. The affected appeals were “third party” appeals, that is, appeals solely by persons other than a public body (including a municipality), the applicant, or the Minister in respect of an official plan amendment or a zoning by-law approval. The application of the Bill 139 regime to those appeals was by way of exception to the general transitional rule in s. 1(1)5 of O. Reg. 303/19. Under that exception, the new Bill 108 regime would apply to appeals filed prior to September 3, 2019 that had not been scheduled for a merits hearing by that date.
[17] How did the above legislative and regulatory changes affect the applicants’ appeals of the Vaughan official plan amendments?
[18] To recap:a. At the time the applicants filed their appeals with the Tribunal in July 2019, the narrower Bill 139 regime applied to the applicants’ appeals.
b. With the coming into force of Bill 108 and O. Reg. 303/19 on September 3, 2019, the new Bill 108 regime became applicable to the applicants’ appeals upon their filing amended notices of appeal. The applicant’s appeals were commenced before Bill 108’s effective date but had not yet been set for a merits hearing by that date: O. Reg. 303/19, s. 1(1)5.
c. Effective November 15, 2019, O. Reg. 382/19, by its terms, amended O. Reg. 303/19 to provide that the narrower Bill 139 procedural regime applied to third party appeals that had not been set for a merits hearing by that date. The applicants were third parties, whose appeals had not been set for a merits hearing by that date.
d. The expanded grounds of appeal in Bill 108 continued to apply to the applicants’ appeals, since the applicants had provided amended notice of appeal within the time required by O. Reg. 296/19. [19] Following O. Reg. 382/19’s effective date, the Tribunal requested and received counsel’s submissions as to whether that regulation applied to the applicants’ appeals. In the Tribunal’s initial decision dated December 11, 2019 (the “Initial Decision”), the Tribunal answered yes to that question, with the result the applicants’ appeals proceeded under the Bill 139 regime. At para. 23, the Tribunal stated:The Tribunal finds that the purposive intent of O. Reg. 303 [as amended by O. Reg. 382/19] was that third party appeals, such as those before the Tribunal now, would be governed by the practices and procedures set out in LPATA as it read on September 2, 2019 [the day before Bill 108’s effective date]. [20] In January 2020, the applicants filed their Appeal Record and Case Synopsis with the Tribunal, which included affidavits and other documentary evidence. Later that month, Vaughan filed their Responding Appeal Record, which included affidavits from two expert witnesses.
[21] On September 29, 2020, following a case conference earlier that month, the Tribunal made a procedural order with respect to the conduct of the appeals in accordance with the Bill 139 regime. The Tribunal, at para. 9-10, set down the appeals for a two-day oral hearing by video and advised the parties that the Tribunal “will not require the attendance of, and will not examine, any witnesses at the oral hearing.” At para. 18, the order also provided that the applicants were not permitted to file reply or sur reply material in response to the material in Vaughan’s responding record. The Tribunal explained:
[18] The Appellants have asked the Tribunal for an opportunity to file what they have styled as Reply to the materials that have already been filed in this case. This is a third party appeal of the decision by the City to adopt OPA 47 and OPA 48. As such, the materials in this case begin with those filed municipally by the Applicants and the subsequent review and decision on the applications by the municipal council. The Appellants have already had ample opportunity to file their materials in response to the municipal action and did so. The requisite content of these materials is set out in the Tribunal Rules and included their appeal record and a synopsis of their case. The City then filed the synopsis of its case and a record in answer to that of the Appellants.
[19] Though characterized as Reply, the request by the Appellants to make further submissions is effectively a request to file Sur Reply. Sur Reply is rarely used or permitted. The Tribunal is not persuaded that Sur Reply is appropriate or necessary for a fair hearing in these proceedings.
[22] A two-day oral appeal hearing before the Tribunal proceeded by video in December 2020. The Tribunal reserved its decision.
[23] Effective June 1, 2021 (while the applicants’ appeals were under reserve), the Accelerating Access to Justice Act, 2021, S.O. 2021, c. 4 (the “AAJA”) came into force. That statute included as a schedule the Ontario Land Tribunal Act, 2021, S.O. 2021, c. 4, Sched. 6 (the “OLTA”). Under the AAJA:a. The LPAT and other property-related tribunals were amalgamated and continued as the Ontario Land Tribunal: see OLTA, s. 2;
b. The LPATA was repealed and replaced by the OLTA: see AAJA, Sched. 6, s. 59(1); and
c. O. Reg. 303/19 was revoked: see AAJA, Sched. 6, s. 59(2). [24] Also effective June 1, 2019, the Attorney General made O. Reg. 350/21: Transition, a new transitional regulation under the OLTA. That regulation effectively replicated the applicable provisions of O. Reg. 303/19, as amended by O. Reg. 382/19. Under O. Reg. 350/21, the Bill 139 regime continues to apply to appeals (like the applicants’ appeals) under s. 17(24) of the Planning Act of municipally approved applications for official plan amendments that were filed solely by third parties under Bill 139 and were not yet scheduled for a hearing on the merits before November 15, 2019: see O. Reg. 350/21, ss. 1(1)5, 1(2), 1(3)1.
[25] By decision dated June 30, 2021 (the “Final Decision”), the Ontario Land Tribunal (as successor to the LPAT) dismissed the applicants’ appeals of the official plan amendments and approved the amendments. At paras 46-81 the court walks through these amended provisions in the course of an actual proceeding, dispelling the argument that they were ultra vires as regulations.
. Township of Oro-Medonte v. Oro-Medonte Association for Responsible STRS
In Township of Oro-Medonte v. Oro-Medonte Association for Responsible STRS (Div Court, 2024) the Divisional Court dismissed an appeal (filed with leave) of a ruling of the Ontario Land Tribunal (OLT), which itself repealed an amending bylaw to a municipality's zoning by-law. The issue of concern was "disruptive short-term rentals" (ie. Airbnbs).
Here the court cites limits on municipal planning/zoning decisions generally:[37] Municipal decisions must also be consistent with policy statements issued by the Province under the Planning Act: Planning Act, s. 3(5). ...
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b. Did the Tribunal make an error in law by finding By-law 2020-073 did not constitute good planning?
[49] The decision whether a municipal by-law constitutes good planning involves the application of a legal test to the facts and a balancing of relevant factors. As a result, whether a municipal by-law constitutes good planning is usually a question of mixed fact and law, and beyond the jurisdiction of this court on an appeal. However, the Appellants argue the Tribunal applied the wrong legal test, which would be an error of law.
[50] I am not persuaded the Tribunal applied the wrong test in finding By-law 2020-073 did not constitute good planning and was not in the public interest.
[51] Having found that By-law 2020-73 created a new land use prohibition, the Tribunal went on to consider whether the means chosen by the Township would effectively address the problem identified and whether the means chosen were a proportionate response to the probem. The Tribunal understood the nature of the problem the Township was trying to address with By-law 2020-073, namely “party houses” that were owned by non-residents and rented for very short periods. The Tribunal found that By-law 2020-073 created a new land use prohibition that would not be an effective means of regulating the disruptive short-term rentals. The Tribunal also found that By-law 2020-073 was not a proportionate response because it would have also banned historically acceptable, bona fide rentals. The Township received complaints about homes that were being rented out for a few days at a time. There was no evidence that rentals for a week or two were causing the same sorts of nuisance. Proportionately and overbreadth are relevant factors for the Tribunal to consider when deciding if a municipal by-law represents good planning.
[52] The Appellants submit that the Tribunal failed to consider relevant factors and failed to recognize that By-law 2020-073 was consistent with the Planning Act, the Provincial Policy Statements and local planning documents.
[53] In a procedural order dated June 2, 2021, the Tribunal identified 12 issues to be addressed at the hearing including whether prohibiting short-term rentals is appropriate and/or proportionate, whether By-law 2020-073 was consistent with the Provincial Policy Statement, the County’s Official Plan and Township’s Official Plan, and what impact By-law 2020-073 would have on members of the public. The Tribunal heard evidence from various witnesses on behalf of the parties about the 12 enumerated issues.
[54] The Tribunal’s reasons do not address most of the issues listed in the statement of issues. However, the Tribunal’s reasons do not have to address every issue. Nor does the Tribunal have to summarize all the evidence received.
[55] To be valid, a municipal by-law must be within the jurisdiction of the municipality. It must be consistent with the Planning Act. It must be consistent with the Provincial Policy Statement. And it must be consistent with applicable regional and local plans. Those are all necessary conditions for a by-law to be valid. They are not, however, sufficient conditions. Municipal by-laws must also be in the public interest and must represent good planning.
[56] The Tribunal can find a zoning by-law is not appropriate and should be quashed for any number of reasons. If the Tribunal finds the by-law under appeal is inappropriate for one determinative reason, it need not address every other issue raised at the hearing in its reasons. Having found that By-law 2020-073 was not in the public interest and did not constitute good planning, the Tribunal was not required to consider and address all the other issues.
[57] I find the Tribunal did not apply the wrong legal test when considering whether By-law 2020-073 respresented good planning. I also find the Tribunal made no error of law in finding that a blanket prohibition on all residential rentals of 28 days or less was contrary to the public interest in maintaining non-disruptive short-term cottage rentals. . Township of Oro-Medonte v. Oro-Medonte Association for Responsible STRS
In Township of Oro-Medonte v. Oro-Medonte Association for Responsible STRS (Div Court, 2024) the Divisional Court dismissed an appeal (filed with leave) of a ruling of the Ontario Land Tribunal (OLT), which itself repealed an amending bylaw to a municipality's zoning by-law. The issue of concern was "disruptive short-term rentals" (Airbnbs).
These quotes illustrate one municipality's efforts to regulate in the much-vexed area of 'short-term rentals' (eg. Airbnbs), and related legal reasoning applied in the OLT and Divisional Court appeals:[3] Following a six-day hearing, the Tribunal gave an oral decision on March 22, 2022 granting the appeal and repealing By-law 2020-073. The Tribunal released written reasons on August 24, 2022. The Tribunal found that By-law 2020-073 did not represent good planning and was not in the public interest.
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C. Legislative and Procedural History
[7] To understand the Tribunal’s decision about the nature and impact of By-law 2020-073 on short-term rentals in the Township of Oro-Medonte, it is important to set out how the zoning by-laws have defined and regulated residential dwellings over time.
[8] The Township of Oro-Medonte passed a comprehensive zoning by-law in 1997. By-law 97-95 created six residential zones, two commercial zones, five industrial zones and eight other zones for specified land uses in the Township. By-law 97-95 identifies what types of “dwellings” are permitted in which zones. For example, single detached dwellings, which are defined as buildings containing one dwelling unit, are permitted in five of the six residential zones. Semi-detached dwellings and apartment dwellings are only permitted in one of the residential zones and the “Village One” zone. Unless a land use is expressly permitted in a particular zone under By-law 97-95, it is prohibited.
[9] The term “dwelling unit” was originally defined in By-law 97-95 as follows:A suite which functions as a housekeeping unit used or intended to be used as a domicile by one or more persons, containing cooking, eating, living, sleeping and sanitary facilities, and having a private entrance from outside the building or from a common hallway or stairway inside or outside the building. [10] In 2015, the Township enacted By-law 2015-192 which, among other things, changed the definition of “dwelling unit” to the following:One or more rooms in a building, designed as, or intended as, or capable of being used or occupied as a single independent housekeeping unit and containing living, sleeping, sanitary and food preparation facilities or facilities for the installation of kitchen equipment and has an independent entrance. For the purposes of this By-law, a dwelling unit does not include any commercial accommodation or a recreational trailer. [11] The term “commercial accommodation” was not defined in either By-law 97-95 or By-law 2015-192.
[12] One of the main issues in this appeal is what the phrase “a dwelling unit does not include any commercial accommodation” means: Does it mean that any lease or rental of a dwelling unit for money is prohibited as a “commercial accommodation”? Or does it mean that providing accommodation as a commercial endeavour like a hotel, motel or bed and breakfast is prohibited?
[13] In 2017, the Township started to receive complaints about properties being rented out for a few days at a time (generally over weekends) and the problems those rentals were causing including noise, vandalism, parking, garbage and septic impacts. Township staff presented a report to the Oro-Medonte Township Council about the problem. The report identified three possible responses: (1) amend By-law 97-95 to define short-term rentals and identify where short-term rentals would be permitted, (2) create a registration and licensing scheme for short-term rentals, or (3) continue to monitor the situation.
[14] In July 2018, the Township enacted an interim control by-law (By-law 2018-071) prohibiting new short-term rentals pending the completion of its study of the issue. Article 1 of By-law 2018-071 stated that only those short-term rental accommodations in existence on the date the by-law was enacted could be maintained. By-law 2018-071 defined “short term rental accommodation” as follows:A dwelling or any part thereof that operates or offers three or more bedrooms as a place of temporary residence, lodging or occupancy by way of concession, permit, lease, license, rental agreement or similar commercial arrangement for any period of 30 consecutive calendar days or less throughout all or any part of the calendar year. Short term accommodation shall not mean or include a motel, hotel, bed and breakfast establishments, hospital or similar commercial or institutional use. [15] The 2018 interim control by-law was extended for a second year in June 2019.
[16] By-law 2020-073 – the focus of this appeal – was enacted in July 2020. It was intended to replace the interim control by-law as a permanent solution to the short-term rental problem in the Township. The preamble to By-law 2020-073 states the Township wished to “clarify” the existing prohibition of commercial accommodations in dwelling units in By-law 97-95. By-law 2020-073 simply added the following definition of “commercial accommodation” to By-law 97-95:Commercial Accommodation – means temporary accommodation, lodging, or board and lodging, or occupancy in a building, dwelling or dwelling unit, hotel, motel, inn, bed & breakfast, or boarding house by way of concession, permit, lease, license, rental agreement or similar commercial arrangement for any period of 28 consecutive days or less throughout any part of a calendar year. For the purposes of this By-law, Commercial Accommodation does not include Village Commercial Resort Units. The effect of By-law 2020-073 was to prohibit any rental for 28 days or less in a residential zone, including the rental of family cottages.
[17] The Oro-Medonte Association for Responsible STRS appealed By-law 2020-073 to the Tribunal, arguing that By-law 2020-073 prohibited a well-established and accepted land use in the Township – short-term rentals – in a manner that was disproportionate to the harm the Township was trying to address.
[18] On the appeal, the Township argued that By-law 2020-073 did not create a new land use prohibition. The Township argued that under the 2015 definition of dwelling unit, all rentals, including short-term rentals, were a commercial use of property and were prohibited in areas zoned as residential. The Township argued that By-law 2020-073 created a new permitted land use by clarifying that longer-term rentals (of more than 28 days) are expressly permitted in residential zones.
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E. Tribunal’s Decision
[21] The parties to the hearing at the Tribunal agreed there was a problem with some short-term rentals in the Township. The parties also agreed that the Township had the authority to amend the zoning by-law to deal with short-term rentals. The issue was whether the means chosen by the Township were consistent with the Planning Act, the Provincial Policy Statement, the provincial Growth Plan, the County’s Official Plan and the Township’s Official Plan, and whether the means chosen represented good planning.
[22] The Tribunal understood there was a disagreement between the parties over whether By-law 2020-073 created a new permitted land use or created a new prohibited land use. The answer to that question turned on the meaning of the phrase “a dwelling unit does not include any commercial accommodation” in the 2015 definition of “dwelling unit”.
[23] The Township argued that by changing the definition of “dwelling unit” to include the phrase “a dwelling unit does not include any commercial accommodation”, any rental of any dwelling unit for money was prohibited no matter the length of the rental. The Township argued that by adding a definition of “commercial accommodation”, By-law 2020-073 “clarified” that rentals of more than 28 days are permitted in the Township. In other words, the Township argued that By-law 2020-073 created a new permitted land use.
[24] On the other hand, the Association of Responsible STRS argued that the addition of the phrase “a dwelling unit does not include any commercial accommodation” to the definition of dwelling unit could not reasonably have meant that all rentals were prohibited, including long-term rentals. The Association of Responsible STRS argued there would have been no need for the Township to enact an Interim Control By-law in 2018 or By-law 2020-073 if the 2015 amendment prohibited the rentals of all residential dwellings, including the problematic short-term rentals, as the Township suggested. The Association of Responsible STRS argued the term “commercial accommodation” in the 2015 amendment must have meant something other than simply renting out a dwelling unit for money. If the Association of Responsible STRS was right, By-law 2020-073 created a new prohibition on short-term rentals.
[25] The Tribunal rejected the Township’s argument and found that By-law 2020-073 created a new land use prohibition under the guise of a clarification. The Tribunal found that By-law 2020-073 did not represent good planning and was not in the public interest because its negative impacts were disproportionate to its potential benefits. The Tribunal found that By-law 2020-073 was not an effective tool to address the problem of disruptive short-term rentals and would have an “unintended punitive” impact on “benign, non contentious” cottage rentals. In other words, the Tribunal found that By-law 2020-073 was overbroad in that it would prohibit short-term rentals that posed no problem within the Township.
[26] The Tribunal also considered whether the result of the appeal would have been different if it had accepted the Township’s argument that By-law 97-95 prohibited all rentals of residential units. The Tribunal found that if By-law 97-95 prohibited all residential rentals as the Township suggested, By-law 2020-073 was not necessary to address the problem of disruptive short-term rentals. If all residential rentals were prohibited under the 2015 definition of “dwelling unit”, the Township could use the existing by-law to shut down disruptive short-term rentals without any amendment. The Tribunal also found that if the existing by-law was sufficient to address the problem, limiting residential rentals to those longer than 28 days unnecessarily targeted historically acceptable rentals that were not disruptive, which was contrary to the public interest.
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a. Did the Tribunal err in finding that By-law 97-95 did not prohibit all rentals?
[33] The Township argued that adding the phrase “a dwelling unit does not include any commercial accommodation” to the definition of “dwelling unit” in 2015 had the effect of prohibiting any dwelling unit from being rented for money no matter the length of the rental. The Township argued that by adding a definition of “commercial accommodation”, By-law 2020-073 “clarified” that rentals of more than 28 days are permitted in the Township. In other words, the Township argued By-law 2020-073 created a new permitted land use.
[34] The Tribunal rejected the Township’s argument and found that “commercial accommodation” must have meant something other than simply renting a dwelling unit for money. I find the Tribunal was correct in its interpretation of the 2015 definition of dwelling unit.
[35] I find the phrase “commercial accommodation” in the definition of a dwelling unit is ambiguous. It could mean that any accommodation for which money is exchanged is a commercial accommodation or it could mean that temporary accommodation provided as part of an ongoing commercial enterprise akin to a hotel, motel, resort or bed and breakfast are prohibited as commercial accommodations. To resolve this ambiguity, the court must undertake a contextual and purposive approach to find a meaning that harmonizes the wording, object, spirit and purpose of the By-law.
[36] The starting point of a contextual analysis must be the Planning Act, which provides the overall framework for land use regulation in the Ontario. Section 2 of the Planning Act enumerates several matters of provincial interest that municipalities must consider when carrying out their responsibilities. The list includes “the adequate provision of a full range of housing, including affordable housing”: Planning Act, s. 2(j). Enacting a definition of “dwelling unit” that prohibited all rentals in areas zoned as residential would be inconsistent with the municipality’s obligation to provide a full range of housing options, including affordable housing.
[37] Municipal decisions must also be consistent with policy statements issued by the Province under the Planning Act: Planning Act, s. 3(5). The 2014 and 2020 Provincial Policy Statements directed municipalities to provide an “appropriate range and mix of housing” including housing that is affordable to low- and moderate-income households: 2020 Provincial Policy Statement, ss. 1.4.1 and 1.4.3, 2014 Provincial Policy Statement, ss. 1.4.1. and 1.4.3. Again, enacting a definition of “dwelling unit” that prohibited all rentals in areas zoned as residential the Township would be inconsistent with the Provincial Policy Statements.
[38] If the term “commercial accommodation” is to be interpreted in a manner that is consistent with the Planning Act and the Provincial Policy Statements, it must mean something other than simply renting a dwelling unit for money. The Tribunal was, therefore, correct to reject the Township’s argument that as of 2015 renting a dwelling unit was prohibited.
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[44] The Tribunal’s decision that “commercial accommodation” must mean something other than simply renting a dwelling unit for money is also consistent with the justification given by the Township for enacting the interim control by-law in 2018 pending a final decision on how to regulate short-term rentals. In the preamble to the 2018 interim control by-law, the Township wrote that the purpose of the interim measure was to “temporarily prohibit” short-term rental accommodations pending a review of the issue. There would have been no need to temporarily prohibit short-term rentals pending a final solution if all rentals, including short-term rentals, were already prohibited in areas zoned as residential under By-law 97-95.
[45] Finally, the Tribunal’s interpretation of “commercial accommodation” is consistent with the text of the interim control by-law itself. By-law 2018-071 specifically allowed “short term rental accommodations in existence as of the date of the passing of this by-law and used for such purposes” to continue. This language is inconsistent with the position taken by the Township on the appeal to the Tribunal that all residential rentals had been prohibited as commercial accommodations since 2015. If all residential rentals had been prohibited since 2015, there would be no reason to allow residents to continue an illegal, non-conforming land use.
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[48] I find the Tribunal was correct to find that the prohibition on “commercial accommodation” in the definition of “dwelling unit” could not have created a complete prohibition on all residential rentals in the Township. To accept the Township’s argument would have been inconsistent with the Planning Act, the Provincial Policy Statement and the position taken by the Township during the study and consultation period.
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