Divisional Court File No. 79/07

ONTARIO SUPERIOR COURT OF JUSTICE (DIVISIONAL COURT) BETWEN: CITY OF TORONTO Appellant - and 2059946 ONTARIO LIMITED, VERDIROC DEVELOPMENT CORPORATION LANDMARK DEVELOPMENTS INC.. WESTSIDE LOFTS AND TOWNS INC., EMBASSY RESIbENCES INC., ACTIVE 18 COMMUNITY ASSOCIATION. ABELL INVESTMENTS LIMITED CANADIAN NATIONAL RAILWAY COMPANY and GREATER TORONTO TRANSIT AUTHORITY Respondents

FACTUM OF TIlE APPELLANT CITY OF TORONTO

September 12, 2007

CITY SOLICITOR'S OFFICE City of Toronto Metro Hall 55 John Street 26th Floor, Station 1260 Toronto, Ontario M5V3C6

Thomas H. Wall Tel.: (416) 392-1561 Fax: (416) 392-1199 L.S.U.C. No. 21171P



Christina Pangos Tel.: (416) 392-1118 Fax: (416) 392-1199 L.S.U.C. No. 52345G

Solicitors for the Appellant, City of Toronto

TO:

Gordon E Petch 181 Bay Street, Suite 2310 P.O. Box 792 Toronto, Ontario M5J 2T3 Tel.: (416) 955-9530 Fax: (416) 955-9532 Counsel for the Respondents, Landmark Developments Inc. and Westside Lofts and Towns Inc.

AND TO:

her Campbell 890 Yonge Street Suite 700 Toronto, Ontario M4W 3P4 Charles Campbell Tel.: (416) 598-0103 Fax: (416) 598-3484 Counsel for the Respondent, Active 18 Community Association

AND TO:

Papazian Heisey Myers Standard Life Centre, P.O. Box 105 121 King Street West, Suite 510 Toronto, Ontario M5H 3T9 Michael Hacki Tel.: (416) 601-2704 Fax: (416)601-1818 Counsel for the Respondents, Canadian National Railway Company and Greater Toronto Transit Authority



AND TO:

Attorney General for Ontario Crown Law Office - Civil 720 Bay Street, 8' Floor Toronto, Ontario M5G2K1 Robert Ratcliffe Tel.: Fax:

(416) 326-4128 (416) 326-4181

Counsel for the Respondent, the Ontario Municipal Board

Divisional Court File No. 79/07 ONTARIO -SUPERIOR COURTOF JUSTICE (DIVISIONAL COURT) BETWEEN: CITY OF TORONTO Appellant - and -

2059946. ONTARIO LIMITED, VERDIROC DEVELOPMENT CORPORATION LANDMARK DEVELOPMENTS INC., WESTSIDE LOFTS AND TOWNS INC., EMBASSY RESIDENCES INC., ACTIVE 18 COMMUNITY ASSOCIATION, ABELL INVESTMENTS LIMITED CANADIAN NATIONAL RAILWAY COMPANY and GREATER TORONTO TRANSIT AUTHORITY Respondents

FACTUM OF THE CITY OF TORONTO

Part I - INTRODUCTION 1.

On July 25, 2007, Justice Lax of the Divisional Court granted the City of Toronto

("City") leave to Appeal from the decision of the Ontario Municipal Board (the "Board") dated January 10, 2007, dealing with a significant residential development project in the area known as the West Queen West Triangle (the "Triangle"). The site to be developed is municipally known as 150 Sudbury Street ("Sudbury"). It is the City's position that the Board committed several errors of law and arrived at aresult that is contrary to Provincial and City policies that properly seek to preserve and promote a mix of uses including non-residential uses that support



2 employment in tne City of Toronto The effect of the decision is to convert a mixed use site, that includes employment and creative uses, to high density residential. 2.

Although there are issues that still need to be addressed by the Board in a further

decision, the decision dated January 10, 2007 gave approval to official plan and zoning by-law amendments that permit the significant residential development.

The Board decision fails to

address at all the evidence and issues presented to the Board as to why the Sudbury project is contrary to the provisions in the Planning Act, Provincial and City policies and the public interest.

3.

Leave to Appeal was granted with respect to the following questions: (i)

Did the Board err in failing to apply or properly interpret sections 1, 2 and 3 of the Planning Act?;

(ii)

Did the Board err in approving a predominantly residential use of the lands in issue contrary to the City's Official Plan Policies, Zoning By-Law and Provincial Pohcies7,

(iii)

Did the Board err in its interpretation and application of relevant Provincial Policies that promote employment and economic development?;

(iv)

Did the Board err it its interpretation and application of the City's Official Plan Policies?; and

(v)

Did the Board err in concluding that the development proposal was in the public interest? Part II- THE FACTS

West Queen West Triangle 4.

The Triangle is an irregularly shaped area in the vicinity of Queen and Dufferin Streets

generally bounded by Queen Street-on the north, the CN Rail Corridor on the south and west and properties fronting on Dovercourt Road on the east. The Sudbury lands in issue comprise a portion of the lands in the Triangle. Appeal Book and Compendium, Council Report of September 25-28, 2006, Tab 19



3

5

Sudbury is located in a unique area m Toronto with a concentration of creative

enterprises and workers which give it a special character and role in the City as a creative hub. The unique employment cluster could expand with appropriate opportunities or, as the City fears, be negatively impacted with an influx of significant new residential development. Appeal Book and Compendium, Witness Statement of Kyle Beñham, Tab 20, pp. 413-415

Proposed Developments

6.

Although there were three developments in issue, they all deal with common issues

applicable to the broader area, the Triangle, and the secondary plan area known as Garrison Common North described below.

The Board heard evidence at the outset of the hearings

regarding the policies that apply to the Triangle as a whole and then heard evidence on the three applications consecutively

A map of the Triangle with the locations of the proposed

developments before the Board is attached as App.endix A. Appeal Book and Compendium, 0MB Decision/Order No 0054, Tab 3 7.

With respect to two of the developments (1171 Queen Street West and 48 Abell Street),

the parties reached a settlement prior to the hearing of the leave application. 8.

Decisjon No. 0054 deals with the appeal by Landmark Developments Inc. for a

significant residential development on the Sudbury lands. application both before Wand during the hearing.

There were revisions made to the

The Board gave approval to two residential

buildings of 8 stories and 48 metres (approximately 15 stories in height) with some minor nonresidential uses at grade along a portion of Abell Street. Appeal Book and Compendium, 0MB Decision/Order No. 0054, Tab 3 Provincial Policies

9

The Planning Act is the governing legislation for development proposals in Ontario

Section 1 of the Act stresses that two of the purposes of the Act are to promote sustainable



4 economic development in a healthy natural environment and to recogmze the decision-making authority of municipal councils in planning.

S

Planning Act, R.S.O. 1990, c. R13, section 1.1 10.

Section 2 of the Planning Act provides that land, use decisions, including those of

municipal councils and the Ontario Municipal Board, shall have regard to matters of provincial interest, which includes the adequate provision of employment opportunities and the protection of the financial and economic well-being of the Province and its munieipalities. The Board fails to give any consideration whatsoever to these sections of the Act in its Sudbury decision Planning Act, section 2 11.

Section 3 of the Planning Act provides that the Minister may issue provincial policy

statements on matters relating to municipal planning that are of provincial interest, and that all decisions of municipalities and the .Board, among others, shall be consistent with those policy Statements. Planning Act, section 3 12.

There are provincial policy statements that speak expressly to promoting employment

and ensuring effective economic

owth and development in the Province and its municipalities.

The Board fails to give any consideration whatsoever to these statements. The 2005 Provincial Policy Statements were in evidence before the Board. They apply to the Sudbury development application which was received on or after March 1, 2005 Appeal Book and Compendium, Council Report, Request for Direction - 150 Sudbury, Tab 16, p.347 Appeal Book and Compendium, 2005 Provincial Policy Statement, Tab 13 13.

The 2005 Provincial Policy Statement ("PPS") emphasizes the importance of

employment. The 2005 PPS calls for efficient land use patterns that promote'a mix of housing, employment, parks and open spaces and transportation choices that facilitate pedestrian mobility and other modes of travel. These land use patterns are to also support the financial well-being of the Province and municipalities over the long term. Appeal Book and Compendium, 2005 Provcial Policy.Statement, Tab 13, p.219

5

14

Sections 111 and 11 2 of the 2005 PPS also stress the need for an appropnate range of

residential and employment uses to meet long-term needs and require that sufficient land be made available to accommodate an appropriate range and mix of employment and housing in the time frame set out by the Province- as a result of a provincial planning exercise. Section 1.3.1 of the 2005 PPS, requires planning authorities such as municipalities to promote economic growth and competitiveness by such means as providing for an appropriate mix and range of employment to meet long-term needs and providing opportunities for a diversified economic base.

Section 1.7 of the 2005 PPS provides that long-term economic prosperity should be

supported by optimizing the long-term availability and use of land, resources and infrastructure. Appeal Book and Compendium, 2005 Provincial Policy Statement, Tab 13, pp. 219, 223, 228 15.

The 2005 Provincial policy statement emphasizes a municipality's official plan as the

most important vehicle for implementing the Provincial policy statement. The Province directs the City and other municipalities to address- provincial interests through their official plans, giving such plans increased importance. Appeal Book and Compendium, 2005 Provincial Policy Statement, Tab 13, p. 233

Official Plan Policies 16.

Municipalities enact official plan policies pursuant to Section 16 of the Planning Act that

establish goals, objectives and policies to manage and direct physical change in the City. Often a municipality will enact policies for the whole city and various secondary plan policies for smaller areas of the city. The Triangle is governed by the official plan policies for the whole City and the secondary plan policies for the area known as the Garrison Common North of which Sudbury is a part. The Garrison Common North area is bounded by Queen Street West on the north, the CN Rail Corridor on the south, Dufferin Street on the west and Bathurst Street on the east. Appeal Book and Compendium, Garrison Common North Secondary Plan, Tab7



6 17.

In 2002, the new affialgamated City of Toronto adopted a new Official Plan for the City

along with numerous secondary plans, including a new Garrison Common North Secondary Plan. However, the development application in issue had been appealed to the Board, prior to the Board bringing the new Official Plan into force in July of 2006. Pursuant to the Board's Order dealing with the new Official Plan, the new Plan is not in force for the Sudbury project The developers agreed at the hearing that the official plan policies that applied to this project were the former City of Toronto's Part 1 Official Plan and the Garrison Common North Part II Plan. Hereinafter, the former plans are referred to as the Toronto Official Plan and the Garrison Common North Secondary Plan. The new official plans that expressly do not apply to this project based on the Board's previous order, are referred to as the New Official Plan and the New Garrison Common North Secondary Plan. Appeal Book and Compendium, 0MB Decision/Order No. 0054, Tab 3 18.

Both the Toronto Official Plan policies and the Garrison Common North Secondary Plan

policies emphasize the need for a mix of uses that will support and eflhance employment opportunities in the City.

(i)

Toronto Official Plan

19.

Toronto's Official Plan, has policies throughout which support the objective of achieving

a balance in the levels of future employment and housing growth. Appeal Book and Compendium, City of Toronto Official Plan, 1994, Tab 5, p.68 20.

With the exception of a 'Low Density Mixed Commercial-Residential Area' designation

on the Queen Street West frontage, the lands in issue are designated as a 'Mixed IndustrialResidential Area' in the Toronto Official Plan. Under Section 9.37 of the plan, this designation provides for a mix of a wide range of residential uses, community services and facilities, street related retail and service uses and industrial uses which are environmentally compatible with adjacent and neighbouring uses. Appeal Book and Compendium, City of Toronto Official Plan, 1994, Tab 5, p.69

7

21

Section 9 39 of the Toronto Official Plan sets out that the zoning by-law will be deployed

in 'Mixed Industrial-Residential Areas' in a manner that recognizes existing uses. With the exception of the Mixed Commercial-Residential ("MCR") zone on the Queen Street West frontage, the lands. were zoned 11D3 by City Zoning By-law 425-93 which permits only industrial (employment) uses in order to implement this policy. Section 9.39 goes on to provide that amendments to the zoning can be enacted upon application, but amendments would be subject to the policies in Sections 9.40 and 9.41 of the Toronto Official Plan. Appeal Bookand Compendium, City of Toronto Official Plan, 1994, Tab 5, p.69 22.

Section 16.4 of the City of Toronto Official Plan, precludes Council from approving any

large redevelopment such as the proposal for the Sudbury lands, until an area study has been completed and Council has adopted amendments to the secondary plan recommended by the area study. Appeal Book and Compendium, City of Toronto Official Plan, 1994, Tab 5, p73 23

Section 9 40 sets out the uses and maximum densities permitted in a 'Mixed Industrial-

Residential Area'. It permits. wholly residential development at a density of up to 2 times the lot area, and wholly industrial development at a density of up to 3 times the lot area

This policy

also permits buildings with a mix of industrial and residential uses at a density of up to 3 times the lot area, provided the residential component does not exceed a density of 2 times the lot area For buildings built out to the maximum density, only two-thirds of the development may be residential and the remaining one-third must be non-residential

Only by providing one-third of

the space for employment uses can an applicant achieve the maximum permissible density. This application sought densities of approximately 3 21 times the area of the lot comprised of 100 per cent residential development. The developers therefore, needed an exception to Policy 9.40. Appeal Book and Compendium, City of Toronto Official Plan, 1994, Tab 5, pp. 69-70 24.

The Board Decision sets out form, massing and heights of development and left the final

density figures to be provided in the final By-law amendments resulting from the decision. A City staff massing of the Board decision shows that the Sudbury decision will result in densities



8 in the range of 2 28 to 2 78 times the area of the lot compnsed of between 97 01 to 97 68 per cent residential development and only 2.32 to 2.99 per cent non-residential development. Appeal Book and Compendium, Affidavit of Elise Hug, Tab 22, p 460 25

Section 9 41 of the Toronto Official Plan provides, among other matters, that pnor to

passing By-laws to permit a change in use from industrial to residential in a 'Mixed Use Industrial-Residential Areas', Council shall have regard for the advisability of retaining-existing industrial buildings or uses in terms of the retention of industrial jobs and the extent to which a change in use would adversely affect the continued compatibility of neighbouring uses, particularly in those areas where identifiable pockets of a consistent residential or industrial use exists. This policy requires Council and therefore the Board to consider both the loss of employment on the lands in issue and the precedent an almost wholly residential development approval would have on the remaining employment lands in the Triangle and other areas in the Garrison Common North Area. Appeal Book and Compendium, City of Toronto Official Plan, 1994, Tab 5, p.70

(ii)

Garrison Common North Secondary Plan

26.

On August 15, 1995, afier detailed study, Toronto City Council adopted By-law 1995-

0552 to approve the Garrison Common Secondary Plan. Much of the background work for this plan was already underway at the time of preparation of the Toronto Official Plan, so the -

provisions of this Secondary Plan relating to the Triangle closely mirror those of the Part I Plan described above.

27. -

Section 2.1 of the Garrison Common North Secondary Plan sets out the principles

governing development in Garrison Common: North. Subsection c) of this policy specifically calls for development to 'introduce a variety of land uses and densities---the plan area should

-

contain a mix of residential, retail, commercial, industrial and community services and facilities so that development can respond to changing market demands for different uses over time



9 consistent with the local poltcies of this plan' In response to this, there was evidence at the hearing that development comprising residential condominiums does not provide the flexibility to respond to market demands for employment uses as market demands change Appeal Boak and Compendium, Garrison Common North Secondary Plan, Tab 7, p.94 Appeal Book and Compendium, Witness Statement of Paul Bain, Tab 21, para. 42, pp. 446-447 Section 3.1028.of the Gathson Common North Secondary Plan reiterates the provisions of Section 9 37 of the Toronto Official Plan in stating that 'Mixed Industnal-Residential Areas' shall be regarded as areas containing a mix of a wide range of residential uses including livework units, community services and facilities and those industrial uses which

are

environmentally compatible with adjacent and neighbouring uses. Appeal Boek and Compendium, Garrison Common North Secondary Plan, Tab 7, p. 94 29.

Section 3.1.2 of the Garrison Common North Secondary Plan sets out the permitted uses

and densities in 'Mixed Industrial-Residential Area B' which includes the Triangle, excepting the Queen Street West frontage. This policy permits wholly industrial development at a density of up to 3 tinies the lot area and wholly residential development on a lot at a density of up to 2 times the lot area. On application by a landowner, buildings containing a mix of industrial, residential and community service and facility uses are permitted at a density of up to 3 times the lot area, provided the gross floor area of the residential uses, including live-work units and commumty services and facilities does not exceed 2 times density

One third of such

development is reserved for industrial uses, as per the parent Plan. Appeal Book and Compendium, Garrison Common North Secondary Plan, Tab 7,p. 98 30.

Section 3.1.3 of the Garrison Common North Secondary Plan specifically provides that

prior to passing by-laws to permit a change in use from industrial to residential in 'Mixed Industnal-Residential Area B' Council and therefore the Board shall have regard for the advisability of retainmg existing industnal buildings or uses, in terms of the retention of industrial jobs and the extent to which a change in use would adversely affect the continued

10 compatibility of neighbounng uses Appeal Book and Compendium, Garrison Common North Secondary Plan, Tab 7, p. 99

(ffl)

Metropolitan Toronto Official Plan

31.

The developer also agreed that the former Metropolitan Official Plan policies apply to

Sudbury. There is support as well in the Metropolitan Plan for economic development and employment. Section 2.1.1 of the Official Plan for the former Municipality of Metropolitan Toronto states that it is the policy of Council to plan the Metropolitan Toronto structure in anticipation of a minimum population of 2.5 million persons and 1.7 million jobs to the year 2011.

Currently, Toronto is not experiencing difficulty meeting residential targets, but is

experiencing significant problems meeting employment or job targets. Appeal Book and Compendium, Witness Statement of Kyle Benham, Tab 21, pp. 412-413 Appeal Book and Compendium, Official Plan of the Municipality of Metropolitan Toronto, Tab 6, pp.81,83,87

New Official Plan

32.

The New Official Plan for the City of Toronto was adopted by City Council in November

of 2002 and approved by the Minister of Municipal Affairs and Housing in March of 2003. Of significance is that the Provincial Minister modified the City's New Official Plan by adding in growth targets in Section 2.1.3 stating that Toronto should accommodate a minimum of 3 million people and 1.835 million jobs by the year 2031. The targets would require the addition of approximately 540,000 new jobs. The New Official Plan was brought into force over most of the City in July of 2006 but as noted above does not apply to this project. Various provisions of the new plan were discussed in evidence at the hearing and the Board makes some brief comments on the new plan in its decisiom Appeal Book and Compendium, City of Toronto New Official Plan, Tab 8, p.114 Appeal Book and Compendium, 0MB Decision/Order No. 1928, Tab 9

11 33

In the new plan, the Sudbury lands are designated as a Regeneration Area

However,

under the new Garrison Common North Secondary Plan, an area study is required to be completed for certain lands including Sudbury that would set out a development framework for the revitalization of those lands. Until this study is completed, no significant development was to be approved. These changes to the secondary plan were adopted by City Council and were not appealed by any property owners. Appeal Book and Compendium, New Garrison Common North Secondary Plan, Tab 10, p. 177 Appeal Book and Compendium, Witness Statement of Paul Bain, Tab 21, para. 34, p. 444

34.

Prior to the commencement of the Sudbury hearing, the City made it clear that if the

Board was going to consider the new official plan, the hearing was premature as it should await the completion of the area study. During the course of the hearing, the area study for Sudbury required under the new official plan had been reported on to Council but had not been implemented by way of amendments to the new official plan and zoning by-law. The staff planner's recommendation based on the study is to maintain a mix of uses in the Triangle with the minimum amount of non-residential gross floor area to be no less than 0.70 times the area of the lot. Appeal Book and Compendium, Council Report of September 25-28, 2006, Tabl9 Appeal Book and Compendium, Witness Statement of Paul Bain, Tab 21, paras. 23, 27-36, pp. 441, 442-445 35.

It is clear from the reports of City Planning staff that had gone forward to City Council in

respect of Sudhury, that there was a need to protect and enhance the mix of uses in the Triangle including employment uses. The reports comment on a policy of a no net loss of employment space on the Sudbury lands as a means of minimizing the impact of new development on existing business and creative enterprises, ensuring that a true mix of employment and residential activities is built and maintained over time. Planning staff recommended that the 40,000 square metres of non-residential space that exists in the Triangle which included Sudbury should at least• be maintained or replaced.

12 36

It has been determined that the average built density of employment space is equivalent

to 0.7 times the area of the parcels in the Triangle. At the hearing the City recommended That the existing average density (0.7 non-residential) be used as a minimum requirement for employment space in the Sudbury project and that it be a condition of any redevelopment approvals. The no net loss policy standard (0.7 non-residential) is less than what is called for in the former City of Toronto Official Plan Policies. Appeal Book and Compendium, Council Report, Request for Direction Official Plan and Zoning Review in the West Queen West Triangle Area, Tab 14, p. 261 Appeal Book and Compendium, Council Report, Request for Direction 1171 and 1171R Queen Street West, Tab 15, pp. 303-304 Appeal Book and Compendium, Council Report, Request for Direction - 150 Sudbury, Tab 16, p. 325 Appeal Book and Compendium, Council Report, Request for Direction 8 Abell Street, Tab 17, p 355 Appeal Book and Compendium, Revised Chart of existing non-residential GFA in WQW Triangle, Tab 18, p.373

Zoning

37.

With the exception of the mixed commercial residential (MCR) zone on the Queen Street

West frontage, the lands in issue are all zoned 11D3 by the City of Toronto's zoning by-law 42593 which is an industrial use designation. The zoning for the Sudbury lands stress and, in fact, only permit employment type uses. Appeal Book and Compendium, Zoning By-law 438-86, Tab 11

Mix of Uses Supports City's Employment Goals

38.

The need for the City to support economic development and job creation is critical.

These needs are reflected in both Provincial and City policies described above and have even found their way into specific job targets for the City. In order to achieve such goals, it is critical for the City to both retain lands that support employment and stimulate new job creation. Land use conversions from employment uses to residential have and are leading to a loss of jobs,

13 employment land and a loss of future employment opportunities. Toronto has yet to return to its 1989 employment level while outlying areas have seen significant new employment growth. There was evidence at the hearing that there are approximately 100,000 fewer jobs in the City today than, in I 989. Appeal Book and Compendium, Witness Statement of'Kyle Benham, Tab 20 39.

In order to meet the employment targets in the New Toronto Official Plan, the City must

retain as much of its employment land as possible. A 2005 survey by the City indicates that 31% of the total employment in the Triangle is involved in creative enterprises. Appeal Book and Compendium, Witness Statement of Kyle Benham, Tab 20 40.

It is critical for the City to not only preserve employment lands and uses in Employment

Districts but also in areas where the designation in the City permits a mix of employment and residential uses. In 'fact, the majority of Toronto's employment is found in areas where there is a mix of employment and residential uses. If the City is to meet its employment needs it is critical that there not be any erosion of the employment uses and jobs in mixed use areas such as the Triangle.

The Board Hearing and Board Decision 41.

The Board approval for this project permits significant residential development which

ignore the, need for protecting and promoting employment uses. The Board failed to give any consideration to the City's official plan policies and provincial policy statements that support employment.

42.

The Board held two pre-hearing conferences before the hearing which resulted in a

procedural order that'-described the consolidated issues to be addressed at the upcoming hearing. The issues included the following: (1)

Are the proposed amendments consistent with the purposes of the Planning Act as set forth in Section 1.1 of the Act?

(2)

Do the proposed amendments have appropriate regard to the matters of provincial

14

interest set forth in Section 2 of the Planning Act and, in particular, subsections (d), (f), (h), (i), (j), (k), (1), (m), (n), (o) and (p)? (3)

Do the proposed amendments have appropnate regard to matters of provincial interest set forth in the Provincial Policy Statement (1997) pursuant to Section 3 of the PlanningAct?

(4)

Do the proposed amendments comply with or maintain the intent of the in-force Official Plan of the (former) Metropolitan Toronto'?

(5)

Do the proposed amendments comply with or maintain the intent of the in-force policies of the Official Plan and the Gamson Common North Part II Plan of the (former) City ofToronto?

Appeal Book and Compendium, 0MB Decision/Order No 2043, Tab 4 43.

The combined evidence and argument before the Board lasted 35 full days of hearing

with 160 Exhibits presented. Despite this, the Board Decision completely fails to address several of the legal issues that were squarely before it.

44.

It is clear from the Board's reasons that it gave no consideration to the issues listed above

that raise the proper interpretation of sections in the Planning Act, the provincial policy statements and the City's official plan policies that apply to the Sudbury lands. Instead, the Board seems critical of the City for not coming up with a specific policy under the New Official Plan for quantifiable employment uses on a site by site basis in the Triangle and seems to conclude that the preservation of employment uses should be left to Employment Districts. This reasoning is flawed for a number of reasons: (i)

the in-force Official Plan policies clearly set out the appropriate mix of residential and non-residential uses on these lands.

The 2-to-i ratio densities is a

quantifiable standard that should be applied to the Sudbury site. (ii)

the City's planners gave evidence that the mix of uses set out in the in-force policies should be maintained and were needed for preserving employment;

(iii)

the New Official Plan did not apply to Sudbury as expressly set out in an earlier Board Order;

15 (iv)

the Board, at an earlier pre-heanng, refused the City's request to postpone the -hearing until the area study was completed;

(v)

the Board was advised dunng the course of the heanng that an area study had been conducted resulting in various recommendations by planning staff to City Council,

(vi)

the Board erred in not considering that the majority of employment in Toronto is supported in mixed-use areas not just Employment Distncts,

(vii)

the ongoing conversion of employment lands in mixed-use areas and setting aside policy and zoning reserves for non-residential gross floor area will prevent the City from complying with Provincial policy statements and meeting employment targets for the City; and

(viii)

the most efficient use of lands is a mix of employment and non-residential uses where residents can live and work in the same area.

45

Further, the Board's decision did not provide a rationale as to why it is in the public

interest to approve an almost wholly residential development on the Sudbury lands rather than support the vision of the City and the community associations for a satisfactory mix of both -- -

residential uses and employment opportunities particularly for the creative industries. The City submits that it cannot be in the public interest when the result is contrary to Provincial policy statements and the employment targets set for the City.

Part III - ISSUES AND THE LAW Nature of the Appeal and Standard of Review

46.

This is an appeal with leave pursuant to section 96(1) of the Ontario Municzpal Board

Act. Justice Lax granted leave to appeal on five questions of law, where she found there was reason to doubt the correctness of the Board's decision. Ontario Municipal BoardAct, R.S.0. 1990, c. 0.28, section 96(1) Appeal Book and Compendium, Reasons of Justice Lax, Tab 2, paras. 2 1-23, p. 13-14

16 47

There is no pnvative clause protecting the Board's decisions when they come before the

Divisional Court, on appeal with leave pursuant to section .96(1) of the Ontario Municipal Board Act. This suggests a less defçrential standard of review. City of Mississauga v. Erin Mills Corporation et aL (2004), 71 O.R. (3d) 397 (C.A.), ("Erin Mills"), at para. 35 London (City) v. Ayerswood Development Corp. (2002), 34 M.P.L.R (3d) 1 (Ont. C.A.), ("Ayerswood"), at para. 7 48.

The Ontario Court of Appeal in two recent cases has commented on the standard of

appellate review in planning cases The proper standard of review is one of either correctness or reasonableness, depending on the nature of the particular question of law. Ayerswood, at para. 7 Erin Mills, at paras. 35-38 49.

The City submits that the standard of review in this case is correctness. Although the

Board was required to consider, amongst other matters, sections of the Planning Act, Provincial Policies and the City's Official Plan policies, the Board completely ignored and failed to consider these matters As found by Justice Lax, the "Board Reasons are devoid of any discussion of the Planning Act, Provincial Policy Statements and the City's Official Plan as they apply to these lands" Appeal Book and Compendium, Reasons of Justice Lax, Tab 2, para. 17, p.12 50.

The Supreme Court of Canada decision in Canada (Director of Investigation and

Research, Competition Act) v. Southam Inc. provides guidance on the standard of appellate review of tribunal decisions. The Supreme Court of Canada confirms that if a tribunal fails to consider matters it was required to consider it has in effect applied the wrong law, and so has made an error of law. In these circumstances, the standard of review should be correctness. Canada (Director of Investigation and Research, Competition Act) v. Southant Inc. (1997), 144 D;L.R. (4th) 1 (S.C.C.), ("Southam"), at para. 39 51.

As described below, the Board erred in law in failing to address matters of "provincial

interest' in s 2 of the PlanningAct the applicable Provincial Policy Statements in s 3 and the City's existing in force Official Plan policies as required by s. 24 of the Planning Act. As a

17 result, the Board's decision is incorrect due to these errors of law 52.

-In the alternative, even if the standard of appellate review is reasonableness, the Board's

Reasons for decision contain errors that are so serious and extensive that they fail to meet the standard of reasonableness. --Vincent v. DeGasperis, [2005] OJ. No. 2890 CDiv. Ct.), at para. 30-3 1

Question (1): -Did the Board err in faffing to apply or properly interpret sections 1, 2 and 3 of the Planning Act? 53.

The Planning Act forms the statutory basis of a policy-led planning regime in Ontario.

Section 1 1 highlights the purposes of the Planning Act including the promotion of sustainable economic development, the provision of a land use planning system led by provincial policy, and the recogmtion of the decision-making authority and accountability of municipal councils in planning This statement of legislative purpose makes it clear that the Act is concerned with the broad policies to govern land use planning and the integration and implementation of Provincial interests at the local level through the municipal councils exercising their local authority. Planning Act, section 1 1 Téronto (City) v. Goidlist Properties Inc., [20031 O.J. No. 3931 (Ont. C.A.), ("Goidlist"), at para. 52-53 54.

Pursuant to Section 2 of the Planning Act, all land use decisions made by City Council

and the Board "shall have regard" to matters of Provincial interest These interests include the orderly development of safe and healthy communities, the adequate provision of employment opportunities, the protection of the financial and economic well being of the Province and its municipalities and the appropriate location of growth and development. Planning Act, sections 2 and subsections 2(h), (k), (1), (p) 55

Section 2 is closely irnked with section 3 of the Act which provides that the Mimster may

issue Provincial Policy Statements on matters relating to municipal planning that are of Provincial interest Section 3 goes on to require that all actions of municipalities and of the Board, among oth-ers, "shall be consistent with" those Provincial Policy Statements. Here the



18 Province has issued Provincial Policy Statements that stress the need for an appropnate range and mix of residential and employment uses to meet long term needs. Appeal Book and Compendium, Reasons of Justice Lax, Tab 2, para. 15, p.12 Planning Act, section 3 Goidlist, at para 53 56.

The current phrase in section 3 "shall be consistent with" replaced the former phrase

"shall have regard to". The current standard applies to applications received after March 1, 2005 and therefore applies to the 150 Sudbury Project. It is the City's position that whether or not the standard is "have regard to" or "be consistent with" the Board failed to do either. Planning Act, section 3

57.

The cases reflect that even under the "have regard to" test, three questions must be

considered in order to have proper regard for Provincial Policy Statements: (1)

Does the individual goal meet the intent and the objectives of the policy statement?

(2)

If there is conflict between the individual goal and the Policy Statement, is there a way to resolve it and meet the Policy Statement?

(3)

If there is no way to resolve it, what higher purpose does. the individual goals serve that would allow it to supersede the Policy Statement9

Re City of London Official Plan Amendment No. 212 (2001), 42 O.M.B.R. 468 (O.M.B.) 58.

Further, in consideration of Provincial Policy, even the "have regard to" test-contemplates

that the Board make more than a cursory review, "regard" includes some form of earnest consideration It requires a careful consideration of the planrnng objective and a determination of how to meet the objective in a particular situation; or alternatively, determining if circumstances make it inappropriate or impossible to meet that objective in a particular situation. To have "regard to" a statement of Provincial Planning Policy requires careful consideration, not a dismissive one, a fair application of an approach to policy which applies similarly to all similar situations, rather than one that allows frequent departure from the policy.

19 Victoria Park Homes Inc v Orillia (City) (1998), 37 0 M B R 146 (0 M B) Material Handling Problem Solvers Inc. v. Ontario (Ministry of Municipal Affairs and Housing), (2002), 44 O.M.B.R. 364 (O.M.B) Campitelli v. Ajax (Town) (2003), 45 O.M.B.R; 165 (0.M.B.) 5-9.

"Having regard" to Provincial interests requires the Board to consider them carefully in

relation- to the circumstances at -hand, their objectives and the statements as a whole, and what they seek to protect. The Board must determine whether and how the matter before it is affected by, and complies with, such objectives and policies with a sense of reasonable consistency in principle. Concerned Citizens of King (Township) v. King (Township), [2000] O.J. No. 3517, ("Concerned Citizens"), at para. 23 60.

Sections 1, 2 and 3 of the Planning Act were expressly raised as issues before the Board

and required the Board to apply and interpret them appropriately.

There is nothing in the

Board's Reasons to reflect that it considered the impact of these sections at all. As found by Lax J, the Board did not expressly address the issues that it was required to under the Planning Act as stated in its procedural orders "Apart from a passing reference to "the existing statutory and policy frame work", there is no indication that the Board gave any consideration to these issues. The Board reasons are devoid of any discussions of the Planning Act, Provincial Policy Statements and the City's Official Plan as they apply to these lands." Appeal Book and Compendium, Reasons of Justice Lax, Tab 2, paras. 16, 17, 20, pp. 12, 13 61. Court should find the Board erred in failing to apply and/or properly Therefore, this interpret sections 1, 2 and 3 o-f the Planning Act.

Question (ii): Did the Board err in approving a predominantly residential use of the lands in issue contrary to the City's Official Plan Policies, Zoning By-law and Provincial Policies? 62.

Part III of the Planning Act contains the statutory provisions that govern Official Plans

and their contents

An Official Plan is required to contain goals, objectives and policies

established primarily to manage and direct physical change and the effects on the social,



20 economic and natural environment of the municipality or part of it. Section 24 of the Planning Act gives the Official Plan a form of statutory impact in that it states that despite any other general or special 'Act where an Official Plan is in effect, no public work shall be imdertaken and no by-law shall be passed that is not in conformity with the Official Plan. 63.

Section 24(1) of the Planning Act provides: "Public works and by-laws to conform with plan -. Despite any other general or special Act, where an Official Plan is in effect, no public work shall be undertaken and, except as provided in subsection (2) and (4), no by-law shall be passed for any purpose that does not conform therewith."

64.

The Planning Act requires that all planning applications, especially zoning by-law

amendments must conform to the Official Plan as a means of ensuring that the practical mechanisms of planning approval are consistent with the planning objective of the community. It is the function of the Board in considering whether to approve a by-law to make sure that the by-law conforms with the Official Plan, in so doing, the Board should give the Official Plan a broad liberal interpretation with a view to furthering its policy objectives. 3414574 Canada Inc. v. Niagara Falls (City) (2001), 42 OM.B.R. 248 (0.M.B.), at p. 252 65.

Further, the importance of the City's Official Plan policies are highlighted in the

Province's policy statements.. If the official plan policies are ignored, as occurred here, the Provincial policy statements are also being ignored which is a reviewable error of law. 66.

The Board's function in dealing with an Official Plan is much different than its function

in determining other matters. . An official plan rises above the level of detailed regulation and establishes the broad principles that are to govern the City's land use planning generally. The Board failed to consider whether the proposed development is contrary to the broad policies supportive of a healthy mix of uses. Goidlist Maxine Holdings Lta. v City of Barrie, 30 M B R 56(0 M B)

21 67

Under the City's Official Plan and Secondary Plan, the Tnangle area is designated

"Mixed Industrial-Residential ("MIR"). This designation provides for a mix of a wide range of residential uses, community services and facilities, street related retail and service uses and industrial uses which are environmentally compatible with adjacent and neighbourhood uses. In the MIR area, the Official Plan permits wholly residential development at a density of up to 2 times the lot area and wholly industrial development at a density of up to 3 times the lot area. For buildings with a mix of both, only two-thirds may be residential and the remaining one-third must be non-residential, if built out to the maximum density. In other words, an applicant can achieve the maximum permissible density of 3 times the lot area only by providing one-third of the space for employment uses.

With the exception of some frontage on Queen street, the

Sudbury lands are zoned industrial (employment). Appeal Book and Compendium, Reasons of Justice Lax, Tab 2, para. 8, pp. 9-10 68.

The Board Decision sets out form, massing and heights of the developments and left the

final density figures to be provided in the final By-law amendments resulting from the Decision City planning staff has calculated the densities that result from the Decision to be in the range of 2.32 to 4.90 times the area of the lot comprised of between 95.1 to 97.21 per cent residential development The Sudbury project was approved at a total density of between 2.28 and 2.78 with a residential density of between 97.68% and 97.2 1% and a non-residential component ranging from 0.05% to 0.08%. The precise density depends on the location of parkland dedication. Appeal Book and Compendium, Reasons of Justice Lax, Tab 2, para. 10, p. 10 69.

However, the Board in its decision does not give any express planning policy rationale,

for not applying the existing in force density of residential at 2 times coverage and nonresidential at 1 times coverage in the City's Official Plan and zoning by-law. The result is a conversion of an area designated as MIR to one that is residential.

70.

Justice Lax made this conclusion on the leave motion: [17]

The Board Reasons are devoid of any discussion of the Planning Act, Provincial

Policy Statements and the City's Official Plan as they apply to these lands The Board is



22 critical of the City for not coming up with a specific policy under the new Official Plan for quantifiable employment uses on a site-by-site basis in the Triangle although the Official Plan that the Board determined would apply to the lands sets out the appropriate mix of residential and non-residential uses. The 2 to 1 ratio density is a quantifiable standard Despite this the Board approved projects that maintain only a fractional nonresidential component on the lands. Appeal Book and Compendium, Reasons of Justice Lax, Tab 2, para 17, p 12 71.

Further, the Board proceeded with the hearing in spite of the fact that there was an area

study underway to determine the appropriate land use and designations and densities. This is in contravention of the City's existing Official Plan policies which precluded Council and the Board, on appeal, as a surrogate Council from approving and enacting amendments to the City's Official Plan and Zoning By-law until the recommendations from the area study that had been adopted Council. Appeal Book and Compendium, City of Toronto Official Plan, 1994, Tab 5, Re Mississauga Golfand Country Club Ltd, [19631 2 0 R 625 (C A), atp 630 72.

In summary, the Board was required to consider the City's ability to_achieve planning

goals relating to employment and economic development both set by the Province and itself under its official plan policies, but failed to do so Further, the Board erred in not providing any planning rationale in granting approval of residential density in excess of the in force official plan and zoning by-law provisions and non-residential density at a fraction of the in force nonresidential density. Therefore, this Court should find that the Board erred in approving a predominantly residential use of the lands in issue contrary to the City's Official Plan Policies, Zoning By-law and Provincial Policies.

Question (iii): Did the Board err in its interpretation of relevant Provincial Policies that promote employment and economic development? 73

As noted above, section 3 of the Planning Act provides that the Minister may issue

23 provincial policy statements on matters relating to municipal planrnng that are of provincial interest, and that all decisions of municipalities and the Board, among others, shall be consistent with those policy statements See paragraphs 11-15 and 54-62 above 74.

There are provincial policy statements that speak expressly to promoting employment

and ensunng effective economic growth and development in the Province and its municipalities The Board fails to giYe any consideration whatsoever to these statements. The 2005 Provincial Policy Statements were in evidence before the Board They apply to the Sudbury development application which was received on or after March 1, 2005 Appeal Book and Compendium, Council Report, Request for Direction - 150 Sudbury, Tab 16, p.347 Appeal Book and Compendium, 2005 Provincial Policy Statement, Tab 13 75.

Therefore, it is the City's position that the Board erred in not addressing or interpreting

the provincial plan policies which spoke to the matter of generating employment The Board erred in approving the proposed development which was not "consistent with" relevant Provincial Policy Statements in contravention of section 3 of the Planning Act

Question (iv): Did the Board err in its interpretation and application of the City's Official Plan Policies? 76.

For the reasons set out above under question (ii), it is the City's position that the Board

erred in not expressly applying or interpreting the City's existing in force Official Plan policies governing residential and non-residential uses on the Sudbury land. The Board further erred in ignoring thein force Official Plan policies without any express planning rationale for doing so, contrary to section 24 of the Planning Act.

Question (v): Did the Board err in concluding that the development proposals are in the public interest? At the core77.of a Board's decision-making in planning cases is, at all times, the detennination of "public interest". The "public interest" is different from the private interests of



24 the parties, pnvate interests may coincide with or further the "public interest"

The Board failed

to provide any rationale or analysis to support its conclusion that this project was in the "public interest". Re Cloverdale Shopping Centre Ltd. et aL and Township of Etobicokeet aL, [1966] 2 O.R. 439 (C.A.), at pp. 450-453 Matakovic v. Sandwich South (Township) Com,nittee ofAdjustment (1994), 30 O.M.B.R. 299 (O.M.B.) Appeal Book and Compendium, Reasons of Justice Lax, Tab 2, para. 20, p. 13 78.

The Board erred in that it did not adequately address at all the issue of "public interest".

There is a bald statement in the Board's decision that the proposed development is in the "public interest" without reference to any evidentiary basis for this conclusion and no planning rationale to support it. In fact, it is contrary to the "public interest" if the decision is seen as diminishing employment opportunities which the Board was required to address under sections 2 and 3 of the Planning Act and in applying the existing Official Plan policies of the City. 79

Therefore, the Board erred in concluding that the proposed development was in the

"public interest".

Conclusion

80.

In summary, the City submits that whether this Court reviews the decision on a standard

of correctness or reasonableness, the appeal should be granted. When one examines the decision as a whole, the errors of the Board are so serious and extensive that it requires a new hearing

Part IV - ORDER REQUESTED 81.

Based upontheabove submissiOns, it is respectfully submitted that the Board's decision

is both incorrect and unreasonable warranting an order of the Divisional Court to have a rehearing before the Board by a panel differently constituted.



25

ALL 0-F WHICH IS RESPECTFULLY SUBMITTED this 12th day of September, 2007.

of counsel for the Moving Party, City of Toronto

of counsel for t1

oving Party, City of Toronto

Thomas H. Wall LSUC #21 171P Tel: (416) 392-1561 Fax: (416)392-1199 Christina Pangos LSUC #52345G Tel: (416) 392-1118 Fax: (416) 392-1199



26 Divisional Court File No. 79/07 ONTARIO SUPERIOR COURT OF JUSTICE (DIVISIONAL COURT) BETWEEN: CITY OF TORONTO Applicant - and -

2059946 ONTARIO LIMITED, VERDIROC DEVELOPMENT CORPORATION LANDMARK DEVELOPMENTS INC., WESTSIDE LOFTS AND TOWNS INC., EMBASSY RESIDENCES INC., ACTIVE 18 COMMUNITY ASSOCIATION, ABELL INVESTMENTS LIMITED CANADIAN NATIONAL RAILWAY COMPANY and GREATER TORONTO TRANSIT AUTHORITY Respondents

CERTIFICATE I estimate that 2.5 hours will be needed for my oral argument of the appeal,-not including reply. An order under subrule 61.09(2) (original records and exhibits) is not required. DATED AT Toronto, Ontario, this

day of September, 2007. Thomas H. Wall CITY SOLICITOR'S OFFICE City ofToronto Metro Hall, 55 John Street 26th Floor, Station 1260 Toronto, ON M5V 3C6 Thomas H. Wall Tel.: (416) 392-1561 Fax: (416) 392-1199 L.S.U.C. NO. 21171P

Solicitors for the Appellant, City of Toronto



27 SCHEDULE "A" (A)

Ontario Municipal BoardAct, R.S.0. 1990. c. 0.28

Appeal 96. (1) Subject to the provisions of Part IV, an appeal lies from the Board to the Divisional Court, withJeave of the Divisional Court, on a question of law. Decisions of Board to be final 96. (4) Save as provided in this section and in sections 43 and 95, (a)

every decision or order of the Board is final; and

(b)

no order, decision or proceeding of the Board shall be questioned or reviewed, restrained or removed by prohibition, injunction, certiorari or any other process or proceeding in any court.

(B)

PlanninjAct, R.S.0. 1990, c. P.13

Purposes 1.1

The purposes of this Act are, (a)

to. promote sustainable economic development in a healthy natural environment within the policy and by the means provided under this Act;

(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;

(d)

to provide for planning processes that are fair by making them open, accessible, timely and efficient;

(e)

to encourage co-operation and co-ordination among various interests;

(f)

to recognize the decision-making authority and accountability of municipal councils in planning. 1994, c. 23, s. 4.



28 Provincial interest 2.

The Minister, the council of a municipality, a local board, a planning board and the Municipal Board, in carrying out their responsibilities under this Act,. shall have regard to, among other matters, matters of provincial interest such as, (a)

the protection of ecological systems, including natural areas, features and functions;

(b)

the protection of the agricultural resources of the Province;

(c)

the conservation and management of natural resources and the mineral resource base;

(d)

the conservation of features of significant architectural, cultural, historical, archaeological or scientific interest;

(e)

the supply, efficient use and conservation of energy and water;

(

the adequate provision and efficient use of communication,

ansportation, sewage

and water services and waste management systems, (g)

the minimization of waste,

(h)

the orderly development of safe and healthy communities;

(h 1)

the accessibility for persons with disabilities to all facilities, services and matters to which this Act applies;

-

(i)

the adequate provision and distribution of educational, health, social, cultural and recreational facilities;

)

the adequate provision of a full range of housing;

(k)

the adequate provision of employment opportunities;

(1)

the protection of the financial and economic well-being of the Province and its municipalities;

(m)

the co-ordination of planning activities of public bodies;

(n)

the resolution of planning conflicts involving public and private interests;

(o)

the protection of public health and safety;

(p)

the appropriate location of growth and development. 1994, c. 23, s. 5; 1996, c. 4, s. 2; 2OO, c. 32, s. 31(1).



29 Policy statements 3. (1) The Minister, or the Minister together with any other minister of the Crown, may from time to time issue policy statements that have been approved by the Lieutenant Governor in Council on matters relating to municipal planning that in the opinion of the Minister are of provincial interest. R.S.O. 1990, c. P.13, s. 3 (1).

Public works and by-laws to conform with plan 24.( 1) Despite any other general or special Act, where an official plan is in effect, no public work shall be undertaken and, except as provided in subsections (2) and (4), no by-law shall be passed for any purpose that does not conform therewith. R.S.O. 1990, c. P.13, s. 24 (1); 1999, c. 12, Sched. M, s. 24.

(C)

PlanninAct, R.S.O. 1990, c. P.13 - Section 3(5)

AS OF MARCH 1, 2005 Consistency with policy statements 3. (5) 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, shall be consistent with policy statements issued under subsection (1). 2004, c. l8,s.2.

PRIOR TO MARCH 1, 2005 Exercising authority 3-. (5) In exercising any authority that affects a planning matter, 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, shall have regard to policy statements issued under subsection (1). 1996, c. 4, s. 3; 1998, c. 15, Sched. E, s. 27(1).



30 SCHEDULE "B" 3414574 Canada Inc. v. Niagara Falls (City) (2001), 42 O.M.B.R. 248 (O.M.B.)

Campitelli v. Ajax (Town) (2003), 45 O.M.B.R. 165 (O.M.B.)

Canada (Director of Investigation and Research, Competition Act) v. Southam Inc. (1997), 144 D.L.R. (4th) 1 (S.C.C.) City of Mississauga v. Erin Mills Corporation et al. (2004), 71 O.R. (3d) 397 (C.A.)

Concerned Citizens of King (Township) v. King (Township), [2000] O.J. No. 3517 (Div. Ct.)

London (City) v. Ayerswood Development Corp. (2002), 34 M.P.L.R (3d) 1 (Ont. C.A.)

Material Handling Problem Solvers Inc v Ontario (Ministry of Municipal Affairs and Housing), (2002), 44 O.M.B.R. 364 (O.M.B.) Matakovic v. Sandwich South (Township) Committee of Adjustment (1994), 30 O.M.B.R. 299 -

(O.M.B.)

Maxine Holdings Ltd. v. City of Barrie, 3 O.M.B.R. 56 (O.M.B.)

Re City of London Official Plan Amendment No. 212 (2001), 42 O.M.B.R. 468 (O.M.B.)

Re Cloverdale Shopping Centre Ltd. et al. and Township of Etobicoke et aL, [1966] 2 O.R. 439 (C.A.) Re Mississauga Golf and Country Club Ltd., [1963] 2 O.R. 625 (C.A.) Toronto (City) v. Goldlist Properties Inc., [2003] O.J. No. 3931 (CA.) Victoria Park Homes Inc. v. Orillia (City) (1998), 37 O.M.B.R. 146 (O.M.B.) Vincent v. DeGasperis, [2005] O.J. No. 2890 (Div. Ct.)