The Mining and Lands Commissioner

Le Commissaire aux mines et aux terres

File No. CA 002-15

Wednesday, the 30th day of November, 2016.

M. Orr
Deputy Mining and Lands Commissioner

The Conservation Authorities Act

In the matter of

An appeal to the Mining and Lands Commissioner pursuant to subsection 27(8) of the Conservation Authorities Act by the City of Hamilton, against the 2015 General Levy Assessment of the Niagara Peninsula Conservation Authority, dated the 19th day of February, 2015;

Between:

City of Hamilton
Appellant

and

The Regional Municipality of Niagara
And Haldimand County
Applicants For Party Status

and

Niagara Peninsula Conservation Authority
Respondent

Procedural Order

Whereas this appeal was filed with this tribunal on the 13th day of March, 2015;

And whereas applications for party status were filed by counsel for the Regional Municipality of Niagara and for Haldimand County with the tribunal and with the appellant and the respondent on the 8th day of July, 2016;

Upon reading the documentation filed;

  1. It is ordered that the Region of Niagara and Haldimand County be added as parties to the City of Hamilton proceeding.
  2. It is further ordered that no costs shall be payable by any party to this matter.

Dated this 30th day of November, 2016.

M. Orr
Deputy Mining and Lands Commissioner

File No. CA 002-15

M. Orr
Deputy Mining and Lands Commissioner

The Conservation Authorities Act

In the matter of

An appeal to the Mining and Lands Commissioner pursuant to subsection 27(8) of the Conservation Authorities Act by the City of Hamilton, against the 2015 General Levy Assessment of the Niagara Peninsula Conservation Authority, dated the 19th day of February, 2015;

Between:

City of Hamilton
Appellant

and

The Regional Municipality of Niagara
And Haldimand County
Applicants For Party Status

and

Niagara Peninsula Conservation Authority
Respondent

Reasons

Background

  • [1] On February 26, 2015, the City of Hamilton ("Hamilton") received notice of the 2015 levy being charged against it by the Niagara Peninsula Conservation Authority (the "NPCA") pursuant to the Conservation Authorities Act, R.S.O. 1990, C. 27 (the "CAA"). The notice stated that Hamilton was required to pay a total of $1,317,020.00 to the NPCA. A payment schedule was included setting out four equal payments of $329,255.00 to be made on April 20th, June 29th, August 4th and September 28th, 2015.
  • [2] Hamilton appealed the levy to the Mining and Lands Commissioner pursuant to subsection 27(8) of the CAA.
  • [03] In opposing the levy Hamilton states "that the 2015 Levy ought to have been based on apportionment ratios set out in a long-standing agreement between the City, the NPCA, the Region of Niagara and Haldimand; that, in any event, the 2015 Levy has been incorrectly calculated by the NPCA; and that the 2015 levy is not appropriate in the circumstances".
  • [04] Pursuant to subsection 27(10), the parties to an appeal are the municipality, the authority and "any other person added as a party by the Commissioner".
  • [05] The County of Haldimand ("Haldimand") and the Region of Niagara ("Niagara") now bring these motions to be made parties to Hamilton's appeal, claiming that a decision by the Mining and Lands Commissioner may impact levy amounts charged to them by the NPCA. Both Niagara and Haldimand participated in mediation together with the City of Hamilton and the NPCA. The NPCA does not object to the motions for party status. The City of Hamilton opposes the motions.
  • [06] The CAA provides the legislative context for the establishment of conservation authorities in the province. Section 20 sets out the objects of an authority, namely to "establish and undertake, in the area over which it has jurisdiction, a program designed to further the conservation, restoration, development and management of natural resources other than gas, oil, coal and minerals."
  • [07] Section 21 gives an authority the power to, amongst other things, "determine the proportion of the total benefit afforded to all the participating municipalities that is afforded to each of them" and "to collaborate and enter into agreements with… municipal councils…."
  • [08] Section 27 of the CAA enables conservation authorities to calculate maintenance and administration costs and apportion those costs to participating municipalities. Maintenance costs are apportioned (subject to subsection 27(16)) according to the "the benefit derived or to be derived by each municipality". Administration costs are apportioned (subject to the same subsection) after being determined by the authority. Subsection 27(16) states that the Lieutenant Governor may make regulations governing the nature and amount of the levies made by authorities under Section 27. The Lieutenant Governor has made such a regulation and it is Ontario Regulation 670/00, described more fully below.
  • [09] Under section 1 of the CAA a participating municipality is defined as "a municipality that is designated by or under this Act as a participating municipality". For the purposes of these motions, no one disputes that the City of Hamilton, the Region of Niagara and Haldimand County are participating municipalities over which the NPCA has jurisdiction under the CAA.
  • [10] In its appeal, Hamilton alleges that amalgamation had an effect on the apportionment of the NPCA levies. Amalgamation occurred on January 1, 2001, creating the new City of Hamilton and effectively disposing of the "old" Region of Hamilton-Wentworth. Hamilton says that amalgamation resulted in it being under the jurisdiction of four conservation authorities. Hamilton alleges that amalgamation presented certain challenges as far as the apportionment of levies was concerned but that, for the period 2004-2014, an agreement was in place to deal with apportionment ratios, such agreement having been made between "the City, the NPCA, the Region of Niagara and Haldimand".

The issue

  • [11] Should Haldimand County and Niagara Region be made parties to the appeal brought by the City of Hamilton under subsection 27(8) of the CAA?
  • [12] If the answer to the previous question is "yes", what limits or restrictions, if any, should be imposed on Haldimand County and Niagara Region as parties to the appeal?

The positions of the parties

(a) The moving parties: Regional Municipality of Niagara and Haldimand County

  • [13] Niagara bases it request to be added as a party to the appeal partly on its contention that there was no agreement regarding the apportionment of levies. A finding in Hamilton's favor would support Hamilton's argument that the levy amount charged to it by the NPCA is incorrect and that a lesser amount should be charged. This would result in an increased levy being imposed on Niagara.
  • [14] In addition, Niagara does not agree with Hamilton's alternative argument that the NPCA's calculations under the regulation are incorrect. Niagara contends that Hamilton's interpretation of the regulation has never been applied in the past and that, in fact, it would conflict with the CAA.
  • [15] Niagara claims a direct financial interest in the issues to be determined at the appeal and contends that it could be held "responsible for an additional amount in excess of $900,000.00 for the 2015 year alone".
  • [16] Niagara also disputes Hamilton's treatment of assessment values regarding lands not situated within the NPCA watershed. According to Niagara, Hamilton's interpretation is contrary to the CAA and would have a negative impact on Niagara's fiscal position.
  • [17] In support of its position to be made a party to the appeal, Niagara refers to subsection 27(10) of the CAA as well as Rule 13.01 of the Rules of Civil Procedure. In Russell v. TRCA the Commissioner held that Rule 13.01 was applicable to a motion for party status, and that a person seeking party status would have to show a "vital or legitimate interest in the proceeding".
  • [18] Niagara, along with Hamilton, Haldimand, and the NPCA participated in mediation efforts in early 2016. Niagara contends that being a party to the mediation created an expectation on its part that it would be a party to any appeal brought by one or more of the participating municipalities.
  • [19] Niagara is also concerned that Hamilton will call at least one witness to testify as to past dealings with the municipalities, "various agreements reached over the years concerning the levy apportionment ratio" and the reason for these agreements. Niagara argues that there is no agreement with respect to the apportionment of the NPCA levies. It has no "actual knowledge that the apportionment ratios applied by the NPCA had in any way deviated from the assessment ratio model under Section 2(1)(b) of the Regulation 670/00". Niagara contends that what Hamilton's witness has to say will "speak to the very dealings of the NPCA with Niagara and others". Niagara has an interest in ensuring that its position is fully and accurately represented at the appeal as its rights and interests are at stake. Niagara therefore has a direct interest in the proceedings.
  • [20] Niagara contends that it meets all of the grounds listed in Rule 13.01 notwithstanding that they are not meant to be cumulative. It claims that it has an interest in the subject matter of the appeal; it may be adversely affected by any decision to alter the levies; and it and other municipalities share an interest in questions of both law and fact that relate to the appeal.
  • [21] According to Niagara, granting it party status will not unduly lengthen the appeal and the Commissioner will be provided with the evidence and arguments of a party that has a direct interest in the outcome of the proceedings. In addition, Niagara agrees to be bound by scheduling dates set by the Tribunal and expects to call only one witness to speak to assertions regarding agreements and the manner in which ratios have been calculated in the past.
  • [22] Finally, Niagara argues that it would not be reasonable to expect that a party directly affected by the outcome should have to rely on the arguments and submissions of others to make its case.
  • [23] Niagara contends that while the NPCA has provided its consent to the motion application, Hamilton has not. Indeed, Hamilton has not provided any reason or basis for alleging prejudice arising out of the requests for party status from Niagara and Haldimand except to say that the hearing may be unduly delayed. Niagara does not agree with this contention and expects to work within the time frames set by the Commissioner.
  • [24] Haldimand's interests are similar to Niagara's interests in the subject matter, except for the amount of money involved. It has an additional concern in that findings made during the appeal may have a "significant impact on [its] contributions to the other conservation authorities that fall within its boundaries". Haldimand says that it contributes to two other authorities. As stated in the affidavit of its General Counsel, Mr. Woodward B. McKaig, "[t]he interpretation of the apportionment formula provisions of Section 2(1) will impact Haldimand's contribution to the Respondent Conservation Authority and to the other Conservation Authorities within Haldimand's boundaries". Haldimand also raises the possibility of being left out of any settlement of the appeal that may affect their interest. Like Niagara, Haldimand intends to call one witness.

(b) Responding party's position: City of Hamilton

  • [25] In reply to the motions brought by Haldimand and Niagara, Hamilton submitted a letter dated August 12, 2016 to the Commissioner. The following points were set out in that letter:
  1. Haldimand and Niagara do not set out any unique facts or arguments but rather support the arguments and position of the NPCA to the appeal. Hamilton elaborated on the notion of whether an applicant for party status could make a "useful contribution" to the matters at issue on appeal, referring to the Divisional Court's approval of the test applied by the Mining and Lands Commissioner's to a motion for party status in McFadyen v. Mining and Lands Commissioner footnote 1 [1] . The court in McFadyen found that the Commissioner's decision that Rule 13.01 could be of assistance "so long as it was not limited to the test applied in court proceedings" was an approach "consistently adopted" by Ontario courts. The question as to whether the applicant for party status could make a "useful contribution" was asked by the Commissioner in McFadyen and the approach adopted mirrored the approach taken by the Court of Appeal in Regional Municipality of Peel v. Great Atlantic & Pacific Co. of Canada (1990), 70 O.R. (2d) 164 (C.A.) at paragraph ten. The court there said "in the end … the matters to be considered are the nature of the case, the issues which arise and the likelihood of the applicant being able to make a useful contribution to the resolution of the appeal without causing injustice to the immediate parties." The Commissioner's refusal to grant party status to the applicant in McFadyen was upheld by the Divisional Court.
  2. Hamilton alleges that the submissions made by Haldimand and Niagara are identical to those made by the NPCA. Repeating the issues put forward by the main parties is unacceptable and would lead to an increase in the magnitude of the hearing in terms of time, cost and complexity.
  3. Hamilton argues that "there is a difference between having an interest in law and being interested in the outcome of the proceeding". Both applicants are only interested in the outcome and this on its own is not sufficient grounds to add them as parties. The Conservation Authorities Act could have been worded to add all participating municipalities to a section 27(8) appeal but was not. Hamilton contends that neither applicant has identified any legal interest "that is separate and apart from the NPCA's interests and this is the proper subject of an appeal before the Commissioner". Hamilton also argues that the past use of the "agreement formula" is "unappealable" at this point and irrelevant to the issues before the Commissioner. "Debating what did or did not happen in 2001-2014 is not helpful to the resolving the issues…." This includes debating whether or not there was an agreement in place during that time period.
  4. Hamilton sees no merit in the applicants' position that they had a reasonable expectation arising out of the mediation process that they would be accorded party status should the mediation not succeed. There is nothing in the conduct of the Commissioner's office to support this contention. Binding the Commissioner by "what can best be described as an informal "without prejudice" mediation before the Registrar… would frankly fetter the discretion of the Commissioner."
  • [26] Hamilton concludes its letter by stating that, were the Commissioner prepared to add the applicants as parties under 27(10) of the Act, Hamilton was prepared to "consent" to their being added "on condition that will each be responsible for the own full legal costs related to the proceeding".

The law as it relates to adding parties

Conservation Authorities Act

  • [27] Conservation authorities are authorized under the CAA to look to participating municipalities for certain funds.
  • [28] Section 27 of the Act, together with Ontario Regulation 670/00, sets out a process whereby maintenance and administration costs are calculated by an authority for the succeeding year and then apportioned to "participating municipalities".
  • [29] Maintenance costs (Subsection 27(2) of the Act) are apportioned on the basis of the benefit derived or to be derived by each participating municipality determined by agreement among the authority and the participating municipalities or by calculating the ratio that each participating municipality's modified assessment bears to the total authority's modified assessment.
  • [30] Administration costs (Subsection 27(3) of the Act) are apportioned on the basis of the ratio that each participating municipality's modified assessment bears to the total authority's modified assessment.
  • [31]Regulation 670/00 sets out how maintenance and administrative costs are to be apportioned. Section 2 states that:
  1. (1)In determining the levy payable by a participating municipality to an authority for maintenance costs pursuant to subsection 27(2) of the Act, the authority shall apportion such costs to the participating municipalities on the basis of the benefit derived or to be derived by each participating municipality determined,
    1. by agreement among the authority and the participating municipalities; or
    2. by calculating the ratio that each participating municipality's modified assessment bears to the total authority's modified assessment. O.Reg. 670/00, s. 2(1).
  • [32] Section 3 of the Regulation sets out the rules that apply for the purposes of section 2 and stipulates the method for calculating a participating municipality's modified assessment. At one point in the overall process the regulation requires the application of factors set out in a chart. These factors represent a value given to various property classes that might be found within a municipality. For example, a commercial property class has a factor of 2.1. Farmlands are given a factor of 0.25. An authority's total modified assessment is comprised of the sum of all of the participating municipalities' modified assessments for that authority.
  • [33] Costs are apportioned to "participating municipalities" – a defined term (in its singular) meaning "a municipality that is designated by or under this Act as a participating municipality".
  • [34] The apportioned amount is levied against the participating municipalities and is "collected by the municipality in the same manner as municipal taxes for general purposes". [Subsection 27(4)]
  • [35] Under subsection 27(7) an authority is given the power to enforce payment against any participating municipality of any portion of the maintenance costs or administration costs levied against the municipality as a "debt due by the municipality to the authority".
  • [36] A municipality may appeal the levy to the Mining and Lands Commissioner under subsection 27(8) of the CAA.
  • [37] Under Subsection 27(10), "[t]he parties to the appeal are the municipality, the authority and any other person added as a party by the Commissioner." (Emphasis added)
  • [38] Subsection 27(12) of the CAA describes the matters to be considered at a hearing, namely:
  1. whether the levy complies with this section and the regulations made under subsection (16); and (b) whether the levy is otherwise appropriate."
  • [39] Under Subsection 27(13), the Commissioner "may, by order, confirm, rescind or vary the amount of the levy and may order the authority or the municipality to pay any amount owing as a result."
  • [40] There is no appeal from the decision of the Commissioner. [Subsection 27(14)]
  • [41] Rule 13.01 of the Rules of Civil Procedure provides that:
  1. A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,
    1. an interest in the subject matter of the proceeding;
    2. that the person may be adversely affected by a judgment in the proceeding; or
    3. that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding. R.R.O. 1990, Reg. 194, r.13.01(1).
  2. On the motion, the court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just. R.R.O. 1990, Reg. 194, r.13.01(2).

Statutory Powers Procedure Act

  • [42] Section 5 provides that "[t]he parties to an administrative proceeding shall be the persons specified as parties by or under the statue under which the proceeding arises or, if not so specified, persons entitled by law to be parties to the proceeding."
  • [43] Subsection 27(10) of the CAA – already referred to above – specifies the persons who are parties to a hearing under Section 27.

Analysis and findings

  • [44] Decisions regarding the application of Rule 13.01 were provided and these will be discussed below.
  • [45] Niagara relied on the case of Russell v. Toronto and Region Conservation Authority [2007] File No. CA 003-05 (unreported) as well as the decision in Goldentuler Estate v. Crosbie, [2016] O.J. No. 674.
  • [46] Hamilton referred to McFadyen v. Mining and Lands Commissioner, 2007 CanLII 54672 (ON SCDC).
  • [47] The case of Russell deals with an application for party status made by neighbours of a landowner who was appealing a conservation authority decision under Section 28 of the CAA. The Mining and Lands Commissioner refused to grant them party status. The case of McFadyen deals with the appeal from that decision. The Mining and Lands Commissioner's decision was upheld.
  • [48] Of the three cases provided, I found the Goldentuler case to be most useful in providing the clearest approach to the use of Rule 13.01 and I have relied on it for the purposes of this decision. What flows from the Goldentuler case is that the conditions set out in Rule 13.01(1) are disjunctive and not conjunctive; that if the court finds that a party falls within one of the conditions then it must turn to Rule 13.01(2) and "consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to [the] proceeding. If the court finds that the intervention will not unduly delay or prejudice, the court may add the party requesting to be intervened as a party to the proceeding and make such order as is just." footnote 2 [2]
  • [49] To summarize then, the Mining and Lands Commissioner has authority under the CAA to add any other person as a party to an appeal brought under subsection 27(8).
  • [50] In order to be granted party status, an applicant need only meet one of the criteria set out in Rule 13.01(1). If an applicant does meet one of the conditions, then the Commissioner is to consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding (Rule 13.01(2).
  • [51] Although not determinative of the issue, I find that Niagara and Haldimand both meet all three requirements set out in Rule 13.01.
  • [52] The CAA specifies the matters to be considered at a hearing under Section 27. They are: whether a levy complies with Section 27 and the regulations made under Subsection 27(16), and whether the levy is otherwise appropriate. This is the subject matter of the appeal brought by Hamilton.
  • [53] This case deals with the calculation and apportionment of certain costs related to the work carried out by the NPCA under the CAA. Costs are apportioned amongst participating municipalities under the NPCA's jurisdiction. The participating municipalities in this instance are Niagara, Haldimand and Hamilton.
  • [54] The applicants have indicated (and this is undisputed) that when one municipality's share decreases (or vice versa) another's may be affected.
  • [55] I conclude that the participating municipalities in this instance have interests that intersect and that these interests have the potential to conflict with one another. I am of the view that Niagara and Haldimand, as municipalities sharing the costs of the NPCA with Hamilton, have an interest in the subject matter of the hearing which deals with the levy charged to Hamilton.
  • [56] Hamilton contends there was "a long-standing agreement between the City, the NPCA, the Region of Niagara and Haldimand". In response, the NPCA alleges "that there has never been an agreement between NPCA and its member municipalities to apportion levies otherwise than in accordance with Section 2(1)(b) of Reg. 670/00."
  • [57] The existence of an agreement that deals with the sharing of costs by the applicants and Hamilton under the jurisdiction of the NPCA is a question of fact for the hearing. Hamilton alleges that Niagara and Haldimand are parties to such an agreement. I am of the view that the applicants have a direct interest in the outcome of the hearing into this question of fact.
  • [58] Another question follows from this. If an agreement is found to exist and it is determined that the agreement addresses the apportionment of levies, then the question has to be asked and answered as to whether the impugned levy complies with the Act and whether it is "otherwise appropriate" pursuant to subsection 27(12). Again, the interests of the applicants could be adversely affected by a decision regarding these questions. This is a question of mixed law and fact that the applicants have in common with Hamilton and the NPCA.
  • [59] Hamilton alternatively alleges that the 2015 levy has been incorrectly calculated in that the NPCA has not applied the legislation correctly. Hamilton further alleges that the NPCA's valuation methods are, for various reasons, inaccurate and have been rejected in the past. The tribunal is satisfied that any changes to the calculation of the levy imposed on the City of Hamilton could adversely affect the interests of the applicants to the motion should they be required to make up any difference.
  • [60] The City of Hamilton points to the fact that the Region of Niagara and Haldimand County both support the NPCA's position and, as a result, their input would be repetitious and not a "useful contribution". I am of the view that while the applicants may support the NPCA's position at the hearing, they approach the issues from different perspectives. Indeed, it would be unfair to put them in a position where their case is made by the very organization that charges them a levy each year. The applicants have already made assurances that they will work to avoid duplication of evidence.
  • [61] I am also of the view that their evidentiary contributions may prove useful in terms of assessing credibility and determining facts. I do not agree that this is something that should be left to the NPCA.
  • [62] The City of Hamilton contends that had the intent of the CAA been to include all participating municipalities in an appeal under subsection 27(8), it would have so specified. I do not believe that allowing the applicants in this instance to be made parties sets a precedent or is contrary to the intent of the CAA. As Hamilton has pointed out, subsection 27(10) allows for the adding of parties by the Commissioner. Each appeal has to be approached in a singular fashion. This particular appeal has raised questions that go to the core of apportioning the NPCA's costs under the CAA. Any changes regarding the calculations for the levy, its correctness and its appropriateness are of serious interest to the applicants - the reason being that the levies charged to them may be affected by the outcome of the appeal. It makes sense to add these parties at this stage. One of the purposes of rules adding parties is to avoid "multiplicity of proceedings and risk of inconsistent results". footnote 3 [3]
  • [63] I am prepared to grant the applicants full party status. I do not agree that, in doing so, the scope of the appeal will be improperly broadened. I cannot find any basis for concluding that adding the applicants as full parties would unduly delay or be disruptive or increase the magnitude of the hearing. The hearing has not yet begun and indeed, both applicants have indicated that they will work with scheduling dates for the hearing and the filing of evidence.
  • [64] The outcome of the appeal may have a direct impact on the applicants and they should be awarded the same rights and responsibilities as the City of Hamilton. To that end, they will be liable for costs and may be entitled to costs.

Costs

  • [65] There will be no order as to the payment of costs in this motion. Each party shall bear its own costs as it concerns this motion brought by Niagara and Haldimand. The questions raised are interesting and unusual. The parties are public bodies and their costs are borne by the public in the end. Procedures for this hearing and the appeal, as well as the awarding of costs are governed by the tribunal's procedural rules and the Statutory Powers Procedure Act.

Conclusion

  • [66] The Region of Niagara and Haldimand County are added as parties to the appeal and may file their own responses to the appeal by the City of Hamilton. Dates for filing will be set out in a Supplementary Order to follow the issuance of this Order.