Mississauga Developers Achieve Development Charge Credits

In a recent decision issued by the Ontario Municipal Board, the Erin Mills Development Corporation, Orlando Corporation, Meadowpines Development Corporation and other land developers achieved major development charge credits.

The Municipal Board case involved situations in which Erin Mills, Orlando, Meadowpines and other land developers had paid lot levies in the late 1980s and early 1990s, pursuant to subdivision agreements entered into with the City of Mississauga. The position of the land developers was that these lot levy payments extinguished their obligation to make any further levy or development charge payments to the city. The position of the city was that it had to recognize credits in the amount of the prior lot levy payments, but that after recognizing such credits, it could require the land developers to “top up” their prior levy payments to the city’s new development charge rates.

In its decision issued September 19, 2001, the Municipal Board favoured the land developers’ position. The board found that development charges under the city’s development charge bylaw are a form of lot levy. It further found that a requirement that the developers would pay additional sums (over and above their previous levy payments), prior to the issuance of building permits, constituted in the circumstances a conflict between the city’s new development charge bylaw and the old lot levy agreements. Under the Development Charges Act, 1997, in the event of a conflict between a development charge bylaw and an old lot levy agreement, the agreement prevails. Whether a conflict exists is to be determined having regard for the language of the agreement and, where necessary, the circumstances surrounding the payments thereunder. Accordingly, for lands where lot levies had been previously paid in full, the board recognized a credit in the full amount of any development charges otherwise payable at any future date. There was varying evidence at the hearing as to the amount of the credits in dispute. The amount was, at a minimum, in excess of $5 million.

Erin Mills was represented at the Municipal Board hearing by Mark Noskiewicz of Goodmans LLP. Orlando, Meadowpines and others were represented by Lyn Townsend Renaud. The City of Mississauga was represented by Tom Lederer, Susan Friedman and Ali Ghiassi of Davis & Company.