OHBA Members should be aware of the result of legal proceedings before the Ontario Court of Appeal concerning the use of Interim Control By-Laws (ICBLs) by municipal governments. We are pleased to report that the appellant was successful in appealing the municipality’s use of an ICBL in an inappropriate way and obtained a decision that builders and developers can rely on in any future disputes with municipalities regarding ICBLs. A brief summary of this decision and its potential implications for Ontario builders is set out below.

By way of brief background regarding ICBLs: 

• ICBLs are harsh planning tools that allow a municipality to effectively freeze development for up to 1 year, while they undertake a land use review or study;
• An ICBL can be extended only once and for no more than one year;
• An ICBL can only be appealed by a landowner after the first year; and
• Once an ICBL expires, a second ICBL cannot be passed for a further 3-years (the “3-year cooling off period”).

In the case of Hummel Properties Inc., the municipality enacted a second ICBL on the subject lands in contravention of the 3-year cooling off period. The lower court found that the municipality was acting within its powers, concluding that two ICBLs could apply to the same property if the ICBLs targeted different purposes. The Association intervened to argue that this was an improper expansion of the ICBL power. External legal counsel at Lenczner Slaght successfully argued that the lower court’s decision was wrong. A more detailed summary of the decision is available on their website here.

The decision has some very positive takeaways for our members: 

1. This decision should discourage municipalities from abusing the ICBL power to delay development. The Court of Appeal confirmed that there must be strict compliance with the 3-year cooling off period. There were conflicting cases about whether a second ICBL could apply to the same lands within the 3-year cooling off period if it was enacted for a different purpose. The Court of Appeal’s decision puts that debate to bed – conclusively determining that a second ICBL cannot be enacted during the 3-year cooling off period even if it is for different purposes. If an ICBL is applied to your lands, take note of when the 3-year cooling off period expires and be sure to challenge any subsequent use of ICBLs if it falls within that time period.
2. ICBLs enacted pursuant to S. 38 of the Planning Act must relate to “land use”. If an ICBL is applied to your land, be sure to carefully review the contents to ensure compliance with the legislative provisions. In the Hummel case, the ICBL prohibited subdivision, which the Court of Appeal concluded was not a “land use” under the Planning Act so the ICBL was illegal.
3. There must be strict compliance with the process for passing the ICBL. The Hummel decision also confirms that municipalities must be transparent when passing ICBLs. If an ICBL is applied to your lands and there is insufficient notice or transparency regarding meetings, the ICBL may be illegal.
4. Limitations on Municipal Powers. The Court of Appeal’s decision confirms that Courts must hold municipalities to strict compliance with statutory requirements when it comes to the exercise of powers that affect property rights. If an ICBL is applied to your land, review it with your lawyers to confirm that it is in strict compliance with all applicable legislation.

For more details or information please contact Andrew Parley and Amy Sherrard at Lenczner Slaght.