May 2016
PFD | Municipal

A municipality cannot seek growth fees under development agreements

By Joanne Côté Lawyer

On March 16, 2016, in Association provinciale des constructeurs d'habitations du Québec (A.P.C.H.Q.) région de l'Outaouais inc. v. Gatineau (Ville de), 2016 QCCS 1124, the Honourable Chantal Chatelain of the Superior Court of Québec handed down a ruling on the validity of the provisions of a municipal regulation of the city of Gatineau on development agreements and the charging of growth fees.

In a difficult financial situation and upon the recommendation of its long-term financial planning committee, Ville de Gatineau amended its regulation on development agreements and the obligation to pay out growth fees under city protocols. The fees aimed to fund future expenses such as sewage, drinking water supply, public transit (including bicycle paths) and park development costs.

In light of the regulatory provisions, the plaintiffs raised two specific grounds to challenge the fees: the unconstitutionality of certain sections of the Act respecting land use planning and development and the fact that the city does not have the authority to enact such regulations.

Justice Chatelain rejected the claim of unconstitutionality but upheld the action based on Ville de Gatineau's lack of authority to seek growth fees under a regulation on development agreements. She ordered Ville de Gatineau to reimburse the amounts paid by developers, which total $4 337 761 (bearing interest).

Finally, it is important to note that, on December 1, 2015, Bill 83 to amend various municipal-related legislative provisions concerning such matters as political financing was tabled in the National Assembly. It will amend the Act respecting land use planning and development by introducing the option for a municipality to require growth fees under development agreements. The bill is currently being considered by members.