The 2014 Provincial Policy Statement (the “PPS”) was the first of the Provincial policy documents to introduce a framework of policies and definitions that attempt to make it easier for agricultural operations to remain viable in this time of intense development pressure.

Prior to 2014, in a Prime Agricultural Area, farm operators were subject to the following permitted uses, as per the 2005 Provincial Policy Statement: “agricultural uses, secondary uses and agriculture-related uses.” The Ontario Municipal Board (the “OMB” or the “Board”) was often asked to consider whether a proposed use was “secondary” or not, and further, whether there had to be a nexus between agriculture and the proposed use.

Following an intensive consultation process, the Province amended the 2014 Provincial Policy Statement (the “PPS”) to clarify the permitted uses: “agricultural uses, agriculture-related uses and on-farm diversified uses.” Each are defined:

Agricultural uses means the growing of crops, including nursery, biomass, and horticultural crops; raising of livestock; raising of other animals for food, fur or fibre, including poultry and fish; aquaculture; apiaries; agro-forestry; maple syrup production; and associated on-farm buildings and structures, including, but not limited to livestock facilities, manure storages, value-retaining facilities, and accommodation for full-time farm labour when the size and nature of the operation requires additional employment.

Agriculture-related uses means those farm-related commercial and farm-related industrial uses that are directly related to farm operations in the area, support agriculture, benefit from being in close proximity to farm operations, and provide direct products and/or services to farm operations as a primary activity.

On-farm diversified uses means uses that are secondary to the principal agricultural use of the property, and are limited in area. On-farm diversified uses include, but are not limited to, home occupations, home industries, agri-tourism uses, and uses that provide value-added agricultural products.

In addition, and to promote consistency across the Province, the Ontario Ministry of Food and Rural Affairs (“OMAFRA”) produced a guideline titled, “Guidelines on Permitted Uses in Ontario’s Prime Agricultural Areas” in 2016. The guideline assists in interpreting each of the three permitted uses in Ontario’s Prime Agricultural Areas: agricultural uses, agriculture-related uses, and on-farm diversified uses.

Important to note is the distinction between agriculture-related, and on-farm diversified uses. The addition of the on-farm diversified definition means that there is an opportunity for uses that have no connection with an agricultural use. This has been explained by OMAFRA as an opportunity to enable farm operators to diversify and supplement their farm income. This has been an issue in rural and agricultural communities for many years, as municipalities would often require that on-farm uses be strictly tied to the agricultural operation. Many farm operators rely on seasonal income and are actively seeking ways to stimulate their personal income and local economy over the winter months, with skills such as woodworking and metal works, but also the potential for other uses such as small-scale storage, bakery, retail, restaurant, provided that the criteria are met.

The Guideline identifies the criteria and restrictions on on-farm diversified uses but also provides direction on scenarios that the Province is seeking to discourage: no additional uses on residential parcels that have been carved out of the original farm, no on-farm diversified uses secondary to an “agricultural use” where the production is primarily for use by the members of the household (a large garden), or as secondary to a recreational or passive use.

The threshold question of whether the proposed on-farm diversified use is actually “secondary” to an agricultural operation has been approached differently by planning authorities well as the Board. In some instances, proof may be required that the property qualifies for the Farm Property Class under the Assessment Act, 1990. The Guideline advises consideration both spatially and temporally: spatially – is the physical size of the on-farm diversified use limited in such a way that agriculture continues to dominate the property; temporally – if the on-farm diversified use is intermittent or temporary, does it interfere with cropping cycles or other agriculture uses of the property.

Spatially, the guideline provides direction to municipalities as to how to develop criteria that will limit the scale of on-farm diversified uses. Generally, 2% of the total parcel is a recommended maximum size for an on-farm diversified use, or up to 1 ha. Other considerations include requiring a shared laneway for the on-farm diversified use and agricultural use, discounting existing buildings and structures, and encouraging the reuse of existing farm buildings.

Prior to the introduction of the “on-farm diversified use” definition in the 2014 PPS, there was little appetite for on-farm, secondary uses that were not strictly agricultural-related. This was reflected in municipal policy approaches to permitted uses in agricultural areas, and also the Board’s commentary in many cases.

THE OMB AND PRE-2014 PPS
Karas v. West Lincoln (Township) [2011] O.M.B.D. No. 757

The applicant in this proceeding was proposing to use vacant poultry barns for the purposes of car storage, sheltering under the PPS permitted uses in the Agricultural Area as a “secondary use.” The Board did make a finding that to be secondary, a use did not have to have a “nexus” between the secondary use and agriculture, but that that determination would usually turn on scale. Other referenced cases found the proposed uses to be too far removed from agriculture so as to dwarf the alleged “principal use” – paintball and storage in shipping containers.

With respect to whether the proposed use was secondary, the Board made a finding that a principal agricultural use existed, despite not producing farm income, stating that a “principal use cannot be regarded in total isolation from what, under normal working conditions, the property was designed for, and what it was planned for” and that matters might be different if the agricultural land was being somehow compromised or the principal use were to disappear forever.

Simcoe (County) v. Innisfil (Town) [2014] O.M.B.D. NO. 129
Similarly to Karas, in this proceeding the applicant was proposing storage (boats) as a secondary use on an agricultural property. With respect to the permitted uses in the PPS, the Board, somewhat contrastingly to Karas, found that “If there are circumstances where a non-agricultural secondary use on prime agricultural lands that are designated agricultural may be found to be consistent with the PPS, this is not one of them” [emphasis added]. In addition, a more restrictive local official plan required that secondary uses also be agricultural, thus there being no ability for secondary uses without a “nexus” to agriculture to locate in an agricultural area.

These are the types of policy hurdles that the extensive consultation and revised framework seek to eliminate.

THE OMB AND POST-2014 PPS
To date, the OMB has dealt with the new definition multiple times.

Hawkins v. Grey Highlands (Township) [2014] O.M.B.D. NO. 1017
The applicant proposed to develop a small-scale cheese and yogurt production and retail outlet. The primary use of the property was stated to be pasture land, and in fact, at the time of the hearing, there were no livestock on the property. The zoning amendment was approved, on the basis that the use was small in scale and could be considered both an agriculture-related and on-farm diversified use.

Bite v. Southgate (Township) [2016] O.M.B.D. NO. 301
Perhaps the most helpful of the OMB’s decisions to date, Member Duncan breaks down the PPS definition to enunciate the test that must be applied to each use seeking to shelter under the “on-farm diversified use” umbrella. Most importantly, the Board finds that an on-farm diversified use is not required to have any connection to the agricultural use, or be supportive to the agricultural community in any way, stating “To require that an on-farm diversified use be connected to agriculture in some way would render the definition of on-farm diversified uses redundant and void of any meaningful utility ... the purpose of allowing on-farm diversified uses is to allow additional uses on agricultural lands that ensure that relatively small parcels of agricultural land continue to be farmed where it would otherwise be uneconomical to do so.”

In Bite, the proposed use would permit a portion of the property to be used for a metal workshop. A zoning by-law amendment was required to amend the zoning on the property from Agricultural to Agricultural-Exception. In finding that the proposal did, in fact, fall within the definition of OFDU, the Board applied the following analysis:

Is the proposal located on a property that is actively farmed?
Is the proposal secondary to the principal agricultural use of the property in terms of land use?
Is the proposal limited in area so as to minimize the amount of land taken out of agricultural production and to limit the possibility of off-site impacts?
What is the nature of the proposed use? (home industry, home occupation, agri-tourism, value-added agricultural, etc.)
Is the proposal compatible with, and will not hinder, surrounding agricultural uses?
While this test will be helpful, it may have potentially narrowed the actual definition – the PPS definition does not require that a parcel be “actively farmed” but that the use be secondary to an agricultural use. It will be interesting to see if future hearings require a broader interpretation of the definition to consider agricultural uses other than active cropping.

CONCLUSION
The test for non-farm uses in prime agricultural areas to be applied by approval authorities is no longer if there are appropriate non-agricultural uses to be located in a prime agricultural area, but where and how approval authorities can accommodate and encourage these uses. This should result in smaller agricultural parcels remaining viable, but more time and litigation will likely be required to understand exactly how the new framework will be implemented.