CANADA Law and Practice Contributed by: Rachel V Hutton, Michael L Dyck, Mario Paura and Miguel Manzano, Stikeman Elliott LLP
parcel size, and impose minimum building setbacks and parking requirements. Building permits are required for construction and for additions/alterations to buildings. Building-permit fees are typically calculated based on the floor area of the proposed building or the value of the proposed construction, and the type and use of the building. Building by-laws, building-permit requirements and building-code standards govern the building materi - als, heating and ventilation systems, electrical sys - tems, sewerage and water systems, fire safety, access and inspection. The National Building Code of Canada has largely been adopted by the municipalities of most provinces, resulting in a trend towards building regu - lation uniformity. Regulations may restrict redevelop - ment of a building having heritage value. For develop - ments in specialised urban areas, additional design approvals may also be required. 4.2 Development Process, Challenges and Enforcement Development projects typically require applications for subdivision, rezoning and development permits. Each municipality has differing eligibility, procedural and documentary requirements for each category of development permissions, which range from applying and paying fees to meeting with municipal commit - tees or the public, submitting plans and seeking the approval of municipal councils. Third parties (particularly neighbours) may have the right to be given notice of the application and to par - ticipate at a public hearing. Certain developments may also require consultation with affected indigenous peoples. While the Crown is constitutionally required to conduct such consultation, procedural aspects are often delegated to the proponent of the development. The availability of a right of appeal in these matters varies. In some provinces, such as Alberta and Ontar - io, the decision of a municipality may be appealed to a specialised tribunal. In others, such as British Colum - bia, there is no such tribunal and municipal council decisions are not subject to judicial review on their merits (although they may be reviewable on formal grounds such as lack of jurisdiction, procedural fair - ness or natural justice).
Large-scale developments by private real estate developers will typically require agreements with the municipality, setting out the terms and conditions for the development to proceed, relating to the construc - tion of public facilities, land dedications, servicing commitments and financial obligations. Provincial legislation generally provides for fines and penalties for contravention of applicable zoning and building by-laws. Municipalities may also take direct enforcement action against an offender to bring about compliance and may pursue injunctions and court orders. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets Legal persons (corporations and natural persons) may hold real property in Canada by way of direct owner - ship by an individual or through ownership of shares in a corporation that owns real estate. Relationships may also be established for the ownership of land, such as co-ownerships, partnerships and trusts, largely based on tax consequences, liability concerns and business considerations. Corporations, partnerships, co-ownerships and trusts are the most popular real estate investment vehicles in Canada. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity Corporations Corporations are legal entities distinct from their shareholders. While corporations provide the benefit of limited liability for shareholders, the income, losses, gains and capital cost allowances of the corporation are taxed or deducted at the corporate level, followed by the taxation of dividends in the hands of the share- holders. Partnerships By contrast, a partnership is not a distinct legal entity, and constitutes a legal relationship among its part - ners and is governed by common law and/or statute. Under Canadian law, there are two principal types of partnership – “general” and “limited”:
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