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Municipalities have the authority to require that a developer give a portion of the development land to a municipality for a park or other recreational purposes either at the plan of subdivision approval or consent approval stage (Planning Act, subsection 51.1(1)) or as a condition of development or redevelopment of land (Planning Act, section 42). Instead of giving over the land, the municipality may require the developer to pay an amount of money equal to the value of the land that would have otherwise been given.
Source
http://www.mah.gov.on.ca/AssetFactory.aspx?did=10253