You'll have to get a building permit. Alot of people have done home improvements without the permits, but because you can't exactly 'hide' such an external change, you'll have to go through the Town. Also, you will have to go through your neighbours if the change could affect their properties.
See:
http://www.milton.ca/townhall/depts/pla ... permit.htm
Also, there was a recent case that went through the legal system involving issues with the grading of the land and the height restrictions on an addition being built. If the final grading assessment hasn't been done yet, you'll have to check on it too.
If you haven't moved or finalized your paperwork, is it possible to switch to a similar model with a balcony?
Best of luck.