On April 6, 2023, the Ontario government introduced a suite of legislative, regulatory, and policy proposals to tackle the housing supply crisis, including a new Provincial Planning Statement to streamline the rules around land use planning.

Helping Homebuyers, Protecting Tenants

On April 6, 2023, Ontario’s Minister of Municipal Affairs and Housing (the “Minister”) introduced the Helping Homebuyers, Protecting Tenants housing supply action plan, the next step in the Government’s ongoing effort to address Ontario’s housing supply crisis and build 1.5 million homes by 2031. This latest action plan builds upon the Government’s past efforts, including the More Homes, More Choice (2019), More Homes For Everyone (Spring 2022) and More Homes Built Faster (Fall 2022) housing supply action plans.

Through this year’s action plan, the Ontario Government is proposing various legislative, regulatory, and policy changes. While some of these changes affect residential tenancy rights, home purchasers, and other matters, the focus of this post will be on the proposed changes to Ontario’s planning and land development regime.

Bill 97 – Helping Homebuyers, Protecting Tenants Act, 2023

As part of this year’s action plan, the Government has tabled Bill 97, Helping Homebuyers, Protecting Tenants Act, 2023 (“Bill 97”). Bill 97 proposes amendments to the Building Code Act, 1992, the City of Toronto Act, 2006, the Development Charges Act, 1997, the Ministry of Municipal Affairs and Housing Act, the Municipal Act, 2001, the Planning Act, and the Residential Tenancies Act, 2006.

Key highlights of these proposed legislative changes include the following:

• “Areas of Employment”
  • While applicants can typically appeal Official Plan and Zoning By-law Amendment applications to the Ontario Land Tribunal for a municipality’s refusal or non-decision, the Planning Act presently prohibits such appeals from being made if the proposal is made to remove lands from “areas of employment”.
  • Bill 97 proposes to narrow the Planning Act’s definition of “areas of employment” to exclude institutional and commercial uses (such as retail and office)—instead, “areas of employment” will include only manufacturing, warehousing, and related uses (as well as certain uses that may be prescribed in regulation).
• Site Plan Control for Small-scale Residential Developments
  • Bill 23, More Homes Built Faster Act, 2022 (“Bill 23”), which was passed on November 28, 2022, exempted residential development containing 10 or fewer residential units from Site Plan Control.
  • Bill 97 proposes to introduce a carve-out to this exemption, such that this exemption will not apply to lands within prescribed areas.
  • The Government is presently consulting on two proposed regulations for carve-outs to this exemption, which will make Site Plan Control applicable for residential development with 10 or fewer units, in the following circumstances:
    • where any part of the property is located within 120 metres of a shoreline; and
    • where any part of the property is located within 300 metres of a railway line.
  • The commenting deadline for these regulatory proposals is May 21, 2023.
• Mandatory Application Fee Refunds – Deadline Extended
  • Bill 109, More Homes for Everyone Act, 2022 (“Bill 109”), which was passed on April 14, 2022, required municipalities to refund application fees for Zoning By-law Amendment and Site Plan Approval applications that were received on or after January 1, 2023 if the municipality failed to make a decision on the application within a specified period of time.
    • Bill 97 proposes to amend the mandatory refund provisions, such that these provisions will apply only to applications received on or after July 1, 2023.
    • Bill 97 also proposes that the mandatory refund provisions do not apply to municipalities prescribed by regulation.
• Ministerial Zoning Orders and Downstream Approvals
  • Bill 97 proposes to empower the Minister, in issuing a Ministerial Zoning Order, to provide that Provincial policy statements, Provincial plans, and municipal official plans do not apply to “downstream” approvals (e.g., plans of subdivision) that are required for uses permitted under that Ministerial Zoning Order.
• Minister’s Order re: Agreements
  • Bill 97 proposes to empower the Minister to require landowners working with the Provincial Land and Development Facilitator to enter into agreements with the Minister or a municipality addressing any matters the Minister considers necessary for the appropriate development of the land (e.g., community benefits).
  • Bill 97 proposes to provide that until the landowner has entered into the agreement(s) specified by the order, there will be restrictions on land use, building construction, and soil activities on the land.

Proposed Regulation for Rental Replacement By-Laws

In November 2022, Bill 23 amended Section 99.1 of the Municipal Act and Section 111 of the City of Toronto Act, 2006 to give the Minister regulation-making authority to impose limits and conditions on municipal powers relating to rental replacement by-laws. Such by-laws are used by municipalities to prohibit and regulate the demolition and conversion of residential rental properties of six units or more.

While the Provincial Government previously consulted on rental replacement by-laws as part of last year’s initiative, the Government is now seeking feedback on future regulations to “create a balanced framework around municipal rental replacement by-laws”.

This consultation document indicates that the Government intends to consider future regulations that proposes to regulate matters such as:

1. Prescribing minimum requirements for landowners to give tenants the option to rent a “replacement unit” at the same location as their demolished unit, and at a similar rent. This requirement would apply in instances where a “replacement unit” is required to be built at the same location as the demolished unit.
2. Setting common rules about the types of compensation that would be required to be provided to displaced tenants.
3. Prescribing minimum requirements for landowners to build “replacement units” with the same core features (e.g., bedrooms) as demolished units.
4. Limiting municipalities from imposing minimum square footage requirements for “replacement units”.

The Government’s stated aim is to “increase consistency across and between municipalities” and to “create a balanced framework around municipal rental replacement by-laws that could help provide additional protections to tenants while working to increase housing supply”. It remains to be seen how significantly the Government’s proposed regulation will depart from the rental replacement by-laws and practices presently used by municipalities. For instance, the proposal to limit municipalities from imposing minimum square footage requirements for “replacement units” may run counter to the current practice in certain municipalities to require that rental replacement units be of equal or greater square footage than the demolished units.

The Government is soliciting comments on the proposed rental replacement by-law regulation until May 21, 2023.

Modular Housing

Through its announcement and related materials, the Government has indicated that it is looking at modular construction and other innovative options to reduce the cost of building “attainable housing”.

The Government has noted that this is another step for the development of the “attainable housing” program, which will leverage Crown lands and seek partnerships for development lands across the Province.

The term “attainable housing” was introduced to legislation through the Bill 23 amendments passed last year. The term refers to certain forms of development – to be prescribed through regulation – that are distinct from “affordable housing”, but which are similarly exempt from development charges, community benefit charges, and parkland dedication requirements. It remains to be seen what forms of development will be included as “attainable housing” for the purpose of these exemptions, although it is worth noting the Government’s use of this term in the context of its announcement regarding modular housing.

Proposed Provincial Planning Statement

As part of this year’s housing supply action plan, the Government is also proposing a new Provincial Planning Statement, which will combine the existing Provincial Policy Statement, 2020 (the “PPS”) and A Place to Grow: Growth Plan for the Greater Golden Horseshoe (the “Growth Plan”) into a single policy document. Through this new policy document, the Government seeks to streamline and simplify Ontario’s land use planning rules and encourage the construction of more homes.

The Government is seeking input on the proposed Provincial Planning Statement and its proposed implementation until June 5, 2023.

Summary of Provincial Planning Statement

As summarized through the Province’s own materials and reproduced below, the following changes are introduced through the proposed Provincial Planning Statement, which are organized around certain key themes:

1) Increasing housing supply

• Maintain a mix of housing types
  • All municipalities would be required to provide a range and mix of housing options, such as low- and mid-rise apartments or multi-generational housing, and work with service managers to address the full range of housing options including housing affordability needs.
• Support multigenerational farming families
  • Giving Ontario farmers the ability to have their family members closer to home by allowing up to three new residences on their existing property. This approach will support multigenerational farming families and people living in rural Ontario while minimizing the impacts on agriculture land and livestock.
• Build up near transit
  • 29 of Ontario’s largest and fastest-growing municipalities would be required to plan for growth in major transit station areas and other strategic growth areas (e.g., downtowns).
• Minimum density targets
  • Minimum density targets would apply to major transit station areas and strategic growth areas in the large and fast-growing municipalities, which would also be encouraged to plan for density that supports transit use on greenfield lands.
• Planning for growth
  • As part of their role, municipalities must plan for future population and employment growth. Municipalities would:
    • have the flexibility to use government or municipally established forecasts for planning growth, with a transition phase for municipalities in the Greater Golden Horseshoe; and
    • be required to plan for growth for a minimum of a 25-year horizon.
• Managing settlement area boundaries
  • Municipalities would have more flexibility deciding when and where to expand their settlement area boundaries, providing more land where it is needed for housing.
• Protecting employment lands
  • The proposed changes would ensure land is available for industry and manufacturing, encourage office and institutional uses in areas closer to transit, and provide flexibility to convert lands for mixed uses – supporting the kinds of development and jobs that communities need.
• Balancing housing and other needs
  • Some industries also need to be separated from residential areas to reduce the impact of noise, odours, and other undesirable by-products. Housing and other sensitive uses could not be located too close to these areas under the proposed policy.

2) Infrastructure to support new homes

• Incorporating child-care and schools in planning
  • Requiring municipalities and school boards to work more closely together in planning for schools and childcare facilities and support innovative ways of integrating these facilities into developments.
• Planning for pipes
  • Many land use planning elements are also covered in other Provincial policies. The Government is proposing to:
    • reduce duplication in planning for water, wastewater, and stormwater infrastructure; and
    • encourage municipalities to plan for the energy needs of their growing communities.
• Corridor protection
  • Policies to protect corridors and rights-of-way for electricity, transit, and transportation infrastructure, and promoting the co-location of them where possible, would be maintained.

3) Balancing housing with resources

• Protecting farmland
  • Municipalities would have to map and designate prime agricultural areas and would be encouraged to support an agricultural systems approach and the use of Agricultural Impact Assessments to support a viable agri-food network.
• Accessing aggregates
  • Creating consistent requirements for aggregate extraction, ensuring fairness between expansions and new applications. All applicants within and adjacent to natural heritage features and near prime agricultural areas will continue to follow Provincial guidelines. The Government will maintain existing requirements to protect “close to market” aggregate resources and existing pits and quarries.
• Protecting water
  • Encouraging municipalities to adopt a watershed planning approach would help protect water resources while facilitating more housing.
• Climate change
  • Municipalities would be required to focus on improving air quality and prepare for the impacts of a changing climate when planning for roads, transit, water, wastewater and stormwater servicing and community facilities under the proposed integrated land use planning policy.
• Greenbelt
  • Existing Greenbelt Plan protections, including policies on environmental and agricultural lands, will continue to be enforced.

Implementation of Provincial Planning Statement

As part of its consultation, the Government has posted a document outlining its proposed implementation approach for the new Provincial Planning Statement.

The proposed implementation details and timelines are summarized below:

• The new Provincial Planning Statement is targeted to take effect in Fall 2023 (the final form of the policy document will be released shortly before the effective date).
• Generally speaking, the new Provincial Planning Statement will apply to planning decisions made on or after the effective date—except for certain matters specified in a proposed transition regulation. The Government is seeking feedback on issues that would benefit from an exemption under the proposed transition regulation.
• Municipal Official Plans are to be updated to implement the new Provincial Planning Statement policies at the time of their ordinary review cycle (every 5 years, or every 10 years after a new Official Plan).
• The change to the definition of “areas of employment” under the Planning Act (summarized above under the discussion on Bill 97) is intended to take effect on proclamation. Many municipalities’ existing employment area policies allow a range of uses that are broader than the narrower definition of “areas of employment” now proposed by the Government in both the Planning Act and the Provincial Planning Statement. Once the proposed legislative and policy changes take effect, areas that do not meet the new, narrower definition of “areas of employment” will no longer be subject to policy requirements for “conversions” to non-employment uses. Accordingly, municipalities are directed to undertake time-sensitive updates to their Official Plans to explicitly authorize the site-specific permission of any existing uses that do not align with the new definition of “areas of employment”.
• The Growth Plan presently requires municipalities to plan for specific population and employment forecasts to 2051. These have been implemented in some, but not all, municipal Official Plans. Where an upper- or single-tier municipality’s Official Plan is still in progress, it is expected that the municipality would continue to use the 2051 forecasts provided by the Province (at a minimum) or a higher forecast as determined by the municipality. Lower-tier municipalities would be expected to meet or exceed the growth forecasts allocated to them by the upper-tier municipality. As time passes and it becomes necessary to update forecasts and extend their horizon beyond 2051, it is expected that municipalities in the Greater Golden Horseshoe would move towards doing their own forecasting of population and employment growth (as is the approach for all other municipalities in the Province).
• Bill 23 amended the Planning Act to remove statutory approval authorities from 7 upper-tier municipalities. These particular amendments have yet to be proclaimed into force, and through this implementation consultation document, the Government has signaled that these changes will not take effect until Winter 2024 at the earliest.
• In 2019, the Minister established 31 Provincially Significant Employment Zones (“PSEZs”) pursuant to the Growth Plan. Notwithstanding the present proposal to revoke the Growth Plan, the Government is seeking feedback on the need to identify select PSEZs or portions of PSEZs for the sole purpose of protecting lands exclusively for employment uses through an alternative approach (e.g., Ministerial Zoning Orders).
• The Government intends to introduce amendments to the Greenbelt Plan to indicate that previous policies in the PPS and the Growth Plan will continue to apply in those cases where the Greenbelt Plan refers to them. The stated intention is to ensure that there will be no change to how the Greenbelt Plan policies are implemented, notwithstanding the proposed Provincial Planning Statement coming into force and replacing the PPS and the Growth Plan.

Conclusion

The Ontario Government is advancing significant legislative, regulatory, and policy changes through the Helping Homebuyers, Protecting Tenants housing supply action plan. It is critical to understand the impacts of these proposed changes on land use and development and, where needed, to provide input before the relevant commenting deadlines indicated above.

Our group will be actively monitoring ongoing developments in this space.

Related Links

• News Release: Ontario Introduces Next Steps to Support Housing Supply Growth
• Helping Homebuyers, Protecting Tenants
• Bill 97, Helping Homebuyers, Protecting Tenants Act, 2023
• Proposed Provincial Planning Statement (April 6, 2023)
• Proposed Approach to Implementation of the proposed Provincial Planning Statement
• ERO 019-6827: Consultations on Helping Homebuyers, Protecting Tenants: Ontario's Housing Supply Action Plan April 2023
• ERO 019-6821: Proposed Planning Act, City of Toronto Act, 2006, and Ministry of Municipal Affairs and Housing Act Changes (Schedules 2, 4, and 6 of Bill 97 - the proposed Helping Homebuyers, Protecting Tenants Act , 2023)
• ERO 019-6813: Review of proposed policies adapted from A Place to Grow and Provincial Policy Statement to form a new provincial planning policy instrument
• ERO 019-6822: Site Plan for Residential Developments of 10 or Fewer Units – Two Proposed new Minister’s Regulations under the Planning Act and the City of Toronto Act, 2006
• 23-MMAH005: Seeking Feedback on Future Regulations To Create A Balanced Framework Around Municipal Rental Replacement By-Law