Over the past months, the Provincial Government of Ontario introduced a suite of new and ambitious legislation with the stated goal of addressing Ontario’s housing crisis by increasing the housing supply and incentivizing the construction of 1.5 million homes over the next 10 years. To summarize the status of these legislative changes:

• On October 25, 2022, the provincial government introduced Bill 23, More Homes Built Faster Act, 2002 (Bill 23), an omnibus bill that includes significant amendments to various Acts and regulations. Bill 23 has been the focus of considerable comment and debate over the past month, both online, in the press, and in the Legislative Assembly. Bill 23 received Royal Assent on November 28, 2022.
• On November 4, 2022, the provincial government introduced proposed amendments to the Greenbelt Plan and the Oak Ridges Moraine Conservation Plan for the purposes of facilitating growth. These proposed amendments are open the public for comment until December 4, 2022.
• On November 16, 2022, the provincial government introduced Bill 39, Better Municipal Governance Act, 2022 (Bill 39), which expands certain mayoral powers for the purposes of achieving “provincial priorities”. Bill 39 is progressing through the legislature and, as of the date of publishing, is on its second reading.
• On November 23, 2022, the province proclaimed into force Bill 3, Strong Mayors, Building Homes Act, 2022 (Bill 3), which also expands certain mayoral powers for the purposes of achieving “provincial priorities”, and which initially received Royal Assent on September 8, 2022.

Prior to the passage of Bill 23, Dentons released two bulletins that summarize and analyze the proposed legislative changes that will have a significant impact on the development industry. For background and history on the development of Bill 23, please see Shovels in the ground for Ontario - The province announces the More Homes Built Faster Act to address the “housing crisis”, and Part 2: Shovels in the ground for Ontario - The Province announces the More Homes Built Faster Act to address the housing crisis. Dentons has also reported on the provincial government’s past legislative efforts to address the housing crisis, with respect to Bill 108, More Homes More Choice Act, the Housing Affordability Task Force Report, and Bill 109, More Homes for Everyone Act, and will continue to monitor for any related changes.

This bulletin provides a further update on, and summary of, Bill 23 and also outlines some of the key changes proposed and implemented by Bills 3 and 39, both of which are also aimed at addressing the Province’s stated goal of solving Ontario’s housing crisis.

1. Bill 23, More Homes Built Faster Act, 2022

Bill 23 received Royal Assent on November 28, 2022. Substantial portions of the Bill came into force upon Royal Assent, while other portions will come into force on a date to be proclaimed by the Lieutenant Governor. Some of the most significant changes to Ontario’s land use planning regime are summarized below.

Planning Act

a. Elimination of planning responsibilities for certain upper-tier municipalities (in-Force Date – TBD, on a date to be proclaimed by the Lieutenant Governor)

Bill 23 amends the Planning Act to distinguish between an “upper-tier municipality without planning responsibilities”, which currently means the County of Simcoe, and the Regional Municipalities of Durham, Halton, Niagara, Peel, Waterloo, and York, and an “upper-tier municipality with planning responsibilities”. The Province has the power to designate other upper-tier municipalities as “upper-tier municipalities without planning responsibilities” by way of future regulations.

These amendments will have far-reaching impacts on Ontario’s land use planning regime, as upper-tier municipalities without planning responsibilities will no longer have the authority or statutory requirement to adopt official plans or amendments, approve lower-tier official plans or amendments, approve plans of subdivision, or appeal planning decisions. These responsibilities will shift to the various lower-tier municipalities forming part of each upper-tier municipality without planning responsibilities in an effort to improve efficiencies and give lower-tier municipalities more discretion over local planning decisions. For the time being, the Minister will assume any approval authority previously held by the upper-tier municipality without planning responsibilities, as required by the Planning Act, subject to future transition regulations.

The role that upper-tier municipalities without planning responsibilities will play in land use planning remains to be seen and may be determined on a case-by-case basis to reflect the specific needs of a particular lower-tier municipality. In this regard, amendments to the Planning Act provide that the council of an upper-tier municipality may provide any assistance to the lower-tier municipality in respect of planning matters, generally, on such conditions as may be agreed to by the lower-tier municipality. Upper-tier municipalities without planning responsibilities will continue to play a critical role in servicing and infrastructure development, as set out in the Municipal Act, 2001, and other statutes.

Various amendments govern the transition of planning responsibilities from upper-tier municipalities without planning responsibilities to lower-tier municipalities, including with respect to the status of official plans or official plan amendments that are in effect before the legislation is in force, adopted but not yet in effect when the legislation comes into force, or in process but not yet adopted. Notably, amendments related to the new distinctions between upper-tier municipalities with and without planning responsibilities will come into force on a date to be named by proclamation of the Lieutenant Governor, but not upon Royal Assent. We understand that this may be to allow for additional time for consultation between the various levels of government, and for discussions and planning to take place around the significant shift in planning responsibilities for various municipalities.

b. Density to address the “Missing Middle” and build more homes near Protected Major Transit Station Areas (in-Force Date – November 28, 2022)

Bill 23 amends the Planning Act to create a new provincial threshold for what is permitted to be built by strengthening the additional residential unit framework and moving toward “as-of-right” zoning to meet planned minimum density targets near major transit stations. Specifically, the new amendments permit landowners to add up to three residential units “as of right” for land zoned for one home in residential areas without requiring a zoning by-law amendment. The three units can be within the existing residential structure or could take the form of a residence with an in-law, basement suite, and a laneway or garden homes. The zoning by-law standards respecting matters such as height will remain and continue to apply.

Other amendments are aimed at ensuring complete, sustainable communities are built near and centred around transit by requiring municipalities to update their zoning by-laws within one year to meet minimum density targets once key development policies for major transit stations are approved.

c. Third-party appeals (in-Force Date – November 28, 2022)

Bill 23 eliminates third-party appeal rights for consents and minor variances, mirroring existing appeal rights for plans of subdivision. Appeals of consents and minor variances for which a hearing on the merits was not scheduled as of October 25, 2022, will be dismissed retroactively. The version of Bill 23 that was originally released by the provincial government on October 25, 2022, included proposed amendments that would have also eliminated third-party rights of appeal for official plans, official plan amendments, zoning by-laws, and zoning by-law amendments under Section 17 and 34 of the Planning Act, respectively. These amendments were the subject of significant discussion and debate over the past month. Ultimately, the third-party appeal rights of official plans, official plan amendments, zoning by-laws, and zoning by-law amendments restrictions do not form part of the version of Bill 23 that received Royal Assent, and these planning instruments can be appealed.

d. Site plan control (in-Force Date – November 28, 2022, except for changes related to subsection 41(9) and new subsection 41(9.1) which come into effect on a date to be proclaimed by the Lieutenant Governor)

In order to streamline the site plan control process, Bill 23 amends the Planning Act to remove site plan control requirements for most projects with fewer than 10 residential units (building permits and building/fire code requirements continue to apply to protect public safety). In addition, amendments to the Planning Act impose limits on a municipalities’ authority to dictate a building’s exterior design, including character, scale, appearance and design, except to the extent that it is a matter relating to exterior access to a building that will contain affordable housing units.

e. Parkland (in-Force Date – November 28, 2022; except for subsection 42(1); new section 42(1.1); new subsection 42(3.0.3); subsection 42 (4.30); and subsections 51(5) and (5.1), which come into effect on a date to be proclaimed by the Lieutenant Governor)

Bill 23 amends the Planning Act by reducing or establishing maximums for parkland dedication requirements. To lower the costs associated with the construction of affordable housing, the amendments establish a maximum amount of land required to be conveyed for development or redevelopment that will include affordable residential units, attainable residential units or residential units required to be affordable pursuant to an inclusionary zoning by-law. In addition, where the alternative rates for parkland dedication are used, amendments are made that:

• Establish the maximum alternative rate for parkland dedication to one hectare for each 600 net residential units proposed or at such lesser rate as may be determined by the municipality for the conveyance of land and one hectare per 1,000 units for cash-in-lieu; and
• Cap the alternative dedication rate at (a) where land proposed for development or redevelopment is 5 hectares or less in area, 10% of the land or value of the land, as the case may be, and (b) where land proposed for development or redevelopment is greater than 5 hectares in area, 15% of the land or the value of the land, as the case may be.

The amendments also set out a framework for owners of land to identify land to be conveyed to satisfy requirements of a by-law passed under the section. Land that is identified for the purposes of conveyance may include, among other things, encumbered lands as well as privately owned publicly accessible spaces (POPS). The framework permits owners to appeal to the Tribunal if the municipality refuses to accept the conveyance of the identified land. Lastly, municipalities are now required to spend or allocate 60 percent of the monies in the special account required by subsection 42(15) annually.

f. Development Charges Act, 1997(in-Force Date – November 28, 2022; except for certain sections which are dependent on future regulations), which come into effect on a date to be proclaimed by the Lieutenant Governor.)

Bill 23 amends the Development Charges Act by freezing, reducing, and exempting fees typically levied by municipalities and other authorities that can significantly impact the cost of development. Specifically, Bill 23 includes:

• Exemptions to development charges for “affordable residential units,” “attainable units,” “non-profit housing developments”, and “affordable housing units” required pursuant to an Inclusionary Zoning By-law;
• Reductions to development charges for the development of rental housing;
• Reduction of the amount of development charges that may be imposed under existing and future development charges by-laws (a 20% reduction from the development charge that otherwise could have been imposed during the first year the by-law is in force, and a 15%, 10%, 5% reduction in the second, third, and fourth year);
• A maximum interest rate (prime plus 1%) that municipalities can charge on development charges in certain circumstances for rental, institutional, and non-profit housing;
• A requirement that municipalities spent at least 60% of their development charge reserve fund for priority services.

Industry stakeholders, including the Association of Municipalities of Ontario, have been especially critical of these changes, arguing that the amendments will result in a shortfall of approximately CA$5 billion for Ontario’s municipalities, which would be passed onto citizens in the form of higher property taxes or reduced services.

g. Ontario Land Tribunal Act, 2001(in-Force Date – TBD, on a date to be proclaimed by the Lieutenant Governor)

Bill 23 amends the Ontario Land Tribunal Act, 2001, by enhancing the power of the Ontario Land Tribunal to prioritize certain hearings and dismiss appeals. Specifically, the amendments expand the Tribunal’s power to dismiss a proceeding without a hearingon the basis that the person who brought the proceeding has contributed to undue delay, or if the Tribunal is of the opinion that a party has failed to comply with an order of the Tribunal in the proceeding. The amendments also provide the Tribunal with the power to order an unsuccessful party to pay a successful party’s costs, a measure that may deter frivolous or meritless appeals given the potential cost consequences. Lastly, Bill 23 provides the Minister with the power to make regulations requiring the Tribunal to prioritize the resolution of specified classes of proceedings, prescribing timelines that would apply to specified steps taken by the Tribunal in specified classes of proceedings (the implications of a failure of the Tribunal to comply with the timelines prescribed by the Minister are also addressed), and to require the Tribunal to report on its compliance with the timelines.

h. Other significant amendments(in-Force Date – various dates)

Bill 23 is an omnibus piece of legislation that includes significant amendments to 10 separate Acts and, as such, the summary contained in this bulletin is non-exhaustive. There are, however, a number of other amendments that may have a significant impact on the development industry, including the following:

• Amendments to the New Home Construction Licensing Act, which are aimed at addressing challenges faced by homebuyers and address bad actors and unethical behaviours.

• Amendments to the Ontario Heritage Act to renew and update Ontario’s heritage policies, strengthen criteria for heritage designation, and update guidelines promoting sustainable development and providing clarity and flexibility to municipalities to move forward with priority projects.

• Amendments to the Conservation Authorities Act that will limit the role that Ontario’s 36 conservation authorities will play in the development process by limiting their ability to comment on development applications.

2. Bill 3, Strong Mayors, Building Homes Act, 2022 and Bill 39, Better Municipal Governance Act, 2022

Bills 3 and 39 are also aimed at addressing Ontario’s housing crisis by expanding mayoral powers and regulating municipal processes so they are consistent with provincial priorities. Bill 3, which initially received Royal Assent on September 8, 2022, but was proclaimed into force on November 23, 2022, amends the City of Toronto Act, 2006, the Municipal Act, 2001, and the Municipal Conflict of Interest Act, and gives the Mayor of the City of Toronto and the City of Ottawa (with further mayors to be prescribed by regulation) the power to:

• Direct city employees to do research and provide advice on city policies and programs related to the powers and duties under the proposed amendments;
• Appoint a chief administrative officer to ensure the efficient and effective operation of the city;
• Hire certain department heads, excluding specific positions such as clerk, treasurer, auditor general etc.;
• Create new identified committees and appoint the chairs and vice-chairs of identified committees and local boards and to change the make-up of a committee;
• Propose the municipal budget for council consideration, which could be subject to proposed amendments by council, but could ultimately be vetoed by the head of council (and only overturned by 2/3 majority vote of the council members).

The mayor will also have a veto with respect to any by-laws or parts of by-laws passed by council that “could potentially interfere with a prescribed provincial priority” (and only overturned by a 2/3 majority vote of the council members).  While this provision is technically in force, its use is limited to “prescribed” provincial priorities, which will be defined by future regulation. Bill 39 seeks to further increase mayoral powers in the City of Toronto and the City of Ottawa by, among other things, providing mayors with the power to pass by-laws on prescribed provincial priorities with the support of 1/3 of council.

3. Takeaways

Bills 3, 23, and 39 propose significant changes to the land use planning regime in Ontario, all for the stated purpose of addressing the housing crisis by increasing the housing supply. The amendments have been the subject of considerable debate and comment over the past month, with supporters and critics on all sides of the private and public spheres of the development industry. It remains to be seen whether the proposed amendments will have their intended impact. Dentons will continue to review the legislation and related policy updates as they unfold and provide updates on any relevant developments.

In the meantime, should you have any questions about Ontario’s proposed plan and related legislative and regulatory proposals or require assistance in providing comments to the Ministry on any of the various consultation items, please do not hesitate to contact Kat Sliwa or any member of Dentons’ Municipal, Land Use Planning and Development Law group.