First Reading of Bill 185 and the Draft 2024 Provincial Planning Statement

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Introduction

Since 2021, there have been no less than 10 bills brought forward by the Province of Ontario (the “Province”) addressing matters of land use planning, development and municipal regulatory powers. Review the names of these bills and you will pick up on the Province’s theme: More Homes for Everyone Act, 2022 (Bill 109), More Homes Built Faster Act, 2022 (Bill 23), Helping Homebuyers, Protecting Tenants Act, 2023 (Bill 97), Affordable Homes and Good Jobs Act, 2023 (Bill 134) and, most recently, the Get It Done Act, 2024 (Bill 162).

To the foregoing we can now add the Cutting Red Tape to Build More Homes Act, 2024 (Bill 185), which was presented to the Legislative Assembly of Ontario for first reading on April 10, 2024. That same day, the Province also released for further public comment an updated draft of a new Provincial Planning Statement 2024 – one that is proposed to replace both the existing Provincial Policy Statement 2020 and the Growth Plan for the Greater Golden Horseshoe, the latter of which has stood as a separate provincial plan applicable to a significant portion of southern Ontario since 2006.

What we have learned over the last three years of fast-paced legislative changes is to expect change. Clear examples of this lesson were provided in two other bills not included in the above-noted list, those being the Greenbelt Statute Law Amendment Act, 2023 (Bill 136) and the Planning Statute Law Amendment Act, 2023 (Bill 150), both of which retroactively reversed decisions of the Ontario Ministry of Municipal Affairs and Housing within a year of those decisions being rendered. In a context where land use law and policy can move both forwards and backwards, it is difficult to actually “plan” for anything.

Regardless, it is important to stay on top of new legislation, not only to understand its immediate implications but also to try to anticipate what could come next. With respect to Bill 185 and the draft 2024 Provincial Planning Statement, what is reviewed and commented upon herein currently represent “drafts” and “proposals” by the Province. They can and will change before they are final. We accordingly recommend that you check back here frequently to both follow the path these laws and policies take over the next few months as well as our summary of where they ultimate land.

Planning Act Proposals

Further Elimination of Third-Party Appeal Rights

Bill 23 introduced into the Planning Act the concept of a “specified person” which is defined to mean a list of entities that includes utilities, pipeline and rail operators, and other similar public/private entities. Bill 23 further revised the Planning Act to limit the right to appeal the approval of a minor variance, a draft plan of subdivision, or a consent to sever to the applicant, the municipal authority, the Minister or a “specified person.” In doing so, the Province eliminated appeals by third-party landowners, ratepayers and other members of the public.

Bill 185 proposes to extend the same limitation on appeal rights to municipally approved official plans, official plan amendments, zoning by-laws and zoning by-law amendments. Subsections 17(24), 17(36) and 34(19) are proposed to be amended to limit third-party appellants to specified persons who made written or oral submissions and public bodies who made written or oral submissions.

In addition, Bill 185 proposes transitional rules that would apply these new appeal limits to existing appeals that are not already scheduled for a merits hearing before the Ontario Land Tribunal, with the cut-off for such transition being April 10, 2024.

This proposal to eliminate third-party appeal rights is similar to a previous proposal that was included in Bill 23 but was ultimately scaled back. The arguments for and against such a broad appeal restriction remain the same, but given that this is the second time in four years that the Province has proposed this type of appeal restriction, it is difficult to predict what will happen.

New Appeal Rights for Settlement Area Expansion Applications

The Planning Act currently provides that an applicant cannot appeal an official plan amendment or a zoning by-law amendment application that would expand or alter an in-force settlement area boundary. Bill 185 proposes a change that would allow a private applicant to appeal the approval authority’s refusal or non-decision so long as the proposed boundary expansion does not include any lands within the Greenbelt area.

As is noted in our summary of the draft 2024 Provincial Planning Statement, this new appeal right is paired with new criteria for the assessment of proposals for settlement area boundary expansions. The draft statement also does not propose size limitations for boundary expansion proposals. Given the political fallout that accompanied the 2022/2023 settlement area expansions imposed by the former Minister of Municipal Affairs and Housing (ultimately resulting in the wind-backs imposed by Bill 150), the idea behind this change is to remove local and provincial politics from important decisions on boundary expansions. Such decisions could now be made by the Ontario Land Tribunal after a full merits hearing.

Use It or Lose It

One of the frequent municipal push-backs to industry efforts to open up more land and more opportunity for development has been the recognition of the number of projects that are currently approved but not moving forward. Municipalities indicate that thousands of units of various types are already approved and awaiting building permit applications that are not coming forward in a timely manner.

To address this concern, Bill 185 proposes to expand on the existing municipal authority to attach lapsing provisions to approved site plans and draft plans of subdivision. While imposing this type of “use it or lose it” tool would be new for site plan approvals, the change for draft plan of subdivision approvals is that it would become mandatory.

Under the Province’s proposal, approval authorities would provide for the lapsing of a site plan or a draft plan of subdivision at the end of a specified time period. The prescribed time period shall not “be less than” or “exceed such” a time period as “may be applicable to the development” or be less than three years. In instances where there is an appeal, the lapsing of the approval would not begin until the Ontario Land Tribunal has issued its decision. Further, where a draft plan of subdivision was approved on or before March 27, 1995, the approval will lapse on the third anniversary of the changes coming into effect.

While one of the key aims of this proposal would be to ensure that housing starts match municipal efforts to create the enabling infrastructure, it will also cause development proponents to have a better understanding of their anticipated timeline between Planning Act approvals and building permit applications. Sitting on approvals is not going to be tolerated.

Ending the Pre-Consultation Fights

Recent years have seen many municipalities passing by-laws requiring pre-application consultation meetings for planning applications. This corresponded with the general shortening of the non-decision appeal timelines as well as Bill 109’s imposition of mandatory application fee refunds for zoning, site plan and combined official plan/zoning amendment proposals.

The ability to appeal and/or get a refund was tied to the clock starting on a complete application. Municipalities accordingly front-ended their pre-consultation and complete application requirements so that they could be in a position to meet the Planning Act timelines. This resulted in bottlenecked disputes between applicants and municipal authorities over the scheduling of pre-consultation meetings, the requirements for a complete application and even whether municipal staff would accept the electronic submission of paperwork or fees.

As a direct response, Bill 185 proposes to remove the municipal authority’s ability to require pre-consultation for applications for official plan amendments, zoning by-law amendments, site plan approval and draft plans of subdivision. Instead, the Planning Act and the City of Toronto Act, 2006 would be amended to simply permit applicants to seek pre-consultation. What is currently mandatory would become entirely optional.

Further, under the current regime, after a municipality has deemed a planning application to be incomplete, the applicant has 30 days to make a motion to the Ontario Land Tribunal to dispute the determination. Bill 185 proposes to remove this deadline, instead allowing applicants to bring a motion to determine the requirements for a complete application at any time after the application fee has been paid or pre-consultation has begun.

Finally, Bill 185 proposes to amend both the Planning Act and the City of Toronto Act, 2006 to erase the Bill 109 fee refund requirements, which will likely result in a precipitous and immediate drop in notices of incomplete application being issued. While applications filed after July 1, 2023, and before the deletion date of the fee refund requirements may still be eligible for a fee refund, the deletion date of the fee refund requirement stops the clock on these refunds.

Time will tell whether the various complete application requirements created by municipal authorities over the last two years will remain in place, thereby continuing to create the potential for motions to the Ontario Land Tribunal to settle application dates. But the deletion of the mandatory fee refunds is likely a welcome proposal for both municipal staff and developers. While the idea behind the fee refunds was to accelerate the approvals process, it ultimately had the opposite effect.

New Limits on Parking Requirements

Bill 185 proposes to add subsections 16(22)-(24) and 34(1.1)-(1.3) to restrict municipal councils from approving official plans or enacting zoning by-laws requiring parking in Protected Major Transit Station Areas (as well as areas surrounding higher-order transit where minimum densities are prescribed or other prescribed areas). These new subsections would also restrict the ability to require more than the prescribed amount of parking in other areas, which we expect to be prescribed by upcoming regulations.

Upper-Tier Planning Responsibilities

Bill 23 created the concept of an “upper-tier municipality without planning responsibilities” and defined it to include the County of Simcoe as well as the Regional Municipalities of Durham, Halton, Niagara, Peel, Waterloo and York. The idea was that these upper-tier municipalities would no longer exercise approval authority over their lower-tier’s planning decisions, nor would they maintain a separate, governing upper-tier official plan. While the concept has formed part of the Planning Act for the last two years, it has yet to be proclaimed into effect.

Under Bill 185, the upper-tier municipalities of Peel, Halton and York will no longer have planning responsibilities as of July 1, 2024. Simcoe County and the regions of Durham, Niagara and Waterloo will continue to be listed as “upper-tier municipalities without planning responsibilities,” but the in-force date for their loss of planning responsibilities remains to be determined.

Broadening of Regulations for Additional Residential Units

Currently, subsection 35.1(2) of the Planning Act authorizes the Minister to make regulations establishing requirements and standards with respect to a second or third residential unit in a detached house, semi-detached house or rowhouse and with respect to a residential unit in a building or structure ancillary to such a house. These are often referred to as additional residential units (“ARUs”).

Bill 185 proposes to re-enact subsection 35.1(2) to authorize regulations establishing requirements and standards with respect to any ARUs in a detached house, semi-detached house or rowhouse, a residential unit in a building or structure ancillary to such a house, a parcel of land where such residential units are located or a building or structure within which such residential units are located. This provision, if passed, would widen the scope of the Minister’s ability to regulate not only a second or third residential unit but any ARUs in a house, as well as the land on which such ARUs are located and the building or structure within which such ARUs are located.

Proposal to Exempt ARUs from Planning Act Requirements

Part V of the Planning Act contains the basic tools to control land use including zoning by-laws, minor variances, site plan control, community benefits charge, parkland conveyance, among others. Section 70.2 of the Planning Act pertains to the regulation of a community planning permit system (formerly known as a development permit system).

Bill 185 proposes to add a new section 49.3 to the Planning Act, which would authorize regulations that provide for the non-application of any provision of Part V of the Planning Act or a regulation under section 70.2 of the Planning Act, or that set out restrictions or limitations with respect to its application, to ARUs that meet prescribed criteria. Corresponding changes to the general regulation-making powers of the Province under section 70 of the Planning Act are also proposed.

Similarly, a new section 114.2 to the City of Toronto Act, 2006 is proposed that would provide that a regulation made for the purposes of section 49.3 of the Planning Act may provide for the non-application of section 113 (conditional zoning) or 114 (site plan control) of the City of Toronto Act, 2006, or may set out restrictions or limitations with respect to their application, to a house or structure containing ARUs.

Proposal to Exempt Community Service Facilities from Planning Act Requirements

As stated in the Province’s press release, to get shovels in the ground faster for priority government projects, Bill 185 proposes to add a new section 62.0.3 to the Planning Act, to authorize regulations that provide for the non-application of any provision of the Planning Act or a regulation made under section 70.2, to prescribed classes of community service facilities that meet prescribed requirements. Community service facilities currently being contemplated for such exemptions include schools, hospitals and long-term care homes.

This new regulation-making power, if passed and utilized, is intended to provide a new expeditated approval process for such community service facilities. A new section 114.3 to the City of Toronto Act, 2006 is also proposed to provide the Province with a similar power applicable within the City of Toronto.

Proposal to Exempt Post-Secondary Institutions from Planning Act Requirements

Bill 185 proposes a new section 62.0.2 to the Planning Act to exempt undertakings of certain classes of post-secondary institutions from the requirements of the Planning Act as well as sections 113 and 114 of the City of Toronto Act, 2006. These classes of post-secondary institutions include publicly assisted universities, as well as colleges and universities federated or affiliated with a publicly assisted university. However, this exemption will not be available for any lands within the Greenbelt area.

Municipal Act, 2001 and City of Toronto Act, 2006 Proposals

New Exception to the Anti-Bonusing Rule

Section 106 of the Municipal Act, 2001 sets out a broad prohibition against municipal bonusing. A municipality is prohibited from directly or indirectly providing assistance to any manufacturing business or other industrial or commercial enterprise (i.e., for-profit entities). Assistance is generally defined to include the lending of money or municipal property, guaranteeing borrowing, leasing or selling municipal property at below fair market value or giving a full or partial exemption from any municipal levy, charge or fee.

Bill 185 proposes to add a new section 106.1, which if passed, would allow the Province to make regulations authorizing a municipality to grant assistance, directly or indirectly, to a specified manufacturing business or other industrial or commercial enterprise during a specified period if the Province considers that it is necessary or desirable in the provincial interest to attract investment in Ontario. This regulation-making power would also allow the Province to set out the types of assistance that may be granted as well as impose restrictions, limits or conditions on the granting of the assistance. The Province may also specify conditions that must be met before the assistance may be granted.

A similarly worded new section 82.1 is proposed to be added to the City of Toronto Act, 2006.

Municipal Policy on Servicing Allocation

Section 70.3 of the Planning Act currently allows all municipalities to pass by-laws establishing a system for allocating sewage and water services to land that is the subject of an application under section 51 (draft plan of subdivision). Such by-laws are to reflect conditions as may be set out by provincial regulation.

Under Bill 185, section 70.3 of the Planning Act is proposed to be repealed. In its place, Bill 185 proposes to add a new section 86.1 to Part III (Specific Municipal Powers) of the Municipal Act, 2001. This new section proposes that a municipality may, by by-law, adopt a policy providing for the allocation of water supply and sewage capacity. Such a policy may include (1) a system for tracking the water supply and sewage capacity available to support approved developments (which is proposed to be defined as a development application which has been given Planning Act approval), and (2) criteria respecting the allocation of water supply and sewage capacity to development applications, including the criteria used to determine the circumstances for when the allocation is assigned, withdrawn or reallocated, if previously withdrawn to an approved development. Such by-laws may provide that the municipal allocation policies apply to the entire municipality or differently to different geographic areas within the municipality.

Where a municipal allocation by-law is passed, the administration of the allocation policy must be assigned to an officer, employee or agent of the municipality, and any decision made by that person under the allocation policy is to be treated as final. There is no proposed appeal route from an allocation decision made under an approved allocation by-law. However, the Minister may, by regulation, exempt an approved development or a class of approved developments from any and all provisions of a municipal allocation by-law.

A similarly worded new section 69.1 is proposed to be added to the City of Toronto Act, 2006. As discussed further in our summary of the draft 2024 Provincial Planning Statement, the Province is proposing more explicit directions concerning matters of municipal water and wastewater allocation, re-allocation and unused system capacity to meet current and projected needs for increased housing supply.

Development Charges Act, 1997 Proposals

Eligible Capital Costs

Subsection 5(1) of the Development Charges Act, 1997 establishes rules that must be followed when calculating a proposed development charge. One of those rules, Rule 7, provides that “the capital costs necessary to provide the increased services must be estimated.” What may be included as a “capital cost” is then set out in subsection 5(3) of the legislation.

In 2022, Bill 23 amended subsection 5(3) to exclude certain study costs, as well as the cost of undertaking the development charge background study itself, from the list of eligible capital costs. Bill 185 proposes to reverse that deletion, thereby allowing municipal authorities to include study costs in the calculation of their development charge rates.

Expiry of Frozen Rates

The concept of a statutory “freeze” of a development charge rate was introduced by Bill 108. Subsection 26.2 of the Development Charges Act, 1997 currently allows for an applicant’s development charge rate to be “frozen” as at the date a complete application for zoning by-law amendment or site plan approval (whichever occurs later) is filed. This “freeze” would apply notwithstanding that the relevant development charge by-law for which the rates are frozen is no longer in effect.

Currently, the freeze applies so long as building permits are pulled (and relevant development charges are paid) within the “prescribed amount of time,” which is set at two years from the approval of the relevant planning application. Bill 185 proposes to reduce the “prescribed amount of time” to 18 months.

Repeal of Mandatory Phase-In

Bill 23 previously amended the Development Charges Act, 1997 to require a reduction in the maximum development charge that could be imposed in the first four years that a new development charge by-law is in force. Specifically, any development charge imposed during the first, second, third and fourth years that the development charge by-law is in force could be no more than 80, 85, 90 and 95 per cent of the charge imposed. This mandatory “phase in” applied to all development charge by-laws passed on or after January 1, 2022.

Bill 185 proposes to delete the above-summarized “phase in” requirements and proposes transition rules for development charge by-laws impacted by this change:

Draft 2024 Provincial Planning Statement

At the time of its enactment, the original Provincial Policy Statement 1997 constituted a substantial rewrite of a set of policy statements that had resulted from a period of previous provincewide consultations. Since that time, there have been numerous updates to the Provincial Policy Statement, both minor and major. Also, since 2006, the Provincial Policy Statement has been paired with the Growth Plan for the Greater Golden Horseshoe, which provided a separate-but-parallel set of planning policies focused on growth, development, compatibility and protections within the Greater Golden Horseshoe.

In early 2023, the Province posted for public consultation a proposed Provincial Planning Statement wherein the Province was proposing to combine both the Provincial Policy Statement and the Growth Plan for the Greater Golden Horseshoe into a single document called the Provincial Planning Statement, being a comprehensive set of provincial interests and policy initiatives to be followed throughout Ontario.

On April 10, 2024, the Province posted a further draft of the proposed new Provincial Planning Statement 2024 with a public commenting period of 30 days. While still open for comment and revision, this latest draft provides a more detailed and comprehensive picture of the Province’s directions for land use planning going forward.

Our Group’s summary of the draft 2024 Provincial Planning Statement can be found here: Ontario Releases a Revised Draft Provincial Planning Statement (airdberlis.com)

The Municipal & Land Use Planning Group at Aird & Berlis LLP will continue to monitor Bill 185 and the draft 2024 Provincial Planning Statement and will keep you informed of any important changes. If you have questions or require assistance, please contact a member of the group.