The Municipal and Provincial Teams at Sussex have been analyzing the newly introduced Government of Ontario legislation: Bill 197, COVID-19 Economic Recovery Act, 2020, to provide our clients with up-to-date advice on the impacts and opportunities in their respective sectors, such as the development industry and will continue to analyze how supporting regulations could further impact Ontario-based businesses and projects.
The Act, which received first reading on July 8, 2020, comes in the form of an omnibus Bill that will have sweeping changes for many sectors. In addition to items like education curriculum and payday lending regulation changes, many of the most significant amendments are in the areas of land use planning and infrastructure. Much of the Act consolidates draft legislation and policy commitments that the Government of Ontario has been speaking about and consulting on for the last two years, rolling them together to form part of Ontario’s economic response to the COVID-19 pandemic and the economic hardship that has accompanied it. The following is a high-level overview of some of the more significant changes.
Under Schedule 20 of the COVID-19 Economic Recovery Act, the Province would now be able to designate lands as transit-oriented community land, if needed to support priority projects including the Ontario Line, the Scarborough Subway Extension, the Yonge Subway Extension, and the LRT Eglinton Crosstown West Extension. If expropriated under specific provisions, there would be no hearing process under the Expropriations Act and, instead, a new process will be established for receiving and considering comments from impacted property owners.
The Province would be able to establish, acquire, manage, participate or otherwise deal with corporations, partnerships, joint ventures or other entities in order to invest assets in, supporting, or developing transit-oriented community projects from the priority lines list.
This legislation formalizes the policy framework that the Government had already announced around expediting transit projects. The Woodbine GO station agreement is an appropriate reference point for the kind of cooperation and opportunities that are being pursued.
Under Schedule 6 of the COVID-19 Economic Recovery Act, changes to the environmental assessment (EA) process will be gradually introduced. These changes will give the Province the power to make regulations that extend the Act to apply to more enterprises, activities, proposals, plans and programs. Parts II (dealing with environmental assessments) and II.1 (dealing with class environmental assessments) of the Act will be repealed and replaced with Parts II.3 and II.4, respectively.
Existing Part II.1 projects allow for the Minister or Tribunal to approve a class environmental assessment that is less onerous than the process described in Part II. As of Royal Assent of the Economic Recovery Act, no further class EAs will be approved. Part II.4 will replace class EAs with a streamlined EA process that will be set out in the regulations. All 10 existing class EAs will continue to follow the historic process, unless specifically replaced, where appropriate, with regulations under Part II.4.
Currently, the Minister can order proponents of approved class EAs to comply with EA process in Part II or may impose other conditions. Changes described in the Act will limit the time period during which the Minister can make a number of changes to EA requirements to 30 days. There will also now be a 10-year expiry date for EA approvals given before section II.5 comes into force, if no expiry date was specified, though the Minister may exempt undertakings from this section by regulation.
In its totality, the Government intends for the legislative changes to reduce EA timelines by half for the largest projects and to better match the levels of assessment required to the degree projects might impact the environment. In its communications, the Government specifically referenced intending to speed up approvals for important infrastructure projects like high voltage transmission lines, municipal expressways, new large waterpower facilities, and large expansions of existing landfills.
In conjunction with the creation of the position of the Provincial Land and Development Facilitator, these regulations might also be used to by the Government to fast-track residential development projects – particularly those with larger footprints significantly altering existing land uses.
The list of services (s. 2(4)) for which a development charge (DC) can be imposed is being expanded (including from the list in the More Homes, More Choice Act) and a new subsection has been added explaining that Community Benefits Charges may be applied to services listed as a DC where there is no plan to cover those costs under a DC by-law. Broadly speaking, the services that can be charged for are almost entirely those which would carry the burden of densification, ranging from storm water and electrical services to parks and emergency preparedness. Services are now to be grouped in classes, which can include, among others, services listed in s. 2(4) as well as capital costs listed in s. 5(3).
A new section establishes transitional rules for the use of existing reserve funds by upper-tier municipalities for which charges can no longer apply. Furthermore second dwelling units are being explicitly exempted from being eligible for a DC.
Some transitional rules created by the More Homes, More Choice Act are being repealed, as they were mainly a bridge until this regime was established. If a DC by-law would have expired on or after May 2, 2019, then that by-law remains in effect until either it is repealed, there is a community benefits charge by-law passed, or 2 years have passed since the changes have come into effect. If a DC by-law was still in force when these changes come into effect, that by-law continues to apply until it is repealed, there is a community benefits charge by-law passed, or 2 years after the changes come into effect.
The COVID-19 Economic Recovery Act replaces Sections 37 and 37.1 of the Planning Act, permitting the Council of a municipality to impose Community Benefits Charges (CBC) against lands to pay for capital costs of facilities, services, and matters required because of development or re-development. CBCs can be imposed for a number of cases, including zoning by-law amendments and projects requiring the approval of a plan of subdivision under. Subsection 37(4) specifies that that community benefits cannot be imposed for developments of fewer than 10 units or fewer than 5 storeys.
Municipalities must develop CBC strategies prior to passing a CBC by-law that identifies the facilities, services, and other items that will be funded with the charges ahead of their receipt. Municipalities must consult on both the strategies and the bylaws before either item is passed and there will be a 40-day appeal period to appeal the bylaw to the LPAT. Once municipalities have a CBC bylaw established, buildings will not be allowed to undertake construction unless the required CBC has been paid or arrangements have made to the satisfaction of Council. Unlike historic Section 37 funds, which could remain in municipal accounts for years before being spent, 60% of CBCs in an account at the start of the year must be spent by the year’s end. CBC funds must also not be spent on services for which development charges are already being levied on a project, essentially protecting developers from being charged twice for the same thing.
The maximum amount of the CBC is to be established in regulation, rather than in the legislation contained in the Act. Previous consultations had suggested that the CBC charge may be set at a maximum of 15% of the value of the land. The valuation date for a community benefits charge is the day before the day the building permit is issued or, if multiple building permits are required for a development or re-development, then the day before the day the first permit is issued. If there is disagreement over the value of the CBC set by a municipality, it may pat the charge under protest and provide the municipality with its own appraisal of the value of the land to initiate further review with an outside appraiser. As was allowed with Section 37 funds, in-kind contributions may be made for credit against a CBC payment, in full or in part.
CBCs may be used for the acquisition of land for park or recreational purposes, if they are not already budgeted for with a specific line-item through development charges or a special account. Amendments are also being made to s. 42 dealing with the alternative parkland rate that can be imposed by by-law, including the process for establishing the maximum rate. Similar to the CBC provisions, this alternative parkland rate by-law can be appealed to the LPAT, with a process laid out for the appeal and how to calculate refunds if the by-law needs to be repealed or amended.
The Minister may make orders on non-Greenbelt lands in relation to site plan control and inclusionary zoning. The Minister will be able to require affordable housing units in the development or redevelopment of certain lands, buildings, or structures. Ministerial orders are not common, but this provides the government with a new power that may be invoked for transit-oriented development.
The COVID-19 Economic Recovery Act would create the role of The Provincial Land and Development Facilitator, to be appointed by the Minister of Municipal Affairs and Housing. This person is to, among other things, advise and make recommendations to the Minister in respect of growth, land use and other matters, including Provincial Interests.
To view the draft of the Bill from 1st Reading on July 8, 2020, please click here.
The Municipal and Provincial Teams will continue to track the COVID-19 Economic Recovery Act, 2020 through Royal Assent and implementation. If you have any questions or concerns, please reach out to either team for assistance.