Part Two: Unpacking the Special Economic Zones Act, 2025
Ontario's Bill 5, the "Protect Ontario by Unleashing our Economy Act, 2025,"1 has unleashed a torrent of criticism. While the government champions it as a tool for economic revitalization, this post focuses on Schedule 9: the "Special Economic Zones Act, 2025."2 This legislation doesn't just tweak existing laws; it threatens to radically reshape Ontario's legal landscape, concentrating unprecedented power within the executive and creating severe risks for Indigenous rights and environmental stewardship.
1. The Special Economic Zones Act: Unprecedented Executive Power
Schedule 9 of Bill 5 introduces the "Special Economic Zones Act, 2025". This new Act empowers the Lieutenant Governor in Council (LGIC) to designate vast swathes of Ontario as "special economic zones" (SEZs).3 Within these zones, the Minister of Economic Development, Job Creation and Trade gains the authority to handpick "trusted proponents"4 and "designated projects".5
The true power of the SEZ Act, however, lies in its sweeping exemption clauses. The LGIC can unilaterally shield favored proponents or projects from any requirement under any provincial Act, regulation, or municipal by-law.6 The Act further permits the LGIC to rewrite how existing laws apply within these zones.7 Critically, the foundational terms that define the scope of these powers – "special economic zones," "trusted proponents," and "designated projects" – remain undefined in the legislation itself. Instead, their meaning will be determined behind closed doors by Cabinet through future regulations,8 bypassing full legislative debate and scrutiny.
This legislative framework enables an extraordinary concentration of power as it enables the executive branch of the government to unilaterally do away with legal safeguards. Such exceptional powers, are typically reserved for genuine emergencies and must be subject to stringent democratic checks and balances – conditions Schedule 9 utterly fails to meet.9
The government's stated aim for Bill 5 is to "cut red tape" for major projects. Yet, by allowing the executive to suspend laws at its discretion, the SEZ Act itself could become the ultimate instrument of regulatory avoidance. It even curtails legal challenges by extinguishing certain causes of action, though judicial review and constitutional claims are preserved.10
2. Special Economic Zones: A Collision Course with Constitutionally Protected Aboriginal and Treaty Rights
The "Special Economic Zones Act, 2025" jeopardizes the constitutionally protected Aboriginal and Treaty rights of Indigenous Peoples, enshrined in Section 35 of the Constitution Act, 1982. Its mechanisms risk creating a legal environment where these fundamental rights are not just overlooked, but actively dismantled.
A glaring constitutional defect is the SEZ Act's profound silence on the Crown's duty to consult and accommodate Indigenous Peoples. This duty is a cornerstone of Canadian constitutional law, essential for upholding the Honour of the Crown. Yet, Schedule 9 offers no provisions that mandate, guide, or even acknowledge this critical obligation before the government designates SEZs,11 "trusted proponents" or "designated projects",12 or, most alarmingly, grants sweeping exemptions from provincial laws.13 This legislative gap isn't just an omission; it paves the way for unconstitutional actions.
The Act's broad exemption powers are central to this risk. Many existing provincial laws – covering environmental assessments, land-use planning, mining, and heritage – contain specific processes that trigger or facilitate Crown consultation. By permitting these statutes to be bypassed for projects within an SEZ, the government could effectively remove legal avenues for consultation. This framework may lead to direct infringements of Aboriginal and Treaty rights.
For example, if SEZs allow projects to proceed without proper oversight or input from Indigenous nations, impacts to health and well-being, traditional land use, hunting, fishing, and trapping could be severely compromised. Such impacts, without deep consultation and accommodation, would likely constitute prima facie infringements of Section 35 rights, inviting constitutional challenges.
This approach may also conflict with the principles of Free, Prior, and Informed Consent (FPIC) which is a key component of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). The SEZ model emphasizes unilateral executive decision making rather than partnership or consent. Designating SEZ's in Treaty territories, such as the Ring of Fire area within Treaty 9 lands, without comprehensive consultation with all affected First Nations, could also raise questions regarding the honour of the Crown and the integrity of treaty relationships. The existing consultation system is already viewed by some Indigenous leaders as burdensome and ineffective; the SEZ Act could exacerbate those issues further rather than resolving them.14
This danger also extends directly to protecting Indigenous heritage. The SEZ Act's exemption powers under section 5(1) could override even the amended Ontario Heritage Act,15 allowing projects to proceed without required archaeological assessments. This could result in the destruction of sacred sites without proper notification protocols that adequately involve First Nations.
3. Environmental Havoc: Special Economic Zones as Deregulation Hotspots
Schedule 9's SEZ framework doesn't just threaten rights; it establishes a legal pathway for significant environmental degradation. The executive's power to exempt "trusted proponents" or "designated projects" from any provincial environmental law or regulation under section 5(1) is at the heart of this threat.
This means that within an SEZ, projects could operate free from the constraints of cornerstone environmental legislation:
- Species at Risk: Protections under acts like the new Species Conservation Act, 202516 could be weakened or nullified for specific projects within an SEZ. This is concerning as changes to the Endangered Species Act17 already changes endangered species law by introducing "social and economic considerations"18 and allowing for "unconditional exemptions"19 from species protection. An SEZ could further dilute these protections.
- Environmental Assessments: The Environmental Assessment Act, critical for scrutinizing major projects, could be completely bypassed, eliminating a vital tool for identifying impacts and ensuring public and Indigenous input.
- Pollution Controls: Laws governing industrial emissions, water quality, and waste management could be selectively suspended, potentially turning SEZs into pollution hotspots with dire consequences for local ecosystems and communities.
The SEZ Act does not specify minimum environmental standards or limitations on these exemption powers, leaving such determinations to Cabinet discretion. This is significant as potential environmental impacts often trigger the duty to consult with First Nations. By removing environmental protections, the province is also removing the triggers for these consultations. For communities already dealing with industrial pollution, the SEZ model may not provide reassurance against further environmental impacts.
In conclusion, the "Special Economic Zones Act, 2025" in Schedule 9 is not a mere streamlining tool. It is a fundamental shift in governance, granting the executive vast, undefined powers to override established laws. This approach directly threatens constitutionally protected Aboriginal and Treaty rights and dismantles critical environmental protections, all under a veil of discretionary decision-making that lacks transparency and accountability.
Footnotes
1 Bill 5, Protect Ontario by Unleashing our Economy Act, 1st Sess, 44th Leg, Ontario, 2025 [Bill 5](referred to Standing Committee on the Interior after second reading 6 May 2025, under consideration by committee as of 22 May 2025).
2 Ibid, Sch 9.
3 Ibid, Sch 9 cl 2(1).
4 Ibid, Sch 9 cl 3(1).
5 Ibid, Sch 9 cl 4(1).
6 Ibid, Sch 9 cl 5(1) and 5(2).
7 Ibid, Sch 9 cl 6(1) and 6(2).
8 Ibid, Sch 9 cl 2(2), 3(3) and 4(3).
9 Canadian Civil Liberties Association, Statement, "CCLA Slams Ontario's Power Grab in Bill 5" (6 May 2025), online: https://ccla.org/press-release/ccla-slams-ontarios-power-grab-in-bill-5/ [CCLA].
10 Bill 5, supra note 1 at Sch 9 cl 7(1) and 7(5).
11 Ibid, Sch 9 cl 2(1).
12 Ibid, Sch 9 cl 3(1) and 4(1).
13 Ibid, Sch 9 cl 5(1).
14 Ontario, Chiefs of Ontario, Bill 5 – Protect Ontario by Unleashing our Economy Act, 2025: Analysis and Next Steps, (Briefing Note), by Chiefs of Ontario – Policy and Communications (Toronto: COO 23, April 2025).
15 Bill 5, supra note 1 at Sch 7.
16 Bill 5, supra note 1 at Sch 10.
17 Bill 5, supra note 1 at Sch 2.
18 Ibid, Sch 2 cl 1(2).
19 Ibid, Sch 2 cl 43(2) and 45.
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