Shortly into its new term, the Provincial Government of Ontario (the "Province") has proposed additional and controversial new legislation seeking to "protect" Ontario, which will directly impact Ontario's construction and development industry. On April 17th, 2025, the Province introduced Bill 5: Protect Ontario by Unleashing Our Economy Act, 2025 ("Bill 5"), following shortly after Bill 2: Protect Ontario Through Free Trade Within Canada Act, 2025 ("Bill 2") (see our summary of Bill 2 here) and preceding Bill 17: Protect Ontario by Building Faster and Smarter Act ("Bill 17") (to be discussed in our forthcoming bulletin).
Most of the changes proposed under this legislation will come into force and effect upon the bill receiving Royal Assent. As of the date of this bulletin, Bill 5 remains in second reading and has been referred to a Standing Committee for further consideration.
As the second bill in the "Protect" trilogy, Bill 5 (according to the Province's news release) aims to "streamline approval processes" and "cut red tape and duplicative processes that have held back major infrastructure". It proposes to do this by fast-tracking critical mineral and mining projects by amending a number of pieces of legislation, including:
- the Electricity Act, 1998;
- the Endangered Species Act, 2007;
- the Environmental Assessment Act;
- the Environmental Protection Act;
- the Mining Act;
- the Ontario Energy Board Act, 1998;
- the Ontario Heritage Act; and
- the Rebuilding Ontario Place Act, 2023.
Bill 5 also proposes to enact two new pieces of legislation:
- the Special Economic Zones Act, 2025; and
- the Species Conservation Act, 2025 (to eventually replace the Endangered Species Act, 2007).
Highlighted below are some of the key changes and new legislation proposed by Bill 5 impacting construction and development in Ontario.
Amendments to the Endangered Species Act, 2007 and the Creation of the Species Conservation Act
The proposed amendments to (and ultimate repeal of) the Endangered Species Act, 2007 ("ESA") are among the most controversial in Bill 5. The proposed revised purpose of this legislation is to promote the protection and conservation of species while also accounting for social and economic considerations like the need for sustainable economic growth in Ontario.1 In particular, these changes aim to accelerate development, including specified mining projects, by simplifying and streamlining the ESA's processes and requirements until the new Species Conservation Act, 2025 is enacted.
Section 7 of the ESA currently directs a designated Ministry of Environment, Conservation and Parks ("MECP") official to file a regulation that lists all species classified as extirpated, endangered, threatened and special concern by the Committee on the Status of Species at Risk in Ontario ("COSSARO"). Bill 5 proposes to replace Section 7 with a new provision that would give the Lieutenant Governor in Council discretion to add, remove or reclassify protected species in the Species at Risk in Ontario List ("SROL") regardless of COSSARO's classifications.2
Bill 5 also proposes to amend the ESA by removing "harass" from the prohibited activities impacting protected species under clause 9(1)(a) of the ESA.3 Additionally, and perhaps most notably, it proposes to narrow the definition of "habitat" in Subsection 2(1) to create more certainty in determining what a habitat is, while focusing on preserving its "core elements". This would change the "habitat" definition from "an area on which the species depends, directly or indirectly, to carry on its life processes" to:
- For animal species: a dwelling place, such as a den, nest, or similar place, occupied or habitually occupied by one or more members of a species for the purposes of breeding, rearing, staging, wintering, or hibernating; and the area immediately surrounding a dwelling place described above that is essential for the purposes mentioned;
- For vascular plant species: the critical root zone surrounding a member of the species; and
- For all other species (for example, lichens): an area on which any member of the species directly depends to carry out its life processes.4
The proposed amendments also seek to repeal provisions relating to government response statements, management plans and agreements. This would include Subsection 12(1) of the ESA, which requires the preparation of management plans for each special concern species listed on the SROL.5 While these plans are intended to provide advice and recommendations to the Minister on approaches for managing the species in Ontario, the MECP would instead have the flexibility to focus the development of conservation guidance where it is needed.
In an effort to streamline commencement of development activities which are currently prohibited under the ESA, Bill 5 proposes to repeal Section 17 of the ESA setting out requirements for when a permit may be issued under the ESA and replacing it with new provisions providing the Minister with discretion to issue such permits and authority to impose conditions, as the Minister considers appropriate.6 It further proposes to repeal Section 18, which authorizes proponents to engage in designated prohibited activities if the requirements specific to the species under the regulation at issue are satisfied.7 While this would appear to be more conservationist, it remains to be seen what the eventual successor-legislation discussed below, ultimately contains in terms of such protections.
While there is much criticism about the proposed amendments, Bill 5 does expand the MECP's enforcement authority to more easily intervene and take protective action through the issuance of an order where a provincial officer has reasonable grounds to believe a person is engaging, has engaged or may engage in an activity that would contravene the ESA. Such order may include a broad range of preventative actions, including requiring a project owner to engage other contractors or consultants to prepare a plan, implement sampling, testing, monitoring and reporting requirements or "any other action necessary to mitigate any adverse effect on a species specified in the order or its habitat".8
Most importantly, the proposed amendments to the ESA are intended to be transitional as Bill 5 seeks to ultimately repeal and replace the ESA with new legislation: the Species Conservation Act, 2025.
Enactment of the New Species Conservation Act
The newly-proposed Species Conservation Act, 2025 (the "SCA") would repeal and replace the ESA enacting a new species at-risk protection regime. The SCA aims to accelerate projects and reduce unnecessary delays through a registration-first approach, allowing projects to commence without the Minister's review and approval of permits, which review and approval process is known to be slow and complex.9 The SCA would establish a "Species Conversation Registry" allowing project proponents to start their activities once they have submitted their registration without the need to obtain permits as long as they follow the regulatory requirements regarding habitat and species protections.10 However, the SCA would still include a general prohibition for activities that would result in a species no longer living in the wild in Ontario.11
The SCA would establish the "Species Conservation Program", through which the Province plans to enhance support for voluntary conservation initiatives.12 This program is intended to fund a wide range of eligible activities aimed at improving outcomes for threatened and endangered species across Ontario.13
The SCA would reduce duplicative efforts by proponents currently resultant under the ESA by removing the requirement for authorization to carry out an activity on non-federal lands impacting species protected under the federal Species at Risk Act, which authorization is currently required from both the federal and provincial authorities.14
Amendments to the Environmental Protection Act and Environmental Assessment Act
The proposed amendment to the Environmental Protection Act would stop the charging of fees for registrations on the Environmental Activity and Sector Registry ("EASR")15 and may possibly require refunding of such fees in circumstances where a registration has been removed from the Registry under the Act.16 These changes aim to reduce the financial burden associated with EASR registrations.17
The proposed amendment to the Environmental Assessment Act is even narrower and only relates to: (1) the termination of an agreement entered into under Section 3.0.1 of the Environmental Protection Act in relation to the proposed Eagle's Nest multi-metal mine in Northern Ontario near McFaulds Lake; and (2) an exemption under Part II.3 of the Act relating to the Chatham-Kent waste disposal site.
Enactment of Special Economic Zones Act, 2025
Also controversial and potentially of significant consequence is the newly proposed Special Economic Zones Act, 2025 ("SEZA"). Despite being a very short piece of legislation, the SEZA would grant new, broad, and undefined powers to the Lieutenant Governor and Minister of Economic Development, Job Creation and Trade, including the power to override any Act located within designated areas of the Province, or for designated projects or trusted persons.
The new SEZA aims to streamline regulatory requirements for "trusted proponents" who undertake projets within designated "special economic zones".18 Specifically, the SEZA would authorize the Lieutenant Governor to designate special economic zones (each an "SEZ") throughout the Province, and authorize the Minister to designate trusted proponents and projects.19 The Act would also authorize the Lieutenant Governor to (i) exempt by regulation a trusted proponent or designated project from requirements under the SEZA, subject to conditions specified in such regulation, and (ii) modify the application of provisions in an Act, regulation or other regulatory instruments applicable to trusted proponents or designated projects in an SEZ or exempt them from such requirements.20
There appears to be no bounds to this legislation in terms of any stated purpose (e.g., for the purpose of streamlining the construction of new housing), and no consultation required, including with other Provincial Ministries (e.g., the Ministry of Municipal Affairs and Housing or MECP). The Act also provides for significant protections for the Government in exercising its authority under this legislation.
Indeed, the vague language in Bill 5 leaves open the door to set aside or override environmental, endangered species, heritage, Indigenous and other protections of sensitive persons, lands, species, natural resources and other things with intrinsic value to the public for the benefit of the "economy". It is also not clear who would be considered a "trusted proponent" and what makes an area or project a "special economic zone". While this would make it easier for the government to clear a path for projects it supports, it also would create instability in Ontario's legislative framework and potentially irreparably harm the subjects of these existing protections.
Amendments to the Ontario Heritage Act
The Ontario Heritage Act ("OHA") will also realize a number of significant changes through Bill 5, which are aimed at advancing the protection and management of archaeological resources in Ontario. The Minister of Heritage, Sport, Tourism and Culture Industries' inspection powers under Section 51.2 will be expanded, allowing the Minister to order inspections for the purpose of assessing whether any artifacts or archaeological sites are present on land or underwater within the Province.21 A new Section 61.1 further authorizes the Minister to issue assessment orders that prevent any alteration or removal of artifacts until a licensed archaeologist completes fieldwork and confirms the site no longer holds cultural heritage value.22
The amendments would re-enact Section 66, granting the Minister greater discretion and the authority to direct the deposition of artifacts and archaeological materials, including placing them in public institutions, archaeological collections, or with Indigenous communities.23 Additionally, authorized individuals may enter non-residential properties during business hours to seize items, and inspectors or investigators may seize artifacts during investigations including those previously released after a conviction.24
Perhaps most significantly, Bill 5 also provides the Lieutenant Governor with the power to exempt properties from certain archaeological assessment requirements under the Act or other legislation, provided such exemptions support specified provincial priorities through new Section 66.1.25
These changes could have potentially significant impacts on developers, owners, and contractors, for better or worse. For instance, the proposed amendments to Section 68.3 provide that no compensation is owed to property owners or developers for losses related to any government actions, including if their permits are delayed, artifacts are seized, or even if their site is shut down. Additionally, the new assessment orders may cause further delays, as development cannot proceed until a licensed archaeologist confirms that the site no longer holds cultural heritage value. Parties looking to develop a site will therefore want to ensure that they undertake sufficient investigations in advance to understand and plan for the potential exposure to such costs and delays.
Amendments to the Electricity Act and Ontario Energy Board Act:
The proposed amendments to the Electricity Act, 1998 and Ontario Energy Board Act, 1998 would allow the Government to regulate the procurement of goods and services by Ontario energy sector participants by imposing requirements or restrictions on any good or service used or procured on the basis of the country, region or territory of origin of such good or service.26
Such "place of origin" procurement restrictions may be placed on:
- the Province's Independent Electricity System Operator ("IESO"),
- the provincially-owned Ontario Power Generation ("OPG"),
- any other Ontario Energy Board ("OEB") licensed participants in Ontario's electricity sector, including electricity generators, transmitters, distributors, retailers, wholesale purchasers, wholesale seller, and submetering providers, and/or
- natural gas transmission, distribution and storage companies.
Such requirements and restrictions could be imposed by regulation, or within a procurement directive from the Minister to the IESO (obligating the IESO to specify requirements relating to the country, region or territory of origin of any good or service used as mandatory qualifications on bidders within the IESO's own procurements for electricity supply, capacity, storage, transmission, demand management, conservation, emission reductions, electrification, etc.).27
Furthermore, amendments to both Acts would preclude causes of action against the Crown, the IESO, OPG and others as a result of the introduction or implementation of such new "place of origin"-based restrictions.28 These new regulatory and directive powers appear to be connected with the current trade and tariff disputes with the United States, as they would allow the Ontario Government to swiftly and unilaterally impose "Buy Ontario", or "Buy Canadian", or "Don't Buy American" restrictions on the high-value energy infrastructure sector.
The concept may feel familiar to those in the sector, as the previous Liberal provincial government similarly imposed "domestic content" obligations in its 2010 Feed-In Tariff Program, requiring new wind and solar power projects to source 50-60% of their parts and services from Ontario suppliers. That requirement was eventually held to be discriminatory by the World Trade Organization in 2013, and the Ontario Government ultimately abandoned the effort in later iterations of the Feed-In Tariff procurement program.
Conclusion
Bill 5 aims to stimulate the Province's economy by reducing red tape and expediting approvals in the development of various types of projects, including infrastructure projects. It does so largely by eliminating or reducing delays caused by environmental, natural resources and cultural heritage regimes, which include both limitations and advanced approval requirements in undertaking designated activities. Further, in the face of economic threats in relation to ongoing trade and tariff disputes with the United States, Bill 5 also requires certain actors to procure services and goods from specified jurisdictions.
For this very reason, Bill 5 is being applauded by many members of the construction, development, mining and aggregate resources industries as a way to streamline their projects, while unsurprisingly, others, including environmental, heritage and Indigenous advocates, are opposed to the removal or reduction of such protections.
McMillan will continue to monitor the status of Bill 2, Bill 5 and Bill 17. If you have questions regarding the proposed amendments as they relate to the future of Ontario's planning, development, and land use, please contact any of the authors of this bulletin, and our team would be pleased to discuss this important piece of legislation and its potential impacts with you.
Footnotes
1. Bill 5, Schedule 2, Section 1(2).
2. Bill 5, Schedule 2, Section 8.
3. Bill 5, Schedule 2, Section 12(1).
4. Bill 5, Schedule 2, Section 2(3).
5. Bill 5, Schedule 2, Section 14.
6. Bill 5, Schedule 2, Section 15.
7. Bill 5, Schedule 2, Section 16.
8. Bill 5, Schedule 2, Section 27.
9. Bill 5, Schedule 10
10. Bill 5, Schedule 10, Sections 16-20.
11. Bill 5, Schedule 10, Section 15; Proposed
Intermittent Changes to the ESA.
12. Environmental Registry of Ontario, "Proposed
interim changes to the Endangered Species Act, 2007 and a proposal
for the Species Conservation Act, 2025,"
("Proposed Intermittent Changes to the
ESA")
13. Proposed Intermittent Changes to the ESA.
14. Bill 5, Schedule 10, Section 2.
15. Bill 5, Schedule 4, Section 1.
16. Bill 5, Schedule 4, Section 1.
17. Bill 5, Schedule 4, Section 1.
18. Ontario News Release: Ontario Unleashing Economic Potential of Critical
Mineral and Resource Development.
19. Bill 5, Schedule 9, Section 2 and 3.
20. Bill 5, Schedule 9, Section 5(1).
21. Bill 5, Schedule 7, Section 1
22. Bill 5, Schedule 7, Section 3.
23. Bill 5, Schedule 7, Section 4.
24. Bill 5, Schedule 7, Section 4.
25. Bill 5, Schedule 7, Section 5.
26. Bill 5, Schedules 1 and 6.
27. Bill 5, Schedule 1, Section 1; and Schedule 6,
Section 1.
28. Bill 5, Schedule 1, Section 1; and Schedule 6, Section 3.
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
