Bill 185, Cutting Red Tape To Build More Homes Act, 2024 Receives Royal Assent

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The Cutting Red Tape to Build More Homes Act, 2024 (Bill 185), received royal assent from the Province of Ontario (the "Province") on June 6, 2024. This legislation is the latest effort by the Province to accelerate...
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Introduction

The Cutting Red Tape to Build More Homes Act, 2024 (Bill 185), received royal assent from the Province of Ontario (the "Province") on June 6, 2024. This legislation is the latest effort by the Province to accelerate the development of new housing by removing perceived barriers. It also unwinds some of the Province's previous amendments which had the unintended consequence of hampering the timely processing of development applications.

Bill 185 was introduced in the Ontario legislature and received first reading on April 10, 2024. At that time, Aird & Berlis LLP's Municipal and Land Use Planning Group released a newsflash summarizing and providing commentary on the proposed amendments. Through the legislative process, the Standing Committee on Finance and Economic Affairs made certain amendments to Bill 185 resulting in an in-force statute that contains important key differences from the first reading version.

This article provides an overview of the in-force statute, highlighting the key changes that were made following Bill 185's introduction.

Planning Act Amendments

Further Elimination of Third-Party Appeal Rights

Bill 23, the More Homes Built Faster Act, 2022, 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. Amendments made by the Standing Committee have further expanded the definition of "specified person" to include a number of other "persons" similar in nature and activity to those "specified persons" previously identified in the Planning Act. The definition now includes NAV Canada, airport operators, aggregate and environmental compliance permit holders with sites within 300 metres and the owners of any such sites.

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 of Municipal Affairs and Housing (the "Minister") or a "specified person." In doing so, the Province eliminated appeals by third-party landowners, ratepayers and other members of the public.

As originally introduced, Bill 185 proposed 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) were 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.

This proposed amendment was modified by the Standing Committee to permit appeals by the "registered owner" of any land to which an official plan or zoning by-law would apply if, before the plan was adopted, the owner made oral submissions at a public meeting or written submissions to the council.

The result of this amendment is that ratepayer groups and industry organizations no longer have the right to appeal to the Ontario Land Tribunal any municipally approved official plan, official plan amendment, zoning by-law, zoning by-law amendment, draft plan of subdivision, site plan or minor variance. While these groups may continue to seek party status where an appeal has been made by a "specified person" or "public body" or "registered owner," they can no longer be the named appellant and risk losing their party status should the underlying appeal be withdrawn.

Disagreements are likely to arise over the interpretation of the term "registered owner" and whether agents acting on behalf of registered landowners – including landowner groups, joint venture nominees, tenants or other related entities – would qualify. This is now an issue for existing appellants as the in-force legislation provides that existing third-party appeals (i.e., appeals by a party other than a "specified person," "registered owner" or "public body") will be retroactively dismissed if a hearing on the merits of the appeal had not been scheduled before April 10, 2024. Appeals by "registered owners" will not be retroactively dismissed.

New Appeal Rights for Settlement Area Expansion Applications

The in-force legislation amends the Planning Act to allow a private applicant to appeal a refusal or non-decision on a private application to expand an existing settlement area boundary, 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 proposed 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, the in-force legislation expands 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 is now mandatory.

Under the in-force legislation, approval authorities will 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 amendment is 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... Maybe

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, the More Homes for Everyone Act, 2022'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, the in-force legislation removes 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 have been amended to simply permit applicants to seek pre-consultation. The applicant is also now empowered to seek a motion before the Ontario Land Tribunal at any time after pre-consultation has occurred or after application fees have been paid.

It must be noted, however, that despite these amendments, any pre-consultation-related official plan amendments that were adopted following Bill 109 and prior to the coming into force of Bill 185, which imposed mandatory pre-application requirements, will remain in effect. Nine of these types of post-Bill 109 official plan amendments were appealed by the Building Industry and Land Development Association (BILD). With the retroactive removal of third-party appeal rights (noted above), only those appeals that have been scheduled for a merits hearing or that involve registered owners will proceed. We understand this to currently include the appeals of the Burlington, Pickering, Vaughan and Toronto post-Bill 109 official plan amendments.

Finally, the in-force legislation amends 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

The in-force legislation adds subsections 16(22)-(24) and 34(1.1)-(1.3) to the Planning Act 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 the in-force legislation, 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.

As of July 1, 2024, the adopted official plans of lower-tier municipalities in Peel, Halton and York will be subject to provincial approval through the Ministry of Municipal Affairs and Housing. To alleviate the impact of this change, the Province proposes to amend O. Reg. 525/97 to exempt most official plan amendments of the lower-tier municipalities adopted on or after July 1, 2024, from the need for the Minister's approval. Specifically, the proposed amendments to the regulation would provide that only new official plans, amendments adopted in accordance with section 26 of the Planning Act, and amendments related to protected major transit station areas would require the Minister's approval.

The Province has further indicated that on and after July 1, 2024, site-specific official plan amendments previously exempted by the upper-tier municipality from its need for approval will be reviewed and adopted by the lower-tier municipality without an additional level of approval.

The scope of the Minister's approval authority over official plans and official plan amendments adopted by the above-noted lower-tier municipalities is important when considering the application of ss. 17(36.5) of the Planning Act. Under this subsection, when the Minister issues a decision as the approval authority, the Minister's decision is not capable of being appealed to the Ontario Land Tribunal.

As an example, a new official plan adopted by council to any of the above-noted lower-tier municipalities will be subject to Ministerial approval. Once the Minister renders his/her approval decision (with or without modifications), the new official plan will come into effect. There will be no right to appeal any portion of the new official plan even for the "registered owners" of lands affected by the new official plan. Affected landowners will have to pursue private applications if they believe amendments are necessary.

Finally, decisions regarding plans of subdivision and consents would also be assigned to the relevant lower-tier municipalities on July 1, 2024 (where such authority has not already been assigned).

The Province's consultation on regulatory amendments to O. Reg. 525/97 is open until June 26, 2024.

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").

The in-force legislation re-enacts 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 widens 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).

The in-force legislation adds a new section 49.3 to the Planning Act, which authorizes 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 now provides 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, the in-force legislation adds 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 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 also provides the Province with a similar power applicable within the City of Toronto.

Exemption of Post-Secondary Institutions from Planning Act Requirements

The in-force legislation adds 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

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.

The in-force legislation adds a new section 106.1 which allows 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 also allows 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 has been 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.

The in-force legislation repeals section 70.3 of the Planning Act. In its place, a new section 86.1 has been added to Part III (Specific Municipal Powers) of the Municipal Act, 2001. This new section provides 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 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 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 has been 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

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. The in-force legislation reverses that deletion, thereby allowing municipal authorities to once more 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, the More Homes, More Choice Act, 2019. 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.

Prior to the coming into force of Bill 185, the freeze applied so long as building permits are pulled (and relevant development charges are paid) within the "prescribed amount of time," which was set at two years from the approval of the relevant planning application. The in-force legislation reduces the "prescribed amount of time" to 18 months.

Repeal of Mandatory Phase-In

Bill 23 previously amended the Development Charges Act, 1997 torequire 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.

The in-force legislation deletes the above-summarized "phase in" requirements and creates transition rules for development charge by-laws impacted by this change:

For DC By-laws passed on or after January 1, 2022, but before November 28, 2022:
  • The reduced "phase-in rates" continue to apply to charges imposed on or after November 28, 2022, and before June 6, 2024 (i.e., the day that Bill 185 received royal assent).
  • Example: A development charge rate is "frozen" by an applicant filing a site plan application after November 28, 2022, and before June 6, 2024. The "frozen" rate will still benefit from the "phase in" discount.
  • However: Pursuant to the changes made by Bill 185, rates frozen prior to November 28, 2022, will no longer benefit from the "phase in" discount, and may therefore, in effect, be increased.
For DC By-laws passed after November 28, 2022:
  • There are no specific transition provisions related to the "phase in" for a development charge by-law passed after November 28, 2022.
  • New subsection 19(1.3) allows a municipality to amend a DC By-law to increase a development charge imposed during the first four years that the DC By-law was in force to the amount that could have been charged if the mandatory "phase in" had never been in effect.
  • The above-described increase must be passed within six months after Bill 185 received royal assent (i.e., June 6, 2024) and is not subject to the normal requirements associated with the passage of a DC By-law (i.e., no background study, public notice or appeals to the Ontario Land Tribunal).

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. This latest draft provides a more detailed and comprehensive picture of the Province's directions for land use planning going forward.

The Province has not yet released or announced a date for the adoption of the new Provincial Planning Statement.

The Municipal & Land Use Planning Group at Aird & Berlis LLP is well-acquainted with the ever-evolving legislative regime governing and affecting development in Ontario. If you have questions or require assistance, please contact a member of the group.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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