Developer-Friendly Changes To Ontario's Record Of Site Condition Regime

On October 23, 2025, the Province of Ontario amended the Records of Site Condition regulation, O. Reg 153/04, (the "RSC Regulation") under the Ontario Environmental Protection Act (the "EPA") in support of its objective to build homes faster by eliminating obstacles to development. In this case, the amendments decrease the need for an RSC where brownfield developments (being vacant or underutilized properties where past industrial or commercial activities may have left environmental contamination behind that now present opportunities for redevelopment and revitalization) are not at issue. The Ontario Ministry of Environment, Conservation and Parks (the "Ministry") also published a companion guidance document explaining the amendments. The changes to the RSC Regulation are targeted at low-risk development and renovation projects, which could ease the burden of some developers in a limited way where an RSC would otherwise be required.

This bulletin summarizes these recent amendments to the RSC Regulation.

When is an RSC required?

Under the EPA, an RSC is required to be filed with the Ministry before a person can change the use of a property from a less sensitive to a more sensitive use (e.g., industrial to residential use). To file an RSC, a qualified person ("QP"), being an environmental consultant with designated experience and qualifications under the EPA, is required to conduct, at a minimum, a Phase I Environmental Site Assessment ("ESA") and, often, a Phase II ESA to confirm the environmental condition of the property meets the standards required for the more sensitive use. In the case of brownfields, additional investigation and remediation work is usually required to ensure the property meets the environmental standards for the planned more sensitive use.

A Phase I ESA assesses potentially contaminating activities historically and currently at the property and identifies areas of environmental concern. It is prepared based on a review of public searches, historical environmental reports, interviews with the property owner or operator and a site visit, but importantly does not include any sampling. A Phase II ESA, on the other hand, investigates the areas of environmental concern identified in the Phase I ESA through sampling to confirm if contaminants are in fact present at the site. While this sampling usually focuses on soil and groundwater, it may also include surface water, indoor air or vapour where appropriate.

There are many instances, however, where a person will file an RSC despite it not being required under the EPA, particularly where it is required as a condition of financing or to obtain a municipality's land use planning approval. It can also serve to increase the value of the property or support a sale transaction.

What did the amendments change?

There are two main changes to Ontario's RSC regime. The first is the addition of section 11.1 to the RSC Regulation, which prohibits the submission of an RSC to the Ministry when the RSC is solely based on a Phase I ESA.¹ Prior to the amendments, such filing could occur where no Phase II ESA is required (meaning no potentially contaminating activities or areas of potential environmental concern were identified by the QP during the Phase I ESA). Strangely, the prohibition is subject to an exception where the property owner wants to file an RSC at their own discretion, but this exception is not available if the filing is a requirement of another person or body.² The RSC Regulation expressly provides that the exception applies to a requirement imposed by a person or body including (but not limited to) a requirement by a public body under a legal instrument (e.g., a municipality's by-law requirement) or pursuant to an agreement the property owner entered into (e.g., a requirement of a financial institution pursuant to a lending agreement or arising from a purchase or sale agreement).³

To use this exemption, the property owner must submit a written declaration to the Ministry stating that they are filing the RSC voluntarily and not in order to comply with a third-party requirement.⁴ It is unlikely, however, that the Ministry will police whether a person wanted to file an RSC based on a Phase I ESA for their own interest rather than in satisfaction of a third party's requirement and will instead rely on the veracity of the written declarations filed by property owners.

There is a one-year transition period for this amendment wherein RSCs based on Phase I ESAs can be filed to satisfy a requirement of another person that predates the amendment.⁵ These filings must still be accompanied by a written declaration by the property owner stating that the third party's requirement to file the RSC was imposed on the property owner before the amendment came into force.⁶ Additionally, if an RSC filing submitted prior to the amendments that would now be prohibited is rejected by the Ministry and needs to be revised and resubmitted, it can be revised and resubmitted for filing without a declaration whether or not it was filed voluntarily (i.e., prior RSC filings that were not accepted are grandfathered into the current RSC regime).⁷

Presumably, this amendment is targeted at preventing municipal and financial institutions from requiring landowners to file an RSC where a Phase II ESA is not required and provide developers a legal basis to push back on such requirements. This could save time in bringing developments to market. At the same time, this would prevent voluntary filing of RSCs by property owners that would otherwise not have been required to do so where they are additionally subject to a requirement imposed by a third-party. However, where municipalities or financial institutions fail to change their policies or legal requirements that an RSC be obtained prior to granting approvals or loans, a property owner's inability to file an RSC based on a Phase I ESA will likely impact their ability to obtain such approvals or loans. Further, it is not difficult for a developer to obtain an RSC based solely on a Phase I ESA where the finding of the ESA is that a Phase II ESA is not required (because this means there is no need for a Phase II ESA or any other environmental investigations or remediation work). Consequently, it is unclear how this amendment would actually ease the regulatory burdens of a developer in any meaningful way.

The second change amends section 15(1) of the RSC Regulation. Before the amendments, there was an exemption from RSC filing requirements for a change in property use of existing buildings used for commercial or community use if the following criteria are met:

1. After the change, the property will continue to be used for commercial or community use, but with the addition of residential use, institutional use, or both;
2. The change in use (i.e., the intended residential or institutional uses) must be restricted to the floors above the ground floor;
3. Before and after the change, the building must have no more than six storeys;
4. The building envelope will not change and there will be no additions to the exterior portions of the building; and,
5. The property on which the building is located cannot be, and cannot have been historically, used for an industrial use, a garage, a bulk liquid dispensing facility, or for the operation of dry-cleaning equipment.

The amendments expand this exemption by removing the six-storey height limit, allowing additions to the exterior of the building on floors above the ground floor, and modifying the ground floor where the changes are made to comply with fire safety and accessibility requirements or adding attached outdoor structures (such as a portico).⁸ This allows a taller building, for example an existing office tower (a commercial use), to be changed to mixed use with residential on the upper floors and commercial on the bottom level without the need to have an RSC filed prior to this change.

This amendment assists developers and property owners seeking to change the use of an existing building without the need to go through the RSC filing process which appears, in the case of converting commercial units to residential, to respond to Ontario's need for additional residential housing.

For additional information on how the proposed amendments to RSC requirements may impact your projects, business or transactions, please reach out to the authors of this bulletin.

Footnotes

1. Records of Site Condition, O. Reg 153/04 at s 11.1(1).

2. Ibid at s 11.1(2).

3. Ibid at s 11.1(4).

4. Ibid at s 11.1(2).

5. Ibid at s 11.1(3).

6. Ibid.

7. Ibid at s 11.1(6).

8. Ibid at s 15(1).

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