Encumbered Parkland Provisions

An Order fit for Canada Day! The New Parkland Rules Have Come into Force.

Through Order in Council 933/2026, the Province has set July 1, 2026 as the day which subsections 42(4.30) to (4.39) of the Planning Act come into force. This Order is accompanied by Ontario Regulation 207/26, which amends Regulation 509/20: Community Benefit Charges and Parkland (the “Regulation”), to prescribe the requirements for identifying land proposed to be conveyed for park or other public recreational purposes, the notice requirements where a municipality refuses to accept the conveyance, the materials to be included in the record if the refusal is appealed and the criteria the Tribunal shall consider in determining whether the land should be conveyed to the municipality for park or other public recreational purposes.

As you will recall, this new parkland regime was first proposed in 2022 through Bill 23, which introduced the ability for owners to identify encumbered lands and privately owned public spaces (“POPs”) to be considered for parkland dedication purposes. However, these changes were never proclaimed into effect. This year, Bill 98 refined these proposed provisions, but it continued to remain unclear when they would come into force.

Refresher on the New Process

Under the new process, at any time before a building permit is issued, an owner of land may identify a part of the land that it proposes to be conveyed to the municipality to satisfy in part or in whole a requirement of a parkland dedication by-law. In doing so, the identification of land may include:

1. Land that is part of a parcel of land that abuts one or more other parcels of land on a horizontal plane;
2. Land that is subject to an easement or other restriction;
3. Land that is encumbered by below grade infrastructure; or
4. An interest in land that would not be conveyed in fee to the municipality, but which interest is sufficient to allow the land to be used for park or other public recreational purposes (i.e. POPs). In this case, if the municipality accepts this conveyance, it may require the owner to enter into an agreement that provides for the land to be used for park or other public recreation purposes.

If the municipality refuses to accept the identified land as parkland dedication, it shall provide notice to the landowner. The owner who receives notice may, within 20 days, appeal the municipality’s refusal to the Ontario Land Tribunal for a hearing. The owner may also appeal its identification to the Tribunal if it does not receive notice within 90 days of identifying the proposed parkland to the municipality.

The Tribunal will then hold a hearing and shall determine whether the identified parkland meets the prescribed suitability criteria, outlined below, and if it does, it shall order that the land:

1. Be conveyed to the local municipality for park or other public recreational purposes; and
2. Be deemed to count towards any requirement set out in the parkland by-law that is applicable to the development or redevelopment.

However, the Tribunal is limited to only be able to credit 70% of the land area as parkland dedication, unless a municipality determines that a greater percentage should be recognized.

The Regulation

The Regulation was issued on June 26, 2026, and now provides the following prescribed details required to implement this process.

Identification of Land

Section 8 of the Regulation sets out the information and materials an owner must provide when identifying land proposed to be conveyed to a municipality for park or other public recreational purposes.

The owner must provide:

• a plan of survey prepared by an Ontario land surveyor;
• a description of any existing or proposed easements or other restrictions to the land, including future restrictions;
• a description of any existing or proposed below-grade infrastructure that is encumbering, or could encumber, the land; and
• a statement from the owner indicating whether the land meets the prescribed criteria set out in section 11 of the Regulation.

For landowners and developers, this means that the suitability of proposed parkland should be considered early, particularly where the lands may be affected by easements or other restrictions, below-grade infrastructure, financial encumbrances, natural heritage features, public access, visibility, soil depth, or size and configuration constraints.

Notice of Refusal

Section 9 of the Regulation sets out the notice requirements where a municipality refuses to accept the proposed conveyance.

If a municipality decides to refuse the conveyance, notice must be given within 20 days of the municipality’s decision. The notice must include, among other things, an explanation for the refusal.

Record on Appeal

Section 10 of the Regulation prescribes the materials that must be included in the record if an appeal is filed.

The record must include:

• a copy of the information and materials submitted by the owner under section 8;
• a copy of the notice of refusal, if one was given; and
• a copy of any report considered by council relating to the identified land.

Suitability Criteria

Section 11 of the Regulation sets out the prescribed criteria the Tribunal shall consider for assessing whether the identified land is suitable for park or other public recreational purposes.

In particular, the land must not:

• contain contaminants that would pose a risk to human health;
• comprise hazardous lands or hazardous sites as defined in the Provincial Planning Statement;
• be affected by mine hazards, oil, gas and salt hazards;
• be affected by former mineral mining operations, mineral aggregate operations or petroleum resource operations;
• contain or be adjacent to natural heritage features and areas, unless the use of the land as a park would have no negative impacts on the feature or area.
• Be located in the Greenbelt Area, unless the land proposed for development or redevelopment is in the Greenbelt Area, in which case, its use must conform with the Greenbelt Plan or other applicable provincial plans.

The land must also:

• contain sufficient soil depth and volume to accommodate trees;
• be free of liens, charges or other financial encumbrances that will not be removed before conveyance;
• be available to the public at all times, subject to any municipal rules;
• be visible from municipal or other publicly owned land;
• be accessible by all users directly from municipal or other publicly owned land; and
• be of a size and shape that is appropriate for park or other public recreational purposes.

Key Takeaways

The Regulation provides a long-awaited structured process for proposing owner-identified parkland, including encumbered lands and POPs. However, the Section 11 prescribed criteria will limit the ability for certain constrained lands to be approved.

For development applications where encumbered lands or POPs may form part of the parkland strategy, the criteria should be considered early in the planning and design process. The materials submitted to the municipality should clearly explain how the proposed lands meet the prescribed criteria and should identify any easements, restrictions, below-grade infrastructure or other encumbrances affecting the lands.