By Isaac Tang, a partner with Borden Ladner Gervais LLP in Toronto.
Why Ontario’s new Growth Plan could be good news for builders
On May 2, 2019, the Government of Ontario released its highly anticipated policy document for stakeholders in the land development industry: A Place to Grow: Growth Plan for the Greater Golden Horseshoe.
The new Growth Plan is an important part of the Ford government’s housing supply action plan that includes Bill 108, the More Homes, More Choice Act, 2019. Bill 108, which received Royal Assent on June 6, 2019, is intended to help accelerate the planning approvals process, increase housing supply and address the anticipated population growth in the Greater Golden Horseshoe (GGH). In addition, the government has committed $1.4 million to help address the backlog of appeals at the Local Planning Appeal Tribunal, many of which are held up due to questions of interpretation with the Bill 139 process introduced by the former government.
The new iteration replaces the 2017 version of the Growth Plan. The government had released a draft (also known as “Proposed Amendment 1”) of the new plan in January for public consultation. For the most part, the changes in Proposed Amendment 1 have been incorporated into the new Growth Plan. The changes reflect a shift away from a ‘one size fits all’ approach and towards greater flexibility at the local level of development in certain cases, but demand greater provincial oversight in others.
All planning decisions in the GGH had to conform to the new Growth Plan as of May 16, subject to transition provisions. Given the nature of the changes, the new plan will have a significant impact on planning decisions going forward. The following are some of the highlights of the new Growth Plan that may be of interest to developers and home builders, recognizing that municipalities and public agencies may view the changes from a different perspective.
1. Greater Flexibility for Employment Land Conversions
The Growth Plan 2017 imposed strict policies that prohibited any conversion of employment lands for non-employment uses outside of a municipal comprehensive review (MCR). An MCR involves a comprehensive application of provincial policies to an official plan or official plan amendment (e.g., a secondary plan) and must be initiated by an upper-tier or single-tier municipality. This meant that local municipalities and developers could not advance applications for employment land conversions before the planning process at the upper-tier level has been resolved.
The new plan has retreated from this strict “top-down” planning approach. Applicants are now provided with a one-time window where they may apply for an employment land conversion in advance of the next MCR. This provides greater flexibility for employment land conversions to be approved where certain tests have been met. Note that one of those tests is that the lands proposed to be conveyed must demonstrate that the conversion would still “maintain a significant number of jobs through the establishment of development criteria.” The unanswered questions include what the Province considers “significant” and how development criteria alone will be able to guarantee a certain density of jobs for a particular parcel of land.
2. Introduction of “No-Touch” Provincially Significant Employment Zones
While providing additional flexibility for employment land conversions, the Ministry also identified 29 “provincially significant employment zones” (PSEZs, or “P-zeds”) across the GGH that it considers “crucial to the province’s economy.” Lands within PSEZs would require Provincial approval before they can be converted and cannot be converted outside of an MCR. In other words, they are considered “no-touch” lands from a conversion perspective unless the Province approves the conversion.
According to the Ministry, the purpose of PSEZs is to ensure that the Province continues to support a strong economy and maintain its global competitiveness. Clearly, the importance of not only encouraging but retaining jobs within Ontario was a major factor for the Ministry in introducing the PSEZ framework.
Some changes have been made to the PSEZs that were originally identified in the mapping of Proposed Amendment 1 include: an expanded area in central Hamilton, an expanded area in south Hamilton near the Hamilton airport, an expanded area near Tremaine Road and Britannia Road south of Milton, and a scoped area near the intersection of the 401 and 407.
Landowners with holdings near previously identified PSEZs should carefully review whether their lands are now included and may be subject to the more rigid employment land conversion policies. The Province has indicated that despite this mapping, it will still consider requests to review the PSEZs.
3. Greater Flexibility for Settlement Area Boundary Expansions
As with employment land conversions, the Growth Plan 2017 imposed very strict policies that prohibited settlement area boundary expansions outside of an MCR. The purpose of this restriction was to limit urban sprawl (renamed as “unmanaged growth” in the new Growth Plan), one of the guiding principles of the Growth Plan 2017. Previously, an MCR was required to expand or even adjust a municipality’s delineated settlement areas.
Under the new Growth Plan, municipalities can expand their settlement area boundaries in advance of an MCR, provided that they meet certain criteria (e.g., minimum density targets, comprehensive planning tests and servicing) and that the amount of land being added to the settlement area is not more than 40 hectares. While the protections with the Greenbelt appear strong, rural settlements or settlement areas within the Greenbelt may not be expanded through this process.
Municipalities may now also adjust settlement area boundaries outside of an MCR, subject to criteria, including that there be no net increase in land within settlement areas. The affected settlement areas also cannot be rural settlements or located within the Greenbelt.
4. Reduced Intensification and Density Targets for Some Municipalities
The Growth Plan 2017 set out the same intensification targets for all delineated built-up areas: 50% until 2031 and 60% thereafter. This meant that until 2031, a minimum of 50% of residential development each year would have occurred within the delineated built-up area.
Proposed Amendment 1 suggested immediately raising the intensification target to 60% for the Regional municipalities of Peel, Waterloo and York and for the City of Hamilton. However, this higher target was not carried forward in the new Growth Plan. Instead, intensification targets were reduced for these municipalities to meet the targets for Barrie, Brantford, Guelph, Orillia, Peterborough, Durham Region, Halton Region and Niagara Region. The former minimum 60% intensification target after 2031 was also removed.
Likewise, the former minimum density target of 80 residents and jobs combined per hectare in designated greenfield areas (areas designated in official plans for development to accommodate forecasted growth) has been removed and replaced with the following:
- Fifty residents and jobs combined per hectare in the cities of Barrie, Brantford, Guelph, Hamilton, Orillia and Peterborough, as well as the regions of Durham, Halton, Niagara, Peel, Waterloo and York.
- Forty residents and jobs combined per hectare in the city of Kawartha Lakes, and the counties of Brant, Dufferin, Haldimand, Northumberland, Peterborough, Simcoe and Wellington
The reduced intensification and density targets in the new Growth Plan permit greater flexibility for developers to provide ground-related housing to respond to market demand. However, the density policies of the Growth Plan 2017 did not appear to be the primary reason why developers opted for higher-density housing (e.g., stacked townhouses) in low-rise neighbourhoods. Rather, the cost of land, building materials and labour appeared to be key factors that would dictate the ultimate built form for a development site.
5. Greater Flexibility and Larger Major Transit Station Areas
As the name would imply, major transit station areas (MTSAs) are areas that surround existing or planned major transit stations. MTSAs include subway stations, light rail transit stations, inter-city rail stations and bus rapid transit stations. The new Growth Plan further expands the policies applicable to MTSAs by:
- Increasing the radius of MTSAs from 500m to 500-800m
- Clarifying that the Minister may lower the density target for a specific MTSA outside of a MCR, subject to streamlined criteria
- Allowing upper- and single-tier municipalities to delineate the boundaries of and set density targets for MTSAs in advance of the municipality’s next MCR, provided that they are done are in accordance with the Planning Act.
Municipalities and developers have long paid close attention to MTSA policies. Given the strength of those policies, it was well recognized that development near MTSAs would support increased densities, usually beyond what the community within the radius of the MTSA would anticipate. However, with the new MTSA policies, it will be interesting to see how PSEZs and MTSAs interact.
Over 81 MTSAs were reportedly located in the 29 PSEZs originally identified by the Province. With the expanded areas for both MTSAs and PSEZs, it will also be interesting to see how the policies that promote increased densities and mixed-use developments in MTSAs will be read together with PSEZ policies that prohibit employment land conversions.
6. Greater Flexibility for Rural Settlements
The new Growth Plan introduces the concept of “rural settlements”—existing hamlets or similar existing small settlement areas that are long-established and identified in official plans. These settlements must be serviced by private water and wastewater systems and contain a limited amount of undeveloped lands that are designated for development. They also include hamlets in the Greenbelt Plan, rural settlements in the Oak Ridges Moraine Conservation Plan and minor urban centres in the Niagara Escarpment Plan.
Given their unique role in the GGH, the new Growth Plan clarifies that rural settlements are not part of designated greenfield areas. The new plan also permits minor adjustments to the boundaries of rural settlements if certain criteria are met.
For developers and home-builders, the rural settlement policies in the new Growth Plan would permit greater flexibility in terms of permitting the “rounding out” of existing development in rural areas (that is, “filling in” an area with additional development—typically a few lots—provided there is a sufficient gap. This was permitted in the old Greenbelt Plan 2005, but was removed in the current version.)
The changes also clarify that permitting development in such areas would not take away from the growth intended to be directed towards urban settlement areas.
7. Refinements to Provincial Agricultural and Natural Heritage System Mapping
The Growth Plan 2017 was released with updated Provincial Agricultural and Natural Heritage System mapping for the GGH. This new mapping was not always consistent with the existing mapping that was recorded by the municipalities. This disconnect between the Provincial and municipal mapping created confusion and uncertainty for development sites that were characterized differently.
The new Growth Plan, though, clarifies that the Provincial mapping does not apply until it has been implemented by the applicable upper-tier or single-tier municipality in its official plan. The new policies not only provide that refinements of the Agricultural and Natural Heritage System mapping may occur at the upper-tier and single-tier level, but also specifically allow upper-tier municipalities to undertake the refinement exercise separately for each municipality.
That clarification resolves much of the uncertainty for developers that were affected by the Provincial mapping. However, developers should still carefully review the mapping proposed for development sites when the municipality undertakes its implementation exercise to ensure that the appropriate refinements are captured.
Given the sweeping changes proposed, the new Growth Plan will have a significant impact on current and future planning approvals. It remains to be seen how the amended plan will affect appeals that are currently underway at the Local Planning Appeal Tribunal, but the Province has released a summary of the proposed transitional regulation on the Environmental Registry of Ontario (Comments on the proposed changes to the transition regulation were accepted by the Province until June 1.)
Needless to say, developers and home builders alike would be wise to consult with their planning and legal professionals early in the process to better understand the nature of the changes, how the new plan may interact with the legislative changes in Bill 108 and their collective impact on their businesses and long-term development strategies.