On August 20, 2024, the Province of Ontario (the "Province") released the updated Provincial Planning Statement (the "2024 PPS") following a lengthy period of consultation with a wide array of stakeholders that began in late 2022. The Province initially published a draft of the 2024 PPS on April 6, 2023 (the "Draft PPS") as discussed in our previous bulletin on Bill 97, which received updates earlier this year as discussed in our further bulletin here. The 2024 PPS will come into force on October 20, 2024 and, while this final document has not been substantially amended from the Draft PPS, it includes a number of important revisions as considered below.
The 2024 PPS replaces both the Provincial Policy Statement, 2020 ("2020 PPS") and A Place to Grow: Growth Plan for the Greater Golden Horseshoe (the "Growth Plan"), and consolidating elements of both into a single land use policy document. The 2024 PPS, once in force, will deliver a streamlined policy document aimed at providing more flexibility to municipalities as well as additional tools to help reach the Province's goal of building 1.5 million homes by 2031 (as stated in the Province's news release here).
Transition from the 2020 PPS and the Growth Plan
Upon the 2024 PPS coming into force on October 20, 2024, the 2020 PPS and the Growth Plan will be repealed and all land use planning decisions made as of October 20, 2024 will need to be consistent with the 2024 PPS, a singular land use policy document for planning authorities to consult. Landowners who may have plans to redevelop, even if in the future, should be aware of these changes and how they may impact their applications moving forward.
The Province has amended O.Reg. 311/16 – Transitional Matters – Growth Plans, which will see a number of transitional provisions revoked upon the Growth Plan being repealed. In addition, the Province is currently inviting feedback on the potential need for further transition provisions, through a regulation passed under the Planning Act, which could include development applications or planning matters currently under appeal. The potential need for a transitional regulation is identified in the Environmental Registry Office notice available here, and consultation is open until October 4, 2024.
Notable Changes from the Draft PPS
Settlement Areas: Policy 2.3.1.4 has been revised to require planning authorities to establish and implement minimum targets for intensification and redevelopment within built-up areas, whereas the Draft PPS previously only "encouraged" planning authorities to simply consider establishing and implementing such minimum targets.1
Employment: Policy 2.8.1.3 of the Draft PPS has been replaced to now require development on lands within 300 metres of employment areas avoids potential impacts on the economic viability of employment uses in such existing areas, or where avoidance is not possible, to minimize and mitigate such potential impacts.2 Together with the new definition of "employment areas" introduced by Bill 97 and the Draft PPS, this could help facilitate the conversion of certain employment uses to residential uses, however these revisions to the 2024 PPS aim to provide a level of protection to existing employment uses.
Land Use Compatibility: Policy 3.5.2 has been modified to require that, where it is not possible to avoid adjoining "major facilities" and "sensitive land uses" or locating such uses in close proximity , planning authorities must protect the long-term viability of the existing major facilities (e.g., industrial or manufacturing uses) and permit sensitive land uses only if potential adverse affects to both the major facilities and the proposed sensitive land uses are minimized and mitigated.3 Previously, under the Draft PPS, development of proposed adjacent sensitive land uses would only be permitted if potential impacts to industrial, manufacturing or other "major facilities" are minimized and mitigated. In contrast, the new language requires that the planning and development of such adjacent sensitive land uses mitigate and minimize potential adverse effects to the proposed sensitive land use as well as any potential impacts to the industrial, manufacturing and other "major facilities".
Agriculture and ARUs: Consistent with the Draft PPS, the 2024 PPS introduces new language relating to the development of agricultural lands intended to permit additional dwelling units on individual properties. In furtherance of this policy direction, Policy 4.3.2.5 has been revised in the 2024 PPS to expressly provide that, where two additional residential units are proposed on a lot in a prime agricultural area, at least one of the additional residential units must be located within or attached to the principal dwelling, in addition to the requirements initially set out in the Draft PPS.4
Cultural Heritage and Archeology: The definition of "Significant" has been revised from the Draft PPS, to include a new item (e) relating to cultural heritage and archeology, such that in this regard "Significant" means "resources that have been determined to have cultural heritage value or interest." The criteria for determining whether resources have cultural heritage value or interest are set out under the Ontario Heritage Act.
Strategic Growth Areas: The definition of "Strategic Growth Areas" has been revised from the Draft PPS to include "lands in close proximity to publicly-assisted post-secondary institutions" as opposed to lands "adjacent" to such institutions. The 2024 PPS does not, however, define "close proximity".
Recap of Key Changes from 2020 PPS
Growth forecasts and intensification targets: The 2024 PPS maintains the 2051 population and employment forecast horizons proposed in the Draft PPS, while requiring municipalities to begin using their own forecasts beyond 2051. Planning authorities will be required to base their population and employment growth forecasts on Ministry of Finance 25-year projections, however, planning authorities may modify projections as appropriate. 5 Further, the 2024 PPS provides that, when a planning authority creates a new official plan or updates an existing official plan, it will need to consider a time horizon of "at least 20 years, but not more than 30 years" as opposed to the original time horizon of 25 years proposed in the Draft PPS.6 This provides municipalities with greater flexibility to forecast their own growth without strict adherence to a mandated 25-year look-ahead.
Additionally, Policy 2.2.1.a and 2.2.1.b carry forward requirements from the 2020 PPS with respect to range and mix of housing options. Policy 2.2.1.a now requires planning authorities to establish and implement minimum targets for housing that is "affordable to moderate and low income households", as compared to the 2020 PPS which only required planning authorities to "address the full range of housing options including housing affordability". Policy 2.2.1.b focuses on permitting and facilitating all housing options, and Policy 2.2.1.b(2) has been amended from the 2020 PPS to expressly identify the "development and redevelopment of underutilized commercial and institutional sites (e.g. shopping malls and plazas) for residential use".7 This is also reflected in further revisions made from the 2020 PPS, such as Policy 2.4.1.3.e, which now requires planning authorities to support the redevelopment of such commercial lands to support mixed-use residential.8
Existing Settlement Areas: Changes to policies surrounding existing settlement areas, new settlement areas and settlement boundary expansion included in the Draft PPS have been maintained in the 2024 PPS, with the 2024 PPS encouraging planning authorities to implement targets for intensification and redevelopment of existing settlement areas9. Importantly, these considerations are "encouraged", not mandated of the planning authority. "Large and fast-growing municipalities" are also "encouraged" to plan for a target of 50 residents and jobs per hectare in designated growth areas (which are distinct from the broader settlement area they are contained within)10, while also ensuring development in such designated growth areas aligns with the timely provision of infrastructure.11
Settlement Area Boundary Expansion: The Draft PPS proposed to simplify the process for a planning authority to expand and create new settlement areas by removing the requirements for a municipal comprehensive review, and these changes have been maintained in the 2024 PPS. By removing the requirement for a municipal comprehensive review, the 2024 PPS allows planning authorities to identify new settlement areas or areas for expansion of existing settlement areas at any time (or, arguably, never). Further, planning authorities will no longer be required to demonstrate the need for such expansion under the new, simplified and flexible approach. Correspondingly, municipalities are obligated by the 2024 PPS to permit more residential development on rural lands. Policy 2.3.2.2 (added in the Draft PPS and included in the 2024 PPS), states that a planning authority may only identify a new settlement area where it has demonstrated that there are adequate infrastructure and public service facilities planned, if not already available.12
Strategic Growth Areas and Major Transit Station Areas ("MTSAs"): The 2024 PPS maintains the concept of strategic growth areas and MTSAs from the Growth Plan, however the 2024 PPS has removed the language requiring "large and fast-growing municipalities" to identify strategic growth areas and meet density targets in MTSAs or higher order transit corridors. The 2024 PPS now encourages all planning authorities to: identify and focus growth and development in strategic growth areas,13 and prioritize planning and investment for infrastructure and public service facilities in strategic growth areas, permit development and intensification in strategic growth areas, consider a student housing strategy, and support redevelopment of commercial lands (such as underutilized malls and plazas to support mixed-use residential). 14
Minimum density requirements around MTSAs have likewise been carried forward from the Growth Plan into the 2024 PPS. One key change made in the Draft PPS and maintained in the 2024 PPS, is that all planning authorities are now required to delineate boundaries of MTSAs, as opposed to only "large and fast growing municipalities" as initially drafted.15 Additional policies have been added, encouraging planning authorities to promote development and intensification within MTSAs, and to plan and design MTSAs to be transit-supportive, including by connecting to local and regional transit services.16
Employment Areas: As considered in our previous bulletins, a new definition of "employment area" was proposed in the Draft PPS and incorporated into the Planning Act to help facilitate more conversion of lands from certain employment uses to residential uses. Relatedly, the "Provincially Significant Employment Zones" ("PSEZs") established under the Growth Plan in 2019 by the Province, as well as the Growth Plan itself, will be revoked, and the Province is seeking feedback on the need to identify select PSEZs to protect lands exclusively for employment uses through an alternative approach, consistent with the amended definition of "employment areas". Such identification would ensure that the highest priority employment areas receive protection from conversion to non-employment uses. While the concept of PSEZs has not been maintained, the 2024 PPS does attempt to protect certain employment areas (e.g., long-term employment area uses that require existing locations, including manufacturing, research and development, warehousing and associated retail and office uses) by adding policies that require consideration of compatible land uses and appropriate transitions to sensitive land uses.17
New Definitions; Clarifying "Affordable" and "Income": The 2024 PPS introduces a number new defined terms, including "affordable", "designated growth area", "energy storage system", "low and moderate income households" and "urban agriculture". This is notable as planning authorities will now be required to consider and encourage near-urban and urban agriculture to foster a "robust agri-food network"18 and provide opportunity for development of energy supply, including energy storage systems under the 2024 PPS.
The new definitions for "affordable" and "low and moderate income households" provide additional clarity to policies focused on the provision of affordable housing. For owned housing to constitute an "affordable" unit, the cost of accommodations resultant from the purchase price cannot exceed the lesser of: (i) 30% of the gross annual household income for low and moderate income households or (ii) the purchase price is at least 10% below the average purchase price for a resale unit in the same municipality. In contrast, an "affordable" rental unit means the least expensive of a unit for which: (i) the rent does not exceed 30% of the gross annual household income for low and moderate income households or (ii) rent is at or below the average market rent in a respective municipality. "Low and moderate income households" is defined to mean a household where incomes are in the lowest 60% of the municipality for ownership, or the lowest 60% of the income for renter households in the municipality.
Conclusion
McMillan will continue to monitor the status of the new Provincial Planning Statement and developments in land use planning legislation. If you have questions or wish to make submissions to the Province regarding the policies proposed to guide the future of Ontario's planning, development, and land use, please contact Annik Forristal, Marc Kemerer, Kailey Sutton or Patrick Pinho, and our team would be pleased to discuss this important piece of legislation and its potential impacts with you.
Footnotes
1 PPS, Policy 2.3.1.4.
2 PPS, Policy 2.8.1.3.
3 PPS, Policy 3.5.2.
4 PPS, Policy 4.3.2.5 and 4.2.3.6.
5 PPS, Policy 2.1.1.
6 PPS, Policy 2.1.3.
7 PPS, Policy 2.2.1.b(2).
8 PPS, Policy 2.4.1.3.
9 PPS, Policy 2.3.1.4.
10 PPS, Policy 2.3.1.5
11 PPS, Policy 2.3.1.6
12 PPS, Policy 2.3.2.2.
13 PPS, Policy 2.4.1.1.
14 PPS, Policy 2.4.1.3.
15 PPS, Policy 2.4.2.1.
16 PPS, Policy 2.4.2.6.
17 PPS, Policy 2.8.2.1 and 2.8.2.4.
18 PPS, Policy 4.3.6.
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 2024