On June 6, 2019, Bill 108, the More Homes, More Choice Act received Royal Assent. The Bill includes extensive amendments to legislation related to housing development in Ontario, including substantial changes to the planning and appeal process, municipal revenue generation tools and environmental protection. The changes are intended to shorten approvals, incentivize the building of a variety of housing types, and provide certainty in the calculation of development levies. The Bill is part of the provincial government’s broader strategy for tackling Ontario’s housing affordability crisis, which also includes revisions to the Growth Plan for the Greater Golden Horseshoe, additional funding for the Local Planning Appeal Tribunal (LPAT), and accompanying regulatory changes.

Individual schedules of Bill 108 will come into force over the coming months, with further implementation details to be finalized by regulation. Below is an overview of the key changes.

The Planning Act and appeal process

Bill 108 amends the Planning Act and Local Planning Appeal Tribunal Act with the changes coming into force on a day to be named by proclamation of the Lieutenant Governor. The most noteworthy changes are those to appeal rights and the hearing process.

First, Bill 108 repeals the stringent limitation on appeal grounds introduced by Bill 139 (the Building Better Communities and Conserving Watersheds Act, 2017); that the applicable approval instrument is inconsistent with the Provincial Policy Statement, fails to conform or conflicts with a provincial plan, or fails to conform with an official plan. The appeal test is broadened to the good planning test; however, the conformity/consistency test remains, as it has always been part of the good planning test.

Second, there is a return to the more cost efficient single hearing format and de novo hearings, with the LPAT having the authority to make a final determination approving, refusing to approve or modifying all or part of the instrument under appeal (as applicable).

Additional changes include:

1. Shortened timelines for decisions related to official plans, zoning by-laws and plans of subdivision (before a right to appeal arises) as outlined below;
   
   

   Approval Instrument	Pre-Bill 139	Bill 139	Bill 108
   Official Plan/Official Plan Amendment	180 days	210 days	120 days
   Zoning By-law Amendment	120 days	150 days	90 days
   Draft Plan of Subdivision	180 days	180 days	120 days

2. Limitations on third party appeals of plans of subdivision (to public bodies, appellants and persons referenced in subsection 51(48.3), primarily including utility companies, railways, etc.), including appeals of a decision on a draft plan or subdivision, lapsing provision or any condition of draft plan approval. The requirement for a 14-day notice period, between notice of an application and an approval authority decision, is also removed, and will be replaced by a new time period and additional new requirements to be set by regulation;
3. Limitations on the parties who may appeal non-decisions of official plans and official plan amendments;
4. Emphasis on development permit systems (DPS), including a new Ministerial power to order a  municipality to adopt a DPS, with restricted opportunities to appeal DPS policies;
5. Requirements allowing municipalities to reconsider new information, and make a recommendation to the LPAT where new information is introduced to the LPAT that was not before municipal council (“Council”) when Council made its decision. The LPAT is required to have regard to Council’s recommendation where one is received;
6. Requiring a Ministerial declaration of provincial interest to occur in writing 30 days before the scheduled hearing date;
7. Authorizing additional residential units by authorizing two residential units in a house, and by authorizing a residential unit in a building or structure ancillary to a house;
8. Emphasizing the LPAT’s authority to limit examination or cross-examination of a witness, where the Tribunal is satisfied that all matters relevant to the issues in the proceeding have been fully or fairly disclosed, or in any other circumstances the Tribunal considers fair and appropriate;
9. For those municipalities not prescribed to have inclusionary zoning policies in official plans, scoping the application of inclusionary zoning policies to protected major transit station areas and areas subject to a DPS; and
10. Removing the ability for the LPAT to state a case to the Divisional Court.

However, Bill 108 is not entirely a return to the Ontario Municipal Board process as has been reported by some media. Many of the Bill 139 changes remain, including:

1. Mandatory case management conferences for appeals, with an increased focus on opportunities for settlement, mediation or other dispute resolution processes;
2. The focus on delineating Major Transit Station Areas (MTSA) in official plans; and
3. The prohibition on appeals, including those pertaining to MTSA policies, two-year prohibition on requests for amendments to secondary plans, and restrictions on appeals of interim control by-laws and Ministerial decisions on official plans or official plan amendments.

Ontario Heritage Act

The heritage designation process under the Ontario Heritage Act is also amended by requiring municipal Council to consider notices of objection, and make a determination on whether to withdraw or proceed with the designation within 90 days of the closing of the period for objection. In the event that no objections are received, Council is required to pass a by-law within 120 days of publishing the notice of intention to designate. Where the municipality fails to make a decision within 120 days, the heritage designation is deemed to be withdrawn. In addition, heritage by-laws are now appealable to the LPAT, instead of the Conservation Review Board, and the LPAT is empowered to make a decision either:

1. Repealing the by-law;
2. Amending the by-law in such a manner as the LPAT may determine;
3. Directing Council to repeal the by-law; or
4. Directing Council to amend the by-law.

Similar rights of appeal to the LPAT are now available in respect of amending by-laws and designation repealing by-laws.

Applications to alter, demolish or remove heritage properties have also been revamped. While heritage property owners must still apply to Council for permission to alter, demolish or remove a designated property, Council must now make a decision on the application within 90 days of issuing a notice of complete application. This decision is appealable to the LPAT, which is empowered to dismiss the appeal, or order the municipality to consent to the alteration. Where Council fails to make a decision on an application within the specified timeframe, it is deemed to have consented to the application. The changes to the Ontario Heritage Act are to come into force on a day to be named by proclamation of the Lieutenant Governor.

Development charges, Section 37, and parkland dedication

Some of the most significant changes in Bill 108 are to the municipal revenue generating powers under the Development Charges Act, and sections 37, and 42 and 51.1 of the Planning Act (density bonusing and parkland dedication, respectively). An overview of the changes is below.

Development charges

The scope of services for which costs are recoverable under the Development Charges Act is prescribed by legislation, and is limited to ‘hard’ services, including: water and wastewater services, storm water management, services related to highways, electricity, policing, ambulance services, fire protection, transit, and waste diversion, and such other services as may be prescribed by regulation.

Timing of payments for development charges will also be overhauled, with the intention of providing certainty to builders and incentivizing a variety of housing types. The total development charge will now be calculated at the date of filing, for site plan and rezoning applications, and a separate payment schedule has been established for rental housing, institutional, industrial, commercial and non-profit housing development. For these developments, charges will be payable in six instalments beginning at occupancy or the date of issuance of a permit authorizing occupancy, whichever is earlier, or in 21 instalments for non-profit housing development. These changes to the Development Charges Act will come into force on a day to be named by proclamation of the Lieutenant Governor.

Changes have also been made to the Education Act provisions regarding Education Development Charges including notice requirements to the Minister if a school board plans to acquire or expropriate land, allowing the Minister to reject the board’s plans. The changes also include the ability to provide for alternative projects, if requested by a board and approved by the Minister, and to enter into localized education development agreements, which would allow for the provision of pupil accommodation in lieu of an education development charge against the land. These changes will come into force on November 1, 2019.

Section 37 – community benefit charges and Section 42 – parkland dedication

Likely one of the more controversial changes for municipalities is that the height and density bonusing regime under section 37 of the Planning Act is replaced with the municipal authority to pass a “Community Benefit Charge” (CBC) by-law for soft services. Section 37 charges will no longer be tied to height or density, but will instead be capped at a percentage of the value of the property being developed, with that percentage to be set by regulation. The Planning Act outlines the appraisal mechanism and resolution scheme where there is a dispute as to the value of the lands between the municipality and the landowner.

CBCs may be collected on a broad range of development and redevelopment approvals, including rezoning, minor variances, consents, part-lot control exemptions, plan of subdivision approvals, condominiums, and building permit approvals. Municipalities may accept in-kind contributions for facilities or services, which may be deducted from the value otherwise owed under the CBC. Prior to the enactment of a CBC by-law, a municipality must prepare a CBC strategy, which identifies the facilities, services and matters that will be funded by the by-law. Costs that would otherwise be recoverable under the Development Charge Act are excluded from CBC funding, and municipalities will be required to spend or allocate 60 percent of outstanding CBC funds at the beginning of each calendar year. Where a municipality has adopted a CBC by-law, it will be precluded from also having and enforcing a parkland dedication by-law. Parkland dedication by-laws are further limited with the removal of the provisions authorizing alternative rates.

The new CBC regime will remove the existing (and frequently criticized) incentive to ‘under-zone’ areas to allow for the collection of height and density bonusing, and replace it with an incentive to update zoning by-laws.

Notably, there is no requirement that existing section 37 by-laws be repealed. Municipalities may opt to utilize their existing section 37 by-laws, indefinitely, but cannot amend them nor benefit from a parallel CBC by-law. The CBC provisions will come into force on a day to be named by proclamation of the Lieutenant Governor.

Natural heritage, endangered species and the environment

Bill 108 also revises various pieces of environmental legislation, including the Conservation Authorities Act, the Endangered Species Act and the Environmental Assessment Act.

Conservation Authorities Act

The changes to the Conservation Authorities Act intend to focus the efforts of conservation authorities on matters related to flooding and other natural hazards. Listed specific programs and services are required to be provided by an authority, if prescribed by the regulations. Authorities continue to be authorized to provide other programs and services, including those advisable to further its objectives, however, where conservation authorities are providing other municipal programs and services, such services must be provided pursuant to an agreement with the municipality setting out the applicable payments from the municipality. If no such agreement is entered into, conservation authorities will be prohibited from including capital costs and operating expenses related to the municipal programs in its apportionment of payments to the participating municipality. These changes will come into force on a day to be named by proclamation of the Lieutenant Governor.

Endangered Species Act

As of July 1, 2019, Bill 108 changes Ontario’s endangered species protection regime, including the establishment of the Species at Risk Conservation Fund (the Fund), the purpose of which is to fund activities to protect or recover species at risk. The Fund will be subsidized primarily through species at risk charges, levied in relation to “Landscape Agreements,” a form of agreement that may be entered into by the Minister to allow otherwise prohibited activities to be carried out, provided various conditions are met.
There is a new one-year grace period after a species is listed on the Species at Risk in Ontario List as an endangered or threatened species from some of the prohibitions where permits are issued or the action was otherwise authorized before the species was listed. In addition, the timelines are extended to add species on the Species at Risk in Ontario List. The Minister is empowered to suspend protections for endangered or threatened species that are listed for the first time for a period of up to three years. The Minister may also issue orders to refrain from or halt any activity that may have a significant adverse effect on a threatened or endangered species, including orders to address the adverse effect of the activity.

Environmental Assessment Act

The Minister’s power to issue a “bump up” order in respect of a class environmental assessment (EA) is now limited to situations where such an order is necessary to prevent, mitigate or remedy adverse impacts on aboriginal or treaty rights, or matters of provincial concern. Further changes to the Environmental Assessment Act streamline the class EA process by permitting the establishment of screening criteria, which exempt certain undertakings within the class from the application of the Act. Certain public agency and Crown Corporation-initiated class EAs are exempted by the new subsection 15.3(3) of the Environmental Assessment Act, provided the conditions within the individual class EAs are complied with. An exemption is also provided for the undertakings listed in certain schedules, groups or categories of approved class EAs.

In addition to these changes, the Minister is bestowed with the power to amend an approved class EA, on his or her own initiative, in accordance with the new section 15.4 of the Environmental Assessment Act. The Director, on his or her own initiative, may make amendments that are administrative in nature. Subject to minor exceptions, the changes to the Environmental Assessment Act came into force upon Royal Assent on June 6, 2019.

Municipal response

Many municipalities criticized the reversal of the Bill 139 changes, which provided deference to municipal councils, and the shortened timeframes for decisions on development applications. Similarly, many municipalities requested that revenue neutrality be enshrined in the changes to the calculations of the various development levies. However, the net impact of these changes on municipal revenues will not be discernable for some time.

In addition to Bill 108 and the other components of the Housing Supply Action Plan, on June 6, 2019, the Minister of Municipal Affairs and Housing proposed amendments to O. Reg 525/97 (Exemption from Approval (Official Plan Amendments)) to exempt official plan amendments in Haliburton County, Hastings County, and the United Counties of Leeds & Grenville from Ministerial approval. This proposal is intended to reinforce the Ministry’s commitment to ensuring that decisions are made at the local level by municipalities that have up-to-date official plans that are consistent with the Provincial Policy Statement. It remains to be seen whether additional municipalities may be exempted.

Dentons will continue to closely track Bill 108 and the regulations as they are released. If you have any questions regarding Bill 108 and its impact on your business, please contact Katarzyna Sliwa.