Canada: More Homes, More Choice Act, 2019: What Will Bill 108 Do To Ontario's Planning And Development Regime?

The Ontario Government's introduction of More Homes, More Choice Act, 2019 ("Bill 108" or the "Bill") will significantly change how planning and development decisions will be made, opposed, reconsidered and ultimately adjudicated upon. Bill 108 restores key elements of the pre-2018 planning and development regime, in particular the ability to appeal land use approval and non-approval decisions to an unelected, and thus non-political, expert tribunal for a fresh determination of whether those approvals should be given. The name of the tribunal is not changed back to the Ontario Municipal Board, but the question remains how much of the old Ontario Municipal Board regime, which served Ontario for many decades, will actually be restored by Bill 108 and what its other changes do to allow Ontarians access to "more homes".

This article does not attempt to set out all of the Bill 108 amendments which affect the planning and development regime. The Bill itself can be found here and the More Homes, More Choice; Ontario's Housing Supply Action Plan describing the government's stated purpose of the Bill can be found here.

The Biggest Change: Restoring the Goal of "Good Planning"

Bill 108 deletes the provisions which narrowly limit appeals of decisions and non-decisions of a municipality or approval authority to the Local Planning Appeal Tribunal ("LPAT" or the "Tribunal"). Effective in the spring of 2018, Bill 139 eliminated the automatic right on the part of most citizens to have the Ontario Municipal Board hear appeals of zoning by-laws, zoning by-law amendment applications, Official Plan Amendments ("OPAs") and OPA applications. A hopeful appellant must demonstrate that a government decision or non-decision is inconsistent with provincial policy or fails to conform with or conflicts with either a provincial plan (such as the Growth Plan) or an applicable official plan (often called the "new appeal test"). Those restrictions will simply be eliminated from the Planning Act and appeals will, as before, be available for zoning by-laws, zoning by-law amendments, OPAs and OPA applications in most cases. The LPAT (effectively a continuation of the Ontario Municipal Board under a new name) will once again be able to replace the municipal or approval authority's decision with its own on the basis of whether the proposal is "good planning".

This change restores the planning and development system in Ontario to a normative one: where the final decision is made after the search for the best result, considering all factors.

Eliminated, along with the new appeal test, are the provisions that require the LPAT to send the matter back to the original decision maker for a new decision if it determines the new appeal test has been met. Instead of waiting to see if the decision maker will once again make a decision that is inconsistent with provincial policy or does not conform to a provincial plan or applicable official plans on a second appeal, the Tribunal will be able to hear the appeal and evidence.

There will be some confusion and uncertainty for appeals brought under the Bill 139 regime for at least some period of time. Regulations and in all likelihood, new LPAT Rules, will be required to properly transition those appeals, many of which are now well underway within the Tribunal's hearings process (or are subject to court adjudication). The Bill ostensibly repeals the provision that allows the Tribunal to state a case for the Divisional Court and it will be intriguing to see how any such stated cases will be dealt with.

Ultimately, but for the last year or so when the new appeal test and the two appeal procedure was in force, landowners, municipalities and citizens will be able to largely go back to relying upon the experience, practice, decisions and approach to land use approvals that has worked for many decades in Ontario.

Rationalization of Community Benefit Charges

Bill 108 introduces what promises to be a significant change to how some municipal levies,

charges and payments are dealt with. It provides for consolidation and rationalization of some of the payments which landowners are often required to pay to a municipality when seeking development approvals. Cash-in-lieu of a parkland dedication will be consolidated with what are commonly called section 37 benefits under this new scheme. Many of the constituent elements of development charges would also be consolidated into the scheme (those services with no percentage reductions, water supply, sewage, storm water, electrical power services etc. are preserved as development charge costs). The new scheme would create a single Community Benefits Charge ("CBC") to be implemented by municipal by-law. CBCs are intended to pay for "the capital cost of facilities, services and matters required because of development or redevelopment in the area to which the by-law applies".

The scheme will recognize in-kind contributions made to the municipality as offsetting any required CBCs and development charge credits can be applied to the CBC, without apparent restriction or concern for exactly how those credits arose and whether the work which created the credit was a service that remains a development charge or not.

While the current regime requires section 37 benefits to be paid into a special account and cash paid in lieu of parkland dedication to be used for parkland purposes, the new CBC system also specifies when those amounts are to be spent by the municipality. Any CBCs received must not only be paid into an special account, at least 60 percent of those funds must be spent each year. We expect that this requirement is reflective of an Altus study completed earlier this year, which found that some municipalities had large unspent parkland reserves.

The two most important changes to the way section 37 benefits and parkland dedications/levies are sought and imposed are the wider ambit of the CBCs and the manner in which a CBC by-law must be created.

Bill 108 requires a municipality to first prepare a community benefits charge strategy that identifies the facilities, services and matters that will be funded by the CBC and complies with prescribed requirements. The extent to which regulatory rules restrict what services can be funded by CBCs and the difficulty of satisfying those regulatory rules remains unknown at this time. What will be imposed however is a cap on the CBCs, based upon a specific percentage (to be established by regulation) of the value of the land being developed, tying very clearly the benefit to value. CBCs will thus take on some of the attributes of development charges (where development charges studies are required to justify the charges) and of parkland dedication/levies (which are percentages of land value). The new CBC scheme will add certainty and more oversight and scrutiny on the part of the developer community to substantially all of the monetary requirements of the municipality. Landowners, particularly those who do not regularly develop (similar) projects have always had difficulty determining what the appropriate value of benefits should be pursuant to section 37 of the Planning Act. Not only would CBCs level the playing field somewhat, they will be determinable up front, clearly justified and not the subject of last minute negotiations late in the approval process.

CBCs will, however, be applicable to a greater number of planning approvals than is the case under the current regime. They may be imposed on zoning by-law amendments, minor variances, plans of subdivision, severances, condominium plans, the lifting of part lot control and the issuance of a building permit. This is a significantly greater number of affected approvals than is the case currently, given how section 37 benefits can only be obtained where a zoning by-law which increases height or density of development is being adopted.

In the short term, the current regime will continue to operate, pending the municipality actually commissioning the CBC study and passing a CBC by-law. Bill 108 does not attempt to force a municipality to carry out that study nor to pass the by-law. Presumably the incentive for a municipality to carry out the study and pass a CBC by-law is to avail itself of the greater reach of that by-law to the greater range of approvals than section 37 allows.

Heritage Designations Appealable to LPAT

In some municipalities heritage buildings and their designation measurably influence redevelopment. Section 33 of the Ontario Heritage Act prevents a landowner from altering a designated property. Heritage designation can thus play an important part, not only in the shape of a redevelopment but also in determining whether the cost of dealing with heritage concerns outweighs the economic benefits of redevelopment. Bill 108 introduces, in addition to a number of procedural tweaks, the ability on the part of a landowner or other person who objects to the notice to designate to appeal the designation itself to the LPAT; separate and apart from any redevelopment application made under pursuant to the Planning Act. It also allows appeals to the LPAT of applications to alter a heritage property, rather than just applications to demolish. At the very least, Bill 108 will allow landowners to resist designation or to narrow its impact and determine earlier in the process whether to even proceed with redevelopment.

Speeding Up The Process

There are a number of changes to the development process which Bill 108 would implement that are likely to speed up the development process.

The most obvious, because they are numeric, are the adjustments to the periods which must elapse before an applicant can appeal an approval application to the Tribunal if no decision is made. Bill 139, when it introduced the new appeal test also lengthened those periods for OPA and zoning by-law amendment applications. Bill 108 shortens those periods, allowing a landowner whose applications are not being dealt with, in what the landowner believes is a timely manner, to bring those appeals much earlier. In fact, those appeal periods have been reduced to less than what existed prior to the Bill 139 changes.

A small but useful amendment is the rationalization of these periods: if a zoning by-law amendment is accompanied by a required official plan amendment, the longer official plan amendment appeal period of 120 days applies to both appeals.

Bill 108 restricts the number of appeals which can be brought by third parties in certain circumstances and maintains some of the appeal restrictions that Bill 139 introduced. For example, of particular importance to grade-related developments, a third party (i.e. neither a municipality, the Ministry, a prescribed person nor the landowner applicant) will not be able to appeal subdivision approvals. This is inherently a move away from the quest for the best planning decision since it eliminates some potential stakeholders from the revitalized LPAT process but clearly has the potential to speed up approvals. Concerned neighbours and citizen groups will need to be vigilant to ensure problematic development is identified and appealed at the OPA and/or rezoning stages. Another example applies when an official plan amendment is adopted and then sent to an approval authority which fails to approve the OPA within 120 days. Bill 108 limits the appellants to the applicant landowner/public body requester, the municipality and the Ministry of Municipal Affairs. A third party will not be able to appeal.

The dispute resolution provisions for CBCs under Bill 108 are simple. An appeal of the entire zoning by-law amendment application to the LPAT is currently required to assess whether a section 37 request was justified. Bill 108 proposes that whenever the appraisals of the municipality and the landowner differ by more than five percent, one of an established (municipally selected) list of appraisers be given right to make the final determination.

The Bill 139 approach to protected major transit station areas remains with new provisions promoting inclusionary zoning in those areas and where a development permit system is established pursuant to the Ministry of Municipal Affairs order.

This approach goes together with a new power on the part of the Minister of Municipal Affairs to order a municipality to adopt a development permit system (effectively eliminating the need for multiple approvals) for a specific area or location. This replaces the power to require a municipality to implement a development permit system for a purpose or purposes, which left the area subject to the development permit by-law to the discretion of the municipality. There is an interesting distinction made between specifying an "area" and a "location". The distinction suggests that the Province may choose to specify a very specific location, perhaps even a single property, for reasons of its own. When that occurs, the Bill would allow the municipality to determine the larger area around that location which would be subject to the new development permit by-law. This amendment clearly allows the Ministry to target areas and locations that it believes should be developed faster and with greater ease.

Some indication of where those areas will be can perhaps be gleaned from the Government's summary of its Action Plan where the changes to the Planning Act are said to: "help municipalities implement community planning permit systems (e.g. in major transit station areas and provincially significant employment zones), which will streamline planning approvals to 45 days".

Bill 108 also restores the provisions that were introduced by Bill 51 and eliminated by Bill 139, which allowed the Tribunal to consider and deal with whether new information, evidence and material can be introduced at the hearing of an appeal (and slow down the hearing process). These provisions, designed to limit the scope and length of the hearing were eliminated because Bill 139 contemplated the elimination of most hearings de novo. With their restoration, these provisions will once again be of value.

The Province estimated that there are 100,000 housing units in Toronto alone "tied up" in pre-Bill 139 appeals in the LPAT pipeline. Those appeals are unlikely to be significantly affected by the Bill 108 amendments. The proposal to invest $1.4 million in the hiring of LPAT members is the primary way in which the Province intends to speed up the adjudication of those appeals.

Second (and Third) Units

Bill 108 introduces a different requirement for official plans respecting additional residential units. The requirement that an official plan contain policies that permit two units in either the main single dwelling unit or a second unit in an ancillary building (like a coach house) is replaced by a requirement that a second unit be permitted in the main single dwelling unit and in any ancillary building. This effectively permits up to three units on a single lot where there is an appropriate ancillary building, consistent with the More Home, More Choices title of the Act.

Transition and Overall Impact

Bill 108, like most modern legislation, is highly reliant upon new regulations. Those have not been prepared and there are no details on how those regulations will deal with transitional matters. Nor do we know how the LPAT will revise its Rules and practices to accommodate these changes and the necessary transition.

Consideration should be given to any applications in process today not being appealed until after Bill 108 receives Royal Assent, as there may be advantages to proceeding under the new regime.

While Bill 108 introduces new changes and a certain level of uncertainty, the move back to a normative, "Is this good planning?" approach to planning approvals recognizes the value of experience and judgment and will over the longer term almost certainly result in greater stability in the planning and development process.

Footnotes

1 There have been a number of additional changes to these appeal periods over the years and not all of the appeal periods in place prior to Bill 139 are necessarily shown nor are the exact dates of earlier appeal periods were in force reflected in the simplistic format of this table. The table is provided to give a sense of the changes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.