Bill 197: Ontario’s sweeping COVID-19 recovery legislation — Key Takeaways for your Business

As Ontario moves to Phase 3 of reopening, its government is looking to move as effectively as possible into a strong economic recovery. On July 8, 2020, the Ontario government introduced Bill 197, the COVID-19 Economic Recovery Act, 2020 (the “Bill”). The Bill, combined with other recent announcements, such as an ambitious infrastructure agenda, signals that the province is open for business. As we discuss below, the Bill streamlines regulation in a number of different key areas, consistent with the government’s pre-pandemic regulatory reviews.

This omnibus legislation proposes to amend twenty provincial statutes, with the stated objective of jumpstarting economic growth and laying the groundwork for long-term, sustainable recovery, by simplifying regulatory processes in a number of different statutory contexts — building and housing, environmental compliance, business regulations, and transportation. Projects may now be fast-tracked from both a planning and environmental perspective: clients in the building and land development sector should pay particular attention to opportunities arising from the Bill. The Bill also addresses food and agriculture, municipal governance, education, judicial services, and consumer protection. Our experts can advise you on specific industry and business impacts. In many respects, the Bill resembles Alberta’s Bill 24. We invite you to read our analysis of Bill 24 here.

Some highlights of these changes are as follows, each described in more detail below.

  • Introducing a new environmental assessment process under the Environmental Assessment Act (the “EAA”) to focus on projects that have the “highest impact on the environment” while simultaneously reducing assessment timelines from six to three years for the largest projects;

  • Enacting the Modernizing Ontario for People and Business Act, 2020 to reduce unnecessary red tape and regulatory burdens while also ensuring the public interest is protected;

  • Amending the Building Code Act to simplify the Act’s regulation-making process and transfer regulation-making authority from the provincial Cabinet to the Minister of Municipal Affairs and Housing;

  • Amending the Planning Act and the Development Charges Act to better ensure that developments or redevelopments benefit their respective communities;

  • Amending the Public Transportation and Highway Improvement Act and enacting the Transit-Oriented Communities Act, 2020 to allow the Minister of Transportation to simplify the process of land expropriation;

  • Amending the Farm Registration and Farm Organizations Funding Act, 1993, to provide an appeal process to a person denied a farming business registration number;

  • Simplifying the environmental appraisal process for drainage works under the Drainage Act;

  • Amending the City of Toronto Act, 2006 and the Municipal Act, 2001 to allow members of municipal government to participate electronically in meetings;

  • Amending the Education Act to allow the Minister to operate “demonstration schools,” which cater to students with learning disabilities, for the 2020-2021 school year;

  • Amending the objects of the Ontario Educational Communications Authority Act to include the establishment and operation of distance-education programs;

  • Amending the Justices of the Peace Act to speed up the process of filling justice of the peace vacancies;

  • Amending the Payday Loans Act, 2008 in order to protect borrowers from harsh repayment arrangements; and

  • Establishing Invest Ontario, an agency meant to secure business and capital investments that support job creation and economic growth in Ontario.

Bill 197 and your business: Read on for a more detailed description of the above proposed amendments. If you have any questions or require additional information in order to determine the potential impacts of the Bill on your business, please contact Hartley Lefton, Matthew Schuman, Adam Goldenberg, Lara Nathans, Trevor Lawson. We look forward to helping you navigate the implications of the Bill on your activities and operations.

Proposed economic measures

Environmental compliance

Some of the Bill’s most significant reforms are focused on the EAA. With the province’s environmental assessment program being fifty years old, the Bill modernizes the environmental assessment process.

Under the proposed process, the provincial Cabinet will have the power to make regulations designating certain enterprises and activities as projects to which the EAA applies. Parts II.3 and II.4 of the amended EAA will set out the process for “comprehensive environmental assessments” and “streamlined environmental assessments,” respectively, and empower the Minister to make an order declaring that a streamlined assessment project is in reality a comprehensive assessment project. The Government has suggested that with this new approach, it will be able to focus on those projects that have the “highest impact on the environment” while simultaneously reducing assessment timelines from six to three years for the largest projects.

Business regulations

Schedule 11 of the Bill will repeal the Burden Reduction Reporting Act, 2014 and the Reducing Regulatory Costs for Business Act, 2017, and enact the Modernizing Ontario for People and Business Act, 2020 (the “MOPBA”). The Preamble of Schedule 11 commits the Province to “reducing unnecessary red tape and regulatory burdens while also ensuring the public interest is protected”.

The MOPBA will provide for the offset of administrative costs of regulatory compliance; where an instrument — i.e., regulations, policies, or forms— governed by the MOPBA creates or increases one or more administrative costs, “a prescribed offset must be made within a prescribed time after the regulation, policy or form is made or approved for use,” subject to consideration of the public interest, including health, safety, and the environment. This offset requirement is meant to, over time, ensure that the burden of regulatory compliance does not increase; the burden may even decrease depending on the ratio of offsets. In developing regulations, policies and forms under the MOPBA, every minister will be required to consider principles, including “recognized industry standards” and international best practices; the principle that small business should face less onerous regulatory and administrative compliance requirements than large businesses; a bias to providing digital services; recognizing regulated entities that demonstrate excellent compliance (and presumably focusing regulatory attention on those with poorer compliance records); reducing unnecessary reporting and duplicative reporting to various government entities; user-centered compliance, including clear communication, reasonable response timelines, and single points of contact; and focusing on the purpose or substance of regulations, policies and forms (i.e. a “risk-based approach”, rather than a “rules-based approach” that focuses on the means by which the result is achieved).

In addition, prior to a new regulation, policy or form being proposed, a regulatory impact analysis, including analysis on cost of compliance, must be conducted and published. 

The Bill will also ease the regulation-amending process articulated by the Occupational Health and Safety Act. A new sub-section, s. 70(3), will allow for “rolling incorporation by reference”, which would allow the government to update health and safety standards without having to formally introduce regulatory amendments, thereby resulting in a more efficient and decentralized regulation-making process, and a process that is likely to bring Ontario in line with other jurisdictions who adopt changes to applicable codes, standards, guides or criteria.

Building and housing

The Bill will amend the Building Code Act, 1992 (the “BCA”) to simplify the BCA’s regulation-making process. It will transfer regulation-making authority from the provincial Cabinet to the Minister of Municipal Affairs and Housing. Under the proposed regulatory process, the Minister may adopt by reference a number of different documents — including, but not limited to, national model codes: the National Building Code of Canada, the National Plumbing Code of Canada, the National Energy Code of Canada for Buildings, and the National Farm Building Code of Canada. The Minister will be able to adapt the provisions of these adopted texts as necessary. These amendments would result in a number of potential benefits to developers and building trades. The transfer of authority from the Cabinet to the Minister is consistent with regulation-making authority in other sectors and will result in a more efficient process. The opportunity to adopt model codes creates the possibility that building standards may become more consistent across provinces. Clients in relevant industries may already have familiarity with provisions in the national model codes.

The Bill will amend the Planning Act, with the goal of ensuring that developments or redevelopments benefit their respective communities. The proposed amendments modify the community benefits charge (the “CBC”) regime passed in Bill 108 as a new section 37, which is not yet in force. Under the CBC regime, municipal councils, through a by-law, may impose CBCs to fund the “capital costs of facilities, services and matters required because of development or redevelopment in the area to which the bylaw applies.” One new limit articulated by the Bill is that a municipal council cannot impose a CBC on a development with fewer than five stories at or above ground or fewer than ten residential units. The proposed amendments would also permit municipalities to enact CBC bylaws that include the costs of development charge services or parkland. Further, section 42(3) of the Planning Act, which was previously slated for repeal in Bill 108, will remain in the Planning Act. Section 42(3) holds that a municipality may pass a bylaw requiring an alternative parkland dedication rate, though such a bylaw will be appealable to the Local Planning Appeal Tribunal. The Bill also amends section 47 of the Planning Act to grant the Minister of Municipal Affairs and Housing more order-making powers in relation to site plan control and inclusionary zoning.

The Bill also proposes changes to the Development Charges Act related to the proposed Planning Act amendments to the CBC regime. As the Development Charges Act notes, development charges are designed to “pay for increased capital costs required because of increased needs for services arising from development of the area to which the by-law applies.” The provisions of Bill 108, which were passed, but not yet in force, would have restricted CBCs and development charges to very limited categories of soft and hard services, respectively. In conjunction with the proposed Planning Act amendments to permit the enactment of a CBC by-law that includes development charge services, the proposed Development Charges Act amendments would permit municipalities to recover the costs of soft services (e.g.: libraries, community centres, and daycares) through development charges, as is currently permitted. While municipalities may be able to choose whether a particular service is funded through development charges or a new CBC, the Bill clarifies that those costs can only be recovered once.

Transportation

The Bill will amend the Public Transportation and Highway Improvement Act (the “PTHIA”). The proposed amendments envision an alternative process in which the Minister will receive and consider comments from property owners regarding the proposed expropriation of land (replacing “hearings of necessity,” a more onerous process).

The Bill will also enact a Transit-Oriented Communities Act, 2020 (the “TOCA”). The provincial Cabinet will be empowered to designate land as “transit-oriented community land” if the land is or may be required to support a “transit-oriented community project”. The transit-oriented communities program focuses specifically on development around transit stations along four priority subway projects: the Ontario Line, the Scarborough Subway Extension, the Yonge Subway Extension, and the Eglinton Crosstown West Extension. Under the TOCA, the government will not need to hold a hearing of necessity if part of the land under discussion is designated as transit-oriented community land and if the expropriation is for a transit-oriented community project. Instead, the Minister is empowered to establish a process for receiving comments from property owners about the proposed expropriation, thus accelerating the process of expropriation related to transit projects.

Other measures

Food and Agriculture

The Bill proposes to amend the Farm Registration and Farm Organizations Funding Act, 1993, allowing a person who has been denied a farming business registration number the ability to appeal the decision to the Agriculture, Food and Rural Affairs Appeal Tribunal.

The Bill would also amend the Drainage Act with the intention of simplifying the environmental appraisal process for drainage works.

Electronic Municipal Meetings

The Bill will allow members of city council, local boards and committees of either of them to participate electronically in meetings, by amending the City of Toronto Act, 2006 and the Municipal Act, 2001.

Education

The Bill proposes various amendments to the Education Act, including allowing the Minister in the 2021-21 school year to operate “demonstration schools for exceptional pupils.” Under the Education Act, exceptional pupils are defined as those pupils whose “behavioral, communicational, intellectual physical or multiple exceptionalities are such that” they are “considered to need placement in a special education program.” The Bill will also amend the objects of the Ontario Educational Communications Authority Act to include the establishment and operation of distance-education programs.

Judicial services

The Bill will amend the composition and functions of the Justices of the Peace Appointments Advisory Committee, in order to speed up the process of filling justice of the peace vacancies and to introduce greater transparency to the appointments process. The Committee is required to include the diversity statistics of candidates in its annual report.

Consumer protection

The Bill would amend the Payday Loans Act, 2008 to set the maximum interest rate at 2.5% per month on the outstanding principal under a payday loan agreement if the advance under the agreement is $1500 or less and the term of the agreement is 62 days or less. These new amendments are focused on protecting borrowers from harsh repayment arrangements.

Introduction of Invest Ontario

On the same day as it tabled Bill 197, the Ontario government promulgated Ontario Regulation 357/20 under the Development Corporations Act. This regulation establishes a corporation named “Invest Ontario”. Bill 197 itself does not refer to the new agency. The objective of Invest Ontario, articulated in the regulation, is to secure business and capital investments that support job creation and economic growth in Ontario.

Invest Ontario will cooperate with the “domestic and international business community,” develop relationships with potential investors, and provide “customized services to assist investors.” Invest Ontario will prepare an annual report—to be provided to the Minister no later than 120 days after the end of the Corporation’s fiscal year—and make that report public.

Conclusion

Bill 197, if passed, would have a significant impact on how businesses across a range of sectors interact with Ontario’s provincial government. If you have any questions or require additional information in order to determine the potential impacts of the Bill on your business, please contact Lara Nathans, Trevor Lawson, Hartley Lefton, or Adam Goldenberg.

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