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Bill 112: The Hazel McCallion Act, 2023 and Potential Impacts of the Proposed Dissolution of the Peel Region

May 31, 2023 Commercial Real Estate Bulletin 6 minute read

On May 18, 2023, Ontario’s provincial government (the “Province”) introduced Bill 112: the Hazel McCallion Act (the “Act”).[1] If passed, the Act will initiate the dissolution of the Regional Municipality of Peel (“Peel Region”) and make the City of Mississauga, the City of Brampton and the Town of Caledon (the “Municipalities”) independent single-tier municipalities. The Province aims to finalize the dissolution process by January 1, 2025.

This bulletin provides a high-level summary of the Act’s proposed changes, the potential impacts of this dissolution, and the Province’s next steps in implementing the dissolution of Peel Region. More information is available on the Provincial news release available here.

Summary of the Act

The Act lays the groundwork for dissolving Peel Region by creating a transition board (the “Board”) to facilitate the dissolution process in a fair manner.[2] The Province would establish the Board sometime in late 2023, which would consist of up to five members appointed by the Minster of Municipal Affairs and Housing (the “Minister”). If the Act is passed, the names of the members of the Board are expected to be released in the coming weeks.[3] Among its many responsibilities, the Board would provide analysis on the disentangling of regional services, property tax arrangements and financial sustainability. The Board would be expected to propose recommendations for a way forward by the summer of 2024. The Act empowers the Minister to make regulations governing the Board, and so it is expected that further details respecting the Board, including its powers and duties, will become available upon publication of such regulations.[4]

Prior to Peel Region’s dissolution, the Act would impose an obligation on Peel Region, together with the Municipalities’ local councils to “act in the public interest having regard to” the eventual dissolution when entering into transactions, commitments, and other decisions,[5] which the Act says includes  acting in a manner that does not “unreasonably” impact each other.[6] While acting in the public interest is a standard direction for municipalities generally, this language appears to impose a further duty on each of Peel Region and the Municipalities to each other – the extent of which, practically speaking, the Act does not make clear.

The Act delegates certain enforcement powers as an oversight mechanism to ensure that the Municipalities are working in the public interest and with regard to each other and the eventual dissolution. For example, the Act would grant the Board oversight powers regarding financial decisions of all three municipalities, with the power to direct the subject municipality to not proceed with, or to modify, the particular transaction, commitment or agreement, and to “notify the Minister” should that municipality act contrary to the obligations set out above.[7] Upon receipt of such notice, the Act empowers the Minister to override the subject Municipality’s actions or decisions made by its Council leading up to dissolution, by either modifying or terminating a completed transaction, commitment or agreement, or otherwise prohibiting a proposed transaction, commitment or agreement.[8] The Act also empowers the Minister to apply to the Courts for an order requiring compliance with the Act, a direction of the Board or an order of the Minister thereunder.[9]

Of note, the Act expressly addresses that no person is entitled compensation as a result of the enactment of the Act or any direction or order made thereunder, and that nothing done or not done in accordance with the Act shall constitute an expropriation or injurious affection pursuant to the Expropriations Act.[10]

The Act will come into force upon receiving Royal Assent, except for the provision that repeals the Regional Municipality of Peel Act, 2005, which will be of force and effect as of January 1, 2025.[11]

Implications for Mississauga, Brampton and Caledon

Where cities and towns in Ontario are organized in a two-tier structure, the “upper-tier municipality”, often called a “Region” or “County” (such as the Region of Peel), provides services such as policing, waste disposal, health and social services, while also being responsible for region-wide land use planning and development policies. The lower-tier municipalities within these Regions or Counties will then typically be responsible for more local matters, including zoning and by-law enforcement.

This is in contrast to single-tier municipalities like the Cities of Toronto, Hamilton and Ottawa (as well as all northern municipalities without upper-tier governance), which the Municipalities are all slated to join. Single-tier municipalities are responsible for administering all planning matters and for providing all local services to their tax-payers independently – neither the long-term planning nor the associated costs of these services are typically shared with a regional government. From a planning perspective, this requires single-tier municipalities to account for protected major transit station areas in their official plan[12], be responsible for decisions relating to zoning amendments, consents to sever land[13] and plans of subdivision,[14] which would otherwise be handled by an upper-tier municipality (unless otherwise prescribed or delegated under the Planning Act).

The Municipalities that make up Peel Region are growing exponentially and are projected to continue growing significantly over the next 20 years; the  current population of approximately 1.5 million residents is expected to grow to over 2 million by 2041.[15] This has made the management of and preparation for continued growth and development within Peel Region a contentious issue. The eventual dissolution of Peel Region will accordingly provide the local Municipalities with more autonomy with respect to decisions on future growth, including on housing supply and development issues. This is significant given Municipalities’ collective pledge to increase the supply of housing by 246,000 new homes before 2031 as part of the Province’s overall goal of building 1.5 million new homes in the same timeframe.[16]

Other Regions on Notice

The Province has also indicated that, in the coming weeks, it will name regional facilitators to “assess” the six remaining upper-tier municipalities: Durham, Halton, Niagara, Simcoe, Waterloo and York.[17] The assessors are to review whether “upper-tier government continues to be relevant… or whether the lower-tier municipalities are mature enough to pursue dissolution.”[18] We expect that, while some of the larger lower-tier municipalities may express an interest in this dissolution, there are others who are more dependent on their Region or County that will be resistant to such change.

Notably, these six upper-tier municipalities, plus Peel Region, were each defined as an “upper-tier municipality without planning responsibilities” in the amendments to the Planning Act under Bill 23, the More Homes Built Faster Act (please see our latest publication on Bill 23 here).

These amendments to the Planning Act provide that the Lieutenant Governor may, by regulation, remove planning responsibilities from additional upper-tier municipalities.[19] These “upper-tier municipalities without planning responsibilities” will  no longer have authority for making decisions respecting amendments to plans of subdivision, lower-tier official plans and amendments to those official plans, which authority will instead be shifted to each of the lower-tier municipalities. These provisions have not come into force as of the date of this bulletin; they are to come into force on a day to be named by proclamation of the Lieutenant Governor.

When considering the implications of the recent changes to the Planning Act, including through Bill 23, it appears the Province is moving to create a landscape where regional governments play a much lesser role in municipal oversight and land use planning, which objective may be achieved not only through legislative amendments impacting planning processes, but also by the dissolution of certain upper tier municipalities altogether.

Concluding Thoughts

While the hot-topic items of the Act have included property tax implications and the uncertainty surrounding the future delivery of core services such as police, roadwork, water and sewer servicing and garbage collection, the dissolution of Peel Region will also materially impact the land-use planning and development landscape of its three Municipalities.

Ontario’s land-use planning legislation has been no stranger to change over the past several years, and the Act is just one more amendment to this regime that could have major long-lasting implications for residents, landowners, developers and other stakeholders. While there may be one less set of policy documents and level of government to contend with (e.g., if the Region of Peel Official Plan is repealed), these responsibilities will need to be undertaken by each of the Municipalities who will have far greater responsibility and authority over development and planning within their respective backyards.

McMillan will continue to monitor and remain apprised of the status of the Act and related legislation. If you would like to discuss, or you wish to advocate on certain policies to guide the future of Ontario’s planning, development, and land use, please contact Mary Flynn-Guglietti, Annik Forristal, Kailey Sutton or Patrick Pinho, and our team would be pleased to discuss this important piece of legislation and its potential impacts with you.

[1] Bill 112, Hazel McCallion Act (Peel Dissolution), 2023 (“Hazel McCallion Act”)
[2] Hazel McCallion Act, s. 3(1).
[3] Release
[4] Hazel McCallion Act, s.10(1)(c).
[5] Hazel McCallion Act, s. 5.
[6] Hazel McCallion Act, s. 5.
[7] Hazel McCallion Act, ss. 6(1)-(2).
[8] Hazel McCallion Act, s. 6(3).
[9] Hazel McCallion Act, s.8.
[10] Hazel McCallion Act, s.9.
[11] Hazel McCallion Act, s.12.
[12] Planning Act, s.16(15)
[13] Planning Act, s.50(1)(b).
[14] Planning Act, s.51(4).
[15] Release
[16] Release
[17] Release
[18] Planning Act, R.S.O. 1990, c. P.13, s.1(1).
[19] Planning Act, s.1(6)

by Mary Flynn-Guglietti, Annik Forristal, Patrick Pinho, Kailey Sutton and Khaleed Mawji

A Cautionary Note

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 2023

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