Encumbered Parkland Amendments Take Effect

On July 1, 2026, long-awaited amendments to section 42 of the Planning Act governing the dedication of encumbered parkland come into force, together with associated regulations. As of Canada Day, landowners will, for the first time, have access to a statutory mechanism to compel municipalities to accept encumbered or partial interests in land – including stratified parcels, land burdened by an easement or below-grade infrastructure, and privately-owned publicly-accessible open spaces – in satisfaction of parkland dedication obligations, backed by a right of appeal to the Ontario Land Tribunal (the “Tribunal”).

The relevant provisions of the Planning Act were first introduced in 2022, through the More Homes Built Faster Act (Bill 23) as outlined in our previous Goodmans Update. However, the parkland provisions remained dormant since they received Royal Assent while the Province considered and prepared the implementing regulations. Those regulations, in O. Reg. 207/206, were made on June 26, 2026 and come into force on the same day as the associated amendments to the Planning Act.

Key Aspects of the New Framework

The amendments establish a landowner-initiated process for satisfying parkland obligations with encumbered land, together with a corresponding right of appeal if the municipality does not accept the proposed conveyance. The key features of the framework are the following:

• Proposal any time before first building permit for the development. A landowner may identify and propose land to be conveyed in full or partial satisfaction of its parkland dedication requirement at any time before the first building permit is issued for the development. As part of the proposal, the landowner must provide a survey, a description of any existing or proposed easements or below-grade infrastructure, and a statement indicating whether the land proposed to be conveyed meets the criteria set out in regulations (outlined below). 
• Municipality may accept proposal. If the municipality accepts the proposed conveyance, the legislation is silent on how much the conveyance counts toward parkland requirements, giving municipalities the flexibility to establish standard credit percentages in their parkland dedication by-laws or evaluate and determine credit amounts on a case-by-case basis. However, municipalities’ approach must be considered in the context of the Tribunal’s powers on appeal: as outlined below, if a proposal is refused and successfully appealed to the Tribunal, the landowner is entitled to a credit of at least 70% of the parkland requirement, regardless of the interest being conveyed or the type of encumbrance affecting the land.
• Municipality may require an easement agreement. If the municipality is willing to accept an interest in land that is less than the fee simple interest (such as an easement), it may require the landowner to enter into an agreement that provides for the land to be used for park or other public recreational purposes, which may be registered on title and run with the land.
  
• Right of appeal on non-decision or refusal. If the municipality fails to respond to a proposal to convey encumbered land within 90 days, or refuses to accept the proposed conveyance, the landowner may appeal to the Tribunal.
• Tribunal’s consideration of prescribed criteria. On an appeal, the Tribunal must consider whether the land meets the criteria prescribed in the regulations. Those criteria are the following:
  1. The land does not have in it any contaminants that would pose a risk to human health.
  2. None of the land comprises any part of hazardous lands or hazardous sites, as those terms are defined in the Provincial Planning Statement (the “PPS”).
  3. None of the land is affected by mine hazards or oil, gas and salt hazards, as those terms are defined in the PPS.
  4. None of the land is affected by former mineral mining operations, mineral aggregate operations or petroleum resource operations as those terms are defined in the PPS.
  5. The land does not contain and is not adjacent to any natural heritage features and areas, as that term is defined in the PPS, unless the use of the land for a park would have no negative impacts on the feature or area.
  6. The land will contain a sufficient depth and volume of soil to accommodate trees.
  7. The land does not contain any liens, charges or other financial encumbrances that will not be removed before being conveyed to the municipality.
  8. The land will be available to the public at all times, subject to any rules the municipality may choose to put in place.
  9. The land will be visible from municipal or other publicly-owned land.
  10. The land will be accessible by all users directly from municipal or other publicly-owned land.
  11. The land is of a size and shape that is appropriate for park or other public recreational purposes.
  12. The land is not located in the Greenbelt Area, unless the land proposed for development or redevelopment is in the Greenbelt Area.
  13. If the land is within the Greenbelt Area, its use as a park would conform with the Greenbelt Plan, Oak Ridges Moraine Conservation Plan and Niagara Escarpment Plan, as applicable.
• Mandatory credit of at least 70%. Where the Tribunal orders the conveyance of the land (or interest in the land), the land must be counted toward the parkland dedication requirement at a credit of 70% or more, regardless of the interest being conveyed or the type of encumbrance affecting the land. If the interest to be conveyed is less than the fee simple, the Tribunal may require the landowner to enter into an agreement that provides for the land to be used for park or other public recreational purposes, which may be registered on title and run with the land.

Implications and Next Steps

The new framework relating to encumbered parkland gives rise to a number of strategic considerations for landowners. Those contemplating proposals to convey encumbered parkland should consider the optimal timing to make such a proposal, given the opportunity to do so at any time before issuance of the first building permit for the development. Landowners should also consider giving early attention to the prescribed criteria and the documentation required to support the proposed conveyance, as those criteria could have important implications for the design of development proposals, construction planning, and permitting.

We will continue to monitor the implementation of these provisions, including the manner in which municipalities update their parkland by-laws and practices to reflect the new framework and the Tribunal’s early treatment of the prescribed criteria on appeal. In the meantime, for more information, please contact any member of our Municipal and Land Development Group.