Tweaks to the Planning System Continue: Bill 17 Seeks to Expedite Housing and Transit Projects

On May 12, 2025, the Province of Ontario introduced the Protect Ontario by Building Faster and Smarter Act, 2025, also known as Bill 17, the provincial government’s first suite of legislative amendments focused on land use planning and development since its re-election in February 2025. Continuing the Province’s efforts in its previous terms, the legislation is intended to remove barriers to building homes and infrastructure. While that objective is ambitious, the proposed legislative amendments and associated regulations refine, rather than overhaul, certain aspects of the planning process, including complete application requirements, the payment of development charges and the Province’s Ministerial Zoning Order (MZO) powers. The key amendments proposed are outlined below.

Requirements for Complete Applications

Bill 17 would impose two restrictions on the materials a municipality can require in support of a complete planning application:

• First, the Province would have authority to prohibit certain studies by way of regulation. The Province has indicated it is currently contemplating identifying sun/shadow, wind and urban design materials in the regulation, so that these studies would not be required for a complete application. Many municipalities’ official plans contain policies regarding these matters. As a result, while the studies to be identified in regulation would not be required to obtain a notice of complete application, municipalities may take the position that the studies are required prior to approval, to demonstrate the statutory tests for approval are met.
  
• Second, materials provided by a professional identified in a list to be established by regulation would be deemed to meet the complete application requirements. The draft of the regulation is not yet released, but it would presumably include planners, engineers and other professionals typically responsible for submitting reports in support of planning applications.

Minor Setback Variations Permitted As-of-Right

Bill 17 would create authority for variations from a by-law’s setback requirements by an amount specified in regulation, without the need to seek a variance from the Committee of Adjustment. The Province has proposed a permitted reduction of 10%, such that a building could be 10% closer to a lot line than set out in a by-law, without a further approval.

Caps on Inclusionary Zoning

Amendments to the Inclusionary Zoning regulation under the Planning Act already in effect establish, for developments within a Protected Major Transit Station area:

• A maximum set aside rate for affordable housing units of 5% of residential units or 5% of the gross floor area; and
  
• A maximum affordability period for affordable housing units of 25 years.

Development Charges

Bill 17 proposes changes to the Development Charges Act, 1997 (DC Act) that would simplify and standardize development charges. The key changes proposed include:

• Deferred payment for non-rental residential developments. Whereas rental projects generally pay development charges in six equal installments over five years beginning at first occupancy, non-rental residential developments generally pay development charges upon issuance of a first building permit. Bill 17 would delay the payment of development charges for non-rental residential projects (including condominiums) to first occupancy.
  • Bill 17 also proposes that the Province could allow municipalities to require developers to provide financial security to secure payment at occupancy, in certain circumstances to be set out in regulation. A draft of that regulation has not yet been released. If the scope of circumstances in which financial security is permitted is broad, it could substantially reduce the benefit of the deferral of payment.
• Development charges amount capped based on rates in effect at time of first permit. The DC Act provides that development charges are determined under the by-law on the date a site plan control application is made (or a rezoning application where site plan control does not apply). However, because that amount is subject to interest to the date of payment, the development charges resulting from such “frozen” rates can sometimes exceed the amount that would otherwise be payable at first building permit.
  • Bill 17 proposes to eliminate this scenario: where the development charges payable based on “frozen rates” plus interest exceed the amount otherwise payable under the by-law at first building permit, the amount payable would be based on the by-law at the time of first permit.
• Prohibition on interest in certain circumstances. For residential and institutional development, the DC Act generally permits municipalities to charge two types of interest: (1) interest between the date of site plan application and the date of development charge payment; and (2) interest between the date of issuance of first building permit and the date of development charge payment. Bill 17 appears to propose to eliminate the second type of interest, but not the first, though it is not clear that this differential treatment is deliberate.
• Permission for early payment. Under Bill 17, development charges for residential (both rental and condo) and institutional development could be paid before they are otherwise due, even in the absence of an agreement under section 27 of the DC Act.
• Merging service categories to allow more flexible use of development charge credits. Where a developer undertakes work on behalf of the municipality in exchange for a development charge credit, the credit can currently only be used with respect to the specific part of the development charge that relates to that service. For example, sewer improvements can only be against the sanitary sewer component of the development charge. This can create challenges where the cost of the work exceeds the amount of the development charge for that specific component. Bill 17 would allow the Province to make regulations deeming multiple services to be one service, so that a credit that relates to any one of those services could be used with respect to any of those services.
  
• Definition of local services. The DC Act provides that municipalities may only require developers to pay development charges in respect of a service or construct a service as a condition of subdivision or consent approval if it is a local service. This can result in disputes between municipalities and developers as to whether a service is a local service (for which development charges are payable) or not. Bill 17 proposes to allow the Province to define what constitutes a local service through regulation. A draft of that regulation has not yet been released.
  
• Simplification of processes for development charge by-law amendments reducing rates. Municipalities would no longer be required to complete a development charge background study or hold public meetings before amending their development charge by-law to reduce the amount of a development charge payable, remove indexing provisions, or extend the expiry date of a by-law. In addition, such amendment would not be subject to appeal. This amendment partly responds to a request from the City of Toronto for expanded procedural flexibility to reduce development charges, following its recent efforts to address scheduled indexed increases.  

Limitations on Municipally-Imposed Construction Standards

Bill 17 proposes to amend the Building Code Act, 1992 to clarify the existing prohibition that municipalities cannot pass by-laws regarding the construction or demolition of buildings. While some have suggested this could apply to green building standards, such as the Toronto Green Standard or Mississauga’s Green Development Standards, the prohibition in Bill 17 as currently drafted is limited to the enactment of by-laws and it is not clear that it extends to standards endorsed by Council and imposed through other means, such as conditions of site plan approval.

Conditional MZOs

Bill 17 would allow MZOs to impose conditions, such that the permissions provided in the MZO would only be available once the conditions are satisfied. When a condition is imposed, the Minister of Municipal Affairs and Housing may require an owner of land to enter into an agreement relating to that condition, which agreement can be registered on title and run with the land.

Broad Provincial Powers Extended to More Transit Projects

The Province currently has broad powers with respect to lands in the vicinity of certain transit projects, such as the Ontario Line, the Scarborough Subway Extension, the Eglinton Crosstown LRT and the Yonge Subway Extension, including to expropriate without a hearing of necessity, prohibit construction without a permit from the Minister of Transportation, or remove obstructions to construction of the transit project. Bill 17 proposes to extend these powers to any project that Metrolinx has the authority to carry out.

Next Steps

Bill 17 has now been ordered for second reading. Consideration by legislative committees will follow. We will continue to monitor its progress as the legislative process advances. In the meantime, for further information regarding Bill 17, please contact any member of our Municipal and Land Development Group.