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Ontario government backgrounder on Bill 23 More Homes Built Faster

The Ontario government’s legislation to support the province’s newest Housing Supply Action Plan, More Homes Built Faster, has been given Royal Assent. This plan is part of a long-term strategy to help build more homes and make life more affordable for Ontario families.

Initiatives in the plan include:

Addressing the Missing Middle

Building on a number of as-of-right residential tools which Ontario provided municipalities with since 2019, the government is changing the Planning Act to create a new provincewide standard threshold for what’s allowed to be built by strengthening the additional residential unit framework. With the More Homes Built Faster plan, up to three residential units are permitted “as of right” on most land zoned for one home in residential areas without needing a municipal by-law amendment. Depending on the property in question, these three units could all be within the existing residential structure or could take the form of a residence with an in-law or basement suite and a laneway or garden home. These new units must be compliant with the building code and municipal by-laws. These units would also be exempt from development charges and parkland dedication fees.

Building More Homes Near Transit

Ontario has taken action to ensure that complete, sustainable communities are built near and centred around our historic investments in provincewide transit expansion. Changes to the Planning Act will help move towards “as-of-right” zoning to meet planned minimum density targets near major transit stations, reducing approval timelines and getting shovels in the ground faster. Once the key development policies for major transit stations are approved, municipalities will be required to update their zoning by-laws within one year to meet minimum density targets.

Supporting the Growth and Standardization of Affordable and Rental Housing

Ontario is creating the conditions for building more affordable and purpose-built rental housing across the province. This legislation supports regulatory changes to provide certainty regarding inclusionary zoning rules, with a maximum 25-year affordability period, a five per cent cap on the number of inclusionary zoning units, and a standardized approach to determining the price or rent of an affordable unit under an inclusionary zoning program.

Ontario is also taking action to help streamline the construction and revitalization of our aging rental housing stock, which in some cases is many decades old, grossly energy inefficient, and decrepit. As it stands, under the Municipal Act and City of Toronto Act, municipalities may enact bylaws to prohibit and regulate the demolition or conversion of multi-unit residential rental properties of six units or more. These by-laws vary among municipalities and can include requirements that may limit access to housing or pose as barriers to creating housing supply. Ontario is reviewing feedback received through a consultation on potential regulations to enable greater standardization of these municipal by-laws, while ensuring that renter protections and landlord accountabilities remain in place.

Freezing, Reducing and Exempting fees for Building Attainable, Affordable and Non-Profit Housing

Government charges and fees significantly impact the cost of housing—adding up to $250,000 to the overall cost of building a home. That is why Ontario changed the Planning Act, the Development Charges Act and the Conservation Authorities Act to freeze, reduce and exempt fees, spur the supply of new home construction and help address Ontario’s housing supply crisis. This includes ensuring affordable and inclusionary zoning units, select attainable housing units, and non-profit housing developments are exempt from municipal development charges, parkland dedication levies and community benefits charges. Rental construction has reduced development charges of up to 25 per cent, and conservation authority fees for development permits and proposals are temporarily frozen. Ontario is also undertaking a review of fees levied by provincial ministries and agencies to determine what impact they may have on the cost of housing.

Streamlining Bureaucratic Processes to Get More Homes Built Faster

Changes to the Planning Act removed site plan control requirements for most projects with fewer than 10 residential units (with limited exceptions). This will reduce the number of required approvals for small housing projects, speeding things up for all housing proposals, while building permits and robust building and fire code requirements continue to protect public safety.

Streamlining changes also include focusing responsibility for land use policies and approvals in certain lower-tier municipalities to eliminate the time and costs associated with planning processes by upper-tier municipalities. This will give the local community more influence over decisions that impact them directly, clarify responsibilities and improve the efficiency of government services for citizens.

Improving the Ontario Land Tribunal to Support Building More Homes Faster

The Ontario Land Tribunal is a critical part of Ontario’s land use planning system. Legislative changes to the Ontario Land Tribunal Act will help speed up proceedings, resolve cases more efficiently and streamline processes. This includes by allowing for regulations to prioritize cases that meet certain criteria (for example, that create the most housing), as well as to establish service standards (i.e., timelines for completing specific stages of a case). Changes will also clarify the tribunal’s powers to dismiss appeals due to unreasonable party delay or party failure to comply with a tribunal order, as well as clarify the tribunal’s powers to order an unsuccessful party to pay the successful party’s costs. Building on the additional $14.7 million funding over three years announced in the Budget, Ontario is further investing $2.5 million for more resources at the tribunal to support faster dispute resolution and to help reduce the overall caseload.

Creating a New Attainable Housing Program

Ontario is creating a new program to support the dream of homeownership for more Ontarians. The new program will leverage a range of tools, including surplus or underutilized provincial lands and commercial innovation and partnerships to help rapidly build attainable homes in mixed-income communities that are more accessible and could help families to build equity.

Protecting Ontario Homebuyers from Unethical Developers

Ontario is further strengthening consumer protections for new home buyers by doubling maximum fines for unethical builders and vendors of new homes that contravene the New Home Construction Licensing Act, 2017 including unfairly cancelling projects or terminating purchase agreements. These changes under the New Home Construction Licensing Act, 2017 will increase existing maximum financial penalties from $25,000 to $50,000 per infraction, with no limit to additional monetary benefit penalties, and be retroactively imposed for contraventions that occurred on or after April 14, 2022. These changes will also enable the Home Construction Regulatory Authority to use funds from these penalties to provide money back to adversely affected consumers, making Ontario the first jurisdiction in Canada to provide such funds to consumers. These amendments will come into force in early 2023.

Taking Action to Crack Down on Land Speculation

In January, during the Ontario-Municipal Housing Summit, Ontario’s mayors expressed concerns that lands planned for residential development are sitting empty because home builders are taking too long to complete their planning applications, delaying the creation of new homes. To further investigate these concerns, Ontario will work with industry partners to consult on the issue of land speculation as a detriment to the housing supply goals of the government, and whether potential regulatory changes under the New Home Construction Licensing Act, are needed to address the issue.

Improving Ontario’s Heritage and Growth Planning

Changes to the Ontario Heritage Act will renew and update Ontario’s heritage policies, strengthen the criteria for heritage designation and update guidelines. These changes continue to support the conservation of heritage properties that are important to Ontarians, while providing clarity and flexibility to ensure critical housing and other priority projects can move forward in a timely manner.

Ontario is consulting on how it manages natural heritage, including improving the management of wetlands, while supporting sustainable growth and development. Ontario is seeking input on integrating A Place to Grow: Growth Plan for the Greater Golden Horseshoe and the Provincial Policy Statement into a single, provincewide planning policy document. This review also includes a consultation on how to speed up housing development and increase housing supply (including rural housing) through a more streamlined, provincewide land use planning policy framework, while continuing to protect the environment, cultural heritage and public health and safety.

Calling for Federal Action on GST/HST

Ontario is calling on the federal government to come to the table and work with us on potential GST/HST incentives to support the building of more homes. This could take the form of rebates, exemptions or deferrals of GST/HST to support both new ownership housing development and new rental housing development. All levels of government need to work together to get more homes built and address the housing crisis.

Promoting Fairness to Support Affordable and Other Rental Housing

Currently, property tax assessments for affordable rental housing are established using the same basis as regular market rental properties. Ontario will explore potential refinements to the assessment methodology used to assess affordable rental housing so that it better reflects the reduced rents that are received by these housing providers. In addition, Ontario will consult with municipalities on potential approaches to reduce the current property tax burden on multi-residential apartment buildings in the province.

Helping Homebuyers and Renters: Addressing Vacant Homes

This winter, there will also be a consultation on a policy framework setting out the key elements of local vacant home taxes. Right now, only a handful of municipalities have the authority to charge this tax on unoccupied residential units to incentivize owners to sell or rent them out. A provincial-municipal working group will be established to consult on this framework, and to facilitate sharing information and best practices.

Strengthening the Non-Resident Speculation Tax

Ontario now has the highest and most comprehensive Non-Resident Speculation Tax (NRST) in the country, set at 25 per cent and applied provincewide. This initiative is meant to further discourage foreign speculation in Ontario’s housing market.

Sustainable Building Practices

In response to public and stakeholder input, the government intends to make future changes to the Building Code to allow municipalities to require certain green standards to promote energy-efficient buildings.