Deep flaws in Ontario's process to fast-track development: Auditor General

Deep flaws exist in the Ford government’s controversial use of minister’s zoning orders (MZOs) to fast-track development projects, concludes a new report.

The latest Ontario Auditor General report reveals that between 2019 and 2023, the government issued 114 MZOs, a 17-fold increase compared to the previous 20 years. The report highlights significant gaps in the process, including arbitrary decision-making, ignoring environmental and agricultural impacts, and a lack of meaningful consultation with Indigenous communities.

In a press conference on Tuesday, Ontario Auditor General Shelley Spence said the information packages prepared for the Ministry of Municipal Affairs and Housing did not even include an assessment of the need for individual MZOs, nor did they assess whether MZOs would actually expedite projects or be any more efficient than the normal municipal planning process.

MZOs allow the minister of Municipal Affairs and Housing to override municipal zoning bylaws and approve land-use changes.

The ministry introduced a new MZO framework earlier this year and is revoking some orders for slow-moving projects. Spence said the new framework addresses some of the problems raised by the audit but does not fully resolve concerns like the lack of site impact assessments, financial implications, or timely identification of environmental and agricultural risks.

Traditionally, MZOs were used for zoning issues in undeveloped areas or to protect agricultural and natural lands. But under the Ford government, over half of recent MZOs have been for residential development, the audit found. 

Half of the MZOs issued between 2019 and 2023 were for housing developments, yet the ministry failed to track project outcomes, the audit determined. No specific targets were set for the number of new housing units, affordable or otherwise. And even though some municipalities supported MZO requests for affordable housing, the ministry has no data confirming that the units were actually built. 

Phil Pothen, land use and land development program manager at Environmental Defence, said Ontarians can no longer trust the safety, integrity or legality of sprawl development approvals issued since 2018. 

In a statement responding to the Auditor General’s report, Pothen warned that leaving these MZOs in place would jeopardize public safety, the environment and municipal budgets. 

“Not only did the government fail to engage with key experts to identify the [potential public health] hazards, like flooding, but it also failed to look at key information about ‘natural hazards,’” Pothen said. He further criticized the government for omitting crucial details in the information packages, such as the impact on infrastructure capacity, the environment, and the financial burdens placed on regions, municipalities and taxpayers.

Unlike municipal planning decisions, MZOs cannot be appealed to the Ontario Land Tribunal, and can only be challenged through costly judicial reviews.

One of the most contentious case studies highlighted in the audit was the approval of zoning for a Home Hardware building centre in Clarington, supported by the local municipal council. The ministry’s information package claimed the project would support post-COVID economic recovery and provided details on the site’s natural features.

However, the package didn’t address how the development, outside settlement boundaries, would impact provincial interests like ecological protection and water conservation. Despite concerns from the Ministry of the Environment and local conservation authorities about risks to natural features and groundwater, the zoning order was granted in 2021, and the Home Hardware centre was completed in 2023. Environmental impacts, including effects on water quality and species-at-risk, remain unknown.

The new MZO framework passed in April more clearly outlines submission components for MZOs, including mandatory consultation with the Ministry of the Environment, Conservation and Parks (MECP). It also emphasizes that MZOs should only be issued when they align with provincial interests such as housing, environmental concerns and municipal planning processes.

The audit, which examined 114 MZOs and did an in-depth analysis of 25, found significant flaws in the ministry’s past approach. While some MZOs supported essential projects, like housing for the homeless, long-term care beds, and a major battery plant creating 2,500 jobs, there was no justification for some of the others. For example, MZOs were issued for transit stations in Vaughan and Caledon that were not supported by the transport agency, Metrolinx.

Spence said, in many cases, the ministry did not provide alternative zoning options or risk assessments for proposed projects. Municipal requests to address potential environmental or infrastructure issues were frequently ignored, and no adjustments were made to mitigate these risks before issuing the orders, the report added.

Concerns were also raised about the ministry's failure to consider environmental and agricultural impacts. In several cases, key experts were not consulted to identify risks such as flooding, loss of natural features or the degradation of agricultural land. Even when expert advice was sought, the ministry often disregarded recommendations to assess or mitigate risks, the report noted.

Now, 18 per cent of MZO-related projects are facing significant delays due to inadequate infrastructure servicing, such as water and wastewater systems, according to the report. These delays could have been anticipated and addressed through the municipal planning process, underscoring the flaws in bypassing standard procedures, it suggested.

As well, in nearly half of the sampled MZOs, there was no evidence that the ministry engaged with affected Indigenous communities, the report found. 

While similar zoning tools exist in British Columbia, Alberta and Saskatchewan, they are rarely used. Unlike Ontario, these provinces require additional Cabinet approval or impose strict conditions to protect ecologically sensitive land. None of these provinces used their equivalent tools between 2019 and 2023.

Recent amendments to Ontario’s Planning Act and the Conservation Authorities Act have expanded the minister's powers, including enhanced MZOs introduced in 2020. These changes allow the minister to override municipal site plan approvals and exempt certain projects from provincial planning policies everywhere except land inside the Greenbelt. This has reduced oversight and accountability since MZOs can be issued with minimal scrutiny and government liability for decisions made under them are limited, the audit said.

The report includes several recommendations for reforming the MZO process, including establishing clear criteria for when an MZO is necessary, consulting with municipalities and Indigenous communities early, conducting thorough environmental and agricultural assessments, and tracking the outcomes of projects approved through MZOs.