The Ontario government is seeking to override rules that could impede sanctioned projects and entrusted project proponents within designated special economic zones, but it hasn’t yet clarified what kinds of sites and undertakings will merit that elite status. The proposed Special Economic Zones Act is one component of newly introduced omnibus legislation, which also contains amendments to seven existing provincial statutes and would additionally repeal the Endangered Species Act and replace it with the proposed Species Conservation Act.

Collectively, Bill 5 is presented as an effort to propel major infrastructure, mining and resource development projects that are considered to be instrumental for economic development, and to safeguard Canadian sovereignty against outside threats. That’s particularly focused on tapping into Ontario’s mother lode of critical minerals and speeding up what’s currently a multi-year period to secure all the required approvals for new mines. However, the envisioned special economic zones could host a broader range of ventures.

“Our intent is to reduce government review time by 50 per cent to get shovels in the ground,” advised Stephen Lecce, Ontario’s Minister of Energy and Mines, as Bill 5 was tabled on April 17. “Accelerating responsible resource development — from clean energy to critical minerals projects — creates a generational opportunity that will transform our country into a true energy superpower.”

Some of the other measures in Bill 5 promise to:

• ease some approval procedures related to the potential for endangered species and/or archeological artifacts on prospective development sites;
• establish provincial authority to block business involvement in the electricity or natural gas sectors based on the country, region or territory of origin of would-be participants;
• reduce timelines for securing permits for mining ventures through a one-window approvals process for requirements from various provincial ministries; and
• establish provincial authority to suspend, deny or revoke mining claims and leases and prospectors’ licences if it is deemed necessary in order to protect the supply chain for nationally strategic minerals.

Unformed guidance leaves wide undefined scope

Although most of the details related to special economic zones are still vague, the Ontario government has announced it is aiming to designate the first one this September. Associated background information now posted on Ontario’s regulatory registry for public comment indicates there is wide scope for what that could entail.

“A zone will be a geographic area that could include one or more projects of critical or strategic importance. Zones could vary significantly in size, from a small parcel of land to a large area,” it states.

As proposed, special zones could be established via regulation provided they meet prescribed criteria that must also be established in currently non-existent regulations. Once zones are in place, the government would follow guidance in other yet-to-be-drafted regulations to authorize “trusted proponents” and “designated projects” that could be freed from various conventional regulatory requirements that generally apply outside the special zones. Projects could be designated individually, or as part of a macro category of eligible projects that the Minister could define and instigate by regulation.

The Act would allow the Minister to exempt projects and/or proponents from provisions of any provincial legislation and/or any municipal bylaw or requirement of a municipal agency, or to modify applicable provincial or municipal requirements within a special economic zone. As well, the province and affected municipalities would be protected against legal action and financial compensation claims in cases where exemptions or modifications occur.

Revising approval processes

Bill 5 offers a couple of other routes around potential project slowdowns to development proponents both inside and outside special economic zones. These are found in the new Species Conservation Act and amendments to the Ontario Heritage Act.

The proposed Species Conservation Act would enshrine an honour system tied to a newly created Species Conservation Registry and related regulatory requirements for species protection. This would replace the current requirement to obtain permits before proceeding on sites where extirpated, endangered or threatened species may have habitats with a “registration-first approach” that presumes registrants will comply with the regulations and conveys penalties if they do not.

“This eliminates the step of waiting for the ministry to review and approve permits. We are also committing to investing in upgraded IT systems to support this newly expanded registration regime,” explanatory background posted on Ontario’s regulatory registry notes. “There will still be requirements set out in regulation that protect species, and we will also continue to provide information and protection guidance for species through policies and implementation supports.”

The Ministry of Environment, Conservation and Parks commits to consulting with the public and Indigenous communities and organizations as it develops the enabling regulations, which will likewise be posted on the provincial environmental registry for comment. Requirements under the legacy Endangered Species Act would remain in place, with some adjustments, until the new registry is ready to be launched. That’s forecasted to be sometime in early 2026.

A proposed amendment to the Ontario Heritage Act would give the Ontario government authority to exempt designated types of development from the requirement to conduct an archaeological assessment, provided it meets with certain criteria that will be set out in a yet-to-be-devised regulation. Accompanying background posted on the provincial regulatory registry indicates that the exemption could be available for transit, housing, health and long-term care facilities or other infrastructure and project types deemed to be a provincial priority.

In contrast, exemptions would not be granted on cemetery lands or other burial grounds, former sites of Indian residential schools or sites that are classified as archaeologically significant.

Shutting out unwanted interest

The provincial government maintains it needs the flexibility to impose restrictions on foreign business involvement in Ontario’s electricity and natural gas transmission, distribution and storage sectors to safeguard against “antagonists” and risks of “malware, manipulation, tampering, extortion, surveillance, rate payer harms and other prospective threats”. Proposed new regulation-making authority would allow the Ministry of Energy and Mines (MEM) to exclude bidders from specified countries or regions from procurement exercises for systems, equipment, services, facilities or technologies.

“In addition, this proposal would enable a mechanism to respond to future trade restrictions imposed by other countries which target the Canadian/Ontario economy,” states accompanying analysis on the provincial regulatory registry. “With respect to resource procurements, MEM’s proposal to limit foreign participation in the energy sector would focus on future resource procurement activities not processes already launched, awarded and being implemented.”

Related to mining activity and critical minerals, it’s suggested the proposed regulations can be used to counter “bad actors” and protect Ontario’s mineral resources and the supply chain for nationally important minerals. The Minister would have new authority to suspend or shut down all or some function of the provincial Mining Lands Administration System (MLAS) and to:

• suspend, restrict or terminate MLAS accounts and/or prospectors’ licences;
• deny registration for MLAS accounts, prospectors’ licences, or lease issuance;
• cancel or revoke unpatented mining claims or occupation licences; and
• terminate leases.

“The Minister would consider any risk assessment provided by the Ministry of the Solicitor General, the economic interests of Ontario, and any prescribed factors in making these decisions,” accompanying information on the regulatory registry states.

All these matters are open for public comment until May 17, 2025 via the pertinent online portal on Ontario’s regulatory registry.