Bill 112, Hazel McCallion Act: The End of the Regional Municipality of Peel

On June 8, 2023, the Ontario government passed a bill to dissolve the government of the Regional Municipality of Peel (informally known as Region of Peel) and make the municipalities of Mississauga, Brampton and Caledon independent single-tier municipalities. Bill 112, Hazel McCallion Act, (the “Act”) establishes a transition board to assist the Region and the three municipalities in devolving responsibilities for delivery of municipal services to each respective municipality and winding up the Region of Peel by January 1, 2025.

At the time of writing this article, the Ontario government has revealed little information as to how it will disentangle Mississauga, Brampton and Caledon from fifty years of integration other than its intention to do so.  With the introduction of several ambitious pieces of legislation addressing housing affordability and supply over the last twelve months, it is clear that the Act is another piece of the Ontario government’s plan to reduce bureaucratic costs and red tape to meet the stated goal of 1.5 million new homes by 2031.

This article summarizes the Act and its potential impacts on the delivery of core services to the citizens of Mississauga, Brampton and Caledon, with a particular emphasis on development approvals and new home construction.

The History of the Region of Peel

The Region of Peel was established in 1974 by the Progressive Conservative government to consolidate municipal service delivery to the newly amalgamated cities of Mississauga, Brampton and Peel.[1] The Region was given responsibility for policing, health programs, waste collection, water and water treatment, road maintenance, and some land-use planning. In 1974, the three municipalities had a combined population of approximately 250,000 people and may not have been equipped to manage service deliver on their own. Since 1974, Brampton and Mississauga have experienced tremendous economic growth through a massive influx of people to the Region and are mature cities with institutional capacity. Today, the Region of Peel has a population of over 1.5 million people with a forecasted population of close to 2 million people by 2041.[2]  The time is right for the three municipalities to become masters of their own destinies.

The Hazel McCallion Act

The Act establishes the framework for dissolving the Region of Peel and continuing the cities of Mississauga and Brampton and the Town of Caledon as single-tier municipalities with full authority for administering land-use planning and delivering core services. The effective date of dissolution is January 1, 2025 and until such time the Region of Peel will continue to have a mandate and authority as an upper-tier municipality. The Act establishes a transition board appointed by the Minister of Municipal Affairs and Housing consisting of five members that will monitor the actions and decisions of the local councils and provide recommendations to the Minister regarding the restructuring necessary to enable a seamless devolving of power to the three municipalities. These duties will include such matters as winding down the financial operations of the Region, transferring assets, assigning liabilities, debts and other financial obligations, allocating regional services to the local municipalities and ensuring long-term economic sustainability as single-tier municipalities. The names of the members of the transition board are expected to be released in the next few weeks.[3]

The Act grants the transition board significant power over the Region and the three municipalities, including requiring the municipalities to share any documents, records or information in its possession, including privileged or confidential information, in order for the transition board to fulfil its mandate.  Further, until January 1, 2025, the Region and the local councils of the three municipalities must “when considering entering into any transaction, commitment or agreement…act in the public interest having regard to the municipal restructuring…including acting in a manner that does not unreasonably impact another municipality”.[4] If the transition board is of the opinion that the Region and the three local councils have made decisions or acted in a manner that is not in the public interest, the transition board, or alternatively the Minister may direct (or as a last resort) order the local council to not proceed, undo or alter the decision, transaction or agreement entered into by the local municipality.[5]

As is the case with most legislation, the Act is scant on details with the regulations containing the operational and administrative impact of the legislation. The Act suggests that regulations concerning the set up of municipal service boards, parameters for the transfer of regional assets, and allocation of debts, liabilities and obligations are forthcoming. If the public statements of the three mayors are any indication, the disentangling of the three municipalities will be a challenge. The Act gives the transition board the legal authority to push through any dispute, challenge or roadblock the local councils and mayors of the three municipalities may throw its way so the Region of Peel can be dissolved by January 1, 2025. 

New Housing in Mississauga, Brampton and Caledon

The Act will have a profound impact on the delivery of new housing to the three municipalities. With the dissolution of the Region of Peel, the cities of Mississauga and Brampton and the Town of Caledon will become single-tier municipalities (like Toronto, Hamilton and Ottawa for example), and therefore be sole approval authority for official plans, official plan amendments, subdivisions, site plans and all other development applications. Under the current system, the Region of Peel is an upper-tier municipality with the authority and the statutory requirement to approve the official plans and official plan amendments of the lower-tier municipality, provide input on site plan applications, approve subdivision plans and the ability to appeal planning decisions. This additional level of review has added significant costs and delays to the delivery of new housing in the region, in the form of added bureaucracy and increased development application and review fees. Furthermore, the Region of Peel and the local municipalities evaluate the merits of development proposals with regard to different priorities. The two-level approval process has prevented otherwise viable and desirable development projects from proceeding.

The dissolution of the Region of Peel gives the three municipalities the authority and autonomy to make their own decisions regarding development applications. The three municipalities have collectively committed to building 246,000 new homes by 2031.[6] The single-tier municipal structure paves the way for the municipalities to deliver housing faster, cheaper and on their own terms.   

The Fall of Regional Governments in the Golden Horseshoe

With the release of the Act, the Ontario government announced its intention to appoint regional facilitators to assess the upper-tier municipalities of Durham, Halton, Niagara, Simcoe, Waterloo and York to determine whether the municipalities in these regions are capable of governing themselves and meeting the service needs of their communities as single-tier municipalities. Bill 23, More Homes Built Faster Act, which passed in 2022, defined these six regions (along with Peel) as “upper-tier municipalities without planning responsibilities” meaning that these regional governments would no longer have authority to approve or evaluate development applications previously under their jurisdiction.[7] While the legislative change is not yet in force, it is clear that the Ontario government has recognized that a two-tiered system for development approvals has resulted in increased cost for homebuilders and a bottleneck in delivery of critical housing supply. Before removing the development approval functions from the regional governments, the province will need to ensure that these municipalities have the ability to evaluate and deliver housing faster and more affordably than the regional governments.

Despite what appears to be a concerted effort by the Ontario government to end decades of regional governance, we believe regional collaboration will continue to play a critical role in local governance for years to come. Housing needs to be built faster and more affordably. Yet, Ontario cannot lose sight of the importance of building quality and livable housing; housing that is connected to transit, close to recreation and parks, education, health care, and shopping. Hundreds of thousands of people in the Golden Horseshoe cross both regional and municipal boundaries every day to get to work, see family and friends, and play. We are all connected. We all benefit from and share in the services of other municipalities. Therefore, development applications must have an eye to the broader community and local municipalities must consider not only how a development application will impact their communities, but also the communities of their visitors and neighbours.

The dissolution of the Region of Peel is expected to have significant implications on core service delivery in the municipalities. Yet, the impact on land use planning and new home construction will present the greatest challenge for the three municipalities who will be tasked with balancing the economic interests of developers with the needs of the residents and stakeholders in their communities. The Hazel McCallion Act is poised to have a lasting impact on the growth of these three municipalities for years to come.

 If you would like to discuss how the Act may impact you or your business, please contact any member of the Real Estate and Land Development group at KMB Law.

By Gideon Bell and Michael Murphy (summer student)

[1] https://peelarchivesblog.com/about-peel/  

[2] https://data.peelregion.ca/pages/demographics

[3] https://news.ontario.ca/en/release/1003064/ontario-announces-intent-to-dissolve-peel-region

[4] Hazel McCallion Act (Peel Dissolution), 2023, s. 5

[5] Hazel McCallion Act (Peel Dissolution), 2023, s. 6

[6] https://news.ontario.ca/en/release/1003064/ontario-announces-intent-to-dissolve-peel-region

[7] https://www.ola.org/en/legislative-business/bills/parliament-43/session-1/bill-23