As many seasoned players in the development community can appreciate, acquiring development approval for real estate in the City of Toronto often requires considerable time, resources and above all, patience. Acquiring development approval for either mixed-use or retail employment uses on lands currently designated in the City of Toronto as employment areas is no exception. As a result of economic globalization during the last 20 years, these lands are no longer home to large manufacturing plants as corporate bodies have relocated to less costly jurisdictions, making these properties highly desirable from a mixed-use or retail redevelopment standpoint. First, lots in these areas tend to be large which minimizes costs as developers need not enter into multiple purchase and sale transactions to acquire title. Second, municipal servicing, such as sewage and roads are often in place in these areas from an era when many of these lands were home to manufacturing and transportation firms. In addition, these areas tend to be closer to existing significant hubs in transportation networks and finally, the construction process in these areas is likely to be hassle-free in comparison to redevelopment in residential areas (i.e., fewer residents, fewer complaints).

All of the above factors make employment areas highly desirable lands among developers looking to construct large-scale retail outlets commonly referred to as "big box" stores. A long time fixture in the Greater Toronto Area, the "big box" store has been a less common sight in the City, but in recent years City Council has faced increased pressure from the development community to allow for the redevelopment of employment area sites for large-scale, "big box" retail outlets. Broad statements of intention concerning land use planning in the City, as contained in the City of Toronto Official Plan (Official Plan), currently allow City Council to approve "big box" development proposals in employment areas. However, the City’s Planning and Growth Management Committee has recommended the Official Plan be amended in order to strengthen the protection of employment areas which will likely mean fewer approvals for "big box" developments in these areas.

Currently, the Official Plan contains two Policies allowing City Council to approve otherwise restricted large-scale retail development in employment areas.

Policy 4.6.3 of the Official Plan allows the City to pass a zoning by-law to allow for large-scale and stand alone retail stores fronting major streets that form the boundary to an employment area. In order to receive approval, such development must ensure

  • existing traffic infrastructure can support an increase in traffic as a result of the development and
  • the development does not negatively affect nearby shopping districts or other economic activities in the employment area.

Policy 4.6.4 of the City of Toronto Official Plan allows the City to amend its Official Plan to allow for large-scale and stand-alone retail stores along major streets within an employment area. If the developer can show the development proposal will not

  • undermine the stability of the area, having particular regard to the viability of industrial uses,
  • require increased capacity for existing traffic infrastructure and that traffic levels on adjacent streets will remain acceptable, and
  • adversely affect the economic health of nearby shopping districts, the City can consider Official Plan Amendment applications for "big box" developments within employment areas.

Policy 4.6.4 has recently been put to use by Home Depot Holdings Inc. (Home Depot) in support of its redevelopment proposal in the Lesmill Employment District.[1] Toronto City Council refused Home Depot’s applications[2] and Home Depot appealed City Council’s decision to the Ontario Municipal Board (the Board).

On appeal all parties to the hearing agreed a series of preliminary issues would first be determined by the Board prior to commencing a full hearing on the merits of Home Depot’s development application. One of the preliminary issues was whether Home Depot’s application constituted a conversion of lands in an employment area to non-employment uses under the Province’s Growth Plan for the Greater Golden Horseshoe (Growth Plan).[3]

One of the objectives of the Growth Plan is the protection of existing employment areas. Official Plan Policy 4.6.4 presently allows for the conversion of employment uses within a designated employment area to major retail use without the City undertaking a municipal comprehensive review as required by the Growth Plan.[4] A municipal comprehensive review is a process mandated by the Growth Plan in cases where non-employment land uses are proposed for lands designated as employment areas in the City’s Official Plan. Not only is a municipal comprehensive review process potentially lengthy, but the Province and City agree that it need only occur once every five years in conjunction with the City’s scheduled review of its entire Official Plan. Currently, Policy 4.6.4 allows for City Council to approve large-scale retail developments within employment areas by amending the City’s Official Plan, a significantly less lengthy process than conducting a municipal comprehensive review.

The Board rejected the City’s position that Home Depot’s application amounted to a conversion of employment lands to non-employment uses. In making this finding, the Board was very clear that Policy 4.6.4 was an acknowledgement by the City that the definition of an employment area was flexible and inclusive of large-scale retail uses and that special locational limitations are appropriate for such uses in employment areas.[5]

Unfortunately, the Board’s recent decision will come as cold comfort to developers as the City is in the process of deleting Policy 4.6.4 from its Official Plan.

In July of 2008 the Ministry of Energy and Infrastructure indicated to the Director of Policy and Research, City Planning Division for the City of Toronto that Official Plan Policy 4.6.4 did not conform with the Growth Plan as it allowed City Council to approve non-employment land uses within an employment area without first conducting a municipal comprehensive review.[6] In reply to the Ministry’s concerns over Policy 4.6.4, City Planning Staff indicated its intention to remove the section from the Official Plan altogether.[7] The City is required by the Places to Grow Act, 2005[8] to have its Official Plan conform to the Growth Plan by June 16th, 2009.

On February 4th, 2009 the City of Toronto Planning and Growth Management Committee directed City Staff to begin the public consultation process under the Planning Act[9] with respect to amending its Official Plan to repeal Policy 4.6.4. As a part of the public consultation process, the Planning and Growth Management Committee instructed City Staff to schedule consultation meetings with interested members of the public, including community representatives, ratepayer associations and business organizations to obtain their comments with respect to the draft Official Plan Amendment that will be prepared by City Staff and later submitted to the Committee for its consideration and ultimate recommendation to Council.[10]

If City Council does repeal Official Plan Policy 4.6.4 developers of large-scale retail projects will have to wait for the City to undertake a municipal comprehensive review before they will be able to obtain approval for non-employment use development applications within employment areas, thus eliminating a much faster process by allowing City Council to pass a by-law to amend the Official Plan. A repeal of Official Plan Policy 4.6.4 will lengthen the approval process for large-scale retail development applications within employment areas; practically speaking, it may completely eliminate certain sites for large scale retail redevelopment.

Provincial land use planning documents, including the Growth Plan, emphasize two goals, among others: on the one hand the Province requires the protection of employment areas for employment uses while on the other hand urban intensification and increased densities are often sited as integral to the future economic prosperity of the province. Ironically, the City’s intention to repeal Official Plan Policy 4.6.4 at the behest of the Province potentially frustrates Provincial intensification policies for currently underdeveloped lands in existing employment areas.