On June 5, 2025, Ontario’s Special Economic Zones Act, 2025 (“SEZA”) came into force. This legislation gives the Ontario cabinet regulatory authority to designate special economic zones (“SEZs”) in which designated proponents or projects may be exempted from certain legal and regulatory requirements. Intended to accelerate the development of infrastructure projects, SEZA was passed as part of “Bill 5”, which included several other economic development measures.
While some details about how SEZA will work won’t be clarified until regulations are released, the legislation’s core concepts – “special economic zones”, “trusted proponents” and “designated projects” – can be summarized as follows:
Special Economic Zones
Ontario’s Minister of Economic Development, Job Creation and Trade (“Minister”) is empowered to establish SEZs by regulation, in accordance with criteria that are also to be established by regulation.
What are SEZs?
SEZs are geographical areas in Ontario within which legislative and/or regulatory restrictions affecting important economic development projects may be relaxed, where certain conditions are met. The aim is to expedite the development of projects that are important to the provincial economy. One well-known example of a potential SEZ is the “Ring of Fire” in northern Ontario, a mineral-rich region with strong potential for resource development.
What is special about them?
Once an SEZ has been created, further regulations may be issued to create an exemption from (or alter) any requirement under a provision of an Ontario statute, regulation or other instrument (including a municipal bylaw) that would otherwise apply to:
- A “Trusted Proponent” (with respect to the SEZ); or
- A “Designated Project” located in the SEZ.
The legislation includes provisions that may restrict the availability of certain remedies in the event that such a designation is subsequently revoked.
What are Trusted Proponents and Designated Projects?
If the prescribed criteria are met, the Minister may designate a project or class of projects as “Designated Projects”, or a qualified person or class of persons as “Trusted Proponents”. More detailed information about “Trusted Proponent” or “Designated Project” status is expected in the forthcoming regulations. The Government’s description of the legislation states that “high operating, safety and environmental standards” will be required before either designation is awarded.
Going Forward
Ontario’s adoption of SEZs is still at an early stage, with consultations underway and much of the regulatory framework still to come. Businesses – especially those with an interest in natural resource development – should monitor developments while considering potential opportunities under the new regime.
The authors would like to acknowledge the support and assistance of Ethan Blumberg, student at law.
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