Coming Soon to Ontario’s Growth Toolkit: Special Economic Zones

Last month, the Ontario government tabled Bill 5 (Protect Ontario by Unleashing our Economy Act, 2025), an Act aimed at supercharging Ontario’s growth by streamlining regulation and creating new tools to expedite approvals for strategically important projects and infrastructure. A key element of the bill would create a novel concept for Ontario: Special Economic Zones. Here’s what we know so far:

1. What is a Special Economic Zone in Ontario?

Under the Special Economic Zones Act, 2025, a Special Economic Zone (SEZ) in Ontario is a geographic area designated by the provincial government where municipal and provincial regulatory requirements can be moderated to accelerate strategically important land development projects by trusted proponents. It could be a large assemblage of land or as small as a single project on a single parcel.  

The government’s intent is to remove red tape and fast-track projects aligned with the province’s economic and infrastructure priorities—particularly in sectors like transportation, mining, waste, energy, and advanced manufacturing.

2. How can I get a Special Economic Zone for my property (or an area including my property)?

While the details still must be worked out, SEZs will be designated by the Cabinet based on criteria set by the Province. However, those looking to benefit from the streamlining offered by this legislation will need to be a “trusted proponent” and/or be part of a “designated project.” There is no public-facing application process, and eligibility depends on meeting yet-to-be-defined criteria.

3. Who oversees SEZs?

While the regulatory process is to be determined, indications are that the Ministry of Economic Development, Job Creation, and Trade will take the lead, but we expect other key ministries, like the Ministries of Environment, Conservation, and Parks (MECP), Natural Resources (MNR), or Municipal Affairs and Housing (MMAH) will have a role to play, especially due to the wide-ranging nature of the accelerations or exemptions under the SEZ framework for projects ordinarily regulated by those ministries. 

4. Which types of industrial land uses or infrastructure projects are eligible for SEZs?

Early signals from government statements and supporting materials suggest SEZs are intended primarily for large-scale mining, industrial, and infrastructure projects. Other provisions of Bill 5 provide some hints: alongside the SEZ framework, the bill eliminates a selection of mining regulations to facilitate critical mineral extraction in the Ring of Fire, fast-track a landfill expansion by no longer requiring an Environmental Assessment (EA), and provides targeted support for interregional transportation corridors. 

The province is framing these zones as tools to advance developments with province-wide economic and supply chain value. In contrast, residential or institutional projects—including housing, student residences, or university infrastructure—may have a more difficult time qualifying under the policy’s intent. 

5. How would SEZs streamline or bypass local and provincial approvals?

While that’s the general approach, the exact places within the existing municipal and provincial regulatory structure where processes will be expedited are not yet clear. Cabinet would have broad authority to exempt trusted proponents or designated projects within SEZs as needed. Once a zone is established, those proponents are also intended to have “one-window access” to provincial government services.  

6. Are there other jurisdictions using similar concepts to the SEZ?

Several U.S. states have enacted legislation allowing state-level authority to bypass local permitting for strategic development. For example, legislative changes in Montana, Nebraska, and Oregon have enabled housing and infrastructure growth by preempting local zoning approvals in communities, particularly if they have fallen short on affordable housing.  

In terms of spurring industrial development, Utah created the Inland Port Authority, designating a large zone of Salt Lake City for industrial development and giving state administrators control over environmental reviews to streamline state-led infrastructure development. It has been positioned as a future hub for rail transportation, warehousing, distribution, and manufacturing. 

Here in Canada, Alberta has implemented regulatory sandboxes in sectors like energy and tech which gives applicants “time-limited exemptions to certain legislative and regulatory requirements” to encourage innovation. Ontario’s SEZs could follow a similar philosophy—prioritizing regulatory flexibility over financial incentives, with centralized provincial discretion. 

7. Should my organization participate in the SEZ consultation process?

If you believe that the establishment of SEZs will be a benefit to your company, sector, or the province’s competitiveness, it may be helpful to submit a comment during the ongoing consultation period. Those who participate can do their part to help shape the regulations that will emerge around trusted proponents and designated projects, while also laying the groundwork for an early, productive conversation with relevant ministries. 

8. What’s the bottom line about SEZs?
The legislation is just the beginning. New regulations will be formed through consultation and policymaking where Cabinet ministers will define the regulatory details, including:

• Which specific areas or criteria will allow for designation as SEZs
• What formal standards will define “trusted proponents” and “designated projects”
• How exemptions from municipal bylaws or provincial approvals will be structured, granted, and monitored
• Whether and how Indigenous consultation and public engagement will be incorporated
• How performance standards for highly-regulated or environmentally sensitive projects will be enforced in these zones