Proposed Updates to the Projection Methodology Guideline to support the implementation of the Provincial Planning Statement, 2024 (PPS, 2024)

Context

As Canada continues to be a leader in population growth among the G7 nations, the bulk of this growth is occurring in Ontario. It is essential that Ontario municipalities’ growth planning adequately anticipates these pressures, both in the near term and well into the future. Adequate growth planning ensures the land and infrastructure needs of current and future Ontarians are in place and reflect the diverse needs of families and businesses, as well as overall balance in the housing market.

As a major step towards achieving the ambitious planning required to adequately and affordably house a growing population and workforce, the Province released the Provincial Planning Statement (‘PPS, 2024’). The PPS, 2024 is a policy statement issued under the authority of section 3 of the Planning Act, which applies to all decisions in respect of the exercise of any authority that affects a planning matter made on or after October 20, 2024.

Population and employment forecasts are important for planning authorities to plan their communities. As required under the PPS, 2024, planning authorities shall base population and employment forecasts on the Ontario Population Projections published by the Ministry of Finance (MOF) and may modify, as appropriate. Sufficient land shall be made available to accommodate an appropriate range and mix of land uses to meet projected needs for a time horizon of at least 20 years, but not more than 30 years, informed by provincial guidance.

For more information about the policy requirements in the PPS, 2024, please refer to pages 1 to 3 in the proposed guidance document in the supporting materials section of this ERO posting.

The proposed guidance is meant to support policy implementation but cannot add to or detract from the policies of PPS, 2024. In addition, the proposed guidance is not intended to address the location of new settlement areas, the location of expansions to settlement areas, the location of employment areas, or the suitability of whether a particular area of land should be included or removed from an employment area. These matters are to be addressed through other relevant policies.

Before the PPS, 2024 came into effect, a detailed land needs assessment methodology applied in the Greater Golden Horseshoe (in accordance with the Growth Plan). The 1995 Projection Methodology Guideline (PMG) has been available to be used elsewhere in Ontario to assist in determining population and employment forecasts and assessing housing and land needs requirements. An update to the PMG is needed to support the implementation of the PPS, 2024, reflect recent provincial government priorities, and incorporate new information, data sources and best practices.

Proposal

The purpose of the proposed guidance is to assist municipalities and other planning authorities with developing population and employment forecasts and identifying land needs requirements to plan their communities and implement provincial policies. If finalized, this proposed guidance would replace the existing Projection Methodology Guideline.

The proposed guidance outlines methodologies and appropriate data sources for municipalities to use to prepare these forecasts and land needs assessments. The proposed guidance is organized into four main sections:

1. Establishing Municipal Population Projections

The purpose of this section of the proposed guidance is to identify and allocate the Ministry of Finance population projections from the Census Division (CD) to the municipality level (i.e., the Census Subdivision) to the planning horizon.

The proposed approach is to develop upper and lower future population projection ranges, to support municipalities to plan for future needs, while providing a test on municipal projections in relation to the CD to ensure a reasonable outcome.

The outcome would be used as an input in developing population and employment forecasts.

2. Developing Housing Needs Forecasts

The purpose of this section is to determine the amount of housing needed to the horizon year, accounting for intensification within built-up areas in existing settlement areas and the need for additional settlement area land to accommodate growth.

The proposed approach recommends developing a municipal level forecast of housing by type (e.g., low, medium, high density) and location (e.g., intensification within settlement areas) based on housing needs by age cohort. This housing needs information would be used as an input for assessing land needs. Municipalities could adjust the municipality level housing needs to account for additional data sources, affordable housing, and market indicators. The outcome would be used as an input for assessing land needs.

3. Developing Employment Forecasts

The purpose of this section is to identify the amount and type of employment growth that should be accommodated over the planning horizon; as well as the distribution of the employment growth by type (e.g., intensification within settlement areas, employment areas). This employment growth information would be an input in assessing land needs.

The recommended approach focuses on considering demographic factors (e.g., population growth, labour supply etc.), in addition to other factors such as infrastructure capacity and government policies at the federal, provincial, and municipal levels. The outcome would be used as an input for assessing land needs.

4. Land Needs Assessment

The purpose of this section is to guide municipalities in identifying the amount of land required to accommodate an appropriate range and mix of land uses to meet a municipality’s projected needs over a 20 to 30-year planning horizon.

While this guidance is written to reflect a 20 to 30-year planning horizon, planning authorities may consider planning for infrastructure, public service facilities, strategic growth areas and employment areas which may extend beyond this time horizon.

The proposed approach would allow for one of three methods to be used, including the option of a simplified method, to identify the quantity of land needed for housing and jobs, considering employment area land needs separately from other employment land needs. Each method is consistent with policy direction in the PPS, 2024 and considers available data and local conditions.

• Method 1 is based on determining the total number of residents and jobs identified to be accommodated by the planning horizon and dividing that amount by the municipality-established appropriate gross density target. The result is the quantity of gross land needs by type.
• Method 2 requires municipalities to assess multiple net densities by land use, based on standard industry and land use planning practices, which then adjusted to account for gross land needs.
• Method 3 is a simplified approach that allows municipalities to use either Method 1 or 2 to develop housing needs. Employment needs would be estimated based on local conditions. When providing feedback on this proposed method, consider what kinds of parameters or thresholds could be established to trigger this simplified approach (e.g., population, geography).

The outcome from using any of the methods is that municipalities would be provided with the amount of developable land needed to support PPS, 2024 implementation.

There are a few general considerations for planning authorities to be aware of when using the proposed guidance document, including:  

1. Municipalities would update their forecasts and land needs requirements at the time of their official plan update pursuant to the Planning Act. The Planning Act requires official plans to be revised every five years after an amendment is made, or ten years after a new official plan is approved. Municipalities would not be required to update their forecasts and land needs requirements outside of the statutory Planning Act requirements.
2. The Ministry of Finance publishes projections by year for a range of up to 25 years beyond the Census year on which the projections are based.
   1. It is recommended that municipalities plan to the planning horizon that aligns with the outer end of the MOF projections, which are available at the time of an update to an official plan.
   2. It is recommended that municipalities use the most recent MOF data published and available at the time of an official plan update.
3. The proposed guidance reflects PPS, 2024 direction (policy 6.2.1) encouraging a coordinated, integrated, and comprehensive approach within and across municipal boundaries and between municipalities and other orders of government, agencies, boards, and Service Managers through all stages of the forecasting and land needs assessment processes.

While not included for consultation, it is anticipated that the final version of the guidance could include hypothetical scenarios to show how planning authorities could implement the recommended methods. These scenarios could be based on specific geographies and/or typologies including regional, northern, and rural communities.

Each scenario could include a background story with hypothetical local conditions to illustrate step-by-step how different planning authorities would follow and implement the guidance. The scenarios could illustrate how the recommended approach is relevant and applicable to a range of considerations. The scenarios could support the recommended approach for two reasons:

1. Demonstrating the steps in a tangible way and supporting a narrative of a municipality going about implementing the approach.
2. Addressing the reality of varying situations, municipality types and local conditions found in Ontario.

The government welcomes your feedback on the proposed guidance The following questions may assist in your review of the guidance:

1. What are your thoughts on the approach in the guidance:
   1. to developing municipal level population growth forecasts to the planning horizon based on Ministry of Finance population projections as required by policy?
   2. to identifying the amount of housing required to accommodate forecast population growth to the planning horizon?
   3. to identifying the amount and type of employment growth to the planning horizon?
   4. to determining the amount of land needed to accommodate forecasted population and employment growth to the planning horizon?

2. Are there additional resources, tools, or information that you think would be helpful to support implementing the guidance?