Consultation on Proposed Special Economic Zones Criteria

Background and Context

On June 5, the Protect Ontario by Unleashing our Economy Act, 2025 received Royal Assent. To respond to recent U.S. trade actions targeting Canada, the Protect Ontario by Unleashing our Economy Act, 2025 enacted the Special Economic Zones Act, 2025(the “Act”) to support economic growth and development by building faster and more strategically to protect Ontario industries. By unlocking new opportunities for long-term investment, the province will drive economic growth, diversify trade, and strengthen supply chains in the short and long term. This is a critical time for Ontario that requires action to protect and defend workers and the economy.

The Act and the regulations made under it will allow for the advancement of critical, strategic and priority work while maintaining necessary safeguards and obligations, protecting Ontario’s industries, and mitigating the impact of trade disruptions. The Act and the regulations made under it will also help ensure the long-term prosperity, security, and competitiveness of the economy by creating new jobs, increasing efficiency, and incentivizing investment at a time of global economic instability.

By default, all laws apply in a special economic zone. Any modifications or exemptions to provincial laws within special economic zones will be made on a case-by-case basis through future regulations.

The Act is structured to include controls through regulation(s) that will ensure responsible decision-making in relation to decisions regarding social, environmental and safety standards. For example, designating a new zone under this Act, and prescribing criteria for zones, designated projects and trusted proponents would be done through a Lieutenant Governor in Council (LGIC) regulation.

Where it arises, Ontario is committed to fulfilling its duty to consult, and, where appropriate, accommodate in relation to any proposal to designate a special economic zone, designated project or trusted proponent; or proposals to grant any modifications or exemptions to provincial laws with respect to projects or proponents in designated zones. The province may also seek further feedback, as applicable, through public consultation prior to the establishment of regulations.

Summary of Feedback To-Date

The Ministry previously sought feedback on the Act through the Environmental Registry of Ontario from April 17 to May 17 and received over 1,100 comments with feedback focused on three major themes:

• Democratic Participation and Indigenous Rights,
• Safeguarding the Environment and People, and
• Transparency and Oversight.

Overall, the feedback expressed the importance of working collaboratively with Indigenous communities and municipalities to provide an opportunity for them to voice their feedback for any future regulatory proposal(s) and ensure there are mechanisms and safeguards in place for the environment, health, safety, and communities. The Ministry is considering feedback received in the development of regulatory proposal(s) under the Act.

Additionally, the Ministry has been seeking feedback on this regulatory proposal through ongoing consultations with Indigenous communities. Please see “Indigenous Communities Consultation Feedback” for more information on the feedback the Ministry has received and is considering from Indigenous communities on the criteria for designating zones, projects and proponents.

Proposed Regulatory Framework

Through this Notice, the Ministry is seeking to consult the public on the regulatory framework under the Act for the criteria to designate zones, projects, and proponents. The criteria being proposed as part of this consultation must be established through an LGIC regulation. The regulation would, if made, aim to support economic development while helping to ensure safeguards are in place to protect the environment and health in a manner that is consistent with the protection of the rights of Indigenous Peoples.

The Ministry has attached the following materials:

1. Draft Policy Intent for SEZ Criteria and Guiding Questions

   This is the draft policy intent shared with Indigenous communities at the start of Indigenous consultation describing the proposed criteria to designate zones, projects, and proponents, and specific guiding questions. Feedback received on the draft policy intent during Indigenous consultations has informed the development of the draft proposed regulation. As such, the ministry invites comments on the draft regulation as it is the latest version of materials.

2. Indigenous Communities Consultation Feedback

   This attachment summarizes the feedback the Ministry has received to date from Indigenous communities on the policy intent for the proposed criteria to designate zones, projects and proponents. Feedback from Indigenous communities is still being considered by the ministries, and further feedback continues to be received.

3. SEZ Draft Regulation (Designation Criteria)

   This is a draft of the proposed special economic zones criteria regulation that incorporates the feedback received from Indigenous communities on the policy intent (see above). The draft regulations are being provided as part of an ongoing consultation process to assist the public and Indigenous communities to understand and provide informed comments on the proposals as they exist to date.

The Ministry invites feedback on the draft proposed regulation which will be considered by the Ministry prior to finalizing the proposal. The draft proposed regulation may continue to evolve as the Ministry consults with, and reviews and considers feedback from, Indigenous communities and the public.

Analysis of Regulatory Impact

The Ministry is still in the process of consulting on the proposed regulatory criteria under the Special Economic Zones Act, 2025, and the proposed regulation may continue to evolve as the Ministry considers feedback. The intention of the proposed regulatory framework is to establish criteria that must be met to designate zones, projects, and proponents. The regulation, if made, would support transparency and consistency in the designation process and help ensure the necessary safeguards are in place to protect health, safety, and the environment.

As this regulatory proposal is to establish a framework on the criteria for designating zones, projects and proponents, there are no direct costs to regulated entities at this time. While proponents may be required to provide documentation of how they meet the criteria, once established, the processes for doing so are still to be determined, and any subsequent regulatory burden or impact will be assessed at that time. The Ministry will continue to assess regulatory impacts associated with this proposal.