Ontario’s Plan to Dissolve Peel May Signal What’s Next for the Region of Waterloo

By T. Seth Jutzi, Mark Schumacher, Ronald Nightingale, Slonee Malhotra and Nathan Henderson

The Ontario government recently announced its intent to split up the Regional Municipality of Peel. The move would leave Mississauga, Brampton, and Caledon as stand-alone municipalities as of January 1, 2025. As part of the announcement, the government also shared plans to assess the dissolution of six other regions: Durham, Halton, Niagara, Simcoe, York, and Waterloo. The news raises questions about the impact on the municipalities comprising Peel Region, and the implications for the other regions that may follow suit by splitting up.

What Is a Regional Government?

Regions, known as “upper-tier” municipalities, are federations formed by “lower-tier” municipalities. A region serves the municipalities within its boundaries by providing services like policing, water systems, waste disposal, healthcare, social assistance, and land planning.^[1] For example, Halton is an upper-tier municipality that provides services to the lower-tier municipalities of Burlington, Halton Hills, Milton, and Oakville.

The Impact of Splitting Up Peel Region

On May 18, 2023, the Ontario government introduced the Hazel McCallion Act to facilitate the process of dissolving Peel. If passed, this legislation would guide the restructuring and transition of Mississauga, Brampton, and Caledon to single-tier administrations. Responsibility for services currently provided by the Peel and planning decided on by the Region’s council would pass onto each single-tier municipality.

Peel is home to approximately 1.5 million residents, with the municipalities of Mississauga, Brampton, and Caledon comprising 50%, 45%, and 5% of the population, respectively.^[2] A 2019 report explored the financial implications of dissolving Peel and concluded that an additional $1.08 billion in taxes would need to be levied over the next ten years compared to the status quo.^[3]

Another consideration is the arbitration that may occur if the local municipalities cannot form a consensus on how to divide resources. Several instances of municipal restructuring have led to the use of an arbitrator to determine appropriate financial adjustments following the transfer of assets between municipal bodies^[4]

However, the Act contains clauses to mitigate this by calling for the appointment of a transition board to monitor and provide recommendations on the dissolution process.^[5] The board would be tasked with providing recommendations to the Minister of Municipal Affairs and Housing on the transfer of assets, liabilities, and debts of Peel and assessing the impact on the affected municipalities.^[6] Moreover, the Act empowers the Minister to modify or prohibit any proposed or effective transactions, commitments, or agreements entered into by Peel or its lower-tier municipalities.^[7] The Minister may also apply to the Superior Court of Justice for an order of compliance, if necessary. The proposed legislation calls for these municipalities and their local boards to consider the public interest before entering into any agreements on or after May 18, 2023, and before January 1, 2025.^[8]

With the mayors of the affected cities having already expressed differing opinions on what constitutes a fair separation of resources, the form this takes remains to be seen.

Implications for the Region of Waterloo

The Ontario government will appoint regional facilitators to explore the relevance of Ontario’s other upper-tier municipalities: Durham, Halton, Niagara, Simcoe, York, and Waterloo.^[9] In cases where the facilitators deem the upper-tier governments necessary for the communities they serve, the facilitators will still provide recommendations concerning how the municipalities can more effectively accommodate their growing populations.^[10] These recommendations will include ways for municipalities to meet housing pledges and address the dearth of housing supply in their locales.

The Ontario government has previously mentioned the introduction of facilitators to assess regional governments. In July 2018, it announced a municipal review covering Ontario’s eight regional governments, their lower-tier municipalities, and Simcoe County.^[11] Special advisors were appointed in January 2019, and a report was submitted to the province in September of that same year.^[12] The Ontario government has since been adamant that it will not release the report’s findings.^[13] Furthermore, instead of acting on the recommendations of its special advisors, the government committed to providing up to $143 million to help Ontario municipalities find efficiencies and lower costs for residents.^[14]

Then, in November 2022, the government introduced the Better Municipal Governance Act. In a press release announcing the Act, the government stated that regional facilitators would be appointed to determine how upper and lower-tier municipalities could meet the government’s goal of building 1.5 million homes by 2031. Last month, during a visit to Kitchener, Doug Ford reiterated the province’s intent to appoint a facilitator to the Region of Waterloo.

Politicians in the Region of Waterloo—which is comprised of Cambridge, Kitchener, Waterloo, North Dumfries, Wellesley, Wilmot, and Woolwich—have already voiced their opinions about the news.^[15] Regional Chair, Karen Redman, stated that “we do not want to be split up like Peel.”^[16] Similar to Peel, the dissolution of the Region of Waterloo would require the current lower-tier municipalities to take on the responsibility for what is presently shared services.

This comes as talks about amalgamating the Region of Waterloo have also been reignited. Former politicians and pro-amalgamation advocates discussed the topic in town halls hosted in January and March of this year.^[17] Despite there being no official plans to amalgamate at the moment, that may change depending on the feedback of the facilitator and their recommendations for the Region. One thing is certain: with 59 politicians representing approximately 650,000 residents, the Region of Waterloo has an abundance of political representation, surpassing the ratio of politicians to residents in cities such as Ottawa, London, and Hamilton.^[18] While some may see this as benefitting democracy by allowing more voices to be heard, others insist it reflects a bloated system that requires change.

If you have any questions about these changes, reach out to one of our qualified Municipal and Land Development real estate lawyers.