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Let’s Make a Deal

Illuminating the often-murky world of Section 37 of the Planning Act. (Hint: it's where some important money comes from.)

Photo by {a href=””}cookedphotos{/a} from the {a href=””}Torontoist Flickr Pool{/a}.

Let’s all check our language, Gillian Mason told the room of planners, students, and community members last night. The director of the Centre for City Ecology, she instructed us to expunge any jargon from our speech and to raise a hand if something wasn’t making sense to us. This was going to prove difficult, as the topic of the evening’s discussion was the often murky, you-scratch-my-back-I’ll-scratch-yours dealings of Section 37 of the Planning Act—the one which allows the City to barter extra density or height on a development site in return for agreed upon community benefits.

To help matters, the CCE brought in two speakers—urban planner John Gladki and property development lawyer Patrick Devine—to help explain what Section 37 allows, how it’s used, and how it can be improved to better serve Toronto.

To attempt to read the Planning Act, one of the pieces of provincial legislation that guides the planning and development of Ontario cities, is to submit oneself to the sometimes frustrating, often dry, and always dizzying world of legalese. You can do A, but not B, except if you do C, subject to D, excluded when E is involved, which it only is if you do A and B together and then stand on your head and spit three times. Simply put, it’s not the type of document you curl up with at night with a glass of wine.

Understanding the implications of this document, however, is crucial to anyone interested in grasping how planning decisions are made in the City of Toronto, what decisions the City is actually allowed to make, and what tools are available to build the kind of city we want and need. Section 37 is one of those tools.

To quote directly from the Act, Section 37 says: “The council of a local municipality may, in a by-law passed under section 34, authorize increases in the height and density of development otherwise permitted by the by-law that will be permitted in return for the provision of such facilities, services or matters as are set out in the by-law.” Essentially, the developers get to extract more value from their land in exchange for providing community benefits; they do this by providing capital facilities or cash that go to capital facilities: they install public art, provide daycare space, do heritage preservation work, and so on.

Section 37 is predicated on the idea that the community should share in the economic uplift a developer gets when the City allows them extra density or height (and thereby higher profits), but also that negative effects of a higher density development should be mitigated. These benefits are negotiated by the councillor in the ward in which the development is situated. Some of these negotiated benefits, such as Wychwood Barns, are probably seen as a good use of Section 37 money, while others, like the instance of a $70,000 dog drinking fountain mentioned by Devine…not so much.

And that is where Patrick Devine sees a problem. “The fundamental problem with Section 37 is the governance issue,” he said, calling each ward councillor the “kings and queens” of their areas. He recounted one story of a time he had brought suggestions for community benefits, based on community consultation, to the councillor in question. This councillor’s response: “Why are you even talking to me about this? There’s only one person who can decide where that money’s spent. Me.” While this reaction is hopefully atypically dramatic, the point is that there needs to be more community involvement and oversight in these decisions.

Devine argued that we’d do better with a different model of government, which would see half the current number of councillors elected in wards that matched the Provincial and Federal ridings (right now there are 44 councillors, each of which have roughly half of one federal/provincial riding), with another 22 councillors elected at-large among four districts. This, Devine said, would allow decisions to be made by councillors not beholden to a narrow geographic area.

John Gladki was also concerned with the lack of community consultation on how to spend Section 37 funds, and argued that the public needs to be involved earlier in the process. He also raised another persistent problem: the greatest needs are often in areas where development isn’t as robust. He suggested that we need to find a way to distribute some of the funds to areas across the city rather than keep each development’s Section 37 funds in its surrounding neighbourhood. Gladki also suggested opening up Section 37 to funding maintenance as well as capital expenditure, which would allow for things like ongoing park upkeep.

The audience’s response in the discussion afterwards highlighted the importance in reforming Section 37 in another way—to demystify a process that often feels a bit too back-room-dealy for some. People argued that it allowed councillors to sprinkle benefits around their ward, currying favour to those groups that may help them win re-election, rather than going toward the projects that are best for the community at large.

Whether this is always the case, one thing that everyone in the room agreed on: Section 37 could benefit from a little tweaking to become more transparent and better involve the community.


  • Anonymous

    Myabe one way would be to make the ruels more precise. For example, developers have to pay some percentage of the the extra value obtained by going over the by-law limits. Then ethe argument becomes more about how the money is spent (which is a lot easier to do in the open) and not about how much.

    • Paul

      My understanding is that you can’t set a consistent percentage of the benefit. In effect, then, the Sec. 37 would be a tax. And the Planning Act isn’t a tax act, so the fear is someone will go to court and get the legislation thrown out.

      • Anonymous

        Given it would require a chnage to provnicial law, then you could make it a tax act as part of those changes.

  • Scott

    Section 37 is actually one of the easiest parts of planning to understand but the public is largely unaware of how it effects things and that may be a good thing.

    First off I think that it should be ward specific because the effects of higher density or other changes are felt the most within a small area of the development. Second, Section 37 money is a fast and direct method to send money to a specific community project rather than the years and years it can take to get a park or other improvements via the regular process. This allows residents to spend their time on other issues. I did not really understand the idea of some new governance model but the last thing we need is to make the process more bureaucratic. As an example look at how the Community Councils have become rubber stamps where citizens get their 2 minutes and then are forgotten.

    Like many things at the local level it really depends on the councillor. Some do a great job and others use it as a slush fund of sorts. Rather than more levels of red tape I think that there should be a change that means that Section 37 money use has to be publicly declared by councillors in their newsletter, the use has to be shown to be directly related to increased density (ie a park within 2 blocks of a new development as opposed to water fountains at the other end of the ward).

    There is also the issue that wards that have more development have more Section 37 money (some which goes unused) and that may seem unfair to some although I dont feel that way.

    I like though that Section 37 money is under the radar as you really dont want every single group in the ward fighting over money, and you dont want to train people to believe that all community improvements can be funded by horse trading with the private sector —we might not like what we end up with. Section 37 money happens as a symptom of a certain kind of development and remains the fasted way to direct money to balance out that effect. Section 37 money is also a way to avoid OMB hearings that cost the city, and ratepayer groups a lot of money.

    • Paul Kishimoto

      I did not really understand the idea of some new governance model

      That’s true. More bureaucratic, as you say, is very different from more democratic, as suggested in the article.

    • Paul

      Agree that Sec. 37 is easy to understand. I had been hearing how complicated it was, but was surprised when I read it. It seems clear. You might not like it, but it’s clear.

      A great example of the use of Sec. 37 funds was just passed at Toronto and East York Community Council on April 17. Active 18, the local residents’ association, pushed the City and a developer (urbancorp) to sign a Sec. 37 deal to create a new media arts centre in one of the buildings the developer is building in West Queen West. That approach points to a much better way of doing things than fighting at the OMB.

  • Anonymous

    “People argued that it allowed councillors to sprinkle benefits around their ward, currying favour to those groups that may help them win re-election, rather than going toward the projects that are best for the community at large.”

    So take it out of the councillors’ hands and let the ward vote on where the money is to be spent.

  • Paul Kishimoto

    negative effects of a higher density development should be mitigated

    Lest it go unsaid, careful higher density development is one of the best ways to mitigate all kinds of other bad things in the first place—driving, energy use, sprawl, densities too low to support transit, etc.

  • Curious_toronto_guy

    “Councillor’s response: “Why are you even talking to me about this? There’s only one person who can decide where that money’s spent. Me.” ”

    Sounds like a very much (deservedly) maligned former Beach councillor…

    I do have to say the 22+22 suggestion above makes sense. Or even a 22+11 (districts)+11 city wide.

    • John Duncan

      The governance suggestion also makes a fair amount of sense to me, with one caveat. 22 councillors elected along federal/provincial electoral ward boundaries would leave each councillor representing about 100,000 people.

      Most communities of 100,000 people in Ontario have somewhere between a half-dozen to a dozen part-time local councillors.

      Each of those 22ish Toronto wards should have its own local council that is responsible for purely local decisions, with some input towards City Council decisions, whether through selection of a representative or the ability to put something on the agenda.

      • Anonymous

        Go back to the 1954 boundaries, with each former municpality electing ~2 councillors to the City, and having its own local council. If we’re going to de-amalgamate, let’s not stop at 1998 or 1967!

  • Jay Saunders

    Section 37 eh.

  • Jay Saunders

    I dont think this is a very well written article. Nor do I think the author understands the full extent of planning in Ontario.

    • Canadianskeezix

      It’s always more helpful, if one is going to be critical, to explain precisely why you do not feel that the article is well written and why you believe that the author misunderstands Ontario planning law. A vague criticism like yours, without any indication of what you find problematic, suggests to me that you are the one that is having trouble understanding.

  • ManInBlack

    I don’t think the money should be spread around to other communities – typically the extra money is allocated because the city is allowing something to be built that has a negative effect on the specific community the project is being built within. The idea is that this money will go to mediate this negative impact for a net benefit to the local community. If areas of the city need proper upkeep – that should be part of the cities annual budget and not dependent upon an unpredictable development charge.