by Sohana Anis, Placement Student, Canadian Environmental Law Associatoin
The Special Economic Zones Act came into effect on January 1, 2026. The Ontario government claims that this legislation will spur economic development by allowing certain projects to override environmental processes and approvals that would otherwise apply. The Special Economic Zones Act intends to fast-track developments such as mining and electric vehicle projects by exempting them from environmental assessment legislation and other regulatory requirements under key legislation such as the Mining Act, Endangered Species Act, and in the future, the Species Conservation Act.
However, the Ontario government’s reframing of environmental protections as barriers to efficiency and development is both misleading and harmful. Environmental protections are not designed to obstruct, or delay development, but to ensure that projects adequately consider long-term environmental and health consequences. In the absence of these assessments, surrounding communities and ecosystems become highly vulnerable to irreversible or long-term damage.
How Ontario’s New Criteria under the Special Economic Zones Act Impacts Environmental Law?
The Ontario government has released regulations that establishes the criteria under which projects may be exempt from environmental processes and regulatory approvals. O. Reg. 373/25 pursuant to the Special Economic Zones Act, 2025, grants exemptions using three categories:
- Special Economic Zones
- Trusted Proponents
- Designated Projects
Special Economic Zones
Under section 1 of the regulation, the Cabinet may designate any area of Ontario as a Special Economic Zone if it is deemed as “economically significant” and “no larger than necessary”, based on Cabinet’s opinion.
This Act grants the Cabinet subjective discretionary authority, and without objective standards or defined thresholds in the regulation, public transparency and accountability is limited.
Furthermore, this section fails to recognize Indigenous rights and obligations, including the duty to consult and accommodate. It also lacks any requirement to consider the environmental, health, or community impacts of designating an area of the province as a Special Economic Zone.
By relying on vague language, and highly subjective criteria, this regulation risks creating “law-free” zones in large areas of the province.
Trusted Proponents
Section 2 of the regulation allows the Minister of Economic Development, Job Creation and Trade (“Minister”) to designate Crown and non-Crown entities, including municipalities, and both public and private corporations as Trusted Proponents.
This designation allows for significant potential exemptions from environmental assessments, and regulatory requirements. To qualify as a Trusted Proponent, the Minister must be of the opinion that the proponent has good compliance records, poses no security risk, and demonstrates both a history and future of engaging with the Indigenous communities during their project.
Each of these conditions is subject entirely to the Minister’s opinion. The regulation does not define “good compliance record”, nor does it specify whether it relates to the environment, safety violations, disputes with the community, or human rights practices. The lack of clear definitions or measurable thresholds raises concerns about consistency and fairness as to how designations will be granted.
CELA is particularly concerned about a subjective Ministerial assessment of whether a proponent has appropriately engaged with impacted Indigenous communities. It is the Indigenous communities themselves, and not the Minister, who are in a position to make such an assessment.
Designated Projects
Section 3 of the regulation outlines the criteria for projects to be established as Designated Projects. Designated Projects take place within Special Economic Zones. To be a Designated Project, the Minister must be of the opinion that the projects are likely to succeed and provide long-term economic benefits to communities both within and outside the zone, including Indigenous communities in Ontario. These parameters grant the Minister broad discretionary powers to determine what qualifies as a Designated Project, without objective evidence or defined criteria.
The regulation identifies factors such as the development’s impact on economic diversification, supply chains, job creation, and technological innovation. However, these factors are left undefined, and there are no transparent guidelines as to how the Minister should assess or weigh them. This discretion is further expanded by including the language of “such other factors as the Minister considers appropriate,” making the designation process highly subjective.
While the regulation requires the Minister to consider whether a project benefits communities, including Indigenous people, it fails to require the consideration of harms within those communities. Although it refers to Indigenous participation, it does not affirm that Indigenous rights will be upheld, nor does it require consent or approval from affected communities for this designation.
The criteria also include identifying environmental and health impacts, and that risk mitigation strategies exist. There is no requirement under this regulation to ensure that these impacts be adequately addressed, or that efforts to reduce harm meet the standards set out under Ontario’s current environmental laws.
The discretionary nature of the Designated Project criteria raises serious concerns about transparency, accountability, environmental justice, and Indigenous rights. Regulatory exemptions should not be granted based on such a subjective determination that a project is likely to succeed, and without any rigorous assessment of any health or environmental harm.
How Ontario’s New Designations Weaken Environmental Protections
The Special Economic Zones Act introduces a regulatory lacuna that allows the Ontario government to exempt certain projects from environmental and regulatory requirements through three designations. The newly released criteria for these three designations assuage serious concerns raised by Indigenous communities and environmental advocates when the legislation was introduced. The new regulatory criteria maintains the high risk of creating “law-free” zones due to a lack of oversight, transparency, accountability, and meaningful public engagement. There is no mechanism for public review or independent oversight that can challenge or assess the decision-making process. Essentially, the Special Economic Zones Act and O. Reg. 373/25 concentrate decision-making power in the hands of the Minister and Cabinet, allowing them to bypass environmental safeguards without public accountability.
During the proposal stage, CELA submitted detailed comments expressing concerns about the potential implications of this legislation. CELA demanded stronger safeguards and accountability for the proposed framework because it would undermine the protection of public health, weaken environmental safeguards, and pose serious risks to Indigenous rights.
The weakening of legal protections under key environmental legislations poses serious risks to ecosystems, communities, biodiversity, and public health. The Ontario government is actively undermining the rule of law by removing critical environmental safeguards, and expanding the government’s ability to unilaterally exempt large areas of the province, projects or proponents from key regulatory requirements. The newly established regulations are vague and allow the provincial government to exercise their power without checks and balances. This erosion of the rule of law further harms key elements of public trust such as transparency, accountability, and oversight. If left unchecked, this framework will normalize a governance model in which the government avoids key legislation to pursue their economic agenda and undermine fact-based decision-making.
Ontario’s Special Economic Zones Act sets a dangerous precedent which prioritizes short-term and subjectively defined economic interests over long-term environmental responsibility. Environmental protections and assessments are critical now, more than ever. Without transparency, oversight, and enforceable legal safeguards, the province risks causing irreversible harm to the very communities and ecosystems that are most vulnerable to environmental harm.
Blog: Special Economic Zones Act
by Sohana Anis, Placement Student, Canadian Environmental Law Associatoin
The Special Economic Zones Act came into effect on January 1, 2026. The Ontario government claims that this legislation will spur economic development by allowing certain projects to override environmental processes and approvals that would otherwise apply. The Special Economic Zones Act intends to fast-track developments such as mining and electric vehicle projects by exempting them from environmental assessment legislation and other regulatory requirements under key legislation such as the Mining Act, Endangered Species Act, and in the future, the Species Conservation Act.
However, the Ontario government’s reframing of environmental protections as barriers to efficiency and development is both misleading and harmful. Environmental protections are not designed to obstruct, or delay development, but to ensure that projects adequately consider long-term environmental and health consequences. In the absence of these assessments, surrounding communities and ecosystems become highly vulnerable to irreversible or long-term damage.
How Ontario’s New Criteria under the Special Economic Zones Act Impacts Environmental Law?
The Ontario government has released regulations that establishes the criteria under which projects may be exempt from environmental processes and regulatory approvals. O. Reg. 373/25 pursuant to the Special Economic Zones Act, 2025, grants exemptions using three categories:
Special Economic Zones
Under section 1 of the regulation, the Cabinet may designate any area of Ontario as a Special Economic Zone if it is deemed as “economically significant” and “no larger than necessary”, based on Cabinet’s opinion.
This Act grants the Cabinet subjective discretionary authority, and without objective standards or defined thresholds in the regulation, public transparency and accountability is limited.
Furthermore, this section fails to recognize Indigenous rights and obligations, including the duty to consult and accommodate. It also lacks any requirement to consider the environmental, health, or community impacts of designating an area of the province as a Special Economic Zone.
By relying on vague language, and highly subjective criteria, this regulation risks creating “law-free” zones in large areas of the province.
Trusted Proponents
Section 2 of the regulation allows the Minister of Economic Development, Job Creation and Trade (“Minister”) to designate Crown and non-Crown entities, including municipalities, and both public and private corporations as Trusted Proponents.
This designation allows for significant potential exemptions from environmental assessments, and regulatory requirements. To qualify as a Trusted Proponent, the Minister must be of the opinion that the proponent has good compliance records, poses no security risk, and demonstrates both a history and future of engaging with the Indigenous communities during their project.
Each of these conditions is subject entirely to the Minister’s opinion. The regulation does not define “good compliance record”, nor does it specify whether it relates to the environment, safety violations, disputes with the community, or human rights practices. The lack of clear definitions or measurable thresholds raises concerns about consistency and fairness as to how designations will be granted.
CELA is particularly concerned about a subjective Ministerial assessment of whether a proponent has appropriately engaged with impacted Indigenous communities. It is the Indigenous communities themselves, and not the Minister, who are in a position to make such an assessment.
Designated Projects
Section 3 of the regulation outlines the criteria for projects to be established as Designated Projects. Designated Projects take place within Special Economic Zones. To be a Designated Project, the Minister must be of the opinion that the projects are likely to succeed and provide long-term economic benefits to communities both within and outside the zone, including Indigenous communities in Ontario. These parameters grant the Minister broad discretionary powers to determine what qualifies as a Designated Project, without objective evidence or defined criteria.
The regulation identifies factors such as the development’s impact on economic diversification, supply chains, job creation, and technological innovation. However, these factors are left undefined, and there are no transparent guidelines as to how the Minister should assess or weigh them. This discretion is further expanded by including the language of “such other factors as the Minister considers appropriate,” making the designation process highly subjective.
While the regulation requires the Minister to consider whether a project benefits communities, including Indigenous people, it fails to require the consideration of harms within those communities. Although it refers to Indigenous participation, it does not affirm that Indigenous rights will be upheld, nor does it require consent or approval from affected communities for this designation.
The criteria also include identifying environmental and health impacts, and that risk mitigation strategies exist. There is no requirement under this regulation to ensure that these impacts be adequately addressed, or that efforts to reduce harm meet the standards set out under Ontario’s current environmental laws.
The discretionary nature of the Designated Project criteria raises serious concerns about transparency, accountability, environmental justice, and Indigenous rights. Regulatory exemptions should not be granted based on such a subjective determination that a project is likely to succeed, and without any rigorous assessment of any health or environmental harm.
How Ontario’s New Designations Weaken Environmental Protections
The Special Economic Zones Act introduces a regulatory lacuna that allows the Ontario government to exempt certain projects from environmental and regulatory requirements through three designations. The newly released criteria for these three designations assuage serious concerns raised by Indigenous communities and environmental advocates when the legislation was introduced. The new regulatory criteria maintains the high risk of creating “law-free” zones due to a lack of oversight, transparency, accountability, and meaningful public engagement. There is no mechanism for public review or independent oversight that can challenge or assess the decision-making process. Essentially, the Special Economic Zones Act and O. Reg. 373/25 concentrate decision-making power in the hands of the Minister and Cabinet, allowing them to bypass environmental safeguards without public accountability.
During the proposal stage, CELA submitted detailed comments expressing concerns about the potential implications of this legislation. CELA demanded stronger safeguards and accountability for the proposed framework because it would undermine the protection of public health, weaken environmental safeguards, and pose serious risks to Indigenous rights.
The weakening of legal protections under key environmental legislations poses serious risks to ecosystems, communities, biodiversity, and public health. The Ontario government is actively undermining the rule of law by removing critical environmental safeguards, and expanding the government’s ability to unilaterally exempt large areas of the province, projects or proponents from key regulatory requirements. The newly established regulations are vague and allow the provincial government to exercise their power without checks and balances. This erosion of the rule of law further harms key elements of public trust such as transparency, accountability, and oversight. If left unchecked, this framework will normalize a governance model in which the government avoids key legislation to pursue their economic agenda and undermine fact-based decision-making.
Ontario’s Special Economic Zones Act sets a dangerous precedent which prioritizes short-term and subjectively defined economic interests over long-term environmental responsibility. Environmental protections and assessments are critical now, more than ever. Without transparency, oversight, and enforceable legal safeguards, the province risks causing irreversible harm to the very communities and ecosystems that are most vulnerable to environmental harm.
Share: