Following consultations with more than 130 Indigenous communities and stakeholders across the province, Ontario’s Progressive Conservative government has released the new regulation for Special Economic Zones (SEZs). Scheduled to come into effect on January 1, 2026, the regulation is a key implementing step under the Protect Ontario by Unleashing Our Economy Act (Bill 5). It creates a framework to advance the government’s stated objective of making Ontario “the most competitive place in the G7 to invest, create jobs, and do business.”
The government is positioning SEZs as a response to heightened economic uncertainty, including tariffs and supply-chain risk. Here’s what you need to know.
What’s New
The regulation sets out the criteria to designate SEZs, trusted proponents, and projects, as enabled by Ontario government legislation, including Bill 5 and the Special Economic Zones Act, 2025. SEZs are geographically defined areas designated for activities that are economically significant or strategically important to Ontario’s economy and must be no larger than necessary to support those activities.
Within SEZs, the province may designate specific projects that, in the opinion of the Minister:
- Deliver significant long-term economic benefits;
- Benefit local communities;
- Are likely to succeed; and
- Will materially benefit from exemptions and modifications, including accelerated completion timelines and an increased likelihood of success.
The regulation also defines “trusted proponents” eligible to advance designated projects, including:
- The Ontario government and its agencies;
- Municipalities; and
- Corporations whose shareholders or members are Indigenous governing bodies.
Taken together, this regulation is intended to accelerate job-creating investments and strategically important projects that support investment and growth, while maintaining rigorous environmental standards and the Crown’s duty to consult.
What’s Next
SEZs reflect the government’s commitment to a project-first, outcomes-driven approvals model. For key sectors, businesses, and communities seeking greater certainty and competitiveness amid U.S. tariffs, the framework creates an opportunity to advance projects that reinforce Ontario’s economic security. The regulation also reinforces the government’s focus on leveraging its critical minerals supply in support of priority sectors such as defence, advanced manufacturing, and aerospace.
This development is particularly notable as the Ontario government signs an agreement with the federal government today to implement the “One Project, One Review” approach. The release also coincides with Ontario’s ongoing efforts to have a project in the Ring of Fire added to the federal Major Projects Office’s list of projects of national significance. The government news release announcing the new SEZ regulation emphasizes its role in accelerating approvals “for major projects that will protect Ontario’s economy,” closely mirroring the language underpinning the federal government’s One Canadian Economy Act.
Growing federal-provincial alignment has the potential to improve predictability and reduce approval timelines in an environment where uncertainty has deterred some proponents from advancing major projects. However, delivery and execution will be critical.
Public opinion data highlights both the opportunity and the risk ahead as governments seek to shift the country’s economic trajectory. A September Abacus Data poll, commissioned by Vantage, shows that, while infrastructure investment is broadly viewed as a driver of economic prosperity, just under half of Canadians (49%) believe they or their household would personally benefit from such projects. The data also points to a tension between prioritizing local consent and streamlining approvals, with Ontarians particularly divided on this question. Against a backdrop of heightened economic insecurity and more recent mixed assessments of government performance on core issues, the province will face pressure to deliver tangible results and clearly link its economic agenda to voter concerns around affordability and jobs.
With the regulation coming into force next month, the province will begin working with interested partners to designate the first SEZs, while continuing to engage in consultation with stakeholders and Indigenous communities. Key questions remain regarding the scope and frequency of regulatory flexibility, the degree of alignment with federal review processes, and how ongoing consultations will impact project timelines, partnerships, and risk.
For project proponents looking for SEZ classification, the process starts with outreach to the reporting Ministry, and that Ministry will put forth recommendations to the Cabinet office for consideration.
Conclusion
Ontario’s SEZ framework is fundamentally about strategic acceleration. Proponents aligned with provincial priorities will need to demonstrate long-term economic value and community benefit to take advantage of the new regime and help protect Ontario’s economic security. More broadly, the regulation underscores the importance of understanding where political and economic priorities are converging before projects are brought forward.
If you’re looking for clarity on this important regulation and need to know what it means for your organization, contact us today at info@mcmillanvantage.com.
Team Vantage is here to help you navigate this fast-changing environment and position your company for success.
