The Evolution of Transit-oriented Development in Canada

The Canadian government is encouraging high-density development as one solution to housing issues.

Over the past decade, transit-oriented development (TOD) policies adopted by all levels of Canadian government, along with the expansion of rapid transit infrastructure, have transformed urban centers across the country. However, this shift was as much a response to the pressing issue of deteriorating housing affordability as it was to congestion, environmental concerns, and a greater public acceptance of densifying areas near rapid transit systems.

In recent years, public opinion in Canada has tilted toward generally supporting the higher densities required to enable TOD, especially in cities where housing affordability has significantly worsened. Many cities have seen investment in new rapid transit lines or the expansion of existing systems to address congestion arising from rapid population growth. Most major Canadian cities are building out their rapid transit systems, which is an important (though not required) precursor to politically initiated TOD.

The Case for TOD

Investment in transit and transportation infrastructure has been demonstrated to produce significant benefits in Canada beyond reducing congestion and air pollution. It has also been linked to boosting economic activity and spending, increasing labor mobility and personal mobility, and improving public health and safety. According to a Canadian Urban Transit Association issue paper, transit investment also generates  enhanced land accessibility that increases residential and commercial values.  

Transit and transportation infrastructure investment has also been shown to stimulate additional commercial and residential development around existing and new transit nodes and corridors in Canada, the U.S. and Europe. In Canada, the ongoing and proposed redevelopment of numerous large enclosed regional shopping centers that were targeted for increased densification was the first manifestation of TOD, although development was initially driven more by land costs than politics. Metro Vancouver adopted its first Regional Growth Strategy in 2011 that identified shopping centers in the region as TOD areas and permitted greater densities at these sites because of their connection to the regional rapid transit network. Construction started in the mid-2010s for many such redevelopments and continues to this day. These new urban enclaves, including The City of Lougheed and The Amazing Brentwood in Burnaby, British Columbia, and Oakridge Park in Vancouver, offer significant amenities, living space, retail opportunities and office space — all connected to the region s rapid transit network.

A similar densification and redevelopment trend followed at enclosed regional shopping centers in suburban areas of Greater Toronto such as Mississauga, Oakville, Vaughan and Richmond Hill. This also happened within the pre-amalgamation municipalities of Etobicoke, North York, Scarborough, East York and York that were either connected or more recently added to the regional subway system or the GO Transit commuter train and bus networks.

City planners have long advocated for densification around transit hubs to address congestion, environmental concerns and commuting costs. In addition, residential real estate with easy access to urban amenities is experiencing renewed popularity, in part due to shifting demographics. This is translating into increased demand — and, subsequently, higher property values — for commercial and residential developments with transit access, particularly around rapid transit lines and light rail. According to a 2018 study from the University of British Columbia and the city of Vancouver, "Land Value and Transit Investment: Case Studies and Analysis for the Broadway Corridor," a meta-analysis conducted using 57 observations concluded that "commercial properties within a quarter mile (402 meters) of the station are 16.4% higher than those outside the quarter-mile zone, while the premium for residential was 4.2%." 

Current Rapid Transit Investments in Canadian Cities

In metro Vancouver, TransLink's SkyTrain is expanding its regional rapid transit system into additional suburban communities south of the Fraser River with a 16-kilometer extension of the Expo Line, as well as tunneling under the Broadway corridor within Vancouver city limits for a 5.7-kilometer extension of the Millennium Line. Also proposed is a 6-kilometer extension of the Millennium Line that would connect to the University of British Columbia on Vancouver's west side. One of the larger private-sector projects planned along these transit expansions is PCI Developments' The Stories at South Granville Station, which is being integrated into the new station being built as part of the Broadway extension. The 39-story mixed-use development is under construction and set for completion in 2026. The project comprises almost 30,000 square feet of retail, 100,000 square feet of office space, more than 15,000 square feet of amenity space and 270 homes. 

In the Toronto region, Metrolinx, an agency of the Government of Ontario, has several rapid transit expansion projects underway. These include the 19-kilometer Eglinton Crosstown Light Rail Transit (LRT) line (Line 5), the 11-kilometer Finch West LRT line (Line 6) and the biggest and most expensive rapid transit project in Canadian history, the 15.5-kilometer Ontario Line (Line 3). Additional extensions are also in the works for Yonge North Subway, Scarborough Subway and Eglinton Crosstown West. A future 18-kilometer line (Eglinton East LRT) has also been proposed.

Much of the TOD in Greater Toronto is still in the planning/preconstruction phases. The revised proposal for a new mixed-use development at 808 Mount Pleasant Road, in a newly designated Protected Major Transit Station Area (PMTSA) along the Eglinton Crosstown LRT, was increased to 61 stories this past December. Now with 896 homes (nearly double what was originally proposed in 2017) along with increased retail and amenity space, the scope of development increased as a direct result of the province mandating higher densities close to rapid transit stations in 2021. This led Toronto to create PMTSAs and Major Transit Station Areas at existing and future transit stations to permit larger redevelopments. The Mount Pleasant station is located directly south of this proposal and is anticipated to open later this year.

Phase one of Calgary s proposed 46-kilometer Green Line LRT, the largest infrastructure investment in the city s history, started construction in late 2024. Edmonton s 13-kilometer Valley Line Southeast opened in November 2024, while construction on the 14-kilometer Valley Line West entered its third year in 2024. Construction on phase one of the 4.5-kilometer Capital Line South will begin this year. Montreal commenced construction last year on a 6-kilometer extension of the Metro system s blue line, which will add five new stations in the city s east end when it becomes operational in 2029.

TOD Policy

In announcing its $30 billion Canada Public Transit Fund (CPTF) last summer, the Canadian government made it clear that increasing density along transit is a priority.  The [CPTF] will also complement our work to build more homes faster,  read a government press release.  Through programs like the Housing Accelerator Fund, we're giving cities and towns more money to build more home — but with a condition: if municipalities want federal funding, they have to change their zoning by-laws to build more housing near transit.

While these changes are occurring in municipalities across Canada, two primary examples of recent TOD policies can be found in Toronto and Vancouver. Infrastructure Ontario's Transit-Oriented Communities (TOC) program, a key component of the provincial government s New Subway Transit Plan for the Greater Toronto Area, aims to create  more housing and jobs near or at transit stations along the routes of the province s four priority subway projects, including the Ontario Line, the Yonge North Subway Extension, the Scarborough Subway Extension, and the Eglinton Crosstown West Extension.

The city of Toronto and the Ontario government signed a memorandum of understanding on the TOC program effective Feb. 14, 2020. The shared objectives include:

• "The creation of complete and accessible communities, with employment and residential densities that support higher-order transit in a manner consistent with good land use planning and city-building principles;
• "An increase in the housing supply, with a range and mix of types that are responsive to the specific context and nature of each unique TOD site, including affordable housing and other types;
• "Growth in potential transit ridership and improvements/enhancements to the customer experience, as a result of direct access to rapid transit and connections to surface transit;
• "Increased transit access for residents to employment areas, while further supporting employment growth;
• "An offset of the costs of building and/or operating transit; and,
• "The coordinated delivery of GO Expansion/SmartTrack and the Provincial subway projects with integrated TOC initiatives that adhere to the committed project schedules, and that optimize the use of City resources."

An April 2024 update from the city of Toronto on the TOC program with Infrastructure Ontario reported that the city has reviewed proposals for nine Ontario Line stations and one station along the Scarborough Subway Extension, with additional TOC proposals anticipated over the next two to three years.

The province of British Columbia has taken a more prescriptive approach in the past year or so, directing municipalities (including Vancouver) through legislation to incorporate a TOD approach into their land-use planning. Legislation will require some municipalities to designate TOD Areas near transit hubs. In these areas, local governments are required to ensure that minimum levels of density, size and dimension are allowed; allow parking requirements to be determined by market demand; and consider provincial policies when planning or amending zoning bylaws.

A Transit-oriented Outcome for Canadian Cities

TOD has been shown to generate economic benefits for communities as well as for developers and property owners. Government at various levels is now embracing this form of mixed-use, high-density development as a quicker, less expensive and increasingly noncontroversial way for both the public and private sectors to develop more homes and reduce congestion in Canada's increasingly traffic-snarled urban centers.  

Andrew Petrozzi is director and head of Canada research at Newmark.

• Magazine Article
• Mixed Use
• Redevelopment
• Transit Oriented Development
• Canada