1. Introduction

The Realty Directive establishes the government’s policy regarding the acquisition of land, buildings and structures, and the management and disposition of realty. The Directive reflects a balance of provincial policy, financial and operational interests.

This Directive is issued under subsection 3 (3) of the Management Board of Cabinet Act and is meant to be read and applied in its entirety.

The Minister of Government and Consumer Services (the Minister) has the statutory authority under the Ministry of Infrastructure Act, 2011 to make recommendations and establish policy for the effective coordination and development of realty across the Ontario government. This Directive has been developed by the Minister pursuant to the Minister’s authority.

2. Purpose

This Directive sets out the principles, requirements and responsibilities for the effective and efficient management of government realty, including active consideration of provincial interests with respect to social, environmental and economic purposes for realty.

3. Application

3.1. Scope

This Realty Directive applies to:

  • all ministries
  • provincial agencies

The requirements in this Directive apply to ministries and provincial agencies that control realty, to government users of realty and ministries that bring forward opportunities for the use of realty to support provincial interests with respect to social, environmental and economic purposes.

The control of realty resides with multiple ministries and provincial agencies as provided for in various statutes or orders made by the Lieutenant Governor in Council.

For clarity, the Directive does not apply to:

  • realty that forfeited to the Crown for any cause until the government registers a notice on title to the realty indicating that it intends to use it for Crown purposes. Property held by a corporation that is part of the government does not forfeit to the Crown if the corporation dissolves
  • unpatented Crown land unless/until the government improves and/or uses the realty for Crown purposes
  • the procurement of real estate services, such as real estate brokers, or services related to conducting due diligence. The Ontario Public Service Procurement Directive and/or other applicable government directives and guidelines must be followed in procuring such services, as applicable

3.2. Applicable law, directives and policies

Ministries and provincial agencies that control realty must also comply with applicable legislation, regulations, constitutional conventions, and corporate directives and policies including those which address:

  • health and safety and the workplace environment
  • accessibility for persons with disabilities
  • the natural environment
  • cultural heritage resources
  • waste, energy and resource management
  • social purpose, and
  • the duty to consult Indigenous peoples

3.3. Exemption from directive

Only Treasury Board/Management Board of Cabinet can grant an exemption from all or part of this Directive. Ministries can request an exemption by bringing forward a business case to Treasury Board/Management Board of Cabinet. Consistent with current practice, ministries must bring forward requests on behalf of provincial agencies for which they are responsible.

The process for seeking exemptions from the Directive is set out in section 6.

4. Principles

The following principles guide the application of this Directive:

  1. Realty decisions are transparent and accountable. High ethical standards are maintained, avoiding real or perceived conflicts of interest.
  2. The appropriate structures and processes are in place to support horizontal government-wide coordination of recommendations and decisions.
  3. The government’s realty inventory is aligned with provincial interests, including consideration of social, environmental and economic purposes.
  4. Realty decisions are forward-looking, sustainable, and support a focused, efficient, flexible and agile realty portfolio across government, and advance government wide interests, including use of realty for public purposes.

5. Requirements

This section of the Directive sets out the requirements for the acquisition of land, buildings or structures, the management and disposition of government realty, and the location of provincial agency offices.

5.1. Acquisition of land, buildings and structures

The requirements for the acquisition of land, buildings and structures are as follows:

  1. Ministries and provincial agencies requiring realty to deliver their mandates must ensure their needs are identified, considered, and planned for as part of their annual budgeting process.
  2. Responsibility for all realty obligations must be determined as part of the planning process for acquiring lands, buildings and structures.
  3. Ministries and provincial agencies that do not have the authority to acquire land, building and structures must request that the Minister of Government and Consumer Services carry out the acquisition, following the requirements and process set out in the Realty Policy applicable to realty controlled by the Minister of Government and Consumer Services.
  4. Acquisition of land, buildings or structures must only be undertaken in the following circumstances:
    1. where available realty is not suitable for the purpose or mandate of a ministry or provincial agency due to issues which cannot be addressed economically
    2. where existing realty cannot be accessed in a timely manner or is identified for use by another ministry or provincial agency within the required timeframe
    3. where existing realty is not within the service area of the program or is not accessible due to lack of required servicing
    4. where there is an existing or anticipated provincial interest with regard to a social, environmental or economic purpose, or
    5. where the acquisition is necessary to respond to a provincially identified emergency
  5. Land, buildings or structures must be acquired in a manner that achieves the most cost-effective outcome for the government while meeting program goals and requirements, and broader government-wide policy interests, including consideration of social, environmental and economic benefits.
  6. Donations of land, buildings or structures can only be accepted if they support provincial interests. The decision to accept donations must take into account the nature of the property, the relationship to a ministry or provincial agency mandate, the conditions upon which the land, building or structure will be donated, potential liability, and full life-cycle costs.

5.2. Management of realty

The requirements for the management of realty apply to ministries and provincial agencies that control realty and entities that use realty to deliver on their priorities.

  1. Ministries and provincial agencies with control of realty are required to:

Administration and reporting

  1. Maintain an up-to-date inventory of realty under their control that at a minimum shall include:
    1. the address of the realty
    2. current use and whether vacant or occupied
    3. buildings or structures on site
    4. the age and condition of buildings or structures
    5. square footage of any buildings or structures
    6. size of the parcel
    7. whether the realty is owned or leased, and
    8. the book value of the realty, if owned
  2. Be prepared to produce or submit the inventory upon request from Treasury Board/Management Board of Cabinet, or in the case of a provincial agency, the ministry administratively responsible for the agency.
  3. Direct government users to provide information associated with their use of realty to support inventory keeping.
  4. Ensure that any costs incurred or attributable to government users of the realty are recovered from or borne by these government users.

Planning

  1. Consider the full life-cycle of realty when making management decisions.
  2. Plan for and rationalize their realty portfolios on an ongoing basis, including by taking steps to better align realty with the mandate of another ministry or provincial agency (i.e. transfer control of the realty to the ministry or provincial agency) or to dispose of realty no longer needed by or useful to the government.
  3. Reuse existing realty for new or additional policy and program needs wherever possible.
  4. Establish exit-planning guidelines in conjunction with government users, where applicable. The guidelines must address responsibility for trailing obligations created by the vacancy.

Support provincial interests

  1. Integrate innovative technology solutions to improve the quality and efficiency of realty.
  2. Integrate environmental and energy-efficiency requirements where appropriate to minimize the environmental footprint of realty.
  3. Consider the potential for realty to be used to support community use, wherever possible.
  4. Support adaptation to climate change, and healthy, functioning ecosystems and biodiversity when managing realty, wherever possible.
  5. Work with the Ministry of Government and Consumer Services to use realty to implement provincial interests where Treasury Board/Management Board of Cabinet directs.

Maintenance

  1. Maintain realty required for long-term program delivery or policy implementation in a state of good repair, increasing or maintaining its useful life, retaining or increasing its value, and/or reducing risk.
  1. Prior to making any improvements or alterations to realty, government users must obtain approval from the controlling ministry or provincial agency, which may be subject to conditions including who is authorized to carry out the improvement or alteration.
  2. Where ministries and provincial agencies no longer require realty for program use, they will continue to be responsible for all realty obligations until a new user is found for the realty or an exit plan is developed and agreed to by the relevant parties.
  3. If realty was acquired by or for an agency that was a corporation that subsequently dissolved, then the ministry responsible for the provincial agency at the time of dissolution will be responsible for all realty obligations. Where the responsible ministry is no longer in existence, Treasury Board/Management Board of Cabinet will determine responsibility for realty obligations based on a submission from the Ministry of Government and Consumer Services.
  4. Ministries and provincial agencies that control realty and have the necessary authority may enter into agreements with third-parties regarding interim use of the realty so long as they ensure the fees collected and/or ministry sponsorship is available and is sufficient to offset realty obligations at a rate that is not less than market rate for the term and type of use.
  5. The use of realty for political or personal purposes is prohibited.
  6. Where ministries and provincial agencies require new or additional realty for program use, or where renovations of realty used for program space are being undertaken, the Office Accommodation Space and Program Specific Accommodation Space requirements set out in Appendix B to this Directive must be met and a Real Estate Options Analysis must be completed in accordance with Appendix B to this Directive.

5.3. Disposition of realty

This section of the Directive sets out requirements for the disposition of realty. Prior to offering all interests in realty for disposition, the process that must be followed includes:

  1. Determining if realty is surplus to government
  2. Circulating realty to ministries and provincial agencies for non-direct use, and
  3. Circulating realty to entities outside government

This section also sets out requirements for the disposition value of realty or interests in realty that are disposed of through sale, lease or granting of an easement.

For the purposes of this Directive, transfers of administration and control of realty within the government (i.e. between ministries and provincial agencies) are not considered dispositions by the transferring entity, nor as acquisitions by the receiving entity. Such transfers must comply with the requirements set out under relevant statutes, policies and directives, and any processes established by the applicable ministries and provincial agencies.

5.3.1. Stage 1: Determining if realty is surplus to government

1. Realty is surplus to government once it has been established that no ministry or provincial agency requires the realty to directly deliver their existing or anticipated mandate.

When a ministry or provincial agency that controls realty no longer requires it to directly deliver their existing or anticipated mandate, ministries, individually or jointly, shall be given an opportunity to identify a need for direct use by the Government. 

5.3.2. Stage 2: Circulation of realty to ministries and provincial agencies for non-direct use (i.e. realty leaves government ownership)

  1. If no ministries or provincial agencies express interest in realty for direct use, ministries and provincial agencies, individually or jointly, shall be given an opportunity to identify a need in respect to policies, programs, or services related to their existing or anticipated mandates that are not delivered directly by the government (i.e. non-direct use).

    The disposition by sale to an entity or entities that are not part of government is intended to support the delivery of policies, programs, or services related to the government’s mandate.
     
  2. Treasury Board/Management Board of Cabinet approval is required for direct dispositions for the purposes described in section 5.3.2.1.

    Where a ministry or ministries indicate interest on behalf of an entity that is not part of government, in acquiring surplus realty, that ministry or those ministries shall develop the business case and obtain Treasury Board/Management Board of Cabinet approval for the disposition. The business case must identify provincial interests with respect to social, environmental or economic purposes; and
     
  3. A ministry or ministries that indicate interest on behalf of an entity, that is not part of government, in acquiring surplus realty must retain responsibility for realty obligations until disposition, and account for the fiscal impacts of the disposition, including costs for the disposition (for example, legal fees, appraisal costs, etc.).

5.3.3. Stage 3: Circulation of realty to entities outside government

1. Where realty is surplus to government and no ministries or provincial agencies express interest in the realty for non-direct use, it is then circulated to the entities listed below to determine if they have an interest in acquiring the realty:

  1. the federal government
  2. municipalities
  3. school boards
  4. public colleges and universities
  5. eligible Indigenous communities
  6. eligible not-for-profit corporations, and
  7. any other entities identified by Treasury Board/Management Board of Cabinet

2. Circulation is not required if the realty:

  1. has been identified by another level of government, a utility company, a conservation authority, or a transit authority as being required for a specific public purpose
  2. has been identified by an Indigenous community and Ontario wishes to transfer for accommodation related to the Crown’s duty to consult Indigenous peoples
  3. is approved for disposition to a particular party by Treasury Board/Management Board of Cabinet
  4. lacks public access or is not separately viable. Under these circumstances the realty may be sold to an adjacent property owner
  5. is needed to restore access or frontage to an adjacent property cut off by realignment or closure of a road
  6. is being exchanged for another property for program purposes, or
  7. was expropriated and is required to first be offered back to the previous owner

5.3.4. Open market sales process and direct sales

Realty is to be offered for sale through an open process (i.e. on the open market) unless the realty:

  1. is being sold or transferred to:
    • an entity outside government described in section 5.3.2.1
    • another level of government or other approved entity in section 5.3.3.1
    • a utility company, a conservation authority, or transit authority described in section 5.3.3.2.a
    • for the benefit of an Indigenous community in the circumstances described in section 5.3.3.2.b
    • a party approved by Treasury Board/Management Board of Cabinet
  2. lacks public access or is not separately viable. Under these circumstances the realty may be sold to an adjacent property owner
  3. is needed to restore access or frontage to an adjacent property cut off by realignment or closure of a road
  4. is being exchanged for another property for program purposes, or
  5. was expropriated and is being offered back to the previous owner

5.3.5. Disposition value

  1. Realty that is disposed of by sale to an entity that is not part of government is to be disposed of at a value that is in accordance with the Tangible Capital Assets Policy, which requires fair value.
  2. Where realty is being disposed of by lease or easement, it must be disposed of at the market rate.
  3. Ministries and provincial agencies with authority to dispose of realty must develop a business case and obtain Treasury Board/Management Board of Cabinet approval to dispose of realty at a value other than that specified in the Tangible Capital Assets Policy or, if disposition is by lease or easement, a value below the market rate.

    If the ministry or provincial agency recommending the disposition of realty is not the controlling ministry or provincial agency of the realty, it must work with the controlling ministry or provincial agency to develop the business case.

    The business case must:
    1. set out how the disposition would support provincial interest, including whether the project or initiative of the receiving entity is provincially funded and/or mentioned in a provincial policy or plan, and
    2. address appropriation and fiscal impact of the proposal to transfer realty below fair value as defined in the Tangible Capital Assets Policy or, if disposition is by lease or easement, a value below the market rate.

5.3.6. Direct and/or less than fair value dispositions

Where realty is being sold to an entity for a specified purpose and/ or at less than fair value, the following must be included in the Agreement of Purchase and Sale:

  1. if the Realty that has been disposed of is not used within the timeframe set out for the purposes for which it was originally purchased, it will be returned in its original condition at the ministry’s or agency’s option, and
  2. if, within a specified period of time, the purchaser sells the realty, all proceeds in excess of the original purchase price (plus allowable expenses) will be returned to the vendor

5.3.7. Dissolution of Provincial agencies

  1. Prior to the dissolution of a provincial agency that is a corporation with the authority to dispose of realty, the agency must transfer administration and control of the realty to the provincial or federal government, or dispose of the realty in accordance with this section of the Directive.
  2. Where a provincial agency described in section 5.3.7.1 dissolved without arranging for or undertaking the transfer or disposition of its realty, the ministry responsible for the agency at the time of dissolution will be responsible for all realty obligations and costs associated with the transfer or disposition of the realty. If the responsible ministry is no longer in existence, responsibility for realty obligations and any other costs associated with the realty will be determined by Treasury Board/ Management Board of Cabinet based on a submission from the Ministry of Government and Consumer Services.

5.4. Location of Provincial Agency Offices

New provincial agencies, and provincial agencies with offices located in the City of Toronto, shall assess and seek out opportunities to locate/relocate agency offices in lower cost communities across Ontario.

Ministries shall work with their provincial agencies to complete the assessment form provided by the Ministry of Government and Consumer Services.

Ministries shall bring forward business cases, informed by the assessments, to Treasury Board/Management Board of Cabinet for approval of agency office locations.

6. Approvals

Any approvals required under this Directive, including an exemption from all or part of the Directive must be sought by the responsible ministry or ministries through a submission to Treasury Board/Management Board of Cabinet.

The submission shall include a business case supporting the approval being sought. See Appendix A for information on the elements that must form part of the business case.

Prior to finalizing the submission, the ministry or ministries must consult with the Ministry of Government and Consumer Services, Realty Division.

7. Roles and responsibilities

7.1. Treasury Board/Management Board of Cabinet

Responsibilities:

  • approving Treasury Board/Management Board of Cabinet submissions related to realty
  • granting exemptions from all or part of this Directive, and
  • approving capital projects and funding

7.2. Secretary of Management Board of Cabinet

Responsibilities:

  • issuing mandatory operational policies offering detailed direction on oversight of common business practices, and
  • ensuring this Directive is reviewed regularly

7.3. Minister of Government and Consumer Services

Responsibilities:

  • recommending directives and establishing policies for the effective coordination, development, and management of realty across government, and
  • providing advice to government on matters and submissions related to realty.

7.4. Ministry of Government and Consumer Services

Responsibilities:

  • reviewing business cases for exemptions from all or part of this Directive
  • reviewing assessments on provincial agency office locations
  • providing advice on interpretation of the Directive, including issuing guidelines and bulletins, and
  • maintaining the list of entities that would receive circulation of surplus realty under section 5.3.3.1

7.5. Ministry of Indigenous Affairs

Responsibilities:

  • developing a list of eligible Indigenous communities for the purposes of Stage 3 circulation of realty to entities outside Government

7.6. Ministry of Training, Colleges and Universities

Responsibilities:

  • developing a list of public colleges and universities for the purposes of Stage 3 circulation of realty to entities outside Government

7.7. All Deputy Ministers

Responsibilities:

  • advising their ministers on the requirements of this Directive
  • ensuring provincial agencies are aware of the requirements of this Directive and attesting to their compliance with them, where applicable
  • ensuring that ministry decisions adhere to this Directive or obtain prior approval from Treasury Board/Management Board of Cabinet for exemptions from all or part of this Directive
  • determining the realty impacts of new policy and program proposals and reflecting these implications in ministry and provincial agency business plans and annual budgeting process submissions, and
  • ensuring the appropriate ministry organizational structures, policies, and processes exist to manage realty in keeping with this Directive

7.8. Chairs/Heads of Provincial Agencies

Responsibilities:

  • implementing and applying the Directive to their realty activities, where applicable
  • ensuring that provincial agency decisions adhere to this Directive or consulting with the responsible ministry on requesting Treasury Board/Management Board of Cabinet approval for exemptions from all or part of this Directive
  • determining the realty impacts of new policy and program proposals and reflecting these implications in provincial agency business plans and annual budgeting process submissions, and
  • ensuring the appropriate provincial agency organizational structures, policies, and processes exist to manage realty in keeping with this Directive

8. Definitions

Acquire/acquisition: the act of obtaining an interest in land, buildings or structures.

Control/controlling: where a ministry or provincial agency has the authority to acquire land, buildings or structures and manage, or dispose, of the realty and is limited to when it is exercising that authority.

Dispose/disposition: the act of transferring an interest in realty from the government to an entity that is not part of government.

Eligible Indigenous communities: communities identified as Indigenous by the Ministry of Indigenous Affairs for the purposes of Disposition under section 5.3.3. of this Directive.

Eligible not-for-profit corporations: corporations without share capital that provide a public benefit purpose and are registered by the Ontario Nonprofit Network.

Fair value: has the same meaning as in the Tangible Capital Assets Policy, as defined in the Tangible Capital Assets Guidelines.

Government: has the same meaning as in the Ministry of Infrastructure Act, 2011 as amended from time to time, and is as of December 10, 2016 defined as:

  1. the Government of Ontario and the Crown in right of Ontario
  2. a ministry of the Government of Ontario
  3. a Crown agency, other than a college of applied arts and technology established under the Ontario Colleges of Applied Arts and Technology Act, 2001, and
  4. any board, commission, authority or unincorporated body of the Crown

Government user: ministries and provincial agencies that use realty controlled by other ministries and provincial agencies to deliver their mandates, including for active policy or program use and where realty is being held for a future purpose.

Market rate: with respect to leases, is the rental rate prevailing in the local market as of a specific date. With respect to easements, market rate is equivalent to the fee associated with granting the easement, which is typically based on an estimated value that considers factors such as but not limited to market conditions, permissible uses and mutual benefit as of a specific date.

Provincial Agency: (Same as “provincial agency” in the Agencies and Appointments Directive) for the purposes of this Directive, has the following characteristics:

  1. is established by government through a constituting instrument (under or by statute, Order in Council or regulation)
  2. is accountable to a minister for fulfilling its legislative obligations, the management of the resources it uses, and its standards for any services it provides
  3. the majority of its appointments are made by the government
  4. is not organizationally part of a ministry but it is part of the Government of Ontario, and
  5. has authority and responsibility, granted by the government to perform an ongoing public function or service that involves adjudicative or regulatory decision-making, operational activity, or an advisory function

Public Colleges and Universities: entities identified by the Ministry of Training, Colleges and Universities for the purposes of Disposition under section 5.3.3. of this Directive.

Realty: has the same meaning as “government property” in the Ministry of Infrastructure Act, 2011 as amended from time to time, which as of December 10, 2016 was defined as:

Government property

1.1 (1) For the purposes of this Act, land or interests in land, and fixtures or interests in fixtures installed or placed in or used in connection with the land, are Government property if they belong to the Government.

Same, certain buildings and structures

(2) For the purposes of this Act, a building or structure or an interest in a building or structure is also Government property if,

(a) the building, structure or interest is owned separately from the land on which the building or structure is located, and

(b) the building, structure or interest belongs to the Government

Realty obligations: are all obligations associated with realty, including any accompanying costs and any trailing obligations, which continue even after the realty is no longer used for program and policy implementation purposes until such time that the realty is reused, disposed of, or an alternative arrangement for the obligations is made by the ministry or provincial agency that required the realty for program purposes.

School boards: has the same meaning as in the Education Act, as amended from time to time.

Trailing obligations: all obligations of the Government user associated with Realty which continue even after the Government user has vacated the realty and until the realty is reused, disposed of, or an alternative arrangement is made with the controlling ministry or provincial agency.

Appendix A: Business case for Treasury Board/Management Board of Cabinet approvals

Approvals

Any approvals required under this Directive must be sought by way of a submission to Treasury Board/Management Board of Cabinet.

The submission shall include a business case supporting the approval being sought setting out details such as:

  1. the relevant section requiring approval under this Directive
  2. the rationale for seeking the approval
  3. any supporting data or evidence
  4. any other information that may be pertinent or useful for decision-makers

Exemptions

Where a ministry or provincial agency is seeking an exemption from all or part of this Directive, the ministry responsible shall bring forward a business case to be submitted to Treasury Board/Management Board of Cabinet.

The business case for an exemption must include:

  1. the exemption being sought, including the relevant section references if the exemption is with respect to a specific requirement
  2. other options considered
  3. rationale for rejecting the other options
  4. the risks of proceeding
  5. rationale for the selected option(s)
  6. risks and mitigation strategies
  7. any supporting data or evidence
  8. any other information that may be pertinent or useful for decision-makers

Appendix B - Mandatory Office Space Standards and Office Space Planning Practices

Office Accommodation Space

The Office Accommodation Space (OAS) standard is up to 180 Rentable Square Feet (RSF) or 160 Useable Square Feet (USF) per workspace and a minimum sharing ratio of 1.3 staff persons per workspace.

Program Specific Accommodation Space

Where additional space is required for program delivery, ministries and provincial agencies may develop and request Treasury Board/Management Board of Cabinet approval of a Program Specific Accommodation Space (PSAS) standard. PSAS is specific space a ministry or provincial agency requires for program delivery in addition to office space (for example, secure interview rooms, public service counters and waiting areas, sample preparation lab space, small hearing rooms, etc.).

Once approved by Treasury Board/ Management Board of Cabinet, the PSAS standard for that ministry or provincial agency is to be used when planning for the use of new space or renovations.

Ministries and provincial agencies that require PSAS and do not have an approved standard are required to prepare a business case supporting the need for PSAS for each new space request, or where renovations are being undertaken. Ministries must submit PSAS business cases to Treasury Board/Management Board of Cabinet for approval until a PSAS standard is approved by Treasury Board/Management Board of Cabinet. The business case may suggest application of a PSAS standard approved for another ministry or provincial agency with similar space requirements.

Real Estate Options Analysis

Each ministry or provincial agency is required to undertake a Real Estate Options Analysis (REOA) for each new space request or where renovations are being undertaken. The REOA is a business case used to document the amount of space required to accommodate the use in accordance with the OAS standard and any applicable PSAS standard and to identify an office location in accordance with the MBC Realty Directive.

All ministry and provincial agency initiatives that require new space or where renovations are required must have an REOA approved as part of the funding approval process. For ministries, the REOA would accompany the Treasury Board/Management Board of Cabinet program funding submission. For provincial agencies, the REOA would be approved as part of its regular funding approvals process.

Definitions

Rentable Square Feet: The space used to calculate rental payments or accommodation charges.

Usable Square Feet: Office floor area available for exclusive use of the tenant or user.

Staff Person: An individual defined in program business plans needed to deliver the program. Typically, this will include all FTEs, seconded or cluster based corporate services (for example IT, Legal, etc.), summer/co-op students, and consultants.

Workspace: Area where a single employee conducts work which includes the location where the employee would work, usually a location for a computer to be used at a desk, and related common area space that supports the program functions.