Commercial Land Next to a Provincial Highway: When an MTO Permit Is Needed on Top of City Approval

Near a provincial highway, the question is not how big your project is but what you are doing: building, opening an access, putting up a sign, bringing in a crowd, or planting. Each activity has its own distance in the Act, and each one can need a permit from the Minister of Transportation.

I’m Arthur Zhao, a real estate broker in Toronto. Picture the owner of a small plaza that backs onto a provincial highway. A prospective tenant wants to run an event hall, put a tall sign facing the highway, and add a second driveway for its guests. The owner’s first thought is the city side. What is easy to miss is that this one lease request raises at least three separate questions under a provincial statute, each measured from the highway by a different distance.

The statute is the Public Transportation and Highway Improvement Act. It does not ask how large your project is. It asks what you are doing on the land, and how close that activity is to the highway. So instead of walking through the sections in order, this article goes activity by activity: building or regrading, a driveway or access, a sign, a use that draws crowds, and planting or utility lines. Enforcement and compensation come last.

First, two classes of provincial highway

The Act sets the rules out twice. Section 34 covers the King’s Highway. Section 38 covers a controlled-access highway, which the Lieutenant Governor in Council designates under s. 36(1); a designated highway is deemed to be part of the King’s Highway. The two lists of prohibited activities look alike, but some distances and exceptions differ, and those differences are flagged in each section below.

I am not going to tell you which class any particular highway falls into; that was not verified for this article. Whether the road beside your parcel is a provincial highway at all, and which class it is, is something to confirm with the Ministry of Transportation (MTO).

Two definitions in s. 1 of the Act shape everything that follows. Highway includes the area between its lateral property lines, so the right-of-way can be wider than the pavement you see. Owner includes a mortgagee, lessee, tenant and occupant, among others, which matters later when we get to who can receive a removal direction.

If you are building, adding on, or regrading

Both s. 34(2)(a) and s. 38(2)(a) prohibit, without a permit from the Minister, placing, erecting or altering any building, fence, gasoline pump or other structure or any road, or performing any grading, upon or within 45 metres of any limit of the highway.

Around intersections the ring is wider, and this is where the two classes differ:

• King’s Highway: within 180 metres of the centre point of an intersection.
• Controlled-access highway: within 395 metres of the centre point of an intersection.

Three words in that clause are wider than they first look. Alter means an addition or renovation to an existing building is covered, not only new construction. Grading is defined in s. 1 as configuring the surface of the land by removing, adding or moving material, earthen or otherwise, so reshaping a parking area or a berm counts. And structure is defined to include any above- or below-ground installation or infrastructure.

If you want a new or changed driveway or access

Under s. 34(2)(f) and s. 38(2)(g), no one may construct or use any private road, entranceway, gate or other structure or facility as a means of access to the highway without a permit. Unlike the other activities, this clause has no distance attached. What triggers it is the connection to the highway itself.

Two practical readings of the text. First, the clause covers use as well as construction, so the wording reaches an access point that is being used, not only one being built. Second, an internal road on your own land that does not connect to the highway can still be caught by the 45-metre building and grading rule above, because that rule also lists any road.

If an access is built or used in breach of the rule, the Minister may direct the owner to close it up (s. 34(6)(c); s. 38(5)(c)).

If you want to put up or change a sign

Signs reach 400 metres from any limit of the highway, under both s. 34(2)(c) and s. 38(2)(e). The clause covers any sign, notice or advertising device, whether it contains words or not, so a logo panel or a lit graphic is included.

The exceptions are where the two classes part ways:

• Both classes: one sign no larger than 60 by 30 centimetres showing the name, or the name and occupation, of the owner of the premises, or the name of the premises.
• King’s Highway only: limited signs about agricultural products (other than tobacco), up to two single-sided signs of 122 by 122 centimetres facing different directions, or one of 122 by 244 centimetres, on premises zoned for agricultural uses and meeting the other conditions in s. 34(2)(c)(ii) and (iii).
• Controlled-access highway: no agricultural sign exception at all.

For a commercial plaza, that means a tenant pylon or wall sign within 400 metres is outside both exceptions and needs a permit. Portable signs (signs not permanently attached or designed to be moved) are handled separately: the Minister may direct the sign’s owner, the person on whose behalf it is displayed, or the landowner, in that order, to remove it, and if it is still there 5 days after the direction is given, the Minister may authorize someone to enter and remove it (s. 34(8), (9); s. 38(7), (8)).

If you lease to a tenant whose use draws crowds

This is the one activity on the list where nothing has to be built. Section 34(2)(d) and s. 38(2)(f) prohibit using any land, any part of which lies within 800 metres of the highway limit, for a shopping centre, stadium, fair ground, race track, drive-in theatre or any other purpose that causes persons to congregate in large numbers, unless the Minister issues a permit. The distance is the same for both classes.

Two details in the wording matter for a lease decision. The test is whether any part of the land is within 800 metres, so a large parcel whose back corner is inside the ring is covered. And the Act does not define “large numbers”; whether a particular banquet hall, place of worship or event space crosses that line is not answered by the text, and is for MTO to determine.

As landlord, you cannot treat this as the tenant’s problem: s. 34(4) and s. 38(3) say no person shall authorize or permit any act prohibited by subsection (2). The Act does not say whether granting a lease for that use counts as authorizing or permitting it; that is a question for your lawyer and MTO.

If you are planting, running utility lines, or selling outdoors

Planting. Placing any tree, shrub or hedge within 45 metres of the highway limit needs a permit under both classes. The intersection ring mirrors the building rule: 180 metres from the centre point on a King’s Highway (s. 34(2)(b)), 395 metres on a controlled-access highway (s. 38(2)(b)).

Power and utility lines. Only the controlled-access section has a separate clause: s. 38(2)(d) covers placing, erecting or altering any power line, pole line or other transmission line within 400 metres of the highway limit. Section 34 has no equivalent line clause. Whether a line near a King’s Highway is caught instead as an “other structure” under the 45-metre rule, given the broad s. 1 definition of structure, is a reading the text does not settle; confirm it with MTO.

Selling goods outdoors. On a King’s Highway, s. 34(2)(e) prohibits selling, offering or displaying produce, goods or merchandise upon the highway, and s. 34(3) lets the Minister direct anyone to stop selling within 45 metres or 180 metres of an intersection centre point. On a controlled-access highway, s. 38(2)(c) puts outdoor sales within 45 metres of the limit, or 395 metres of an intersection centre point, under the permit requirement.

Enforcement, compensation, and how this sits beside city approvals

Directions. The Minister may direct an owner of land to remove or alter what was placed in breach, remove a sign, or close an access (s. 34(6); s. 38(5)). A direction must be in writing, served personally or by registered letter; a registered letter is deemed received on the second day after mailing (s. 34(10)). If the direction is not complied with within 30 days after receipt, the Minister may authorize any person to enter the land and do the work (s. 34(11)), and neither the Minister nor that person is liable for damages caused in doing so (s. 34(12)). Because “owner” includes a tenant, lessee, occupant or mortgagee, the person receiving a direction is not necessarily the person on title.

Fines. According to s. 34(13), breaching the prohibitions (including authorizing or permitting a breach) or failing to follow a direction is an offence: $50 to $500 for a first offence and $200 to $1,000 for any subsequent offence. The same clause applies to the controlled-access rules.

Compensation. After you comply with a removal direction, the Act says the Minister shall pay due compensation if the item was put there (a) before March 24, 1950 in compliance with the 1937 Highway Improvement Act, (b) before the highway was designated, in compliance with the Highway Improvement Act then in force, or (c) under a permit, in which case compensation is subject to the permit’s terms (s. 34(14); s. 38(9)). A disputed claim goes to the Ontario Land Tribunal; an appeal to the Divisional Court needs that court’s leave, applied for within 30 days of the Tribunal’s decision (s. 14(2) to (5), applied by s. 34(15) and s. 38(10)). A permit itself can be issued on whatever terms the Minister considers proper and cancelled at any time (s. 34(16); s. 38(11)).

City approvals. The MTO permit and the municipal approvals are two independent tracks. The Act does not say which comes first, and I am not going to suggest an order it does not set. For the municipal side, see our pieces on site plan control and on billboard leases; if MTO is taking part of your land rather than regulating its use, that is an expropriation question, covered separately.