Building Better Cities: Evaluating Canada's Transit-Oriented Development Strategy
April 17, 2025
By Allwyn Dsouza, Senior Analyst, Research and Insights, REIC/ICI
By Allwyn Dsouza, Senior Analyst, Research and Insights, REIC/ICI
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Transit-Oriented Development (TOD) – the practice of concentrating high-density, mixed-use development around transit stations – has gained momentum across Canada over the past 10–15 years. Driven by rapid transit expansion and a pressing need for sustainable, affordable growth, Canadian cities are embracing TOD to curb sprawl, cut congestion, and address housing challenges
Announced in 2021 and formally launched in 2024, Canada’s Public Transit Fund (CPTF) is a major step in this direction. A historic federal investment of $30 billion over 10 years (averaging $3 billion annually) dedicated to improving transit infrastructure[1], represents the largest public transit investment in Canadian history. |
Crucially, it is designed to link transit funding with housing and climate goals, signaling a policy shift toward integrated urban planning.
We looked at key successful factors and evaluated Canada’s progress so far on these parameters. Global best practices highlight seven critical success factors:
We looked at key successful factors and evaluated Canada’s progress so far on these parameters. Global best practices highlight seven critical success factors:
- High-Density, Mixed-Use Zoning Near Transit: TOD requires compact, vertical development within walking distance of transit. Cities like Hong Kong and Amsterdam align zoning and density with transit to minimize car use and boost ridership[2]. The Netherlands’ national VINEX program (1996–2005) coordinated with municipalities to build 455,000 new homes in the heart of the Randstad to minimize travel and secure maximum use of public transport, walking and bicycles.”
- Multimodal Access and Complete Streets: Walkability and cycling are essential. The Institute for Transportation and Development Policy (ITDP) emphasizes pedestrian and cycling infrastructure around stations as a TOD core principle[3].
- Sustainable Financing Tools: Long-term funding, PPPs, and innovative models such as Hong Kong’s Rail + Property (MTR) or London’s Crossrail levy help finance infrastructure without reliance on ad hoc grants[4].
- Land Value Capture (LVC): Transit creates land value. Capturing that value through mechanisms like density bonuses, public land leases, or tax-increment financing (TIF) in station area districts (as in Hong Kong or London) helps reinvest in transit and affordable housing[5].
- Affordable and Inclusive Housing: Successful TOD initiatives integrate affordable housing so that a mix of income levels can live near transit. London’s Transport for London (TfL) development program aims for 50% of homes built on its land to be affordable, and cities like San Francisco and New York have “transit zone” inclusionary housing requirements[6],[7].
- Intergovernmental Coordination: Seamless collaboration across federal, provincial, and municipal levels ensures transit and land use plans align. Models include the Netherlands' national government brokered VINEX and London’s Mayor’s Office and TfL coordinated plan[8].
- Timing Alignment: Housing and transit must be delivered concurrently. Delays lead to underused infrastructure or car-dependent communities. Leaders like Stockholm and Hong Kong plan both in sync[9],[10].
Global TOD Best Practices examples
Canada’s Performance on TOD Criteria
Canada has increasingly embraced TOD principles in recent years, with new federal programs and provincial policies directly targeting the integration of transit and housing.
Overall, Canada’s performance is mixed but improving. Most TOD-enabling elements are only partially addressed to date – recent reforms have made significant strides in some areas (notably zoning and funding), while other areas remain gaps (e.g. land value capture).
Canada has increasingly embraced TOD principles in recent years, with new federal programs and provincial policies directly targeting the integration of transit and housing.
Overall, Canada’s performance is mixed but improving. Most TOD-enabling elements are only partially addressed to date – recent reforms have made significant strides in some areas (notably zoning and funding), while other areas remain gaps (e.g. land value capture).
- High-Density, Mixed-Use Zoning Near Transit – Partially Addressed. The federal Permanent Public Transit Fund (PTF), beginning in 2026 with $3 billion annually, requires municipalities to zone for high-density housing within 800 meters of major transit routes and eliminate parking minimums[11]. British Columbia leads with legislation enabling up to 6 units on transit-adjacent lots and allowing buildings up to 20 storeys in station areas[12],[13]. Ontario's Bill 23 similarly allows three units by-right on all urban lots and mandates zoning in major station areas. Yet, implementation is inconsistent—many smaller cities lag.
- Multimodal Access and Complete Streets – Partially Addressed. Federal and city-level initiatives, including the Active Transportation Fund (2021), support sidewalks, bike paths, and pedestrian amenities. Ottawa, Edmonton, and Toronto have embedded pedestrian infrastructure into LRT projects. Parking reforms also aid walkability[14]. Nonetheless, legacy transit systems still prioritize cars—e.g., GO Transit’s large parking lots—and station connectivity remains weak in suburbs.
- Transit Funding and Innovative Financing – Partially Addressed. Canada now guarantees long-term transit investment via the PTF. But innovative TOD financing tools like land value capture (LVC) and public-private partnerships remain rare. The Canada Infrastructure Bank has studied and promoted LVC, but adoption is minimal[15]. Most transit remains publicly funded through general revenues or debt.
- Land Value Capture – Largely Not Addressed. Canadian cities have experimented with development charges and density bonuses (e.g., Toronto Section 37; Vancouver’s Community Amenity Contributions), but these tools are not integrated with transit expansion[16],[17]. Unlike Hong Kong’s MTR where the transit operator routinely develops land to finance rail, Canadian transit agencies do not systematically profit from station-area development, historically having focused only on transit operations and left real estate to the private market. Land value capture is used by governments to fund infrastructure such as transit, to fund affordable housing, and to suppress growth in land value – all goals relevant to Canada’s situation but no federal LVC policy exists and remains a major gap in Canada’s TOD toolkit.
- Affordable Housing Integration – Partially Addressed. The Housing Accelerator Fund ($4B) promotes affordable TOD housing. Cities like Calgary and Edmonton have dedicated funds to TOD-related housing delivery[18],[19]. Toronto and Mississauga mandate inclusionary zoning (5–10%) in key transit areas[20]. Still, efforts are fragmented and modest; few cities meet demand. Canada’s TOD affordability measures are in progress but incomplete. The alignment of transit funding with housing (through HAF and PTF conditions) is encouraging, and some cities have pioneered inclusionary zoning in station areas. To fully match global exemplars (like Vienna’s social housing near U-Bahn stations, or Hong Kong’s mixed-income new towns), Canada will need to substantially scale up affordable housing delivery in transit zones.
- Intergovernmental Coordination – Partially Addressed. Stronger federal-provincial-municipal alignment is emerging via funding strings in the PTF and Housing Infrastructure Fund ($6B), which require provinces to enforce densification mandates[21],[22]. Ontario’s Transit-Oriented Communities (TOC) program integrates development and infrastructure planning, while B.C.( Metro Vancouver 2050 regional plan and TransLink’s Transport 2050 strategy) and Québec(REM project) align regional growth with transit. However, jurisdictional conflicts (e.g., Toronto vs. Ontario) persist.
- Timing Alignment – Partially Addressed. Mixed results define Canada’s transit-housing synchronization. Canada has seen both transit-led and development-led mismatches: For example, Calgary’s early LRT lines in the 1980s ran through low-density areas that only developed decades later; conversely, Vancouver’s suburban MetroTown area boomed with high-rise housing in the 1990s before transit service fully caught up. Likewise, Vaughan’s subway extension in 2017 saw transit built before development, reducing initial ridership. Today, projects like Mimico GO Station and East Harbour Hub in Toronto include concurrent construction of housing and stations. Federal PTF zoning conditions and municipal fast-tracking of approvals are encouraging signs[23].
Comparing TOD Strategies Across Major Provinces
TOD has gained momentum across Canada, but implementation varies widely by province due to differences in governance, funding models, land use tools, and community engagement approaches.
TOD has gained momentum across Canada, but implementation varies widely by province due to differences in governance, funding models, land use tools, and community engagement approaches.
Governance & Planning
Ontario leads with a centralized, top-down governance model. The provincial government, through agencies like Metrolinx and Infrastructure Ontario, actively directs TOD via “Transit-Oriented Communities” (TOC) and enforces density targets using ministerial zoning orders and designated Urban Growth Centres. In contrast, British Columbia has historically left land-use planning to municipalities, although a recent provincial law now mandates TOD zoning[24]. Metro Vancouver’s regional authority sets overarching transit and growth goals but lets cities like Burnaby and Surrey take the lead on implementation. Alberta adopts a more municipal-led model where cities like Calgary and Edmonton manage transit and land use locally, although the province supports capital projects like Calgary’s Green Line. Quebec takes a hybrid approach: the Montreal Metropolitan Community (CMM) adopted the Montreal Metropolitan Plan (PMAD) with explicit TOD objectives (40% of new housing in TOD by 2031)[25], and special-purpose entities like CDPQ Infra blur the line between transit and land development to boost ridership and density near stations.
Funding Mechanisms
Funding for TOD and transit projects also differs. Ontario’s TOC program actively pursues public-private partnerships to reduce public costs, allowing developers to build transit stations alongside mixed-use developments[26]. Metrolinx capitalizes on air rights to monetize land value. In BC, TransLink employs land value capture through community amenity contributions and joint real estate ventures, although funding still heavily relies on public sources like development cost charges and fuel taxes. Alberta has tested Tax Increment Financing (TIF), using tools like the Community Revitalization Levy in Calgary’s East Village to reinvest increased property tax revenue into infrastructure. Edmonton is exploring similar models. Quebec leverages special property taxes near new REM stations and integrates station entrances into private developments to help fund transit infrastructure[27].
Land Use Policy Tools[28]
Ontario’s Protected Major Transit Station Areas (PMTSAs) streamline high-density zoning near transit and blocks appeals, expediting high-rise development. BC is shifting from incentive-based planning to mandating minimum densities and removing parking minimums in TOD areas. Cities like Surrey have focused TOD around “Frequent Transit Development Areas.” Alberta municipalities use TOD guidelines and incentives like reduced parking and density bonuses but still contend with car-centric planning legacies. Quebec sets TOD housing targets (40% of new housing) and applies incentive programs like Mobility Oriented Development. Montreal also employs inclusionary zoning to secure affordable housing near transit.
Community & Stakeholder Engagement
Public support for TOD varies. Urban areas with strong transit traditions like Toronto and Montreal often see greater acceptance, but suburban communities may resist high-rise development due to concerns over traffic or aesthetics. Ontario’s approach can override local opposition, while BC continues to rely on public hearings, although new provincial laws may reduce local resistance. Projects that phase development and include early delivery of public amenities, like Brentwood and Lougheed in Burnaby, have built strong community backing. Aligning developers and transit agencies—through formal agreements or shared planning goals—has proven vital for success, particularly in Ontario where city-province tensions initially threatened TOD rollouts.
Ontario leads with a centralized, top-down governance model. The provincial government, through agencies like Metrolinx and Infrastructure Ontario, actively directs TOD via “Transit-Oriented Communities” (TOC) and enforces density targets using ministerial zoning orders and designated Urban Growth Centres. In contrast, British Columbia has historically left land-use planning to municipalities, although a recent provincial law now mandates TOD zoning[24]. Metro Vancouver’s regional authority sets overarching transit and growth goals but lets cities like Burnaby and Surrey take the lead on implementation. Alberta adopts a more municipal-led model where cities like Calgary and Edmonton manage transit and land use locally, although the province supports capital projects like Calgary’s Green Line. Quebec takes a hybrid approach: the Montreal Metropolitan Community (CMM) adopted the Montreal Metropolitan Plan (PMAD) with explicit TOD objectives (40% of new housing in TOD by 2031)[25], and special-purpose entities like CDPQ Infra blur the line between transit and land development to boost ridership and density near stations.
Funding Mechanisms
Funding for TOD and transit projects also differs. Ontario’s TOC program actively pursues public-private partnerships to reduce public costs, allowing developers to build transit stations alongside mixed-use developments[26]. Metrolinx capitalizes on air rights to monetize land value. In BC, TransLink employs land value capture through community amenity contributions and joint real estate ventures, although funding still heavily relies on public sources like development cost charges and fuel taxes. Alberta has tested Tax Increment Financing (TIF), using tools like the Community Revitalization Levy in Calgary’s East Village to reinvest increased property tax revenue into infrastructure. Edmonton is exploring similar models. Quebec leverages special property taxes near new REM stations and integrates station entrances into private developments to help fund transit infrastructure[27].
Land Use Policy Tools[28]
Ontario’s Protected Major Transit Station Areas (PMTSAs) streamline high-density zoning near transit and blocks appeals, expediting high-rise development. BC is shifting from incentive-based planning to mandating minimum densities and removing parking minimums in TOD areas. Cities like Surrey have focused TOD around “Frequent Transit Development Areas.” Alberta municipalities use TOD guidelines and incentives like reduced parking and density bonuses but still contend with car-centric planning legacies. Quebec sets TOD housing targets (40% of new housing) and applies incentive programs like Mobility Oriented Development. Montreal also employs inclusionary zoning to secure affordable housing near transit.
Community & Stakeholder Engagement
Public support for TOD varies. Urban areas with strong transit traditions like Toronto and Montreal often see greater acceptance, but suburban communities may resist high-rise development due to concerns over traffic or aesthetics. Ontario’s approach can override local opposition, while BC continues to rely on public hearings, although new provincial laws may reduce local resistance. Projects that phase development and include early delivery of public amenities, like Brentwood and Lougheed in Burnaby, have built strong community backing. Aligning developers and transit agencies—through formal agreements or shared planning goals—has proven vital for success, particularly in Ontario where city-province tensions initially threatened TOD rollouts.
Gaps and Recommendations for Strengthening TOD in Canada
As Canada embraces Transit-Oriented Development (TOD) to meet urgent housing, transit, and climate goals, the role of skilled, ethical real estate professionals has never been more vital. Provinces like Ontario and B.C. are leading with bold reforms, yet challenges around affordability, equity, and execution persist. The Real Estate Institute of Canada (REIC) helps bridge this gap by equipping its members with the expertise to lead on-ground implementation. Through advanced education and professional standards, REIC champions best practices in planning, valuation, and development—ensuring TOD contributes to vibrant, inclusive, and resilient communities across the country.
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[1] pm.gc.ca
[2] prospectmagazine.co.uk [3] od.itdp.org [4] mckinsey.com [5] tfl.gov.uk [6] tod.itdp.org [7] masstransitmag.com [8] prospectmagazine.co.uk [9] mckinsey.com [10] tod.itdp.org [11] PM.gc.ca [12] News.gov.bc.ca [13] Sightline.org [14] CTBUH.org |
[15] CDN.cib-bic.ca
[16] IMFG.org [17] Vancouver.ca [18] Calgary.ca [19] Edmonton.ca [20] airdberlis.com [21] ctbuh.org [22] pm.gc.ca [23] masstransitmag.com [24] naiop.org [25] equiterre.org [26] naiop.org [27] movingwaldo.com [28] naiop.org |
Allwyn Dsouza is REIC’s Senior Analyst, Market Research and Insights. He can be reached at [email protected]. Media enquiries can be directed to [email protected]