Municipalities Have More Power Than They Think To Fight Alto

A federally-funded study admits Ottawa has no jurisdiction over land use planning. Municipalities do. So why are some municipalities signing away their ability to compare notes about it?

In April 2023, the University of Toronto’s Infrastructure Institute (School of Cities) published a study financed by the Canada Infrastructure Bank: Land Value Capture Study: Paying for Transit-Oriented Communities, authored by Matti Siemiatycki, Drew Fagan, and Robert Nutifafa Arku.

Buried in the section on Canada’s legislative context, the study states that the federal government has no jurisdiction over urban planning decisions or land taxation, and does not direct which urban transit projects get prioritized in municipalities. Whatever role Ottawa plays in land value capture schemes, the study says, has always been indirect: channelled through infrastructure and housing funding to programs that municipalities and provinces run.

This statement got me thinking about constitutional division of powers and the role of municipalities in land use planning in their communities. I decided to dive deeper into that statement to confirm its accuracy and consider possible strategies for municipalities.

I do think municipalities have options. The trouble is that authority only works if municipalities actually use it — individually and collectively. And right now, a lot of them are signing agreements that ensure silence and the voluntary erosion of municipal authority instead.

Where municipal and provincial power comes from

Allow me to sound like a lawyer for a few minutes.

Under the Constitution Act, 1867, s. 92(8) gives provinces exclusive authority over “Municipal Institutions in the Province.” Municipalities aren’t a third constitutional order of government. Legally, they’re creatures of the province, holding only what their enabling provincial statute gives them. But what provincial statutes give Ontario and Quebec municipalities are not trivial matters. In Ontario, the Planning Act and Municipal Act, 2001 hand municipalities control over things like official plans, zoning bylaws, site plan approval, road approvals and (critically) the ability to withhold consent on matters touching municipal infrastructure and roads. Quebec’s municipalities hold analogous authority under the Act respecting land use planning and development.

The CIB study describes this delegation chain when it says municipalities are the primary government actors involved in land value capture in Canada, operating through provincial frameworks for development charges, density bonuses, and tax increment financing. Stated simply, it is municipalities that decide what gets built, where and under what terms.

That said, this isn’t a case where municipal planning authority simply trumps a federal rail project. Interprovincial railways are squarely federal jurisdiction under the Constitution Act, 1867, and courts have been consistent that the core of that federal undertaking (where to build, how to construct it, how to operate it) is protected from municipal interference by the doctrine of interjurisdictional immunity.

The leading recent case is Halton (Regional Municipality) v. Canadian National Railway Company, 2024 ONCA 174, where several Halton-area municipalities tried to force CN to obtain municipal planning approval before building a large intermodal rail hub near Milton. Both the application judge and the Court of Appeal rejected that: bylaws that give a municipality veto or consent power over the siting, construction, or operation of a railway facility (including its stations and terminals) don’t apply to the railway. The Supreme Court declined to hear a further appeal. CN did not claim blanket immunity from every municipal law, only from the ones that struck at that core of their rail project.

This is the distinction that matters for Alto. There is a difference between how the core rail project (track, stations, signalling, safety systems — likely immune from any municipal veto) and everything Alto is doing that isn’t running a railway (land banking, acquisition and disposition, transit-oriented development, construction material sites and land value capture around stations). The CIB study’s note that Canada has no jurisdiction over urban planning or land taxation is about that second category of federal activities, not the first. A federal Crown corporation building a rail line gets the benefit of federal immunity for the line itself. It does not automatically get the same immunity for a real estate development and land value capture program bolted onto that line because that program isn’t “operating a railway” in the sense the doctrine protects, it’s the kind of urban land use planning and development that the CIB’s report acknowledges has never been federal work.

What a municipality can actually do

None of this makes a municipality able to completely block a project found to be within federal jurisdiction over an interprovincial railway. But it does mean municipalities are not just powerless bystanders waiting for Ottawa to decide their fate and destroy their communities. A municipality sitting in the corridor still controls:

• Official plan and zoning conformity: any proposed Alto stations, ancillary development, construction land requirements/staging areas and transit-oriented development the corporation pursues in their communities still have to fit within, or force an amendment to, the municipality’s official plan.

• Road authority consent: grade crossing changes, road closures, and realignments run through a regulated, arm’s-length process with the Canadian Transportation Agency, not through Alto’s discretion alone. This won’t stop the railway but it could be used to force Canada to directly pay for more of the impacts rather than municipal taxpayers.

• Servicing and infrastructure agreements: water, sewer, and municipal utility tie-ins are municipal assets, and connecting to them still requires municipal agreement. This will impact development around stations and ancillary buildings required in the corridor.

• The council resolution: these are mostly symbolic, but not nothing. A hundred-plus municipalities on record opposing a project changes the political cost of ignoring them, even where it doesn’t change the legal outcome.

• Coordinated regional bodies: the Eastern Ontario Wardens’ Caucus model, where thirteen upper-tier municipalities speak for 103 communities, is exactly the kind of aggregation that converts individually weak municipal voices into something Ottawa has to answer.

Where is FCM and AMO?

The Federation of Canadian Municipalities and, in Ontario, the Association of Municipalities of Ontario should matter and be involved in this issue. FCM is the national voice of local government, representing more than 2,000 municipalities and over 90 percent of Canadians, with the explicit mandate of ensuring municipal interests are reflected in federal policy including on infrastructure and transit. AMO’s role is narrower: it operates under a standing Memorandum of Understanding with the Ontario government that includes a protocol obligating the province to consult AMO and municipalities on federal-provincial matters that could affect municipal services and finances, and commits the province to pursue a seat for municipalities at the federal-provincial table. A proposed railway cutting through several municipalities surely fits this definition. As does the widespread practice of forcing municipalities to sign confidentiality agreements that limit their ability to represent their constituents.

Neither organization appears, at least on the public record, to have taken an explicit collective position on Alto’s tactics and the federal government’s approach. The individual municipalities fighting this are largely alone or acting through ad hoc regional caucuses, not through the two bodies whose entire institutional purpose is to aggregate exactly this kind of municipal-federal and municipal-provincial friction into a single, harder-to-ignore voice.

If AMO’s MOU protocol means anything, a federal Crown corporation running a statutory land acquisition and expropriation regime through Ontario municipalities is precisely the kind of federal-provincial matter affecting municipal finances that the protocol contemplates. Pressing AMO and FCM to take an explicit, well-resourced position (rather than leaving each township to retain its own counsel and negotiate its own agreement) is one of the more obvious moves available.

The NDA problem undercuts all of it

Here is where the collective leverage described above runs into a wall Alto built on purpose.

Alto has asked municipalities along the corridor to sign what it calls Collaborator Agreements as a condition of getting detailed route and planning information. The National Farmers Union — Ontario has characterized these collaboration agreements as non-disclosure agreements. I have seen the agreements provided to community groups who have refused to sign them. Those are nothing more than documents designed to stifle dissent while making no actual promises to collaborate.

Several municipalities, including the United Counties of Stormont, Dundas and Glengarry, Prescott-Russell, and South Frontenac, have declined to sign. Others — Ottawa’s Planning and Development department chief among them — have signed. In December 2025, Ottawa’s General Manager of Planning and Development, Marcia Wallace, signed an NDA with Alto to access detailed mapping and route planning options, disclosed to council roughly a month before public consultations opened. Kingston also signed this past week. I assume every community with a station has already signed an NDA. We do not know if the AMO and FCM have already been in discussion with Alto and have been asked to sign such an agreement themselves. Municipal members of these organizations would be able to inquire.

The statutory framework that governs the relationship between a railway and the municipalities its tracks pass through is, by design, the opposite of this. Grade crossing changes are handled through a regulated, transparent process, with the Canadian Transportation Agency available to arbitrate disputes when the railway and the municipality disagree. Nothing in that framework gates information-sharing behind a confidentiality agreement. It actually requires the opposite: open structured sharing of information supervised by an independent body. Alto has introduced their own rules and municipalities are blindly signing these agreements without much thought of the larger implications and without public debate.

The practical effect to signing these NDAs is that it stops the coordination that gives municipal planning authority force. A municipality that has signed a Collaborator Agreement may be constrained from telling its neighbouring township, its regional caucus, or even AMO what it has learned that is concerning about routing, land acquisition, process, cost distribution, planning pressures or timelines in its own jurisdiction. Municipalities negotiating individually, under seal, with their hands tied behind their back against a well-resourced federal Crown corporation that maintains all control of the flow of information are negotiating from a very weak position and are serving their communities poorly. This is exactly how municipal authority gets neutralized without formally being taken away.

What is a municipality to do?

A few concrete steps flow from all of this, none of which require waiting on the federal government or Alto to do anything:

1. Do not sign a Collaborator Agreement. If for whatever reason council decides that it must, don’t sign it without independent legal review, and specifically without seeking as many carve-outs as possible permitting disclosure to AMO, FCM, neighbouring municipalities, regional caucuses, and legal, planning and other advisors as my be necessary. There also needs to be the ability to discuss matters at council and provide information to the public to obtain required public input. If you must sign an NDA, keeping it as narrow as possible is best for everyone.

2. Treat the official plan and zoning process as active leverage over land development, not the rail line itself. Halton v. CN means this leverage likely doesn’t extend to blocking or conditioning the track and stations. It does extend to any transit-oriented development, land banking, ancillary lands for construction material or commercial real estate Alto pursues around those stations. That’s ordinary municipal planning authority that can be exercised through the ordinary process rather than through negotiation with Alto on Alto’s terms.

3. Coordinate before signing anything, not after. The EOWC’s aggregation of 103 communities through 13 upper-tier bodies shows what collective weight looks like. A municipality approached individually should be raising the approach with its regional caucus before responding, not after. Regional coordination is critical.

4. Press AMO and FCM for an explicit, resourced position. The approach being taken towards municipalities by the federal government could have significant impacts across Ontario and across the country. Both organizations have direct institutional mandates that map onto this exact situation and it’s concerning that I haven’t seen them involved. A federal-provincial-municipal jurisdictional dispute over land acquisition, planning authority and confidentiality agreements impacting democratic institutions is exactly what these bodies exist to represent municipalities on.

5. Get the province involved. Ontario and Quebec hold the actual constitutional authority the CIB study describes. Not enough pressure is being placed on provinces. Unfortunately, both themselves have been asked to sign letters of intent with Alto, the text of which has not been released as far as I can tell. Quebec has signed a confidentiality agreement. I found it listed on the government’s proactive disclosure database. I have not found one for Ontario, although it may well exist. Provincial silence is certainly a choice worth asking Queen’s Park to explain.

None of this guarantees an outcome. But the framing that municipalities are simply in the way of a federal project, waiting to be informed of their collective fate, does not match what the CIB’s researchers told the government about where planning authority for matters related to land value capture in Canada actually sits.

Given that this project only appears to be profitable if literally billions can be raised through Land Value Capture, this is real leverage. The McGill study (the TRAM Lab HSR study led by Ahmed El-Geneidy, published March 2026) found that the project’s success relies on roughly C$12 billion of land value capture, out of a total estimated capital cost of C$79.8 billion. That’s $12 billion worth of municipal leverage, assuming it hasn’t been squandered.

The remaining question is whether municipalities will actually exercise their authority together, or if they will continue to sign it away one confidentiality agreement at a time.