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Effective January 1, 2007, the Municipal Act, 2001 (the Act) has been significantly amended by the Municipal Statute Law Amendment Act, 2006 (Bill 130). Further, there is now a separate municipal statute for Toronto, the City of Toronto Act, 2006.

As part of the Ontario government's plan to ensure that local governments have the powers and flexibility they need, the government launched a review of the Municipal Act, 2001 in June 2004. The review was undertaken in consultation with Ontario’s municipalities and with the Association of Municipalities of Ontario (AMO). Bill 130, the Municipal Statute Law Amendment Act, 2006, was introduced in June 2006, and most sections were proclaimed into force on January 1, 2007 (Proclamation Facts).

The revised Municipal Act, 2001 has brought about a new relationship between the municipal sector and the province based on mutual respect, consultation and cooperation. It recognizes municipalities as responsible and accountable levels of government and provides for the establishment of integrity officer functions at the local level. Local councils are now better able to determine the appropriate mechanisms for delivering municipal services to their communities.

The Municipal Act, 2001 came into force on January 1, 2003. It consolidated dozens of acts related to municipal governance or powers and shifted the Municipal Act from a prescriptive to a more permissive approach by including natural person powers and spheres of jurisdiction to allow municipalities to administer and organize their affairs and deliver services. The review that preceded the enactment represented the first comprehensive review and revision of the original Municipal Act since its passage in 1849. The Municipal Act, 2001 recognizes the importance of ongoing consultation with municipalities on matters of mutual interest by recognizing the memorandum of understanding (MOU) between the province and Association of Municipalities of Ontario (AMO) in the legislation.