Ontario will move to the third step of its summer reopening plan on July 16, reopening indoor dining, indoor fitness activity, cinemas and nightclubs for the first time in months, but capacity restrictions will remain until August.

The Ford cabinet met on Friday morning to confirm the measures, which will allow indoor dining to resume across the province with capacity limited to the number of people who can maintain physical distancing of two metres, along with numerous other loosened restrictions throughout the economy.

The relaxed measures will take effect at 12:01 a.m. on Friday morning, the government said in a news release.

They also confirmed the existence of a fourth step in the reopening plan, where “the vast majority of public health and workplace safety measures, including capacity limits for indoor and outdoor settings and limits for social gatherings, will be lifted.”

They say Ontario will remain in Step 3 for at least 21 days, and until 80 per cent of Ontarians 12+ have received a first dose of a COVID-19 vaccine and 75 per cent have received a second.

As of Friday, 78 per cent of Ontarians age 12 and up have received a first dose and 50 per cent have received a second.

Chief Medical Officer of Health Dr. Kieran Moore said it’s important that as many people get vaccinated this summer as is possible to prevent a fall resurgence.

“I do think it’s an ambitious target,” he said of the 80/75 threshold. “I think it is a call to arms for all Ontarians – I think all of us want a return to a post-pandemic world. I absolutely do expect we will have an increase in cases in the fall when we move indoors.”

He said that at 80 per cent of people 12+ with a first dose, it would significantly curtail transmission, even when the weather gets colder.

“We have several weeks – six to seven weeks before September to really talk to your family and friends and ensure they get vaccinated – ensure they get any questions about vaccines answered,” he said, adding that Delta variant still keeps him “up at night.”

Premier Doug Ford said the new relaxed restrictions in the plan do not mean Ontarians should become complacent.

"Folks this isn’t over by any means, we still have a good battle on our hands," he told reporters in Brampton on Friday. "So let’s not be out there doing the victory lap whatsoever, let’s just be diligent and continue getting vaccinated."

As of July 16, all retailers will also be allowed to accept as many patrons as they can fit while maintaining physical distancing of two metres.

Cinemas, amusement parks and indoor fitness facilities will be allowed to reopen at 50 per cent capacity.

Indoor gatherings will be permitted with up to 25 people indoors or 100 people outdoors.

Nightclubs and restaurants with dance floors will be restricted to 25 per cent of pre-pandemic capacity, up to 250 patrons. 

The size of each party seated indoors or outdoors at a restaurant will no longer be limited in size, whereas current guidelines cap the size of a table at six patrons.

Also, professional sports venues will be able to accept up to 15,000 spectators seated outdoors, or 75 per cent of their pre-pandemic capacity. Indoors, they will be allowed to accept 1,000 spectators or half of pre-pandemic capacity, whichever is smaller.

Elsewhere in sport, all sport activity with contact will be allowed to resume.

Personal care outlets will also be allowed to resume services that require the removal of masks.

Places of worship will be allowed to accept as many people as they can provided two metre distancing can be maintained.

Event and conference venues will be allowed up to 1,000 attendees or 50 per cent of pre-pandemic capacity, whatever is less.

Last month, Moore seemed to suggest the province would not move to Step 3 ahead of schedule, as he said they needed time to analyze case trends in the wake of the Delta variant.

Speaking on Friday, Moore said he had no reason to keep to the prior schedule given the rapid pace of vaccination.

“I didn’t see any reason to hold us back given that so many Ontarians are coming forward – almost 200,000 per day are coming forward (for vaccination),” he told reporters.

Moore stressed that for all of the loosened restrictions, masks will still be required in all publicly accessible indoor spaces.

The scientific director of Ontario’s COVID-19 Science Advisory Table, Dr. Peter Jüni, echoed his concern, saying this week that the province was not ready for Step 3 because of the increased transmission capabilities of the Delta variant.

Toronto Mayor John Tory issued a statement Friday supporting the accelerated move to Step 3.

“I support this decision, based as it is on the advice of health officials, and believe it is the right thing to do as we continue to see lower case counts and higher vaccine rates,” he said. “It makes continued progress on vaccinations more important than ever.”

The Canadian Federation of Independent Business (CFIB) reacted to the news by pointing out this arrangement leads to a fourth stage of restrictions where they will mostly, finally end.

“While this is good news, for those businesses that face capacity restraints and other restrictions this will not put them on a pathway to breaking even after accumulating an average of over $200,000 in COVID-related debt,” a spokesperson said. “They will have to wait until early August for a full reopening under the new plan to move to step 4.”

In Toronto and Peel Region, cinemas, indoor dining and gyms have been closed since Oct. 2020.

Ontario Restaurant, Hotel and Motel Association President Tony Elenis called the lengthy suspension of indoor dining "a very frustrating waiting period."

"After a very frustrating waiting period that has tested our patience, we are very pleased to see the Province of Ontario announcing the required regulations for Step 3 of reopening Ontario. This is a good step for Ontario’s hospitality operations and at this point we are satisfied with the capacity rules being announced."

Strip clubs, bathhouses and sex clubs will also be permitted to reopen in Step 3.

Strip clubs will be restricted to the number of patrons where two metres of physical distancing can be maintained, with a three metre gap between patrons and performers.

Bathhouses and sex clubs will be restricted to 50 per cent of pre-pandemic capacity up to the number of patrons where two metres of physical distancing can be maintained.

Other cultural sites such as museums, science centres and aquariums will be limited to 50 per cent of pre-pandemic capacity.

Casinos will also reopen at 50 per cent of pre-pandemic capacity.

Moore said any local public health unit will be able to opt out of the move to Step 3 if conditions on the ground merit it, and implement additional “limitations.”

-- With files from Colin D'Mello, CTV News Toronto