An innovation of the 1971 season was The Third Stage, a small, modestly-equipped theater in the Casino on Lakeside Drive. It has been used for workshops and performances of new Canadian plays and contemporary plays from abroad, for experimental productions of classical theater and for chamber opera.

In 1987, while Robin Phillips was Director of the Young Company, a new modular stage was created and seating capacity was increased to 500. Further changes were made in 1990 by Debra Hanson, then Head of Design. The stage was stained to a deeper colour of oak, the back wall was moved forward by 10 feet, the heights and angles of entrances were reproportioned, and the end of the thrust was softened by angling the square corners. Current seating capacity is 496. In 1991, the space was renamed the Tom Patterson Theatre, in honour of the Festival's founder.