Bill 227, Cutting Red Tape, Building Ontario Act, 2024 was introduced on November 20, 2024. It is the omnibus legislation the Ontario government fast-tracked through Queen’s Park this week. The legislation contains several changes that tenants should be concerned about. The government claims this bill will address the backlog at the Landlord and Tenant Board (LTB). Instead, a closer look suggests these measures will weaken tenant protections and will not meaningfully improve operations at the LTB.
Sending LTB orders to credit agencies
A backgrounder states the province is exploring the idea of providing credit reporting agencies the LTB orders of tenants who have a “history” of missed rental payments. This proposal is premised on the myth that all tenants who miss rent payments are intentional fraudsters – and fails to recognize that personal hardships, landlord misconduct, or LTB processes can result in situations where a renter falls behind on their rent (see examples below).
By sharing only these orders and not those of landlords owing money to tenants, the province is prioritizing the hardships of landlords over tenants. They are ignoring years of landlords locking out renters and the rise of bad faith evictions. These breaches have become so frequent that municipalities have introduced by-laws to stem this illegal activity by landlords.
Without details confirmed, questions arise around whether the LTB can manage this added responsibility. How will the LTB or province define a “history of missed payments” – is it by the number of missed payments in a tenancy or the number of arrears orders? Would it be over a specified period of time? Would it account for special circumstances impacting the tenant household or their ability to participate in the hearing?
The other concern is at which point during the adjudicative process an order would be shared with the credit agency. Often, after an arrears order is issued, a tenant is able to secure the funds to void the order, or have the order overturned at a review hearing and/or on appeal at a divisional court. Will this proposal respect tenants’ rights to save their tenancy after an order has been issued?
Having owed rent in the past does not automatically mean a tenant will be unable to pay rent to a new landlord. There are lots of reasons why a tenant may have fallen behind on rent in the past. Situations like a health issues, job loss, or a bad roommate could be at play. Regardless, in most cases when those situations are resolved, these renters are reliable and pay their rent on time.
There are also several situations where an eviction order also does not reflect a renter’s ability to pay the rent, such as:
- When a renter pays off their money owing in full after an eviction order. The tenancy is saved but the order may have already been filed with a credit agency.
- In situations involving intimate partner violence, a survivor could find themselves evicted and their credit score impacted if their abuser does not pay the rent.
- Renters living in units first occupied after November 15, 2018 are at risk of being “economically evicted” if the landlord raises their rent (well above the market rent) knowing that it is beyond what their tenants can afford. An eviction order in this circumstance would not reflect a tenant’s ability to pay the legal rent.
- The LTB often will not allow a tenant to present their issues (i.e. repairs) at their eviction hearing, despite it being a right under the RTA. If renters were allowed to present their issues, this means they could offset any rent owing to the landlord with rent deductions owed to them because their landlord did not fulfill legal obligations. Instead, renters have to wait for a separate hearing to have those issues heard.
- Renters are being squeezed without full rent controls. In 2022, Ontario saw rent increases double, where asking rents for two bedroom apartments went up by 26% in Hamilton, 17% in Ottawa, and 29% in Toronto. Of course, renters incomes have not gone up by this much each year. Bill 227 will further harm many Ontarian renters struggling in the affordable housing crisis gripping this province.
ACTO is concerned that the province has not fully considered the societal impact of a bad credit rating on a tenant household, especially one trying to get back on their feet. This proposal could jeopardize a tenant’s ability to rent a new unit, obtain loans, or secure a mortgage to buy their first home. Hardships of the past should not prevent a person from achieving their future potential.
Amendment to the Statutory Powers and Procedures Act to Address Adjudicator Retention and Expertise
The Ombudsman’s report on the LTB identified concerns regarding the training and expertise of adjudicators, which slowed the scheduling, completion of hearings, and significantly lengthened the time to issue decisions. These delays are compounded by the high turnover of adjudicators at the LTB. Many adjudicators leave without issuing their final decisions for hearings they presided over months (and even years) earlier. In this situation, the LTB will usually notify the parties that a new adjudicator will be appointed and a new hearing is scheduled for the parties to present their evidence once again. This can result in added costs and time to resolve a dispute for both sides.
Bill 227 – Schedule 25 proposes that if an adjudicator leaves before completing a hearing and issuing their decision, the LTB may appoint a new adjudicator to step in and complete the hearing on the basis of the record already established – rather than holding a new hearing.
The LTB’s discretion to allow for a new hearing or appoint a new adjudicator to resume the old hearing should include safeguards. The Board should notify the parties of the departure of their original adjudicator, and explain: why the hearing cannot continue; why a new hearing or a new adjudicator is the best approach for this matter given the evidence already shared; the issues being heard; and the impact on the parties. The LTB should also give parties the chance to weigh in on the selected process and whether they believe it will be unfair.
Amendment to s. 212 proposes to make mandatory provisions under the Act discretionary
Bill 227 proposes that errors in the contents of a form, notice, or document should be deemed to meet LTB requirements as long as the error does not “significantly prejudice a party’s ability to participate in a proceeding.”
We are concerned that this will trample on established rights and protections for renters and gut the tenant protection focus of the Residential Tenancies Act (RTA). For example, there is a mandatory requirement for the landlord to provide a renter an N4 form (notice to end tenancy for non-payment of rent) that specifies a termination date of 14 days after the notice is given. The 14-day notice period is an important protection to allow renters to fix the issue before the termination date passes.
Presently, if there were an error calculating the termination date, an eviction hearing would not proceed. Under this proposed change, the LTB could proceed with the eviction hearing even though the notice had an incorrect termination date saying it would not “prejudice” the tenant from participating in their hearing. This could allow more bad faith evictions if these safeguards in the forms are not followed. This proves the province is prioritizing being fast over being fair, which is something higher Courts have consistently ruled they should not do. It also introduces greater uncertainty for the parties because they cannot be sure the LTB is correctly applying the rules in the RTA to their case.
Rather than allowing the LTB to ignore the law, the province should reconsider a return to the in-person services provided through the six regional LTB centres (in Sudbury, London, Hamilton, Toronto, Mississauga, and Ottawa). These service centres allowed applicants to file their documents and have them reviewed for errors before being scheduled. The centres could provide valuable information on the important documents that parties need to file and remove the digital barriers that participants face when accessing the LTB’s services today only through the online portal.
The changes set out in Bill 227 are not the solutions that landlords and tenants wanted. It will, however, weaken renter protections, which will in turn put more Ontarians at risk of homelessness and increase the rate at which affordable units are lost.
Solutions for the Landlord and Tenant Board
The best way to address the concerns Bill 277 sets out to fix is a return to in-person hearings, reinstate regional scheduling for hearings, and reopen the regional LTB centres.
Before 2020, the LTB was able to manage its current caseload with 1/3 the number of adjudicators they have now, all without removing renter protections. Back then, the LTB had wait times of less than two months for both landlords and tenants. This was partly because there were mediators there to proactively resolve matters before a hearing at every hearing block (unlike today’s LTB where mediators are less available).
There is no reason not to return to the processes that worked before. These solutions are also supported by tribunal experts like Tribunals Watch Ontario, municipalities including Toronto, Hamilton, Chatham Kent, by landlords such as the Small Landlords of Ontario, and by property managers and agents at the Toronto Regional Real Estate Board, and health care professionals. If Ontarians already agree on the solutions to the problems at the Landlord and Tenant Board, why won’t the province listen?