A Much-Weeded Clarification: Ontario Provides Guidance on Bill 10 as it Comes into Force.

By: John Fox and Adin Fine

When Ontario first introduced Bill 10, Protect Ontario Through Safer Streets and Stronger Communities Act, 2025, many questions remained unanswered regarding the scope of the proposed Measures Respecting Premises with Illegal Drug Activity Act, 2025 (the “Act"). In our previous articles on Bill 10, we examined those uncertainties, including who the legislation would apply to, what conduct would trigger liability, and what "reasonable measures" landlords would be expected to take. Those articles can be accessed here and here.

With the Act now in force as of July 1, 2026, the Ontario government has recently issued a guidance document providing some important clarification. While a degree of uncertainty remains, the regulations and accompanying guidance significantly limit the Act's scope and offer greater direction for commercial landlords.

The Act Currently Only Applies to Commercial Landlords

As of date of this article, the Act only applies to landlords who lease premises for commercial use. However, the Act includes not-yet-in-force provisions that, once in force, will broaden its application to include both residential landlords, and commercial and residential tenants who sublet.

In addition, landlords of certain categories of premises are expressly excluded from the Act’s application, including:

• retirement home (as defined in subsection 2 (1) of the Retirement Homes Act, 2010)
• long-term care homes (as defined in as defined in subsection 2 (1) of the Fixing Long-Term Care Act, 2021); and
• premises providing homelessness prevention and support services, including emergency shelters and providers of health and social services.

This last exclusion is not defined and we encourage the government to be more specific, excluding, for example, housing co-ops and non-profits with housing mandates (similar to the definition in the Development Charges Act), along with local housing corporations.

Prohibited Conduct: Permitting Illegal Drug Production and Possessing its Proceeds

Commercial landlords commit an offence under the Act if they:

1. knowingly permit their premises to be used in relation to a prescribed offence under the Act; or
2. knowingly possess proceeds derived from a prescribed offence under the Act.

As of the date of this article, Ontario has prescribed only one offence under the Act: Section 7.1(1)(a) of the Controlled Drugs and Substances Act, which prohibits possessing, producing, selling, importing or transporting anything intended to be used in the unlawful production of a controlled substance.

While this is a significantly narrower scope than many anticipated when the legislation was first introduced, it is important to keep in mind that additional offences could be prescribed over time.

There Is No Duty to Proactively Investigate

One of the principal concerns identified in our earlier articles was whether landlords would be expected to actively monitor tenants in order to avoid liability. The guidance confirms that the Act does not create a new obligation requiring landlords to proactively investigate whether tenants are engaging in activities related to illegal drug production. However, it also cautions that once a landlord believes or suspects that illegal drug production is occurring and fails to take further steps to confirm that belief, the landlord may nevertheless be found to have knowingly permitted the activity.

The guidance recommends several actions a landlord can take before they have any suspicions that can reduce the chance that unlawful drug production, or its related activities are occurring on their premises. These actions are listed in Appendix “A”.

It is important to note that these actions are merely recommendations; none of them are required to meet the statutory defence, discussed in more detail below.

The "Reasonable Measures" Defence Now Has Practical Content

Our earlier articles observed that the Act provided no guidance regarding what constituted "reasonable measures" for the purposes of the statutory defence. Although the legislation itself remains unchanged, the issued guidance document identifies several measures that may demonstrate taking “reasonable measures” to prevent illegal drug production once the landlord becomes aware or reasonably suspects it is taking place on their premises. These actions are listed in Appendix “B”.

Despite these recommended actions, the guidance document emphasizes that what constitutes “reasonable measures” will depend on the circumstances of each case.

Guidance Regarding Suspicious Activity

The guidance has also included examples of indicators that may suggest illegal drug production and its related activities, including physical indicators (e.g. odours), behavioural indicators (e.g. being secretive), and supply indicators (e.g. delivery of chemicals at night). A complete list of these indicators and related examples is listed in Appendix “C”.

These examples do not create specific legal obligations but do provide practical guidance for commercial landlords assessing whether further inquiry may be warranted.

Police Powers Are More Limited Than Initially Feared

Our earlier articles discussed the broad enforcement powers granted to police under the Act. The guidance document has now clarified that these powers are directed exclusively at commercial premises. Where officers have reasonable grounds to believe that a commercial landlord is permitting the prescribed offence to occur on their premises, they may take a number of actions, listed in Appendix “D”.

The guidance expressly confirms that the powers to remove occupants and close premises do not apply to residences.

Remaining Questions

Although the guidance resolves many of the uncertainties identified when Bill 10 was introduced, several legal questions remain.

The legislation continues to leave "reasonable measures" undefined, and the guidance, while helpful, is not legally binding. Courts will ultimately determine the scope of landlords' obligations and the circumstances in which the “reasonable measures” defence is available.

It also remains unclear what constitutes “possessing the proceeds” of unlawful drug production. Unlike permitting unlawful drug production, this rule does not offer landlords a “reasonable measures” defence. Whether accepting rent payments after discovering illegal activity would violate this rule remains uncertain, leaving landlords vulnerable to unintended consequences.

Conclusion

The scope of the Act as it comes into force represents a considerably more targeted regime than many anticipated when Bill 10 was first introduced. Yet, many questions still remain. As enforcement begins and the courts interpret the legislation, further clarity regarding the meaning of "reasonable measures" and what will be considered “possession of proceeds” will likely emerge. Be that as it may, Landlords should seriously consider implementing the measures described in Appendix “A”, if not already part of their operations.

Appendix “A”

Actions a landlord can take to reduce the chance that a prescribed offence takes place on their premises:

• Implementing oversight measures such as inspections and installing security systems where appropriate;
• Educating staff, property managers and board members on their responsibilities;
• Establishing internal protocols for responding to suspected illegal activity;
• Consulting with legal counsel for lease drafting, risk management, and compliance strategies; and
• Reviewing and updating lease agreements to permit termination upon the discovery of illegal activity.

Appendix “B”

Measures that may demonstrate taking “reasonable measures” to prevent illegal drug production once a landlord becomes aware, or reasonably, suspects it is taking place on their premises:

• contacting the police;
• gathering further information about the activities occurring on the premise;
• conducting a reasonable inspection of the premise if permitted by their lease;
• taking steps to lawfully evict the tenant, in accordance with the Commercial Tenancies Act and their lease; and
• ensuring a tenant cannot regain access to the premises following a lawful eviction.

Appendix “C”

Physical Indicators:

• stronger unusual chemicals (e.g., ammonia);
• excessive condensation;
• blacked out windows;
• corrosion in stove/sink;
• modified vent; and
• unexplained modifications to the premise and utility flags (water, electrical).

Behavioural Indicators:

• tenants refusing entry;
• high foot traffic at all hours;
• rent cash payments;
• short-term occupants rotating through the premise;
• refusing criminal checks;
• avoiding other tenant interactions; and
• being secretive.

Supply indicators:

• Large quantities of chemicals;
• deliveries at night of chemicals;
• dumping chemicals down sinks causing corrosion; and
• garbage such as glass or chemical containers.

Other Indicators:

• waste being dumped;
• disheveled properties (especially rural);
• properties where nobody is living but people are coming and going at all hours; and
• a driveway/parking lot not shoveled.

Appendix “D”

Where officers have reasonable grounds to believe that a commercial landlord is permitting the prescribed offence to occur on their premises, they may:

• seize items as evidence;
• order persons to vacate commercial premises, unless such persons are living there;
• close commercial premises where charges have been laid and the premises were allegedly used in committing the offence, unless the premises serve as a residence; and
• seek recovery of certain enforcement costs through the courts.

John Fox is a Partner and Head of our Affordable & Social Housing at Robins Appleby LLP and Adin Fine is a summer student.

At Robins Appleby, we have been providing legal advice for over 70 years to entrepreneurs, businesses, financial institutions, and foreign companies operating in Canada. Located in Toronto's financial district, our firm is trusted by clients to help solve critical, time-sensitive issues. We offer a wide range of legal services including business and transactions, affordable and social housing, litigation and dispute resolution, commercial real estate development, tax law, employment law, and estate planning.