Housing and Bill 97

by Kavita Pandya and John Fox

On April 6, 2023, two key measures were announced as part of a series of legislative changes aimed at supporting Ontario’s Housing Supply Action Plan. The first is the introduction of Bill 97- Helping Homebuyers, Protecting Tenants Act, 2023 (“Bill 97”) which is an extension of the Government’s ongoing efforts to address the housing crisis and build 1.5 million homes by 2031. The second is the publication of the New “Draft Provincial Planning Statement”.

The Robins Appleby Housing Group would like to underline three changes of interest to housing providers and advocates.

1. Changes with respect to the Rental Replacement Regulations:

   Bill 97 builds on the singular change relating to Rental Replacement included in Bill 23- The More Homes Built Faster Act (“Bill 23”) which came into force in the fall of 2022. Bill 23 permits the Minister of Housing to make changes to regulations imposing limits and conditions on municipalities’ authority to adopt rental replacement policies, which regulate the demolition or conversion of rental properties of six units or more.
   

   Bill 97 expands on this regulation-making power. The changes aim to regulate matters such as: (i) setting up minimum requirements for landowners to give tenants the option to rent a 'replacement unit’; (ii) setting rules regarding the type of compensation required for displaced tenants; (iii) prescribing minimum requirements for landowners to build replacement units; and (iv) limiting municipalities from imposing minimum square footage requirements for replacement units. By implementing these proposed changes, the provincial government intends to create a balanced framework around municipal rental replacement by-laws.
   

   Taken together, there is still no way of knowing what kind of regulatory framework will end up being implemented. Indeed, feedback is presently being sought. However, the introduction of provisions that appear to create a payment-in-lieu option suggest that the government is open to the concept of a developer buying their way out of rental replacement, rather than banning the practice altogether. To state the obvious, the geographic benefits of rental replacement – keeping affordable units in diverse parts of the City – would be lost, should that be the case. In addition, it’s hard to see the government seeking to impose the cost of replacing a unit on a developer,
   

   Commensurate changes have also been made to the Municipal Act, so that all municipalities are expected to be similarly impacted.  
   

2. Enhanced tenant protection under The Residential Tenancies Act, 2006 (the “RTA”):
   

   Changes proposed under the RTA revolve around strengthening tenant protection during eviction due to demolition, extensive renovations, conversion or personal use by the landlord.
   

   Changes under section 50(3) of the RTA propose an additional requirement for a landlord seeking to evict a tenant as a result of repairs and renovations. The landlord would now need to obtain a report prepared by a qualified person stating that the repairs/renovations are so extensive as to require the unit to be vacant before issuing a notice of termination. Failure to meet this requirement will render the notice void.
   

   Landlords are also now required to provide the tenants an estimate of when the unit will be ready for occupancy and inform them (in writing) of any known delay in occupancy of the unit. Failure to comply with the notice requirements is deemed to constitute a failure to have afforded a right of first refusal to re-occupy under Section 53(1) of the RTA.

   Another change proposed under Bill 97 is the introduction of a new subsection, which provides that if none of the specified persons under section 48 (usually the landlord itself or a relative) occupy the rental unit within the prescribed period of time after the former tenant vacates the rental unit, it is presumed that the landlord gave the notice of termination in bad faith, unless the contrary is proven on a balance of probabilities.  

   These changes aim to enhance tenants’ rights under the RTA against wrongful termination. This is augmented by the fact that the penalty for non-compliance is being doubled to $100,000 for individuals and $500,000 for corporations.

3. Removal of the term “Affordability” under the New Draft Provincial Planning Statement:
   To increase the housing supply and help speed up planning approvals, the government is proposing to combine the existing Provincial Policy Statement (the “PPS 2020”) with A Place to Grow: Growth Plan for the Greater Golden Horseshoe (the “Growth Plan”) into a single document called the Draft Provincial Planning Statement (the “PPS 2023”).
   
   The term “affordability”[1] is defined in PPS 2020 in terms of income for both rental and ownership housing. PPS 2023 proposes to remove “affordability” as a defined term. In so doing, the government is making the PPS 2023 consistent with its choice to define affordability relating to market rents and sales, rather than income. This aligns with the proposed revision to the inclusionary zoning regulation introduced in Bill 23, and changes to the Development Charges Act, which set the affordable prices/rents at 80% of the average resale purchase price or average market rent.