Analyzing Bill 97, the Helping Homebuyers, Protecting Tenants Act, 2023

On April 6, 2023, Ontario announced the next steps in its plan to build 1.5 million homes by 2031. Two key components of this announcement are the introduction of Bill 97, the Helping Homebuyers, Protecting Tenants Act, 2023 (“Bill 97”), and the release of a draft Provincial Planning Statement to replace the current Provincial Policy Statement and the Growth Plan. Our overview of the draft Provincial Planning Statement can be viewed here.

Bill 97 carried through the Ontario legislature for first reading on April 6, 2023. Bill 97 is the latest of a series of legislative amendments intended to facilitate Ontario’s Housing Supply Action Plan and increase housing supply in the province.

The bill proposes to introduce amendments to the following statutes:

1. Building Code Act, 1992
2. City of Toronto Act, 2006
3. Development Charges Act, 1997
4. Ministry of Municipal Affairs and Housing Act
5. Municipal Act, 2001
6. Planning Act
7. Residential Tenancies Act, 2006

Bill 97 will be subject to further readings by the legislature, as well as potential committee review, and may be amended through that process. While some of the proposed legislative changes are consequential and will be of great interest to the development community, municipalities and landowners, other proposed changes are largely in the nature of housekeeping amendments. Highlights from the first reading of Bill 97 are discussed below.

1.    City of Toronto Act, 2006/Municipal Act, 2001

Rental Replacement Regulations

Schedules 2 and 5 of Bill 97 propose to introduce changes respecting the regulation of demolition and conversion of residential rental properties, and site plan control (in the City of Toronto, Schedule 2 only). These proposed changes build upon previously enacted measures in Bill 23 and Bill 109.

Section 111 of the City of Toronto Act, 2006 and companion section 99.1 of the Municipal Act, 2001 authorize municipal council to regulate the demolition and conversion of residential rental properties.

Bill 23 amended these statutory provisions to grant the Minister of Municipal Affairs and Housing (the “Minister”) the authority to make regulations imposing limits and conditions on the powers of a local municipality to prohibit and regulate the demolition and conversion of residential rental properties. These sections are further amended by Bill 97 to provide details on what may be subject to ministerial regulation, establishing that the Minister may make regulations:

• imposing restrictions, limits and conditions on the powers of the municipality to prohibit and regulate the demolition and conversion of residential rental properties;
• prescribing requirements to be contained in by-laws passed under section 111/section 99.1;
• prescribing conditions that the City (or local municipalities) must include as a requirement for obtaining a permit;
• prescribing requirements that the City (or local municipalities) must impose on owners of land to which a by-law passed under section 111/section 99.1 applies;       
• prescribing the amounts to be paid, the compensation to be provided, the persons to whom payments and compensation shall be made and the circumstances in which payments and compensation shall be made;
• prescribing steps the City (or local municipalities) must take or conditions that must be met before passing a by-law under this section and governing any transitional matters.

Draft regulations have not yet been published.

Site Plan Control

Schedule 2 of Bill 97 (in conjunction with a proposed regulation) also makes a change to the less-than-10-unit exclusion from site plan control that was introduced through Bill 23. This change would allow site plan control to apply to developments of less than 10 residential units where the development is proposed within 120 metres of a shoreline or 300 metres of a railway line. A similar amendment is proposed to the site plan control sections of the Planning Act through Schedule 6 of Bill 97.

Finally, Schedule 2 of Bill 97 delivers on an earlier proposal from the Minister to delay the effective date of the Bill 109 application fee refund requirements until July 1, 2023. Any refunds that would have been owed prior to that date are proposed to be retroactively voided. Further detail is provided below.

2.    Planning Act

Fee Refund Provisions

In April 2022 (under Bill 109), the Planning Act was amended to introduce a requirement that municipalities shall refund application fees if the municipality fails to meet statutory deadlines for decisions on zoning by-law amendment applications, combined zoning by-law/official plan amendment applications, and site plan approval applications. These refund requirements came into force on January 1, 2023.  

Schedule 6 of Bill 97 proposes amendments which will delay the commencement of these refund provisions to July 1, 2023. In addition, new proposed subsections 34 (10.13) and 41 (11.2) provide that any refunds that would have been owing for applications filed before July 1, 2023, are cancelled. Finally, new subsections 34 (10.14) and 41 (11.3) propose to create a regulation-making authority to exempt certain municipalities from the fee refund provisions in the future. Which municipalities will benefit from this proposed exemption has not yet been disclosed. 

Area of Employment

The scope of what constitutes an “area of employment” would be narrowed if Schedule 6 of Bill 97 is passed. The present definition under subsection 1(1) of the Planning Act defines an area of employment as lands designated in an official plan for clusters of business and economic uses including (but not limited to) manufacturing uses, warehousing uses, office uses, associated retail uses and ancillary facilities. 

Bill 97 proposes to expressly exclude institutional uses and commercial uses, which include retail and office uses not associated with primary industrial uses, from the list of uses. The exclusion will likely mean that sites that are currently designated as an “area of employment” in an official plan (e.g., a site with an office building or a hospital) may no longer be identified as “employment” and no longer be subject to the employment areas policies, particularly those dealing with employment conversion set out in the newly proposed Provincial Planning Statement.

Furthermore, a new subsection 1(1.1) would be added to the Planning Act. That provision provides that an area of employment with institutional or non-associated commercial uses would nevertheless be deemed an “area of employment” for the purposes of the Planning Act, provided the following two conditions are satisfied:

(1) the lands in question are subject to official plan policies authorizing the continuation of the use; and

(2) the use was lawfully established on the land before the day the Bill 97 modified “area of employment” definition came into force. 

The effect of this addition appears to allow municipalities to maintain the status quo, provided it adopts official plan policies that specifically authorize the continuation of that lawfully existing use prior to the modified “area of employment” definition coming into effect.

Appeals of Interim Control By-laws

Section 38 of the Planning Act permits a municipality to pass an interim control by-law (“ICBL”). An ICBL may be passed without notice and may prohibit the use of land, buildings or structures for the purposes set out in the ICBL, and for the period of time set out in the ICBL (not to exceed two years). The power to enact an ICBL is an extraordinary one, typically exercised in situations where an unforeseen issue arises within the terms of an existing zoning permission, as a means of providing breathing space during which time the municipality may study the issue and determine the appropriate planning policy and controls.

Prior to 2017, ICBLs were capable of being appealed to the Ontario Land Tribunal within 60 days of passage. This appeal right was removed through Bill 139, which allowed private appeals of the renewal of an ICBL, but limited appeals within the first year of the ICBL to only the Minister. 

Schedule 6 of Bill 97 proposes amendments to section 38 of the Planning Act to shorten the period of time within which the clerk of a municipality is required to give notice of the ICBL (from 30 days to 20 days) and to enable an individual who received notice of the passing of an ICBL to file an appeal at the time of initial passing (rather than at the time of extension).

3.    Residential Tenancies Act, 2006

Schedule 7 of Bill 97 proposes several changes to the Residential Tenancies Act, 2006 to provide additional rights to tenants related to the use of window air conditioning units. Changes are also proposed affecting notices of termination based on renovations or repairs to the rental unit.  

Air Conditioning Units

Bill 97 proposes to introduce a new section 36.1, which will permit a tenant to install and use a window or portable air conditioner where the landlord does not supply air conditioning, subject to certain conditions such as the tenant providing notice to the landlord, the air conditioner being installed safely and securely, and the installation of the air conditioner not being prohibited by any applicable law.

Section 36.1 also establishes that the landlord may prohibit a tenant from installing an air conditioner in circumstances prescribed by regulation, and rules governing the impacts on rent are introduced.

Termination for Repairs/Renovations

Subsection 50(1) of the Residential Tenancies Act, 2006 allows a landlord to serve a notice of termination if the landlord intends to undertake repairs or renovations that are so extensive that they require a building permit and vacant possession of the rental unit. Currently, if a tenant is given a notice of termination due to extensive repairs or renovations, the tenant has the right to move back into the unit once the repairs are complete. Schedule 7 of Bill 97 proposes to enhance tenant protections related to such notices of termination.

Subsection 50(3) of the Residential Tenancies Act, 2006 is proposed to be amended to provide that a notice of termination for extensive repairs or renovations must be accompanied by a report prepared by a qualified person, which states that the repairs or renovations are so extensive that they require the vacant possession and which meets any other prescribed requirements. A landlord’s failure to provide this report renders the notice void. Subsection 73(4) is also proposed to be amended to require the Landlord and Tenant Board to consider the report when determining whether to make an order terminating the tenancy, although the Board will not be bound by the report.

A tenant who receives notice of termination of a tenancy for the purpose of repairs or renovations has the right to move back into the unit once the repairs are complete. Schedule 7 of Bill 97 introduces new provisions to address the requirement of status updates and notices to the tenant to permit the tenant to exercise this right.

Section 53 of the Residential Tenancies Act, 2006 is proposed to be amended to provide that, if a tenant gives notice that they wish to exercise their right to return to the unit, the landlord must provide specified notices to the tenant respecting the unit’s readiness for occupancy. When the unit is ready for occupancy, the landlord must give the tenant at least 60 days to exercise the right of first refusal to re-occupy the unit. Schedule 7 of Bill 97 further proposes to amend section 57.1 to provide that a failure to comply with the notice requirements is deemed to constitute a failure to have afforded a right of first refusal to re-occupy.

N12 Notice of Termination Given in Bad Faith

Section 48 of the Residential Tenancies Act, 2006 allows a landlord to give a notice of termination if, in good faith, the landlord, their spouse, or a child or parent of one of them or a person who will provide care services to one of them, requires possession of the rental unit for the purpose of residential occupation. Schedule 7 of Bill 97 proposes to introduce a new subsection providing that if none of these specified persons occupy the rental unit within the prescribed period of time after the former tenant vacated the rental unit, it is presumed that the landlord gave the notice of termination under section 48 in bad faith, and the tenant may be entitled to a remedy.

Increase in Maximum Fines

Certain conduct by a landlord can result in prosecutions pursuant to the Residential Tenancies Act, 2006. Maximum penalties are established in section 238. Schedule 7 of Bill 97 proposes to amend this section to increase the maximum fines from $50,000 to $100,000 in the case of an individual person convicted of an offence, and from $250,000 to $500,000 in the case of a corporation.