Bill 184: Summary of ONPHA’s legal analysis

Introduction

Bill 184, Protecting Tenants and Strengthening Community Housing Act, 2020 (Bill 184) represents the culmination of several years of consultation between the Province and the community and rental housing sectors. The Bill aims to modernize the community housing sector, in addition to creating more accountability for tenants and landlords in the rental housing sector. It was tabled in the Ontario legislature on March 12, 2020 and after passing Second Reading on May 27, 2020, has been referred to the Standing Committee on Social Policy.

Importantly, Bill 184 is enabling legislation, meaning that many of the details related to the proposed changes will come through regulations.

ONPHA is currently preparing a submission to the Standing Committee focusing on the relevant aspects of the Bill for the community housing sector, with a strong focus on ensuring the long-term sustainability of community housing providers at the end of mortgage and operating agreements, maintaining and/or expanding service levels and engaging with ONPHA and the sector on an ongoing basis to inform the development and implementation of the legislation’s forthcoming regulatory framework.

Shortly after Bill 184 was tabled, ONPHA sought a legal opinion from Robins Appleby LLP to assess the potential impacts and implications of the legislation on the sector. This document presents an overview of the legal analysis. The full version is available here.

The Bill proposes four key areas of change, including:

• Amendments to the Building Code Act, 1992
• Amendments to the Housing Services Act, 2011
• Enforcement of the Ontario Mortgage and Housing Corporation Repeal Act, 2020
• Amendments to the Residential Tenancies Act, 2006

Proposed Changes to the Building Code Act, 1992

Bill 184 proposes the creation of a new authority to administer certain aspects of the building code regime (the Building Code Act, 1992 and Ontario’s Building Code, collectively the BCA).

Currently, municipalities, Boards of Health and Conservation Authorities (Principal Authorities) are responsible for enforcing BCA provisions. Bill 184 proposes to amend the BCA by creating a new, non-governmental, non-profit organization with the authority to administer and oversee the current responsibilities of Principal Authorities. Details of the specific responsibilities to be delegated to the new authority and the potential overlap and/or conflict with existing Principal Authorities remain unknown. Potential benefits could include the implementation of standard application processes across jurisdictions and the potential for a more responsive Principal Authority that will accelerate approval processes for new housing projects in jurisdictions with fewer resources, which ONPHA will highlight in our advocacy.

Proposed Changes to the Housing Services Act, 2011

The Housing Services Act, 2011 (HSA) is the most significant piece of legislation governing the community housing sector and many of the proposed changes in Bill 184 impact the HSA. The proposed changes relate to rent-geared-to-income (RGI) administration, service levels and expiration of operating agreements and mortgages.

RGI administration and service levels

The proposed changes would only allow Service Managers to make local eligibility rules related to matters to be determined through regulation. This would remove sections of the HSA that determine the number of households that receive RGI assistance and the number of accessible units Service Mangers must provide, and potentially change Service Manager authority over local rules for RGI eligibility.

In addition, the proposed changes would require Service Managers to provide assistance in accordance with regulations, including the levels at which assistance must be provided. Regulations would also determine specifications related to services provided through the access system.

As such, these proposed changes and the forthcoming regulations have the potential to significantly change how Service Managers operate, including:

• Number of RGI units to be provided
• Eligibility requirements for RGI
• Methods of providing assistance (e.g., rent supplement)
• Number of accessible units to be provided
• Priority rules
• Waiting list management
• Ability to determine local eligibility rules

ONPHA’s forthcoming advocacy will focus strongly on the need to maintain current service levels and create opportunities for expansion, expand eligibility assistance to (at a minimum) align with eligibility criteria for the Canada-Ontario Housing Benefit (with consideration for broader eligibility to meet growing needs due to COVID-19), ensure priority of assistance is administered equitably to meet the diverse housing needs across the province and ensure the access system is comprehensive, standardized and accessible to meet the needs and gaps across the housing system.

Exit agreements

Top of mind for ONPHA and housing providers is the need for a supportive and flexible operating and funding frameworks for providers upon the expiration of their operating agreements and mortgages. The proposed changes in Bill 184 would provide a mechanism (exit agreements) for delisting housing projects from the HSA and removing them from all related obligations (e.g., operating and reporting standards, maintaining a set number of RGI units). To become delisted, a housing project would need to meet prescribed criteria (to be determined through regulation), the housing provider and the Service Manager would need to enter into an exit agreement that complies with prescribed requirements (to be determined through regulation) and jointly notify the Minister of Municipal Affairs and Housing.

Service agreements

In addition to the delisting process, Bill 184 also proposes another mechanism (service agreements), in which housing projects would still be governed in part by the HSA and housing providers would enter into service agreements with Service Managers in compliance with prescribed requirements (to be determined through regulation). These requirements may include operating obligations for the housing provider and funding commitments from the Service Manager.

Considering many of the details related to the exit and service agreements will be determined through regulation, ONPHA will be strongly advocating for broad sector engagement in developing these regulations, with a focus on flexibility and ongoing support for providers.

Ontario Mortgage and Housing Corporation Repeal Act, 2020

The Ontario Mortgage and Housing Corporation Repeal Act, 2020 would dissolve the Ontario Mortgage and Housing Corporation (OMHC) and transfer its assets, liabilities, rights and obligations to the Province. Currently a statutory corporation, OMHC manages and administers obligations of former housing programs (e.g., debt retirement, environmental obligations), insures certain CMHC social housing mortgages and manages legacy mortgages and land leases from former housing programs.

Managing liabilities

OMHC appears to have long-term debt from loans related to housing that has been transferred to Local Housing Corporations, as well as environmental remediation liabilities (related to obligations to clean up environmental contaminants of former public housing properties) associated with Toronto Community Housing Corporation redevelopment projects. It is unclear who is currently responsible for the environmental liabilities and who will carry them if OMHC is dissolved.

OMHC also appears to have excess revenues from provincial subsidies and it is unclear whether those funds will be available for the sector or rolled into other provincial programs. ONPHA’s advocacy will also focus on seeking clarity on these items and reinforcing previous positions for housing dollars to stay in housing.

Property transfer

The Ontario Mortgage and Housing Corporation Repeal Act, 2020 would also give the Minister of Municipal Affairs and Housing authority to either sell or dispose of OMHC-owned properties. This would include transferring properties to municipalities, which could be done without notice to or consent from the municipality. It is unclear whether OMHC still owns properties, but if so, municipalities will need to ensure they are not receiving them without notice or consent.

Proposed Changes to the Residential Tenancies Act, 2006

Many of the proposed changes to the Residential Tenancies Act, 2006 (RTA) will have minimal impact on community housing providers, as most relate to Section 7, from which providers are exempt. Further details on those proposed changes can be found in the full legal analysis.

Landlord and Tenant Board

Proposed changes to Landlord and Tenant Board (LTB) processes would prevent tenants from being able to raise any related issues at an eviction hearing for non-payment of rent. Instead, tenants would need to provide advance notice to the landlord regarding the related issue, or provide the LTB with a satisfactory explanation on why the issue was not raised in advance. For community housing providers following eviction prevention policies and engaging with tenants, the impacts of these proposed changes should be minimal.

Proposed changes to LTB applications would require landlords seeking to end tenancies due to the landlord or purchaser taking-over the unit or the demolition, conversion or repair of the unit to provide an affidavit indicating whether they had given any related notices within the previous two years. These proposed changes are meant to minimize bad faith evictions, which should have a minimal impact on community housing providers, providing they act in good faith.

Tenant compensation

In the event of a new purchaser taking over a building with three units or less, proposed changes would require landlords to give a notice of termination of tenancy on behalf of the purchaser and either compensate the tenant one month’s rent or offer another unit. The impact of these proposed changes should be minimal for community housing providers, who would likely offer a transfer for the tenant.

With respect to compensating tenants for bad faith tenancy terminations, proposed changes would allow the LTB to require the landlord to compensate the tenant one year’s worth of rent. While community housing providers are subject to these proposed changes, the impact should be minimal, as providers are exempt from rent increase guidelines that often precipitate such bad faith evictions.

For former tenants owing rental arrears, proposed changes would allow landlords to pursue the tenant through the LTB within one year after the tenant ceased possession of the unit (currently landlords can only do so through other venues, such as small claims court, once the tenant has moved out). Landlords would also be able to pursue former tenants for owed utility costs and out-of-pocket expenses related to interference with reasonable enjoyment of the residence.

In light of the mounting backlog of LTB hearings due to the COVID-19 eviction moratorium, in addition to previous concerns around low staffing levels and community housing expertise at the LTB, ONPHA’s forthcoming advocacy will focus on the need for elevated LTB staffing levels and training to meet existing needs, as well as proposed changes that would increase LTB responsibilities and workloads.

Mediation

Proposed changes would provide flexibility for landlords and tenants to resolve disputes, either through mediation or other less formal dispute resolution processes. While this may expedite the resolution process, it may also disadvantage tenants, who often have less resources and knowledge related to landlord-tenant law. If implemented, the LTB would need to provide appropriate scrutiny to non-mediated settlement agreements to ensure equitable resolutions.

Other proposed changes with minimal impact on community housing providers:

• Increased authority for the Ministry to investigate those in breach of the RTA
• Increased penalties for landlords breaching the RTA
• Exemption for land lease homes from the RTA in an employment context
• One-year time limit for tenants to pursue reimbursement for illegal rent increases through the LTB (while the majority of community housing units  are not subject to rent increase guidelines under the RTA, it is advised they develop internal policies related to compensating tenants for incorrectly charged rent)

Next Steps

Stay tuned to ONPHA’s communication channels for ONPHA’s forthcoming submission to the Standing Committee on Social Policy related to Bill 184. If you have questions about the proposed changes or feedback to inform ONPHA’s advocacy, please reach out to member.support@onpha.org.

In the coming months, ONPHA will also be seeking input from members, partners and stakeholders to co-design solutions for end of operating agreements and mortgages to guide the development of Bill 184’s regulatory framework and help meet the needs of your organizations.

ONPHA is continuing to work closely with our municipal, provincial, federal and sector partners to develop and advocate for solutions to ensure that that the community housing sector is sustainable and supported for the long-term and can continue meeting the needs of our communities.