The Ontario government has extended existing protections from commercial tenancy evictions.
Bill 229 (Protect, Support and Recover from COVID-19 Act (Budget Measures), 2020) received Royal Assent on December 8, 2020 and introduced an extension of the eviction moratoriums originally imposed under Bill 192 (Protecting Small Business Act, 2020) and Bill 204 (Helping Tenants and Small Businesses Act, 2020).1
Overview of the Legislation
Schedule 5 of Bill 229 amends Part IV of the Commercial Tenancies Act (RSO 1990) (the "CTA"), and extends protections from eviction and distress for commercial tenants that were in force until October 30, 2020 under Bill 192 and Bill 204. In particular, Bill 229 provides that during the "Non-Enforcement Period", the following actions with respect to eligible commercial tenancies will be prohibited:
- judges will be prohibited from ordering a writ of possession based on arrears of rent;
- landlords will be prohibited from exercising any self-help rights of re-entry or termination; and
- landlords will be prohibited from exercising any rights of distress for arrears of rent.
The original eviction moratoriums under Bill 192 and Bill 204 applied to commercial tenancies where the landlord received or was eligible to receive assistance under the former Canada Emergency Commercial Rent Assistance (the "CECRA") program. While the CECRA program has since been replaced as of September 30, 2020 with the Canada Emergency Rent Subsidy (the "CERS")2, Bill 229 still utilizes the CECRA program for eligibility.
The eviction moratorium under Bill 229 applies to tenancies where the landlord:
- is or was eligible to receive assistance under the CECRA;
- is receiving or has received assistance under the CECRA;
- would have been eligible to receive assistance under the CECRA program if the tenant and landlord had entered into a rent reduction agreement containing an eviction moratorium; or
- would have been eligible to receive assistance under the CECRA if the program was still running.
The moratorium on evictions for tenancies eligible under the CECRA (the "CECRA Moratorium") is retroactive to October 31, 2020.
On December 17, 2020, the Ontario government enacted regulation O. Reg. 763/20: Non-Enforcement Period - Prescribed Tenancies (the "Regulation") under the CTA, to further clarify the protections available to commercial tenants under Bill 229. The fundamental elements of the Regulation include the following:
- The Regulation confirms that the CECRA moratorium will continue until January 31, 2021;
- The Regulation adds a new moratorium under Bill 229 for the class of protected tenancies under the CERS (the "CERS moratorium"), which includes any tenancy that:
- has been approved to receive CERS;
- has provided proof of the CERS approval to its landlord; and
- not more than 12 weeks have passed since the day the tenant was approved for the CERS.
CECRA related tenancies will continue to receive the eviction and distress protections under Bill 229 until January 31, 2021. After January 31, 2021, only tenants that satisfy the above criteria for the CERS will be able to receive protection under Bill 229. In addition, the Regulation provides that the "non-enforcement period" for CERS related tenancies is not retroactive. The "non-enforcement period" begins on December 17, 2020 and will expire on April 22, 2022.
Impact on Landlords and Tenants
Pursuant to the Regulation, tenants who were previously ineligible for CECRA and the eviction moratorium can now receive the benefit of the eviction moratorium under Bill 229 if they qualify for CERS. The CERS moratorium, however, is not retroactive — tenants who were previously ineligible for CECRA will not be protected from the landlord's right of re-entry or the remedy of distress prior to the CERS moratorium coming into effect.
Under the new Regulation, as noted above, to receive protection from the CERS moratorium under Bill 229, tenants must provide proof of their CERS approval. If a landlord has not received requisite proof of CERS from a tenant, the landlord is entitled to exercise its remedies under its lease, including the remedies of eviction and distress, as a result of a tenant's default.
How Do Tenants Qualify for Protection under Bill 229?
Tenants may apply for the CERS for various qualifying periods, as established by the federal government. To qualify, an eligible business, charity, or non-profit entity must have experienced a drop in revenue as a result of the COVID-19 pandemic during the claim period for which they are applying.
The tenant will receive the benefit of the CERS moratorium for up to 12 weeks following approval. However, a tenant can qualify for more than one approval for the CERS. For example, if a tenant reapplies and is approved for a new CERS period, the CERS moratorium would begin from the date of approval for the subsequent CERS period and would expire 12 weeks after the date of the new CERS approval.
Please contact our Ontario real estate team for any questions you may have regarding the new legislation and the eviction moratorium.
1 For more information on Bill 192, please see our earlier bulletin Ontario Government Introduces Bill 192 - Protecting Small Business Act, Temporarily Halting the Eviction of Small Business Commercial Tenants.
2 For more information on the CERS, please see our earlier bulletin New Canada Emergency Rent Subsidy (CERS) Program for Commercial Tenants and Property Owners
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