In a decision released November 9, 2022, Justice Perell granted the Greater Toronto Apartment Association’s (“GTAA”) request to declare the City’s “RentSafeTO” emergency accommodation fee unenforceable and void.
The intention of the By-law was to allow the City to collect from apartment owners the City’s cost of emergency social services provided to tenants displaced from their apartments. The By-law’s intention was to impose the obligation to provide or pay for emergency social services regardless of the reason for displacement. It was a no-fault regime where apartment owners were required to rehouse its tenants even were tenants were at fault. While the City can choose to house displaced tenants, Justice Perell held that the City cannot require apartment owners to provide the services as a condition of owning an apartment. Justice Perell agreed that the By-law imposed an improper user fee on landlords as they received no service or benefit in exchange for the fee, which was not prescribed or capped and was determined by staff. Justice Perell further accepted GTAA’s evidence and found as a fact that there are no insurance products available to apartment owners to insure against the risk of displacement, but that specific insurance product is readily available to tenants.
The decision confirms a longstanding and important legal limit on municipal governments. That is, no matter how worthwhile or necessary a municipal service may be, municipalities cannot recover their costs from individuals or businesses who do not benefit from the service.
Cassels represented the GTAA.