Ontario's government has introduced a new legislation called "Measures Respecting Premises with Illegal Drug Activity Act, 2025" ("the Act"). This law establishes a framework of prohibitions, enforcement mechanisms, and penalties designed to combat illegal drug activity in rental properties. Under the Act, the illicit drug activity includes the production or trafficking of controlled substances or cannabis.
Under section 61(2) of the Residential Tenancies Act ("RTA"), three specific drug offences are cited as grounds for eviction through the Landlord and Tenant Board:
- Production of an illegal drug
- Trafficking of an illegal drug
- Possession of an illegal drug for trafficking purposes
The above RTA provision enables landlords to evict tenants for the aforesaid reasons. The new Act broadens those powers by allowing the police to remove offending tenants directly without an eviction process, and it places legal responsibilities on landlords to prevent drug-related activity in their rental units.
The Act centers on two fundamental prohibitions that directly impact landlord operations:
- Prohibition Against Permitting Misuse (Section 2): "No person shall knowingly permit a premises of which the person is a landlord to be used in relation to a prescribed offence." The Act provides a defence for the landlord if they "took reasonable measures to prevent the activity," though these measures remain undefined in the legislation.
- Prohibition Against Possessing Proceeds (Section 3): "No person shall knowingly possess the proceeds of an offence under this Act." Unlike Section 2, this provision notably lacks the "reasonable measures" defence, creating significant risk exposure for landlords who receive rental payments potentially connected to illegal activities.
The Act establishes substantial penalties:
- Individual Landlords: First offences under Section 2 carry fines of $10,000-$250,000 and/or imprisonment up to two years less a day. Subsequent convictions may result in daily fines of $5,000-$100,000.
- Corporate Landlords: First offences under Section 2 carry fines of $25,000-$1,000,000, with subsequent daily fines of $10,000-$500,000.
- Other Violations: Contraventions of other provisions carry fines up to $100,000 for individuals and $250,000 for corporations.
The police are empowered under the Act to remove tenants from the rental premises, close down commercial properties (but not residential properties), and seize items linked to criminal activity. The police can also arrest individuals, including landlords, without a warrant under certain conditions.
If charged, landlords have the option to plead a defence that they took reasonable steps to prevent themselves from knowingly renting to an offending tenant. What would constitute such a defence is not defined under the Act, so we will have to wait for the Court's interpretation on this defence. The following acts could form a reasonable measures defence: engaging in tenant screening, including a criminal records check, performing regular inspections, commencing eviction when necessary and reporting any illicit activity to the police without delay.
In conclusion, Ontario's "Measures Respecting Premises with Illegal Drug Activity Act, 2025" represents a significant shift in landlord obligations and potential liabilities regarding illegal drug activities in rental properties. This legislation substantially expands law enforcement powers while simultaneously increasing landlord responsibilities and exposure to severe penalties. Landlords must now implement robust preventative measures. It is recommended that landlords review their current property management practices, update lease agreements to prohibit illegal drug activities explicitly, document all preventative efforts, and seek qualified legal counsel to ensure compliance with this new regulatory framework.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
