New legislation in the Fighting Delays, Building Faster Act by Doug Ford’s Ontario government contains provisions to end evergreen leases through security of tenure. Critics warn that this act will put many renters on the street as the province aims to “protect tenants while supporting landlords.”
Currently, rental agreements in the province can transfer to evergreen leases once the timeframe of the original rental contract is up. An evergreen lease is a lease that transfers to a month-to-month rental agreement where the tenant may stay indefinitely, unless a legal reason for eviction occurs.
Attorney General Doug Downey explained in an interview with Toronto Today that stakeholders say “these evergreen leases […] just go on with no end in sight [and] may not be appropriate. […] There are a lot of landlords that are not putting their units on the market; we need to get those units.”
Changes proposed by the Ford government would give landlords more control over how long tenants may rent for, while making it easier to evict tenants by moving to fixed term leasing.
Fixed term leasing is not a new concept in Canada and has been implemented in Nova Scotia. ACORN, Canada’s “independent national organization of low- and moderate-income people” conducted a study on its effects in Nova Scotia.
ACORN found that in three years, evictions in the province went up 466 per cent from a reported 6.3 per cent of total renters reporting being evicted in 2021 prior to fixed term leasing to 35.7 per cent under fixed term leasing.”
ACORN noted that fixed term leasing contributing to higher rent is shown by“tenants who have moved in the last five years,” as “84.4 per cent are paying more in rent than they were in their previous apartment.”
Since fixed term leasing has been found to raise rent costs, ACORN notes that “landlords are incentivized to evict tenants both long term and otherwise to raise the rent.”
Many Ontarians have expressed that by ending evergreen leases, the province is ending rent control. The province partially ended rent control on Nov. 15, 2018, when Ford government legislation exempted newly constructed and newly renovated and occupied units from rent control measures.
The law, however, grandfathered in those who had evergreen leases, allowing them to keep rent control. Rent control in the province has been 2.5 per cent of increase per year on the original rental amount agreed upon at the time of signing.
In addition to ending evergreen leases, the proposal aims to allow landlords to evict tenants without any compensation if 120 days’ notice is given.
Organizations such as ACORN have put out petitions for tenants to sign in order to protest the proposals.
Though the proposals have not yet passed, they remain in the ideas stage for the Ford government.