August 10, 1998
URBAN ENVIRONMENT AND DEVELOPMENT COMMITTEE:
I am enclosing for your information and any attention deemed necessary, Clause No.3
contained in Report No. 9 of The Urban Environment and Development Committee, headed
"Vital Services in Rental Residential Properties in the City of Toronto", which was adopted,
without amendment, by the Council of the City of Toronto at its meeting held on July29,
30and31,1998.
for City Clerk
J.A. Abrams/csb
Encl.
Clause sent to:Urban Environment and Development Committee
City Solicitor
c:Council Strategy Committee for People Without Homes
Commissioner of Urban Planning and Development Services
Executive Director and Chief Building Official
Director, Municipal Standards Division, City Planning
Medical Officer of Health
CITY CLERK
Clause embodied in Report No. 9 of the Urban Environment and Development
Committee, as adopted by the Council of the City of Toronto at its meeting held
on July 29, 30 and 31, 1998.
3
Vital Services in Rental Residential Properties
in the City of Toronto.
(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)
The Urban Environment and Development Committee reports having requested the
CitySolicitor to submit a report directly to Council for its meeting scheduled to be held
on July 29, 1998, on the legislative amendments that would be required should Council
decide to request the Province of Ontario to enact legislation which would permit the
new City of Toronto to adopt a Vital Services Program similar to that conducted by the
former City of Toronto under its special legislation.
The Urban Environment and Development Committee reports, for the information of Council,
having:
(1)deferred consideration of the following reports and communication to its next meeting,
scheduled to be held on September8, 1998, for the hearing of deputations;
(2)requested the Commissioner of Urban Planning and Development Services, in consultation
with the Executive Director and Chief Building Official, to submit a report to the September8,
1998 meeting of the Urban Environment and Development Committee regarding:
(a)the anticipated actual financial loss resulting from the provision of vital services when
necessary under the current legislation; and
(b)the ability of Toronto Hydro and other essential services to provide the continuation of
services under the same conditions as were previously applied to the "UrgentHazard Program"
by the former City of Toronto (under the former City of Toronto Act);
(3)requested the Medical Officer of Health to consult with agencies which serve tenants and
persons living in poverty, and submit a report to the September 8, 1998 meeting of the Urban
Environment and Development Committee on the probable health impacts of refusing to
intervene in the cut-off of vital services;
(4)directed that a copy of the following reports and communication be referred to the
CouncilStrategy Committee for People Without Homes, with a request that the Committee
submit its comments thereon to the September 8, 1998 meeting of the Urban Environment and
Development Committee.
The Urban Environment and Development Committee submits the following report
(June10, 1998) from the Commissioner of Urban Planning and Development Services:
Purpose:
Report submitted for information, to address issues of enforcement regarding vital services
where a landlord who is responsible for the payment of utility bills in a rental residential
property defaults on that obligation.
Funding Sources, Financial Implications and Impact Statement:
In the event that Council chooses not to adopt the recommendation below, and instead
chooses to enact a vital services by-law, then that action would require the reversal of
Council's previous budgetary decision in order now to commit funds to the staffing and
administration of a vital services program in the amount of $60,000.00 for 1998 and
$120,000.00 annualized thereafter.
In addition, historically the former City of Toronto has committed funds ranging from
$500,000.00 to $1,000,000.00 annualized to the restoration of utilities in rental residential
properties. These funds were recoverable as being collectible through the municipal realty tax
process, as provided for by the City of Toronto Act. Any future funds to be expended by the
City to restore such utilities under a Vital Services By-law would be at great risk of being
unrecoverable, given that the enabling legislation does not provide for such funds to be placed
on the tax rolls. The current legislation provides for a lien to be placed against the property
and/or the City to have tenants pay rents directly to the City.
Recommendation:
It is recommended that the City of Toronto not enact a vital services by-law under authority of
the Tenant Protection Act, given the expected high cost of its administration and the potential
for financial risk to the City.
Background/History:
Existing municipal standards regulations throughout the new City provide for a range of
options in addressing the issue of a landlord's obligation to maintain vital services in rental
residential properties.
Current regulations which exist under authority of the Planning Act set out an owner's
responsibility to ensure that vital services such as utilities are maintained for residential
tenants. A breach of that obligation is an enforceable offence. All City of Toronto districts,
with the exception of the former City of Toronto, have municipal standards regulations
enforced under the authority of the PlanningAct.
Current regulations within the former City of Toronto, under authority of the City of Toronto
Act, set out owner obligations similar to the above but also provide authority for the City to
restore utility services where an "urgent hazard" is considered to exist and to re-coup such
monies by placing expended amounts directly on the tax roll to be collected in a like manner
as municipal taxes. This program has been administratively costly to run and has been
targeted to be discontinued as part of the budget process.
At the present time a staff group is working toward drafting harmonized municipal
maintenance standards that will be applicable to the entire new City. The enabling legislation
for such new regulations will come under the authority of the Building Code Act. On
November 28, 1997, Royal Assent was given to the Tenant Protection Act which serves to
consolidate, replace and supersede numerous existing acts which deal with tenant issues,
including the enactment of municipal maintenance standards and by-laws regarding vital
services. The Tenant Protection Act is proclaimed as effective and in force June 17, 1998.
Comments:
The Tenant Protection Act amends the Building Code Act which becomes the new enabling
legislation for municipal maintenance standards. The Tenant Protection Act also incorporates
the former provisions of the Municipal Amendment Act (Vital Services) that allows a
municipality to choose to enact a by-law to authorize the restoration of utilities where a
landlord defaults on payment of utility bills to rental residential properties. This authority
requires that a lien be placed on the title of the property, and allows the municipality to have
tenants direct rents to the City until the debt is repaid. This process effectively would appear
to make the municipality a quasi-landlord in ensuring that outstanding rents are paid. In
addition, there is no reasonable guarantee that monies expended by the municipality to restore
utilities would, in fact, ever be recouped. This process would likely serve to be very labour
intensive and costly to run, which may be the reason that to date only three Ontario
municipalities have previously chosen to enact a municipal vital services by-law.
Information obtained from the City of Ottawa, which currently administers a vital services
by-law, indicates that such a program is very time-consuming, administrative and costly in
terms of staff time and resources. It is uncertain whether, once the amalgamation of
Ottawa-area municipalities occurs, a vital services program will be maintained given that the
municipalities around the existing City of Ottawa do not administer such a program. As is the
case in most Ontario cities, the municipalities surrounding Ottawa have not chosen to pursue a
local vital services by-law.
The Tenant Protection Act sets up a Provincial Tribunal process to address tenant concerns
where a municipality has no maintenance standards by-law, and also to enforce vital services
provisions that are directly contained in the Act requiring a landlord to ensure that vital
services such as utilities are provided. Ministry staff have confirmed that, while a fee is
chargeable under the Tenant Protection Act to municipalities where the Provincial Tribunal
enforces maintenance standards, no fee is chargeable to a municipality where the Provincial
Tribunal enforces vital services. The Act includes Provincial responsibility to directly receive
tenant complaints regarding vital services matters and enforce resulting Provincial orders
through the courts. This new Act places the onus of evidence collection and complaint
reporting directly into the hands of affected tenants, who would then bring their vital services
issues forward to the Provincial Tribunal for prosecution/enforcement.
Conclusions:
Given that the current City of Toronto budget process is seeking to discontinue the former
City of Toronto's "urgent hazard" program due to the cost of administering it, City Council
may similarly want to consider not undertaking an even more bureaucratic and financially
risky process in the restoration of utility services under a vital services by-law. It is suggested
that City Council seek to rely instead on general enforcement of municipal standards
regulations through prosecution by the City as necessary, as well as procedures which are
currently being put into place under the TenantProtection Act for tenants to seek prosecution
activity through the Provincial Tribunal specifically regarding vital services.
Contact Name:
Ms. Judi McBurney, Technical Advisor, Buildings Division, Toronto City Hall, 392-7963,
Fax:392-0677.
The Urban Environment and Development Committee also submits the following report
(June9, 1998) from the City Solicitor:
Purpose:
The purpose of this report is to review the potential implications of the motion set out below,
to provide information with respect to the authority of City Council to enact a vital services
by-law, and to explain the limitations on that authority.
Funding Sources, Financial Implications and Impact Statement:
There will be costs associated with the implementation of programs pursuant to a "vital
services by-law", should Council choose to enact such a by-law. In the former City of
Toronto, a similar program was in place pursuant to the former City's special legislation. The
Budget Committee has recommended discontinuing that program.
Recommendation:
It is recommended that this report be received for information.
Council Reference/Background/History:
At its meeting of May 13 and 14, 1998, City Council referred the following motion to the
Urban Environment and Development Committee for its consideration:
WHEREAS the Budget Committee accepted the proposal of the Commissioner of Urban
Planning and Development Services to discontinue the program previously delivered only in
the former City of Toronto, which paid on behalf of property owners and collected utility
payments in like manner as realty property taxes when such utilities had been discontinued to
tenanted properties, under the authority of Section6 of the City of Toronto Act, 1936 (which
applied only in the former City of Toronto); and
WHEREAS it is anticipated that the legislative authority for this program will be repealed or
superseded by the Provincial Government in the spring of 1998; and
WHEREAS it is desirable to ensure regulations are in place that are applicable to the whole
of the new City of Toronto; and
WHEREAS Bill 104, The Vital Services Act, authorizes Municipalities to pass By-laws
requiring Vital Services Utilities to adopt a similar program;
NOW THEREFORE BE IT RESOLVED THAT the City Solicitor be requested to draft a
By-law in accordance with Bill 104 to be presented to the Urban Environment and
Development Committee for consideration;
AND BE IT FURTHER RESOLVED THAT City Council communicate with the City's
vital services utility providers requesting their co-operation in continuing this service under
the authority of and as would be required by the By-law proposed in resolution No.(1);
AND BE IT FURTHER RESOLVED THAT the appropriate staff initiate discussions with
the City's vital services utility providers to share information regarding the operational
aspects of the former City of Toronto's utility restoration program.
Comments and/or Discussion and/or Justification:
The motion set out above, proposes that the City enact a by-law requiring providers of vital
services to adopt a program whereby the service providers would continue to provide services
to tenanted properties despite the landlord's failure to make utility payments. City Council,
however, lacks the authority to enact such a by-law. Council may require utility companies to
give 30 days notice of the intention to discontinue service for non-payment; however, after the
30-day period has elapsed, Council cannot require continuation of the service without
payment to the utility company.
The motion refers to "Bill 104, The Vital Services Act", which appears to be a reference to the
City's power, under s. 210.2 of the Municipal Act, to enact a vital services by-law. There is
not actually a statute entitled "The Vital Services Act". Section 210.2 of the Municipal Act
was added to the Municipal Act in 1994 when the Legislature passed the Municipal
Amendment Act (Vital Services), 1994, which was Bill 104 when it was introduced. Section
210.2 will be replaced on June 17, 1998, when the Tenant Protection Act (the "TPA"), comes
into force. Sections 145 to 153 of the Tenant Protection Act provide authority that is
essentially the same as that currently provided in s. 210.2 of the Municipal Act. City Council's
authority to enact a vital services by-law will not be changed by the TPA.
The TPA defines "vital service" as "fuel, hydro, gas or hot or cold water", and provides that a
"vital services by-law" is a by-law passed pursuant to s.146 of the TPA. Section 146 of the
TPA provides that a vital services by-law may require landlords to provide adequate and
suitable vital services to the rental units. A vital services by-law may require the supplier of a
vital service to notify the municipality if the vital service is to be discontinued for the reason
that the landlord has breached a contract with the supplier (i.e., failure to make utility
payments). At least 30 days notice is required.
The municipality may then arrange for the service to be provided. The municipality would do
this by paying for the service and then attempting to recover the amount paid plus
administrative costs. Accordingly, the municipality is authorized to register a lien against the
property for the amount, and to direct the tenant to pay any or all of the rent for the unit to the
municipality. The payment by the tenant is not to be treated as a default of the obligation to
pay rent to the landlord. Naturally, such provisions do not apply where the tenant has agreed
to maintain the vital services.
There will be administrative costs to the City of administering a program pursuant to a vital
services by-law, and there may also be some difficulty in recovering all of the money paid by
the City to the utility companies. It is my understanding that funds have not been budgeted for
the administration of a vital services program by the City.
Pursuant to special legislation, the former City of Toronto had a program somewhat similar to
that which would be permitted pursuant to a vital services by-law. The Budget Committee has
recommended discontinuation of the program. The other former municipalities within the
urban area that is currently the City of Toronto had the ability to enact such a by-law, but none
of them enacted one.
Should Council choose not to enact a vital services by-law, tenants will still have some
recourse against landlords who fail to provide an adequate supply of a vital service. The TPA
will prohibit landlords from withholding a "reasonable supply of any vital service ... that it is
the landlord's obligation to supply under the tenancy agreement". Tenants may apply to the
Ontario Rental Housing Tribunal should the landlord breach this provision. The Tribunal can
provide a range of relief including an abatement of rent. In addition, I am informed by staff of
the Municipal Standards Division that existing municipal standards by-laws address the
provision of vital services.
Conclusions:
While City Council can enact a vital services by-law, it cannot require suppliers of a vital
service to provide the service beyond the 30-day notice period or to adopt a program similar
to that which was in place in the former City of Toronto.
Contact Name:
Ms. Wendy Walberg , 392-8078.
The Urban Environment and Development Committee also submits the following report
(July13, 1998) from Councillor Anne Johnston, North Toronto:
Recommendations:
(1)That your Committee defer this item until your September 8, 1998 meeting for
deputations. My reading of the reports before you today will leave tenants at great risk should
we eliminate the Urgent Hazards Program. It therefore seems only fair to give tenants across
the new City of Toronto time to review the Urgent Hazard Program and the replacement
proposed by Councillor Jakobek's motion before you today;
(2)that your Committee ask the City Solicitor to report to the next meeting of your
Committee on what legislation would be required to reinstate the former City of Toronto's
Urgent Hazard Program to serve the new City of Toronto; and
(3)that the relevant officials report on the ability of Toronto Hydro and other essential
services to provide the continuation of services under the same conditions as formerly applied
to the Urgent Hazard Program by the old City of Toronto (under the former City of Toronto
Act).
Background:
On July 2, 1998, I received the attached communication from the Urban Planning and
Development Services Department informing me that the Urgent Hazard Program, formerly
operating in the old City of Toronto, has been discontinued due to "budgetary changes".
On checking the Urban Planning and Development budget line (attached) applicable to the
cancellation of the Urgent Hazard Program, I was surprised to see the notation that the
then-proposed "Vital Services Act" would allow the utilities to continue with the former
Urgent Hazard Program. This statement was misleading, to say the least, as far as tenants and
their essential services are concerned.
(Communication dated June 26, 1998, from the
Urban Planning and Development Services Department,
referred to in the foregoing report.)
Urgent Hazard Program Change - Former City of Toronto:
Attached is a communique being circulated in order to provide advice of an upcoming
program change which is effective July 1, 1998, regarding utility service cuts to rental
residential properties within the former City of Toronto. Budgetary changes have resulted in
the subject program adjustment.
Please review the attachment and advise relevant parties affiliated with your office or
organization.
Thank you.
(Communique dated June 26, 1998, from the
Urban Planning and Development Services Department,
referred to in the foregoing communication.)
Changes in the City of Toronto's Urban Planning and Development Services' budget, as
approved by City Council, will result in adjustments to certain of the Department's programs,
effective July1, 1998.
The Urgent Hazard Program, which provided only for the former City of Toronto to directly
authorize payments to utility companies in cases where hydro or gas services were cut to
residential rental properties due to a landlord's defaulting on payments, will be discontinued.
The City will continue to handle complaints, and any necessary enforcement action will be
undertaken.
The Urban Environment and Development Committee also submits the following
communication (May 25, 1998) from the City Clerk:
City Council, at its meeting held on May 13 and 14, 1998, referred the following Motion to
the Urban Environment and Development Committee for consideration:
Moved by:Councillor Jakobek
Seconded by:Councillor Ootes
"WHEREAS the Budget Committee accepted the proposal of the Commissioner of Urban
Planning and Development Services to discontinue the program previously delivered, only in
the former City of Toronto, which paid on behalf of property owners and collected utility
payments in like manner as realty property taxes when such utilities had been discontinued to
tenanted properties, under the authority of Section 6 of the City of Toronto Act, 1936 (which
applied only in the former City of Toronto); and
WHEREAS it is anticipated that the legislative authority for this program will be repealed or
superseded by the Provincial Government in the spring of 1998; and
WHEREAS it is desirable to ensure regulations are in place that are applicable to the whole
of the new City of Toronto; and
WHEREAS Bill 104, The Vital Services Act, authorizes Municipalities to pass By-laws
requiring Vital Services Utilities to adopt a similar program;
NOW THEREFORE BE IT RESOLVED THAT the City Solicitor be requested to draft a
By-law in accordance with Bill 104 to be presented to the Urban Environment and
Development Committee for consideration;
AND BE IT FURTHER RESOLVED THAT City Council communicate with the City's
vital services utility providers requesting their co-operation in continuing this service under
the authority of and as would be required by the By-law proposed in resolution No. (1);
AND BE IT FURTHER RESOLVED THAT the appropriate staff initiate discussions with
the City's vital services utility providers to share information regarding the operational
aspects of the former City of Toronto's utility restoration program."
(A copy of the relevant pages of the Urban Planning and Development budget, referred to in
the foregoing report dated July 13, 1998, from Councillor Anne Johnston, North Toronto, is
on file in the office of the City Clerk.)
(City Council on July 29, 30 and 31, 1998, had before it, during consideration of the
foregoing Clause, the following report (July 15, 1998) from the City Solicitor:
Purpose:
The Urban Environment and Development Committee has requested that I report directly to
Council on the legislative amendments that would be required to permit the City to adopt a
vital services program similar to that conducted in the former City of Toronto under its
special legislation.
Funding Sources, Financial Implications and Impact Statement:
Should the City request special legislation, there will likely be a cost of more than $6,000.00
to make the request. Should the City's request be granted, there will be a cost of operating a
vital services program. The Committee deferred consideration of the Commissioner of Urban
Planning and Development's report of June 10, 1998 which outlined some of those costs. The
Commissioner has been requested to prepare an additional report for the Committee's
September 8, 1998, meeting.
Recommendation:
It is recommended that this report be received for information.
Council Reference/Background/History:
On July 13, 1998, the Urban Environment and Development Committee considered two
reports on the subject of vital services by-laws.
A report from me explained that the City lacked the authority to require providers of vital
services to adopt a program whereby the suppliers would continue to provide services to
rental properties despite the landlord's failure to make utility payments.
The report also explained that the Tenant Protection Act gives Council the power to enact a
vital services by-law. Under a vital services by-law the City can pay the cost of providing a
vital service when the landlord has failed to do so and the service provider intends to
discontinue the service. The City would have some power to collect the money spent. It could
place a lien on the premises and require the tenant to pay any or all rent directly to the City.
The former City of Toronto had a similar program under its special legislation. The special
legislation applies only to the urban area that was formerly the City of Toronto. The main
difference between the former City's program and one which the new City could adopt is that
special legislation permitted the former City to collect the money paid out as realty taxes.
Realty taxes have the first priority above all other claims. For this reason, the money was
much easier to collect under that program. Even so, the program was considered costly to
administer and has been discontinued.
The Commissioner's report recommends that "the City of Toronto NOT enact a vital services
by-law under authority of the Tenant Protection Act, given the expected high cost of its
administration and potential for financial risk to the City."
The Urban Environment and Development Committee requested that I report directly to
Council on the legislative amendments that would be required to permit the City to adopt a
program similar to the one that was in place in the former City.
Comments and/or Discussion and/or Justification:
The program that was in place in the former City of Toronto was authorized by the City of
Toronto Act, 1936. That special legislation provides authority for property standards by-laws
and enforcement of the by-laws. Under the legislation the former City could enact a by-law
like a vital services by-law and adopt a program similar to that which can currently be
established by the City under the Tenant Protection Act. Like the Tenant Protection Act, the
special legislation provided that the City had a lien for the amount expended; however, the
special legislation also provided that the amount was deemed to be municipal real property
taxes and could be collected in the same manner as real property taxes.
The Tenant Protection Act does not authorize the municipality to collect the amount owed to it
as real property taxes. I have been asked to report on the legislative amendments that would
be required to give the City this authority. There are three possible approaches.
First, the City could request that the City of Toronto Act, 1936 be amended to provide that the
relevant provisions apply the new City of Toronto. I do not recommend this course of action.
Only a small part of a very lengthy section of that legislation is relevant, and there is a
standing order that special legislation will not be amended unless the entire section is put
forward for amendment.
Second, the City could request new special legislation which would include provisions similar
to the relevant portions of the City of Toronto Act, 1936 and any portions of the relevant
Tenant Protection Act provisions that might assist.
In order to expedite the processing of an application for special legislation and as
encouraged by guidelines of the Standing Committee on Regulations and Private Bills, the
usual practice is to consult ahead of time with the Legislative Counsel on the form of the
Private Bill and with the Ministry of Municipal Affairs' staff on both the form and content of
the Private Bill before giving notice and filing an application for a Private Bill with the Clerk
of the House.
Third, the City could request an amendment to the Tenant Protection Act. The amendment
could add to the current provision that permits a municipality to put a lien on the property. It
could provide that the amount of the lien is deemed to be real property taxes.
I am informed by staff of the Municipal Standards Division that they have met with
Consumers Gas and Toronto Hydro about the discontinuation of the vital services program in
the former City of Toronto. They have been informed that the utilities will institute their
normal collection process which includes a policy of not cutting in winter if vulnerable people
are at risk.
Conclusions:
Should City Council wish to request legislation that would enable the City to adopt a program
similar to the vital services program that was in place in the former City of Toronto, Council
could instruct staff to make that request. Should City Council wish to request private
legislation, Council could instruct the City Solicitor to consult with the Legislative Counsel
and the Minister of Municipal Affairs and report back to the Urban Environment and
Development Committee.
Contact Name:
Wendy E. Walberg, Solicitor, 392-8078.)