Illegal drug production in residential properties is a serious issue. It creates safety hazards, exposes neighbours to chemical risks and can leave lasting structural damage. No one questions the need for strong enforcement against criminal activity.
But as Ontario considers new regulations under the Measures Respecting Premises with Illegal Drug Activity Act, the province must ensure it does not hurt an already fragile rental housing market in the process.
The act gives the government authority to prescribe certain federal drug offences, including unauthorized production of controlled substances under the Controlled Drugs and Substances Act, and to hold landlords accountable where they knowingly permit such activity on their premises.
On its face, that objective is important. However, the way the regulations are structured will determine whether they enhance community safety without unintentionally hurting Ontario’s rental housing market or discouraging the very investment needed to sustain and expand rental supply.
A market already under pressure
Ontario’s rental market is navigating significant headwinds. Condominium pre-construction activity has slowed materially. Financing conditions for purpose-built rental projects remain challenging. Interest rates, while stabilizing, are still well above the levels that fuelled much of the last decade’s housing growth.
Meanwhile, landlords are absorbing higher property taxes, insurance premiums, maintenance costs and regulatory compliance obligations. Many of the rental units in the Greater Toronto Area (GTA) and across the province are owned by small-scale investors, not institutional operators with compliance departments and risk managers. They are ordinary Ontarians who have taken their hard-earned savings and invested it into badly needed rental housing.
Where accountability is reasonable, and where it is not
Under the act, the province’s intention is to hold landlords accountable where they knowingly permit illegal drug production or trafficking. This accountability is a reasonable starting point.
The difficulty arises if liability goes further, extending to what a landlord “should have known” or to an undefined duty to take “reasonable measures” to uncover criminal conduct. Landlords do not have search powers, nor can they enter a unit whenever they choose. Their actions are strictly governed by the Residential Tenancies Act, 2006, which sets clear procedural and evidentiary limits on landlord interactions with tenants. Landlords are not trained investigators, and they are not equipped to detect sophisticated drug production operations concealed within a leased premise.
A regulatory framework that blurs this line risks encouraging intrusive tenant screening, excessive monitoring or precautionary eviction applications based on suspicion rather than evidence. Such outcomes would strain an already overstretched Landlord and Tenant Board (LTB) and undermine tenant rights without meaningfully enhancing public safety.
Liability must be tied to actual knowledge
If the province proceeds, the regulations must clearly limit liability to circumstances involving actual knowledge and wilful non-compliance. Anything broader risks transforming landlords into de facto law enforcement investigators, a role for which they are neither trained nor authorized.
Even where illegal activity is identified, fairness requires a structured response. Landlords who co-operate with law enforcement and pursue lawful remedies under tenancy legislation should be protected from penalties under the act. Absent such safeguards, a landlord could face sanction for activity they did not know about and could not legally remedy overnight.
That outcome would discourage participation in the rental market without advancing the act’s core objectives.
The definition of ‘landlord’ is too broad
The act’s current definition of “landlord” is expansive. While proposed exemptions appropriately shield institutional and publicly supported housing providers, small private landlords remain fully captured.
This is where the greatest risk lies. The individual who rents out a basement apartment or a single condominium unit should not face the same regulatory exposure as a large, multi-property operator. The regulation-making authority should be used to narrow the scope of application for prescribed offences, particularly where there is no evidence of knowledge or active facilitation.
Precision, proportionality and economic context
Ontario can address illegal drug activity in residential properties without destabilizing the rental housing market. But that requires precision, proportionality and careful attention to economic context.
Liability must be confined to actual knowledge and wilful inaction. Landlords must be afforded notice and a reasonable opportunity to respond. The definition of “landlord” must be narrowly tailored to avoid overreach and enforcement must remain, first and foremost, the responsibility of the government.
At a time when Ontario is striving to bring more rental housing online, policy choices that increase regulatory uncertainty deserve increased and careful scrutiny. Public safety is essential. So too is preserving the investment environment that sustains Ontario’s rental supply.
The province should pursue both, but not at the expense of either.
Daniel Steinfeld, TRREB President, is an engaged and active member of the real estate community as a broker-owner of On The Block, a Vaughan brokerage focused on innovation and professionalism in the industry. He and his wife Katie co-founded ‘Level Up’, a well-known real estate community and podcast that aired over 200 episodes for the REALTOR® community. Daniel has Chaired the Finance Committee and TRESA Working Group. He has also chaired the Government Relations Committee as well as served as Vice-Chair of the Finance Committee. He has been an active member of the OREA TRESA Task Force and the YPN Committee.
Daniel is thrilled about the opportunity to serve the membership of TRREB on its Board of Directors. With 15 years of experience as a Senator and Board Member for York University, he understands the importance of good governance, a clear path and thoughtful progress.
Daniel has considerable experience in the industry, with a background rooted in finance and sales. He was the Chief Financial Officer and the Vice President of Sales for the Toronto Argonauts Football Club, leading the highest-grossing single-day event in Canadian history with the 100th Grey Cup. He is a chartered accountant, a speaker at conferences and lectures, and has trained some of the largest sales teams in the country.
He’s the proud dad of four kids and enjoys drumming, golf, and all kinds of travel.
