1. Why this case should be on your radar
If your business is subject to regulatory compliance obligations, like the Occupational Health and Safety Act (OHSA), a recent Ontario Court of Justice decision should give you pause. In Toronto (City) v. Havcare Investments Inc., 2026 ONCJ 374, the court rejected a negotiated plea deal and imposed fines more than five times higher than what the parties had agreed to. The message is clear: when penalties don’t match the seriousness of the violation, courts will step in.
2. What happened in the Havcare case?
Havcare Investments Inc. owned a 14-storey, 282-unit rental apartment building in Toronto. The company pled guilty to 13 counts of failing to comply with City property standards orders. The violations were serious and some were even life-threatening.
Two counts stood out: balcony guards that were rusted through or missing entirely, and an underground parking garage with falling concrete, exposed rebar and severely damaged support columns. The City ordered Havcare to hire engineers to assess the structural problems and oversee repairs, but Havcare chose to ignore those orders.
3. The rejected plea deal
Havcare and the City agreed to a proposed guilty plea: $300,000 total, with $75,000 each for the two most serious structural violations. The court said no.
Justice of the Peace Scarfe found that $75,000 per count was far too low for violations that put lives at risk, and that accepting such a plea deal would undermine public confidence in the justice system. Instead, the court imposed $400,000 for each of those two counts, more than five times the proposed amount. The total fines came to $950,000, plus surcharges and fees.
What drove the Court’s decision?
(a) Deterrence comes first
For regulatory offences, courts prioritize deterrence, both for the specific defendant and as a message to others in the industry. When prior fines haven’t worked, courts will escalate penalties to ensure the message gets through.
Unlike criminal offences, regulatory violations aren’t about punishing inherently wrongful conduct. They’re about protecting the public and ensuring that workplaces, housing and public spaces are safe. Courts take this protective purpose seriously.
(b) Past conduct matters
Several factors pushed the penalties higher. Havcare had prior convictions for violations at the same property and the earlier fines (ranging from $800 to $25,000) clearly hadn’t worked. Many tenants were recipients of Ontario Works or the Ontario Disability Support Program, with few housing alternatives. Even after pleading guilty, Havcare still hadn’t fixed the problems. The court found the company to be in a persistent “ongoing state of non-compliance.” Most critically, the risks were severe. As the court observed: “it is only a matter of time before someone falls off a balcony and dies.”
(c) Fines must hurt
The court emphasized that fines must “make a significant impact on [the corporation’s] pocketbook” to be effective. A penalty that amounts to a rounding error won’t change behaviour.
Consider the numbers here: Havcare’s building was worth approximately $35 million (mortgage-free), generating over $2 million in annual rental income. Against that backdrop, $75,000 fines would amount to a “licensing fee to continue operating without compliance.” When the cost of compliance exceeds the cost of the fine, non-compliance becomes the economically rational choice and courts will not tolerate that outcome.
(d) Corporate defendants face higher stakes
Courts don’t apply the same sentencing logic to corporations as they do to individuals. Under the OHSA, corporations face fines of up to $2,000,000 per count, while directors and officers face up to $1,500,000 and potential imprisonment. The legislation is designed to ensure that repeat corporate offenders face escalating consequences.
What this means for your business
1. Compliance must be cheaper than the fine. If the proposed penalty is less than what it would cost to fix the problem, courts may view the fine as enabling continued non-compliance. Life-threatening risks will always increase judicial scrutiny.
2. Your history matters. Prior convictions trigger escalating penalties. Havcare’s relatively modest earlier fines didn’t deter continued violations and the court took notice. Every guilty plea, no matter how small or minor the infringement may be, will always be taken into account should a further incident happen. It is therefore important to strongly consider the implications of pleading guilty, even if the fine seems small at the time and you and your business simply want to move on.
3. Courts will look at the whole corporate picture. Your overall financial capacity matters, not just the specific property or project involved. Courts will assess total revenue, asset values and ownership of other properties to determine what fine will actually deter future violations.
4. Budget for the victim fine surcharge. The 25% surcharge is added on top of any fine and represents a real cost that Courts factor into their analysis.
5. A guilty plea helps, but only so much. While pleading guilty can save court time and demonstrate accountability, it won’t insulate you from significant penalties when the violations are serious.
The bottom line
The Havcare decision sends a clear message: regulatory compliance isn’t optional, and negotiated penalties won’t protect you if they don’t reflect the seriousness of the violations. Courts are willing to impose dramatically higher fines when public safety is at stake.
If you have questions about your regulatory obligations or are facing a Ministry of Labour, Immigration, Training and Skills Development investigation, our Employment and Labour team can help you navigate the process and minimize your exposure.
For more information on this topic, please reach out to Anil Nair.
