Tim Hortons franchisee in P.E.I. evicts tenants to make way for temporary foreign workers

One of three people fighting eviction notices they received from the local Tim Hortons franchisee in Souris, P.E.I., says the company has no legal grounds to make tenants leave their apartment building.

D.P. Murphy Inc., which operates a number of Tim Hortons franchises across Prince Edward Island, bought the apartment building at 4 Pleasant St. in November, and issued eviction notices to the tenants on Jan. 5.

According to documents filed by the company with the Island Regulatory and Appeals Commission, P.E.I.'s rentals regulator, the company plans to use the building to house temporary foreign workers "to address an important business need for our company by ensuring we can properly staff our Tim Hortons restaurants."

"There's no legal grounds on which to do this at all," said Cécile Sly, one of the tenants taking on the corporation, its lawyer and now the provincial rentals regulator.

According to the eviction notices, D.P. Murphy said it's planning to convert the premises "to a use other than residential," which can be grounds for eviction under section 15(1)(b) of the Rental of Residential Properties Act.

Sly said they don't think that can apply, given the company has said it plans to house workers in the building.

They noted the property remains zoned as residential.

The mayor of Souris, JoAnne Dunphy, said there's been no application filed to change that zoning – but such a change would not be necessary in order for the building to be used for staff housing.

"If it was changing into a business such as a hotel, then it would mean the owner would have to apply for a zoning change and a business permit," Dunphy told CBC News via email.

"We certainly do not like to see anyone lose their homes," she added. "There is a shortage of housing in our area."

Housing temporary foreign workers 'essential'

P.E.I. is seeing a pressing demand for both workers and housing.

When the province's tourism industry began to rebound post-pandemic in the latter part of 2021, employers in the service industry said they were having a hard time getting workers to come back to their jobs.

We are… very concerned about possible public dissemination of our business records so I felt I had no choice but to notify the rental officer of this issue.- Mark Doucet, lawyer for D.P. Murphy Inc.

Since then, demand for workers has continued to grow, with the province's traditionally high unemployment rate reaching a record low of 4.9 per cent last June.

The P.E.I. government launched a new stream of its provincial nominee program early last year, open to the tourism industry.

Then the federal government announced an expansion of the temporary foreign worker program, allowing tourism businesses to take part.

In documents filed with IRAC as part of the eviction case, D.P. Murphy said providing staff accommodations has been "an essential part of our sponsoring temporary foreign workers," according to a statement signed by Abdul Babar, the company's senior human resources manager.

A tight rental market

But the company's plan for the Souris building is coming at a time when housing in P.E.I. has become a hot commodity.

P.E.I.'s apartment vacancy rate dropped to 0.8 per cent in 2022, according to the Canada Mortgage and Housing Corporation. That's the lowest rate among all of Canada's provinces.

A lack of staff accommodations in Souris "has meant managers driving staff for over an hour to and from Charlottetown," Babar wrote, "or the employees drive on their own, often late at night on winding roads and in winter conditions."

In its filing with IRAC, D.P. Murphy listed four other Island properties it uses for staff accommodations, including a home in Souris where the company listed 10 tenants.

In some cases, the company said it charges workers a monthly rent of between $200 and $400. In others, the accommodations are listed as a taxable benefit for the employee.

The company said the rent charged to staff "is so that we can begin to recover our costs and is not intended as a profit centre for the company."

Tenants could face 'fines or sanctions' for sharing info

D.P. Murphy's lawyer, Mark Doucet, said the company would not provide comment for this story.

However, the day after CBC News advised D.P. Murphy that it had received copies of the company's submissions to IRAC, Doucet said two of the tenants fighting their eviction notices, both seniors, had been warned by the commission they could face "fines or sanctions" for sharing records related to their hearing.

Both tenants later declined to provide interviews to CBC News.

"We are… very concerned about possible public dissemination of our business records so I felt I had no choice but to notify the rental officer of this issue," Doucet wrote in an email.

He cited a provision of the Rental of Residential Property Act that requires confidentiality in hearings over rental increases. However, the same provision is not included in the legislation relating to eviction proceedings.

But Doucet said that under the act, the director of residential rental property at IRAC has "the power to determine rules of procedure."

CBC News then asked IRAC what confidentiality requirements could be placed on an eviction hearing. 

"The Commission cannot comment on matters that have come before the Director or that may come before the Commission," was the email response. 

"Matters at the Director-level are private and confidential and between landlords and tenants. If the matter is appealed to the Commission, that is when it becomes public."

A landlord with 'deep pockets'

Rosalind Waters, a volunteer with P.E.I. Fight for Affordable Housing, said that group has "attended numbers of hearings over the years… and never have tenants been told that they can't talk to anyone about what went on in the hearing. So the optics of this are not good."

"It kind of illustrates the huge power imbalance between landlords and tenants in this province," Waters said, adding it can be intimidating for tenants to go up against landlords who have "a lawyer representing them, and a landlord that the tenants know has deep pockets."

It kind of illustrates the huge power imbalance between landlords and tenants in this province.- Rosalind Waters, P.E.I. Fight for Affordable Housing

Waters said her group has been advocating for "massive investment in public and non-profit housing" with below-market, subsidized rents "so everybody has access to decent, affordable housing. And of course migrant workers should have access to decent affordable housing."

But she said it's wrong to pit such workers against existing residents as has happened with the evictions taking place in Souris.

"I don't think it's right and I also don't think it does anything to solve the housing crisis for folks who live up around Souris," she said.

'Not an issue of national security'

Sly said their hearing is coming up Feb. 23.

They said some other tenants left without trying to fight their evictions, and some people have told Sly they should be "frightened" to stand up against such a big corporation.

But Sly said they want to have their eviction notice declared invalid — and said they won't be silenced when it comes to talking about the results of their hearing.

"This is a rental board hearing, not an issue of national security."