MONETARY LIMIT FOR ONTARIO’S SMALL CLAIMS COURT WILL INCREASE FROM $35,000 TO $50,000

This is a significant development that will have wide-reaching implications for individuals and businesses seeking more affordable and efficient legal recourse.

The jurisdictional ceiling for the Small Claims Court increased from $10,000 to $25,000 in 2010. A further increase to $35,000 in 2020 enhanced access to justice for a broader range of civil disputes. The upcoming increase to $50,000 continues this trend, allowing more claims to be resolved through a streamlined, cost-effective legal process.

Once the new limit takes effect October 1, 2025, parties with existing Small Claims Court matters under $35,000 may amend their claims to seek a higher amount up to the new $50,000 threshold.

What Does this Mean for Employers?

Employers can expect to see plaintiff employees seeking higher damages in wrongful dismissal cases. Specifically, the higher monetary ceiling is likely to encourage an existing trend in wrongful dismissal cases where plaintiffs make additional claims for general and/or exemplary damages in wrongful dismissal matters, often relating to harassment, discrimination and employer bad faith conduct. Unlike reasonable notice awards, general and exemplary damage awards are not taxed and are therefore more appealing to employee plaintiffs.

Conversely, some plaintiffs may also reduce the quantum of damages they are seeking in a civil action to $50,000 or less, so that they can access the faster, less complex, and more cost-effective dispute resolution process provided within the Small Claims Court framework.