Ontario to raise small claims court monetary limit to $50,000

Law360 Canada (September 29, 2025, 2:39 PM EDT) --

Sam Zargami

As a litigation associate, I have come to appreciate that big challenges do not always involve large sums. My experience in handling a broad range of commercial, insurance and collections disputes in Ontario’s small claims court has taught me that claims with smaller monetary amounts can present legal and factual complexities comparable to those in the regular stream of the Ontario Superior Court of Justice.

Ontario recently passed O. Reg. 42/25, Small Claims Court Jurisdiction and Appeal Limit, which increases the monetary jurisdiction of the small claims court from $35,000 to $50,000. This important change, which takes effect on Oct. 1, 2025, is intended to reflect both the growing financial stakes in everyday litigation and the broader economic realities of inflation and rising living costs.

Benefits of increasing the small claims court monetary limit to $50,000

Increasing the small claims court monetary limit to $50,000 aims to bring several benefits. A key advantage is the potential for faster dispute resolution. The small claims court process is designed to be more efficient and streamlined compared to the regular stream of the Ontario Superior Court of Justice as it does not involve a formal discovery process.

In addition, increasing the small claims court’s monetary jurisdiction to $50,000 is intended to improve access to justice by enabling more litigants, many of whom are self-represented, to avoid the higher costs of the regular stream of the Ontario Superior Court of Justice. Moreover, raising the monetary limit is expected to help alleviate the ongoing backlog in the regular stream of the Ontario Superior Court of Justice through the redirection of more cases to the small claims court.

Practical challenges of raising the monetary limit to $50,000

Despite the laudable merits of increasing the monetary jurisdiction limit to $50,000, implementing this change may prove to be more challenging from a practical perspective. Small claims courts across Ontario, particularly in high-volume jurisdictions like Toronto, are already facing significant delays in getting cases to trial. Scheduling even a procedural motion can unduly delay a case from advancing through the system. As it stands, an action in the small claims court can already take over a year to adjudicate, not factoring in any further delays stemming from procedural motions brought along the way. One can therefore expect that increasing the monetary jurisdictional limit to $50,000 may further add to the backlog within the small claims court system.

Recovery of legal costs in small claims court

Recovering a significant portion of one’s true legal costs will continue to pose issues for litigants within the small claims court. Under s. 29 of the Courts of Justice Act, cost awards in small claims court are usually capped at 15 per cent of the amount claimed or awarded, excluding disbursements. Rule 15.07 of the Rules of the Small Claims Court also limits motion costs to $100, except in cases of misconduct or unreasonable behaviour.

These restrictions are meant to keep litigation affordable and discourage unnecessary disputes. However, they also mean that successful parties may recover only a small fraction of their actual legal expenses. In addition, pursuant to recent amendments made to the Rules of the Small Claims Court, the maximum costs recoverable by successful self-represented litigants has increased from $500 to $1,500. This change is intended to recognize the significant effort and challenges faced by self-represented parties and seeks to promote better access to justice.

However, the small claims court is maintaining the 15 per cent limit on costs available to legal counsel within small claims court, which will continue to create financial challenges to litigants requiring legal representation. The legal costs issue is further exacerbated when one considers that successful claimants who obtain judgments between $35,000 to $50,000 will be subject to the 15 per cent limit on costs instead of the higher costs previously available in the regular stream of the Ontario Superior Court of Justice. As a result, individuals requiring legal representation may find it more difficult to pursue their claims.

Conclusion: Striking a balance between access and efficiency

Increasing the small claims court jurisdictional limit to $50,000 represents a significant policy shift that will expand access to justice and reduce pressure on the regular stream of the Ontario Superior Court of Justice. However, this higher limit may also create additional challenges for the small claims court, including longer delays in adjudicating claims, and place further limitations on litigants’ ability to recover a realistic portion of their actual legal costs.

As the Ontario legal community adapts to these changes, careful monitoring of the regime by the government will be essential to ensure that the small claims court continues to provide accessible, efficient and fair dispute resolution.

Sam Zargami is a litigation associate at Wray James LLP in Toronto, where he maintains a diverse practice encompassing commercial, real estate, employment, construction, insurance and regulatory disputes. He earned his Juris Doctor from Queen’s University Faculty of Law. During his studies, he interned with the Department of Justice in Ottawa at the Centre for Privacy and Information Law and worked as a student caseworker with the Queen’s Business Law Clinic.

The opinions expressed are those of the author and do not reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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