The Ministry of Municipal Affairs and Housing did not answer when asked if there are any avenues for tenants to recover that money if it is determined that they are not in fact behind on payment.

Everything you need to know right there.

I don't disagree that there is a lot of bad actors who attempt to game the system indefinitely, but this isn't the way to address those issues.

Not sure what else I'd expect from this government though.

Landlords should be registered in Ontario, and have their places inspected once a year. Any investment property that fails a safety inspection should simply be seized by the government. Stop playing around.

They should pay it into an escrow account that requires dual sign-off to release. Proves willingness to pay but doesn't just give away the money. The fact this wasn't suggested or required is it's own red flag.