Does the Ontario Building Code still apply to permit-exempt dampproofing?

Yes. The City of Ottawa's permit exemption for "damp proofing of existing basements" removes the need to file for a building permit; it does not remove the obligation to meet Ontario's Building Code.

The Code sets out what dampproofing must do and where it must go. Under clause 9.13.2.1, the exterior surfaces of foundation walls below ground must be dampproofed where the finished ground outside is higher than the ground level inside. The dampproofing runs from finished ground level down to the top of the exterior of the footing (9.13.2.4), and joints, cracks and penetrations must be sealed to keep it continuous. For a masonry block wall, clause 9.13.2.3 requires at least 6 mm of mortar parging on the exterior face below ground, coved over the footing, before the dampproofing goes on. For a poured concrete wall, holes and recesses are sealed first.

The exemption also does not remove the Code's foundation drainage requirements. Clause 9.14.2.1 calls for drainage at the bottom of every foundation wall that encloses the building interior, unless it can be shown to be unnecessary. If the exterior work disturbs or replaces the drain tile, that work moves onto the permit list: the City names "structural foundation repairs and drain tile replacement" as permit-required. Ask the City's Building Code Services whether your scope crosses that line before the work starts.

One other limit on the exemption: the City says designated heritage buildings and buildings in a Heritage District Overlay are not subject to the exemptions, so check with the City first.

A contractor doing permit-exempt dampproofing is still working to the Code. Ask the contractor which specific Code clauses their quote is written to meet, and get that in writing alongside the scope of work.