Can a seller be forced to negotiate in good faith just because they signed an LOI?

Not automatically, just from signing a standard LOI. Ontario contract law recognizes a general duty of honest performance within existing contractual relationships, but that principle doesn't, by itself, turn a non-binding negotiation into an enforceable obligation to keep negotiating toward a completed deal. Whether you owe the other side anything close to a "good faith" obligation depends on whether your specific LOI actually contains language creating one.

Some LOIs do include an express good-faith negotiation clause, and where that language exists, courts are generally more willing to treat it as a real, if narrow, obligation — typically limited to negotiating honestly and not undermining the process in bad faith, rather than a duty to actually reach or accept particular terms. Without that kind of clause, a seller who simply signed a standard LOI usually isn't bound to negotiate at all, let alone in good faith, beyond whatever specific provisions the document made binding.

Whether your LOI contains this kind of language, and what it would actually require if it does, is worth confirming directly rather than assuming either way. A Treadstone business lawyer can read your specific document and tell you what obligations, if any, it actually creates.