Legislative Assembly of Ontario

RESIDENTIAL RENT REGULATION AMENDMENT ACT, 1990

AFTERNOON SITTING

CONTENTS

Wednesday 20 February 1991

Residential Rent Regulation Amendment Act, 1990, Bill 4

Afternoon sitting

Adjournment

STANDING COMMITTEE ON GENERAL GOVERNMENT

Chair: Mancini, Remo (Essex South L)

Vice-Chair: Brown, Michael A. (Algoma-Manitoulin L)

Abel, Donald (Wentworth North NDP)

Bisson, Gilles (Cochrane South NDP)

Drainville, Dennis (Victoria-Haliburton NDP)

Duignan, Noel (Halton North NDP)

Harrington, Margaret H. (Niagara Falls NDP)

Mahoney, Steven W. (Mississauga West L)

Mammoliti, George (Yorkview NDP)

Murdoch, Bill (Grey PC)

O'Neill, Yvonne (Ottawa-Rideau L)

Scott, Ian G. (St George-St. David L)

Turnbull, David (York Mills PC)

Substitutions:

Huget, Bob (Sarnia NDP) for Mr Duignan

Miclash, Frank (Kenora L) for Mrs O'Neill

Poole, Dianne (Eglinton L) for Mr Scott

Tilson, David (Dufferin-Peel PC) for Mr B. Murdoch

Ward, Margery (Don Mills NDP) for Mr Bisson

Clerk: Deller, Deborah

Staff:

Baldwin, Elizabeth, Legislative Counsel

Hunter, Leith, Legislative Counsel

Richmond, Jerry, Research Officer, Legislative Research Service

The committee met at 1012 in room 151.

RESIDENTIAL RENT REGULATION AMENDMENT ACT, 1990

Resuming consideration of Bill 4, An Act to amend the Residential Rent Regulation Amendment Act, 1986.

The Chair: I see a quorum.

It is my understanding that the committee has carried the following sections of Bill 4: sections 2, 3, 4, 5, 6 and 7, section 8 with section 100a; that there had been discussion on section 100b, and furthermore, that section 1 of the bill had been stood down. Is it my understanding that we are going to go back to section 1?

Mr Mammoliti: I would recommend it.

The Chair: The committee would recommend that?

Ms Poole: If anybody else would recommend it I would say no, but for you --

The Chair: Very good. There is a lot of co-operation here.

Mr Tilson: Mr Chair, before we start I have a question of information, you can certainly call it, and it has to do with ads that have started to appear in the newspapers around the province -- there was one in the Globe and Mail, there was one in my riding -- on rent control, inviting members of the public to make submissions or attend public meetings. Several places are listed indicating that meetings start in March although they are saying they would like to hear from people by 5 April. In other words, the meetings are to be held throughout March but you have got until 5 April to contact us.

I guess I would like to know specifically how much the public relations of this whole process is going to cost, and second, because we are going to get calls on this, a clarification, where it is being listed that meetings are going to be held in Barrie, Etobicoke, London, Ottawa, Toronto, Sudbury and Windsor throughout March -- although they do not have to let them know until 5 April, I do not understand that -- but what specific dates those are being held on.

I guess I ask that question of the minister.

The Chair: Okay. We have the minister with us this morning as our guest. Minister, the way I understand it, Mr Tilson has asked two questions: one, the cost of the ads, another, the ancillary costs.

Mr Tilson: It may be ads, it may be other things, it may be radio ads, Mr Chair.

The Chair: Okay.

Mr Tilson: The public relations cost of this project.

The Chair: The cost of the advertising campaign and second, the specific dates of the meetings that are being advertised.

Hon Mr Cooke: I can get you the specific dates. I do not have them in my head, there is a schedule. I think the ad is fairly clear, though, and as we indicated the other day, 5 April is the -- because there will be several ways that people will provide for their input. Some will be attending public meetings, some will be having the special consultation meetings, the interest groups, and some will write. As I indicated in my statement the other day, there is also a summary of the discussion document that is going out to over 900,000 households across the province, the various tenant households across the province, so there is a very extensive consultation process.

My recollection is that the entire process is costing us approximately $500,000.

Mr Tilson: You are just sending that notice to tenants?

Hon Mr Cooke: No, the tenant households. I am not the expert in the field, but obviously we can do that through the mail walk process. Obviously the entire consultation document, the full consultation document is going to another list of people including landlords'

groups and tenant organizations as well. So the summary is going to households; the package, the full consultation document is going to a whole host of interest groups.

Mr Tilson: Is there going to be another notice that will go in the press indicating when these specific dates will be held?

Hon Mr Cooke: I cannot answer that. I will get the answer for you; in fact, we will get for you a little summary of the entire consultation process.

Mr Tilson: But your answer is that the public relations aspect of this process will cost half a million dollars.

Hon Mr Cooke: That is my recollection.

Mr Tilson: Thank you.

Hon Mr Cooke: When you refer to it as a public relations exercise, if you take a look at the summary of the consultation document, and we will also supply it to you, I do not see it that way, it is a consultation process. Even a document that is going to tenants cannot be viewed as a political document. It is a very fair, non-partisan summary.

Mr Tilson: You are referring to the green paper?

Hon Mr Cooke: I am talking about the summary of it that is going to tenant households.

Mr Tilson: Will you be making that available to this committee?

Hon Mr Cooke: Yes, we will try to get to you as quickly as possible a summary of the entire consultation process plus that document.

Mr Tilson: Thank you, Mr Chairman.

Mr Duignan: Getting back to Bill 4 for a minute, we were in the middle of discussion or debate on 100b. Would it be more appropriate to conclude the debate on 100b before we move to section 1?

The Chair: It is up to the committee. I am willing to continue on the discussion for section 100b. I have a list that has been carried over from the 19 February. We can proceed with the list as I see it, or we can go back to section 1. If we were in the middle of the debate, maybe it would be better to finish up 100b, but I am in the committee's hands. I was not here with you yesterday, so I am a little bit at a disadvantage to know what to advise the committee. What is the wish of the committee? Do we complete 100b or do we go --

Mr Abel: Yes, 100b.

Mr Duignan: Let's complete 100b.

The Chair: Do I see a consensus? Okay, that is what we are going to do then.

All right. The standing committee on general government then is going to proceed with clause-by-clause review of Bill 4. As I stated earlier, a number of sections have been carried and we are now discussing section 100b. The list carried over from 19 February is Mrs Ward, Mr Turnbull -- I guess the minister is on the list.

Hon Mr Cooke: I think I spoke. In fact, I think I spoke too long.

The Chair: Okay. Mr Brown and then Mrs Poole. Does that list seem familiar? Ms Ward.

Ms M. Ward: I pass. It is no longer terribly relevant.

The Chair: Thank you. Mr Turnbull.

Section 8:

Mr Turnbull: Well, I will be brief, because I think the moment has passed, but I want to revisit just briefly with the minister this whole question of retroactivity. As the minister will appreciate, this has been the most contentious issue in the whole of this debate. Yesterday, in your absence I addressed myself to your parliamentary assistant and I pointed out that it is tremendously important that people respect parliamentary tradition and your right to govern, and nobody challenges that, Minister.

However, I think you would find it utterly repugnant if at the point when your government is no longer in power, as undoubtedly at some point it will change -- and I said yesterday there is no doubt that any government in Canada today has got to accept the fact that in time its time will pass.

Hon Mr Cooke: I was just looking forward to 42 years.

Mr Turnbull: I am sure you would find it utterly repugnant if a subsequent administration were to pass retroactive legislation which would nullify all of your changes retroactively and say that tenants had to pay back all of the increases that they should have been paying. I would say that that would undermine the democratic process of this country. Every time there has been any discussion about the date and the retroactivity, it has always been suggested that any date you would have chosen would cause problems. I can quite understand that. Part of the political spectrum would have problems with any date and it is true. However, this is somewhat different to any normal retroactive legislation where it goes back a few weeks or even a few months.

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Because of the way that Bill 51 worked, people purchased buildings. I have to emphasize that many of them, the majority of them certainly were not in the business of flipping. They were buying them as long-term investments where they structured their financing within the framework of Bill 51. In fact, very often you would have people financing up to 85% of the purchase price. I think probably one of the few areas you and I could agree on is that 85% was a ridiculously high amount. Traditionally, in other forms of real estate investment 75% was considered as a normal, healthy ratio in any commercial investment, and that is not to say that somebody who is developing a property may have less equity in. But we are talking about resales.

But notwithstanding the fact that you and I might agree on the fact that 85% was too much, these people purchased buildings in many cases with their life's savings and this was their pension fund. A lot of the small landlords have no other source of pension. They have bought these buildings within the framework of the law as far back as the introduction of Bill 51, and because of phase-in orders they are going to lose the ability to get those increases which were calculated. The argument that these people were making bad business decisions has no validity when you consider the cost that many of these people were paying for the apartments on a per-unit basis relative to the replacement value of those units and certainly relative to what non-profit housing is costing.

So these people are going to be wiped out. Notwithstanding the fact that you are saying that you will allow them to reapply under the permanent legislation, you have the problem that they will be bankrupt. You cannot retroactively unbankrupt them. So I have to say to you once again, in the interests of tenants, because we have heard Mrs Poole speak quite eloquently about the fact that tenants are hurt when they are tenants in buildings that go bankrupt, will you not reconsider the retroactive aspects of this legislation?

Hon Mr Cooke: I wish I had been able to be with you last evening. I certainly will want to, and I have not, and because Instant Hansard takes a little bit longer to come out of committee, I have not had a chance to read directly the transcript last night. But I gather that Mr Thom, in answer to a question from the Liberal Housing critic, made it clear that the whole issue of retroactivity has been visited in the past when we have dealt with rent review legislation starting back in 1975. I cannot give you an exact quote, but I believe he made the point last night that this is not the first piece of rent review or rent regulation legislation that has been retroactive. I think it is important to keep in mind that even back in the 1970s, when your party was in power and legislation came in, the rent review legislation that was brought in by the Davis government had a retroactive nature to it as well.

The phase-in issue is something that I feel particularly strongly about. I think phase-ins were a very nasty part of Bill 51 because over time it made units very unaffordable.

There were cases of 10 and longer numbers of years for the guideline, plus 5% was built into the rent increases. If we had to allow all of the phase-ins to continue, we would be allowing one of the more negative aspects of Bill 51 to continue for years and years. I just could not live with that aspect of Bill 51.

I would just remind you, on a final point, that I have indicated, and I hope one of the issues the committee might address will be on the permanent legislation with respect to capital, how we might treat the buildings that would have been able to apply through the rent review system for capital but have been caught by Bill 4, whether there should be a provision in the permanent legislation to address that issue. I certainly will be looking to the committee, as well as people throughout the province, for their views on that.

Mr Turnbull: Minister, taking part of your response, because there are several things you said -- unfortunately I was not able to stay last night and I did not hear that section of Mr Thom's answers -- but you will recall, because I believe that you were actually in the House; you were a member at the time that rent review was brought in originally --

Hon Mr Cooke: No.

Mr Turnbull: No? Okay, well not long thereafter. While it was retroactive in the respect that it included buildings which had some impact on the overall profitability, it did not reach back years before that to the framework of the financial structure within which the people had purchased those buildings, and of course it only took in the older buildings, it did not take in new buildings at the time. That is the first point I wanted to make.

The other point is, I would remind you that Mr Thom, last night before I left, said that with respect, he did not believe that your efforts, encapsulated by the green paper, would work. He actually recommended that we go to some sort of shelter allowance for, I think he used the number, the bottom third of the population.

You also mentioned in your answer that you thought the phase-in aspect was something which was reprehensible, but it has been suggested by your members during these hearings that the offsetting value to low net incomes, and in some cases negative net incomes from landlords owning apartment buildings, was the capital appreciation. But you will appreciate that if you have a loss and you stay within the guidelines which are essentially the cost that all things are rising by, you will still have a loss at the end of the day.

By allowing the phase-in, it was a mechanism by which you allowed some sort of capital appreciation, the very capital appreciation that your members have been citing as the offsetting saving factor to landlords. If you do not allow that, you will have no capital appreciation and it totally takes away from landlords the incentive to invest in housing. Mr Thom said last night that he felt, first of all, that there was no government in Canada that had sufficient funds to be able to provide the rental housing which was needed, so if you drive these people away, you will not have any more rental housing created.

Hon Mr Cooke: I think that if you take a look at the statistics over the years, the numbers of units that have been constructed in the private sector have been relatively low since about 1974, before the first rent review legislation came in. If you take a look at the numbers in British Columbia, where has it been five years now that they have had an unregulated market, the numbers of units that have been constructed out there have been very low, so I would argue that construction of new units in the private sector has a lot to do with a whole bunch of other issues you are very familiar with in this province and that the rent regulation issue is not going to affect that one way or the other.

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Certainly during the consultation process, and I believe it is in the document, one of the issues I would like to hear from people about is the whole idea of whether we can do anything in the rent review legislation for buildings that go up at the beginning, of whether there should be a period of time that buildings are exempted from rent regulation, whether it is three years or whether it is five years, and then they would automatically come into the system. I do not know whether that would work, whether that would be helpful or not. Some people I have talked to in the private sector over the last number of months have indicated that it might be helpful. I hope that that is one of the issues I will hear from people about, both landlords and tenants. I am told that a three-year period would probably be too short, that if you were going to do it, it would probably have to be five years.

I would certainly like to hear from people about that, both landlords and tenants. If tenants object to it, I would like to know exactly why, what the difficulty would be, because if they ultimately do come under rent control, and arguments certainly can be made that the protection is guaranteed at the end of the five years, it is not as if we are doing what was in the original legislation, post-1976 buildings not being covered at all, ever. This would be a special mechanism that would be to allow private developers to construct their buildings, exempt them for five years so that they can search out the market and set their rents based on what they need and based on what the market will provide and then at the end of the five years they would have to come under rent control. I have not made up my mind on that. If you think it would work, I would like to hear from people about that. That might be one mechanism.

Mr Turnbull: Starting out from the first part of your answer, you will recall that when construction slowed down prior to the introduction of rent controls, it was a period when you had had a certain amount of overbuilding. There was a vacancy rate and the cost of construction suddenly shot up and as you get waves in the market, you will always have slowdowns and acceleration of construction in a normal market. But with respect to BC, I think you will find there a perfect example of reluctance to start into construction of rental accommodation due to the fact that after the long period of regulation there is a certain period where people have to get comfortable again, that governments are not going to move with precisely the type of legislation that you are bringing in here.

I have to say that yes, you are correct. Three years would not be sufficient to make an apartment building viable. I would suggest that probably five years is too short and you have to look at probably eight years, and I am just simply basing that on all of the factors that apply to office construction today. But we certainly cannot say that simply because there has been no construction here, it is not going to occur. When you look at the unregulated markets in the US vis-à-vis, say, New York, where you have this terrible problem of long-term regulation, you get on an orderly basis construction, and it slows down and increases according to absorption of those units and other market factors. But if you drive developers out of the private market, you are going to drive them out, I suggest, for a very long time.

I would respectfully point out that we heard in the hearings here the president of the Graydon Hall Tenants' Association, who supported rent regulation but said that retroactive legislation was inappropriate. His solution was certainly to make sure that rent increases were based upon a base rent and not upon the renovation costs and that renovation costs would drop off after they had been amortized. I see that in your discussion paper.

But another of my tenants' groups, the president of the St Andrews Tenants' Association, suggested that property taxes were the best way of funding things, but he did not like retroactive legislation.

The Chair: I want to make sure we have as much freewheeling discussion on every section as we possibly can and I would just ask members to try as much as possible to speak specifically to the section we are dealing with. That will give us all more time to deal with each and every section. I do not think the discussion this morning has in any way been out of order, but I think on occasion maybe we can start talking about subjects which are not contained in section 100b, but I will leave it up to the members of the committee to judge for themselves.

Mr Turnbull: Mr Chair, I said that by way of explanation in response to what the minister said, because you will recall --

The Chair: I understand.

Mr Turnbull: -- I asked about getting into the retroactive.

The Chair: I was talking to the minister too.

Mr Turnbull: I have said what I have to say. I think that retroactivity is extremely bad. It sends the wrong message, and not only does it send the wrong message in a Conservative viewpoint, but I think the tenants are the net losers and that your party will be the net loser too, because when you have no decent standards, you are going to have a very great difficulty explaining your housing policy in the future.

Hon Mr Cooke: I hope the message coming out of this process will be that we have indicated that the permanent legislation is going to deal with capital, and I am prepared, as we develop the permanent legislation, to take a look at the capital that has been expended by landlords and caught by Bill 4. I am prepared to look at that issue and see if it can be incorporated in the permanent legislation.

So, without going into it at length, because I do not want the Chairman to cut me off, it was interesting, on my way back from holidays I picked up a copy of the New York Times and read it on the plane. There was an extremely large article on the weekend about the rent control system in New York, which started in 1947 after a housing emergency was declared. Their definition in New York of a housing emergency is when the vacancy rate drops below 5%. If we had a 5% vacancy rate or the over-4% vacancy they have now we would be in wonderful condition, but that is what they use in New York, and they have a very tough rent regulation system.

Mr Turnbull: You know, Minister, New York is the best example of having had long rent regulations and absolutely choking off construction. There are some reprehensible practices going on in New York, as you well know. There is key money and all of these things.

You know, with respect, I have to say that -- I mentioned it yesterday when you were away -- the Conservative Party, along with all of the other people around this table, is concerned about the need for affordable, safe, accessible housing for all people. Where we differ is how we get there, and we really believe that it is a fundamental problem unless we can ensure that private funds are available and incented to invest. Mr Thom confirmed this last night, and I think it can truly be said that Mr Thom rose above all politics, because he took a little swipe at all three parties last night. I would urge you to read the transcript of what he had to say last night.

Thank you, Mr Chair. I think I have made my point.

Mr Brown: I will be brief. I made an intervention yesterday which I thought was totally persuasive, but I was obviously wrong.

Ms Poole: Wrong again.

Mr Brown: Wrong again, and received a lecture about the greater good.

What I am concerned with, Minister, is obviously the retroactivity in the bill and the message it sends to the investment community and I am a little confused. We have seen in this province since 1 October a government whose message to the investment community has been a little bit mixed. Varity Corp, which you promised could not leave Ontario, was allowed to go. In the case of Consumers' Gas, that had to be owned by Ontario; it was sold to British interests. And most recently, in Sault Ste Marie the government, to its credit, and I applaud it for what it has done, provided a loan guarantee to Algoma Steel Corp in the interests of protecting jobs and protecting steel-making capacity in Canada and particularly in this province. As a member who represents part of the district of Algoma, I am very pleased about the fact that you have intervened and done that.

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But here at this committee we have had numerous landlords before us, the big ones, the large landlords, who have all said the same thing: "We do not like this legislation. We find problems with it. But, you know, we will survive. We will live to fight another day." The small landlords, of whom we have had numerous ones before us said: "Well, our portfolio isn't mixed. We own one building. We own three units. We own 12 units. We own 10 units. We are not going to make it. We are just not going to make it. And we cannot unsell or unbuy our building. We can't go back. We did everything in accordance with the regulations that were there at the present time."

So I understand your position. It is the greater good, from your position, although I disagree, but your position says the greater good is that we go forward with this retroactivity. That is the greater good. Well, if that is the greater good and that must be proceeded with, why can we not do something for the landlords who are going to go bankrupt, are going to lose their life's savings, are not going to have a pension, are not going to be able to live in the style they should be accustomed to? They did nothing wrong other than believe the government.

I wonder if you could do the same for the small landlord, provide the loan guarantees, go to the banks and say: "Yes, we will back your mortgage until you can get this thing refinanced. We will do these things. We do them for Algoma Steel, we do them for the big companies, we do them for the big operators in this province. We will do it for the individuals." I wonder if you have considered that approach and would take that approach through the executive council and say: "Look, we have got to help the little guy. We are not just the party of big business."

Hon Mr Cooke: I appreciate the fact, Mr Chairman --

Mr Abel: I think you have got the wrong party there, Mike.

Mr Mammoliti: I think that is a first, Mike.

Hon Mr Cooke: -- that I will take the comments the member has made about as seriously -- the last comment, anyway -- as he means them.

Mr Brown: I take my comments seriously. Maybe I got a little excited in the last part.

Hon Mr Cooke: I certainly take your comments seriously as well. But I would indicate to you that if you reviewed the transcripts from hearings that took place on Bill 51, you would see that the numbers of landlords who came before the standing committee that studied Bill 51 and the emotion and the concern expressed about Bill 51 were identical. That is the nature of rent regulation. Small landlords came forward and indicated they had great difficulty with the legislation, that it was going to harm them and so forth. There were lots of hearings right in this room where landlords were before the committee and there were some examples of landlords weeping because they were concerned about Bill 51 as well. That is the nature of rent regulation.

The other point I would make to you is that I do not know how you would ever make an assessment of what the difficulties were that landlords were having in this province. You obviously disagree with me, but I certainly submit to you that the difficulty with bankruptcies in this province right now, whether it is in the small business sector or in the large business sector or in the landlord sector, is to do with policies of high interest rates that are set by the federal government and a deliberate attempt by the federal government to slow down the economy, which has thrown us into a very deep recession. Every time there is a recession, of course there is a huge number of casualties and I really want to hold the appropriate person responsible and I would suggest that it is the federal government.

Mr Brown: Well, Mr Cooke, we do not disagree that the federal government in its high interest rate policy is creating havoc in the Canadian economy and the Ontario economy.

Mr Tilson: We disagree.

Mr Brown: You will get your turn in a minute, David.

What I would suggest to you, though, is that these people went to banks; they got loans, not always for pass-through of financial loss but for capital expenditure. They went and in good faith got these loans. They do not have a choice, Minister. It has nothing to do with the free market because there is no free market according to rents, it is controlled. There is no free market. These buildings are full, there are no vacancies in these buildings. In most cases the tenants have agreed this is okay.

We are talking about the small landlords I am concerned about. I cannot see the problem. If you can figure it out for Algoma Steel, why can you not do it for the little guy, for the individual, for the fellow who is risking his life's savings? Create a system where they come before you. I do not think you should run around the province looking for them, but I think they could certainly approach the government and let the government know they are having difficulties. They could prove to you that it was not because of the general economic situation, that it was directly as a result of the retroactivity provisions of this bill. Would you not consider that?

Hon Mr Cooke: I indicated to you that my assessment of the problem is quite different from your assessment. That is to be expected. Usually when I was in opposition I had an assessment of the problem different from whatever minister of the day we were talking to.

But I would point out to you, and I think you remember, that there are 130,000 units that even under Bill 4 are going through the old system, which is over 10% of the market. And there are certainly a large number of people who feel very strongly that the date of 1 October was wrong, that the date should have been an earlier date. Along with the government, I had to make an assessment of what was a fair date to choose and I believed at the time that the bill was introduced, and I still believe today, that 1 October was a fair date. This morning before I came into committee, Councillor Kay Gardner was waiting for me outside with some constituents of hers who may in fact be constituents of your Housing critic, I do not know, and nearly 3,000 names on petitions indicating that they expected a full protection for tenants in this province.

So it is a balancing act, I agree. You feel that I have not chosen the proper balance. Other groups feel that I have not chosen the proper balance either. They think I should have fallen more on the side of even greater protection for tenants. I think that on an interim basis we have found a fair balance.

Mr Brown: I guess we disagree.

Hon Mr Cooke: We do.

Mr Brown: And our party is about to place an amendment in the very near future concerning this section. But I have difficulty when you compare the retroactivity aspects of this bill to Bill 51. We know there were some retroactive --

Hon Mr Cooke: I was just talking about Stuart Thom's comments last night.

Mr Brown: -- retroactive provisions in Bill 51. But they were different and you know they were different and I do not have to pursue those. They are not the same, and to try to make it appear as if Bill 51's provisions are identical to this one's is just not fair and I will leave it at that.

Ms Poole: Mr Chair, Mr Minister, I do have a number of comments to make about the retroactivity. First of all, I would like to dispel the myth that we can compare the retroactivity of Bill 4 to the retroactivity of Bill 51.

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Bill 51 arose out of the NDP-Liberal accord in May 1985. In 1985 the Liberals appointed a rent advisory committee to look at this whole issue and to expand even beyond the basis of the accord. The legislation was introduced in June 1986 and it was given royal assent in December 1986. It is true the legislation was retroactive or parts of it were retroactive to August 1985. A large proportion of the act actually went into force and effect on the date of proclamation, but section 71, which related to the rent increases, went into effect August 1985.

But every person in this province was aware, because of the great publicity behind it, of what was happening to rent review and what the government was considering. There were landlords or tenants who made decisions in that interim before the act was given final proclamation, did it with full knowledge of what the government was intending to do. That is very different from the government coming out on 28 November and saying retroactively, "We are going to do this to you."

There are two separate issues with the retroactivity. One, the one I am going to address primarily right now, relates to capital expenditures. Minister, there was not anything in Bill 51 which said that if a landlord spent money renovating the building, prior to notice being given by the government that it was changing the rules, those expenditures could not be recouped, and that is what Bill 4 does. It says that a landlord who went out -- in many cases they used their homes as collateral, in many cases they did not. These are small landlords we are talking about who did not have the money to do these capital repairs. The financial institution lent them the money on the basis that they would have an increase in rents to recover these losses. And now you have said that even though they acted within the law in the spring of 1990: "Too bad. We are going to cover you under this legislation." To me that is a very, very different thing.

I know that you feel, Minister, that it is giving you some consolation and giving other people some consolation that you may be able to rectify some of these inequities in your final long-term legislation, but as I have said before in this committee, bankrupt is bankrupt. You cannot bring them back from the dead and unfortunately that is the state we are in.

I wish, Minister, that you had been on this committee when we heard presentations because I think, as Mr Drainville said yesterday, members did not remain unmoved. I would take that double negative to mean that we were moved as committee members and I think you will all agree, particularly when people presenting to us did break down in tears.

We had Emil Tancredi, who came from Europe between 20 to 35 years ago, and to quote from his comments, "looking for a more democratic and fair government which we found in Canada." He said: "We are losing our savings of a lifetime because of our government. We are not 20 years old any more so that we can start over again. What do you suggest we do? Our lives and families are being destroyed by our government." And he broke down in tears as he said those words.

We had Brian Timmons, who was a relatively young man, I would say in the vintage of the minister and myself --

Mr Tilson: That old?

Ms Poole: -- who had consulted with his tenants and he showed us copies of his newsletters to them. He followed their suggestions, he incorporated their suggestions, he adapted the renovations to suit their convenience and their schedules and he faces the loss of his retirement savings he has been putting money into for a number of years.

We had Jim Bright, and I think a number of members will remember Mr Bright as he sat here with his son. He broke down; he could not continue when he was talking about how his knuckles and his palms were calloused from the handyman work in the building that he owns and now, as he is just going into retirement, he is on the verge of bankruptcy if Bill 4 goes through.

We heard from Marty Cash, who has already laid off 20 workers from his window replacement company and said he would have to close his company, putting 80 employees out of work.

We heard from John Makuch and I think you will remember him. He was a young man with a family and he told us he was going to lose his concrete rehabilitation company. He has to tell his children that he is going to be out of work and they are going to have to sell their home and move.

We heard from Barbara Carpenter, a Sudbury landlord who put her life's savings into renovating a run-down 75 year-old property, and she cried as she told us she would lose everything. We looked at the rents that were going to be charged after the very major renovation that she received a loan for and the rents were not unreasonable. These are all people who have come before us, admittedly from the side of the small landlords, who are going to suffer and who told us their life stories.

One final one from the landlord's perspective; the name of the man was, I believe, Mr Reitter and he gave some examples of retroactivity. He said, "As a homeowner, could you imagine having arranged a five-year mortgage at 11%, feeling secure in your new home until after one year the mortgage company informs you that it has declared void your mortgage and that for the remaining four years the interest rate has risen to 15%? As an employer, could you imagine new minimum wage laws being passed retroactive to 1986? As an employee, could you imagine your written employment contracts simply being cancelled in mid-term and wages reduced?"

Hon Mr Cooke: You did that.

Ms Poole: "As a landlord, good decisions made in 1987 now turn into poor decisions. Money spent in 1990 can never be recovered. Income granted in 1987 by the Ministry of Housing is now made void," and it is going to have dramatic implications.

I had a copy of a letter sent to me that Altus Property Management sent to a couple of its tenants which said:

"Please find enclosed" -- and then it has the tenant's name, which I will not read into the record -- "January 1991 rent cheque in the amount of $19.51 and your repair receipts. I know that I had agreed to pay these bills to correct the damages caused by the previous tenant. When I made this agreement with you, I was expecting to get certain rent increases which had already been granted or applied for. Now I find that the NDP has legislated me into a financial loss position and I am not able to live up to our agreement.

"I must now ask you to pay your full January rent in the amount of $532.94. I do not intend to ask you to pay your December 1990 rent and have already accepted your repair receipts over a month ago and no matter how hard I try, I cannot stoop to the level of our provincial government and make you pay retroactively.

"I'm sure you feel that it is disgusting that someone would tell you to spend money and you will be reimbursed, only to find after spending the money that you will not. If you wish to call Premier Bob Rae or Housing Minister Dave Cooke, I am sure they will be happy to explain that thanks to them this is the way business is now done in Ontario."

If this government thinks it is going to buy the votes of tenants through this retroactive provision, it is wrong. We had presentations from tenant groups, and major tenant groups, that decried the unfairness of the retroactivity.

The Housing Help Centre for Hamilton-Wentworth is a group whose mandate is to help and advocate for low-income tenants. We had a very, very sensitive brief from them as to what they would like to see in Bill 4 and in the long term. This is what they said about the retroactivity:

"Any rent review system should treat all stakeholders fairly and equitably. Retroactive legislation is rarely justified and always dangerous. Retroactivity requires overwhelming evidence as to its necessity to justify such action. Bill 4 incorporates retroactivity to 1 October 1990. We are certainly aware of tenants who face very large increases because of applications which involve capital expenditures and refinancing. We are not aware of the total number of applications and units or the magnitude of increases which this retroactive feature captures in Hamilton-Wentworth or Ontario. Therefore we feel that the burden of proof is on the government to clearly prove to the public that there are sufficient numbers involved to justify this action."

I have asked for the figures. The minister in the House said the reason they chose the date of 1 October was because there was a flood of applications in the fall. They had to nip this in the bud because these landlords were taking advantage of the fact that they wanted to get in before the NDP managed to do its rent control legislation. I have the figures for the last three years. We were given them as a committee. They show every fall, which is somewhat natural because most of the construction for capital expenditures occurs in the spring and summer months, that there are more applications than there are in the dead of winter, which is not surprising. But I am comparing the figures for the fall of 1989 and the fall of 1990; there were around 73,000 applications in the fall of 1989 and there were over 76,000 applications in the fall of 1990. I just do not see the justification the minister used, which was that there was a new flood brought on by the fact there was a new NDP government. The figures do not justify it.

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We had other presentations from tenant associations. I am going to read to you briefly from the submission by the Graydon Hall Manor Tenants' Association, the Winchfield Place Tenants' Association and the 7 Roanoke Road Tenants' Association, which are very large associations in North York:

"In all fairness, though we appreciate the intent of the legislation brought in to halt abuses in the rental industry by a relatively few landlords, unfortunately its retroactive provision has caused real hardship for quite a number of honest, hardworking and decent landlords. We do not consider it at all fair or ethical to change the rules after the work has been done except in very exceptional circumstances, and we consider it to be a well-intentioned but unfortunate error of judgement."

And finally, from the tenants of a 56-unit apartment at 1000 Huron Street in London, Ontario:

"Our landlord has continually strived to give us good rental accommodation at a fair price. Two years ago, when our parking lot became congested, our landlord decided to enlarge it for our benefit at his own expense. We are entitled to one parking space per unit, according to our lease. However, he provided the extra space which we now use for our second vehicles and our visitors' vehicles without hesitation.

"We recently had the leaky roof replaced, new carpets installed in all apartments, new counter tops and taps, new hall carpets and a beautiful new lobby installed. All of this work was carried out in a proper and legal fashion, all tenants in our building were agreeable to 17% increase in rent, which our landlord legitimately applied for. We were all given written notification from the Ministry of Housing informing us that we had 45 days in which to dispute the suggested increase, but we all knew that we had nothing to dispute because every replacement in our building had been a necessary replacement."

Underlined it says, "Not one of us balked.

"We are now led to understand that you, sir, are not going to grant our landlord his increase in rent and we would suggest that you rethink this decision.

"As tenants we are concerned that:

"(a) Our landlord may be forced into selling our building to someone who will not look after us nearly as well as he does; and

"(b) The level of care and consideration which we have received in the past will greatly deteriorate because our landlord cannot get a decent return on his investment.

"Your flagrant disregard of our wants and needs leaves us no alternative but to demand that you turn your attention away from landlords and tenants, because you obviously know nothing about this situation. In short, don't call us, we'll call you."

And the petition is signed -- a 56-unit building -- with a signature of every tenant in the building.

So do not try to tell me this is for tenant protection because, Minister, there are other ways in which you could have been providing tenant protection. I mentioned yesterday on the committee prior to your arrival back from Windsor that I have a building in my riding that is under receivership because the landlord went bankrupt and what has happened to those tenants. It is not a pretty picture. My office has had to intervene on a number of occasions to get them heat, to get them hydro.

Right now, with the Ministry of Consumer and Commercial Relations we are trying to intervene to get the elevator working, which the ministry refuses to give the permit for because there is no maintenance contract in place. There is no maintenance contract in place because there is no landlord who will give the maintenance contract and we are in a catch-22 situation. That is what is going to happen when landlords go bankrupt, and I know you think they are crying wolf. You are saying, "Well, landlords said this under Bill 51 and they didn't go bankrupt." This is very different because the small landlords went out there and got the loans on the proviso that they were going to get returns through rent increases in order to pay those loans back. They will go bankrupt, and it just seems to me that we have to reach some compromise on it.

I believe that the Conservatives may have been talking about making this legislation retroactive only to the date of proclamation. I understand their intent and maybe logically it makes sense, but I say to you, I share your concern that if you do that, then your bill basically will have been gutted. But my amendment, which I will be proposing shortly as soon as we have heard from Mr Tilson, will not gut your retroactivity.

I would like statistics from the Ministry of Revenue stating how many applications would be affected by this, what the average rent increase would be, the effect on tenants. I have heard none of that. These amendments were tabled at the beginning of the Ottawa Friday hearings and I would like to find out why that amendment is not reasonable and why it cannot work. To me it would protect landlords who did go out in good faith, did renovations, and many of them necessary renovations on their buildings, spent that money and now face bankruptcy. At the same time it is going to protect tenants who will not end up with a bankrupt landlord and who will pay the price that way.

We are talking two different situations, Bill 4 and Bill 51. Show me where in Bill 4 there was notice given, show me in Bill 4 where there is grandfathering to buffer. Show me this and I would be happy to vote in favour of this motion that is before us, but I cannot. My conscience will not allow me. The easiest thing for me to do, particularly with my riding, which is 60% tenants, is to try to buy their votes and say: "Well, so what. You always break a few eggs in making an omelette." I cannot in good conscience do that, Minister. So if you have comments to make now that will make me change my mind and will allow me to vote in good conscience for your provision, then I would be happy to hear those comments.

Hon Mr Cooke: We will discuss in more detail your amendment when your amendment is put, but I have great difficulty with the approach that the member is taking because the member talks about the approach that we are taking in the legislation and how she in all conscience cannot support it. But I remember very clearly, when this bill was being debated on second reading, that your party supported this legislation. There is more to second reading than simply saying you support the concept of rent control and that is the principle involved. This legislation was very specific.

Interjection.

Hon Mr Cooke: Please let me continue. I listened to you.

I think you are very much trying to have it both ways and I am getting a little sick and tired of hearing that from your party.

I have a lot more respect for an approach that is taken by the third party that tells us right from the beginning, up front, what its position is. They are opposed to it, they do not like the idea of rent regulation in general, they voted against Bill 4 and so forth. You are very much trying to have it both ways and you cannot have it both ways on such a difficult issue.

We have told you why we have proceeded with 1 October. I told you that in the House when we had a second reading debate. I talked to you several times about the issue and you understood; you had to understand from talking to me that the 1 October date was not up for grabs. That is part of the principle of this legislation and I am not prepared to accept amendments which would gut the whole purpose of having an interim period to bring us to the permanent legislation. This is a temporary piece of legislation.

I agree it is a tough piece of legislation. It is the kind of approach we promised during the election, it is the kind of approach we promised before the election and it is the kind of approach we delivered on. I remember very clearly the day I introduced the legislation. The first part of your response to my statement in the House was, "Mr Minister, you didn't deliver on your promise. You didn't go far enough," and then the second part of your comment was, "Mr Minister, you went too far." Well, you cannot have it both ways and you are trying to have it both ways. That might work in your riding, but it is not the kind of approach we are taking in our government.

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Ms Poole: Mr Minister, I have a number of comments I would like to refute. First of all, you talked about when this legislation was introduced in the House and my response to it, that on the first part I said you did not deliver on your promise and you did not go far enough, and that on the second part I said you went too far. Do not misquote me, Mr Minister. I said in the first part that you did not deliver on your promise because of either of two circumstances. One is that you realized your promise was unworkable and unrealistic, or two, that out of purely political opportunism you delivered that promise knowing that it was unrealistic and could not work, but you delivered it because you wanted the votes. That is what I condemned. I made it very clear that I did not agree with the promise and I did not think it realistic or workable, and I have had this conversation with you on many occasions, including in the previous Parliament.

Second, you have condemned our party for voting for this legislation on second reading and quite frankly, you have been in the House long enough to know that when you are voting on the principle of the bill it does not mean that you agree with every provision in that bill. You know that. Unlike the third party, we do not have a policy or an inherent philosophical bent against rent regulation. In our party we believe it is necessary. In the best of all possible worlds, sure, a free market system would work, but we are not in that world and we do have to have rent regulation. That has been the stand of our party for many years and continues to be, so there is nothing that we were violating in our principles by voting for that legislation. But I made it very clear in the speeches I gave at the time that while we supported the principle of tenant protection -- we even supported the principle of a moratorium, a pause in which to look at the long-term legislation and make the system more simple and to changes -- while we agreed with that, there were provisions that we were opposed to. And from day one of your introduction of that legislation, that was our principle, that was our stand and we have remained firm in that.

As far as having to understand that the date of 1 October was not negotiable, no, I did not understand that that was cast in stone. I appreciated the fact and I understood that you did not want your bill gutted, but I have received nothing in statistics or figures or anything else to show me that the principle of your bill will be gutted by accepting applications until 28 November.

So yes, I am afraid that I do have a disagreement, and it is not a matter of it playing well in my riding. In my riding the best thing for me to do would have been to support your legislation on second reading, to come to the hearings and support you to the hilt and go back to my riding and say: "See what I have forced this government to do. Look at my stands over the years on behalf of tenants." I cannot do that and I could not do that.

The Chair: Very good. I think we are going to have to move along. Minister, did you have any final comments? Mr Tilson.

Mr Tilson: Mr Minister, I have disagreed with almost everything you have said in these hearings and in the House on rent control up until now, and I do agree with you. I think that the Liberal Party is trying to have it both ways. I think it depends who is sitting out here. You know we have a vote in the House supporting Bill 4 by the Liberals and yet we come to this hearing and there seems to be opposition to it. So it is confusing to the public as to exactly where the Liberals are going and we will wait and see. However, that does not necessarily mean divide and conquer.

Hon Mr Cooke: I would not dare to try that.

Mr Tilson: Of course you would not.

Hon Mr Cooke: It worked for 42 years. I am not going to think it is going to work for ever.

Mr Tilson: Having said that, having said my concern as to the approach the Liberals have taken, I do agree with much of what Ms Poole has said and it is quite apparent we have put you on notice. Ms Poole has put you on notice as to what her amendment will be to this retroactive section and I have, although it is not in writing, but you know if that fails I will be putting forward a motion with respect to the date of proclamation. Anticipating these amendments -- and I know, Mr Chairman, we are getting into a debate on amendments that have not even been made, but I like to follow through; having taken a shot at Ms Poole, I would then like to support her on her request.

Ms Poole: On a point of order, Mr Chairman: This is very confusing to me. I wish the Conservative Party would be consistent.

Mr Tilson: Having taken a shot at Ms Poole, and I will try not to overdo it too much, I think she has put forward a reasonable request, Mr Chair, before any amendments are made, because the minister has made some comments as to the effect of the number of applications that will be affected by the type of amendment that is being proposed by the Liberal Party and the number of applications that would be affected if the amendment is made by the Progressive Conservative Party, which has to do, of course, with the date of proclamation.

So those are two sets of information that I think should be given by the ministry because it has these facts. They have been referring to them and I think it would be useful to know the numbers of application. That is my question, Mr Chairman, to the minister.

Hon Mr Cooke: The second question is a little more difficult to answer because I have no idea what day the bill is going to be proclaimed. That will have something to do with you.

Mr Tilson: It won't work, Mr Chairman, but go ahead.

Hon Mr Cooke: My understanding of the figures is that there are 130,000 applications that go through the system that are not covered by Bill 4 and there are 110,000 that will be affected by Bill 4. That includes, and we can give to you a breakdown, the phase-ins and that includes applications for rent review. We know the phase-ins, of course, but I cannot give you a statistic on the rent increases that would be non-phase-ins, because the only statistic that is kept is after the rent review hearing process has proceeded. So the only statistics we have are the decisions that have already been made, and we are not talking about decisions that have already been made. We are talking about applications, so I cannot give you a statistic on the rent increase for the non-phase-in units that are affected by the moratorium.

Mr Tilson: Can you give us information on the statistics as to the phase-ins that have actually been ordered, that have actually been granted?

Hon Mr Cooke: Yes, the phase-in information we can give you. I can give you a breakdown of the 110,000.

Mr Tilson: Yes.

Hon Mr Cooke: I do not know if Colleen has that.

Ms Parrish: Phase-ins are always capped at 5%, so you cannot have a phase-in that is more.

Mr Tilson: Yes.

Ms Parrish: You may have some that are a little bit less; they are coming up to the end, you know.

Mr Tilson: Can you be specific on your statistics?

Hon Mr Cooke: Break down the 110,000?

Mr Tilson: Yes.

Ms Parrish: I cannot this very second, but we can try to do it this afternoon. I think there are about 30,000 phase-ins, so there are 110,000 of which 30,000 are phase-in.

Hon Mr Cooke: That is the break; the breakdown is close to that. There are 30,000 phase-ins and then the balance are individual units that are applications pending.

Mr Tilson: I have three or four questions, Mr Chairman, but I wanted to support Ms Poole on that request. You know these amendments are coming and if that information can be made available before those amendments are made, I think the committee should hear that information, that detailed information, before we vote on those amendments.

Mr Chairman, I have some questions for the minister specifically on the issue of retroactivity. The minister has referred of course to previous legislation, starting in 1975 and in 1986, and there has been reference made by him and indeed by Mr Thom that there are retroactive features in both of those pieces of legislation, although if I could start supporting Ms Poole, there is no question that the type of retroactivity certainly was not near the type of retroactivity that has been put forward by your government.

In other words, there was some notice that was given in the previous bills, mainly through the types of discussions, but all of a sudden it is announced by your government. In other words, it is like -- surprise -- a 28 November surprise party. Has the NDP become a surprise party? I would like your comments because you have boasted that your government fought the retroactive features that were put forward in 1975 and 1986 and you boast that you are different from the other parties. Why are you being different now?

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Hon Mr Cooke: I have not indicated that we opposed the retroactive nature of this --

Mr Tilson: You supported it?

Hon Mr Cooke: I was not in the House in 1975 --

Mr Tilson: I was not in the House in 1975 either, but --

Hon Mr Cooke: -- but I certainly remember that we supported the bill. Bill 51 we opposed, but not on the grounds of its being retroactive. We opposed it on the grounds that it was not an adequate piece of legislation to protect tenants.

Mr Tilson: So you are telling us that your party supported the retroactive features in 1975 and 1986?

Hon Mr Cooke: Supported the legislation because we felt that it was important to protect tenants, yes.

Mr Tilson: And specifically, your position, and you have indicated that you personally were not present, but to your knowledge your party has supported those aspects of those bills.

Hon Mr Cooke: Supported the need to protect tenants and that was part of the legislation. As I say, we did oppose Bill 51 because we did not think it provided adequate protection for tenants.

The Chair: If I could help you out, between 1975 and 1977 the Conservatives and the NDP had an unwritten gentleman's agreement to support each other to keep the minority government going. I do not know all of the details of it.

Mr Tilson: Thanks very much, Mr Chairman.

Hon Mr Cooke: We always rely on the Chairman's memory.

Ms Poole: Mr Chair, I would assume that if you are making that statement in 1987 in 1990 terms you would of course have used the word "gentlewoman." Just at the time it was an old boys' club; 1975-77 is an old boys' club, right? Things have changed.

The Chair: It is just a term, a colloquial term. It is just like buon giorno. You can say that in the afternoon also.

Mr Tilson: Perhaps I could go on, Mr Chairman. The second question I have is again on retroactivity. I believe that when a government makes a law, it is a government with its citizens -- to avoid the feminine/masculine aspect of it -- a contract with its citizens to do certain things. And the people of the province, the citizens of the province, must know the law.

I give an example, Mr Minister. I saw some time ago a cartoon of you, an editorial cartoon. I suppose that is an example of having arrived, when someone is depicting you in an editorial cartoon. The cartoon depicted a scene where someone was charged under the Highway Traffic Act for speeding and at a specific speed rate, a legal speed rate, except that the law was made retroactive and subsequently, when someone was actually driving he was within the law and some time later, because of a retroactive feature, he found himself outside the law.

Here we are, this has been handed to me. Maybe we should submit this as an exhibit, Mr Chairman.

The Chair: I have not seen it. I would love to see it.

Mr Tilson: Yes, I will file this as an exhibit.

Ms Poole: Why do you not read it out?

Hon Mr Cooke: I have heard it.

Mr Tilson: "So you see, Mr Cooke, they lowered the speed limit on the 401 retroactively in the name of the public safety, you know, just like your rent review. Anyway, you now have 37 speeding violations recorded on video for that time period. Hmm, very expensive. I am sure you understand it is in the public interest." I would like to file that as an exhibit, Mr Chairman, and I am sure the minister will comment on his editorial cartoon.

But I think that we are getting down to the issue of breach of contract. We are talking about between the government and citizens, we are talking about issues of natural justice, following the rules of natural justice. If an individual, a landlord, raises the rent beyond the statutory guidelines set forth in Bill 51, or the Residential Rent Regulation Act, 1986, he can be fined. Several things can happen to them; one, the tenants -- as I understand it, and tenants pay that -- can deduct it off their future rent, but more important, they can be fined. They can be fined up to $25,000.

So therefore landlords are saying to us across the province that they have made applications, and you are going to be providing us with statistics of people who have followed the law, and as Ms Poole has read out to you, have in many cases got the consent of tenants and they have followed the law. Yet all of a sudden, out of nowhere the surprise party breaks the rules itself and says, "Sorry, that's not the rules any more," even though they have spent the money, they have the consent of the tenants, they have done the work and everything of course is therefore retroactive and these people are going broke.

My question to you is, if Bill 4 is implemented, if this retroactive feature is implemented, is it breaking the rules of natural justice?

Hon Mr Cooke: You see, as I indicated to you yesterday, your party and the federal Liberal government made decisions on another approach when it came to wage and price controls.

Mr Tilson: Yes, but we are now, Mr Minister, we are not then.

Hon Mr Cooke: No, there is --

Mr Tilson: We are not long ago.

Hon Mr Cooke: Exactly the same principle is involved and the principle --

Mr Tilson: Let's talk about now. You are a new government.

Hon Mr Cooke: I cannot tell you how to ask your questions and if I can just take a couple of minutes to answer the question in the way that I would like to, the point being that there is a decision that governments have to make of what is in the public interest and what is the public good that has to be served. Your party and the Liberal Party made those types of decisions when it came to retroactive legislation dealing with wage and price controls and ripping up of contracts of many workers across this province. I did not agree with that approach because I did not think it was necessary in that case and I did not think it was the appropriate thing to do, but you did.

Now, in this particular case we as a government have made a decision that this type of legislation is necessary. Those are judgement calls that governments have to make. You made them in the past and you proceeded and we have made this decision in this particular case and we are proceeding. You were judged by the approach that your government had taken in the past -- and I am not saying specifically on that piece of legislation, but overall on the approach that governments take -- and we will be judged as well. But that is the nature of the process. Each government has to make those decisions and I stick by this one. I think this is the approach that is necessary.

Mr Tilson: It will indeed be judged, Mr Minister. I guess my question is, making those comparisons you indicated that you opposed that type of legislation now; why do you not oppose it now? You opposed it then; why do you not opposed it now?

Hon Mr Cooke: I opposed the whole approach that was taken during, I think it was called the 6 and 5 program. Back then I opposed it because I did not believe it was going to solve the economic problems we were experiencing at the time. I am just indicating to you that one of the things that legislation did was retroactively rip up contracts between workers and unions and their employers, and it did that retroactively. Your government said you had to do that because it was going to serve the public good and it was absolutely necessary because the provincial government had the responsibility of looking at the needs of the entire province. Well, in this particular case we have made a judgement that this is necessary and that it is in the overall public interest to proceed.

Mr Tilson: Well, Mr Minister, that is what I am getting at. What caused you to change your mind? What facts do you have? What facts has your government obtained to make that decision? It is a judgement call, but presumably you obtained some facts to make it. Why have you changed your mind?

Hon Mr Cooke: I have not changed my mind when it comes to the need to protect tenants.

Mr Tilson: So you want to protect tenants but not landlords?

Hon Mr Cooke: We are talking about rent regulation here.

Mr Tilson: Yes, we are. We are talking about retroactivity. That is exactly --

Hon Mr Cooke: The permanent legislation obviously has to have some approaches that we have talked about. Yes, the need was there to bring in a temporary moratorium, which is what we have done. The statistics and the rent increases were raised by myself and my leader on regular occasions when we were in opposition and we had come to the conclusion when we were in opposition that there was a need to bring in strong rent control legislation. That is what we promised before the election and during the election and we delivered on it after the election.

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Mr Tilson: I think where your party and the PC party differ is that our party is concerned with all of the people. We are concerned with both tenants and landlords, where you have stated just now and have stated publicly in the past that your interest is the tenants. In fact, you have made a statement that you are not representing the landlords.

Hon Mr Cooke: No, to correct the member, that quote from my home community -- and I spoke to the person after -- was completely misleading. That was not the case. I can run through exactly what --

Mr Tilson: What did you say?

Hon Mr Cooke: Exactly what happened was that there was a meeting of landlords in my community and one of the questions from one of the landlords in the group was: "You've got 150 landlords here and we all oppose your legislation. Why aren't you representing us?" I said there could be a group of tenants in the room next door and some of those tenants would also indicate that they do not support my legislation because they do not think it has gone far enough. "I'm not here to represent landlords or tenants. I'm here to do what I think is necessary to provide basic, decent housing in the province." That was the approach that was taken at that meeting and, you know, obviously any short quotes can be used from anybody. That is the nature of the business.

Mr Tilson: I will leave that for a moment because of course we were told that this --

Hon Mr Cooke: Oh, I know what you were told. I was there.

Mr Tilson: Yes. Again, I would like to get back to my question. My question is that I would like to know the facts that you are relying on to make this retroactive decision.

Hon Mr Cooke: We will supply you. I told you, there are 110,000 units that are affected by the moratorium and we will give you the exact breakdown. It is 30,000 approximately that are phase-ins and the balance are applications, and also part of that is conditional orders. We will give you the breakdown first thing this afternoon, but those are the numbers.

Mr Tilson: I guess that is what I am getting at of course, that you have those sets of facts. But there are other facts, some of which have been read into the record by Ms Poole.

Hon Mr Cooke: Exactly. She went for the briefing and she got those statistics.

Mr Tilson: The facts that have been read into the record, Mr Minister, are that there are a large number of people who will be going bankrupt, who will be losing their jobs because of your retroactive legislation. Those facts obviously were not considered by you when you put forward Bill 4. Now that you have had an opportunity to hear those facts, and not just the facts that Ms Poole has read into the record but the facts of this committee -- I am sure you have been briefed on that, I am sure you have probably read Hansard as to the number of people who are saying, "We're going bankrupt" -- are you prepared to reconsider your position and take the retroactive feature out of this bill?

Hon Mr Cooke: There are a number of considerations to think about and one of the considerations is the need to make sure that we do not lose more of our affordable housing, which is exactly the difficulty if we do not act. And yes, I have taken into consideration, in developing the policy, all aspects of the effect of the policy and I came to the conclusion that 1 October was the appropriate date to include in Bill 4. It is a date that I put in the legislation when I introduced it on 28 November and we will continue to disagree about the real impact of Bill 4. I believe that there are several other economic factors that are playing very considerably on all businesses in this province and, you know, I would look to Ottawa for some of those effects.

Mr Tilson: These facts were not available to you when you made your decision, when Bill 4 was --

Hon Mr Cooke: What facts are you referring to? The fact that there have been some landlords coming to you and saying they are going to go bankrupt? Well, you know that is not necessarily my view of a fact.

Mr Tilson: Mr Chair, again to the minister, the facts have been presented to this committee, unrefuted facts, that these people are saying they are going to go bankrupt.

Hon Mr Cooke: I do not necessarily agree with that.

Mr Tilson: You disagree with those statements. Is that what you are telling us?

Hon Mr Cooke: I did not say that. I do not know how, on the basis of people coming before the committee saying they are going to go bankrupt and saying it is going to be Bill 4 that makes them go bankrupt, how that is a fact. We do not know that.

Mr Tilson: What are they, fairy stories?

Hon Mr Cooke: We do not know that. Have you gone and examined books and taken a look at whether this is the case?

Mr Tilson: The facts that have been presented to this committee are that these people have made an application for an order. They have spent the money. They have put mortgages on their house. They put mortgages on their own houses and on their buildings. The expenditures have been made. They have obtained the approval of the tenants. Those orders are null and void. Those are facts. They are not fairy tales. And as a result of those facts, they cannot make their mortgage payments on either their apartment buildings or their houses. Those are facts. They are going to be put out of not only their apartment buildings but their houses. Those are not fairy tales. My question to you is, having heard that type of information, are you prepared to reconsider your position on retroactivity in this bill?

Hon Mr Cooke: And I am telling you that we will continue to disagree about the impact of Bill 4 on landlords in this province. I do not agree with the position that you have taken. I do not agree that Bill 4 is the cause of all the economic problems that landlords are experiencing in this province. We will not agree on that. I am not prepared to change the 1 October date. I have indicated that several times yesterday and today.

Mr Tilson: Well, I know Ms Poole. It is not going to prevent Ms Poole from making her amendment, and it sounds like it is going to lose before we even vote on it as a result of that last statement the minister has made. I can assure you that if Ms Poole's amendment has been made, the PC party will be making an amendment, and it sounds like we are going to lose that as well. But so be it. That is the way it appears this government is going to operate.

This is my final question, Mr Chairman, again dealing with retroactivity. These individuals, these people who are coming to us and saying that they are going to sustain substantial losses, that they are going to go bankrupt, you have made a statement that you do not necessarily believe that that is attributable to Bill 4. They are saying that they are going to go bankrupt, that they are going to sustain major losses. If Bill 4 is passed with very little amendment and these people again come in and can produce further facts that they hopefully will not have gone bankrupt but perhaps they can say, "We're on the verge of bankruptcy," and they can produce facts attributing it to -- in other words, they will show you their books, and I am sure many of them will; they would probably do it right now if we extended these hearings -- if they will produce these books to you, would you provide them with financial assistance to allow for their losses?

Hon Mr Cooke: Mr Chair, we are prepared to develop a permanent system of rent control in this province that will address some of the concerns you have expressed and some of the concerns that landlords have expressed as well. That commitment I have made. We already did, as you will recall, put some additional money into another program called the low-rise rehab program, which certainly has been a very successful program in the past and is expected to be a very successful program in the future as well. So those are the limits of the involvement of the government in terms of direct subsidy to the private sector.

Mr Tilson: I appreciate that drop in the bucket, but again, I am referring specifically to the implications of this retroactive feature of the bill.

Hon Mr Cooke: We do not agree on the implications of Bill 4, so the more often you say it, that does not mean it is going to make it more true. I do not agree. We have a fundamental difference of opinion on the effects of Bill 4. I believe it has the effect of stabilizing the market, protecting tenants while we develop the permanent system. That is the purpose of it and I believe that is the effect of it.

Mr Tilson: Well, then I wish you well, sir, when we start reading about powers of sale and mortgage foreclosures.

Hon Mr Cooke: I have been reading about that already, about a lot of homeowners in this province and a lot of businesses in this province that have been experiencing these problems because of economic policies that are set in Ottawa.

Mr Tilson: You are going read a lot more because of Bill 4. Mr Chair, those are my questions.

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Mr Turnbull: Minister, I have to take issue with some of your last statements. You said that with respect to the so-called 6 and 5 legislation which was brought in by the federal Liberals, first of --

The Chair: We are going to deal with subsections 100b(1), (2) and (3), right?

Mr Turnbull: Yes, this has respect to the retroactive aspect of it. You will recall that all provincial governments across Canada opted into that program and your party objected to it when it was voted on in the provincial Legislature, as I believe. The legislation was wage and price controls.

Hon Mr Cooke: Retroactive on prices?

Mr Turnbull: The only retroactivity on wages was with those where there was a collective agreement -- well, let's say it was a three-year agreement. They were not allowed to get the amount in the future from the date of introduction of the bill and not allowed to get that amount which they had negotiated for. But by the same token, while they were not getting that increase, they were also not having any increases in the prices of items.

Hon Mr Cooke: So you would not oppose, then, the section of our bill that affects phase-ins, because that is future rent increases.

Mr Turnbull: What I am saying is, you are not bringing in any legislation to offset the negative impact, you will recall that, as I said, wage and price controls, to the extent that people were not getting rises in their wages that they had already negotiated, but they had not spent money. Under this rent review, you have to have substantially completed the work, which means that you have to have spent the money.

You have brought forward nothing to date to protect these people who have spent the money. And with respect to your statement that you have no facts about the impact of people going bankrupt and it is just stories that people have told, I moved in this committee to get expert testimony from the Trust Companies Association of Canada and your people voted it down. They did not want to hear expert testimony from the association of the trust companies that have the largest share in mortgages.

Now, Minister, I have been told by a senior executive of one of the large trust companies in Canada -- and he was reluctant to come forward with this information -- that he was concerned that they may end up being one of the largest residential property owners in this province as a result of this legislation, and he did not want to come forward. Do you know why? Because he was worried about the run on his company's shares because of the impact, because they were taking them in at less than the value of the mortgage they have. And your party refused to have expert testimony to come forward and at least tell us the measure of the problem. You are saying you do not have any evidence. Of course you do not have any evidence. Your party refused to accept any evidence.

Ms Poole: First of all, I would like to ask the ministry, when it gives us those statistics about applications that are caught in the retroactivity, if we would have a breakdown. That is what I did not receive at the briefing session that the minister referred to back in December. I would like a breakdown as to what applications were for capital expenditures, which ones for phase-ins, which ones for conditional orders; also the dates of those applications -- not specific dates, as you can appreciate, but the range of dates.

Hon Mr Cooke: Again, I will get as much of that information as possible for you. The range of dates is pretty clear. We are talking about after 1 October. You are not talking about years; you are talking over a period of months. But we will get as much information for you as we have. Not all of the statistical information that would be helpful is collected, so we will get as much of it as we can.

Ms Poole: Mr Chair, I have a problem with what the minister is talking about. He is saying it does not involve a long time and many people out there across the province are confused about the retroactivity. They think the retroactivity is till 1 October, and it is not. We are talking 1 October rent increases, and the minister knows as well as I do and as well as you do, Mr Chair, and every member of this committee should know that, that in order to get a 1 October increase you must have filed your application with rent review at least by 1 July 1990. If it is capital repairs you are talking about, they have to be substantively completed before you even apply. So we are not talking about six weeks of retroactivity.

The newspapers, which I gather have not done their homework on this issue, have written that the retroactivity covers capital expenditures made between 1 October and 28 November. Let me dispel any myths or illusions about that; that is not what we are saying. We are talking about matters that occurred far in advance of any election call, and the implication that there was a run on applications because of the election call is completely erroneous. A landlord would have to have applied by no later than 1 July in order to receive a 1 October increase.

Second, the minister has made a couple of comments that I simply have to refute. One is that in dealing with the bankruptcies, the minister has told me when we have talked that he feels a lot of these bankruptcies are related to economic conditions and the recession, and in committee today he has blamed it on the federal Conservative party and their high interest rates. It has not been my practice to defend Brian Mulroney, heaven knows, I think this is the first time I have ever said anything positive in that regard --

The Chair: Careful, you are on shaky ground.

Ms Poole: -- but to lay this at his door, to me that is totally misleading. We have had witnesses who were unionists, Mr Minister, who have come before us and told us about layoffs and bankruptcies in their area. And we have asked them specifically, how much of this is seasonal, the fact that the trades and suppliers usually are not as busy in winter months as they are at other times of the year? How much of this is economic, due to the downturn in the economy? And we asked how much they attribute to Bill 4. One of the witnesses we had gave us a figure. He said 60% of the employment in their sector was directly attributed to Bill 4.

Now, I cannot see how you can say that it is all due to the recession. There is no doubt that some people will go bankrupt because of the recession, and that is the major cause, but not the witnesses that were coming before us. They said in no uncertain terms that it was Bill 4 that was causing the difficulties.

The final point I would like to make involves going back to the wage and price control legislation which was introduced by the federal Liberals, as the minister said. He said he did not agree with the retroactivity on it, but --

The Chair: This is the last time we are going to talk about the 1975 wage and price controls.

Mr Tilson: I certainly hope so.

Ms Poole: If anybody from any party wishes to have me ask --

The Chair: And this is the last time.

Ms Poole: -- or include their comments in mine, please pass it now and I will make sure it gets said, otherwise --

Mr Mammoliti: Let them know it was one of my contracts that got affected by it.

Ms Poole: Okay, I am very firmly opposed to this because it affected George and his contract, and in keeping with my policy of being nice to George so he will feel good when he votes for my amendments, I would like to make that point. But Minister, I really am having trouble with consistency here, with your consistency, not mine. You have said you did not agree with the retroactivity but it was necessary, and then when Mr Tilson asked you about that --

Hon Mr Cooke: I do not think I said that, but go ahead.

Ms Poole: Well, that is what you said. I copied down your words exactly, and we can prove it by Hansard once it is available.

Hon Mr Cooke: Good, okay.

Ms Poole: But then when Mr Tilson asked you about those words you said, well, you were opposed to the whole approach.

Hon Mr Cooke: Exactly.

Ms Poole: Now, on the one hand you were saying that you are opposed to the retroactivity, and now you are saying, "Well, yes, this is the same thing but I am no longer opposed to it."

Hon Mr Cooke: That is how you describe it. That is not how I see it, but anyway, that is fine.

Ms Poole: That is not only how I see it, that is how it is going to appear on the record. At least have some consistency. And I mean you, Minister, and the Premier.

Hon Mr Cooke: We did not vote for it on second reading and then against it on third reading did we, anyway?

Ms Poole: That is your problem, Mr Minister. Do not ask me to revisit how you voted on things. We are talking about how we voted and why we voted. But as far as I am concerned, what you are basically saying is, "I can rely on precedent, which I did not agree with at the time, but I am relying on it to justify why I am doing this." And it does not hold water. It just does not make sense. You are basically saying two wrongs make a right. It does not matter if it is unfair because it is only interim, and after all if it is temporary let's not worry about whether it is fair. I have a real problem with that approach.

The Chair: Okay, thank you. That completes the list of members who wish to discuss subsections 100b(1), (2) and (3). Any further questions, comments or amendments? Ms Poole.

Ms Poole: Yes, Mr Chair, due to the hour I am going to suggest that I will read my amendment into the record and then we would entertain debate on it when we come back, if that is satisfactory.

The Chair: That sounds reasonable.

Ms Poole moves that subsections 100b(1) and (2) of the act as set out in section 8 of the bill be struck out and the following substituted:

"(1) Subject to subsection (2), this part applies to every application for rent increases filed after the 28th day of November 1990.

"This part does not apply to an application filed on or before the day that is 30 days after the Residential Rent Regulation Amendment Act, 1991, receives royal assent if the application,

"(a) is made under section 86 of the act, and

"(b) applies only to capital repairs in respect of which the landlord paid or owed money on before the 28th day of November 1990 for work that has been done."

Ms Poole has moved an amendment to section 8. I believe it has been suggested that we table the amendment for now and that when we return at 2 pm we will have full debate and then we will vote on the amendment. Is that the consensus of the committee? Thank you. The standing committee on general government is adjourned until 2 pm.

The committee recessed at 1153.

AFTERNOON SITTING

The committee resumed at 1413.

The Chair: Prior to the recess we were discussing section 8, section 100b and after lengthy discussion, which took most of the morning, Mrs Poole moved an amendment to section 8, 100b (1) and (2). It was decided at that time that we would reserve debate on this amendment until this afternoon. So the Chair will make a list of the speakers wishing to debate Mrs Poole's amendment and we will give Mrs Poole the opportunity to explain her motion and why she is making the motion. Mrs Poole.

Ms Poole: Thank you, Mr Chair, for giving me an opportunity to explain my motion. Now, if I could just have an opportunity to find my motion then we will be in good order.

We have had a considerable amount of discussion this morning on the retroactivity of the bill. The basic premise of the amendment that I have placed before you is to change the provisions of the particular section to state that it applies to applications for rent increases which were filed basically on or prior to 28 November 1990, which is the date that the government introduced the legislation.

The second part of this amendment applies to the fact that there may have been landlords who did not apply on or prior to 28 November 1990 and yet incurred expenses for major capital repairs.

We have limited our motion and this -- by the way, I would explain for members' benefit that this motion, this amendment specifically refers to the capital expenditures, not phase-ins, so we are only dealing with one section of retroactivity here.

Our concern was that if a landlord had actually spent money on major capital work with good intentions, bona fide under the laws of the land, that the landlord should not be penalized after the fact and be notified that the rules had changed even though he or she was not aware of the change at the time.

So we have covered capital work that was done up to 28 November 1990 but not capital work that was done subsequent to that date. Obviously, this will not satisfy all landlords because some landlords signed contracts on or prior to 28 November 1990 for which they are legally liable, whether or not they had the work done. Those landlords, unfortunately, will have to take their cases to court in order to prove that they should not be liable.

We did not try to protect everybody with this amendment. We tried to protect those who had actually incurred expenses for capital repairs that were done and that would be in financial jeopardy if not reimbursed.

I think it is a fairly moderate and, in the true liberal spirit, a compromise proposal. Like I say, I am sure that there are many landlords who would resent the fact that it did not cover up until the date of proclamation. On the other hand, as the minister has pointed out, it is extremely difficult to pick a day that is fair to all. I would submit, though, that this date is fairer than the 1 October rent increases chosen for the bill. I do not feel that it interferes with the spirit of the legislation which is to call for a moratorium period, but instead that it will offer an opportunity for fairness and justice for those who acted within the laws of the land.

Those are my initial comments, Mr Chair.

Mr Tilson: Mr Turnbull and I will be supporting this amendment.

I think that our position has been throughout these hearings, as we have indicated, that we would prefer the date of proclamation as being a more realistic approach as to when the bill should become law. However, our party is always prepared to enter into compromise, because I can see -- obviously the minister expressed his view this morning that he feels very strongly about the retroactive aspect, and I do not think it is a matter of compromise. I think it is looking at, as I indicated this morning, some of the facts that have been presented.

As I understand it, if under section 86 a landlord and a tenant have agreed that certain matters should be done, and that is prior to 28 November, that would apply, as I understand the proposed amendment, and that is exactly what has happened. There have been several instances that have been presented to these hearings where that situation has occurred, where the landlord has sought the approval of the tenants, it has been done with the approval of the tenants and the work indeed has been done.

If the retroactive section is allowed to continue under Bill 4, even though the tenants have wanted particular work to be done and have agreed to it, they will not be done, and this amendment solves that issue.

We have had landlords come to us and say the work has been done, the work has been paid for. The work has been done and mortgages have been taken out on their house, mortgages have been taken out on their building, other financial commitments have been made out of their own personal resources for the purposes of doing this work, and that has been done based on the existing legislation. This amendment covers that. The proposed Bill 4 legislation does not, and I think that the Liberal Party has zeroed in on two specific areas which our party wholeheartedly supports.

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Mr Brown: I look on this amendment as being a minimal amendment, as being the bottom line, as being the sort of last step in fairness. We have discussed this issue for quite a while. Committee members have heard a tremendous number of landlords come before us. We have heard tenants come before us who know that if the landlord does not get the increase that they agreed to, they are going to be in great difficulty.

Over three weeks, as we travelled throughout the province to various locations, we heard both tenants and landlords tell us that this needed to happen, that the work that the landlord did was necessary. It was not a whirlpool, it was not a marble lobby, it was necessary work that had to be done and the tenants wanted it done, and it is just totally unreasonable when they had agreed to it, in many cases, to not pass through that cost.

My colleague this morning read into the record some of the testimony from people, from tenants and from landlords. This does not solve all the problems with retroactivity, but it does seem far fairer than what the government is proposing to do.

We are really having difficulty with this issue. We are having trouble wondering whether there was anybody on the committee but Liberals and Conservatives, because we all heard this, and yet on the other side there is just no noise at all. They do not want to speak to this issue; they do not want to talk about this issue; they do not want to talk about how this government will help big business but will not help individuals, where they think big is better.

I am very, very troubled by the fact that our government would so blindly pursue such an avenue when all the evidence the committee has heard -- well, most of the evidence the committee has heard -- has said to this committee that this does not make sense, this is not fair, this is not just. We certainly believe that the government has the right to change the law, and certainly that is what a democracy is about. But a democracy is not about reaching back into the past. That is not what a democracy is about, and that is what this amendment addresses. What we are saying is that this is far fairer; this makes more sense and should be followed.

We really find it difficult to believe that needed repairs to buildings -- in the minister's addresses, he said over and over again, "I have always been in favour of capital expenditures being passed through," and that is what this amendment talks about. Why was it okay before 1 October, and presumably will be okay once Bill 4 expires, but it is not okay now, or was not okay for the landlord who spent the money in August or July or, in some cases, the first of the year, the first of last year? I do not understand the fairness. I do not understand why we help Varity Corp, why we help Algoma Steel, why we help big corporations and we will not help the little landlord, the fellow who has mortgaged his house to do these repairs.

We have heard over on the other side that --

Interjection.

Mr Brown: Yes. We are hoping they will support us, so I will be nice. These are real people. There are real people affected here. It is real people who are going to lose their pensions. It is real people who are going to lose the investments of all their savings. It is real people, and they did these things in good faith; they did these things according to the rules. They made these investments for the betterment of the homes of the tenants. They did all these things properly and they are having a government just take them away from them. That is what is happening. We should make no mistake about what is happening out there in the rental market, what is happening to landlords who have invested in their future and in the future of this province with their sweat equity that they will never see a dime for. That is what is happening and that is what this amendment is addressing.

I find it incomprehensible that anyone could not support this amendment after hearing what we have heard. I want you to think about what we have been doing for three weeks. I want you to think about the people who have sat over here or sat in Sudbury or sat in Ottawa or sat in Windsor and told us these things. It is reality. It is no myth. It is not hypothetical. It is not about the greater good; it is about real people, real individuals. We know that the big companies are going to be okay in this market. They told us that. They do not like it, but the big guy is going to be just fine. His profits are going to be down, but it is the little guy, it is the ma-and-pa operation that is in really big trouble. From our party's perspective, we just cannot imagine that somebody who improves the homes of tenants, somebody who makes life better for tenants, is going to be penalized and lose, in many cases, his or her life savings.

I saw somewhere or other a paper that said on the same sheet that this legislation is supported by tenants' associations and OPSEU. I thought that was interesting. I was interested, and I have mentioned this before in this committee a number of times, that the NDP seems to think that being a landlord is a great investment, that it is super to be a landlord and you are going to make lots of money -- "You should be in this business; the return is great." I suggested a couple of times that if they believe it, if that is what they believe and if OPSEU wants to support this legislation, that is great.

They have billions of dollars of pension funds that are administered in conjunction with the province of Ontario, and Mr Cooke knows all about that legislation. He knows there are billions of dollars. I wonder, Mr Cooke, just as a question, would you support having the pension funds of OPSEU invested in real estate in this province?

Hon Mr Cooke: I do not understand your point. I think that many pension funds in this province already are investing in real estate in this province. I would certainly like to see pension funds used to a greater extent for non-profit and co-op housing, but I know OMERS, which comes under the Ministry of Municipal Affairs, certainly have invested in housing across the province.

Mr Brown: What I am asking is, would you suggest to OPSEU or to the public pension plans that they invest in Ontario real estate?

Hon Mr Cooke: What is your point? Pension funds already do that. OMERS has done it and I do not know about the -- I know about OMERS because it comes under my ministry, but I do not know whether the Ontario public service pension plan has invested in private sector real estate or not. I do not know.

Mr Brown: Well, maybe we can pursue --

Ms Parrish: I actually know the answer to that question but I am not sure if -- I do not want to intervene. Up until public sector pension legislation was changed, as you know, the public sector pensions for folks like us were invested essentially in the consolidated revenue fund of Ontario. Under the new system, there is a pension board whose president is an old colleague of mine, Jim Wilbee, who was the superintendent of insurance, and they now have the ability to invest in other market securities, including real estate, and it is sort of phased in over time. So they now have the ability, which they did not have in the past, to invest in real estate, as well as in the markets generally, in the securities market as well.

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Mr Brown: Yes, I am quite aware of that and it seems to me Mr Cooke is also, as we debated that in the last Parliament. My real question is, is being a landlord in this province a good investment? What, Minister, is the rate of return in this province for a landlord?

Hon Mr Cooke: I will respond, Mr Chairman, at the appropriate time. I would certainly like to make some comments about the amendment.

The Chair: Sure.

Mr Brown: Therefore, if it is a good investment, would he recommend to the newly freed-up public service pension plan to make investments in the real estate in this province? We had a presenter here who talked about real estate investments, an investment broker, and he told us that institutional investors had abandoned this sector, that they were not about to put their money into Ontario residential real estate. He told us that big corporations are withdrawing. He told us that the only people really left creating and maintaining -- well, creating -- rental housing are the small individual landlords, the ma-and-pa type operation, the group of friends, the nine steelworkers from Hamilton who invest in a building with their life savings. Those are the only people in this province to do it because they do it with their sweat equity; they do it with their own hands; they keep the costs to a minimum and that is how they do it.

The discussion here is really around investment -- whether the retroactivity enhances the ability of, or the minister thinks that the retroactivity gives the right signal to business, gives the right signal to the small individual to help this province and create more housing, if this retroactivity helps any of those things. I would suggest to him that it does not. I would suggest that the retroactivity as expressed in the bill is a bad signal to business and at least this amendment somewhat mitigates that kind of investment in properties. I think I will leave it for now and you can move on to the next person, Mr Chairman.

Ms Poole: I think the bottom line with this amendment and this bill is whether the people of this province are going to have trust and have faith in government. I am not talking about this government at this particular point in time; I am talking about government. All members of this Legislature and all members of this committee have just gone through an election where I am sure you can appreciate the cynicism of the people and the general contempt for not only government but for all politicians. Sometimes I think we have given them good cause for that. I would not want to exacerbate that lack of faith and trust in government. As Mr Brown has just so eloquently put -- Mr Brown, like that?

Mr Brown: I love it.

Ms Poole: Yes. I want Mr Brown's support as well as George's, but as he so eloquently put it, there are going to be a number of people who will not trust government and certainly will not trust this government if the retroactivity affects them in the negative ways in which we have been informed it will. So I think that is the first important thing we will have to remember, our obligation to restore trust and faith in government. Secondly, we have had a number of comments throughout these hearings about how widespread the problem is or is not. And the reason this affects the retroactivity is because the retroactivity is a fairly strong weapon, if you will. It is certainly a very strong statement to make, that the situation in Ontario was at such a crisis pitch that the government had to take extraordinary actions by which to deal with it.

But the minister's own comments at the press conference when he announced the legislation back in November, his very own words were that it was an abuse by a few landlords and that this legislation was being put forward to correct that problem. Again I have to ask the question, if it is abuse by a few landlords, by some landlords -- and I think there is no doubt about it; there are some landlords taking excessive advantage of the system -- but if it is only abused by those few landlords, why so dramatic a provision in this legislation?

The final point I would like to make is actually in the form of a question. This morning, and I can appreciate it was only some three hours ago, we asked the ministry for statistics about how many applications were caught in the moratorium, a breakdown for whether they were by capital expenditure, phase-in, or whatever reason, the average rent increase; that type of breakdown. I would like to reiterate that I am not expecting miracles. If you do have that information right now, I would hope it could be tabled with the committee. If it is not available, I would suggest that we stand down the vote on this particular amendment until such time as we have those figures. So that is my suggestion.

Hon Mr Cooke: We have them for you and I just signed the letter which will go to the Chair, but I can read them to you.

The Chair: Yes. Go ahead, Minister.

Hon Mr Cooke: There are 23,204 units that --

Ms Poole: Mr Chair, could we have that distributed?

Ms Parrish: I am not sure -- this is actually about the -- this is a different one.

Hon Mr Cooke: Okay, this is statistics on the --

Ms Parrish: This is the money issue.

Hon Mr Cooke: -- on the cost of the consultation. But I have the statistics on the numbers of units too, and it is fairly --

Ms Poole: I just wondered, if there were sufficient copies, if we could just have it as you read it. It just is easier.

Hon Mr Cooke: We are getting the copies for you. As soon as we get the -- I have it written down here and I guess that is actually being prepared right now.

Ms Poole: Okay.

Hon Mr Cooke: But it is not that difficult. There are 23,204 units that were phase-ins that are affected, there are 3,739 units that were conditional orders and there are 74,557 units that were whole-building reviews.

Ms Poole: Could I have that again?

Hon Mr Cooke: That is 74,557. So the total is 101,500 units for first effective date of 1 October.

Ms Poole: For a first effective date after 1 October.

Hon Mr Cooke: Under our legislation that is how many units are affected.

Ms Poole: And how many applications would that represent?

Hon Mr Cooke: Well, I will get you that figure.

Ms Parrish: You will have to give me a few moments. It is probably around 1,000, but I will just --

Ms Poole: So that would be 1,000 applications.

Ms Parrish: It depends on how you treat a phase-in. You see, a phase-in is not normally treated as an application, if you know what I mean.

Hon Mr Cooke: Because phase-in is not a pending application, it is a --

Ms Poole: It is an order.

Hon Mr Cooke: It is an order. And just so that you have the information, if we accepted your amendment, the number of units that would be affected would be 8,673.

Ms Poole: So 8,673 units would be affected?

Hon Mr Cooke: Right.

Ms Parrish: They have an application date after 28 November. They are in the system; landlords have made an application after 28 November other than for a joint landlord-tenant application.

Ms Poole: Okay. So those are post 28 November.

Ms Parrish: That is applications.

Ms Poole: Applications.

Mr Tilson: That is over and above the 101.

Ms Poole: So they would not actually be caught by my amendment. Is that what you are saying?

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Ms Parrish: That is correct. Those would proceed.

Hon Mr Cooke: The 101,500 would proceed. The 8,673 would be applications that have come in since 28 November.

Ms Poole: And do we have information as to what the average rent increase was for those 101,500?

Hon Mr Cooke: No. You see, we will not have that. You know that phase-ins are 5% over and above the guideline.

Ms Poole: Yes.

Hon Mr Cooke: The other information -- statistics are not kept on applications; the statistics are kept on decisions. So we cannot give you a breakdown on the 74,557, as I indicated this morning. We can only assume that the same type of information or the same types of statistics that have applied to past applications would apply as well to these so that, you know, we would have the range of rent increases that has existed under Bill 51.

Ms Poole: Yes. Well, the information that we have been, certainly, given by rent review and that we have been using on this committee is that from those applications going to rent review, the average increase was 11%, and that overall, taking every unit in the province, whether or not they went to rent review, the average increase across the province was 5.8%.

Hon Mr Cooke: So you could probably take a look at the 74,557 whole-building reviews and apply that the average would be the same, would approximate the same average, that existed for orders in the past. I am not sure. I mean, you can disagree with me, but I am not sure that an average figure is particularly relevant in that we are looking at some of the other increases that were more offensive and resulted in some of the problems. But that is for you to decide and for others to decide.

Ms Poole: Well, I guess an average would only be relevant to the point that you could have taken care of the excessive abuses by simply putting a cap on.

Hon Mr Cooke: But then you would have the problem of retroactivity, which you are so upset about, and you would have the same problem with those landlords. If you put a cap on that was effective 1 October you would have the same problem of all the landlords who you claim are having financial difficulties as a result of my bill; those landlords would still have those difficulties. Since you are in principle opposed to the retroactive aspect of our legislation, then I am sure that in principle you could not support a cap because it would still have retroactivity in it.

Ms Poole: Yes. Actually, I was talking, Minister, just to clarify -- I was referring to my later amendment, which we will get into, the cap on the capital expenditures.

Hon Mr Cooke: Yes, but what your amendment does is it would allow the 101,500 to go through without any restrictions and that would mean that we would have the same range of rent increases for the 74,557 under the whole-building reviews. We would have the same range that we have had for five years under Bill 51.

Ms Poole: Just to be perfectly correct, my amendment would only affect the 74,557 units under whole-building review. It would not affect either conditional orders or phase-ins; not this particular amendment. This amendment is only for the capital expenditures.

Hon Mr Cooke: Right, but I mean, your overall approach, you have other amendments that would affect those too, so the total package of your amendments would be to free up that 101,500.

The Chair: Okay. Any further debate? Seeing no further debate on Ms Poole's amendment --

Interjection: I think Mr Tilson has his hand up.

The Chair: Mr Tilson?

Mr Tilson: Mr Chair, you have to help me on procedure.Yesterday, I think it was, when you and Mr Cooke were not present, the question was raised on the legality of the retroactive feature of this bill and the fact that we have had comments made throughout these proceedings from different people suggesting that the bill -- specifically the retroactive feature of the bill -- is unconstitutional on perhaps other grounds as well. In fact, it has been drawn to our attention that a legal opinion has been provided --

Mr Mammoliti: On a point of order, Mr Chairman: We are being repetitive here. I am not too sure about the ruling on this particular point of order but are we going to be repetitive, and if so, what are you going to do as the Chair when this happens?

The Chair: What am I going to do? Well --

Mr Owens: Resign, resign.

The Chair: Well --

Mr Tilson: It is unanimous.

The Chair: Yes. I have listened very carefully over the last few weeks to many of the things that the members have said and many of the things that the witnesses who have come before us have said, and it appears to me that the retroactivity portion of the bill has in fact been highly contentious on both sides, no matter where you stand on the issue, and this is the first time that I know of that we have actually dealt with subsections 100b (1), (2), (3), which deal with the retroactivity. We have been dealing with this for almost 42 minutes, and given the strong feelings and the fact that there is a substantive amendment that would actually replace the entire amendment, I did not think at the time that 42 minutes was excessive, but I am keeping an eye on the clock and we will listen to the concerns of all members. Thank you.

Mr Tilson: Thank you. To continue, we now have a -- I cannot recall if it has been filed or not, but I think most of us have seen a legal opinion that has been presented to a particular group, and I also understand a press release has been issued by that particular group stating that they believe that this bill is unconstitutional on various grounds that have been given, and it is by a reputable law firm from the city of Toronto. The group has suggested that they were requesting the minister to make a reference on this specific legislation -- and I am dealing specifically with the retroactive feature, Mr Chairman, so you know I am not veering from it, because that is specifically where the challenge was being made -- and that if that reference was not made by the minister or by the ministry, that they would challenge the legislation if it was ever passed.

The point that I raised, which was set aside, hopefully so that the minister could be here to make his comments, dealt with this whole aspect, and you -- just to tell you a little bit of what happened, we made requests that any legal opinions that had been made to the minister as to whether it is constitutional be presented to this committee. Mr Chairman, it has never been made quite clear to us what form that legal opinion is. The minister has commented in the House that it went past the Attorney General's department. I think it would be useful for us to know what form that was. Did the minister simply go to the legislative counsel and say, "Well, what do you think?" and did the legislative counsel say, "That's fine"? Or did he go to the Attorney General's department and ask some official, "Well, what do you think?" and did the Attorney General's representative say, "It's fine"? Or did he formally get a legal opinion in a letter form or a statement form such as we have seen from the particular group that has made it available to us?

Mr Chairman, that is in the form of a question to the minister. Notwithstanding whatever that is, I think that this committee should see whatever information the ministry has, and I do not think there has been a formal motion made. I would like to make one requesting that the minister make whatever legal information he has available to this committee for its consideration. I suppose the difficulty is there is already --

The Chair: I do not think we are able to make such a motion at this time, Mr Tilson, but when you are finished your remarks, maybe the minister can help us to some extent and then when we finish dealing with subsections 100b (1), (2), (3), maybe at that particular time you --

Mr Tilson: That was my long way about getting to the question as to whether it was procedurally possible, and you said no.

Mr Mammoliti: On a point of order, Mr Chairman: Perhaps Mr Tilson can explain what this has to do with the amendment at hand.

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The Chair: Mr Tilson, can you please explain what this has to do with the amendment?

Mr Tilson: I would be pleased to. I think that the whole issue of retroactivity, whether it be in the form it is in the bill or the form of the amendment, I think that this committee is totally irresponsible in not determining in its own mind whether the retroactive feature is unconstitutional. If we ignore it, I think that this committee is being irresponsible, and I think that this committee seeks expert opinion. We had Mr Thom come and Mr Thom gave us his comment on the residential tenancies. We are having a tax expert come to talk about the issue of taxation and we have a whole series of -- that is why you have these committees, so that the committee can hear expert testimony from different sources. I do not think that a legal opinion is any different from any other type of evidence that this committee needs to consider. So that is the reason I think that those type of facts will be most useful for this committee to have before we make our report to the Legislature.

The Chair: Thank you, Mr Tilson. Maybe the minister might want to add some information at this time?

Hon Mr Cooke: Very briefly, Mr Chair. I can tell the members of the committee that there are really three things, I guess, that happen. One is that when the legislation is being drafted it goes through the regular process and the Attorney General's office reviews all legislation that the government produces, and there was that review that took place. Then we did ask for a written review, or legal opinion, from the AG's office which we have and we also had a legal opinion from the AG's office which was a review of the Fair Rental Policy Organization of Ontario's legal opinion. So those are the legal opinions that we have received in the ministry.

I certainly understand the argument that you are making in your request to table those legal opinions in the committee, but -- now, I am not a lawyer, my background is social work. My understanding is your background is law, so you will understand better than I, but when a group indicates to you that they are going to take you to court, it is not very usual for a government, as it has not been usual for past governments -- I remember having this type of discussion and making these kinds of motions when I was in opposition, when your party was in power, and the line that I am going to use is exactly the same line that they used. It was appropriate then and it is appropriate now. The Attorney General --

Interjection.

Hon Mr Cooke: I was wrong back then. The Attorney General is our --

Interjections.

Hon Mr Cooke: The Attorney General offers us legal advice. We are their clients and we are not about to interfere with the client-lawyer relationship, especially when an organization in the province has made it very clear that they intend this matter to go to court. With respect to making a reference of our own of this legislation, you again would know much better than I, but to go through the legal process would mean that -- and I can only assume that Fair Rental's suggestion would mean that they would not want Bill 4 to come into place until this has gone through the reference process and through a judgement through the courts -- would basically mean that Bill 4 would never happen, because you know as well as I do that to go through and get to the Supreme Court, by the time a judgement occurred we would be a long way down the road. We are confident as a government that this legislation does not violate the Constitution of our nation. If we were not confident in that, it would not have been introduced in the first place, and that is all I need to say about it.

Ms Poole: On a point of order, Mr Chairman: The minister has now admitted that was wrong in opposition. Will he admit that he is wrong now when he is in government?

The Chair: That is not a point of order. It is an interesting point.

Hon Mr Cooke: I have admitted that I was wrong once before.

Mr Tilson: Do not let it happen again.

Interjection: You were mistaken, right?

Hon Mr Cooke: That is twice more than you.

Mr Tilson: Mr Chairman, I guess my concern is that, first of all, this is not the first time that I have asked the minister for this information. In fact, it was suggested in the House in December that a reference be made, and if a reference was made at that time, it could have been over by now. We could have been heard in January. I am sure that Mr Hampton has got influence, that that was something -- as a piece of legislation as important as this, that this matter could have been heard by now. So it is regrettable that we are still denying that process.

I guess my concern, Mr Chairman, is that I just look at the issue of the Sunday shopping legislation and how, if the committee --

Mr Owens: On a point of order, Mr Chairman.

The Chair: I was just going to get to that.

Mr Tilson: I thought perhaps you might, but --

The Chair: We have got to deal with Ms Poole's

amendment, Mr Tilson.

Mr Mammoliti: Nice try, though. If you had been a lawyer --

Ms Poole: No Sunday shopping here.

The Chair: Ms Poole's amendment.

Ms Poole: No Sunday shopping here, Mr Tilson.

Mr Tilson: Mr Chairman, my concern is that I would place the Chair on notice that I will be asking this committee to formally request from the minister the legal opinions, and if not, to seek its own legal opinion. I say that --

The Chair: We have been put on notice that you are going to be requesting this information at a different point in time, and now I must refer you back to Ms Poole's amendment.

Mr Tilson: Yes. I say that because it is relevant, Mr Chair, because if the amendment is passed and the whole issue of retroactivity -- if this committee comes to the conclusion that retroactivity is unconstitutional, then really this whole subject should not be voted on until that opinion has been given to this committee.

The Chair: Thank you, Mr Tilson. Ms Poole has moved --

Mr Brown: Mr Chairman, the minister was going to speak to some questions that I had regarding investment. I asked about what rate of return you thought was appropriate in this industry.

Ms Poole: And we talked about pension funds.

Mr Brown: We talked about pension funds.

Hon Mr Cooke: I assumed, Mr Brown, that your comments were making a particular point which I do not happen to agree with. I mean, I do not think that there is a specific response to your questions. Pension funds want to invest in residential properties in this province. They have done so in the past and they will do so in the future, and I certainly encourage them to.

Mr Brown: That was one question. The other question was, what do you think is an appropriate rate of return in this industry?

Hon Mr Cooke: What specifically -- that particular matter was discussed in detail with Bill 51. It will be discussed in detail, I am sure, as we go through the consultation process for the permanent legislation. I am not sure that I understand the --

Mr Brown: Well, the issue revolves around investor

confidence, it revolves around what retroactivity does. All these things interrelate. You cannot take one without taking some of the others. And we are over here getting very nervous thinking that, given some of the statements by the Premier before the election and some of the statements -- I am not going to pursue that; I see you roll your eyes -- the government does not think that they have any reason whatever to encourage private investment in rental housing. I am just trying to get at whether you think a rate of return is appropriate and what it is and if you think institutional investors will be in this market. If you do not want to answer, that is fine, we will discuss this some other time.

Hon Mr Cooke: Well, good. We will discuss it some other time. But when you went through the process of developing Bill 51, that was one of the whole concepts behind Bill 51.

Mr Brown: I did not go through that.

Hon Mr Cooke: When your government did.

Mr Brown: My government did not.

Hon Mr Cooke: Well, the Liberal government did develop Bill 51.

Mr Brown: Okay.

Hon Mr Cooke: Well, okay.

Mr Brown: I was not there.

Hon Mr Cooke: I do not blame you for trying to dissociate yourself with that government, but --

Mr Mammoliti: They are a bunch of seals anyway.

Hon Mr Cooke: That was certainly one of the issues that was raised, but I do not agree -- the whole idea of phase-ins is one of the aspects of Bill 51 that deals with that issue, and you can see how Bill 51 treated phase-ins, how it treated rate of return, that there were all sorts of difficulties that resulted, and I do not buy into that philosophy. We are developing a piece of rent control legislation and we are going to try in the long term, through the consultation process, to have a very fair system. But it is not going to be the type of system with the same philosophy that Bill 51 had.

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The only other comment, Mr Chairman, that I would make on this particular amendment, because I am not going to go on at length about it, is that the way that you would hear, the way that the Liberals and the Conservatives are talking about Ms Poole's amendment, you would think that by adopting this amendment, there are simply no victims. It is all win and no lose. The fact of the matter is that you have got to talk about the victims of your amendment and the people that will lose protection that have protection under Bill 4.

And you know, as we went through, there are 101,500 units. So you cannot talk about your amendment in isolation. It is a balance, and that is what we have attempted to do with Bill 4. We have looked at what will happen if we do not bring in a moratorium, and we look at the impact of your amendment and I cannot support your amendment. If we were to accept your amendment, there would be the 101,500 plus the 130,000 that are already going through even under our bill. We would be up to nearly 250,000 units in this province of rental housing that would go through under the old system, which we in our party just simply cannot support.

The Chair: Ms Poole followed by Mr Turnbull, if Mr Brown has finished.

Mr Brown: For now, Mr Chair.

Ms Poole: The minister has talked about victims, he has talked about the losers with this amendment. I would like to say to you, Minister, that Bill 4 is not going to be the solution to all the problems. It has created a whole set of new problems. But yesterday, just prior to your arrival at the committee, I had talked about some of the ways in which you as minister had the power to help some of those victims, because a lot of the people you are talking about here in Bill 4 cannot afford the rent they are already paying. Those 3,000 tenants who signed the petition that Ms Gardner brought in, many of them cannot pay the rent they are paying now, no matter what the amount is. They just simply do not have the resources. And Bill 4 does not do anything for them. When you talk about those people as victims of this retroactivity, they are not victims of this retroactivity, they are victims because their economic circumstances do not allow them to afford accommodation in this province.

Hon Mr Cooke: So the government should just write a cheque?

Ms Poole: No. What I was suggesting --

Hon Mr Cooke: Typical Liberal response.

Ms Poole: What I was suggesting is that the minister, if he truly was concerned about this situation, something he could have done extremely quickly and very expeditiously at relatively little cost was to increase the number of in situ placements.

Hon Mr Cooke: There was nothing in your budget that your government brought in last year to even fund that type of thing, and you will know that my ministry is operating under your budget until we can bring in a new budget. So you did not think that that was a priority last year. Now, you said it would be a priority for you, but it was your government and you brought not one -- in fact, you killed any additional supply programs. So, you know, do not lecture me about solving the housing problems.

Ms Poole: Well, let's be quite accurate about this.

Hon Mr Cooke: We are developing a strategy.

Ms Poole: Let's be quite accurate about this, Minister. Under our government, the number of in situ placements did increase and increase dramatically. What I am saying is that with the commitments you have expressed in the House and in this Legislature over a number of years, that this, as a brand-new government, as a brand-new minister, was something that you could have done to help these victims.

Hon Mr Cooke: There was a big increase. As you will remember, there was a big increase under the Minister of Community and Social Services for assisting people on social assistance with their rents.

Ms Poole: Yes, and to be fair again, Minister, you will acknowledge that that same type of dramatic increase was given under our government and it was our government which initiated the Social Assistance Review Committee amendments which allowed those increases to happen.

The Chair: We are straying a little bit.

Ms Poole: I am sorry, Mr Chair. I apologize but it does make me somewhat upset when the minister talks about victims as though it is our amendment which is going to create victims. Those victims are there and nothing is being done to help them. So if you really, truly want to help those victims, then you are going to have to go beyond this because this is not going to help.

Hon Mr Cooke: We intend to.

The Chair: Thank you. I have on the list Mr Turnbull and Mr Brown.

Mr Turnbull: Minister, you speak about victims. It is exactly the same situation. You are saying the Liberals, it is a typical Liberal response to help: give government money to those people in most need. It is also a typically Conservative response that the people who are in need should be addressed, not this rubbish legislation. You speak about victims. In your opening statement to this committee, you talked about these outrageous rent increases and you gave a list of locations with high percentages. We found out from your ministry they account for 24 units in the province, which shows what tripe you are talking.

Mr Mammoliti: What does "tripe" mean?

Ms Poole: Mr Chair, George has asked for a definition of tripe. I think that "pap" would do very well, and we have already talked about pap on this committee.

The Chair: All right.

Mr Mammoliti: So what does "pap" mean?

Mr Abel: Why do you not look it up in the dictionary, George? It is a real word.

The Chair: Okay. Well, we will make up a list of those words that have to be described. Mr Turnbull followed by Mr Brown.

Mr Brown: I will just be very quick, Mr Chair. I was just interested -- the minister piqued my interest when he mentioned that they could not fund the in situ placements because there was not enough money left in the budget from the former government. I think that is passing strange when the budget deficit is increased $2.2 billion because of their efforts. They can do anything they want. They do not have to stay within that guideline.

Hon Mr Cooke: You know that is not true.

Mr Brown: It is perfectly correct. And Pink Floyd's budget will prove it when we can actually see the numbers.

The Chair: I think we have completed the list of speakers. Ms Poole.

Ms Poole: Mr Chair, I did want a recorded vote on this amendment together with George, who of course will be supporting us, and the Conservatives have indicated their support for our amendment. It looks like it might be a tie vote, so I would like to request a 20-minute adjournment so we can find Mr Mahoney wherever he is in this building and bring him down for the vote.

The Chair: You are requesting an adjournment? I am informed by the clerk that if we do that, as soon as we come back we are going to have to vote.

Ms Poole: That is fine. No problem.

The Chair: So we will convene again at exactly --

Interjection: Here he is.

The Chair: I guess we do not have to adjourn.

Ms Poole: Well, Mr Chair, could I have 20 minutes so I can find Mr Mahoney?

The Chair: The standing committee on general government is adjourned until exactly 3:30.

The committee recessed at 1510.

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The Chair: I see a quorum. It was agreed that when we came back we would vote on Ms Poole's amendment. We are going to have a recorded vote, which was requested by Mr Brown, so the clerk will help.

The committee divided on Ms Poole's motion, which was negatived on the following vote:

Ayes-5

Brown, Mahoney, Poole, Tilson, Turnbull.

Nays-6

Abel, Harrington, Huget, Mammoliti, Owens, Ward, M.

The Chair: The motion is defeated.

Mr Tilson: Mr Chairman, if I could make the motion that I had placed the committee on notice for during the debate on the amendment at this time?

The Chair: Mr Tilson moves that the ministry table the two opinions received from the Attorney General in regard to the constitutionality of Bill 4 to this committee.

Is that correct, we want that information tabled to this committee?

Mr Tilson: Yes.

The Chair: Any discussion on the motion? Mr Tilson.

Mr Tilson: Yes, Mr Chairman, since I appeared to have been out of the order before, I would like to indicate that I think that this information is paramount. I do not think that legal information should be treated any differently from engineering advice, taxation advice, planning advice, economic advice. It is no different, and the suggestion that has been made is that it is different. I think that if this committee is going to make intelligent recommendations to the Legislature, if it has been suggested by not just one witness but a number of witnesses, not just the large landlord or a group of large landlords, but small landlords, small individual landlords, the little man, I think that this committee has an obligation to pursue that and be satisfied that if it feels that this bill is illegal, that that information be passed on as a recommendation to the Legislature to perhaps review the bill to remove that problem.

So, accordingly, Mr Chairman, I believe that this motion is there is nothing difficult about it and there should not be anything unusual about it either.

Ms Poole: We will be supporting the Conservative motion. I would perhaps clarify that what we are asking for is a copy of the legal opinions which the minister referred to, that the Ministry of Housing obtained back when they drafted Bill 4. We are not referring to the legal opinion about the constitutionality that is being challenged by the Fair Rental Policy Organization of Ontario, as outlined in their press conference last week. They are two entirely separate matters, so --

The Chair: We will have to re-read the motion to make sure that we are voting on exactly what we think we are voting on, so possibly the clerk can work with Mr Tilson as we are discussing this matter, so that we understand the wording.

Mr Tilson: Mr Chair, if the clerk wants to rework the -- it was hastily scrawled out and that is exactly the intent; the motion is to receive the legal opinions that the minister has referred to.

The Chair: Right.

Hon Mr Cooke: I am not quite sure what the member for Eglinton is referring to because it was not a written legal opinion when the bill was drafted. There was the regular process that the bill goes through.

Ms Poole: Well, yesterday we were told that the ministry had an opinion on the constitutionality and the legality of this provision prior to the legislation being tabled, and that is what we were requesting, a copy of that legal opinion.

Hon Mr Cooke: My understanding is that when the bill went through the process, just as I referred to a few minutes ago when Mr Tilson was speaking, the bill went through the regular process. The Attorney General looks at the legislation, all legislation. Subsequent to that there was a written legal opinion that we sought from the AG. As for the legal opinion that Fair Rental released, we asked for an opinion from the AG in response to that as well. Those are the only two written responses that we have, both of those after the bill was tabled.

Mr Tilson: This government has boasted in the House that it is a new government, that it is a new philosophy, it is going to be an open government, it is going to provide us with as much information as possible, it is going to consult, it is going to do things that perhaps other governments in the past have never even considered. If these legal opinions exist as the minister says they are -- and I will accept that; he has said that there are two legal opinions, both from the Attorney General's department, and both those legal opinions say that this retroactive legislation or Bill 4, as such, is constitutional -- then they have nothing to hide. They have nothing to hide. There is absolutely nothing. It backs up what the minister has been saying in the House and in this committee that this bill is constitutional. There is nothing illegal about it. Hence, I think the members of this committee would be satisfied and would have no problem recommending to the House that it proceed as far as the constitutional aspect of it is concerned.

If, indeed, the legal opinions say it is unconstitutional, it is obvious, then, the government is irresponsible in proceeding with the legislation and, indeed, this committee would be recommending to the Legislature that it should not proceed with the legislation.

So there is nothing difficult about the motion at all. It is perfectly reasonable.

Mr Mammoliti: On a point of order, Mr Chairman: I would like to know whether or not we should accept the motion altogether. I had understood that we are dealing with 100b, subsection (1). This motion deals with the full bill, and I do not know whether or not we should accept the motion. I would ask for a ruling from the Chair -- that particular motion.

The Chair: I think we voted on one motion in regard to section 8, 100b (1) and (2). That motion was --

Mr Mammoliti: That was an amendment.

The Chair: Right, and that amendment was defeated. We had received prior notification from Mr Tilson that once we were finished with Ms Poole's amendment he was going to request, by way of motion, these legal opinions. That is what we are doing now. As soon as we dispose of Mr Tilson's motion one way or another, we will then get back immediately to another amendment that I have in regard to subsections 100b (1) and (2).

Mr Mammoliti: I just think that we should be dealing with 100b first before we accept any other motions to this degree.

The Chair: I double-checked with the clerk and she advises me that we are in order.

Mr Mammoliti: We are in order? Okay.

The Chair: Mr Mahoney, I am sorry, I did not ask for your comments. I know you were on the list.

Mr Mahoney: As I believe the minister was unavoidably away yesterday, I was as well and was not aware of this information. I am somewhat shocked to find out that there are two legal opinions dealing with the bill that have not been made available to this committee. I know you can get a legal opinion for just about anything and for everyone who says one thing, you can get another legal opinion that says another, I guess depending on --

Hon Mr Cooke: I would never say that.

Mr Mahoney: Well, no, I will say it about it; I have seen it many times. Whether or not they are consistent or contrary, or whether or not they support the bill or raise objections to the bill, if they are there it would seem to me that the integrity of this committee is being questioned, that we would actually deal with a piece of legislation and make recommendation to the Legislature of the province of Ontario to enact certain legislation when some members of the committee are privy to legal opinions that would have an effect on the outcome of that.

I would presume that even members of the government, indeed even the minister himself, would be hesitant to vote in favour of something if indeed there was legal advice from the provincial lawyers that what we are doing is unconstitutional.

It is not that what we are doing may not be liked by certain people or is supported by others, and it is not minor details here. We are talking about the Constitution of the country.

So I do not know; I am a little surprised that it even requires a motion by Mr Tilson or by anyone else to bring forward that kind of information. I would have thought, Minister, that that would have been the type of information you would have volunteered. I am really appalled that those two opinions are there and that apparently, since it requires a motion, you are refusing to provide them.

Hon Mr Cooke: I explained earlier this afternoon or this morning as to why, and I would like to make one thing very clear to you.

You said that the legal opinions had been shared with only some members of the committee. No one has seen the opinion except for myself as minister and my staff. It has not been shared because the client-lawyer relationship exists and I am the minister. I have seen the opinions, I have read the opinions, and I assure you -- and you can believe me or not -- that we are confident that Bill 4 is constitutional. But I am not prepared to share the analysis from the Attorney General's office with you. That is going to be, according to Fair Rental, the subject of a case before the courts.

Obviously the legal opinion that we have as the client of the AG is our information and our opinion that we will share with the appropriate people when Fair Rental decides to take us to court. That will be the strategy, that will be the approach that the government will be taking. It is the analysis of the case by the AG's office. So we are obviously not going to be sharing that when a group in the province has said they are taking us to court. I think it would be fairly irresponsible.

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Mr Mahoney: A very interesting position or conundrum that --

Hon Mr Cooke: The same position the government has taken for years.

Mr Mahoney: It is a very interesting position or conundrum that it puts this committee in. You are asking us to support or reject certain aspects of the bill, and indeed the bill in its entirety, and yet -- and then make a recommendation to the Legislature, and yet you are already finding yourself in a defensive posture, getting ready to receive attacks on the constitutionality of it.

I think, as I said the other day, that you manipulated the committee with regard to the green paper and the finality of Bill 4. It appears to me that you are now just ignoring committee requests and even if it were done in camera, it would seem to me that even the government members would have some concern about the integrity of the committee system, which I think is being very seriously abused here.

Ms Poole: I would again like some clarification. It is my understanding that, prior to introduction of any piece of legislation, the ministry involved gets an opinion from the Attorney General's office as to its legality and constitutionality.

Mr Tilson: He said that in the House.

Ms Poole: That was my understanding and I believe it was said yesterday when we were discussing this issue, and that is what I feel that it would be appropriate to table with this committee. If the ministry is preparing in defence --

Hon Mr Cooke: Give me a break, Dianne. Do not deliberately try to put words in my mouth.

Mr Mahoney: It is what you said.

Hon Mr Cooke: It was not what I said at all.

Mr Mahoney: It was what you said.

Hon Mr Cooke: No, it is not.

Mr Tilson: It certainly was.

Ms Poole: If you would wait, Minister, to hear the rest of what I had to say, you might not leap in with that conclusion.

What I was going to say was, I can certainly appreciate that, if you are obtaining a legal opinion for a defence in court, at this stage it may not be ready and it may not be appropriate to table with this committee. I am talking about the original legal opinion that would have been obtained prior to introduction of this legislation.

Hon Mr Cooke: There is not one. Colleen will --

Ms Poole: So you did not receive a legal opinion?

Hon Mr Cooke: Colleen will explain to you the process that I have tried to explain three times, but Colleen will explain it probably in a way that --

Ms Poole: -- even I can understand.

Hon Mr Cooke: Exactly.

Ms Parrish: Oh, dear.

Ms Poole: It seems like a lot of us are having this problem, Minister, so maybe it is not personal --

Ms Parrish: Perhaps I will explain what the normal process is.

The normal process is that when we develop a cabinet submission we inquire from our colleagues in the Ministry of the Attorney General as to the constitutionality of the policy proposal, that is proceeded, and that is part of the confidential cabinet process. We then proceed to legislative counsel and our own lawyers and we draft the legislation. It then goes back through cabinet, through the committee that approves legislation. The legislation went through all those normal steps and there were no concerns raised at any of those steps.

It is not the normal course to obtain a constitutional opinion on every piece of legislation that is introduced because that would be an incredible burden. However, when Fair Rental first made its presentation to this committee, it raised the issue of constitutionality at that time when Mr Melnitzer made his first presentation to the committee. As a result of that concern that was raised, we did request a formal written opinion from the constitutional law section, which we normally do only when these kinds of concerns are formally raised when we thought that there was potential for litigation. We also shared with them and have asked their views on the opinion that was provided at the press conference of Mr Robert Doumani.

That was the process and that is the normal process that government follows in relationship to legislation.

Ms Poole: So what you are saying is that there may be an opinion as to the legality of what you are proposing, but not the constitutionality? I am saying that, prior to the introduction of the legislation, it is not a normal process to get an opinion on the constitutionality -- that when the AG's office looks at the policy, it is looking at it from the legality point and whether there is any conflict with other legislation and that type of thing as opposed to the constitutionality.

Ms Parrish: They look specifically at the issue of constitutionality of the policy.

Ms Poole: So this is done, but what you are saying is that it is a confidential cabinet document and cannot be released.

Ms Parrish: What I am saying is that we do not normally ask for a formal constitutional opinion unless there is a specific issued flagged. Up until the time that someone says specifically to us at some stage, that is when we trigger the constitutional opinion. In all honesty, the first time the issue surfaced in that sense was when it was raised by Fair Rental, and that was the time at which we anticipated that there could be an issue raised, and that was when we followed the normal procedure to ask for a formal request in a formal way.

Ms Poole: So any opinion, legal opinion, given prior to the introduction of the legislation would have been verbal, not written. Is that correct?

Ms Parrish: Yes. We do go through a certain written process in regard to cabinet submissions, but we do not ask for a formal, written opinion. They simply -- it is not a formal opinion system.

Mr Tilson: My recollection is I raised this matter in the House in December I asked, had he received a legal opinion on the constitutionality of this matter? -- and the minister informed the House at that time that he had, that the Attorney General's department had provided him with such an opinion. This was long before this committee was even struck. That is on Hansard.

Hon Mr Cooke: No, I did not say that the AG's office had supplied us with an opinion. What I indicated was it had gone through the normal process and there were no concerns expressed. I know I did not say there was a written opinion, because there was not a written opinion.

Mr Tilson: I would concur. You did not say it was a written opinion, but you did indicate --

Hon Mr Cooke: I said it had gone through the normal process.

Mr Tilson: You did indicate that there was an opinion obtained from the Attorney General's department.

Hon Mr Cooke: I said it had gone through the normal process.

Mr Tilson: I do not want to play with words, Mr Chairman. All I know is that I am satisfied now that there are opinions out there that the minister has in his possession, which leads me to believe that this bill is unconstitutional, or otherwise why would he have any fear of producing them? I think that this committee should insist on seeing them. Even the members of this committee, the New Democratic members of this committee, have not seen this. I think that this committee is totally irresponsible if we are going to proceed without forming an opinion as to whether or not this is in fact a legal law.

The Chair: I am going to ask the clerk to re-read the motion, please.

Clerk of the Committee: Mr Tilson moved that the Minister of Housing table with the committee the two written legal opinions of the Attorney General requested by the ministry on (1) the constitutionality of Bill 4 and (2) the legal opinion given to Fair Rental Policy Organization of Ontario.

Mr Tilson: I request a recorded vote, Mr Chairman.

The Chair: A recorded vote has been requested.

The committee divided on Mr Tilson's motion, which was negatived on the following vote:

Ayes-5

Brown, Poole, Mahoney, Tilson, Turnbull.

Nays-6

Abel, Harrington, Huget, Mammoliti, Owens, Ward, M.

Mr Tilson: Mr Chairman, on a point of information: It is regrettable that the committee is taking this position, and I am therefore now serving the minister with an application, and I am making it under the Freedom of Information and Protection of Privacy Act, for those opinions.

The Chair: Thank you for the information. Okay. We are going to carry on with clause-by-clause. Are there any further amendments?

Mr Tilson: I have delivered to the clerk an amendment that the Progressive Conservative Party wishes to submit, which she will distribute to you.

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The Chair: The motion has been distributed.

Mr Tilson moves that section 100b of the act, as set out in section 8 of the bill, be struck out and the following substituted:

"100b(1) Subject to subsections (2) and (3), this part applies to every rent increase that takes effect on or after the day the Residential Rent Regulation Amendment Act, 1991, receives royal assent.

"(2) This part does not apply to a rent increase proposed in an application or set out in an order of the minister, the board or a court if the effective date of the first rent increase in the residential complex applied for in the application or set out in the order is before the day the Residential Rent Regulation Amendment Act, 1991, receives royal assent.

"(3) This part does not apply to a notice issued under section 92 if the order under subsection 92(1) on which it is based was made before the day the Residential Rent Regulation Amendment Act, 1991, receives royal assent.

"(4) Part VI does not apply where this part applies, unless this part provides otherwise."

Mr Tilson: I am not going to repeat what has been said. Again, this is an amendment to the retroactive provisions of the bill and obviously the Progressive Conservative Party has stated throughout these entire hearings that we are opposed to the retroactive feature of the bill. It is unfair. It is unexpected. It is a surprise. It is dastardly.

We did support the Liberal amendment as a form of compromise. We did not feel that in fact went far enough. However, we supported it. We believe, however -- and this is based on the minister's own information -- that certain matters would not be caught by the legislation, and this of course does catch all outstanding applications.

One of the matters that was raised throughout these proceedings by tenants was the terrible, terrible condition that apartments are being kept in around this province -- everything from major capital expenditures, such as apartment roofs, parking garages, cement work, matters that deal not only with the upkeep of the building but the safety of the building. Driveways, parking lots are not being maintained, and we believe that landlords should be encouraged to do all of these things.

We do not believe -- and this was reiterated by Mr Thom last night -- that this government is encouraging private enterprise to proceed with making capital improvements to its buildings. Specifically, there are good landlords in this province, good landlords who have sought the approval of the tenants, who have made the applications, who, under the rules of the Bill 51 legislation, the Residential Rent Regulation Act, 1986, obtained orders, obtained authority from the government to proceed, mortgaged their houses, mortgaged their buildings, obtained other financing, have done things. They are trying to keep up their buildings. In fact, they have done it. I will not list the many examples, because that has been done earlier today. I am sure that most of the members of this committee will recall the stories that have been told this committee. I believe that this type of amendment will catch all of the situations.

People who were contemplating making changes to their buildings -- there have been landlords who have advised us that they had in the works plans to repair their roofs, to repair their parking garages, to repair the cement work on their buildings. Those have been stopped because of Bill 4, because of the retroactive aspect of Bill 4. The Liberal amendment of course went specifically to where moneys have been paid or work had actually been done. But it did not catch the situation where an application had been made contemplating these very serious renovations. So accordingly, I would ask the committee to make this amendment to the bill to essentially do away with the retroactive aspect of the legislation.

Mr Mahoney: I would like to contemplate the thought of voting on motions such as this in somewhere other than the confines of Queen's Park. I would like to see the government members who sat on the committee vote in favour of it in London with the people in the audience who came before us demonstrating the losses that they had incurred. Remember that young fellow who bought his first six-unit building, moved into one of them with his wife, struggled, did the carpentry work himself, the electrical work himself, the plumbing work himself until he could afford to save enough money over the years to buy a second building with six units and he moved into one of those units with his wife and did all of that same work himself? Do you remember him? And we are telling him, by not agreeing to Ms Poole's amendment, and now, if you do not agree to this amendment, we are telling him that he is bankrupt.

We are sending that message very clearly. We are telling him that as a government you do not care that he is going bankrupt. You can say you care. I heard members of the committee make sympathetic noises, warm and cosy, and "Thank you very much for bringing your concerns to this committee." I can remember members of the committee saying how the government was going to listen and how the government intended to take into consideration the concerns of that young man. But if you do not do something about the retroactivity, you are not listening and you are not doing anything to take into account his concerns -- and you are bankrupting him.

The young man in Sudbury who had bought a building from his grandfather and who had done all the work himself sat before us and told us his story: how it used to be just a barn in his grandfather's day, and how they worked hard together, and his skills as a carpenter and how they built it into an apartment unit. He told you that whole story too. And you again made those warm, cosy sounds, many of you, that you appreciated him coming. There were the woman and the daughter from New Liskeard who came before the committee in Sudbury with their story about the consistency -- the low rents of all three of those individuals, and they are only three that come to mind off the top of my head.

I understand the concerns of the people from Parkdale who were in here with vermin and cockroaches and holes in their walls. Nobody wants to see that. If changes are needed in the present system to correct that problem, I would support those changes. I would support this minister and this government in making changes that would address the problems that those tenants in Parkdale are facing. But how can anybody with any kind of human decency support legislation that does what this is going to do to those people in London and Sudbury and New Liskeard? It is absolutely beyond comprehension. Yet that is exactly what you are doing by not supporting this motion.

I understand the system full well, being the official whip of my party. I understand caucus discipline and the necessity for it and I think it is part of our system and I understand the frustration. Even though you are going to vote this down, I presume, I would hope that at least there has been some blood on the floor in your caucus room. I would hope that especially all of you who sat in those committee hearings and heard those people tell real stories -- they were not coming to us with some fabrication. They were not coming to us saying, "If you do this, this may affect me this way." They were coming to you saying, "Here are hard facts, here is my life story, and you people, if you pass this, are destroying me." So I would hope that at the very least there is blood on the floor in your caucus room and that you have communicated to this minister, and through him to the ministry, that this retroactivity, whether it is even constitutional or not, is simply not fair.

How can you say it is fair to take someone's life savings, life investment, life career, family gains and with one stroke of a legislative pen eliminate it? If I could hear one of you speak to me and to this committee and to those people and justify that action, I would just be delighted. But you cannot. And exactly right; as Ms Poole says, you have not. I think you should be ashamed of this, of not supporting the elimination of the retroactivity. And you could.

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Mr Mammoliti: On a point of order, Mr Chairman: Is he speaking to us or to the Chair? I do not know.

The Vice-Chair: That is not a point of order.

Mr Mahoney: It is nothing, Mr Mammoliti. If you are feeling nervous --

Interjection: Something you do not understand, George.

Mr Mammoliti: He is referring to us. That is not going through the Chair. That is a point of order.

Mr Mahoney: Mr Chair, I am referring to the members of this committee through you. And Mr Chair, if any of the members of this committee are able to justify to those people in Ontario -- and if they feel a little nervous, Mr Chairman, about my statements, I understand that because indeed, if I were sitting on that side I would feel nervous, too, if I were voting to do that. The minister can smirk if he wants to, but he did not sit there and listen to those people in London and Sudbury. I think it is criminal what you are doing. You should be ashamed of yourself.

Mr Turnbull: All I can say is Mr Mahoney has spoken eloquently to the point I was going to make and I agree with every word he said.

Ms Poole: I will try one more time. I know that my own amendment failed, which I think did address the problems that Mr Mahoney was just referring to, but this is the last chance you have to change the retroactivity in this bill. As Mr Mahoney just said, as we travelled the province we heard many stories. They were not fabrications; they were not fairy tales; they were real people. In the first few weeks that we sat on this committee, if I heard the term "real people" once, I heard it 50 times. But when the members of the government used that word, they only used it in reference to tenants. I believe tenants are real people, with real needs and real problems. But what I fail to comprehend is how members of the government can sit there and deny that these people who came before our committee were real people. They came to our committee and virtually everyone who came, all of these small landlords, came with the story, "We can live with the other things, but we cannot live with the retroactivity."

Back in December when I was speaking to this issue in the House I used the example of a lady from Ottawa. She was a widow in her 70s and she had borrowed money from the bank and from her family with which to do the capital repairs on the building that she and her husband had owned, a small building, for 25 years. They had done all the work, worked day and night on this building, everything they did themselves. She took all of five days off in those 25 years to go to Disney World because her son won a trip. Now this lady, who is in her 70s and had rheumatism in her hands and has spent the last 25 years that she has been in Canada pouring her life blood into this building as her way of life, has had her retirement savings completely wiped out, plus she owes money that she cannot repay.

Hon Mr Cooke: And she did not set any money aside for capital repairs for 25 years?

Ms Poole: Mr Minister!

Interjection: What an attitude.

Interjection: What tripe.

Ms Poole: The minister has just said in 25 -- the minister misspeaks what I used to say. The minister's comment was that for 25 years she did not put anything aside for capital repairs. She did a lot of repairs on her own but when the point came when the boiler needed replacing and the roof needed replacing -- the rents in that building were very low --

Hon Mr Cooke: Is that what the repairs were?

Ms Poole: That is what the repairs were.

Mr Mahoney: On a point of order, Mr Chairman: I just think that it is extremely inappropriate that a minister would be interrupting a member of this committee who is making a speech in relationship to an amendment. I think the minister should apologize and withdraw his remarks.

The Chair: Ms Poole.

Ms Poole: Well, if you are not interested in listening -- but, I mean, you heard these same stories. You are going to go home tonight as members of this committee, including the Chair, to whom I am addressing these remarks, and we are all going to have to say -- if those people do have their worst fears realized and they lose their retirement savings, then are we to say as legislators, "Well, too bad. That is the way the cookie crumbles. It was a bad investment because you did not think ahead"? Certainly they did not think ahead. They looked at the laws at the time, which were to assist them in making those capital repairs, and they acted under the laws of the land.

There is nothing left to say. I think it has all been said. I hope that this last chance to reconsider will be taken by the government members and that you can give some support to addressing the devastating retroactivity of this bill.

Hon Mr Cooke: Very briefly, again I would simply point out that the opposition members try to picture this as if by supporting this type of amendment that there are absolutely no side effects, there is nothing on the other side. The critics and the members know that that is simply not the case, that there are victims on the other side. There are tenants like the tenants, as I said earlier today, whom Councillor Gardner brought down today who would be dramatically affected by your amendment.

Choosing a date for this legislation was extremely difficult but the date of 1 October still allows 130,000 units to go through the system under your rules, under Bill 51, and this saves some of the tenants from the negative effects of the current rent review system that is in place. It is a difficult balance to find, but, you know, I have met many landlords in this province as well. I have done some travelling, too. I do not know if it is the same landlord, but there certainly was a landlord whom I met in Ottawa who had owned her building for quite a number of years. I am not quite sure why, over that period of time, there would be the expectation that all of the money for capital would be coming from an application to rent review. In fact, one of the landlords when I was in Ottawa made the comment that there had not been fridges and stoves replaced for 25 years and she decided to do that and she could not understand why we would not support the idea of those fridges and stoves being able to be passed through the system.

Well, I do not agree with that philosophy. I think that rent is paying for something in this province and that to just give the impression that if they do not get to go through the rent review system that -- the way that you would talk, they are getting zero; they are getting no rent at all, they are getting no income at all. That is simply not the case. There is an expectation that some of this work is supposed to be done and some of this capital is supposed to be spent out of the rental income that is coming in. If somebody has owned a building for 25 years, I think it is a very relevant question to ask, "Why was some money not set aside?" That is a difference in philosophy between your parties and the government party. I accept that. I do not view things the way that you view things. I do not believe that Bill 51 provided enough protection. I am not prepared to accept an amendment that will in effect have a dramatic effect and destroy the positive effects of protection for tenants in this province. That is exactly what the amendment that the Tory critic is supporting will do. We are not prepared to support this amendment because it eliminates the protection that Bill 4 provides.

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Mr Tilson: On a point of order, Mr Chairman: I do not think that reserve funds have anything much to do with retroactive provision. That is another area. It is getting into the green paper. It is clouding the issue.

Hon Mr Cooke: I am specifically responding to Ms Poole's statement.

Mr Tilson: I think the minister should be stopped from getting into irrelevant matters as far as the retroactive issue of this debate is concerned.

The Chair: Well, we have been allowing some considerable latitude all day and part of the afternoon and I think I will continue to do so. Excuse me, Minister. If you are finished we have Mr Brown and then Ms Poole on the list.

Mr Brown: I joined this committee and, quite frankly, although I have been a member of this place for a while, I did not know a great deal about rent review. In my particular riding it has not been a great issue. As a matter of fact, in my particular riding we have a large surplus -- at least in one part of the riding -- of rental stock where the maximum rent that could be charged for these units is often twice what the market will bear. So I come here without really knowing a lot about rent review because, as an MPP, I had never become involved, basically, on a constituency basis.

Therefore, I came, as you did -- a lot of you perhaps did not have a great knowledge of rent control, and so we came here kind of as a jury and it is remarkable there are 12 of us, it is the same as a jury -- to see the government prove its case, to go out and hear the people of Ontario speak to us, to hear their views, and to see what the people of Ontario had to say about this particular piece of legislation. And we have heard.

My colleagues have talked about the small landlord, the little guy, the guy we need to protect, the guy who has worked very hard and has provided a great service to this province. He has provided rental accommodation in a province where we do not have anywhere near as many units as we need. These people have contributed to Ontario. Sure, there have been some who have not been good landlords, but there are always some of any group who have not behaved the way the rest of us would have wished. Certainly we know that some things needed to be addressed, that there were problems out there, particularly maintenance problems.

So we look at retroactivity and we say to landlords who have spent the money, played by the rules, done everything the way it should be done so far as we can see -- no one on the government side has questioned any of these landlords and elicited a response that they had done anything other than what was permitted by the law of the province of Ontario, and now they are being penalized with retroactivity.

It has been suggested by some witnesses that retroactivity needs a very strong case put before the committee before you would ever allow such a sweeping elimination of the rights of people as put before -- it was the law of the land. They could do as they wished provided they followed this law. Maybe it was bad. I understand what the minister says, that he thinks it was not correct, and that is fair. That is a difference of opinion. But he has reached back and we all know he has reached back far more than the date of 1 October when you really look at this.

So the minister says: "Yes, but on the other side, what about tenants? You are not taIking about tenants on this side of the floor." Well, that is just not true. We are talking about maintenance. Does anyone in this room really believe that maintenance and capital expenditures during the term of Bill 4 will be at a level even as much as they were last year? I would say not. My colleague Mr Mahoney asked over and over again what they were going to gain in terms of maintenance under Bill 4. Not one tenants' organization, I believe, could point out anything. Nothing.

What about choice? How many rental units do you think will come onto the market during the term of this bill? None, or very few. So if price is the only thing that concerns the minister, maybe he is right. But there are more issues for tenants and we believe that. So I am very happy to support the Conservative motion today because I think it is in the interests of tenants. I was happier with ours but it did not find favour with the committee. I just ask the government to reconsider. This is important. It is important to tenants.

Ms Poole: I would like to refer back to the two cases we were just discussing from the Ottawa area: the one I brought up and the one the minister referred to. I do not believe they are the same instance because the lady I was talking to came to meet with me in December and did not make a presentation to the committee in Ottawa.

The widow I was talking about had major repairs that were necessary to her building. She had taken care of the minor repairs; the building was in very good shape. When she needed the roof, she needed the new boiler, needed the new plumbing system, she took $100,000 of her own money, which is what she had saved over those 25 years to put into the building. When she went to the bank to get the rest, they said: "We cannot give you this money unless you have got revenue in. If you go back to rent review and raise the rent so that you have revenue coming in so that you can afford to pay back the loan, then we will loan it." So, Minister, she did put in her own money for which she had no intention and did not plan to raise the rents.

The fact of the matter is, the units were renting for $250. When you consider municipal taxes for $100 a month, and prior to going to anything else as far as expenditures you have municipal taxes eating up that kind of proportion, you can tell she did not make a lot of profit. As far as the Ottawa landlord you were referring to who presented to the committee is concerned, I would venture to say that that Ottawa landlord had a personal income from her rental property of far less than half of your salary, and how is she supposed to put on a new roof or fix the parking garage or anything else on that type of income?

We have had evidence from this committee from presenters which showed that they would have had to own the building for 120 years in order to make the kind of income to pay for these repairs. It just does not hold water because there is a very major difference between major capital repairs and minor repairs. The minister is absolutely right about day-to-day maintenance and minor repairs, and I have always agreed with him that if these are not provided in the rent then we should be hammering the landlords who are not providing them. I have never changed my position on that. The minister and I, from day one, have had a very different idea of how you handle major capital repairs.

In his newborn life he has said, "Well, we've always considered that there had to be some cost pass-through for capital." That was not true. It was not true a year ago --

Hon Mr Cooke: I have never said that.

Ms Poole: Well, Minister, your words in Hansard --

Hon Mr Cooke: I have said that the permanent solution has to deal with capital, is what I have said.

Ms Poole: Your words in Hansard not even one year ago were that you felt that the only thing that should be passed through to tenants was an inflationary amount and not one penny more, and that was your position.

1630

Mr Mahoney: It was the agenda for power.

Ms Poole: And it ended up being the agenda for power.

Getting back to the issue at hand, these are the kind of people whom this retroactivity is going to affect. When you come down to the bottom line, you have to look at yourself in the mirror and say either you believed these witnesses or you did not. If you did not and you want to smile about it and say, "I cannot believe she fell for that," then that is fine. I did believe them. I do believe that the retroactivity is going to have serious ramifications for those landlords. Ultimately it is going to have serious ramifications for our housing market because I can assure you that what I am getting back from people in my area is that their relationship has deteriorated with their landlord, even those who had very good relationships; that the landlord has said: "Well, I am sorry. The way my throat is being strangled I am not going to provide any extras. I am not going to provide the same standards. I am sorry but that is the way things are." That is not good for tenants and it is not good for our housing market. It is not good for anybody. So anyway, I think that sums up what I have to say.

Mr Tilson: I have listened to the Premier of this province in the House, particularly in the early stages, saying he never dreamt he would be here. Well, here he is. I would like you all, all of the members of the New Democratic Party who are on this committee and the minister, to go back a year ago, a year ago right now. Would you have ever dreamt that you would be where you are now, running this province? Would you ever have dreamt that? If you are honest, I do not think you would have. We had an unexpected election and here you are; you are running the place. Yet you have the gall to sit there and say that the landlords should be psychic and predict (a) that you were going to achieve power and (b) that you were going to do what you did.

You certainly did not say during the election that you were going to do what you did now with respect to the retroactive features. So I find it astounding that you would sit there -- if you are honest about it, you know perfectly well that you never dreamt, particularly the New Democratic members on this committee, never dreamt that you would be over where you are now. You would be off on town councils or off on unions or whatever you were doing, but you never dreamt that you would be here. But you are here and yet you expect the landlords to be psychic and predict that you would be passing this dreadful legislation. So think about that when you are voting on this amendment.

The Chair: Any further debate on this amendment?

Mr Tilson: I would like this vote to be recorded, Mr Chair.

Mr Mahoney: There are no speakers on the government side, Mr Chair?

Mr Tilson: No. They had not asked to be --

The Chair: I have no influence on speakers. Were you asking me?

Mr Mahoney: Sure, I was asking you if there are any of the government members on your list to speak.

The Chair: Okay.

Mr Mahoney: Are there?

The Chair: No, Mr Mahoney, there are not.

Mr Mahoney: Mr Chairman, I am somewhat shocked at that, somewhat surprised. I would have thought -- I mean, there have been enough pleas here to ask for some justification. Do you not feel any -- aside from the minister; we know that his mind is made up. Mr Chair, through you I would ask why the members of the committee --

Mr Mammoliti: On a point of order, Mr Chairman: I think it is our option whether we want to speak. We do not have to tell Mr Mahoney why we wish not to speak. That is our business. They are finished. Let's deal with the vote.

The Chair: It is not a point of order.

Interjection: Thank you.

Mr Mahoney: I may not be finished. I am just aghast, though, and I certainly cannot --

Interjection: Do not get them mad, George. They will go on all night.

Mr Mahoney: I cannot, certainly any more than the Chair, influence the members to speak to this amendment. But I am very shocked, having been through the process that we have been through. I have the feeling that all of these amendments -- there are a number of pages here; I think the Liberal Party critic has submitted a dozen or so and there are, I am not sure, a few here from the Conservative Party critic as well. There are a number from the government. I suspect the ones from the government will probably carry since they are signed on behalf of the minister by Frances Lankin.

The Chair: Thank you.

Mr Mahoney: So I suspect that they will carry, but this amendment is being given short shrift by the members of this committee. It concerns me because of the impact that it has on the people that we saw around the province. Is there a problem, Mr Chairman?

The Chair: I was just going to ask you to direct your comments as much as possible to 100b(1) and (2) in the amendments. I have allowed latitude for everybody this afternoon and we have to --

Mr Mahoney: You are just not going to allow any for me at this stage?

The Chair: I am going to allow you as much as I can, Mr Mahoney.

Mr Mahoney: Thank you very much, Mr Chairman. You are always a gentleman.

I guess the concern that I have, and it is not really even a matter of just repeating; I am not going to do that, repeating the concerns that my party's critic has eloquently put forward. But it is the frustration, I guess, of this amendment coming forward and dealing with such an important issue. It appears that the minister, perhaps through the whip of the committee, has done the job of just simply whipping everybody into being trained seals. I find that very unfortunate.

Mr Owens: On a point of order, Mr Chairman: The comment with respect to trained seals is certainly not germane to the amendment at hand and I would request that the Chair instruct the member to restrain his comments to the matter that is at hand.

The Chair: They are not seals.

Mr Mahoney: No, they are seals, they are just not trained, I guess. That is fine. That is all I have, Mr Chairman. The day will come when you have to answer to your people why you did not speak on their behalf.

The Chair: The Chair cannot instruct members on what adjectives to use. There are certain terms and certain words which are unparliamentary.

Mr Owens: Well, at least use something that is not monosyllabic. Like, let's get into some intellectual debate as opposed to simple name-calling.

Mr Tilson: We are trying to keep it simple for you.

The Chair: As I was saying, the Chair cannot instruct members on what adjectives to use. The Chair can only caution members when they use unparliamentary phrases or terms, as has been documented by the works that we govern ourselves by. And every now and then when I feel I need assistance I check with the clerk. But I cannot advise members on what adjectives they should use.

Mr Mammoliti: Mr Chairman, with all due respect, I take offence to being called a seal in this particular building and I think that you can stop that particular adjective.

Ms Poole: On a point of clarification, Mr Chairman: So George does not object to being a trained seal, he just does not like the word "seal."

Mr Mammoliti: It is not whether it is seal or whether it is trained seal, it is still name-calling and I think the Chair can put a stop to that sort of thing.

Ms Poole: Sticks and stones may break my bones, but names will never hurt me.

Mr Mammoliti: My name is George Mammoliti.

The Chair: Okay, where are we at here? We are going to put the question. Do you want the --

Mr Tilson: A recorded vote.

The Chair: Mr Tilson has requested a recorded vote.

The committee divided on Mr Tilson's motion, which was negatived on the following vote:

Ayes-3

Mahoney, Poole, Tilson.

Nays-6

Abel, Harrington, Huget, Mammoliti, Owens, Ward, M.

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The Chair: The motion is defeated. Are there further amendments to section 8, subsections 100b(1), (2) and (3)? Shall subsection 100b(1) carry? All in favour? Carried.

Interjection: Nay.

The Chair: Four nays, six in favour.

Shall subsection 100b(2) carry? Carried.

Shall subsection 100b(3) carry? All in favour? Carried. In the Chair's opinion, it is carried.

Shall section 8 -- oh, I am sorry, no, not quite. We are on to section 100c. We are moving along too quickly here. I am sorry about that.

Mr Mahoney: We would not want the government to do that.

The Chair: No.

Ms Poole: You only missed seven pages, Mr Chair.

The Chair: Any amendments to clauses 100c(1)(a), (b) or subsection 100c(2)? Ms Poole.

Ms Poole: Mr Chair, I had understood that we were going to go back to subsections 1(1) and (2) of the bill, which were stood down yesterday.

The Chair: Do we have unanimous consent to go back to section 1, like we discussed earlier on?

Hon Mr Cooke: Do we want to finish what we are doing? Why do we not finish section 100?

The Chair: It has been suggested that we finish section 100.

Hon Mr Cooke: Just keep going through this section and then go back to section 1. Why do we not finish what we are doing and then go back?

Clerk of the Committee: I am just going by what the member had asked --

The Chair: Okay, we are going to proceed then. Any amendments to section 100c? Shall subsection 100c(1) carry? All in favour? Opposed? Carried.

Shall clause 100c(1)(a) carry?

Clerk of the Committee: You just have to go to subsection (2).

The Chair: Oh, we just go right to subsection (2). We do not need clauses (a) and (b)? We have already done that.

Ms Poole: Mr Chair, I realize that you were unable to be with the committee yesterday, but the procedure we had established --

The Chair: You have adopted a block procedure, I can see that, where you do clauses (a) and (b) all at once.

Ms Poole: Well, we also adopted the procedure where the parliamentary assistant and/or the minister, depending on which one was available at the time, would describe the purpose of the amendment.

The Chair: Yes, my apologies. I was not aware of what you had agreed on yesterday. We will ask the minister then to explain for us the purpose of clauses 100c(1)(a) and (b).

Hon Mr Cooke: Okay, this subsection refers to rent increases which may be charged without making an application, otherwise known as the guideline. It also preserves the right of the landlord to increase the rent above the guideline, up to the maximum rent where an amount less than the maximum rent is being charged. As well, increases above the guideline are specifically permitted by an order. This section is basically the same as is in the current act.

The Chair: Thank you. Shall clauses 100c(1)(a) and (b) carry? Oh, I am sorry, Ms Poole.

Ms Poole: I just did have one point of clarification. The minister had said that this provision was similar to the one that is already in the RRRA. I just wondered what the difference specifically was, because otherwise we would not have to bring it in.

Ms Parrish: Well, my understanding -- and I hope legislative counsel or my colleague Christina Sokulsky from the legal branch will correct me -- is that what we are doing in section 8 is we are creating a new part that says essentially, this is sort of like a little code or a little procedure that applies to all of the moratorium applications. So there is a certain repetition just because what you have done is you have created a whole part. You may recall in the previous amendment we had this mysterious thing that said this part applies and part V does not apply or part VI, and I understand that a lot of these repetition elements from the other statute are simply to create this sort of whole part that in essence governs the sort of moratorium period applications. That is my understanding as to why there is -- and there are a number of sections coming up that do essentially carry forward the same provisions as are in the RRRA in the other part, part VI, I guess it is.

Ms Poole: So it does not change the process as it applied in the RRRA, but it just substantiates that the moratorium can take place and these are the rules governing it.

Ms Parrish: These are the moratorium rules, sort of to avoid having to do too much running back and forth between the two sections.

Ms Poole: Thank you. That is it.

The Chair: Any further comments, questions? Seeing none, shall clause 100c(1)(a) and (b) carry? Carried.

Shall subsection 100c(2) carry? I am sorry, Minister, could you please explain the --

Hon Mr Cooke: On subsection 100c(2)?

The Chair: Yes.

Hon Mr Cooke: This subsection continues the provision that there must be at least 12 months between rent increases. The rent cannot be increased even if a new tenant moves in if there has been less than 12 months since the last rent increase. The landlord must provide the tenant a 90-day notice of rent increase as required by section 5. That is the same as --

The Chair: Any questions on that? Shall subsection 100c(2) carry? Carried. Minister, could you please explain for us the purpose of subsection 100d(1)?

Hon Mr Cooke: Okay. Subsection 100d(1) requires the landlord wishing to increase the maximum rent for a rental unit by more than the current maximum rent plus the guideline to make an application to the minister not less than 90 days before the effective date of the first intended rent increase in the complex.

The Chair: Thank you. Any questions on that? Shall subsection 100d(1) carry? Carried.

Hon Mr Cooke: Subsection 100d(2)?

The Chair: Yes, subsection 100d(2).

Hon Mr Cooke: This section requires that when a whole-building-review application is made under subsection 100d(1), it include all units in the building. Rent increases for each unit will be determined for a 12-month period starting with the first intended increase in the complex.

The Chair: Any questions? Shall subsection 100d(2) carry? Carried.

Hon Mr Cooke: Subsection 100d(3) specifies that the whole-building review applies regardless of whether tenancy agreements exist between the landlord and the tenant. That is, the application includes vacant units in the building.

The Chair: Any questions? Shall subsection 100d(3) carry? Carried.

Subsection 100d(4).

Hon Mr Cooke: Subsection 100d(4) preserves certain procedures in conjunction with a whole-building-review application. The application must be made at least 90 days before the effective date of the first intended rent increase. The landlord must file a cost-revenue statement together with supporting documents at the time of filing the application. Parties to the application are permitted to view the material and make representations within specific time frames. Provisions for extension of time to make submissions are set out.

The Chair: Shall subsection 100d(4) carry?

Ms Poole: Just another question of clarification. Necessary modifications to the application: Are you referring to the form there or the procedure?

Ms Parrish: Perhaps I can get Christina to address this issue. As far as I know, the necessary modifications mean that these sections apply with necessary modifications to this part where you make the application. I do not think it affects the -- am I wrong? It does not affect the --

The Chair: We can get some information from the ministry. Please come forward and identify yourself and help us out if you can.

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Ms Sokulsky: Christina Sokulsky, senior solicitor, rent review, Ministry of Housing, legal branch. Perhaps I could ask assistance from my colleague Betsy Baldwin, legislative counsel, on this point.

Ms Baldwin: Subsections 74(3) to 74(6) are dealing with procedural matters in the comparable situation for part V1, and "with necessary modifications" is language we use when we make something that was there also apply here. So, all we are saying is the same sort of procedural rules that happen in subsections 74(3) to 74(6) happen here too, and that is what it means.

Ms Poole: So, there is no change in procedure.

Ms Baldwin: No, no. It is just adopting the same procedure.

Ms Poole: Okay. Thank you.

The Chair: Shall subsection 100d(4) carry? Carried.

Hon Mr Cooke: Subsection 100d(5) permits a landlord to make an application for an increase in advance of providing a notice of rent increase to tenants. Landlords still have to give 90 days' notice to tenants before increasing rents.

The Chair: Any questions? Ms Poole.

Ms Poole: I would assume that this is not a change from the RRRA, and this is just to provide some leeway so that the landlord does not have to apply on exactly the same day as he or she gives notice to tenants. Thank you.

The Chair: Shall subsection 100d(5) carry? Carried.

Shall subsection 100d in its entirety carry? Carried. Moving on to subsection 100e(1).

Hon Mr Cooke: Do you want me to read it before you --

The Chair: The minister is going to give us a brief explanation.

Hon Mr Cooke: Subsection 100e(1) sets out the threshold test for determining an extraordinary operating cost. One of the two tests must be met. Clause (1)(a) defines an extraordinary operating cost as a variance of 50% or more from the same cost category in the building operating cost index, BOCI. For example, if the heating cost component of BOCI is 6%, a landlord's heating cost must have increased by 9% or more to qualify for an extraordinary operating cost increase or 3% or less to qualify for an extraordinary operating cost decrease.

Clause 100e(1)(b) provides an alternative measure of extraordinary operating cost where the increase in any one of the six specified operating cost items, after allowing for the BOCI increase, accounts for a variance in the gross potential rent of at lease 1%. For example, if the heating cost component of BOCI is 6%, a landlord's heating cost must have increased by the BOCI component plus 1% of the gross potential rent of the complex. If heating costs are $10,000 and the landlord's gross potential rent is $100,000, then heating costs would have to increase by at least $1,600, which is 6% of $10,000 plus 1% of $100,000 to qualify for an extraordinary operating cost increase.

These are, as you will appreciate, the formulas for the exceptions under Bill 4 for operating costs to apply to rent review and are the same formulas that exist under the current legislation.

Ms Poole: I just point out for members' information that we have tabled an amendment which affects this particular section of the act. Because legislative counsel had advised we could not do a clause 100e(1)(c) because of the way the language was worded, we have -- it is, I think, item 6 in the package we gave you -- 100e(5)(a) and this relates to the municipal taxes, particularly those where there has been non-compliance with a municipal work order. I do not know whether the Chair would like to deal with the amendment at the same time or -- if not, I just wanted to point out to members that there will be an amendment relating to this.

The Chair: Well, I believe the Progressive Conservatives have an amendment on clauses 100e(1)(a) and 100e(1)(b).

Mr Tilson: Yes, I wish to have an amendment with respect to 100e(1).

The Chair: Would you like to move your amendment, Mr Tilson?

Mr Tilson: Could I ask the clerk to hand out copies of that, Mr Chair.

Hon Mr Cooke: I do not know, as not a member of the committee, whether I am allowed to ask on a point of order, but would it be possible, if there other amendments that you have, that we could perhaps get them ahead of time? They are normally tabled ahead of time.

Mr Tilson: I have no problem. The reason I had not done this --

Hon Mr Cooke: In fact the rules call for that.

Mr Tilson: The reason I had not done that is that, for example, for the last amendment dealing with the retro-

active feature, we had indicated that we would support the Liberal amendment, which we did, and obviously I am not going to jump ahead and say, "Well I want the Conservative amendment." So that is why we had not produced that at that particular time.

Hon Mr Cooke: I do not think you have to worry about that.

Mr Tilson: I have no problem, and if you understand that, depending on what happens to the -- because of the order, the Liberals speak first. If that is understood, then I have no problem giving the entire package to the members of the committee.

Hon Mr Cooke: That would be helpful so that the ministry staff --

Mr Tilson: Of course. I have no problem with that, Mr Chair.

Ms Poole: I am looking at the two amendments, the Liberal amendment which provides a clarification about outstanding work orders and whether the charge for that which is levied on municipal taxes can be put through, and also the Conservative amendment, and it appears that amendment, the only change that it adds is garbage tippage fees, is that correct?

Mr Tilson: Yes.

Ms Poole: So I do not know how the minister would prefer to deal with this. I would suggest maybe we would deal with Mr Tilson's amendment first.

Hon Mr Cooke: Then we can go with an amendment.

The Chair: If I can just help the committee, it appears that procedurally Mr Tilson's amendment comes first, and I do not know how we would do it any other way. Mr Tilson's amendment deals directly with 100e(1)(a) and (b) and Ms Poole's amendment deals with 100e(2)(f).

Ms Poole: No, I have moved on to about the sixth one in the package. It is 100e(5)(a). Just for logistical reasons we could not include it in subsection 100e(1), but it does go hand in hand with that particular provision. So I think you are still technically correct, Mr Chair, but I wanted members to know that --

Hon Mr Cooke: If it is of any assistance, we can go through the package if you would like, in the order, and we are going to be indicating support for that amendment, so it will not throw anything out if we just continue going through and when we get to that section, we will --

Ms Poole: Okay.

Mr Mahoney: You just said you are going to support one. You get to vote --

Hon Mr Cooke: It does not change the bill in principle.

Ms Poole: George, you are going to be able to vote for my amendment.

An hon member: Write that down.

Mr Mammoliti: I just want to point out that it is 5 o'clock and that it is unfortunate, but I have a plane to catch and I am wondering whether or not we are going to be going past 5 o'clock.

The Chair: I think we have time for Mr Tilson to move his amendment and then we will have to adjourn.

Mr Tilson moves that subsection 100e(1) of the act be struck out and the following substituted:

"100e(1) In this section, `extraordinary operating cost' means a change in the cost of municipal taxes, heating, hydro, water, insurance, cablevision and garbage tippage fees respecting the residential complex,

"(a) that creates a variance of at least 50% from the same component set out in the building operating cost index; or

"(b) that would justify a variance in gross potential rent of at least 1% from the amount resulting from the application of the building operating cost index component."

It being 5 o'clock in the afternoon, I ask that the standing committee on general government adjourn until 10 am tomorrow morning.

The committee adjourned at 1700.