TENANT PROTECTION ACT, 1996 / LOI DE 1996 SUR LA PROTECTION DES LOCATAIRES
SUDBURY COALITION FOR SOCIAL JUSTICE
LEGAL CLINICS' HOUSING ISSUES COMMITTEE
PARALEGAL ASSOCIATES (SUDBURY)
SANDYCOVE ACRES HOME OWNERS' ASSOCIATION
SOCIAL PLANNING COUNCIL OF THE SUDBURY REGION COMMUNITY ALLIANCE ON SOCIAL ISSUES
NORTHERN ONTARIO REGIONAL COOPERATIVE HOUSING ASSOCIATION
SUDBURY COMMUNITY LEGAL CLINIC
NATIONAL ANTI-POVERTY ORGANIZATION
PETERBOROUGH COMMUNITY LEGAL CENTRE
CONTENTS
Thursday 7 August 1997
Tenant Protection Act, 1996, Bill 96, Mr Leach / Loi de 1996 sur la protection des locataires, projet de loi 96, M. Leach
Group Action Against Poverty
Mrs Bobbie Cascanette
Sudbury Coalition for Social Justice
Mr Dan Saumur
Miss Lori Jo Flood
Legal Clinics' Housing Issues Committee
Ms Wendy Bird
Ms Mary Garrett
Paralegal Associates (Sudbury)
Ms Lynda Beavis
Tim Welch and Associates
Mr Tim Welch
Sandycove Acres Home Owners' Association
Mr Paul Burkholder
Social Planning Council of the Sudbury Region;
Community Alliance on Social Issues
Ms Annette Reszczynski
Housing Resource Centre
Mr Guy Demarais
Northern Ontario Regional Cooperative Housing Association
Ms Donna Mayer
United Tenants of Ontario
Ms Nancy Bailey
Sudbury Community Legal Clinic
Mr Bruce Best
National Anti-Poverty Organization
Mr Barry Schmidl
Muskoka Legal Clinic
Ms Jo-Anne Boulding
Peterborough Community Legal Centre
Ms Martha Macfie
Sudbury Women's Centre
Ms Katheen Myre
Ms Katherine Beddows
Ms Marlene Johnson
Zulich Enterprises
Mr Paul Zulich
Mr Peter Faggioni
STANDING COMMITTEE ON GENERAL GOVERNMENT
Chair / Président
Mr David Tilson (Dufferin-Peel PC)
Vice-Chair / Vice-Présidente
Mrs Julia Munro (Durham-York PC)
Mr Mike Colle (Oakwood L)
Mr Harry Danford (Hastings-Peterborough PC)
Mr Carl DeFaria (Mississauga East / -Est PC)
Mr Ed Doyle (Wentworth East / -Est PC)
Mrs Barbara Fisher (Bruce PC)
Mr Tom Froese (St Catharines-Brock PC)
Mr Steve Gilchrist (Scarborough East / -Est PC)
Mr Michael Gravelle (Port Arthur L)
Mr Rosario Marchese (Fort York ND)
Mrs Julia Munro (Durham-York PC)
Mr Mario Sergio (Yorkview L)
Mr R. Gary Stewart (Peterborough PC)
Mr David Tilson (Dufferin-Peel PC)
Mr Len Wood (Cochrane North / -Nord ND)
Substitutions / Membres remplacants
Mr Dominic Agostino (Hamilton East / -Est ND)
Mr John Gerretsen (Kingston and The Islands / Kingston et Les Îles L)
Mr Bill Grimmett (Muskoka-Georgian Bay / Muskoka-Baie-Georgienne PC)
Ms Shelley Martel (Sudbury East / -Est ND)
Mr Peter L. Preston (Brant-Haldimand PC)
Mr Wayne Wettlaufer (Kitchener PC)
Clerk / Greffier
Mr Tom Prins
Staff /Personnel
Mr Jerry Richmond, research officer, Legislative Research Service
The committee met at 1001 in the Ambassador Motor Hotel, Sudbury.
TENANT PROTECTION ACT, 1996 / LOI DE 1996 SUR LA PROTECTION DES LOCATAIRES
Consideration of Bill 96, An Act to Consolidate and Revise the Law with respect to Residential Tenancies / Projet de loi 96, Loi codifiant et révisant le droit de la location à usage d'habitation.
GROUP ACTION AGAINST POVERTY
The Chair (Mr David Tilson): Good morning, ladies and gentlemen. The standing committee on general government of the Ontario Legislature is having public hearings with respect to Bill 96. The first delegation is the Group Action Against Poverty, Bobbie Cascanette. Good morning to you. You can proceed any time.
Mrs Bobbie Cascanette: Good morning. Group Action Against Poverty is a network of people concerned with issues of poverty, mainly because most of us are living with them. We are mutually supportive, creating opportunities for personal and collective empowerment through encouragement, education and the promotion of cooperative ventures. We are some of the people most dramatically and directly affected by this government's enthusiastic restructuring of everything. To be blunt, we want to know what this government has against low-income people. This government seems to have a policy of assuming that low-income people are responsible for the problem, whatever problem you happen to be talking about, and unfortunately, many sections of the proposed Tenant Protection Act reflect this sentiment.
Our presentation is going to focus on the most obvious impact of this legislation in our day-to-day lives, highlighting situations we most commonly have to deal with. We have read through the proposed legislation in the long form, and much of it we find confusing, making reference to other acts and legislation that we are not familiar with. This is a common problem. We need help in interpreting the laws. We do not have the expertise to critique the legal technicalities or governmental details and we shall not pretend to. For these issues we defer to the expertise of the Legal Clinics' Housing Issues Committee and the Centre for Equality Rights in Accommodation.
We are really hoping that the government will reconsider some critical sections of the proposed Bill 96. Working on the theory that the government is truly trying to improve the legislation for all concerned and not just responding to a high-pressure landlord lobby, we respectfully submit the following recommendations.
(1) Eliminate the use of income information to determine eligibility. A landlord has the right to check references and credit ratings. We find that this is reasonable and do not dispute it. However, even though it is presently illegal to discriminate based on income, it happens consistently. We tell you this based on our own life experience. This discrimination takes a variety of forms: There are landlords that won't rent to you at all, despite a good tenant record. There are landlords that will rent to you but then feel no necessity to maintain the premises, as they know that your resources to enforce your rights are limited. There are landlords that constantly violate a tenant's right to notice upon entering the premises, again knowing your options are limited. We won't use all our time detailing the many forms of harassment and discrimination we have to deal with. Not all landlords discriminate, but making income disclosure legal ensures those that do will have no problem identifying their victims. Think about it. If you are inclined to take advantage of people, are you going to victimize somebody with the resources to fight back?
Furthermore, when you combine this with other changes this government has made or is planning to make, it becomes even more devastating. With the current levels of social assistance and its division of housing income and living allowance, absolutely no social assistance recipient will meet the criterion of their rent being no more than 30% of their income. Or a landlord could decide they prefer to rent to a social assistance recipient and collect the direct payment to landlords proposed in the Social Assistance Reform Act, effectively rendering a low-income tenant powerless in any landlord-tenant disputes. Either way, we see no benefit and a lot of harm if the landlord is in legal possession of this information.
Studies show that most social assistance recipients put their rent as a priority even over food. Believe us when we say that having a roof over your head takes on whole new dimensions when you are poor. Being poor is its own barrier to finding shelter. What possible non-discriminatory advantage is gained by a landlord knowing the income source? We can picture the classified ads now: "For rent, one two-bedroom apartment, close to bus routes and schools: $600 a month plus utilities. Social assistance recipients and working poor need not apply."
(2) Include rent controls for new tenants. Giving landlords the right to increase the rents with new tenants is almost worse than no rent controls at all. Please do not take that as a suggestion to remove rent controls. Remember that we're talking about landlords who are less than completely ethical, which is who the Tenant Protection Act is theoretically designed to deal with. No matter how many laws we put in place to avoid it, determined landlords can find all kinds of ways to make your life miserable if they want you out. Unlimited rent increases for new tenants give unethical landlords an incentive to evict existing tenants.
(3) Limit the landlords' ability to pass on increased property taxes. Downloading: I wrote this before the news last night, but we just found out that we're looking at a 25% increase here, and though this government consistently denies it, downloading is going to result in municipalities being forced to increase property taxes. The Tenant Protection Act creates a direct line to pass this expense on to those least able to afford it. In case you missed it, "low-income" means that we have no money. Increased rents and decreased incomes are resulting in multi-family dwellings at best, which landlords do not appreciate, and homelessness at worst, which we don't appreciate.
(4) Include a minimum maintenance standard for all of Ontario. Unethical landlords are in it for the money. Maintenance is an expense that can cut into immediate income. For whatever reasons, very often unethical landlords do not appreciate the long-term value of maintaining their investment. We could bury you with examples of poor maintenance that many of us are already tolerating because it's too difficult to get the current legislation and regulations enforced. This legislation effectively removes any incentive or threat of punishment that could inspire a landlord to maintain a property. To rub salt in the wound, very often low-income tenants are stereotyped as slobs with no respect for property when the problem is a lack of maintenance on the part of the landlord.
(5) Commit the proper time and resources to the proposed Ontario Rental Housing Tribunal. We're not sure what the government's intention is in replacing existing watchdog bodies with government-appointed committees, but our experience with the family support plan makes us very, very nervous about any restructuring of this nature. To the best of our understanding, the new tribunal will take on the caseload of the rent control board and the caseload that currently goes to the courts, and they are going to be doing this on the same budget that the rent control board currently receives. That's comparable to the current rent control board, with its present delays and backlog, taking on 65,000 more cases a year. Combine this with legal aid and legal clinic cuts and you have virtually eliminated any reasonable recourse for low-income tenants. Sometimes the threat of legal action has been enough for us to instigate change. If landlords know that legal action will be next to impossible, we will lose a valuable tool for resolving disputes.
(6) Protect tenants' rights to privacy and control over who enters their home, and when. This covers two points.
(a) The right to change the locks if the tenant feels it is necessary: This is most common when a tenant first moves into a residence or when a partner or a roommate moves out. Many landlords are reluctant to change the locks because of the expense, the whole $22.98, but for tenants this is a priority security issue. How would you like not having control over how many people had a key to your home?
(b) Proper notice and permission to enter the premises: You would think a landlord would understand that a rental unit is a tenant's home, that agreeing to rent the unit is entering into a contract with a tenant and that the tenant has control over that property during their occupancy, excluding doing wilful damage to the property. But some landlords are worse than nosy fathers with teenage daughters and this is also one of the most common forms of harassment.
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To summarize:
(1) We don't want it to be legal to discriminate against us.
(2) We don't want our landlords to have incentives to evict us.
(3) We don't want to foot the bill for the 30% income tax break. Correct that. We can't afford to foot the bill for the 30% income tax break.
(4) We want our residences to be decently maintained.
(5) We want access to legal recourse in case of landlord-tenant disputes.
(6) We want to have security and privacy in our own homes.
We are not asking for anything unreasonable here. We find it unreasonable that a document titled the Tenant Protection Act does not already address these issues. There seems to be no appreciation of the power imbalance between landlords and tenants. It's important to remember that landlords become landlords by choice. Tenants are tenants out of necessity. This is a crucial point. At worst, landlords are inconvenienced by a dispute, possibly losing some money. Tenants can end up harassed, terrorized and ultimately homeless.
With the remaining time, we would like this committee to explain to us why these issues are not addressed in the proposed Tenant Protection Act and why we have to be here at all, hat in hand, asking for our province's laws to reflect a standard of common human decency.
The Chair: Mrs Cascanette, you have given a concise report on your position and you have allowed time for questions. Are you prepared to entertain questions from the committee?
Mrs Cascanette: Could I get a response on why these weren't --
The Chair: I'll tell you the process that we have. We allow each caucus to ask questions and you're free to respond or ask questions of anyone you wish. We'll start with the New Democratic caucus.
Mr Rosario Marchese (Fort York): I would like to, first of all, thank Mrs Cascanette for her presentation and for the work she does in representing people who are poor. I want to give my time to the Conservative member, the parliamentary assistant, to assist you in answering the questions you've raised.
Mr Steve Gilchrist (Scarborough East): Thank you, Mr Marchese. I'm more than happy to do that. Let me deal with them in order, if I can.
First off, section 200 in no way changes the existing Human Rights Code's prohibition against discriminating on the basis of source of income. I know that a number of critics of this bill are suggesting otherwise in their mailings. That is patently untrue. This section says -- and then there's a follow-up section. The second part of the clause says that the regulations will be set that guarantee that even the income check cannot be used to discriminate in any way, shape or form, and none of the existing protections by source of income -- for example, right now it is illegal to discriminate on the basis of source of income, so if someone is on government assistance, a landlord can't hold that against you. If you're aware of any landlord doing that, then I would be more than happy to assist you in pursuing that through the Human Rights Commission because that will continue to be the case.
Mrs Cascanette: Could I ask then, sir, what benefit is gained by them doing an income check?
Mr Gilchrist: Very simply, the case has been made by many tenants coming forward and saying they recognize that there may be someone with either a bad credit history or no credit history at all and to not have the ability then to say, "Okay, convince me that you are a good potential tenant, because nothing in the check of previous landlords, nothing in your credit check gives me that assurance." You would ask us to deny people the opportunity to say, "I just got a new job and here's what I make and I guarantee to do that."
Mrs Cascanette: Sir, that's voluntarily offered information. This gives the landlord a way to check it.
Mr Gilchrist: No, I'm sorry, the way that our critics would like it expressed, you would not be allowed to ask the question.
Mrs Cascanette: If a landlord wanted to ask, "Prove to me that you're a good risk," the tenant could offer the information that "I just got a new job," etc?
Mr Gilchrist: There's nothing that would force a prospective tenant to give that information now. Again, the landlord can ask and you can say, "No, I'm not going to tell you that." But if you have nothing else in your credit history that would convince the landlord that you're a good risk, it would seem to me folly to not volunteer that information.
In the limited time, let me talk about some of your other points here as well.
The property tax issue: First off, Sudbury is not going up 25%. Second, it is true here in Sudbury, as it is in every part of this province, that the municipal governments are charging on average four times more property tax for the same area in an apartment that they would in a single-family home. It's quite ironic that these people turn out -- in Toronto we had three city councillors come and talk about how bad this bill is.
At the same time not one of them, even in this current election, never mind retroactively, is campaigning on a platform to bring fairness. In Scarborough, for example, if that fairness existed today, the average rent for an apartment in Scarborough would drop by $125 a month. That's how big a differential we're talking about, over a 20% reduction for every apartment in Scarborough. That's just staggering.
The fact of the matter is it's not covered in this bill, but we've given the municipalities the tools to bring that fairness in there. I would encourage you to ask every candidate for municipal office this fall where they stand on that issue and whether this January 1 they will move to bring about a change in their property tax regime so that homeowners and apartment residents are dealt with on the same principle and with the same fairness. It's in your interests to do that.
Mrs Cascanette: If we don't get the municipal government to do something differently, then it's going to stay the same, that it's completely straight to pass that right on to the tenants.
Mr Gilchrist: Property tax has always been a municipal authority.
Mrs Cascanette: The point in my presentation, sir, was that the way you're setting up rent increases, any property tax increase -- we're going to have to agree to disagree on that -- that might result in the future, from anything, can get passed on directly, with no barriers to passing it on.
Mr Gilchrist: And every decrease will be similarly passed on.
Mrs Cascanette: We don't get them, sir.
Mr Gilchrist: You may be pleasantly surprised in the next couple of months.
Mrs Cascanette: I would be shocked.
Mr Gilchrist: Maintain a minimum standard in Ontario: It's in subsection 24(1). Subsection 24(1) of the act specifically says just that. I don't think it could be clearer. If you don't have a copy of the act itself, I would be more than happy to share mine with you.
The final thing is that you talked about privacy issues. Quite frankly, there's a very simple reason. If you're in an apartment building where the same key is involved in the common entrance, for example, or if there's a master key, then clearly one tenant can't go and change a lock if the landlord's master key or the tenant's key to the entrance then is inapplicable. The bill says that if the lock is changed, the landlord must immediately give a copy of the key, not to anyone else, to the tenant.
Mrs Cascanette: The common area, where this becomes a problem, is relevant to the door of your own apartment. It really is an issue for us to get permission, because under this new act we have to have the landlord's permission to change the lock. This is to help us deal with those who are unreasonable for reasons that are beyond our understanding. If we can't change the lock at our own instigation, very often we can't get their permission.
Mr Gilchrist: Would you then suggest that the act have an amendment to the effect that a tenant would have the right to insist the landlord do it -- I'll let you speak to the time period you think would be reasonable: 24 hours, 48 hours -- obviously with the tenant picking up the cost if they want that lock voluntarily changed? But then the landlord could still control issues such as the master key or if there's a common key to enter the building itself. Both sides would be appeased with that.
Mrs Cascanette: For the tenant picking up the cost, if it happens during their tenancy.
Mr Gilchrist: Yes.
Mrs Cascanette: But when it's moving in, you should have new locks, because you have no control and that should be at the landlord's expense.
Mr Gilchrist: I don't disagree with that fundamentally. The scenario we keep getting is if there's an abusive relationship and someone who may have a key leaves in the middle of a tenancy. If you think that's reasonable, I'd be more than happy to take that back as a proposal that we could amend the bill.
Mrs Cascanette: Definitely as a proposal that the tenant can change the lock. I would like to have more consideration. In an abusive relationship, that's when income is the most crucial. You can't legislate it, but unfortunately there's often not a lot of sympathy to help in that situation. Sometimes the $22.98 is a fortune in an abusive relationship because they've been left with no income. So to change the locks is a big deal.
Mr John Gerretsen (Kingston and The Islands): Just a couple of comments: Getting back to this income information, it's kind of interesting that the Ontario Human Rights commissioner, Mr Norton, a former prominent Conservative cabinet minister over a number of years, has some very serious concerns about this. I haven't got the exact wording he used, but I heard him speak before the committee just three or four weeks ago and he certainly thinks the Ontario Human Rights Code may very well be violated as a result of the new provisions that are being suggested here.
As far as taxes are concerned, I don't know, but when just about every municipal politician in this province says there's a downloading of about $600 million, and even some papers were reporting yesterday --
Mrs Cascanette: It's when the bureaucrats agree with them.
Mr Gerretsen: -- it is $900 million, which is even higher than I thought it was, it's kind of interesting that the province is saying, "Don't worry about it, there's not going to be an extra downloading." There will be downloading, or if they are somehow able to find the money it will mean fewer municipal services. You can't have it both ways. I wonder if you have any comments on that at all.
Mrs Cascanette: Last year, locally, before the downloading, we went through 30 service cuts and 20 user fees. I don't care -- a rose by any other name. This is what we went through in our last year's budget. This year coming up, when the bureaucrats agree -- I've been trying to deal with them for the last year or so. Normally they really do a good job on following the provincial government's line, and when the bureaucrats are agreeing that we can't cover it, I really get scared. We are going to have that extra expense and we are going to have to find ways to cover it.
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The way it's going, it's being covered by user fees, it's being covered by cuts to services, and all of that lands on the low income. As much as everybody talks about the low income being a drain on society etc, if you keep smashing us down, we'll never get up. That's what's ending up happening. If we don't have proper access to services, if our garbage is not collected and maintained, if we can't get around our city because our bus service is being cut and our rents and taxes are going up -- we spend so much time just on daily existence, forget about us getting off assistance. We don't have the energy left.
Mr Gerretsen: Taking into account the fact that this downloading's going to take place, do you have any concerns, particularly with the group you represent -- I assume a lot of your members are residents of public housing --
Mrs Cascanette: Yes.
Mr Gerretsen: -- that the public housing portfolio in effect will be handed to local municipalities, taking into account the kind of economic pressures they are already going to be under?
Mrs Cascanette: Yes, we've been watching that situation very carefully and we really hope Mr Chrétien holds on to that and doesn't hand it down, because it will land on the municipalities and we can't afford -- the way things are right now, there's so much confusion and everybody's trying to sort things out, that we're not even covering what we already have. So if we take on the added expense of public housing, we're afraid it is going to disappear, and when it disappears our housing situation -- we have a high vacancy rate here in Sudbury. You wouldn't know it by the low-income community. We have people who are looking for apartments, for places to live for two, three to four months, and when they find something they're taking whatever they get. Public housing is a better option, and when that disappears, our situation gets more desperate, and we are afraid it will happen.
The Chair: Ms Cascanette, the committee thanks you for making your presentation this morning.
Applause.
The Chair: Just for the future, ladies and gentlemen, the rules of the committee don't allow applause. Even though you might want to applaud or boo someone, it's not allowed. I'm afraid you'll just have to refrain from doing that.
SUDBURY COALITION FOR SOCIAL JUSTICE
The Chair: The second delegation this morning is the Sudbury Coalition for Social Justice, Dan Saumur and Lori Jo Flood. Good morning to you. You may proceed.
Mr Dan Saumur: Good morning, everyone. On behalf of the Sudbury Coalition for Social Justice, I would like to thank the committee for the opportunity to speak on the subject of the legislative amendments proposed by Bill 96. My comments will focus on amendments within Bill 96, specifically those that threaten the protections currently guaranteed under the Ontario Human Rights Code.
But before I begin that, I'd like to introduce myself and our organization. My name is Dan Saumur, I'm 34 years young and I have lived most of my life here in Sudbury. I'm a maintenance employee with the Sudury District Housing Authority and vice-president of Local 3096 of the Canadian Union of Public Employees, which represents about 900 public housing employees across Ontario. I have also worked for the Ontario Housing Corp as a workplace discrimination and harassment prevention adviser-trainer. I have received specialized training from both CUPE and OHC in the prevention of discrimination and harassment. I am the proud father of twin daughters, and I'm also a landlord here in the Sudbury district.
The Sudbury Coalition for Social Justice was formed approximately two years ago. We have over 200 active members, from the ranks of organized labour, the community and interfaith organizations. We were the principal organizers of the Sudbury Celebration of Resistance this past March. These days of action against the policies of the Harris and Chrétien governments sparked the largest street demonstrations ever held in the history of northern Ontario. This meant that many people who previously would never have marched in a demonstration did so because they disagree with the present government's agenda.
The Sudbury coalition's resistance to the agenda of the Harris government is shaped by a strong vision that we have for the kind of society in which we want to live. We believe that many people in Ontario share this vision. Current government policies are progressing towards a dangerous society, one that pits an ever-growing number of people who are losing ground against a small élite who are benefiting from these policies. This will inevitably take us down the same road as has happened in the United Kingdom and the United States where large numbers of homeless people and a mounting climate of hopelessness and despair will translate into an unsafe and unproductive environment in which to live.
The Common Sense Revolution cleverly disguises its real aim: the creation of an exclusive society that primarily benefits one special interest group in Ontario -- the wealthy and powerful. Our vision of society takes us down a different road.
We want to live in an inclusive society that gives all people hope; gives all people access to services and opportunities to live healthy and positive lives; promotes wellbeing for each and every child, woman and man regardless of their age, gender, race, sexual orientation, class, culture or ability. We want to live in a society that has people working together for the collective benefit of all its members, and supports and cares for those unable to support themselves. We want to live in a society that respects and nurtures diversity. Finally, we want to live in a society that builds on its own history of bringing social justice and equal opportunities to its members, rather than abruptly dismantling this history, using fearmongering and divisiveness as its tools.
The coalition is especially pleased to have this rare opportunity to speak directly and bluntly to some of the elected members of the Harris government. As you're probably aware, there was only one sitting member north of the French River from the Progressive Conservative Party before the last election, and there is only one Conservative member in the current House: Premier Mike Harris himself.
I wonder if the government members on this committee could raise their hands so it's clear to all of us just who you are, so I can look you in the eye while I make the coalition's presentation. Thank you.
I think it's deplorable that these hearings are being held here today on this issue at all. I think these proposed changes to the Landlord and Tenant Act are part of a number of measures, including reductions to social assistance payments and the Ontario Works program, also known as workfare, which target the disadvantaged in our society. Instead of accepting the larger challenge of attacking the root causes of poverty and inequality in our society, the Harris government has adopted the small-minded and mean-spirited approach of attacking the poor themselves.
We're well aware of the government's rhetoric concerning the need to cut public spending so as to reduce Ontario's deficit, and we've long suspected there's a hidden agenda that comes with the rhetoric. These proposed changes to the act confirm our suspicions. They greatly enhance the rights of landlords at the expense of tenants, especially low-income tenants. These proposals will have no impact at all on the deficit, but they will benefit the already privileged class in our society, and we think that's what the so-called Common Sense Revolution has really been about all along.
What we have here is one special interest group in Ontario, mainly straight white males with financial resources and privileged class and educational backgrounds, choosing to enrich themselves even further, and others like them, at the expense of women and children, young people, first nations people and disabled people, to name just a few of the groups who are suffering under the policies of this government. At best these policies are short-sighted and self-interested, and at worst they are downright cowardly.
In my work experience with the Sudbury District Housing Authority, I had an opportunity to work in the tenant placement department for about eight months. I met a large number of applicants and many of them paid a large portion of their income towards rent, even as high as 75%. When we offer a unit, standard practice is to check landlord references. Most often these potential tenants would receive an excellent reference. This, to me, proves that income information has no bearing on a tenant's ability to pay rent.
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Authorizing the use of income information to disqualify potential tenants will have disastrous consequences for many disadvantaged people. Studies show that minimum income criteria have an adverse impact on Ontarians on the basis of their gender, marital and family status, age, citizenship, race, immigration status, place of origin and people in receipt of public assistance. Studies also show that if the 30% rent-to-income ratio were applied, all persons in receipt of public assistance would not qualify for an apartment.
We are not opposed to landlords checking prospective tenants' credit and rental history when available and refusing to rent to tenants on the basis of a negative record or reference. We also do not dispute a landlord's right to require a guarantor where there is a bad credit record or reference. But the effect of including income information is beyond the right of landlords to assess creditworthiness, giving them the right to exclude whole classes of people and entire groups currently protected by the Human Rights Code on the basis of their income. We have come a long way in Ontario in reversing discrimination and harassment and this amendment will set us back 40 years.
As stated earlier, Keith Norton, chief commissioner of the Ontario Human Rights Commission, stated publicly that including income information as a permitted basis for disqualifying prospective tenants will effectively authorize discrimination against people on public assistance. It will wipe out the protection provided by the code on the ground of public assistance for all practical purposes. Commissioner Norton also stated that discrimination against social assistance recipients and the poor is one of the most pressing human rights issues of the decade.
A survey conducted by N. Barry Lyon and Associates found that most landlords use credit checks and references, but most do not use income information to select tenants. Surveys have shown that the affordability problem is almost always the result of a change in circumstances and therefore could not have been screened at the time of application for tenancy. Job loss or reduction in wages or salary or the onset of illness are obvious examples of causes of default. Rent-to-income ratios do not predict these types of events. Any change in circumstances for a social assistant recipient is likely to be favourable, so to exempt them would not make good business sense.
Rental default in the real estate business is almost always less than 1% of gross annual income. Most businesses have bad debt, and bad debt of less than 1% of income is well within the acceptable range. These proposed changes are, in summary, discriminatory, in violation of the Ontario Human Rights Code and wholly unnecessary from a business point of view.
We had planned to have two tenants' perspectives for you to accompany this presentation, but they are low-income tenants and can't afford cars. There was some mixup in the arrangements for transportation, so Lori has volunteered to help with the presentation this morning.
Miss Lori Jo Flood: My name is Lori Jo. I'm 23 years old and a low-income earner. From my perspective of being low income and being a tenant, all I can say is that Bill 96 is legislated discrimination, especially when you consider that 35% to 65% of a social assistance recipient's and/or low-income earner's monthly income is spent on rent. With the proposed changes that state that if you pay over 30% of your income in rent you can be denied the apartment, I believe that many of us will no longer have access to decent housing. Whether I'm on social assistance or earn a low income, I feel that I should not have to disclose that type of financial information to a stranger just in order to look at an apartment that I'm considering renting. My pay stubs tell only of my financial situation and nothing about my character. References would tell the prospective landlord more about me and my character than any pay stub would.
Finding affordable and suitable housing is an arduous task. I have lived in apartments that have been flooded with sewage, that have improper fire escapes -- in two of the apartments there was no way out other than the front door -- apartments where the foundation was buckling, causing the floors to slant, and where the windows and frames were literally falling out. With the proposed changes to sections 110 to l34, a landlord could increase the rent without repairing any of these things. I ask you, is this fair?
Tenants will no longer have the right to apply for a rent decrease when the cost of the unit's utilities go down. The landlord charges an amount based on his or her expenditures and one of these is utilities. It would be illegal for the utility companies to charge landlords for utilities that were not being delivered, so why would it be legal for a landlord to charge a tenant for utilities that were not being delivered?
Unfortunately, when we tenants move into a building, we expect that the landlord will be honest and fair because many of us do not know all of our rights. With the changes to sections 37 to 85 -- I quote the Coalition to Save Tenants' Rights, the Summary of the Tenant Protection Act: Bad News for Tenants -- "As well, the warning that tells tenants that they don't have to leave right away is no longer required." Many people are not aware that they have 14 days they can use to appeal the eviction or to find a new apartment.
With these changes and others that are proposed in Bill 96, it will be harder to find affordable housing and to keep the housing we already have. The rights of the tenants must also be considered with the rights of the landlords. These changes are wrong and they may prevent our society's most vulnerable people from obtaining affordable, decent homes. A decent, affordable home is one of the most crucial aspects of a quality of life that we all deserve, even those of us who are at the bottom financial bracket of society.
The Chair: Thank you. Mr Saumur, that's your presentation?
Mr Saumur: Yes, it is. Do you have any questions?
The Chair: I'm sure the committee does. We have a chance for a brief statement or question from each caucus.
Mr Wayne Wettlaufer (Kitchener): Thank you both for coming today. There is a great deal of misconception, I think, and certainly a lack of understanding between landlord and tenant. I'm not going to defend either one. I've been both and may be a tenant again very soon.
You talk about rental default in the real estate business, almost always less than 1% of gross annual income, and that most businesses have bad debt. The average return on equity for a landlord today is between 2% and 4% in the province of Ontario. I want you to understand that 80% of buildings are less than 10 units. Most of these buildings are owned by people who came here after the war, in the 1950s and l960s, immigrants. They are people who have their life savings tied up in these buildings. On a return on equity of 2% to 4%, they can't possibly maintain a decent residence for anyone, especially you. I personally would not want to live in a building where the balcony was falling down or the garage door wouldn't open when I needed security. I want to be in my garage, I don't want to be outside.
The Chair: Thank you, Mr Wettlaufer. Mr Gerretsen.
Mr Gerretsen: How long do I have?
The Chair: About as long as he had.
Mr Gerretsen: I think it's very interesting. If he's saying the landlords are only making 2% to 4%, I assume that what he's saying is they're not making enough. So basically what this is all about is to increase rents across the province. That's got to be the bottom line.
Mr Wettlaufer: I didn't get a chance to finish, and you know that.
Mr Gerretsen: Well, I can't see why you would say that otherwise, if they're not making enough.
Let's admit there are some bad public housing tenants and there are some bad rich tenants. You get bad and good in every group of society, whether we're talking about workers or tenants or what have you. But I think this income reference here is based on the fact that somehow there seems to be this belief around that people with low incomes don't pay their debts. As Mr Norton clearly indicated before the committee, there's absolutely no proof of that whatsoever. Just as many rich people default on payments as poor people and vice versa. Do you have any comments on that at all?
Mr Saumur: I agree with you 100%. There's no evidence of that. Even the landlords now who are using income information are in a very small minority and I've seen -- I'll just get you the name -- N. Barry Lyon and Associates found that the people who have used this information haven't benefited from it at all. I've seen the report.
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Mr Marchese: I just wanted to make some statements, and by and large I agree with most everything you have said. What we've seen here are two types of camps: the landlords, those who want to develop and want breaks from governments, and the Conservative members and, on the other side, everybody else. Most of us are in agreement that this bill is for landlords and not for tenants. It protects a specific privileged group of people who don't need much help.
Mr Wettlaufer was representing the view of the poor landlord who is only making 2% or 4%. We believe that figure varies. It's quite possible some people are only making 2% or 4% profit every year, although most people's wages have gone down. They haven't increased in the last six years. People haven't had an increase of a wage in the last six years.
So I just wanted to agree with you. I think tenants need protection. This bill that speaks of tenant protection is not for tenants, it's really for landlords, and I think you've got the right perspective on this bill.
The Chair: Mr Saumur and Ms Flood, thank you for coming.
Mr Saumur: Could I just respond to the comment?
The Chair: Very briefly, yes.
Mr Saumur: Very briefly, the 2% to 4% that Mr Wettlaufer says landlords are earning, the key is that there are many investments that people can choose to invest their money in. If the real estate market is not profitable, then why are they there? Why are they doing it? Low-income people don't have a choice; they have to rent apartments, they have to live somewhere. And most of the low-income people wouldn't have apartments with garage doors.
The Chair: Thank you, Mr Saumur.
LEGAL CLINICS' HOUSING ISSUES COMMITTEE
The Chair: The third presenters today are from the Legal Clinics' Housing Issues Committee, Wendy Bird and Mary Garrett. Good morning. You may proceed when you're ready.
Ms Wendy Bird: Thank you. Ms Garrett and I are here today representing, as you announced, the Legal Clinics' Housing Issues Committee. This is a province-wide organization representing tenant advocates. We do not anticipate being able to sway the government to our view concerning rent control and rental housing protection; however, we wish to emphasize that the elimination of rent control, which this bill effects, creates a powerful financial incentive for landlords to evict tenants by any means.
Contrary to government assurances, the inevitable result will be the elimination of meaningful security of tenure. The undermining of rent control, together with the repeal of the Rental Housing Protection Act, will result in a dwindling supply of affordable housing in Ontario. This can only lead to an increase in homelessness in Ontario and to the further impoverishment of an ever-larger segment of our already vulnerable population.
Our written submission focuses primarily on jurisdictional and procedural issues. We believe there are many incidental changes which have a significant but unintended negative impact on existing rights and obligations. This is the result of combining two very different pieces of legislation: the Landlord and Tenant Act and the Rent Control Act. Today, because of time constraints, we will cover only a few areas contained in our submission.
Concerning human rights, we endorse and support the submissions presented to this committee by Keith Norton and the Centre for Equality Rights in Accommodation.
The first issue that I want to address is the treatment of tenants' personal property. We find that the Tenant Protection Act's treatment of tenant property is fragmented and lacking in purpose. There is no accountability and it opens the way for serious abuse. The Tenant Protection Act contemplates the seizure of property in four separate situations: vacating tenants, abandoning tenants, mobile home park tenants and dead tenants.
Under the unproclaimed Residential Tenancies Act of 1979, there was one scheme to govern the seizure and sale of abandoned property of a tenant. The Tenant Protection Act now provides no single scheme. In this regard it is an example of sloppy and unintegrated drafting. There is also no monitoring of the process, and there are few safeguards against abuse. Moreover, it is landlords and not the crown who will have the benefit of any excess proceeds which are not claimed by tenants. It is the landlord who has a free hand to sell or dispose of tenants' property without any accountability.
In terms of mobile homes, a section dealing specifically with abandoned land-lease or mobile homes is new. The ability of a landlord to deal with a home is not as immediate as the landlord's ability to deal with the other personal property of tenants in other situations; and in this case, the tenant has the right to claim the proceeds of the sale of the home above expenses and any rent arrears owing or to recover a home that the landlord has personally retained if the tenant comes forward within six months. But if the landlord has disposed of the home by gift or has sold it for an amount equal to his expenses, there is nothing the tenant can do. There is no recovery. There is no requirement that the landlord act reasonably or responsibly. There is no supervision by the tribunal; indeed there is no administrative remedy at all provided in the Tenant Protection Act. This act opens the way for serious abuse.
While there is no question that abandoned property needs to be dealt with in the act, the legislation seems to give an excessive windfall to landlords, especially to mobile home landlords. A mobile home or land-lease home is an expensive structure, of far greater value than most items of furniture or other personal effects in other rental situations. If the property is sold or disposed of for less than market value -- for example, given to a child, spouse, friend or relative of the landlord -- the former tenant is out of luck. There is nothing to recover from the landlord.
Only if the landlord retains the property for his or her personal use can the tenant recover it. If the property is sold or disposed of, only the excess of the landlord's expenses and any arrears of rent is recoverable. Since there is no obligation for an accounting and no obligation that the landlord receive fair market value for the sale of the home, this remedy is minimal. Moreover, the tenant or the estate of a dead tenant must come forward within six months; otherwise, even this minimal recourse is lost.
In terms of dead tenants, the Tenant Protection Act deems the tenancy to be terminated 30 days from the date of death if there is no other tenant of the premises. Where the tenant is a mobile homeowner, these provisions do not apply. In many cases, the 30-day period will not give the executor or the estate administrators time to adequately deal with the property and affairs of the deceased.
I would like to give an example of the problems that are inherent in the legislation. For example, an elderly tenant dies and no one else lives with the tenant; 30 days after the tenant's death, the landlord can start to deal with the tenant's property. An estate may not be able to be wound up and the unit vacated within the 30 days. There may not be close relatives or relatives may live far away; the will may not be located immediately, so no one is sure who has the authority to act for the estate; and of course there's a funeral to arrange. At the end of 30 days the landlord can enter the premises and remove all the dead tenant's belongings. The landlord can give everything away to his friends and family; he can sell everything for the amount of the rent arrears owing. The estate has no way to stop the sale or gift of the dead tenant's property. The estate can only claim the excess proceeds from any sale. In this case there may be none.
The landlord is expressly within his rights to act like this under the Tenant Protection Act. The landlord is expressly absolved from any liability for these actions under the Tenant Protection Act. This is an absolutely shocking scenario but perfectly within the law under the Tenant Protection Act. There is no remedy in the Tenant Protection Act by which the estate can gain access if the landlord refuses, although it's contrary to the act; nor is there any remedy if the landlord disposes of the property before the 30-day period is up. As in so much of the Tenant Protection Act, there are rights but there are no remedies.
The present bill promotes animosity between landlords and tenants, irresponsibility and injustice. Frequently, tenants' personal possessions are their only assets of value. There should be one scheme, with minor variations for mobile homes and land-lease homes because of their value. There is no reason to treat those who vacate legally differently from those who abandon the premises. The process should be subject to close supervision by the tribunal. There should be a remedy of relief against forfeiture available to the owner of the property at every stage. Sale of property must be to a good-faith, arm's-length purchaser at reasonable market value. A landlord should not be absolved of liability where the landlord fails to deal fairly and reasonably with the property of its owners.
On another issue concerning mobile homes, I wish to make only a few brief comments, as I'm sure there will be other submissions today dealing with this issue. The date of termination of a tenancy in a mobile home park or land-lease community under the Tenant Protection Act is to be at least one year and not before the end of the period or term of the tenancy where the notice of termination is for demolition, conversion or repairs.
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This is an attempt to make up for the removal of the Rental Housing Protection Act coverage. While it does recognize the unique considerations involved in moving a mobile home, it does not go far enough. If there is no other site to move to, the tenant is still going to lose a major investment, and this is only delayed to a later date. It also does not help with the often prohibitive expense of moving. Most mobile home park tenants live there because they have low incomes.
We suggest that suitable alternative sites must be available before a tenant-owner in a mobile home park or land-lease community ought to be subject to eviction on this ground. Alternatively, the landlord who is seeking to convert, repair or demolish the premises should be required to compensate tenants for any losses they suffer regardless of whether the conversion, demolition or repair has been ordered by law.
In terms of repair and maintenance standards, the Tenant Protection Act diminishes the role of the provincial maintenance standard. It now only applies to unorganized areas and to municipalities which do not have any property standards bylaws. It also will apply to areas meeting the prescribed circumstances. Unfortunately, we don't know what these circumstances will be.
The Tenant Protection Act now allows landlords who have outstanding work orders to collect rent increases. This is prohibited under the Rent Control Act at present and it has been proven to be a significant incentive to get landlords to make ordered repairs. The removal of this incentive is counterproductive to the effective, efficient and cost-effective enforcement of maintenance standards. It suggests the government is not serious about such enforcement.
The Tenant Protection Act downloads more responsibility to municipalities to resolve repair and maintenance problems. The act does significantly improve a municipality's ability to enforce property standards bylaws, conduct inspections and go in to do repairs and collect the costs from landlords through property taxes, but it does not require municipalities to do this work. The duty must be mandatory before tenants will have adequate protection from lack of adequate repair.
Municipalities which were active in the area of property standards have generally cut back on these services because of cost and reduced transfer payments from the province. There is no reason to believe they will again become more active, with no new resources from the province, and every suggestion that they will not. Those who were never active in this area certainly have no incentive to become active.
The Tenant Protection Act fails to mention other order-issuing bodies. Presently, the Rent Control Act requires that other order-issuing bodies send their orders to rent control. Such bodies are Ontario Hydro, elevating devices, district health units and so on. Budget cuts may have reduced the effectiveness of these organization.
Generally, the Tenant Protection Act puts more of an onus on the tenants to enforce their rights to require landlords to carry out repairs. This is a concern when the Tenant Protection Act also encourages landlords to evict tenants so they can raise the rent because of elimination of rent control on vacancy. Tenants will usually be more hesitant to enforce their rights in the anti-tenant climate engendered by the Tenant Protection Act.
Ms Mary Garrett: For those of you who are following our brief, I'm at page 11. I'm going to talk about the general procedures and jurisdiction.
The new tribunal's procedure is to be governed in part by the Statutory Powers Procedure Act. Other procedures are set out in the TPA itself, but many important procedural issues are left for the future development of rules of procedure by the tribunal. The tribunal is also empowered to make guidelines. This makes an informed discussion of procedures before the tribunal almost impossible at this time. Substantive rights, without clarity and fairness of procedure, are an empty benefit.
As under the Landlord and Tenant Act, there is very little procedure set out in the Tenant Protection Act. Much is left to be announced in regulations, rules and guidelines. Tenants and landlords must have input into the formulation of these regulations, rules and guidelines. This includes input into the drafting of the various forms required under the Tenant Protection Act.
Tribunal: The transfer of jurisdiction to a tribunal is both an attempt to save money and to alleviate pressure on the court system. We had hoped it was also an attempt to provide a fairer, more equitable system of justice. A leaked Ministry of Housing document raises serious concerns about the government's commitment to a high-quality quasi-judicial process to replace the court system. It suggests that this will be quick and dirty justice or, more likely, injustice. Contemplated time frames for important and complex legal proceedings of 20 minutes, 30 minutes and 40 minutes are nothing less than an affront to the people of this province. No experienced advocate could ever have devised such time frames in good conscience, and likewise, no government ministry should endorse them.
I would ask you, when we're finished, to take a look at appendix A. I'm not going to get into it right now, but I can guarantee you'll hear more about it tomorrow in Ottawa.
I'm going to go to page 14 now, to the mandatory refusal of evictions.
Another significant undermining change to part IV of the Landlord and Tenant Act jurisdiction is the fact that the mandatory refusal of a writ of possession under subsection 121(3) of the Landlord and Tenant Act has been changed. The section is still mandatory. However, the reasons in clauses (b) to (e) have been changed so that these must be "the reason" rather than merely "a reason" for the landlord's application. This is not a clarification of the existing law but a blatant undermining of tenants' rights.
Subsection 121(3) of the Landlord and Tenant Act is the section that states that a tenant cannot be evicted for enforcing rights, calling the government agency against the landlord or joining or forming a tenants' association. The simple change from "a reason" to "the reason" means that any tenant who stands up against their landlord and tries to enforce their rights could be putting their family out on the street. While this might not help tenants, it certainly could help the tribunal, because there will be fewer and fewer applications and fewer tenants trying to enforce their rights with other bodies.
Now I'm going to page 15.
Amending applications: The tribunal is given the power to amend the application at any time under the Tenant Protection Act, section 176. Under part IV of the Landlord and Tenant Act, this was not possible. Allowing last-minute amendments is nothing less than trial by ambush and is contrary to the basic principles of natural justice.
Now to page 20. I wish we had more time so we could go through all of this, but I hope people will take the time to read this brief. I'll deal with disputes, at the bottom of the page.
The Tenant Protection Act contemplates different remedies for disputes in different applications, but very little is set out in the actual bill. The Tenant Protection Act requires that a dispute be in writing. Under the Landlord and Tenant Act, a dispute could be either made in writing or by appearing before the return date and time specified in the notice of application. It is unclear why the right to appear and dispute has been removed. It merely places a further roadblock in the way of tenant disputes. The requirement of a written dispute adds a level of formality that negatively impacts on various classes of tenants. I'm referring to those with literacy and linguistic barriers.
Moreover, a landlord or tenant, most often the latter in reality, had until the day before the return date under the Landlord and Tenant Act to dispute. While this could be as little as five days from the receipt of the notice of application if served and filing took place immediately, most often the time for dispute was longer because the probability of getting an early return date was minimal. Under the Tenant Protection Act, the respondent has only five days after service of the notice of hearing to file a written dispute whether or not the actual hearing date is available to be scheduled within that time.
In other summary proceedings, such as Small Claims Court, a defendant has 20 days from service of the claim to file a dispute.
The Chair: Ms Garrett, I regret to tell you you have one minute. I know you have a lot to say, but that's all you've got.
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Ms Garrett: Okay. There is no guideline as to how the dispute is to be filed. It most certainly cannot from a practical point of view be filed by mail, yet this is the most accessible form of delivery for most tenants. The reason mail delivery is precluded relates to the fact that mail is deemed to be received on the fifth day after mailing. In order to be received within the five days the dispute allows, it would have to be mailed before the date that the dispute is served on the tenant.
I would like to go on, but I can guarantee you that tomorrow in Ottawa I will educate you about rent control.
The Chair: Thank you for coming. You've obviously prepared a very detailed brief and spent a lot of time on many issues. It is unfortunate we can't hear more from you, but time does not permit that. Unfortunately, there is no time for questions either, but thank you for your time. I know members of the committee will review this brief.
Mr Gerretsen: I hope the government staff will review the brief as well.
Mr Gilchrist: Just can't keep quiet, can you, John? You just have to flap your gums.
PARALEGAL ASSOCIATES (SUDBURY)
The Chair: The next group is Paralegal Associates (Sudbury), Lynda Beavis. Good morning to you.
Ms Lynda Beavis: I apologize to the committee, Mr Tilson. I didn't run off enough copies for everyone, but I can manage that if you want them afterwards.
The Chair: If you can give a copy to the clerk, the clerk will make the copy available to us at a later date.
Ms Beavis: I did, thank you. I'm going to speak to you this morning unabashedly from the point of view of landlords. I think perhaps it's a bit of a cry in the wilderness, from some of the presentations I've heard this morning. However, there are some things in the legislation that need to be addressed, and from the landlord's point of view I'd like to briefly take you through some of them. This list is not at all extensive. It's a big piece of legislation, and nothing is perfect.
I will start out by saying that it's a progressive piece of legislation, if you'll pardon the pun. I feel it goes a long way to helping remove some of the barriers under the previous Rent Control Act. It doesn't do a lot to address some of the issues that should have been addressed in the Landlord and Tenant Act, but as I said, nothing is perfect and it is making an attempt to streamline the situation.
Just as some background for the members who are here, I own and operate a business called Paralegal Associates (Sudbury), which was established in 1989. In the course of the business, we do landlord and tenant matters and rent control matters, almost exclusively for landlords. Our clientele ranges from a landlord who has a basement unit apartment in his or her home to multi-unit complexes, landlords who have major holdings with many units. From that point of view, I feel I have a fairly extensive knowledge of the range of problems and pitfalls that landlords run into in the course of trying to do their normal business under the Landlord and Tenant Act and the Rent Control Act.
In addition to that, I am also a member of the executive committee of the Sudbury and District Property Owners Association, which is made up of local area property owners for the purpose of getting together to try and help each other through some of the things that have been in our way in the last few years, like the Rent Control Act, and also to exchange ideas and just talk about the normal business of being a landlord.
As I mentioned, it's heartening to see that there are some positive changes in the pending legislation, which consolidates all of the rental housing issues into one act. The changes are long overdue, and I think the bill does attempt to correct several inconsistencies and/or omissions that were in previous pieces of legislation.
In previous appearances before this committee or committees such as this, our position was then, and still is, that the residential tenancy market should be part of the free market system, allowing for peaks and valleys and adjustments to them to naturally occur while at the same time providing assistance in housing for those who truly need it.
When I say "we" -- the royal "we" -- I'm not going to differentiate my personal comments from those of my business to the ones that I would make as an executive member of the Sudbury and District Property Owners Association, simply because our aims and issues are one and the same, as we work primarily for landlords, and the property association is made up of landlords. So I'm not going to differentiate. Our position has always been that there shouldn't be rent controls at all, that the free market system should persist and that, like any normal business, which being a landlord is, it will settle itself out. When the market's soft, you're not going to have high rents. When the market will bear it, the rents might tighten up. I think there's a very ungrounded fear by some of the tenants' associations and some of the tenants themselves that by removing the rent controls on units that become vacant, all of a sudden there's going to be a miraculous, horrendously high increase in rents. I can tell you it's simply not so.
In Sudbury currently we have approximately 12,000 rental units. We're running at 8% vacancy. It's just not going to happen. There are chronically depressed rents in Sudbury. There are beautiful two-bedroom units that I would love to live in for $599 a month inclusive. It's just not market rents regardless of where you go. The few of them that are are occupied by tenants who primarily stay there. There isn't a large turnover, with the exception of some of the people who habitually turn over. That's a point that I would like to make to the committee. Someone made it earlier, that there are some good tenants and there are some bad tenants. There are some good landlords; there are some bad landlords. There are some transient people by nature or by necessity. I think it's a small minority of those who catch the media attention and primarily blow it out of proportion.
My sister, by the way, just sent me a facsimile transmission this morning out of the Hamilton Spectator. It says that the rent bill is cruel and unnecessary. It's a flagrant attempt by some media people and some people who are in the business of law, who should know better, to discredit the bill and not give it a fair hearing or attempt to round out what the bill attempts to do. This is having regard to people who move out in the middle of the night, for instance, and their furniture is going to be all of a sudden sold and the tenant who leaves is going to suffer great loss because of it.
In my personal experience, anyone who moves out in the middle of the night doesn't have a big-screen TV they are leaving behind that I would love to have for my own personal use. Normally we have to call Reliable Cleaning Services; sometimes we have to call an exterminator. Quite often on abandoned units these days we have to call in the SPCA people because they leave large dogs or animals behind. These are a minority. They are definitely a minority, and it's unfortunate that that part of it is played up in the press.
I should probably stick to my text. But the vacancy rent increases are not going to happen. It's not going to be a major concern. I can assure you that since the Rent Control Act came in, my business has seen a marked reduction in the numbers of applications that go before the rent control hearings officers for above-guideline increases. I don't think we've had any in almost 18 months now.
The punitive nature of the Rent Control Act, coupled with the 3% cap, was a barrier to most of the landlords, who just decided to forget the whole thing and they would try and limp along, and I do mean limp along, as they had been doing. They're not making any great, horrendous amounts of money. They have aging building stock, quite often 20 years old or more. These buildings need constant repairs, like any home does. Most of the landlords I deal with, a majority of them, are very proud of the buildings they own; most of the tenants I know are very proud of where they live. Both of them want the place to be as nice as possible, given the economic circumstances that allow the landlord, with restrictions on his or her guideline increases, to put back into the building.
I think it's a welcome relief that the 2% penalty is removed and that the cap, if we have to have a cap, is at least increased to 4%. It may just spur some of the people who have been sitting back and doing nothing with their buildings in the course of major repairs to start doing that.
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The maximum rent concept is a glaring omission. I don't think I can emphasize that to you strongly enough. Especially in Sudbury there are major reasons for my saying this, and it's because there are very few apartment units that are at market rent. The majority of the landlords have earned their maximum rent, but they haven't been able to use it because of the economic conditions. However, when they do have to finance or if there is a sale in the wind, the market maximum rent concept is quite often the deciding factor in whether the mortgage is going to be given to them or the sale will go through, simply because the bank can look at the books and say, "This is what could happen, and these are the rents that are available if we wanted to move to them tomorrow," without making an application right now under the Rent Control Act or under the new Tenant Protection Act.
If there is any possibility of your rethinking the provisions of the act, the maximum rent concept is a very valuable one. I think you're going to hear from Zulich Enterprises this afternoon, who are in the business of buying and selling and running units. I know to them it is one of the major factors in looking at the business proposition of rental housing.
I do have some concerns with making the legislation work. I will start off by saying that all the positive changes in the world will not help any legislation unless it's viewed by those who use it to be fair and equitable. There are some things that really do concern me, and the landlords I work with, with respect to the actual working of the legislation.
Currently under the Ontario Court (General Division), when applications are heard and an order is signed by even a registrar, a deputy registrar or a judge, it has some weight. In all fairness to the committee, I know the regulations aren't available yet for public use or for public viewing. If I had an opportunity to read the regulations, I might alter some of the things that I'm about to say; however, without having access to that information, I just have to take it at face value.
It doesn't seem at first blush that the legislation has any teeth. There have been very few alterations to the Landlord and Tenant Act except for ones which will allow, I believe, more abuse of the system. Specifically in the seven-day barrier now, a statute bar, the judge can only take seven days for the delay of a writ of possession, regardless of the reason. Under the new legislation, that seven-day restriction is removed entirely, and in the absence of a definite period of time to postpone an eviction, we are dealing now with personal biases, with personal beliefs, with whatever is happening that week in the community. Who knows what we're dealing with? I firmly believe that if we're going to make the procedure workable, there have to be some time frames set out in order to make that happen. So I'm asking the committee, if there is any room for revision -- and I hope these hearings are allowing that room -- that that is one of the sections you'll revisit.
The other one is that there is no payment of rent into the system. Currently if a tenant wants to dispute the rent, the tenant has to pay the rent into court, and after a hearing on the merits, the court will decide whether the landlord gets all of the rent or a portion of it, or, if there is an abatement due to the tenant, the tenant gets the rent back, the point being that the rent is due and payable. Anyone who is in business or anyone who actually goes to work for a living, like we all do -- we're all here today getting paid somehow, although I'm not this minute -- we expect to get paid for what we do.
The landlord in this instance has provided to the tenant a place to live. Whether or not the tenant likes it or thinks it's good or bad or indifferent, the point is that it's provided, it's a contractual relationship, and where there is a valid dispute the rent has to be paid and the trier of fact should then decide where the money is distributed so neither side has it and it makes the hearing impartial. I know the landlords would like to see that provision reinstated in the new legislation.
There is a new section -- correct me if I'm wrong; I think it's section 27, I'm not sure -- something about harassment: the landlord cannot harass a tenant. I'm sure the drafters have it right at their fingertips.
The Chair: I believe you're correct.
Ms Beavis: There are other provisions -- again, I'm not sure which they are, but they come later on in the bill -- that give the landlord the responsibility to give the tenant quiet enjoyment. As for section 27, I feel, and the landlords I know feel, this is a really negative section of the bill. It opens the floodgates to widespread abuse.
In my practice, I have had landlords unjustly charged with criminal offences such as mischief and assault, totally unfounded, but once the charge is laid they have to answer to it, they have to make an appearance in court, they have to be fingerprinted, they have to go through the whole criminal justice system. It's humiliating at the very least, and when it's totally unwarranted it really leaves a long-standing anger and real fear that this could happen again. I feel section 27 is going to lead to more and more of that, and that section should be removed, because there is adequate protection under the other sections in the act, where the landlord has to give the tenants quiet enjoyment. The Criminal Code does adequately protect anyone who feels they are being abused for any reason and it doesn't have any business being in an act such as this.
I'm probably running very short of time.
The Chair: You have about five minutes.
Ms Beavis: Those are some of my concerns, not all of them. Above all, I'm grateful that I had the opportunity to at least address those concerns to you this morning. Rather than take the other five minutes just talking, if there are some questions, I could try to answer them.
Mr Gerretsen: I've been a landlord and I've been a tenant and I agree with you that there are some problems in the Landlord and Tenant Act that really aren't addressed in this act to deal with the so-called bad tenant, and I know that's subject to interpretation. Correct me if I'm wrong, but what we're basically talking about is the landlord's right to make a profit and I've got nothing against that.
Would you not agree with me that interest rates on mortgages -- and the mortgage expense is usually one of the biggest expenditures a landlord has -- being between 6% and 8% over the last two to three years, compared to 11%, 12%, 13% five or six years ago -- that a lot of these mortgages are coming up for renewal right now, have come up over the last couple of years and the landlords are paying much less as far as mortgage expenses are concerns, that the landlords, generally speaking, are doing a heck of a lot better as a result of the lower interest rates than they were three or four years ago?
Ms Beavis: I can't honestly tell you that's the case. One would think it may be, although I do have some experience, to answer your question, with two clients of mine who are so grateful that the interest rates are lower now and they've been able to renegotiate their mortgages, because quite frankly they were subsidizing their buildings before. The rents weren't covering their monthly expenses.
There are a lot of landlords in the Sudbury area who work not just at their buildings -- their buildings are a sideline. The lower interest rates now are just letting them break even; they're not making them money. I can honestly tell you I don't know of any landlord here who's rolling in dough being a residential landlord. They're simply not. It has eased the burden. Your point is quite correct there. It eased the burden but has by no means made them financially independent.
Mr Marchese: I appreciate your views, Ms Beavis, but everything I'm reading points to the contrary. A study done by Greg Lampert -- a separate study, other than the one the Conservative government commissioned, Steve Pomeroy and Helyar -- compared the economics of existing and new rental buildings, and the study found that returns were substantially higher for existing buildings. This doesn't say how much return, obviously, but clearly they're doing okay. Another study showed that the rate of concern is quite high on separate studies, although you'll have Mr Wettlaufer saying, "Oh, that's not true, the rate of return is just 2% or 4%." We think the rate of return is by and large quite high. Some may not be doing as well, but by and large they're doing okay. Is that a fair remark, or are you saying some of these poor landlords really have been suffering over the 30 years?
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Ms Beavis: I'm going to say that some of them have struggled; I won't say "suffered." There certainly hasn't been any rush on buying the buildings. When the NDP government brought in the rent controls -- at the time Mr Cooke was here as Minister of Housing -- we offered Mr Cooke all kinds of beautiful buildings for next to nothing because that's what they were worth under that regime. He declined to take our offer but instead decided that he would put in a whole bunch of co-op housing that no one could compete with, by the way.
In answer to your question, if all the statisticians were lined up end to end across the province, I think that would be a good thing. I don't know what the question on the survey was, I don't know what kind of results they expected by the way the question was worded, who was sampled, how old the survey is. There are too many variables to make a bald statement to say they're doing well by and large.
Certainly my landlords are not declaring bankruptcy but they're not by any stretch of the imagination in a position to dig in their pockets and give you five grand just for the hell of it.
Mr Gilchrist: Thank you for making your presentation here before us today. We appreciate that clearly you've found some criticisms with this bill as well. It's unfortunate that others don't recognize that obviously if every landlord was pleased with the bill or every tenant was pleased with the bill there would not be the necessary balance. You will never have a perfect relationship in any human endeavour but this bill, we believe, strikes a far better balance. Mr Marchese referred to the Lampert report. It's true --
Mr Marchese: It was a different report.
Mr Gilchrist: Sorry, okay. I was going to say that was updated. The most recent report done on housing in this province says yes, existing buildings do better; new buildings lose an average of $3,800 the first year and it takes seven years for them to break even. That's why nobody in today's property tax regime builds new buildings. I think it's very telling that Mr Cooke did not take up your offer, did not take free accommodation when he could get it, because he recognized that under the current rent control regime, which by the way does not apply to co-ops -- he exempted those co-ops. They can increase their rents by any amount they want. But only by making that exemption could he find a way to provide any new housing. We think this bill will stimulate investment. Again, I appreciate your sharing a different perspective on this bill.
The Chair: Thank you for coming.
TIM WELCH AND ASSOCIATES
The Chair: The next presenter is Tim Welch and Associates. Mr Welch, good to see you again.
Mr Tim Welch: Good morning. This is actually my first time appearing before a legislative committee here.
The Chair: You and I have travelled the province, Mr Welch.
Mr Welch: But I have observed many committee hearings on rent legislation over the years.
My name is Tim Welch and I have a company, Tim Welch and Associates. Among other things, I represent tenants at rent control hearings. I also, as background, am a former policy adviser to the aforesaid Mr Cooke as well as Evelyn Gigantes. I hope by saying "Mr Cooke" -- he's not viewed as such a bad person by the current government perhaps as Ms Gigantes is. She didn't get an appointment.
Mr Marchese: They might view you objectively now that you've said that.
Mr Welch: I have been observing rent laws for over a decade in terms of the good and the bad in them. No piece of rent legislation is perfect and I'd say even the current law is not perfect. I've heard the parliamentary assistant say the status quo is not working, I've heard the minister say the status quo is not working and there's a need to change. I would certainly suggest the proposed bill is not necessarily the direction I would choose to go, but the government clearly has a majority and there will be a new rent law at some point, probably later on this year. What I would like to try to do is focus on amendments. This is what the purpose of this legislative committee is supposed to be, to focus on amendments and improve the legislation.
One of the things I would say that falls under the rubric of "The status quo is not working under the current law" is the rent control guideline. Unfortunately, that's one of the areas the government has not chosen to change. Right now, we have a guideline of 2.8% this year, and it'll go up to 3% next year. I would say over the past four to five years the rent control guideline has been significantly higher than inflation. We've had inflation of about 1.5% to 2% the last three or four years. When this Rent Control Act was designed in 1991 we had been having inflation in the 4%, 5% and 6% range for many years and I don't think anyone predicted all of a sudden we'd be looking at inflation of 1% to 2% for a number of years to come in the 1990s. This legislation, certainly the way the rent control guideline was designed, did not foresee the dramatic change we would have in inflation in Ontario.
One of the problems with the guideline -- I don't know how familiar all of you are with the details of the guideline, but of the 2.8%, the 0.8% is an inflation component, and under the current law, the 2% is for capital expenditures or repairs and maintenance of the building. Under the new law, the 2% figure will stay there, but it's no longer specifically designated.
One of the questions I have is, what really is the purpose of that 2% in the guideline? I would like to try to have a little more dialogue in the committee hearings. I'm more than familiar with the structure of committee hearings and I could go through, and hope to go through, a number of points. But I would be interested, if the parliamentary assistant or Chair was agreeable, in trying to get some feedback on a point-by-point basis so there can be a little more dialogue rather than my going through a statement and then you responding.
The Chair: If there is unanimous consent, this committee can do almost anything.
Mr Welch: Amazing powers.
The Chair: Absolutely.
Mr Welch: Again, I'm just trying to have it informal and get some feedback along the way on how the government views that 2% and what that 2% is for in the guideline under the new legislation.
Interjections.
The Chair: Excuse me.
Mr Welch: Sorry. Jumped the gun.
The Chair: We are varying from the usual process. Do committee members have any problem with this process?
Mr Marchese: Mr Gilchrist should respond.
Mr Gerretsen: I have no problems at all.
The Chair: Fine. Does everybody agree? Mr Gilchrist.
Mr Gilchrist: Precisely the same. The expectation would be that it would be spent on all of those: capital improvements, routine maintenance and the other components. Obviously, as buildings depreciate, there is a need to make allowances for that. I think there is no need particularly to allocate point by point, because again covered in subsection 24(1) is the expectation that the landlord must maintain his premise in a safe and secure manner, if that means fixing windows or doors or it means doing other improvements. Again, I don't think tying it to a specific capital project or a specific cost --
Mr Welch: Not to a specific capital project. I guess one of my questions is, why has it changed then? Under the current law, the 2% is for that. If landlords come in for an above-guideline application, they have to account for that 2%, but under Bill 96 they no longer will have to account for that 2%. Instead of starting from just the inflation component and having to say how they spent that 2% this year on capital expenditures, landlords will no longer have to account for that at all. They will start at 2.8% and then will have to account for expenditures above that. So it is somewhat of a free gift, and that is a change from the legislation. When a landlord comes in for an above-guideline application, I don't know why there shouldn't be at least some accountability for that portion of the guideline.
Mr Gilchrist: You've recounted it accurately. I guess I would respond in two directions. First off, I'm sure you would agree with me that while the government anticipated when your bill was passed that there would be that 2% allocated towards capital improvements, because that was the best guesstimate of the amount of money that would be needed to maintain buildings, there never was any kind of correlation; there was never any follow-up with landlords to ensure that those dollars were spent. I think, on the one side, it would be inappropriate to suggest that somehow the 2%, up to the guideline right now -- that anything changes. If landlords are doing what they should do, which is maintaining the building at a fine standard, and they were spending the dollars before, they're still going to spend the dollars.
As to the improvements over and above that, there's no doubt. We have recognized there are extraordinary increases that traditionally -- at least traditionally in the sense of since the current bill was passed -- have not been allowed to be passed through. Quite frankly, we see that that has stopped a lot of necessary health and safety renovations in buildings across this province, and no tenant profits from that. So yes, a different approach to it. I accept that, Mr Welch, no ifs, ands, or buts. But the bottom line is, again, we understand that this is a different approach, but we believe that the status quo is what has left us with the buildings that tenants are coming and complaining to us about today. You can't have it both ways. We believe this will stimulate the renovation market, will stimulate new construction.
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Mr Welch: Can I make another suggestion for amendment?
Mr Gilchrist: Certainly.
Mr Welch: At meetings I've been in with tenants, in a variety of capacities over the last three or four years, they want to know: "How come the guideline is so high? My income has been frozen, inflation is only 1% and 2%. How come the guideline is 3%?" Even in 1993 you had inflation of 1% and a guideline of 4.9%, a very huge and visible gap, and there still will continue to be, as long as we continue to have this low inflation, a significant gap each year, and it compounds.
One proposal is to amend the guideline formula to have it straight inflation, because then I think it's understandable to people. People know generally what inflation is, and you can use the CPI as a benchmark for that, but people don't understand the guideline. Whether it's most tenants or many small landlords, they don't know where that comes from. Once you start trying to get into explaining about this 2%, (a) it gets very confusing, but (b) there's no clear relationship on that.
Another option for amending, if you do want to make sure to encourage more renovation and repair work, is that instead of the 2% which is unaccounted for, if you had a 1% component -- because right now you've got the guideline of 2.8 plus four under your proposal. If you took 1% out of that given part of the 2%, but then allocated it over to those landlords who actually do have legitimate repairs to undertake so that you still have the same net amount of, say, 7% in 1998, then tenants may not be that thrilled with the end number, but at least they get some sort of accountability of where their money has gone, as opposed to the 2% and there's no accountability. I would make that suggestion.
You want to try to make legislation understandable, and it's always a struggle at any point, but accountability to tenants -- no one's thrilled with paying rent increases, fair enough, but they at least want to see something come out of that. That's why I would make a suggestion to try to amend the guideline formula to make it clearer and at least be able to explain what that money is for in the guideline. I'll leave that suggestion.
Mr Gilchrist: I appreciate your suggestion. Just as an aside, these are the proposed amendments -- I'm sure you know the process better than most in this room -- based on the submissions that have been made by tenants. Most of those are tenants. That's the landlord section; that's the tenant section. It hss been taken to the minister and on to cabinet. I will forward your suggestion as well.
Mr Welch: Another point I'd like to pick up on that you made a couple of days ago in committee hearings is on the question of property taxes. I know you've raised that issue a number of times in a number of ways. I'd say, yes, the current legislation is unfair when there is a decrease in property taxes. Even under the existing legislation, if there is a reassessment by the Assessment Review Board, and a downward reassessment, and there were a number of buildings in Metro Toronto over a number of years --
Mr Gilchrist: Done.
Mr Welch: I'll be happy to hear they're done. There are two points. On the suggestion you've made, which is the first time I had heard that in committee, that if a municipality does an across-the-board change to property taxes, tenants will be automatically informed, it's my understanding that's not currently in the legislation.
Mr Gilchrist: That's correct. That's one of the proposals.
Mr Welch: I think tenants will be very pleased to hear that.
Mr Gilchrist: I think it will be the first time they've ever even known.
Mr Welch: To echo the comments made by the first presenter and others, I think a lot of tenants will not be holding their breath for municipalities to do across-the-board reductions. It's only an optional thing, and I think currently with a lot of the downloading discussions, not to get too much into that, I don't know how many municipalities will be running out, given the various fiscal pressures they're going to be facing in the next couple of years.
But something that is happening in some buildings -- it's not across the board -- is that when there is a decision by the Assessment Review Board, tenants who live there aren't informed. They don't know the property taxes have gone down. Although this current legislation and Bill 96 both say you can apply for rent reduction if there's a property tax decrease, no one tells them. How do they know to apply?
What I would suggest as a further amendment, building upon what you've stated about when it's a municipal across-the-board reduction, is that if there is a decision by the Assessment Review Board where there is a property tax decrease, I would recommend to have an automatic notice to the tenants of the building by the Assessment Review Board that this decision has come out. You can give theoretical rights about a rent reduction, but if no one's telling the tenants something has happened, they obviously can't enforce their rights. I don't know if you're nodding that that's something you're looking at as well.
Mr Gilchrist: It may not make you a convert, Mr Welch, but on that matter we agree as well.
Ms Shelley Martel (Sudbury East): On a point of order, Mr Chair -- sorry, Mr Welch -- this is the second time the parliamentary assistant has intimated to the committee that this has been done. I'm assuming he's got a package of amendments. I don't know whether or not these have been tabled with the committee, including the opposition members, but it sure would make our lives a little bit easier to know the changes the government has already decided to make, and would probably help any number of presenters, including Mr Welch.
Mr Gilchrist: I'm sure Ms Martel is the last person who needs to be informed that when things get sent to cabinet they're not official till cabinet has approved them.
Ms Martel: You've got them in your hand.
Mr Gilchrist: But I have no reason to believe --
The Chair: Mr Welch, perhaps you could continue.
Mr Gilchrist: -- that at that point they won't adopt what the minister and we have already suggested, or I wouldn't make the assertion today.
Interjection.
The Chair: Ms Martel, let's let the presenter continue.
Mr Welch:, I don't want to get into any political discussions.
The Chair: There are all kinds of firsts here this morning, Mr Welch.
Mr Welch: Another issue I'd like to talk about is where I think the status quo or the current legislation does not work well, and that's the question of parking, which in a lot of buildings can be a real minefield, but I think there's never been a great explanation to give to tenants who say: "I don't own a car. I don't need a parking space. Why am I required to pay for parking?" There is no good answer to that. It's an unfair part of the current legislation, and it's certainly been in all the rent legislation over the years, so I guess I was hopeful, as others were hopeful, that if --
Mr Gilchrist: Mr Welch, can you help us, and I say this most sincerely, why is it still there today? Because I agree with you. We wrestle with why those sections survived your bill and the previous one.
Mr Welch: And previous and so on and so on, yes.
Mr Gilchrist: At some point they take on a life of their own, but I'm curious to know --
Mr Welch: They're just part of the law and they're handed down. That part of it is sort of the historical decision when buildings were built over the last number of decades about whether to have parking included in the original construction costs. You may have had an apartment in 1972 rent for $200 plus $10 parking, and in the apartment building next door it rented for $210 and that included parking. So there are many things in the rent legislation which are just historical and are perpetuated. Not necessarily has there been a full analysis each time the law has been revised; some just continue.
I can sometimes appreciate the landlord's perspective on that, but there have been suggestions made in other presentations of a proper legal notice. If someone owns a car -- it will vary in cities obviously. In Metro Toronto you have a lot fewer tenants owning cars than you would in Sudbury or other cities, but if you are not using that service you have to pay for, that defies logic.
Mr Gilchrist: Was part of the consideration that accountability might be difficult to arrive at in both directions? Someone could say, "I don't swim and I don't use the swimming pool." So if you exempt --
Mr Welch: But they don't have to pay a swimming charge.
Mr Gilchrist: Except they would argue the other side of that historical model you talked about, that it was built in, so one building adopted an all-in-one package and another segmented their charges, maybe not singled out swimming pools obviously, but once they had segmented out a charge, then it would seem to me they open themselves up to an accusation that it really is a common cost in the sense that when you plow a parking lot, you plow all the spaces. You don't say, "Okay, I'm only going to do odd numbered spaces" sort of thing. So there is a cost that's borne by the landlord that normally, if it was elevator maintenance, painting or something is divided by the total number of units you'd have in the building.
Mr Welch: But I think for a lot of the buildings where it is in dispute, that parking space can be rented out by others, whether it's people having a second car, or in any more central neighbourhoods it could be rented --
Mr Gilchrist: Would you arrive at the same conclusion if you allowed subletting?
The Chair: I draw to Mr Welch's and Mr Gilchrist's attention that this dialogue will end in two minutes.
Mr Welch: Do I regain any of that time?
The Chair: It's over in two minutes, Mr Welch.
Mr Welch: Okay. I would make that suggestion. Another point I do want to touch on very briefly, and again we could have a long discussion on a lot of issues, is the question of utilities. Under the current law, if utilities go up, a landlord can apply for a rent increase, and under the current law if utilities go down, tenants can apply for a rent decrease. That struck me as extremely fair and balanced and that balance is being taken away. Tenants will no longer be able to apply for a rent decrease based on utility costs going down. I have one client I represented with the exact situation: The landlord's heating costs went up. It was a colder than average winter. The landlord got a rent increase. The tenants weren't thrilled, but they could see the logic there. The next year heating costs went back down to average. The tenants applied for a decrease. They got that, not as much as their rent went up but they got a decrease. Now they're being told, no, that's unfair.
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I would very strongly suggest that either (a) you could keep the status quo, which I know is something you don't want to do, or (b), if you want to change, to eliminate that altogether, to have neither landlords apply when utilities go up nor tenants apply when utilities go down. That's a balance. That will keep cases out of the tribunal -- I assume you're always looking for administrative cost savings -- and can at least be explained, because for utility costs going up you have the inflation component of the guideline.
I strongly suggest either get those out of the application system altogether and save yourself some money, or if you're going to keep having utilities in the system, at least make it balanced, because I know the only explanation ever given said, "If landlords want to do energy retrofit, if you don't have it going up, that even more strongly encourages them to do those energy retofits because they will save the money."
Mr Gilchrist: I will give you an undertaking to take that back; that is an excellent suggestion.
Mr Welch: On the OPRIs, they do work in the vast majority of situations. It seems blatantly unfair if maintenance is not being done. It has been recognized by the municipalities and the front-line workers, the property standards officers, that this does work. Again, it keeps things out of the tribunal system, because if there are no OPRIs, there will be a lot more rent reduction applications by tenants. It keeps things out of the courts. Your proposal is to take maintenance, outstanding work orders from municipalities, back to the court system, and I thought part of the objective of Bill 96 was to get more cases out of the court system.
It works against a lot of the principles this legislation is supposed to espouse. It hasn't solved every single maintenance problem in the province, but it's very practical, it's efficient, it's quick, and in a vast majority of cases it works. I can't see any reason for removing it if you're going to be serious about maintenance.
The Chair: Mr Welch, unfortunately, your time has --
Mr Marchese: Steve --
The Chair: Mr Marchese, be a good boy. Unfortunately, your time has expired, Mr Welch. I think whether many of us agree or disagree with you politically, we all respect the knowledge you have and the many years of experience you have, and we thank you for coming and sharing those thoughts with us.
SANDYCOVE ACRES HOME OWNERS' ASSOCIATION
The Chair: The final presenter this morning is the Sandycove Acres Home Owners' Association, Paul Burkholder. Good morning. Oh, there are two people.
Mr Paul Burkholder: There are two of us, Mr Chairman, and we appreciate the opportunity to make a presentation to yourself and the committee. My name is Paul Burkholder and with me is my associate Dorothy Lea. It takes two of us in case there are some sophisticated questions we must deal with.
I'll be working from a brief which we had prepared, and I believe copies have been distributed.
First of all, I want to talk for three or four minutes about general background. Dorothy and I represent a fairly narrow segment of the population with very specific interests, and in order to deal with the specific suggestions and the specific concerns we'll be raising later, it's in our view critical that members of the committee understand our community and the nature of it. I don't think there are any communities of this type in the Sudbury area. We're from down just south of Barrie and appear here this morning simply because other hearing calendars were overloaded.
We represent about 2,000 mostly senior residents and home owners in the Sandycove Acres Land Lease Community, just south of Barrie, in the town of Innisfil.
This is a planned lifestyle community of 1,185 modular or site-built, owner-occupied homes located on sites leased from the landowner-developer, along with landowner-owned and -maintained common-use property and recreation facilities. The residents organize and operate a wide variety of social and recreational activities.
Lease rental payments, although the mechanics have become muddied through the application of rent controls over the last number of years, cover basic land rent, common area property taxes and the maintenance and operating costs of the services and facilities provided. The homes and related sites are individually assessed, with municipal taxes paid by the homeowner through the landowner as a rent add-on.
Initially developed in 1972, this is the largest and longest established land-lease community for the retired or near-retired market. Some of our resident homeowners have been here 25 years, although, as might be expected, there is perhaps an 8% to 10% turnover each year. The inverse of that, of course, is that typically a tenancy in one of these land-lease communities is much more lengthy than in typical rental housing. Ten, 12 or 15 years is not at all unusual.
Most residents are quite happy with the lifestyle they themselves have evolved, although again, as one would expect, there are differences of opinion with the landowner about operations and administrative matters. There are real concerns, particularly with those on non-indexed incomes, that the cost creep-up over the years threatens their ability to stay on.
As a supplementary comment at that point, we have real concerns about the lease wording details. These are 20-year leases that each of us has entered into for the site. There have now been nine versions of that lease over the years that have become progressively more advantageous to the landowner, who seems unwilling even to consider more balanced arrangements. As things stand, we have absolutely no leverage to push the landowner into balancing the lease in any way. Since there is no alternative location for our homes, we cannot simply up and move somewhere else. There is no competitive land-lease community we can move to, so we're a captive audience.
Under rent controls, the legal maximum rents have increased 45% in the last 10 years. That's just as a matter of interest.
Our community is seen by municipal officials as clearly an economic and social asset, with a combination of minimal service demands and a high level of local community involvement. This type of housing clearly meets an increasing housing need in a practical way.
Again a further comment on that point: We think this is a very desirable type of housing for that specific segment of society. Demand is bound to increase in the years ahead due to the demographics. Shortly, the first wave of the baby-boomers will be prospects for this kind of community residence.
For some years, we and the Ontario Owned-Home Leased-Lot Federation have been pressing for specific legislation to recognize and provide appropriate controls over this specific housing category. The introduction about three years ago of land-lease communities was in our view a big step towards this goal, and we hope further steps will follow. Bill 96 unfortunately does not include progress on this particular objective.
Our comments on the draft Bill 96 are limited to those aspects that we feel have a direct impact on our land-lease community, noting only that there are a number of provisions that we would have liked to have included beyond those enumerated below.
Since our further comments are so dependent on members of the committee having a picture of our community -- I would have liked to have gone multimedia with the background -- perhaps we could stop for just a moment to see if there are any questions related to that background information that committee members would like to have responded to.
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The Chair: Sir, you have 20 minutes, roughly 10 minutes left. Normally we go in rotation with each caucus. If you wish each caucus to ask questions now, we can do that, but that may prejudice --
Mr Burkholder: Perhaps the mechanics would jeopardize my objective.
The Chair: Yes. I'd suggest that you complete your report.
Mr Burkholder: Into specifics then, Mr Chairman. We endorse and support the provisions of part V, mobile home parks and land-lease communities, noting that for the most part these are carry-forward provisions from current legislation.
We do not see sections 99 or 102 having impact in our community, but of course have no objection to them. Section 103(f) will be helpful, and we are pleased to see it in the bill.
Section 107, in our view, is a critically important provision. We had noted a need for this exclusion in our comments concerning the discussion paper. Section 107, of course, is the new tenant rent level provision, and we're delighted that it shows up in the bill.
Specifics related to part VI, which is the rent control part: This part of the bill is to a large extent a carry-forward from the Rent Control Act, 1992. As such, our comments are really related to those areas we see as inappropriate for land-lease communities in that act and for which we believe alternative control procedures should apply.
First, subsection 121(2), paragraphs 1 and 2: This is the guideline increase that was just raised with the last presenter. This portion of the guideline, set at 0.8% for recent years, is a calculated index established under the 1992 act to reflect increases in a long list of building cost items detailed in the associated regulations, which presumably will be carried forward to the new regulations. It is a building operating cost index, over half of which is municipal taxes and heating. In our land-lease community, these specific costs, that is, municipal taxes and heating, are borne directly by the tenant homeowner, except for minor heating of common-use recreation facilities. While the landowner does cover other common area operating costs not found in apartment buildings, the related year-to-year cost increases for these should have little impact. We thus believe that this index overstates the real cost increases in our land-lease community. We note also that while the amounts involved may not be great, the way the guideline operates, the related increases are cumulative and compounded, having a significant effect over a long-term tenancy, which is typical in a land-lease community.
Paragraph 121(2)3, which of course is the general guideline increase: In the current Rent Control Act, 1992, this component of the guideline increase is specifically dedicated, and I quote from paragraph 12(1)3 of the current act: "The part of the guideline allocated to capital expenditures is equal to 2.2%." While this dedication has not been carried forward to the draft bill, we assume the rationale continues.
Again, the situation in land-lease communities is quite different from that for conventional rental accommodation. In our situation, there are of course capital repair costs incurred, but according to our landowner's expense reports, actual capital repair costs were not much more than half of the income stream this 2% provided from 1992 to 1997. Through other channels we are currently pursuing the possibility of having this income stream accounted for as a capital reserve. If so, since 1992 it would show about a $350,000 balance.
Third and finally, aside from other changes -- I'm dealing now with sections 128 and 129, which is extraordinary above-guideline increases -- we note that in 128(8) and 129, a 4% cap is established. Generally, we concur with these provisions as an improvement, but note again that the overall arrangement is really not appropriate for, and operates to the detriment of, long-term tenancies typical of land-lease communities. The Rent Control Act, 1992, regulations provide that such increases be calculated on the expected life of the assets involved, with no provision to delete the amounts when the expense involved has been fully recovered.
To be at all fair, we believe such increases should be handled as a rent supplement, to be deleted when the expense has been amortized and thus not folded into normal rents where they become compounded year over year.
We note also that in normal business accounting, capital repair costs are primarily financed by depreciation reserves, but in our land-lease community, depreciation expense has been a part of normal total rent since the beginning of the rent control processes, as have all common area and facilities operating and maintenance expenses.
As a brief summary, Mr Chairman, our view is that our land-lease community has proven to be a valid and viable housing alternative for the increasing segment of the population for which it was designed. There are, however, points of conflict between the objectives of the landowner/ developer and those of the residents/homeowners. We see these requiring careful legislative control.
As drafted, Bill 96 speaks to some of the specifics but falls far short of resolving a variety of other problems, some of which are carried forward from current legislation and some of which have never been addressed legislatively.
In general, we support and endorse this draft legislation except where it carries forward components of the Rent Control Act, 1992, that we deem inappropriate for land-lease communities. These are the 0.8% rent guideline increase, the 2% capital repair cost guideline increase and the absence of sunset provisions for above-guideline capital cost increases. Our detailed comments concerning these are in the prior section.
Thank you, Mr Chairman. There still is just a very brief period, I believe.
The Chair: We have time for one question. Do any members of the committee have a question?
Mr Gerretsen: Just like Jeopardy.
The Chair: It is indeed.
Mr Wettlaufer: Thank you, Mr Burkholder and Ms Lea, for showing up today. You mentioned in your report, "Through other channels we are currently pursuing the possibility of a capital reserve." What other channels might you be talking about?
Mr Burkholder: We'd be going the legal, professional accounting, court action route.
Mr Wettlaufer: You realize that at present the federal income tax laws do not allow a capital reserve to be set up?
Mr Burkholder: I wasn't aware of that. We have a query out to a very high-priced accountant, and if that's the case, I'm sure he'll be letting us know.
Mr Wettlaufer: It is the case.
The Chair: He's got a daughter who's an accountant.
Mr Wettlaufer: You don't want to pay for that advice.
Mr Burkholder: I shouldn't pay much, in other words. Thank you, sir.
The Chair: Thank you, sir, for coming and making your presentation to us.
That concludes the presentations this morning, ladies and gentlemen. This committee will resume at 1:30 pm. The meeting is recessed until that time.
The committee recessed from 1201 to 1330.
SOCIAL PLANNING COUNCIL OF THE SUDBURY REGION COMMUNITY ALLIANCE ON SOCIAL ISSUES
The Chair: The first delegation this afternoon is Annette Reszczynski, who is with the Social Planning Council of the Sudbury Region, and the Community Alliance on Social Issues. Good afternoon, Ms Reszczynski.
Ms Annette Reszczynski: Good afternoon. I won't be providing you with my written submission at this time, that'll be coming later; however, I have provided you with the list of the body of organizations I represent today.
The Chair: Yes, we have that.
Ms Reszczynski: As you said, Mr Chair, I'm here on behalf of the Social Planning Council of the Sudbury Region. I'm the community development coordinator for the social planning council. I'm also here representing the Community Alliance on Social Issues, which is an alliance comprised of over 90 social services agencies, churches, government representatives and businesses.
Thank you for the opportunity to present our concerns regarding the proposed Tenant Protection Act. The primary aim of my presentation is to illustrate what we believe will be some of the consequences of implementing section 200 of Bill 96 and how this will impact populations represented by CASI, which is the acronym for the Community Alliance on Social Issues, and the Sudbury region as a whole.
Before I speak directly to this, however, I would like to take some time to first talk about how low-income Ontarians have been doing both provincially and locally since they received the 21.6% cut to their income 21 months ago.
The social planning council works in the areas of research, community development, public education and advocacy. In response to the provincial government's decision to cut social assistance in funding social services, the social planning council put out a call to the community asking concerned individuals and organizations to come together to try and find ways to collectively deal with the present crisis that recipients and agencies were facing. The response was overwhelming and out of this grew the Community Alliance on Social Issues.
By working collectively and pooling resources over the last 21 months, CASI has been able to accomplish a lot. New partnerships between the social, faith and business sectors have been established and resulted in a number of new initiatives, including the establishment of a youth resource centre and a volunteer recruitment centre, both situated in Sudbury's downtown mall. As well, a community emergency fund completely supported through private donations has been established to assist people who have nowhere else to turn for emergency financial assistance.
An interfaith alliance that works to assist social service agencies meet the needs of their clients and an emergency help line and community resource directory are also in existence now due to the collective efforts of this alliance. However, despite our best efforts, we are painfully aware that the difficult economic times we are facing in Ontario are continuing to have an especially devastating effect on traditionally marginalized and disadvantaged groups.
With governments at all levels reducing their role in service delivery and local unemployment rates hovering around 10% for adults and 26% for youth, many people are having a hard time coping and are reaching out for help just as traditional service providers are less able to offer assistance. Those who have been most significantly affected by the cuts include women and children, especially single mothers, native people, seniors, people with disabilities and the working poor.
According to the Ontario Social Safety Network's report entitled Ontario's Welfare Rate Cuts: An Anniversary Report, what was already a serious housing problem before the cuts had become a housing crisis. Before the cuts many people were spending more than their maximum shelter allowances on rent and the amount of affordable housing had already been decreasing for years.
At present, if you are a single person on general welfare, your maximum shelter allowance is $325, and that includes utilities. Unfortunately, the average rent in the cheapest part of town here in Sudbury for a bachelor apartment is about $355. In fact, in all but a few Ontario municipalities average rents for apartments of all sizes are far higher than the shelter maximums provided in welfare allowances.
One could argue, as has the provincial government, that people can double up or move to smaller and cheaper accommodation, and many have, despite the fact that this solution, and I put that in parentheses, is causing additional problems related to overcrowding, ultimately affecting people's ability to leave the system.
Food bank use has also increased since the fall of 1995 as more people are having to spend their food money to pay their rent. Food banks have reported large increases since the cuts, but even they cannot be used as a true indicator of hunger in Ontario since their services have not been able to expand to meet the increased demand. It was reported in the anniversary report that in one training program for welfare recipients, half the participants had to leave classes during the month to get to a local food bank during its operating hours.
The numbers of children relying on food banks for basic subsistence have dramatically increased as well. In 1996, 71,000 children living in families in the greater Toronto area needed food bank assistance, an increase of 65% over the year before. Almost two thirds of parents go hungry regularly to shield their kids from hunger, while over a quarter of all children in families receiving social assistance in the GTA who use food banks go hungry regularly.
Furthermore, to secure and maintain their housing people are relinquishing things like telephone services and their furniture. The Toronto Daily Bread Food Bank reports that 30% of food bank household users in the Metro area do not have a telephone, double the percentage before the cuts. Some people have had to choose between keeping phone services for emergencies and giving up hydro or another utility. However, the relieving effect this produces is only temporary at best and leaves the person with a reduced ability to actually get off the system and end their poverty.
Most poor people juggle bills frantically trying to pay off the most pressing this month and leaving another for next month's crisis. However, more and more companies are disconnecting utilities for late payments. They demand not only the arrears but a substantial deposit, usually hundreds of dollars, in reconnection charges to restore services. These are far out of reach for welfare recipients. Some welfare offices will cover part of a deposit, but almost all have a policy that they will only help once. Furthermore, if you are a youth you are not eligible for this type of assistance, nor are you eligible for a letter of guarantee for last month's rent.
Even more frightening are the findings of a survey commissioned by the Ministry of Community and Social Services conducted by Levy-Coughlin Partnership in October 1996, which found that 38% of the people surveyed had dropped off the welfare rolls since the rate cuts because they had reconciled with their spouse. This may seem like good news until one considers what other sources have found. For example, in a survey of clients from October 1995 to April 1996, the London Battered Women's Advocacy Centre found that the number of clients living with or returning to live with an abuser rose from 21% to 33%. Of those who decided to continue living with an abuser, almost 42% cited the social assistance cuts as the reason.
The implications of these findings are very troubling when one takes into account what we already know about the long-term effects on children who grow up in abusive homes. This, coupled with the loss of counselling services for batterers, has compounded the overall problem. The message here is simple: The most vulnerable people in our communities, and I want to add that we are all vulnerable at different times in our lives, have been stripped of what little they had and are absolutely unable to withstand another siege, especially one that will target as basic a need as the roof over our heads.
In the north we have known for some time that the population of the regional municipality of Sudbury compares unfavourably with our provincial counterparts according to every indicator used to establish status of health. Even prior to government cutbacks, studies clearly show a more vulnerable population in terms of all determinants of health, including level of education, unemployment, poverty and substance abuse. For example, compared to provincial rates, Sudburians are more likely to have less education, to be unemployed, to live in poverty, to smoke, to drink alcohol or use illicit drugs and to commit suicide.
In our region, young people constitute an especially high-risk population. Many live in poverty. In 1992, 21.4% of children under 18 years of age in Sudbury lived in poverty. Northern youth are also more likely to smoke, to suffer from sexually transmitted diseases and to have birth rates that are higher than provincial averages. Sudbury also has a substantial native population of approximately 10,000 and aboriginal people are among the most economically and socially disadvantaged groups in society. They also have a much higher suicide rate than white youth and they are also more likely to drop out of school with their completion rate for secondary school being one fourth the national average.
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In a report entitled Toward a Healthier Community, recently released by the Manitoulin and Sudbury District Health Council, the Premier's Council on Health Strategy's vision for Ontario stated that adequate housing, along with adequate food and education, contributed directly to good health. Nowhere in this thorough report does it recommend that the provincial government make it legal for landlords to exclude the most vulnerable tenants from the most affordable units on the market by amending the Human Rights Code or to eliminate rent control.
Many of the social service providers I represent believe this bill will cause irreparable hardship for generations of Ontarians to come, particularly in the north where communities are already at a social and economic disadvantage compared to their southern counterparts. The possibility of unfair evictions, dramatic increases in rents, poor repair and maintenance of current housing, loss of affordable housing to condominiums, and ultimately an increase in the number of homeless are cause for alarm.
For the majority of organizations I represent, perhaps the most disturbing proposed change is contained in section 200. If passed unamended, it will allow landlords to legally deny accommodation to applicants based on their income. Since the shelter allowance component of social assistance payments makes up from 35% to 65% of the total benefit, what this means is that a 30% rent-to-income ratio would disqualify all persons in receipt of public assistance, 92% of unattached women under the age of 20, 86% of young mothers under 20, 77% of couples under 20, 51% of single mothers and 50% of single women.
My question is: Where will low-income people live? At present, according to the Sudbury Housing Authority, the waiting list for subsidized housing has 1,028 people on it with the average wait for an available apartment being anywhere between one and two years.
If people stay in their present accommodations, it is true that they will not be faced with an increase in their rent. However, if they have to move, which 25% of all tenants do each year, they will be faced with a new landlord who can not only charge as much as he or she wants for rent, but can also deny occupancy based on income level, even if the potential tenant is willing to pay the amount asked for and can prove they have a good credit rating and rental history.
While the average private apartment vacancy rate in Sudbury is presently hovering around 7%, and thus is serving to keep rental rates from climbing, the Canada Mortgage and Housing Corp predicts that the market will remain oversupplied for only the next year or so. Four years ago a locally struck task force on emergency shelter recognized there were many population groups in the Sudbury region whose emergency shelter needs were not being met. That was four years ago. If we couldn't absorb the people who needed emergency shelter then, and still can't now, how will we manage when the need grows, and we believe it will.
According to the executive director at Sudbury's Action Centre for Youth, this will affect almost all the clients they serve, making it virtually impossible to help young people find a place to live, let alone a safe, clean and affordable place to live. As I mentioned earlier, youth are already disadvantaged when trying to find housing as they are discriminated against by landlords because of their age. If they are on social assistance, they are doubly discriminated against. With no job, limited education and nowhere to live, many young people who are unable to live at home, often because of abusive home environments, suddenly find themselves living on the streets, or if they are very lucky, in overcrowded shelters. Is this the future fate of all low-income people in Ontario?
According to the housing coordinator at the Canadian Mental Health Association, the right to request income information will also detrimentally affect psychiatric survivors. Like youth, people who are mentally ill face many barriers when trying to secure housing. Not only is there the stigmatization that goes along with having a mental illness, but the need for subsidized housing is great as many survivors are on disability pensions. People with mental illnesses are particularly vulnerable to stressful housing situations which often go hand in hand with cheap rental accommodation, making them more likely to become homeless and/or require hospitalization, costing taxpayers roughly $380 a day.
How can a government that has encouraged welfare recipients to move to other cities to find employment and/or more affordable housing at the same time be proposing to severely limit the access of social assistance recipients to the most affordable apartments? The amendment to the code proposed in 200 would make the lack of choice in housing for households on social assistance dramatically worse.
It is therefore the recommendation of the social planning council and the Community Alliance on Social Issues that income information be deleted from sections 36 and 200 of Bill 96 to avoid opening the floodgates of discrimination against low-income tenants, causing what we believe will be tragic results for a community already burdened and a population already struggling under enormous pressure.
Mr Marchese: Thank you, Ms Reszczynski, for your presentation. It's important to get the other side, because I believe the government forgets this in its construction of this bill. This affects one special interest group in particular, and that's the wealthy -- and the landlords are the most wealthy -- at the expense of the tenants.
You ask a good question: Where will low-income people live in the future when the need becomes greater if they've cancelled housing projects at the moment? The private sector is telling us they can't build. They on the other side say, "Oh no, our bill will make it possible and things will be different." But we have no assurances from any developer that we're going to get housing for low-income people or even housing for moderate-income people. That is a problem you've raised that I share with you. I'm not sure what the government has to offer us other than simply saying, "We're just going to do it, and go home and feel better." That's a question I hope they will address.
Section 200 gives me no assurances, as they argue, that it gives greater protection to the people you are worried about. What I argue is that they have given them the tools, through section 200, to discriminate, but they say, "Oh, but they can't." So they're given the tools to discriminate by using income information, then they argue, "But the same section says they can't do it." I don't know if you feel good about that, but I certainly don't.
Ms Reszczysnki: No, I don't feel good about it at all. It's going to make a situation where people are already discriminated against that much easier. To me, it seems very obvious.
Mr Carl DeFaria (Mississauga East): Ms Reszczynski, have you had the opportunity of reading section 200?
Ms Reszczynski: Of what?
Mr DeFaria: Have you had the opportunity of reviewing section 200? That's the section that deals with income information.
Ms Reszczynski: Yes, I have read it.
Mr DeFaria: All right. If you notice, section 200 has two parts to it. The first part deals with allowing the landlord to get information about income and that part says to obtain it only if a landlord uses the information in a manner prescribed under this act. Then the second part goes on to say that another section of the Human Rights Code is amended "prescribing the manner in which income information...may be used by a landlord in selecting prospective tenants without infringing section 2" of the Human Rights Code.
Actually, what this section does is protect tenants by indicating exactly how a landlord can use the information about income in selection of tenants.
Ms Reszczynski: That's not how I see it. That's not how I understand it.
Mr DeFaria: But that's what the act reads and we have to go by the wording of the section; we can't go just on innuendo and general interpretation. When a section clearly provides that the landlord cannot use that information in a manner that violates the Human Rights Code, we can't go on and say, as some members of the opposition have been saying --
Ms Reszczynski: Perhaps, sir, you could explain to me how it is that today if the law says you can't discriminate on the basis of income information --
Mr Gilchrist: It doesn't say that. It is legal today.
Ms Reszczynski: No, it's --
Mr Gilchrist: Yes, it is legal today.
Ms Reszczynski: You can ask for information, that's right. You can ask for credit checks, you can ask for income information, but you can't discriminate on the basis of what that information is in terms of how much you'd be paying for your rent. You can't do that now, but that's already happening.
Mr DeFaria: That's exactly what this section is designed to prevent.
The Chair: Mr DeFaria, it is now Mr Gerretsen's turn.
Mr Marchese: They want to discriminate so that this issue --
The Chair: Everybody's talking. You can't do that. Mr Gerretsen.
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Mr Gerretsen: It's kind of inverse logic that I think is being used, because once the landlord has the information, how the rest of the world is going to determine whether he or she is going to use it against the Ontario Human Rights Code is nonsensical, for my part. It doesn't make any sense at all. Once the information is there, how do we know how the landlords are going to use it?
One of the comments I've heard over and over again from people who are in favour of this section 200 is, "Landlords pretty well know the kind of economic or social background of the tenant anyway because they will know whether they're on welfare or mother's allowance or this, that or the other thing." How would you deal with that? It's probably true in a lot of cases that a landlord will somehow get that information as to their source of income.
Ms Reszczynski: I can respond to that very easily. That information is irrelevant. We know that people who are on assistance are not any more likely to default on paying their rent than people who have jobs as lawyers or bank tellers. That's irrelevant. That's the kind of discrimination we're talking about. You can't judge somebody on the basis of how they look when they apply for an apartment. It's not right.
Mr Gerretsen: I agree.
The Chair: Thank you for coming and giving us your presentation this afternoon.
HOUSING RESOURCE CENTRE
The Chair: The second presentation this afternoon is Guy Demarais of the Housing Resource Centre. Good afternoon, sir.
Mr Guy Demarais: My name is Guy Demarais and I'm speaking at this hearing on behalf of the Housing Resource Centre. As the coordinator of the Housing Resource Centre I am extremely concerned about the proposed legislation of Bill 96. This piece of legislation would affect all services we offer within our agency. At the top of our list we are concerned about loss of affordable housing and also an increase in tenant harassment.
Affordable housing has always been necessary in the regional municipality of Sudbury. There has also been an ongoing shortage of affordable housing for lower-income individuals and families. For example Sudbury Housing, as of June 30, 1997, has 1,037 applicants who are on the waiting list. This includes 333 families, 283 seniors and 421 singles. This does not account for the geared-to-income applications with co-op non-profits within our region.
With high unemployment and an increase in lower-paying jobs, the demand for affordable housing will likely increase in the future. I feel that eliminating the total structure of rent control would be devastating for low-income people.
At the moment, a high vacancy rate has helped in various ways. Some landlords have lowered their rents. There has also been an increase in low-cost maintenance and renovation in repairs and painting. Some landlords have removed the required last month's rent and others offer to negotiate the last month with prospective tenants. This has also slightly increased the choice of housing for low-income individuals, but you must remember this is mainly attributed to the high vacancy rate we have at this time.
With the loss of rent control, a lower vacancy rate can be devastating because the market value of renting could be determined by lower vacancy rates as opposed to a better economic situation. The numbers clearly show there is a need for affordable housing. We should not threaten this by implicating the legislation related to Bill 96. I certainly can't relate this legislation in any way to what we call the Tenant Protection Act.
Bob Arsenault, a government spokesman, said, "British Columbia eliminated rent control in 1991 and rent increases averaged 2.8%." He failed to mention that rents in British Columbia are very high, so substantial increases are unlikely. He also failed to mention that there's a great shortage of affordable housing for low-income people. On July 10, 1997, BC's municipal affairs and housing allocated $500,000 for community housing initiatives. This money is basically used to find solutions for the lack of affordable housing for low-income people.
With the removal of rent control, it will be easier for landlords to evict people at their own discretion. It will give them the right to discriminate by looking at the type of job and income or anything else to satisfy themselves. This will surely increase disputes between landlords and tenants. We have laws in place at this time that are not enforced due to lack of resources.
The rent control board for the month of June had a total of 1,125 inquiries: 386 were from landlords, 548 from tenants and 173 from others; 302 inquiries pertained to the Rent Control Act and 797 inquiries were related to the Landlord and Tenant Act. The rent control board registers complaints as inquiries. They do not have stats on the number of calls that are complaints and how many are actual inquiries. The numbers alone show that 797 inquiries concerning the tenant act in June are reasons for concern. With the proposed changes to the act, which would increase the power of landlords, I could only guess at how many more so-called inquiries will be made. None of us have a crystal ball, but does anyone here believe that inquiries or complaints will decrease with this new proposed legislation?
With the elimination of rent control, the housing market will become unpredictable. Landlords will raise their rents when the vacancy rate decreases and download their costs to tenants whenever they can. Harassing tenants will also be easier for landlords. This is total unfairness. We have homeowners among us who also have tax increases, repairs and maintenance and decreases in the value of property in this economic situation. Do we get raises in pay or feel someone else should be paying for some of our losses?
There are good tenants and there are bad tenants, as there are good landlords and bad landlords. My question is, who is going to benefit from this piece of legislation?
As coordinator of the Housing Resource Centre I get to talk on a daily basis to both tenants and landlords, so I see it from both sides. As far as discrimination, I see it on a daily basis. We have landlords who list through us and we provide listings for people who have trouble finding affordable housing. For example, I sometimes get landlords with a two-bedroom apartment calling and saying, "I want to rent a two-bedroom apartment but I don't want any kids." Talk about discrimination. I say, "I'm very sorry but I can't list your apartment in that way." We see it every day on some stuff that's minimal; just look at the paper: "No pets allowed." We have legislation in place right now that's not being enforced. What's going to happen when we open up the market? I've even seen listed in the paper -- I couldn't believe that was in the paper -- for shared accommodation with somebody, "Only working people need apply." I don't know why that even hit the paper.
Right now we're not too bad because of the high vacancy rate. What's going to be scary is when the vacancy rate lowers. I think that construction, as far as people building houses, building apartment blocks, is mostly based on the vacancy rate. With a high vacancy rate I don't think this legislation will encourage builders to build any more than they are now. Thank you.
The Chair: Thank you, sir. We've got time for some questions if you're prepared to entertain questions from the committee.
Mr Gilchrist: Thank you, Mr Demarais. I appreciate your coming before us today. Have you been active in this current posting for a period of time? How long have you been handling the resource centre?
Mr Demarais: I've only been at the resource centre for a period of three months.
Mr Gilchrist: So you couldn't tell what the waiting list was in June 1995, then, up here in Sudbury?
Mr Demarais: No. I'm just looking at the facts right now and I think it's very high.
Mr Gilchrist: In Scarborough, just anecdotal evidence perhaps but it's the one I'm most intimately familiar with, the waiting list on the day of the election was seven years for new housing in Metro Toronto, seven years under the current act. I'm proud to say it's down to under four years already in Metro Toronto, and in some categories, depending on whether you're looking for a bachelor or a four-bedroom -- obviously a four-bedroom would be the longest and a bachelor is significantly less. For most people who come to us in dire circumstances we can get the housing authority to move heaven and earth and get them in pretty quickly. In fact, the transient shelters that had taken over almost every one of the motels on Kingston Road had 1,000 people in them on the day of the election. There are now fewer than 400 because all the rest have found permanent accommodation. That's the reality of what's happening, even in a marketplace with a far lower vacancy rate than you have here in Sudbury.
Let me follow up on something you've just said there, and I think you've hit the nail right on the head. I'm somewhat intrigued that we're approaching this from a different direction but have arrived at the same point. Correct me if I'm wrong, but it's your submission that the high vacancy rate has led to better service --
Mr Demarais: Slightly, not all --
Mr Gilchrist: Indeed, not all landlords, I accept that, but in general terms it has led to better choice for tenants, I think you said, and has led to a more competitive environment in terms of being able to negotiate certain clauses or maybe even the base rent itself. If a certain landlord is desperate to get something, he may want $600 a month but he'll take $500.
Mr Demarais: There's a reason behind that. If the landlord hasn't rented it for two months, right now at this time sure he'll do that, and that's an economic decision.
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Mr Gilchrist: I accept that. Then would you accept that if new housing were to come on the market in a place where the vacancy rate is lower, you would have effectively the same impact? The new apartments are obviously vacant on the day they're built, and that would have the same competitive impact. Would you not agree with me that if we can do something to stimulate the construction of new apartment units, particularly geared to where the demand is highest right now, which is the lower and middle-income apartment dwellers, that would have the same impact as what you've just said has taken place in Sudbury? We'd see better choice for tenants, we'd see lower prices and we'd see more choices for tenants.
Mr Demarais: Not necessarily.
Mr Gilchrist: Why not? Why wouldn't more new housing do the same as more old housing?
Mr Demarais: First of all, I think it's unrealistic. With the high vacancy rate you don't see --
Mr Gilchrist: No, sorry, I said not here; in a place with a lower impact, let's say Toronto, which is at 1.8%. Sudbury, by the way, and you probably know this, has the highest vacancy rate in all of Ontario. Toronto, at 1.8%, has tripled its vacancy rate since we were elected. But if all of a sudden more new housing were built in Toronto, would that not create the same impact you've experienced here in Sudbury?
Mr Demarais: With the control you want to give landlords, no, I don't think so. There's a reason for that. Right now I have people calling their landlords. What happens is that they're listed through me and when their place is empty, they call me and say: "How much rent are you asking for? Would you please bring that down $30, $35?" I have other landlords calling me, "How much can I raise my rent?" That's because people are in there. There is no consistency.
Right now the housing market for everybody is down, for homeowners it is down. They're looking at it that they should be making a certain profit all the time. What some of them don't realize is that the vacancy rate is very high. It's the same with repairs. If you check the paper -- it's not too hard; we don't need to do a survey here -- for the ones that have been empty for a couple of months you see renovations, painting. But when people are living in apartments, I get people coming to me saying: "I'm moving out. I'm looking for a place. I asked the landlord to do some renovations. He refuses totally." What does that tell me? Just think about that.
Mr Gilchrist: Contrary to what Mr Marchese has said, we have had builders appear before this committee, this hearing, and say they will, once this bill is passed, have the confidence to build more new apartments up to today's building code. That's what has been said on the record in these hearings and we'll hold them to that. I suggest to you that you'll see exactly the same benefits in places like Toronto that you've seen here in Sudbury. Here it has been caused by a vacancy rate in existing units. In other parts of Ontario we hope it's competitive pressures brought by bringing new units on stream. Hopefully history will prove us correct in that assumption and we'll see tenants get the same benefits you've seen here in Sudbury.
Mr Demarais: Could you actually state that the new housing that will be developed will be affordable housing?
Mr Gilchrist: I would expect it to be across the board. I know of at least one project in Scarborough East that's geared exclusively to low income just as of last month.
Mr Gerretsen: I hope, Mr Chair, being the wise kind of Chair you are, you will allow the other two caucuses as much time as Mr Gilchrist was allowed to have just now.
Mr Demarais: I relate to this gentleman's comment -- I don't know what his name is -- about interest rates.
The Chair: Mr Gerretsen has the floor.
Mr Gerretsen: I think it's interesting that the parliamentary assistant would suggest on the one hand that he needs this bill to get more construction going, because not a housing unit has been built since the NDP first came to power, according to what we've been hearing at this committee hearing not only today but on other days as well. On the other hand, all these people he's talking about have found accommodation since the date of the last election. I would suggest to him that the reason they've found alternative accommodation may have nothing to do with new construction at all. You can't have it both ways. You can't on the one hand say, "We need this for new construction," and on the other hand say, "All these people have found accommodation."
I found your statistics on the inquiries you get very interesting. I guess you get more inquiries on landlord and tenant matters, dealing strictly with the Landlord and Tenant Act, rather than the rent control aspect of it. Is that correct?
Mr Demarais: That's correct.
Mr Gerretsen: What kinds of inquiries do you get mainly on the landlord and tenant side?
Mr Demarais: We do a lot of referrals, on that point, but I'm just talking about the comments I get. I get a lot of comments from landlords. When they list, they sometimes feel they can put certain comments in there that are totally unfounded. The only thing I can tell them is that it's not allowed, that the way they approach people is none of my concern; I'm just telling them they're not allowed to proceed in this manner. But it's unbelievable how much landlords are not up on the laws at this moment, so I don't know what's going to happen when this bill changes.
Mr Gerretsen: Do you hear complaints from landlords to the effect that at times they cannot get rid of "bad tenants" quickly enough, people who are literally destroying their places? Let's face it, there are some of those people around.
Mr Demarais: I agree there are some of those people. But on an average basis, no, I hear more complaints about people who are just moving due to affordability and due to lack of maintenance being done to the place where they live. The only increase I've seen lately, like I said, and I looked back on the statistics we have down there too, is more in painting and minor repairs. That's because the place is vacant. To landlords it's a business, so I guess they have no choice but to try to upgrade it to make it look good. When they have a half a dozen people going through and none of them rent the place, there's probably a reason behind it.
Mr Marchese: Thank you, Mr Demarais. Many people will be affected by this and there will be middle-class people as well, but particularly low-income, as you stated and as others are stating here today. Mr Gilchrist and I have a big difference, as you might have imagined or heard. Contrary to what he says, the developers have said they might build, but if they build, it will be at the high end, not the lower end. He knows that because that's what we've heard. They've all heard the same thing I've heard.
This landlord and others have said, "It's okay that it's at the high end because then these other people will move there," therefore leaving openings for presumably these other low-income people. We don't think we're going to get too much housing as a result of this government saying, "We're not building because there's a big gap" -- that's why the private sector isn't building -- "between the cost it takes to build and what someone can afford to rent at that level," so there's no demand.
The supply and demand isn't working here and the demand has to do with whether you've got cash in your pocket to be able to rent at that high end. That's why they're not building. Wouldn't it be wonderful if they had a choice? Yes, but it would be wonderful if we had a choice where low-income people would say, "Yes, I'd love to be able to have a choice of something I can afford."
Mr Demarais: I know. I deal every day with people looking for affordable housing and it's very hard. The only way we do it, and it's still difficult, is that we go through all newspapers plus landlords who list with us and we update that on a daily basis. People come and get five, six pages of one-bedrooms or two-bedrooms and sometimes come two days later and give me an update that they can't find anything with that many places listed.
Mr Marchese: Right. There's another factor here about the vacancy rates because sometimes they make it appear like vacancy rates are high, which means it's good. But the reason why vacancy rates are probably high in some areas is because it's at the high end. Most of the low-income people you represent can't afford to rent at that high end. Is that your experience or am I imagining this?
Mr Demarais: It is. When people have to come back for more listings, it shows there's still the affordability factor. Even now we have people with this high vacancy rate and a lot of listings saying, "Oh, my God, is it ever expensive." But these people are low-income and they're looking for a specific price and it's just not there. I'd say over 90% -- and we take stats on the over 90% -- of people pay about 50% or more in rent than what their income allows.
The Chair: Thank you, Mr Demarais, for coming this afternoon.
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NORTHERN ONTARIO REGIONAL COOPERATIVE HOUSING ASSOCIATION
The Chair: The third presenter this afternoon is Donna Mayer of the Northern Ontario Regional Cooperative Housing Association. Good afternoon, Ms Mayer. You may proceed when ready.
Ms Donna Mayer: Thank you for the opportunity to address the standing committee on Bill 96. The Northern Ontario Regional Cooperative Housing Association, NORCHA, is a federation of housing cooperatives. We work to unify the cooperative housing sector of northern Ontario with mutual support and problem-solving by providing education programs and activities for boards of directors, committees, staff and members of housing co-ops.
NORCHA can be characterized as a landlord association, as our members are housing co-ops rather than individual co-op housing members. We are in the business of teaching co-ops how to be good landlords. We want to address the committee today because we believe housing is a fundamental human right. Ours is a general presentation for a few reasons.
First, we do not have the resources to research the bill in its entirety. This bill is no small tinkering with the law. It involves not only changes to the Rent Control Act and the Landlord and Tenant Act but also the Human Rights Code, among others, and it proposes a whole new quasi-judicial process for enforcing the rights of consumers.
Second, you have received and will receive submissions from far more knowledgeable and resourceful people and groups than ourselves. Specifically, I will refer you to the submissions by the Centre for Equality Rights in Accommodation, and by Keith Norton, the chief commissioner of the Human Rights Commission. The submission you received today from the Legal Clinics' Housing Issues Committee is without a doubt the best analysis you will find on the bill anywhere in the province. No one in Ontario is better qualified to assess the implications the bill will have on tenants and the administrators of justice. If you have time in committee to review only a few of the recommendations received through your hearing process, please ensure the brief by the Legal Clinics' Housing Issues Committee gets a thorough analysis. Certainly we endorse their recommendations.
Third, as to the general nature of my presentation, quite frankly I personally just don't have it any more and if we have time, I'll get back to this a little later.
Bill 96, as it stands now, is intrusive, offensive and immoral. The most offensive part of the bill is of course section 200, which will legalize discrimination against poor people. You have heard it many times. No one disputes a landlord's right to determine a consumer's creditworthiness, but we do object to using income information as a basis to discriminate against people.
In housing co-ops and other forms of social housing we must submit to income verification to retain a subsidy on our rents. We do this to prove we are in need of financial assistance, not to prove we are worthy of having a place to live. In the co-op sector we have confidence that our personal business will be handled in a confidential manner. If it is not, there are repercussions. What remedies will tenants in the private rental market have when landlords share their personal information with whomever they choose?
If you keep section 200 in the act you are saying that people have equal opportunity for housing only if they have enough money. Where are you going to put all the homeless women and children? I really want that question answered, I hope today.
In regard to the amount of money which is commonly regarded as being affordable, that is, 30% of gross household income, let me assure you it is not an affordable benchmark. In co-op and social housing in Ontario, tenants and members have been facing higher rent increases over the last five years than any other renter in the province. The rent-geared-to-income ratio has increased 1% per year, raising it from 25% to 30% in provincially administered social housing. This works out to approximately a 4% increase every year for five years. The effect on your net income is enormous. By way of example, in my own case, I am presently paying 41% of my take-home pay on rent.
What this means is that social housing is no longer affordable to the working poor, neither the people who live there now, nor the thousands on waiting lists. The idea that the private market can't compete with co-ops and other social housing is total rubbish.
In the area of rent control, passing the full cost of repairs and maintenance on to tenants is grossly unfair. First, tenants should not have to pay for neglect of which they had no part. Second, tenants should not pay for the profits landlords garner from the equity in their asset.
As for the affordability and the relation to the vacancy rate, certainly we know that Sudbury has the highest vacancy rate in the province. However, we also have above-average affordability problems. Over 50% of all tenants in Sudbury pay more than 30% on their housing now. It's really important, if you don't understand the difference between having sufficient supply of housing and the vacancy rate and the affordability factor, to go home and do some homework because there's a big difference between what is affordable and what is available, and that's what is at issue here. To make all these breaks for landlords so they can make more money is just going to make more homeless people. I really wonder where those homeless people are going to go.
Bill 96 is apparently about making the rental market a free market. How much freer do landlords need to be? It's one of the only places where you can actually conduct business without a business licence. Landlords should be licensed. That's the sort of legislative change we need to protect both landlords and tenants.
This morning on CBC Radio I heard Mr Gilchrist stating that the committee had heard from a lot of tenants' associations but no real tenants. I am a renter, and last year when I was unemployed I planned to present to your hearing on rent control which was held in Sault Ste Marie. I made it as far as Blind River; I was crying so much I just couldn't do it. Today it's really hard to come here again and talk to you people. First, you made me unemployed, then you took away -- you just took a lot away.
When you see that tenants aren't running to talk to you, it's because they can only take so much. I woke up this morning: "Do I really want to go bang my head against a wall? Do I really want to talk about all the work I've done for all these years that just got flushed down the toilet? Do these people care at all? Is there any hope that anything I say today or that any of the people here say today is going to have an effect and is going to help tenants?" The agenda of this government is very clear: You have your friends and they're not us.
So when you wonder why you're not hearing a whole lot from tenants, we can't see past tomorrow. Every day I wonder, when am I ever going to get that tooth fixed? I'm never going to get this tooth fixed, never. My future is so bleak it's not funny. Now you want to take away the housing. I am really sorry. We just don't have the fight any more.
Thank you and please give me questions. Despite my emotional state, I'm quite prepared.
The Chair: I understand. We will have a question per caucus. Mr Gerretsen is first.
Mr Gerretsen: I can certainly appreciate and understand, or try to understand, how you feel about this whole process, because I know a lot of people like you feel that a lot of the actions this government has taken have been directed against the most vulnerable in our society, and that's what's happening.
Could you answer a question? I asked the earlier presenter about the income provision. What we always hear from the people on the other side of the issue who think the information is relevant is, "Well, the landlords know it anyway and we may as well put it on the table so that at least it's out there and they know they're going to rent to people who are getting social assistance in one way or another," and that somehow justifies the fact that they have tried to legitimize this in this legislation.
How do you see that? Would you say that most landlords would know? Particularly in the co-op housing situation or any kind of social housing situation, if a person gets a subsidy, the income information is there. But how about other tenants who aren't in the social housing situation where they're getting a subsidy? Do you feel landlords would know where people are getting their income in any event?
Ms Mayer: In many cases they do because they ask, "Are you working?" and that sort of thing. We know many landlords actually like to rent to people on social assistance because in these economic times it is probably one of the more stable forms of income. But I think being able to go to my employer and ask for details and things like that is a little more intrusive than the sort of thing they currently have available or could get from the tenant. I think the critical answer here is that tenants are not going to rent a place that's not affordable to them, so finding out more about their income isn't going to ensure or guarantee they're going to pay the rent, if they're able to or not. They're not going to rent a place they're not able to afford.
Mr Gerretsen: Thank you and good luck.
Mr Marchese: Ms Mayer, thank you. I want to urge you to continue to do what you're doing, because we all ask ourselves the same questions. Even in opposition we have similar kinds of questions about whether we should continue doing what we do, and we're committed to it. Even though you're on the losing end, we've got to do it.
You're right about this government. They have staked a claim. Mr Leach has accused the NDP of taking sides with the tenants. He clearly said he took sides too, with the other side, with the landlords. It's quite clear. The only thing for tenants in this bill is the title. That's pretty well all they got; everything else is for the other guys.
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Section 200 is something I need to come to, because you touched on it, and Mr DeFaria and I have a bit of a problem in this regard. You heard him argue this section. He pointed to section 200, and there are two parts and he said the second part says you can't discriminate. The first part says you can use the income information; the second part says you can't use it to discriminate. It's the same thing as saying, what they're saying, "We are all equal in society." "It's against the law to discriminate," says Ms Mushinski, the Minister of Citizenship, "so presumably it isn't happening, because it's against the law." She then comes up with something even better: an equal opportunity plan to indicate that we're all equal, and therefore, "Everybody in society is equal," she and they argue, "because it's against the law, and in addition we have an equal opportunity plan."
This section, in my view, says the same thing, "You can use it" -- they give them the tools to discriminate but the other section says to the landlord -- "but you can't discriminate." My view is they will use the tools and they will discriminate. I don't see a remedy after that. You pointed out, and a number of other people have pointed out, that there is no remedy in some of these cases other than their assurance that it's against the law to discriminate based on income information.
Ms Mayer: That's correct.
Mr Marchese: Thank you for coming. I just want to urge you to continue doing what you're doing.
Mrs Julia Munro (Durham-York): I want to thank you for making that personal effort in being here. I can assure you, having sat on a number of committees and having travelled around the province, that information we have received in this process has made and does make an impact. Certainly I can assure you on a personal level that I have seen that happen in the hearings I've participated in.
I want to go to the issue that seems to have caused people so much concern, and that is, of course, section 200. Most people seem to agree, and I just want to clarify this in your position, that the ability to make credit checks and to consult in terms of tenant reference is something you think is appropriate. I don't think any of us would dispute that the question of income equalling good tenants is an issue. That isn't the base on which we see that this kind of information comes forward.
I want to ask you about situations, particularly for women who have left an abusive relationship, where they may not have a credit rating, they may not have a good credit rating, because of the relationship they find themselves leaving, and they may not have a tenant history. Is there something you can suggest to us that would be appropriate for a landlord to be able to ask? What other things? I would argue that it would be inappropriate for a landlord to turn down that person if those were not appropriate questions for that particular individual. What happens if that person has a job? Would it not then be useful information and to the benefit of that potential tenant?
Ms Mayer: Sure. What a tenant chooses to disclose to a landlord in order to negotiate a tenancy is up to the tenant to decide. I'm not sure if I totally understand your question as far as a woman's --
Mrs Munro: With this person or, for instance, a young adult who is a new renter, who may not have those things, does that mean the prospective landlord can't ask a question that would sort of offset that imbalance?
Ms Mayer: You tell me what that question is. The fact is there are many people, young people, newcomers to Canada, victims of wife assault, who don't have a credit history. It should not be used against them, period.
Mrs Munro: But then is there something the landlord can ask? The third option of income is one that obviously you find offensive. My question to you is, if the first two aren't germane to the circumstances of this individual, what does the landlord do now?
Ms Mayer: "Can you afford to pay the rent, yes or no? Yes? Okay."
Mrs Munro: But if he's allowed to ask some question of proof of ability, that is, through a credit check, then can he not ask for some kind of demonstration beyond your say-so?
Ms Mayer: That's the problem: There is no way to demonstrate it for some people. There's no credit history.
Mr Peter L. Preston (Brant-Haldimand): Then you're going to get turned down and discriminated against just because he cannot ask that question. As a landlord he has the right to protect his investment, so he says: "What's going to cause you to stay here? What's going to cause you to pay it?" You have no answers, because you're brand-new and you have no records. He's going to just say, "Well, I'm sorry, you don't qualify," unless he can say: "Do you have a job? How much do you make?"
Ms Mayer: No. "Here's my cheque. Take it." That's one answer.
Ms Martel: Sometimes it's not paid if they make lots of money.
Mr Gerretsen: The assumption here is that they won't pay the second month.
Mr Preston: That's right. That's the assumption, yes. There's no record.
Mr Gilchrist: Shelley, maybe it's finally sinking into you this isn't just geared to one income level, that with those condos on Bay Street that are rented, it's just as relevant to ask the question there.
Ms Martel: No, because you've got no guarantee that in the current shape and form the landlord is not going to use that to discriminate against low-income people and say: "Forget it. I don't think you make enough so I'm not going to rent to you." He's not going to flat out say that to their face. They're going to say, "No, I just don't want to rent to you, thank you very much; go home." That's what's going to happen.
Mr Gilchrist: How is that different than the current prohibition against checking on the source of income?
The Chair: Thank you very much for coming.
Ms Mayer: That's it?
The Chair: That is it. There are a few minutes if you have a few thoughts to conclude with.
Ms Mayer: No thanks.
UNITED TENANTS OF ONTARIO
The Chair: The next presenter is Nancy Bailey of the United Tenants of Ontario.
Ms Nancy Bailey: Good afternoon. I'm Nancy Bailey, co-chair of United Tenants of Ontario. I drove up this morning on the highway from hell, from Sault Ste Marie. I wish you guys could've enjoyed the ride from Thunder Bay.
I'm here today to speak to you on behalf of tenants across Ontario, especially northern Ontario. I'm not going through a clause-by-clause analysis of Bill 96 because I feel it's already been done to death and it's up to the legal experts to do so. However, I have major concerns about Bill 96 that I would like to speak to you about.
My major concern is discrimination. This government has been promoting a lot of discrimination between rich and poor, haves and have-nots. This has to stop. Perhaps you're wondering why a blond WASP worries about discrimination. Too many blond jokes perhaps? No, because I have been the victim of economic discrimination. Section 200 in the TPA allows a potential landlord to discriminate against a potential tenant based on where they receive their income, contrary to the Human Rights Code.
If you're in receipt of family benefits, general welfare, Canada pension or unemployment moneys, they can refuse you accommodation. The landlords asked for this one after their own were on the verge of losing a 59-day hearing in which the landlord failed to prove that a low income tenant is more likely to default on rent. According to Bill 96, it doesn't matter if you have first and last, a good credit rating, references from previous landlords, if you're on social assistance, you're a deadbeat.
I beg to differ. I remember about 15 years ago when I applied for an apartment, mainly because it was $50 cheaper than what I was currently paying. I had always paid my rent on time. I had first and last. I had excellent references from previous landlords. I was working part-time consistently and my son had never been a problem to me or other tenants. The superintendent who showed me the apartment was a former client of mine. I filled out the application and waited a few days to hear when I could move in. When I called the office of this complex, they told me they had misplaced my application and now they rented the apartment to someone else.
I called the superintendent to see what had happened to my missing application. I have never forgotten what she said: "Oh, Nancy, I don't know why you even applied here. Everyone knows they don't rent to anyone on welfare or even partial assistance." The hurt and outrage I felt was enormous. I felt totally degraded and humiliated. At the time I don't even know if the same laws were in effect; I know I didn't know my rights. But 10 years later I would've had them up on charges so fast their head would've spun.
If discrimination can happen to me, of course I'm concerned about my native friends. One told me that when looking for an apartment she calls the prospective landlord's office and asks them outright: "Look, I don't want to waste your time or mine. I will not file a complaint. Just tell me if you rent to natives." Some tell her honestly, no, they don't rent to natives; others won't give her a direct answer; others claim never to discriminate; and others have even said they don't rent to local bands but will rent to out-of-town bands. If this kind of blatant discrimination happens now with the present laws, what's going to happen when you pass this bill with section 200?
On the other hand, a friend of mine and her husband own a triplex in which they and their two tenants live. She has often told me her best tenant is the guy on welfare. He has literally run down the street after her with rent in hand to make sure she has her money. When he works, he'll pay her for months in advance knowing the job will end and it takes a couple of months for unemployment to come in regularly. My friend has had other tenants who have moved out with no notice, been late on rent, caused damage. But this one guy, who for more than seven years has lived in her building, has paid the rent on time, has not been any trouble to her or her family or neighbours. As far as she's concerned, she wishes all her tenants were like this man and she would rent to someone on welfare in a second.
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I live in a non-profit and have served on the board a couple of times. I can tell you that in any given month, 94% of the rent is on time. Others are delayed a week or two by pay schedules at their job and FBA overdeducting them for working and the replacement cheque taking a couple of weeks to arrive. Nevertheless, in talking to my neighbours, I can say that their number one priority is to pay the rent, to make sure that at least they and their family have a roof over their heads.
I've worked the last four years at a long-term-care facility, reputedly the best in Sault Ste Marie. As their hairstylist, they often tell me of previous care homes they have lived in. My sister has also worked in a couple of these care homes as a health care aide. From both these sources I've heard incredible horror stories, from people not being fed because they could not manoeuvre a spoon and the only health care aide on the floor was busy with other residents, to a health care aide being made supervisor instead of hiring an RN, to people dying and no one discovering that for hours because of a lack of staff.
Care homes need more specific standards and regulations, similar to long-term-care facilities. I know we all resolve to never be in one of these places, but we don't know what our future will bring us. I am very concerned about the elderly in these facilities who know they have a long list to wait on until they can get a better place, and in the case of advanced Alzheimer's the only place they can be referred to. I'm worried about some administrator deciding a particular resident is too much trouble and evicting them, saying they need more care, but there is nowhere for that person to go.
I'm also concerned about discrimination against tenants in northern Ontario and rural areas, who are underrepresented and totally ignored. You have revised the land-lease laws regarding mobile home communities, but I wonder if you've ever seen a park in northern Ontario. They are not the lovely, desirable developments in Florida, but are often referred to as the public housing and the slums of the north. There are five of these communities around the Sault. Two are nice but definitely rural, two have a number of problems but are livable and the last one I wouldn't raise a dog in, let alone a child.
You now say not only can the tenant be evicted, but their home as well as their property. Here's some big news for you city boys: Mobile homes aren't. Most of these buildings have been on foundations and the wheels off for 20 years. They require a transport truck to move them, not your car. If a person had the money to hire a crew and a transport and buy a piece of land to park this on, I don't think they'd be behind in their rent.
From the other changes in these laws, it appears that the owner of the park will end up owning all the trailers, either by getting the first offer on the trailer for sale or from rent owing with the increase of higher cost pass-through. Why is it fair for increases to be passed on, but not decreases? This discriminates against all tenants, especially when we don't get to see the paperwork and it's not filed with any government agency like the rent registry.
There is discrimination against tenants throughout this legislation, but you've also forgotten the developmentally and learning-disabled, the immigrant who cannot read English and those who cannot read a document posted on their doors telling them they have five days to answer this notice or be found in default judgement.
I have two nephews who are dyslexic. The younger one has it so bad I could see him leaving that piece of paper on the door thinking it's some sort of decoration until somebody else notices it and reads it to him. You have to see that the immigrant, the person of colour, the elderly, the social assistance recipient, the physically, learning or emotionally disabled will be at a great disadvantage to speak, let alone defend an action in regard to their tenancy.
I implore you to take this legislation back to a committee with tenant legal workers and advocates to make the rules of the game more fair for both sides.
I'm afraid that under your present Bill 96 there will be increased harassment and discrimination. You, as representatives of the population, have the power now to change this legislation and introduce a new law to be proud of, and not make change for the sake of change and pay back some of your big landlord buddies.
If you cannot make some fair and reasonable changes to this bill, then why not leave the five present laws as they are and go back to your ivory towers and leave us bad little kids who didn't vote for you alone, because although you have the power now, there are a million voting tenants who in a year and a half will remember those who told them that rent control and their rights would not change and those who said they would never discriminate and do.
The Chair: Thank you, Ms Mayer. There are questions, I believe, from the committee members.
Mr Marchese: Thank you very much, Ms Bailey, for your presentation. You used to get funding from our government in the past, as the United Tenants of Ontario.
Ms Bailey: Yes.
Mr Marchese: You don't get any more funding from this government, do you?
Ms Bailey: No. We were defunded within a month of them coming to power.
Mr Marchese: Have the needs of tenants changed so much that you shouldn't get the funding, do you think?
Ms Bailey: No. In fact, all of us, including myself, came up at my own expense. I paid my own staff to work for me. We do it all voluntarily.
Mr Marchese: It seems to me from the changes this bill is making -- and I pointed out that the only thing for tenants is the title, the tenant protection package, because most of the other changes are for landlords -- this is the time to fund organizations like yours, not defund them.
When we went through the first hearings, if you recall, they made very few changes, hardly noticeable changes. Some were for landlords. I'm not sure what there was for tenants but maybe they'll be able to tell us. Mr Gilchrist has shown a whole list of changes that they're considering, so I'm optimistic. Hopefully your concluding remarks will lead to something they can be proud of, but I'm not sure.
All the changes here, like vacancy decontrol, are going to affect the people you were talking about. There is going to be an increase, in spite of the fact that one of the tenants this morning, Ms Lynda Beavis, said, "They're dreaming if they think rents are going to go up." We're all afraid that vacancy decontrol means rents will go up. Why are they doing it otherwise? If they're not going to go up, why touch the system? The tenants who stay are going to face an increase. They're going to face an increase because the taxes and utility costs are going to be passed on now.
The capital costs go from 3% to 4%. As one of the previous speakers, Tim Welch, pointed out, if landlords were to apply for capital costs of 3%, they would have to justify how that 2% had been spent previously for other maintenance stuff. Now they don't have to prove that any more.
This says that landlords have six years to be able to get back rent arrears, but the same doesn't apply for tenants who are trying to recover for illegal rents that have been charged over the years.
There are so many changes I don't have the time to raise that affect tenants. United Tenants of Ontario could be there to assist them in some little way. Are you making an appeal to these guys somehow, just to give you a little money so you can continue to do some of the work you used to do before, or are you beyond that?
Ms Bailey: No, we gave up on that.
The Chair: Ms Bailey, I earlier called you the wrong name and I apologize for that. Mr Gilchrist has a question.
Mr Gilchrist: Thank you, Ms Bailey, for your presentation. I have just a quick comment on Mr Marchese's suggestion that nothing has changed since last year. I'm looking at page after page of changes, a number of them in fact directly related to comments you've made; for example, the institution for the first time of anti-gouging restrictions, the setting of rent in mobile home parks, security of tenure for people who live in buildings that someone proposes to turn into condominiums. That may not have affected you directly, but I can tell you in Toronto and many other urban centres that's a big problem right now. For the first time, tenants are now absolutely, positively guaranteed that they can stay there. If the rest of the building is converted to condos, that's fine, they still have security of tenure.
Also, determining which are eligible capital expenditures. Mr Marchese talked about the 2%. We've focused and refined the specific things that will count that could be added to the rent.
Ms Bailey: Do they have to register their paperwork with anyone?
Mr Gilchrist: Absolutely. They have to prove that they've spent those dollars. It's not the quote; they have to show the invoice.
Let me go back to your very opening comments. Forgive me, but I have to be very direct in this: You are absolutely, positively 100% wrong in your interpretation of what section 200 is all about. It does not delete the prohibition that exists today about discriminating against tenants on the basis of the source of income. That section of the Human Rights Code is not changed, not one word of it is changed.
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Ms Bailey: How come the human rights commissioner said it was?
Mr Gilchrist: He did not.
Ms Bailey: He did too. I saw the letter.
Mr Gilchrist: Excuse me, he did not say that the section regarding source of income, which is your point, was changed. He has said --
Interjection.
Mr Gilchrist: Mr Marchese, please show a little respect. The bottom line is that right now it is legal in Ontario to ask a prospective tenant how much money they make. It is legal to ask an income question. Every single landlord who has rented to all those people whom we are told -- and we see it in our own communities -- are paying more than 30% of their rent right now clearly has done that regardless of what their income was.
We've heard group after group come before us saying that, simply putting on to paper the fact that this right exists, and all of a sudden landlords will behave differently. Where's the empirical data that right now tenants are being discriminated against on the basis of the amount of income? Because it's a legal right today. On the other hand --
The Chair: Mr Gilchrist, I'm about to go "bang."
Mr Gilchrist: I'll be very quick, 30 seconds. I will say this: If you are aware of people who are getting response that you've just said -- and by the way, it's been there for 10 years -- about the source of income --
The Chair: Thank you, Mr Gilchrist.
Mr Gilchrist: -- call the Human Rights Commission because that section won't change.
Mr Gerretsen: I'm curious. You talked about the rights of immigrants and disabled groups etc. I'm an immigrant to this country myself and I know that many immigrants when they first come here will try to put as much money together to buy a house or to pay as much down on a mortgage or to pay as much rent as they want because that is where their priorities lie. I guess the main concern that you have with the income information section is that landlords will, in their own minds, not on paper, not out in the open, determine whether or not a person should be paying more than 35% or 40% of their income towards rent. Is that one of the concerns you have?
Ms Bailey: Yes. We don't want them paying more than they can afford, but by the same hand, when you go for a mortgage, 35% of your income is the cutoff for your mortgage.
Mr Gerretsen: But the point is that if a tenant wants to get an upgraded accommodation and pay 60% of their income towards rent or on a mortgage, that should be up to them and the landlord should not determine that.
Ms Bailey: You're right.
Mr Gerretsen: That's one of the main reasons for section 200 being there. It will give landlords -- how shall I put it? -- a foot in the door to try to get as much information. Of course, as has been stated before, what that information is ultimately used for once they have it is totally out of anybody's control.
Mr Marchese: But they can't discriminate.
Mr Gerretsen: That's right. It's very easy to say. Just by merely saying it, that makes it so.
Ms Bailey: Yes, it never happens.
The Chair: Thank you very much for coming.
SUDBURY COMMUNITY LEGAL CLINIC
The Chair: The next delegation is Bruce Best of the Sudbury Community --
Mr Gilchrist: I dare you to make that insinuation to a landlord to his face.
The Chair: Mr Gilchrist, I'd like to say the name -- Bruce Best of the Sudbury Community Legal Clinic.
Mr Bruce Best: My name is Bruce Best. I'm a staff lawyer at the Sudbury Community Legal Clinic. I trust you all had an enjoyable month of July in your constituencies.
Mr Gilchrist, carrying on about section 200 here, if it's not changing the Human Rights Code, then why is it in the TPA?
The Chair: Mr Best, that's not the way we're doing it here.
Mr Best: I think this is something which is current.
Interjections.
The Chair: Do we have unanimous consent that we can have a dialogue between Mr Best and Mr Gilchrist?
Mr Gerretsen: For no more than three minutes.
Mr Gilchrist: You lost that one.
The Chair: Mr Best, you're going to have to wait until Mr Gilchrist's turn comes. You may proceed, sir.
Mr Best: In reviewing the Tenant Protection Act, one of the first things that jumped out at me was how the act seems to have a different view of people whether they happen to be landlords or tenants. It's something that kept on popping up, that landlords seem to be assumed to be honest, forthright and trustworthy people, whereas tenants are perhaps underhanded and sly. This is a very disturbing theme to view, especially in legislation, not in the least because it's completely false in my experience.
I'm sure you all agree there are good landlords and there are good tenants and there are bad landlords and there are bad tenants. This has always been the case. When part IV of the Landlord and Tenant Act was introduced, it was recognized that the law must introduce procedural safeguards to protect the vulnerable from abuse and to introduce an element of certainty into the dispute process. This certainty has been compromised with the present act. The protections that have been afforded tenants are being removed because it is seen that landlords are more deserving of this kind of protection.
I also disagree with Mr Marchese. I don't think the title is the only thing for the tenants. I don't believe the title in itself is for tenants. I think it might be protection from tenants rather than protection for tenants.
I believe the current Landlord and Tenant Act is flawed, certainly. It contains much arcane legal argument and language, and most parties to landlord and tenant disputes do not have the benefit of counsel and have to deal with these issues on their own. Much could be done to make a renewed residential tenancy act better and more accessible for both landlords and tenants. However, this has not been done with the TPA. Much of the language and much of the uncertainty has been transposed, often verbatim, from part IV of the Landlord and Tenant Act. Even worse, there are a lot of things which have actually been taken away, such as the definition of "spouse," which was something that was present and is no longer.
The Tenant Protection Act, as it is now drafted, changes the landlord and tenant law to protect landlords from unscrupulous tenants. That seems to be the real theme of the changes that have been made. For example, clause 72(1)(a) allows a landlord to enforce an oral agreement to terminate, and this can be enforced without notice to the tenant. Why is the current requirement of a written agreement removed? The assumption is that landlords, being upstanding fellows, would never make this up, there would never be a misunderstanding between a landlord and tenant as to what a conversation actually entailed or what conclusions were reached. But I don't quite understand. Why take away a written requirement?
Another example is the issue of locks, which I'm sure has come up before. Currently, as you know, neither landlord nor tenant may unilaterally change the lock. Now a landlord may change the lock, provided they give keys to a tenant. First of all, in terms of uncertainty -- I hope this is something that will be addressed -- it doesn't mention when keys should be given to a tenant. I think for the sake of certainty it should be specified that keys should be given before locks are changed. Furthermore, there's no reason why tenants shouldn't be able to change locks as well, at least as applies to their own residential unit. I can understand the problem if you're dealing with a large apartment building and wanted to change outside doors, that this is a real problem for landlords if they have to come to a consensus with all the tenants. However, as it applies to a residential unit, it is the tenant whose safety is at issue and it is the tenant who should be able to change the locks if the landlord refuses to.
Another issue which I have with the Tenant Protection Act is the paternalistic, patronizing way the sections are phrased. With regard to section 200 and the income provisions, it assumes that a landlord is better able to assess a potential tenant's ability to budget than that tenant is. It assumes that a landlord is better able to judge whether or not a tenant's safety is at risk with regard to the changing of locks and it assumes that landlords are better at understanding a conversation between a tenant and themselves.
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As far as procedural fairness goes, another issue is the ability of the tribunal to amend an application at any time or allow the landlord to amend an application at any time during the proceedings. This means that a tenant may be forced to deal with issues that they were unaware of prior to a hearing. It may be argued that the same advantage will be given to tenants on a tenant's application so that this is a tradeoff which is acceptable. However, this argument doesn't really hold water. First of all, most applications are brought by landlords. Second, whereas the end result of a successful landlord application will in most cases result in an eviction, a tenant application will most often be about repairs or money. The prejudice to tenants in allowing an amendment at the 11th hour far, far outweighs any prejudice to landlords in a tenant application.
In conclusion, it is of vital importance to ensure that the procedural safeguards are in place to protect tenants. It's in the interest of all parties to know how the process works. We want the Ontario government to listen to the one third of citizens of Sudbury who rent their housing. We want the government to recognize the potential for abuse and to make sure that residential tenancy law will not harm the most vulnerable members of our society.
The Chair: Questions?
Interjection: I think there's one out there.
Mr Gilchrist: Well, let's go back to section 200. If I recall, you posed the question, what was added by or what was the intent --
Mr Best: You earlier stated that it was not going to be changing the Human Rights Code in any way.
Mr Gilchrist: It was not changing the section on the fact that you cannot discriminate on the basis of source of income. Do you disagree with that? Source of income. There's a section in the Human Rights Code right now that says I can't discriminate against anybody, and it was there obviously intentionally to deal with people discriminating against those that are receiving government assistance.
Mr Best: Right.
Mr Gilchrist: Is it your submission that I'm right, or am I wrong?
Mr Best: If you will allow me to quickly review the section.
Mr Gilchrist: Sure.
Mr Best: The question I'm posing is, this amendment, section 200 of the TPA, if it is not affecting the act, then why is it being put in?
Mr Gilchrist: Now you're answering a question with a question. I asked you because you had said you were following up the previous comment that this changed the existing Human Rights Code section prohibiting discrimination on the basis of source of income. Could you read for me anywhere in section 200 where it says it's doing that, or would you agree with me that the preamble says it is amended by adding an additional subsection, a new subsection? Is that what that says?
Mr Best: Saying that you can collect this information but you cannot use it to refuse someone tenancy --
Mr Gilchrist: Thank you.
Mr Best: Does this mean that under the Human Rights Code, if you collect this information, you're required to take them as tenants? I don't think so. That seems to be what you're implying.
Mr Gilchrist: Right now, can I ask if you're on government assistance? If I have an apartment building, am I in any way restrained to ask the question, "Are you on government assistance?"
Mr Best: I would consider that discrimination.
Mr Gilchrist: Then small wonder the legal system is in the state it's in in this province. Obviously you can ask the question. You can't discriminate once you've had the answer. Despite all the hand-waving from Mr Marchese, that exists today. That's a protection people in this province have, and it's going to continue. Right now it is legal for a landlord to ask a prospective tenant, "How much do you make?" But there's nothing in the Human Rights Code today that stops a landlord from discriminating once he has the information. Once this section is there, he or she will be prohibited from using that information to discriminate. That is a new right that people will have.
Mr Best: By being able to collect the information --
Mr Gilchrist: They can do it today. Are you aware of a single case right now anywhere in the province where a landlord has abused the knowledge of the income of a tenant?
The Chair: Mr Gilchrist, we must let Mr Best respond if he wishes to.
Mr Best: By permitting the collection of the information, there is absolutely no way that it can be enforced that that information was used as discrimination.
Mr Gilchrist: Okay, but by that interpretation -- so right now there is no way to enforce the Human Rights Code that says it's legal for me to ask if you're on government assistance but I can't use it to discriminate. Is that what you're telling me?
Mr Best: That's information that you will use to discriminate. That is what we can control in terms of trying to respect the human rights of low-income people in this province.
Mr Gilchrist: I'm afraid you haven't answered a single question here yet, but if you're aware of a single landlord anywhere in this province who has discriminated against a tenant --
The Chair: Mr Gilchrist, it's Mr Gerretsen's turn.
Mr Gerretsen: I guess the real question, just following up on that, is whether or not a landlord is able to make the proper kinds of judgement by merely getting information relating to credit checks, credit references, rental history, possible guarantees etc. My question to you is, if a landlord is able to get that kind of information, why is income information so relevant? Can you see any reason why income information would be relevant?
Mr Best: Because of the potential for discrimination, which will come, which that information can be used for, and the discrimination in particular it will have upon recipients of social insurance.
Mr Gerretsen: I was very much struck by something else you said at the beginning, that the whole tenor of the act -- and I must admit that I didn't focus on it until you actually mentioned this -- is that it seems to talk about landlords in very positive terms, as if a landlord can do no wrong, whereas everything as far as it relates to tenants in the act is always in sort of negative terms, as if tenants are people who should potentially be feared by landlords. Could you expand on that?
Mr Best: I would say this. In so many of the changes in particular, as I said, landlords tend to be given the benefit of the doubt. This is particularly the case where provisions are sufficiently vague, when it actually gets towards a hearing or when you're talking about notice provisions -- the notice is something else which has come up, I'm sure, several times. There's not as much certainty any more, and this is for the most part going to be going to the benefit of landlords, as I say, this fogging of the procedural requirements and the procedural safeguards.
Mr Gerretsen: I was very much taken with a comment made earlier this morning where apparently a hearing can be held on a matter of five days' notice, and yet written notice can be given and mail is -- not "meant" to be delivered but is --
Mr Best: It's deemed.
Mr Gerretsen: It's deemed to have been delivered within five days, which could actually be the day after the hearing is held.
Mr Best: Yes, the written response. I think that's something which this committee is definitely going to have to consider in great detail, the requirement of a written response, which I mentioned as well. It's unsure where that came from. I've worked in several legal clinics in the province. I have dealt with a lot of tenants who are from other cultures who may not read English very well. I've dealt with a lot of tenants who are illiterate. Generally, if someone has real problems with language, they can show up on the day, but having these procedural barriers put in place where you have to put in writing a response within such a short time frame, that's why it has to be -- and it's all deemed. As I say, you could do your best efforts and still not make that.
Mr Marchese: Thank you, Mr Best. You've raised a few other issues that I'm hopeful the government will be reasonable with, given that they use common sense as part of their tools for reasoning.
A number of lawyers have made a number of references that you've touched: A tenant should be entitled to alter the locks at any time if there are valid reasons for doing so, provided the tenant gives the landlord the new key.
Mr Best: Right.
Mr Marchese: You said that and a number of other people have said as much. I'm assuming that's a reasonable request. Hopefully, Mr Gilchrist --
Mr Preston: Mr Gilchrist already said it was.
Mr Marchese: Mr Gilchrist, you said that it was?
The Chair: I think we're going to have to address this stuff through the Chair.
Mr Marchese: Yes, fine, Chair. Thank you.
"A landlord should not have the right to enter premises after giving notice of termination unless the tenant does not intend to challenge the notice of termination."
Mr Best: I agree there's something else which may come from that in terms of the abuse of the system. There's really no prejudice to a landlord giving a notice of termination. If a landlord wants to enter without 24 hours' notice, all they have to do is give a notice of termination.
Mr Marchese: Anyway, there are a number of things that many lawyers have presented here on which there's agreement. I was just trying to recap a few, but I'm hoping they are taking that into account, if they haven't already agreed. It's hard to know to which matters they've agreed.
But section 200 is preoccupying me, and some of the other government members as well. The argument is something like this. At the moment, some -- I'm not sure how many -- landlords are using income information. They're saying it's legal. I'm thinking they're using income information and they're probably using it to discriminate. How are we to know? But some of them are probably afraid, if it's not law -- they're probably afraid because if a tenant decides to take them to the Human Rights Commission, it could become an illegal act. There are probably cases where that has been taken to the Human Rights Commission, but I'm not sure.
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They're saying, "Given that landlords are now doing it, we're going to put it into the act and say that you can use income information, but the second part of section 200 says it's illegal to use it to discriminate." How are we to know that? What they're saying is, "This section says they can't discriminate," and it's supposed to make me feel better as a tenant. How are we to know how that landlord is going to use that information? Many of you are saying, "We don't trust that."
The point I make and the point some of you make, I'm assuming, is that if they're allowed to use income information, they have no more fear. No one is going to say to the tenant, "I'm allowed to use this information, and by the way, I'm not going to let you in because you're earning so much or you're on welfare," and so on. The point I make is, it doesn't give me any assurances. Do you see it somewhat the way I see it, or is there something else we're missing?
Mr Best: No. If you're not going to use that information to decide whether or not someone can afford to live in your apartment, then why do you need it in the first place? If you're going to use it to make that distinction, you're going to be discriminating against them because of their income.
Mr Marchese: But they're saying, "Because they're already doing it, we want to put it in the act to say it's okay and we also want to put in the act that you can't discriminate." They're making it appear like they're doing tenants a favour. That's the point. I'm not assured by it.
Mr Best: As I said before, I think that's a trite point by the government.
Mr Marchese: Thanks very much.
The Chair: Thank you, sir, for coming.
NATIONAL ANTI-POVERTY ORGANIZATION
The Chair: The next delegation is the National Anti-Poverty Organization, Barry Schmidl. Good afternoon.
Mr Barry Schmidl: Thank you for the opportunity to present the views of the National Anti-Poverty Organization to your committee. I've been informed there is a time limit of 20 minutes on my presentation, so I will attempt to be brief and to the point and allow time for Mr Gilchrist and other people to ask questions. I'm sorry; I've been sitting here for a few minutes.
Allow me to begin by introducing the organization I represent. The National Anti-Poverty Organization, NAPO for short, is a non-profit, non-partisan organization representing the 5.2 million people in this country currently living below the poverty line. Our mandate is to eradicate poverty in this country.
From its founding in 1971, NAPO has been commonly referred to as the voice of the poor because our 21-member board is made up of people who live or have lived in poverty at some time in their lives. Our membership is made up of both individuals and groups, including local and provincial anti-poverty groups and other organizations that provide direct or indirect services to the poor.
Today I am speaking both for the national organization, which I represent as secretary-treasurer, and particularly for our membership in northern Ontario, which I represent as the northern Ontario director.
Part of NAPO's mandate is to advocate for poor people. Decent, affordable housing and tenant protection programs aid poor people. This concern, and a concern for the future of Ontario's tenants in general, is what brings us before this committee.
Our concerns with Bill 96 are many and profound and I am not able to cover all of them in detail in the time allotted. Therefore, I would like to concentrate on three areas of major concern. I will deal with the area of affordability and supply of housing, the area of maintenance standards and the area of human and tenant rights.
First, affordability and supply of housing. The point of Bill 96 is this: Rent control will be dead, period. In everything but name, the proposed legislation will do away with any meaningful rent regulation. It is true that the rent control guideline and other niceties will still be there. However, there are enough holes in them that you could use them as a sieve. Let's look at a few.
Landlords can increase the rent by any amount they wish when a tenant moves. Landlords can harass tenants into leaving their units so that the rent can be raised between tenants. Although the proposed legislation makes this illegal, there are many forms of harassment that are difficult to prove, and it is unlikely that a government cutting the public service will add an enforcement unit of any meaningful size. About 20% of tenants move within a given year, thus allowing big rent increases for a sizeable portion of the units in any one year.
All new units created are free from rent control forever. Operating cost and property tax increases will now be fully passed on to tenants, as well as capital expenditures, and tenants will not be able to challenge whether they were needed or not. In fact, tenants may be liable to pay for non-essential items such as marble lobbies in their rent increases.
Costs no longer borne by the landlord, such as possible utility decreases -- and they do occasionally happen -- will not have to be withdrawn from the rent. In other words, you have to keep paying the landlord for the higher utility rate even after they are no longer paying it.
All of these things mean that tenants will be going back to the old days of double-digit rent increases. This is not rent control.
NAPO supports a system of rent control that provides tenants with protection from unreasonable rent increases but allows landlords a fair return on their investment, with flexibility for some exceptional costs allowed.
We support a system that requires that good repair standards be maintained and provides landlords with the cash to meet these obligations.
We support a system that helps both landlords and tenants by allowing for a swift and fair appeals mechanism.
The proposed legislation does not meet any of these criteria and indeed is the antithesis of them.
The government says that Bill 96 will cause more affordable housing to be built. This will not happen. Even the minister and the Fair Rental Policy Organization, a landlord lobby group, have admitted as much at different times.
British Columbia had no rent legislation at all for years and did not see much in the way of private sector affordable housing built. Indeed, the problem is not rent control; the problem is that developers can't build new units for what the average tenant can afford to pay.
I'd like to talk next about landlords and rent control for a moment. It is truly a shame that a law is required because a few landlords are unscrupulous. The vast majority of landlords are decent people who care about their property and are not in business to exploit others. Unfortunately, society has to have laws to protect us from exploitation by others, whether it be false advertising, child labour or substandard living conditions. Any system of regulation will no doubt work hardships on some people. However, the fact is that existing landlords can make money, and generally do, even with the present rent control and other laws. In the March 10, 1996, Toronto Star, real estate broker J.J. Barnicke stated that people who buy an apartment building can expect a return of over 15% on their equity and that apartment buildings had been one of the most important real estate sales areas in the greater Toronto area. Obviously somebody is making money.
I'd like to turn to maintenance and standards. Bill 96 ensures that if there is no property standards bylaw in a municipality, the standards in the act will be used, and that tenants can apply directly to the minister for enforcement where there is no local standards bylaw to enforce.
Many municipalities barely enforce standards now. Provincial cuts to municipalities will not cause property standards enforcement to be prosecuted more vigorously, as probably fewer inspectors will be working for municipalities due to the cuts. In addition, I'm afraid I do not have a great deal of faith, given their track record, in the present government's determination to properly fund a branch of the Ministry of Housing to enforce property standards.
The standards set in the bill are not even minimum standards, and it does not address a vital aspect of maintenance at all. Bill 96 would eliminate the provision in the Rent Control Act that can prohibit landlords from receiving rent increases if they do not do required repairs.
All of the foregoing means that buildings are less likely to be well maintained.
In addition, the elimination of the protections under the Rental Housing Protection Act will mean it will be easier for a landlord to demolish or convert affordable units to condos or parking lots. Given the present government's stand on social assistance levels and housing legislation, there are likely to be growing numbers of former tenants sleeping in both condos and parking lots in the future.
Moving to tenant and human rights, an attack on tenant and human rights is our other major concern with Bill 96. Not only is the Harris government pushing tenants out of decent housing through effectively eliminating rent control and allowing buildings to deteriorate because of an effective lack of standards enforcement, but they are also proposing to eliminate many of the protections that tenants have.
Some of the rights eroded include increased landlord right to refuse a sublet and therefore force a rent increase between tenants; removing landlord-tenant matters from the courts and giving them to a government-appointed Ontario Rental Housing Tribunal, thus allowing for potential patronage appointments by government and judgement by potentially unqualified, unindependent and unsympathetic individuals; allowing evictions to be easier for the landlord and making it more difficult for tenants to fight an eviction -- for example, by not requiring the reason for the eviction to be on the notice and by forcing tenants to prove that the landlord is evicting them only due to revenge for them exercising their rights, not as one reason.
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Our most serious concern in the area of human rights, however, is that which arises from sections 36 and 200 of the bill. This will allow a landlord to actively discriminate against poor tenants and those on social assistance. I could easily spend my entire time on this issue and I'm sure many people have. I know many people have because I've been sitting here for a while listening to other people speak about that.
Keith Norton, chief commissioner of the Ontario Human Rights Commission and a former Conservative cabinet minister, told this committee in June that the bill would "condone tenant selection practices that involve the application of income criteria [that] will have devastating results for some of the most disadvantaged people among us."
NAPO must agree with him. Rolling back human rights legislation is not what this government was elected to do. Regardless of whatever else this government has a mandate to do and whether or not NAPO agrees with it, we find that specifically allowing one group of people to deny a necessity of life to another group of people and entrenching it in law is reprehensible in the extreme. If you are to change anything in this bill before it becomes law, change this.
In conclusion, the Harris government is rushing through the process of changing landlord-tenant law in this province without either caring or knowing what its impact is going to be on real people, not on the numbers on spreadsheets. With cuts to social assistance rates, co-op and non-profit housing and wholesale slashing and burning of the social, education and health systems in the province, the provincial government has launched not a war on poverty but a war on the poor.
The National Anti-Poverty Organization feels that much of the Tenant Protection Act is another volley in this war and is certainly a misuse of the English language. To our knowledge, no thorough study of what the human costs of this bill will be, including the death toll caused by increased homelessness, has been done. If it had been done, then we believe that it should have shown anyone with a shred of decency -- and yes, I assume that most politicians do have that -- that this proposed legislation and the rest of the war on the poor is sheer folly.
I would like to thank you once again for the opportunity to make this presentation to the committee and I look forward to your questions.
The Chair: Mr Schmidl, thank you very much. Mr Gerretsen has a question for you.
Mr Gerretsen: Thank you very much for your presentation. I'm sorry, I was out of the room for a few minutes, but I did have an opportunity to review the brief.
I was very much struck by the third page where you list about five or six things that this bill is doing to tenants right away. One of the greatest difficulties I have with this government is the fact that they don't even admit that they're doing some things. If they at least had some intellectual honesty and said, "Yes, we believe that, generally speaking, landlords should have more rights and tenants fewer rights and we believe that rent control has got to go," and things along those lines, I could say, "At least you're intellectually honest and you're admitting that your philosophy is totally different from past governments and there shouldn't be tenant protection," and that sort of thing. But this government is in total denial about that. The mere title of the bill alone indicates that what they're really trying to hang on the people of Ontario is, "We are really doing more to protect tenants' rights."
You have clearly indicated in the five or six examples that you use on page 3 how tenants' rights are being destroyed and how rent control is being done away with in this province. There's no intellectual honesty there at all by this government. Would you, in summation, agree that from where you sit this bill hurts tenants and does the exact opposite for landlords?
Mr Schmidl: I think certainly if you read through the whole thing and research the whole thing in depth you'd probably pick out a couple of things that are good for tenants, no doubt. However, just about everything else is not good for tenants, or a few things don't matter one way or the other, I suppose. But this really amounts to gutting the protection that tenants have fought for for years, not just their rights but the rent control system and pretty much everything else that supports tenants. Certainly in no way could I characterize the bill as something that favours tenants in any way, and I would characterize the bill as something that favours landlords and allows unscrupulous landlords in some cases to take advantage of people who are not able to fight for themselves.
Mr Marchese: Thank you, Mr Schmidl. You raised a point about the tribunal that worries me as well. In the last hearings a year ago we heard from a number of legal people and many of them weren't convinced that this new system would necessarily work. I'm not convinced. They argue that 95% of all cases get dealt with expeditiously and it's only 5% of the cases that there were some problems with. My worry is that this new tribunal is going to be a new bureaucracy. They will be political appointments; we're assuming they're going to be neutral. It will create a new bureaucracy that they've got to deal with. I'm as worried as you are about that and I wanted to raise it with you.
You say landlords can increase the rent by any amount they wish when the tenant moves. That's the vacancy decontrol. Ms Beavis from Paralegal Associates said: "That's not true. It's just not going to happen. We're dreaming if we think that's going to happen." What do you think?
Mr Schmidl: If there's a 20% vacancy rate or something like that or a large vacancy rate, I can certainly see that would not happen, that landlords would not jack up the rent. That's quite true. Where exactly that would stop or where the curve would start going up, I couldn't say without research to back me up. But I find it really, really hard to believe that if we're in the situation that Sudbury was in a few years ago, where we had a below 1% vacancy rate, landlords would not jack up the rent by tremendous amounts because it is a commodity that everyone must have unless you're prepared to camp out all winter, and I don't think anybody is.
It's a commodity that people must have, and when it is in short supply, the price will go up. It's like gas on a Friday afternoon before a long weekend. The price goes up because the demand is up. Unfortunately, if you're on a disability pension or something of that sort, just because your rent is about to go through the roof or there is nothing available that's affordable, your pension is not going to go up as well.
Mr Marchese: That's right. You mentioned another point about harassment. The government has got a measure there to protect you against harassment. As you know, the anti-harassment unit now is going to increase the fine by a pretty hefty amount. Don't you feel good about that?
Mr Schmidl: I feel wonderful about that. Let me tell you, if I were a landlord and I were stupid enough to be blatant about harassing a tenant, I think I would deserve everything I got. But, generally speaking, landlords are not stupid people. They are in business. I suppose there are stupid business people too and that's why some businesses fail. But if you want to harass someone, you're not stupid, you're not going to get caught because there are all sorts of things you can do to harass someone that will be difficult to prove as harassment.
Mr Preston: I'm glad to hear you say that landlords are businessmen because there's something that's been puzzling me today and yesterday. We're continuously hearing that landlords are not repairing their buildings, they're letting them run down, they're not doing what's supposed to be done, yet they can charge fantastic increases. Do you think those two things follow?
Mr Schmidl: They can't charge fantastic increases right now. They will when this law comes in.
Mr Preston: Fine. In the future they'll be able to. Do you really think that you can let your car run down and not do any repairs and get a half-decent trade-in value on it? It's the same corollary. Hey, you're going to let your building run down and yet you're going to be able to charge huge increases. I'm asking you, does that follow? Do those two things go together?
Mr Schmidl: I don't pretend that every landlord is going to do that. Certainly that is not the case. As I said, most landlords are decent people who want a fair return from their property. The reason you have legislation that deals with tenants' rights, with maintenance standards, with rent control, is that there are a small number of unscrupulous people who will take advantage of people. There are some landlords who, quite frankly, don't give a damn about the building; they just want the money out of it. They are the ones who will let their units go to hell in a handbasket and charge whatever they can possibly get for it.
Unfortunately, when you're able to charge whatever you want for something, the price will go up for everyone. Of course, people who can afford it will move into the well-maintained, good units and they will live there. People who can't afford something that someone who's making $40,000 a year or $30,000 a year can afford will end up living in something that is not just expensive but also not decent.
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Mr Wettlaufer: Mr Schmidl, I'd like to follow up this bit about allowing buildings to deteriorate. You blame this on the Harris government. I have to tell you I consider that absolute drivel. We have had rent control for 20 years, and what I have seen is buildings deteriorating over that 20-year period. Why have they deteriorated? It's because landlords, by and large, haven't received a decent return on their equity so that they could afford to maintain their buildings. We have had submissions presented to us to the effect that there is about $10 billion in repairs needed to the apartment stock in Ontario because it is aging and deteriorating.
We talk about the effect on the poor, and I've very concerned about this. Would you believe that Massachusetts and Ontario are similar in their problems?
Mr Schmidl: I really don't know a lot about Massachusetts so I couldn't say yes or no.
Mr Wettlaufer: Massachusetts has had rent control for a long time and they lifted most of the rent controls. They said the effect on the poor was going to be monumental, was going to be severe.
I want to read very quickly --
The Chair: It had better be brief.
Mr Wettlaufer: It will be -- from the New York Times on Saturday, June 13:
"Officials were surprised to find that the poor were not the main group benefiting from rent control. When the Massachusetts Legislature sought to ease the transition by offering short-term extensions for needier tenants, remarkably few households applied and even fewer qualified."
The vast majority of people who were benefiting were less likely to be in families with children. Half of them had higher-status, white-collar jobs and only 10% were elderly.
Mr Schmidl: And you want to know what I have to say about that?
Mr Wettlaufer: Sure.
Mr Schmidl: First, I don't pretend to know anything about the rent control system in Massachusetts, but I honestly don't have a hard time believing that if it was something you had to apply for to a government body of some sort that there were a large number of white-collar people applying, because they themselves would have the education and the background and the comfort level to actually deal with that themselves, as opposed to people who perhaps didn't have a high level of education, a high level of literacy, and certainly weren't real fans of dealing with government in a positive way. I don't know anything about that system, but that's what comes to mind when you read that to me.
The Chair: Thank you, Mr Schmidl. Unfortunately, your time has expired, but we appreciate your coming and giving us your thoughts.
MUSKOKA LEGAL CLINIC
The Chair: The next delegation is the Muskoka Legal Clinic, Jo-Anne Boulding. Good afternoon, Ms Boulding. You may proceed.
Ms Jo-Anne Boulding: Good afternoon. Thank you for the opportunity to speak.
Muskoka Legal Clinic is a community legal clinic serving the entire district of Muskoka. We have offices in both Huntsville and Bracebridge. We practise poverty law, which includes representing tenants in landlord and tenant disputes. We have been involved in all aspects of tenant matters: rent control for individuals as well as whole building reviews; mobile home parks; Ontario Court (General Division) applications and Small Claims Court. We have previously appeared before the standing committee on general government and provided written submissions on changes to the Residential Rent Regulation Act. We also appeared in front of the committee last August and provided written submissions on the government's paper New Directions.
In this paper we will restrict our comments to just a few of the changes proposed in Bill 96. We endorse the submissions of the Legal Clinics' Housing Issues Committee.
Housing is one of the most important decisions in our lives. Recent studies by health officials demonstrate that poor people in this province are spending a greater proportion of their income on housing. In order to feel safe and secure, tenants need to know that this new act will protect them from unlawful eviction and harassment by their landlord and ensure a quick, inexpensive method for requiring the landlord to perform all necessary repairs and maintenance.
Mobile home parks: If any of you are familiar with Muskoka, you know we have quite a few mobile home parks. Housing in this sector is quite different from other residential rental situations. Typically, the house or mobile home is owned by the tenant and the land is rented. As a result, if the tenant is evicted, she or he stands to lose a substantial investment as well as the place where they live. In a land-lease community, the house is fixed to the land. However, the vast majority of mobile homes are not truly mobile any longer. Most of them have additions built on to them that are not intended to be moved.
Residents of these communities are often seniors and low-income persons for whom the mobile home purchase was their only chance at home ownership. In Muskoka there are quite a few mobile home parks, and we have represented a number of residents in the parks.
Purchasers of mobile homes cannot obtain traditional mortgages from the bank and are forced to purchase chattel mortgages, which are not governed by terms as favourable as traditional mortgages. Mobile home owners typically pay much less in land rent than they do in mortgage payments. Rents are traditionally low, as the only thing these tenants are paying for with their rent are the hookup to sewage, water, electrical utilities, maintenance of these, common areas and a fee for the use of the land, including taxes.
When these tenants are evicted, they usually lose their equity in their home. Typically, they cannot afford to pay their mortgage on top of the rent at a new place, and the home is seized. As a result, these tenants are even more vulnerable than other tenants. They will endure the most outrageous abuses from their landlords and the most serious instances of non-repair, just to ensure they are not evicted. Eviction, for these tenants, means ruin.
This unique vulnerability is why they were afforded the protection of the Rental Housing Protection Act. It was quite rightly perceived by the Legislature that tenants of mobile home parks and land-lease communities need extra protection from their landlords' desire to evict them, because more is at stake for these tenants. The RHPA protection has meant that landlords could not use conversion as an excuse to get rid of tenants without the municipality's approval. It has also meant that mobile home parks which would otherwise have been closed have continued. Tenants in these communities cannot afford the loss of the RHPA. It will mean disaster and financial ruin for hundreds of families. We ask the committee to amend Bill 96 so that protection from conversion is continued for mobile home parks and land-lease communities.
Under Bill 96, mobile home park and land-lease community landlords can pass through capital expenses for infrastructure work required by the government. The idea that these landlords should be allowed higher costs through allowances for capital expenditures is an outrage. Many of the reported cases involving mobile home parks and land-lease communities are about tenants trying to get basic services like water or repairs to sewage systems. See, for example, the cases involving Kingsway Villa in Sudbury, Lakehead Trailer Park in Peterborough, Allenview Trailer Park in Huntsville and Trenton Mobile Home Park in Murray township, to name a few. All these cases involved tenants struggling to get basic safe water to drink and a workable sewage system which did not put their health and safety at risk.
In rural Ontario there are a number of mobile home parks where the landlord has ignored public health and environmental regulations for years. They have refused to abide by section 128 of the Landlord and Tenant Act on the specious excuse that repairing a sewage system to code would simply cut into their profit margins too much. No landlord who has abused his or her tenants by allowing disrepair to occur over years of neglect should now be rewarded by being able to obtain higher rent increases than other landlords.
Infrastructure upgrades have not been done in a number of these communities for decades. For those decades, the landlords profited enormously. The Legislature should find a way to force these landlords to pour some of their profits into the upgrades on a systemic and timely basis and not wait for crises to happen, like burst sewage pipes and polluted water systems.
The only question for discussion posited in this section is, what cap should be placed on the special cost pass-through provisions for capital expenditures required by a public agency? There should be no difference in cap moneys for expenditures undertaken by a landlord who wishes to improve the property and those undertaken by a landlord because he is in breach of the law. Why would a Legislature wish to reward the lawbreaker and withhold reward from a progressive landlord who wishes to improve his property without being forced?
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The cap on capital expenditures should not be different in these communities, nor should it vary because of the reason for the expenditure. To do so would be to discriminate against some of the most vulnerable tenants in the province. And remember, in a mobile home, when you are trying to sell your property, you have to be able to tell the incoming buyer what the next land rent will be. If the landlord can jack the land rent up considerably, you may not be able to sell your mobile home because the purchaser can't afford to pay the land rent.
The right for a landlord to remove abandoned homes and their contents from the property after 60 days with a writ of possession is a new provision in this act. There is no need for such an extra provision. Currently, when a mobile home park landlord obtains a writ of possession pursuant to section 113 of the Landlord and Tenant Act, he or she has a right to enforce the writ within seven days, not 60. The writ of possession entitles the landlord to vacant possession of the land. Obviously, if the tenant is unable to move the mobile home, vacant possession of the land means the landlord can remove the trailer pursuant to a normal writ of possession.
Rent control: Bill 96 proposes to remove rent control from residential housing once the current tenant vacates the premises. All tenants lose if sitting tenants are the only ones covered by rent control. There is already a shortage of affordable housing in our area. This major change creates a powerful financial incentive for landlords to evict tenants. The inevitable result is the elimination of true security of tenure and affordable rental housing. With 25% of tenants moving each year, it will not take long for the majority of units in this province to not be covered. There does not appear to be any incentive for the landlord to do necessary repairs. The landlord does, however, have a powerful incentive to have tenants move out.
Most of the tenants that the clinic represents are vulnerable to unscrupulous landlords. I agree that not all landlords are unscrupulous, but unfortunately, the tenants who are in trouble tend to have the wrong kind of landlords. Our clients are single parents, elderly, disabled, and they're on fixed incomes. They're not in a position to freely bargain with their landlords over the price of an apartment. They don't have equal bargaining power with their landlords any more than the rest of us do with our banks, insurance company or grocery store. Their resources are often quite limited, and they are unable to engage in negotiations with the landlord. The recent figures I've seen for the major urban centres of Ontario are less than 0.1% vacancy. We have that same problem in Muskoka. We just don't have homeless people; we give them bus tickets to Toronto because we don't have a single homeless shelter.
In the current rental market in Muskoka, tenants move for various reasons, but the principal ones we encounter are that they are unable to afford their current accommodations and/or the premises are in a state of disrepair. Already too much of poor people's income is allocated to housing, to the detriment of food, clothing and other necessities. If rents are decontrolled, tenants will have a greater need to hold on to the premises they have. Landlords will have a correspondingly increased desire to get them to move. This is a clear recipe for disaster that rent control with its modest yearly increases has been able to avert.
We ask this committee to amend the bill removing the sections on decontrol of rents of vacant units.
Maintenance is a must for tenants. The TPA now allows landlords who have outstanding work orders to collect rent increases. Currently, this is prohibited under the Rent Control Act and has been found to act as a significant incentive to get landlords to make ordered repairs.
Tenants also do not currently make applications to court or rent control every time there's a maintenance or a disrepair problem. They often live with it for a while; they negotiate with their landlords; they withhold rent. Now, with the new act giving a one-year time limitation, tenants will have to go to the tribunal each and every time to preserve their rights and to have the landlord live up to her obligations. Given the financial incentive because of rent control, this will certainly cause unscrupulous landlords to evict tenants or harass them into leaving rather than effect the necessary repairs. Some landlords have already demonstrated a willingness to harass tenants into vacating the premises through illegal means like cutting off the heat or water supply. Currently, we are involved in a case where we have now sought our 10th injunction against the landlord for shutting off electricity and gas. Injunctions can only be received for 10 days at a time and then they have to be renewed. It's been going on for two months and we haven't yet got a trial date.
So there are landlords who are already doing that, and there are parts of the act that could get them charged. It's almost impossible to get them charged. In six years at the clinic, I've managed to get one landlord charged under the provincial offences. He was given a $50 fine. He moved all the tenant's belongings on to the front yard and locked her out in February while she was at bingo. The criminal court saw no reason to fine him, because it was in civil court. When we got to civil court, because he had been charged criminally, the civil judge put absolutely no fine against him at all. In the end, the landlord paid nothing for his clearly illegal behaviour.
Heat, water and power are not luxuries but necessities. The vast majority of rental properties in Muskoka have utilities as a plus. They are not included in the rent, so they have never been covered by rent control and they are often quite costly. The loss of a vital service like heat and water can effectively mean a loss of housing. Many renters are not on town water and a loss of electricity means the loss of a water pump.
One of the most common problems we encounter as advocates for tenants is landlords who do not pay their utilities. The hydro and gas companies disconnect service. They're not interested that the tenant has paid for their utilities in the rent.
The vital services and maintenance standards part of this new act is to protect tenants from losing vital services like heat or electricity if landlords do not pay the bills. If municipalities make vital services bylaws, they can get involved to keep the services going, even though the landlord has not paid the bills. These sections are almost identical to the sections in the Municipal Act. Municipalities have virtually ignored the previous enabling legislation, and there's no reason to believe they will endorse them now.
The problem is that this act does not require municipalities to have vital services bylaws. Further, just in our area of property standards -- many of our communities have passed property standards bylaws -- you cannot get the bylaw officers to get involved in tenant matters. In fact, in one town they suggest you go to town council in order to get an order that the bylaw officer appear at the property. In six years I have never had a work order made out against a landlord, and it isn't for lack of trying. It is very difficult to get a work order made out against a landlord. Now, if the tenant is successful in getting a work order and it isn't obeyed, they have to go the tribunal. Doesn't that seem like a lot of steps for the person who has been injured by the lack of repair having to do all the work? In our community, as in the rest of the province, cutbacks have been made, so it's unlikely that any moneys or personnel will be allocated to vital services or property inspections. They're even cutting back how frequently roads are plowed. Powers without the resources --
The Chair: Ms Boulding, I regret to tell you that you have only two minutes left.
Ms Boulding: Powers without resources or incentive to enforce them are meaningless. We would like you to require that municipalities have property bylaw standards and vital services and enforcement mechanisms for both of them.
Many of my other topics people have spoken to today: security for tenants. We also support the position that either of the parties should be able to change the lock as long as they immediately provide a key to the other party. The tenant's security concerns are just as important as the landlord's.
We are very much against discrimination by allowing the credit rating to show the type of income. Yes, there have been cases that have gone to the Human Rights Commission, and some landlords got very inventive. Instead of following the type, they just came up with the percentage of your income you were allowed to use on housing. As people on social assistance traditionally spend 60% of their income on housing, they could never rent the apartments because the cutoff was 35%. There are other ways that discrimination can be effected without them saying, "You're not getting the apartment because you're on welfare."
We also support the position that all eviction notices should have reasons. It would make the system work much simpler. Everybody would know right up front what the complaints are about their tenancy.
In summary, we ask this committee to review Bill 69 and retain rent control; protect the security and privacy issues of tenants; protect mobile home park residents; provide an inexpensive, quick remedy for tenants with disrepair problems; require municipalities to have appropriate property standards and vital services enforcement; protect tenants from discrimination and harassment; require that landlords provide reasons for all evictions. In other words, live up to the name of the act and protect tenants and retain affordable, good housing stock in this province.
The Chair: Ms Boulding, thank you very much for your presentation today. Unfortunately, we have no time for questions. I'm sure members would like to, but we're out of time. I thank you for coming; you've come a long way. Thank you very much.
The next presenters are the Sudbury Women's Shelter. Not here? We'll pass on them for a moment.
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PETERBOROUGH COMMUNITY LEGAL CENTRE
The Chair: The Peterborough Community Legal Centre, Martha Macfie. Good afternoon, Ms Macfie.
Ms Martha Macfie: Good afternoon. I'm Martha Macfie, and I'm here today on behalf of the Peterborough Community Legal Centre and tenants of Peterborough county. The Peterborough Community Legal Centre is one of 70 community legal clinics across the province. The centre provides legal services and public legal education to low-income residents of Peterborough county. Over 90% of the centre's clients are residential tenants.
When the government announced that it was holding public hearings on Bill 96, many tenants contacted the legal centre to find out more about the bill. They said they hoped Peterborough would be selected, as it was last year for the initial consultation, as one of the locations for hearings because they had concerns they wanted to raise with the committee. When the locations were finally announced, the tenants were upset that Peterborough had not been selected and angry that the government was conducting such a limited consultation.
Mr Chair, I would like to present a petition that has been signed by 246 tenants from the city of Peterborough who could not be here today. The petition asks this government to keep existing rent laws, which provide true protection for tenants, in place. The legal centre and tenants of Peterborough county urge this government to scrap Bill 96. You'll find that petition attached to my written submission.
Why do we need tenant protection? Tenant protection laws have been enacted over the past 25 years by all three parties. These laws were enacted because there was overwhelming evidence that tenants needed government protection from landlords and developers. Tenant protection was deemed necessary because of rent gouging, arbitrary eviction, the loss of rental housing through conversion and persistent failure by landlords to provide safe and well-maintained buildings. Tenant laws have always been written as remedial legislation offering consumer protection to individuals and families in rental accommodation. If Bill 96 becomes law, this government will be remembered as the government that dismantled tenant protection laws in Ontario.
I'd like now to talk a little bit about tenants in Peterborough. A Statistics Canada report, based on 1991 census data, tells us important information about Peterborough tenants. Thirty-three per cent of city of Peterborough residents are tenants. While the city has an overall poverty rate of 17%, tenants as a group have a poverty rate of 37%; 70% of all city of Peterborough residents living below the poverty line are tenants; 40% of disabled residents in Peterborough are tenants, whereas only 31% of non-disabled residents are tenants. Members of visible minorities are also disproportionately represented in the tenant group: 38% of visible minorities are tenants as opposed to only 32% of those not a member of a visible minority. Of the aboriginal population, 66% are tenants and 71% of the aboriginal tenants live below the poverty line. Elderly women are three times more likely to be tenants than their male counterparts and three times more likely to be living below the poverty line. In Peterborough, 64% of female lone-parent families are tenants, and of this group 84% are living below the poverty line.
This government cannot claim that they aren't responsible for any of those figures. With the 22% slashing of the welfare rates in October 1995, this government has added to that burden. These are based on 1991 figures, so these figures would actually be increased directly as a result of this government's action in slashing benefits.
In summary, tenants of Peterborough are some of society's most vulnerable members.
Beyond what the StatsCan data tell us, the legal centre has developed its own data during the eight and a half years it has provided legal services to tenants in Peterborough and during the last two years that it has provided a landlord and tenant court duty counsel program for tenants. The centre is most frequently contacted by tenants, who are young people, often attending high school, Sir Sandford Fleming College and Trent University; low-income families trying to juggle their expenses on incomes derived from social assistance, low-paying jobs and child support, or a combination of all three; native tenants; battered women and their families who are desperately trying to establish new residences in the community; mentally and physically disabled tenants, many in care homes and in rooming-houses; seniors, many in care homes -- Peterborough does happen to have a particularly high senior population; uneducated and illiterate tenants, and of course a lot of the groups I've already previously mentioned are people who have difficulty reading and writing; female-led single-parent families; and trailer park tenants.
Tenants contact the legal centre when they are experiencing legal problems with their tenancy. The two problems we see most frequently are when the landlord is trying to evict the tenant and when the tenant feels that the landlord is failing to properly repair and maintain the rental unit.
While there are many reasons for eviction -- including damage to the premises; conversion to a use other than rental-residential; demolition or repair; and occupation by the landlord -- non-payment of rent is the reason given for eviction in approximately 96% of the centre's cases. Furthermore, approximately 90% of the non-payment-of-rent evictions are economic evictions; in other words, evictions caused by the fact that the tenant has insufficient income to afford the rent being charged.
A December 1996 report by the Peterborough Social Planning Council, which was based on a survey of low-income residents in the city of Peterborough, concluded that, on average, low-income households spend 59% of their monthly income on shelter costs, that households receiving social assistance spend 63% of their income on shelter costs and that sole-support parent households spend 61% of their income on shelter costs.
Therefore, the high rate of economic evictions can be traced to a number of factors, which include: the high level of poverty experienced by Peterborough tenants; the fact that a large number of Peterborough tenants are in receipt of social assistance and that social assistance rates were slashed by this government in October 1995 by 22%; and the inadequate supply of affordable housing in Peterborough.
As I have already indicated, the second-most-common reason that tenants contact the legal centre is that the landlord has failed to repair or maintain the premises. This is a particularly serious problem in Peterborough because much of the rental housing stock is old, single-family homes or town houses that have been converted to rental units.
Good-quality affordable housing for low-income residents in Peterborough is in short supply, and this has left room for unscrupulous slum landlords to take advantage of a captive tenant population in desperate need of shelter. Further exacerbating the situation, the city of Peterborough has a dismal record of enforcing its own property standards, and we've already heard the previous speaker speaking a bit about that.
Now that we know who Peterborough tenants are and we know what their main legal problems are, let's look at Bill 96 and determine whether it protects or rejects tenants.
Remember, the biggest problem Peterborough tenants face is that they cannot afford the rents their landlord charges. However, with Bill 96 rents will increase. This is because Bill 96 gets rid of rent controls by allowing unlimited rent increases whenever a rental unit becomes vacant. With normal turnover rates of 10% to 20% or, as the previous speaker indicated, 25%, it will not take long for rent controls to be gone entirely.
Although rent control will remain in place for tenants while they remain in their unit, this is small comfort if the rent charged when they took over the unit was excessive in the first place. Those tenants living in decent, affordable rental units at the time that Bill 96 becomes law will be sitting targets for eviction by landlords who want to increase the rent. By the way, not many of my clients are living in decent, affordable rental units right now, so they're obviously not going to be living in decent, affordable rental units if this bill becomes law.
Those tenants who are able to remain in their unit may have their rent increased beyond the guideline amount in any event. This is because landlords may apply to the rent tribunal for an increase beyond the guideline if the cost of utilities goes up. However, ironically enough, or possibly predictably enough, the government hasn't put in a provision for tenants to apply for a decrease if those utility costs go down.
As well, the bill permits landlords and tenants to "agree" to a rent increase that is 4% above guideline without having that increase reviewed by the rent tribunal. This provision in the bill encourages landlords to coerce tenants to agree, and I say "agree" because obviously it isn't going to be a true consent to this kind of rent increase.
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Bill 96 eliminates rent controls at the same time the government has stopped building non-profit housing and is seeking to divest itself of responsibility for public housing and at the same time the government has reduced income supports for the most vulnerable and needy members of our community. We conclude that Bill 96 will only increase the incidence of economic eviction.
Shelter is a necessity, but is it a right? The Peterborough Community Legal Centre and tenants in Peterborough say that tenants must have a right to stay in their homes, unless there is good cause for eviction. Tenants should not be evicted without having a chance to defend against the eviction.
Sadly, it is not clear that this government considers shelter to be a necessity. The procedures for eviction that are set out in Bill 96 are designed to facilitate a quick and dirty eviction process. On the other hand, there are very few effective mechanisms by which a tenant can protect himself or herself against eviction.
Under Bill 96, landlords are no longer required to give particulars for the eviction on the notice of termination. This will make it impossible for tenants to defend themselves against eviction. While the bill requires tenants to file their disputes in writing, it does not give sufficient time to do so.
The bill states that service will be deemed to have occurred five days after it is mailed. The five-day deemed service provision means that a tenant will likely receive a notice several days after he or she is "deemed" to have received it. As the tenant must file a dispute within five days of receiving it, and as the tenant will have actually received the notice several days after he or she is deemed to have received it, the tenant will be left with very little time, if any, in which to file a dispute.
Many tenants in the city and county of Peterborough have limited reading and writing skills. These tenants will need help completing their dispute, and this will further delay the filing of their dispute. Under Bill 96, tenants will be denied the opportunity to defend against their landlord's eviction.
In addition to the elimination of rent controls on vacant units, landlords have a second incentive for evicting tenants now under Bill 96. A landlord simply has to conclude that a tenant has vacated, after receiving either an eviction notice or eviction order, and he can -- and this is lifted directly from the bill -- "sell, retain for the landlord's own use or otherwise dispose of" the tenant's property. Furthermore, a landlord is not liable to any person for selling, retaining or disposing of the tenant's property.
Today's Toronto Star carries an article that sets out Housing Minister Al Leach's views on this issue. The articles states, "Leach strongly supported one aspect of the new law which would allow landlords to sell furniture abandoned by tenants who have moved out or been evicted." This is quoting directly from Mr Leach: "'It happens quite often, particularly in low-rent areas where tenants are quite transient,' Leach said yesterday. 'Their furnishings are usually quite modest.'"
By Mr Leach's standards, low-income tenants' furnishings are "quite modest." Why does that not surprise us? But the Peterborough Community Legal Centre and Peterborough tenants have news for Mr Leach. A single mother and her child living on an income of $950 a month cannot afford to replace furniture, appliances, linens, kitchenware and clothes that have been taken by their landlord. And, Mr Leach, low-income people too have belongings of great sentimental value that they don't want their landlords to take.
The Peterborough Community Legal Centre recently represented a tenant whose landlord had wrongly concluded that she had vacated her unit. The landlord kept her furniture and appliances and took the rest of her belongings, including photographs of a dead child, to the dump. Where under current law our client had remedies available to her, such as charging the landlord with illegal distraint and asking a court to grant an injunction and damages, she would have no remedy under Bill 96. Her landlord would act with impunity.
With the elimination of rent controls, security of tenure will be gone. Landlords have a financial incentive, either to get rid of tenants who are living in rent-controlled apartments or illegally increase their rents. Tenants in small communities, such as the city of Peterborough and in rural communities in Peterborough county, will be a captive tenant population with extremely limited choice of rental accommodation. These tenants will be particularly susceptible to eviction and to illegal rents.
The anti-harassment measures in Bill 96 are a clear acknowledgement by this government that the bill creates an incentive for harassment by landlords. We say, why give landlords the incentive to harass tenants in the first place?
As noted above, there is a high proportion of seniors residing in Peterborough, and a large number of those seniors live in care homes in the community. Bill 96 will give care homeowners the right to evict these seniors if a tenant's health changes and the landlord doesn't want to rent to them any longer. This means that seniors and also people with disabilities who live in care homes in Peterborough will have fewer rights than people living in other accommodation.
As discussed above, the quality of rental housing is an important issue for tenants in Peterborough county. So let's look at Bill 96 and see if it ensures that tenants' homes will be adequately maintained and safe.
In fact, Bill 96 eliminates many of the mechanisms which ensure that the rental housing stock is properly maintained. For tenants in Peterborough this is a very serious problem, given that much of the rental housing stock in Peterborough is quite old. Under current law, landlords who violate municipal work orders are not allowed to raise their rents until they fix up their buildings. These orders prohibiting rent increases, or OPRIs, are automatic and do not require initiative by a tenant. As well, under the current system all tenants affected by the disrepair will see their rent frozen, which places further incentive on landlords to quickly make the repairs.
Under Bill 96, only those tenants who apply for a rent reduction will benefit should the rent tribunal order such a reduction. Furthermore, despite stating that maintaining and improving the quality of Ontario's rental housing stock is important, the government has failed in Bill 96 to establish a minimum maintenance standard for the province. The maintenance standard that has been established applies only to areas with no property standards bylaw. This means that a municipality may enact a token property standards bylaw and thus circumvent a provincial standard.
In rural areas like Peterborough, enforcement of property standards has always been problematical, in large part due to lack of municipal resources. Bill 96 establishes a system where enforcement of municipal property standards will be crucial to tenants seeking redress for repair and maintenance problems. However, at the same time that the government is requiring increased services from municipalities, it has slashed funding to and downloaded additional services on municipalities.
We conclude that the government has yet again rejected tenants. Tenants in Peterborough will have no option but to live in unrepaired, dangerous rental units.
The government says that eliminating rent controls will encourage rental housing construction. Developers and housing experts say that the government has it wrong. Under current legislation, new rental housing is exempt for a period of time from rent controls, but despite this exemption new units have not been built.
Exacerbating the problem, the government has cancelled many of its housing programs and funding for new construction of non-profit housing. As well, it plans to download responsibility for public housing to the municipalities.
In my submission I talk briefly about trailer parks and land-lease communities. The previous speaker referred to the Lakehead Trailer Park. I have personal experience with that particular park. There has been a long, 20-year history of repair problems in that community county because the tenants there are under long-term leases. There have been a number of successive owners in that trailer park, and as it stands right now, it looks like things are pretty good, but the concern of course is, now we're looking at Bill 96 and what the tenants of Lakehead Trailer Park are worried about is that the landlord is going to convert that trailer park. A lot of the tenants in that park are seniors who put their life savings into their trailer, and when the landlord converts, a number of owners of trailer parks across this province are going to convert under Bill 96, there will be no place for them to park their trailer and they will have lost their life savings. Once again, Bill 96 rejects tenants.
We conclude that the Tenant Protection Act would be more aptly named the Tenant Rejection Act. The Peterborough Community Legal Centre and tenants in Peterborough county urge this government to scrap the Tenant Rejection Act. Thank you.
The Chair: Ms Macfie, you've come a long way to make your presentation and we thank you for coming. Unfortunately, we are out of time, but thank you for coming and making your presentation, and thank you for speaking ahead of schedule. I appreciate that.
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SUDBURY WOMEN'S CENTRE
The Chair: The next delegation is the Sudbury Women's Centre. The speaker is Kathleen Myre. I'll let you indicate who is with you.
Ms Kathleen Myre: My name is Kathleen Myre. This is Katherine Beddows. This is Marlene Johnson. We are here representing the Sudbury Women's Centre.
The Sudbury Women's Centre is a non-profit organisation dedicated to improving the status of women in northeastern Ontario. The mission of the women's centre is to provide a safe entry point for women in difficulty to access information via our resource library, public education and outreach programs; to offer referrals to the local community and social services network; and to give support in a trusting, non-threatening environment which reflects and respects the woman's expressed needs.
The mandate of the centre is to provide services and support to all women. Over the past 15 years the Sudbury Women's Centre has offered special projects and programs targeting such women's communities as lesbians, youth, physically disabled, rural, poor, immigrant, visible minority and first nations' women. The centre aims to achieve this goal through public education, advocacy and political action.
But the fact is that women lack equality in the workplace, in the home and in society as a whole. Women are paid less than men; women are stereotyped as dependent on others for survival; women are harassed in the workplace; women are violated sexually, physically, psychologically and emotionally; women's reproductive and employment choices are challenged; and most women don't know their rights, don't know where to get help and often are victims of a judicial system run by those who don't know how to assess women's needs.
We recognize that women in our society are oppressed by the very way in which society is currently organized; therefore, we are working towards changing the structures, systems, processes and people who oppress. We are committed to continuing to work together to empower all women in personal life, in the community and in society as a whole.
Bill 96 undermines the protection in the Ontario Human Rights Code for single mothers, people with disabilities and people relying on social assistance. Section 200 of the bill would amend the Ontario Human Rights Code to allow landlords to refuse to rent to women on social assistance and other disadvantaged groups based on income information.
The Sudbury Women's Centre is greatly concerned how the removal of rent controls on re-rented apartments will affect women, specifically, unattached women, young mothers, single mothers, women leaving shelters, women on social assistance and those women relying on benefits to survive. Women already face widespread discrimination in accessing affordable housing, and with the removal of rent control women will be faced with differential pricing, paying significantly more.
In 1993 a United Nations committee reported that it had received evidence of widespread discrimination in housing in Canada against social assistance recipients and low-income households. It recommended improved human rights protection and enforcement. Bill 96 is explicitly in contempt of international human rights commitments made by Ontario. Bill 96 also violates the Canadian Charter of Rights and Freedoms and the Freedom of Information and Protection of Privacy Act by discriminating against the poor.
By authorizing the use of arbitrary affordability rules of thumb such as income criteria, the government of Ontario would effectively be authorizing discrimination against low-income households. It would be doing this even though there is no evidence that using such criteria increases landlords' chances of selecting good tenants. By including income information, Bill 96 will allow landlords to exclude whole classes of people and entire groups currently protected under the Human Rights Code on the basis of their income.
This bill will greatly affect women who are doubly disadvantaged: Women of colour, women with disabilities, immigrant women and first nations' women will be discriminated against because of their appearance, while young women, poor women, single mothers and elderly women will be discriminated against because of their income. Women lack equality in the workplace, in the home and in society, and it is women who will be greatly affected by Bill 96.
Bill 96 will allow a landlord to discriminate against an individual just because they are on government assistance. This illegal practice of discrimination already occurs in excess. The chief commissioner of the Human Rights Commission recently discussed that discrimination against social assistance recipients and the poor is one of the most pressing human rights issues of the decade.
Bill 96 will allow landlords a free-for-all in legally discriminating against individuals based on their income, and it will be women who will face the brunt of the discrimination.
Women currently make up slightly more than half of all people living in Canada. The percentage of women being sole providers for themselves and their families is ever-increasing. In 1991, over 80% of all single-parent families were headed by women, a figure that has remained relatively constant since the 1960s. More and more women are having to provide for their families on their own.
Society itself does not provide women with the opportunities of making the same incomes as men. Women make 72 cents on the dollar as compared to men. It is proven that working women make less money than men and it is also shown that women are discriminated against. On the average, women live longer than men and therefore on less money.
The vast majority of all part-time jobs are held by women. In 1994, 69% of all part-time workers in Canada were female, a figure that has changed little over the past two decades. In 1994, 1.6 million women, 26% of all those with jobs, worked part-time, compared with just 9% of employed men.
Even when employed, women are still largely responsible for looking after their homes and families. In 1992, employed women with a spouse and at least one child under the age of five spent 5.3 hours a day on household activities, including domestic work, primary child care and shopping. This is about two hours more per day than their male counterparts spent on unpaid household work.
Women constitute a particularly large share of the senior population. In 1991, women represented 58% of all people aged 65 and over in Canada. Is it fair that a landlord could refuse to rent to this individual because she is in receipt of social assistance? Perhaps this woman has become a widow and has no choice but to go on social assistance because her husband did not have a great amount of life insurance or pension and therefore social assistance is her only means of survival.
Divorce is another issue that women face. Within Ontario there were 30,718 divorces in 1994.
In 1993, 3% of all women who were married or living common-law reported that they had experienced wife assault at least once during the 12 months prior to the 1993 violence-against-women survey. As well, 6% of women in Canada had been sexually assaulted and 3% had been physically assaulted that year by dates, boyfriends, other known men or strangers.
Unfortunately there is still abuse in today's society. Many women are in need of temporary shelter, yet once they have built up some self-esteem, they are still in need of housing. This bill allows landlords the right to decline rental because of their marital status or prior credit history. In addition, single-parent status or social assistance could also be determining factors. Not only has she received abuse from her partner, but now she'll be discriminated against by society.
In 1993, there were 208 female homicide victims, representing about one third of all homicide victims that year. However, women made up almost two thirds -- 59% -- of all homicide victims killed in a domestic relationship.
There are many homeless people in today's society. Bill 96 could have great repercussions, deeming many more people to become homeless. Whose problem will this be now? It will not be the fault of the individuals who try to seek appropriate housing but will be the fault of the government that has allowed this bill to pass. Because of Bill 96, individuals will be discriminated against by landlords, which in effect will result in an increase in homeless people.
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Bill 96 will not only discriminate against women who are receiving social assistance but will also discriminate against their children. Figures presented from Statistics Canada in 1993 showed that the highest number of people receiving assistance was children of single parents, amounting to 1,108,600. Single parents represent the third-highest group, at 441,500 receiving social assistance, and single people are the second-highest group, being 924,500.
Looking at the figures presented, does the government feel comfortable and willing to implement Bill 96, knowing that not only will this bill be discriminating against women but also the children of society? This bill, if passed, will only make it even more difficult for women to access the necessities of life, which is their human right.
If this is an equal opportunity society, how can Bill 96 go against our rights, as in the Human Rights Code, chapter 53, and especially section 200? It is unjust and irresponsible for the government of Ontario to introduce amendments to the Human Rights Code which would increase the difficulties disadvantaged groups face when trying to find good affordable housing. The government of Ontario must strive to ensure that low-income Ontarians have access to what little affordable rental housing is available. Section 200 of Bill 96 works directly against this.
The Sudbury Women's Centre recommends that income information be deleted from sections 36 and 200 of Bill 96. The Sudbury Women's Centre also recommends that section 200 be amended to clarify that absence or inaccessibility of credit references, credit checks or landlord references will not be used to disadvantage prospective tenants.
A perfect world would ensure equality, justice and freedom for all people. On behalf of the Sudbury Women's Centre, we hope you take our recommendations into account regarding Bill 96.
Mr Marchese: I want to thank all three of you for coming and congratulate you on the work you do. It's not an easy job dealing with the kinds of problems you have to deal with on a daily basis. I think a lot of the times we're sheltered from those problems, I suspect, in ways that are sometimes not helpful to the work you do. But you raise this section 200, which we have discussed. I'm not sure you were here earlier to listen to some --
Ms Myre: No, we weren't.
Mr Marchese: What this government is saying with this section is that landlords now have been asking for income information, and they say that's not illegal. What is illegal, probably, is how you use that information. In other words, you can't discriminate based on that information. But how do we know whether the landlord is discriminating based on how he uses that information? My assumption is that they ask for it in order to use it. They're not going to tell you, but surely in their own mind, if they're asking, they're asking for a purpose. My sense is they are probably using it to discriminate. Is that your sense?
Ms Myre: Yes.
Mr Marchese: This section 200 says they can use the income information but now, with this section, they also say, "But you can't discriminate." The point is that it's supposed to make you feel better that it's in the law that it says you can't use that information to discriminate. Do you now feel better with this section?
Ms Katherine Beddows: Why do they need the information in the first place?
Mr Marchese: These are the questions we ask. If they can use a credit check and credit references, we think it's sufficient. They don't think it's sufficient, because sometimes, they say, you need a little more, so now they've added income information as well.
Ms Myre: Landlords, with Bill 96, can choose not to rent to a person on social assistance because they know they can find somebody else who's not on social assistance to rent it. They find out that information by asking for your income references. I'm not sure what your question is.
Mr Marchese: You'll get to them because they're going to ask you now.
Ms Marlene Johnson: I was in the property management field for many years and I've been in the credit racket for over 40 years. When we ask information on income, it's to be used. We cannot guarantee any individual's actions, and God only knows what goes on in their heads when they make a decision. I have enough trouble discerning my own decisions, let alone anyone else's. It's an impossibility for the government to know what in hell the landlord's going to do if they don't put the checks and balance in the bill itself. It's got to be there for the people who are disadvantaged, the young children who will have no place to live. It's got to be in place.
When I was in the private industry of property management of a 104-unit block many years ago -- that was a big place -- I had to ask information like this, and it was used to discern whether the person could afford the rent. Anything further than that I won't get into, because I did not make final decisions on it; I simply handled that end of it. But I'm telling you, it's asked for a reason and decisions are made based on it. If there are no safeguards from the government we voted in, who the hell's going to do it?
Mrs Munro: I'd like to thank you for coming and also for bringing to us this particular perspective and the research you provided for us today.
I want to go back to this issue because it seems to be the pivotal point of your concern. I'm sorry, I didn't write down the name of the other presenter with you. I want to go back to the issues you raised as someone who made those decisions. Clearly, this is all about trying to create some kind of balance. The person who has to make that rental decision -- at the very end of your presentation, I was unclear about whether you supported the idea of the use of credit checks and tenant references. Could you just clarify your last comments? Were you supporting those ideas for a way of application?
Ms Myre: No, I don't believe we support that. Not if it can be used against women who need affordable housing.
Mrs Munro: What would you suggest as an appropriate way by which a landlord makes a decision?
Ms Myre: I think each landlord should use their own common sense, but if they have a law that can back them up it will make things more difficult. There's no set way to make it perfect for everyone, but making laws so landlords can discriminate in order to make more money doesn't seem right.
Mrs Munro: So you don't accept the notion that it's appropriate to ask for a credit check, for instance, or a tenant history or anything like that?
Ms Myre: I'm not sure how to answer that. In some cases yes, in some cases no. That's why set rules --
Mrs Munro: But you suggested that you want this individual to demonstrate common sense. I think we have to provide a menu of options, of what it is that you would deem appropriate for him to ask. For instance, there are people, particularly some of the women you talk about and advocate for, who don't have a credit rating and who don't have a tenant history; they come to the situation without either of those things. Does that mean they automatically get refused rent, or is there an appropriate menu of options that should be available?
Ms Myre: There should always be more options made available.
Ms Johnson: I think that's your job, not mine. You are the people who want to put the bill in place; so you put the options there. That's why you're consulting with people like us. I'm here, by the way, flying in on this one, right from left field very quickly this afternoon. I realized coming here that perhaps you wanted some things suggested. I would think common sense would dictate what should be done, and it shouldn't be carte blanche for either the landlords or the tenants, I agree, because I've seen many instances where there is abuse of the public dollar.
I appeared in front of the previous government on abuse of health care dollars, yet I don't agree with this government whatsoever. I'm apolitical. I don't believe in any of them; therefore I'm safe, because I don't believe in anything any of them say.
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However, you should have certain criteria with which you judge these things, and when you're going to make a bill or you're going to do any of these things, have the options there. With your political parties and with your opposition and everything else, you debate them out. To ask us to have the options -- we don't know. We deal with the crises on a daily basis, with someone coming in whose lip is split, with a black eye and maybe even a broken arm. I don't know anything political; I don't want to know.
But I do know people and we deal with people, people who are broken in spirit, people who are broken in their hearts, people whose minds are broken, whose pocketbooks are broken, whose banks are broken and their backs are broken. We need the government to have safeguards. We don't want our safety nets taken away. We are not Americans, we're Canadians, and we're known around the world for it.
Mr Gerretsen: Thank you very much for your comments -- you're very plain-speaking, and that's what we really need to hear at this committee level -- and also for your overall presentation on women's issues in general.
No matter how you cut the cake, as you stated in your earlier intervention, the income information being requested is there for a purpose. How it's going to be used later on, or whether it's against or not against human rights, nobody really knows. Let's put that right out front: Nobody can guarantee that, no matter how many sections you put that into.
I have a general question, particularly since you make such an excellent presentation on women's issues in general and where women fit into the total economic life and social life of the country etc. If you could make one change to the current Landlord and Tenant Act or residential tenancy act, what would that be? What do you see as the biggest thing women face over and over again in trying to get accommodation, and if the government could do something about that, what would that be? Do you have any one or two items like that?
Ms Beddows: If a landlord wants to do a reference check, fine; you can ask a tenant for a prior history of where they've rented. It's up to the individual to give it. The landlord can go that way. But as for a credit history, the landlord doesn't need to know that. I would like to see that that is not implemented. That is one of our big arguments, not to put that in. That doesn't need to be in there. They don't need to know the credit history. They'll find out how the tenant is at paying their rent by speaking to the prior landlords, and that should be good enough.
The Chair: Thank you, ladies, for coming this afternoon.
ZULICH ENTERPRISES
The Chair: The final presentation this afternoon is Zulich Enterprises Ltd, Peter Faggioni and Paul Zulich. Close? I'm having an awful time this afternoon. I can't pronounce anybody's name right.
Mr Marchese: When you have to get up at 5 o'clock in the morning, it affects your reading of names.
The Chair: That's true. Don't rub it in.
Mr Paul Zulich: This is Peter Faggioni and I'm Paul Zulich.
The Chair: I wasn't even close. Thank you for coming.
Mr Peter Faggioni: Close enough.
Thank you for the opportunity to address the committee. My name again is Peter Faggioni and with me is Paul Zulich. We are managers with Zulich Enterprises Ltd here in Sudbury.
I would like to start out by saying that Bill 96 overall is a positive change and a step in the right direction. However, Bill 96 is still rent control, although it is less restrictive than the current legislation. In terms of the concerns we have regarding specifics of Bill 96, the Fair Rental Policy Organization's statement to you on June 19, 1997, addresses our concerns and won't be repeated here.
At a time where governments are downsizing and moving towards being more efficient in the private sector, we feel that in the rent control area we are maintaining the status quo. We urge the committee to move towards a reduction in control legislation and government red tape.
Mr Zulich: As far as maintaining the status quo is concerned, we have 1,000 units here in Sudbury, and we haven't increased the rents for three years. Market factors really control what we do and how we do it. In the big scope, deregulation is the way we want to go. It's the market forces that dictate what rents should be.
The Chair: Short and concise. Any questions from the government members?
Mr Gilchrist: Thank you both for coming forward today. If I can just follow up on your last comment, Mr Zulich, we agree that in a perfect world market forces would be a determinant. Comments have been made by people earlier this morning that they just don't believe that if the situation turned around in Sudbury and the vacancy rate went from being the highest in Ontario to, let's say, the lowest, the marketplace would respond.
I invite your personal comment here, not to put you on the spot overtly. But if people have got into the landlording business as a business, it would stand to reason that if they had the resources, they would want to grow that business. It's no different when you buy a car dealership; you would want to become a big car dealership. If you buy a hardware store, you want to grow that business. I don't think any reasonable person would suggest that landlords get into it to make it smaller; they would get into it to be as good or bigger. If the ability was there, in a free market system, to build and deliver more apartment buildings when the vacancy rate went down, would your company do that?
Mr Zulich: As a matter of fact, we have. About five years ago now, when the market was tight in Sudbury, we developed quite a few properties, as well as a 100-unit apartment building in the south end of Sudbury. As we were in the construction phase, vacancies started to come into play. We had to absorb that. That would spur new growth. If the vacancy rate was zero, there would be upward pressure on the rents, and landlords and developers would be motivated towards developing new product. We have done so in the past, and we will continue to do so once the market tightens up.
Mr Gilchrist: Would it be safe to say that here in Sudbury, as in other communities that have a high vacancy rate and have some economic problems like that, there's a correlation with the root cause of poverty, namely, high unemployment? Has it been your experience -- I appreciate your giving that anecdote about the turnaround -- that there has been a correlation between the downturn in businesses here in Sudbury, therefore laying off some of the workforce, and a decline in the housing market?
Mr Zulich: I'm not a demographic expert, but there's no question that it would stand to reason that the vacancy rate is partly attributable to the loss of jobs, the market itself in Sudbury, and the downsizing in government, no question.
Mr Gilchrist: Will the creation of over 1,000 full-time jobs a day in the last five months in this province, that many more people in Ontario going from having, in many cases, no income or maybe government assistance to having a good, full-time job, have an impact on people's ability to pay market rent?
Mr Zulich: I would think so.
Mr Gilchrist: For example, in Nepean in the last month Northern Telecom announced 5,000 more jobs and Newbridge, another computer peripheral company, announced 4,100 jobs. We had to go back to 1962 to find the last time somebody announced 5,000 jobs in one day in Ontario. Would it be likely, on the assumption that 9,100 more people show up and claim those jobs, that somebody in Nepean is now going to be building more apartments and more single-family homes?
Mr Zulich: Of course. It stands to reason. Coming into Sudbury we have the College Boreal, which is just completed; it's going to be opening up in the fall. That has tightened the market substantially in that sector of our community. We have apartment buildings in that area where we had substantial vacancies, but with the influx of so many people and so many students it has tightened the market in that respect. The property values in that area, as a matter of fact, have risen because of the possibility of renting to the students and having a stable market there for landlords to rent to. No question that it would help.
Mr Faggioni: If an employer or agencies decide to hire 9,000 people or 5,000 people, we would also want to calculate the existing rental stock available prior to one undertaking other developments.
Mr Gilchrist: You'd apply reasonable business practices, no different from any other business.
Mr Faggioni: Absolutely.
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Mr Gerretsen: How many new units did you actually build five years ago, that you just talked about?
Mr Faggioni: One hundred and seven.
Mr Gerretsen: At that time we had the rental law in operation that was passed by the NDP. Did that have any effect on how many units you were going to build?
Mr Zulich: We performed our own feasibility study and found a niche in the south end market for high-end apartments. With the legislation in place at that time, rent controls were not applied to brand-new buildings, so we were able to make a spectacular building and charge the rent it merited.
Mr Gerretsen: Rent control really hasn't been applied to new buildings since about 1976.
Interjection.
Mr Gerretsen: Well, 1976 or whatever it was, but it's been a long time, anyway. We keep hearing from the government that the reason new rental accommodation isn't coming onstream is because of the rent control legislation that's in effect from time to time, yet the new buildings are free of rent control. I don't want you to get political, because you've been very forthright in your statements, but would you agree with me that since new buildings are not subject to rent control and haven't been for over 20 years, there's absolutely no relationship between the new buildings you build and the rent control legislation in effect at any one time?
Mr Zulich: I'm not sure what you're asking. You'll have to repeat that for me.
Interjection.
Mr Gerretsen: Excuse me. You had your time the whole day. Would you let somebody else have a minute?
Since new buildings are not subject to rent control, would you agree with me that there is no relationship between the existing rent control legislation and the building of new units?
Mr Zulich: No question that there is a correlation, because once you rent an apartment, no matter what the rent is, it falls under rent control.
Mr Gilchrist: Oops, forgot that one, didn't you, John?
The Chair: Mr Gerretsen is right, Mr Gilchrist. You shouldn't be interrupting.
Mr Gilchrist: You're right, Chair, absolutely.
Mr Zulich: Once the rent is stated and you accept the tenants, the unit falls under rent control and is controlled from that point forward.
Mr Gerretsen: So if you get rid of rent control, you get higher rents? That's what you want. You want to get higher rents.
Mr Zulich: I don't understand again what you're getting at.
Mr Faggioni: Why would we want higher rents?
Mr Gerretsen: You basically want to get rid of rent control. That was your premise: Get rid of rent control and you'd be a lot happier.
Mr Zulich: Absolutely.
Mr Gerretsen: The reason is that if you get rid of rent control, you get higher rents.
Mr Zulich: We would have market conditions dictate what the rents are.
Mr Gerretsen: And they'd be higher than what they are now.
Mr Zulich: Rent control now gives us a legal maximum. We're not even close to that, because the market dictates exactly what our rents should be. With that in mind, when there is no vacancy, new property will be developed and there will be more units on the market.
Mr Faggioni: Why would you say that rental rates would increase if there was no rent control?
Mr Gerretsen: I'm asking you whether they would increase.
Mr Faggioni: You specifically said that if there was no rent control, rental rates would increase. You said that.
Mr Gerretsen: That's right.
Mr Faggioni: Why would you say that?
Mr Gerretsen: I'm going on the assumption that that's the assumption that you're going on. Why would you be against rent control otherwise?
Mr Faggioni: We're just against control, period. We believe private industry or business or market forces will dictate what the rent will be. Going back to what you said earlier, back to your comment, rents have in fact decreased because the supply of rental accommodation is excessive. It's between 6% and 7% in certain sectors of Sudbury. I'm specifically limiting my comments to Sudbury. We have lowered rent on numerous buildings. It's fair to say that, with or without rent control, the market will dictate what the rental rate will be.
Mr Marchese: Thank you very much, Mr Faggioni, Mr Zulich. There are different parties here, of course. The New Democratic Party, which we represent, talks about greater controls, because we believe in that; we believe we need to regulate the free market system that you love and that they over there love. The Liberals are somewhere in between; it depends on the times.
I wanted to ask you several questions about rent control. One of the questions has been asked already, that is, on the whole issue of rent control, some of them argue that if you get rid of rent controls that's going to be an incentive for you to build. Is that true? If we get rid of rent control, which is in part what this bill does -- not completely, but in part -- is that going to help you to build?
Mr Zulich: Not today, because of the vacancy, but in time, as that vacancy is absorbed, yes, it will.
Mr Marchese: Not today, but sometime in the future?
Mr Zulich: Yes.
Mr Marchese: And you link that to the vacancy rate. When it's zero, you say you're likely to build because there's going to be a demand, presumably.
Mr Zulich: Right now we have a vacancy in Sudbury because of the massive influx of cooperatives that were built in the city of Sudbury. That's where our vacancy originated. There was some new development, but higher-end development, because that's what the market was demanding. The lower-end development came in and stole a lot of our tenants from our older buildings, our three-storey walkup buildings. That's what contributed to the vacancy rate, as well as the other facts.
Mr Marchese: You're not the first one to say it. In fact, a number of other people who build rental buildings have been saying that they saw the government's building as competition. I think they agree with you. I'm not sure; they'll have to speak for themselves. But I don't agree with that, because part of the problem is that unless the government builds affordable housing, no one else is going to build it; that's the problem. Do you agree with that?
Mr Zulich: I think part of the root of that problem was the rent controls in the first place.
Mr Marchese: We don't think there's a connection with that. In fact, there is no logical connection I've seen, other than hearsay from them. There is no evidence whatsoever that that is the case.
Mr Zulich: With rent controls, your rent is low so your vacancies are low, because no one can build new units. Do you follow me so far?
Mr Marchese: Absolutely, but let me make the other point. Under our existing law -- there was rent review with the Liberals, where rent increases went anywhere from zero to 110% at times. We brought in rent control --
Mr Tom Froese (St Catharines-Brock): Is that right, 110%?
Mr Marchese: It is very right, absolutely right. Under rent control there were limits imposed on that, but you still had a maximum, which some people objected to, but we gave in to that. That has allowed many of you guys to increase rents to a maximum which is very high in many cases. Would you agree with that?
Mr Zulich: Yes.
Mr Marchese: Okay. That's under rent control.
Mr Zulich: What other industry has a guaranteed increase in its income stream, on an annual basis, with rent control? And because of rent control, you never have a vacancy.
Mr Marchese: I'm not sure it's because of rent control that you never have a vacancy.
Mr Zulich: It has stifled development.
Mr Marchese: I'm not sure, by the way, that because of the building of cooperatives you all of a sudden have a vacancy. The reason you have a vacancy, in my view, in many cases is that many people can't afford the rates. It's in this city as many other cities. Some of these people are going back with their families or doubling up, as people say, because they can't afford it. You can blame it on co-ops or social housing or non-profit housing, but I think there are other economic factors at work.
I want to raise one more point.
The Chair: Very briefly.
Mr Marchese: Yes. There's a fellow they hired to do a study for them; he's an economist. He says the reason some of you guys are not building is because there is an economic gap between what it costs you to build and what people can afford. That's why you're not building. The point I make and that many others make is that if people could afford it in terms of supply and demand, you'd be building. The reason you're not building is that people can't afford to pay what you'd need to build. Would you agree with that?
Mr Zulich: Agreed. Before we'd build, we'd buy something that's existing. It's cheaper to buy something existing and keeping the rents at that level, and the reason the rents are at that level is because of rent control -- not economically feasible to build.
Mr Marchese: Otherwise they'd go up.
The Chair: That's it, Mr Marchese. It's the end of the day. Gentlemen, for such a brief presentation you had a lot of questions. Thank you for being cooperative and providing us with your thoughts. This meeting is adjourned to Ottawa at the Westin Hotel tomorrow morning at 8:30 am.
The committee adjourned at 1641.