Transcription du comité 1996-août-26 | Assemblée législative de l'Ontario

The Chair (Mr Jack Carroll): Good morning, everyone. Welcome to our committee hearings on proposed changes to the rent control legislation in the province of Ontario. We're delighted to be here in Thunder Bay on a beautiful summer morning.

I must make a comment about the dress of some of our people, which will get more outlandish probably when a couple more of them arrive, but Air Ontario, in its inimitable fashion, lost some of the luggage last night -- on a charter, no less. Somebody said it had something to do with the fact that the pilot was a lady, but I'm sure that person is --

Mrs Lyn McLeod (Fort William): Oh, bad start, Jack.

The Chair: So we apologize for that. They will get dressed up more appropriately as the day goes on.

UNITED TENANTS OF ONTARIO

The Chair: We're here to hear what some people in Thunder Bay have to say about the proposed changes and our first group presenting this morning is Gerry Kucherka, representing the United Tenants of Ontario. You have 20 minutes to use whatever way you see fit. Should you allow some time for questions at the end, we rotate the questions and we would begin with the official opposition, the Liberals. The floor is yours, sir.

Mr Gerry Kucherka: United Tenants of Ontario is one of two bodies that have over the past few years represented tenants in Ontario. Our basic philosophy or basic values are that every individual in Ontario has a right to affordable and safe housing. We see the dismantling of the current protections as being a direct threat to that value and have grave concerns for the future of a lot of people renting in Ontario at this time.

In looking over the information over the last few days to see what I was going to say today, I decided to come from strictly a value base and ignore market arguments about what will work and what will not work because my qualifications in economics are restricted to graduate school. When I was there, they told me that economics was more of a descriptive science than a predictive one, so I'm going to leave that stuff alone and leave it for you guys.

Policy is value driven. There's been a dramatic shift in those values recently and it's being reflected in statements being made in the press and changes being made to other pieces of legislation in the province. The situation for renters in Ontario is no different.

This is nowhere more evident than in the statements made during a recent meeting with the Minister of Municipal Affairs and Housing. Our group met with the Minister of Housing and he made a couple of statements which caused us some grave concern, to say the least.

One of the statements he made was that his knowledge of housing can fit on the head of a pin and leave room for the Lord's Prayer. Some people think that might be generous. The other statement he made was that the province is getting out of the business of subsidizing ghettos. Both these statements are completely opposite to the values that we have.

I said earlier that there have been two bodies in the province representing tenants. That was UTOO, and the other one used to be the province of Ontario. Now there is just UTOO. The province is helping us out by defunding us and we're in the midst of surrendering our charter, so within the next month or two there will be no bodies provincially representing tenants. Where this is going to leave people as they try to find affordable safe housing I don't know.

Thunder Bay has roughly a 6% vacancy rate. At this time it's fluctuating and it's been like that for quite some time. That vacancy rate has not produced a reduction in rents. The rents have stayed roughly at the same spot. So it can only be anticipated that if rent control is removed, the rents will go up rather than follow supply and demand.

This is causing direct human suffering for people struggling under restraints in other areas. Children are going to be facing reduced food. Shelter is going to be a problem. What the final outcome will be our organization isn't sure, other than that we feel that homelessness is going to be on the increase and that people are going to be compromising themselves in where they live simply to have a place to live.

We produce a provincial newsletter and we'd requested people to send in some information, some letters about how they felt about the changes that are happening or believed to be happening. One young woman sent in a letter and I'd like to take a moment just to read it. She's entitled it, "A Lot has Changed."

"A lot has changed over the last few months. I've never felt so hopeless. I can't seem to even drag myself to school any more. I need to keep on trying for the kids, but I don't know how. My benefits have been cut and there isn't enough to go around. I'm going to be thrown out of my apartment after Christmas. I just can't afford it any more. Where am I going to go? Does anyone care? My worker told me that she knows that it isn't fair, but there isn't anything she can do. I don't understand.

"Neighbours who used to be friendly seem to just look down on me now. `Get a job,' some of them say. Where? I don't know where I'm going to go. I always followed the rules. It was important to me. My grandma raised me and taught me that the most important thing was to keep your head high and to be honest and kind to others. I have tried, but I stole yesterday -- food. When I got it home, I ate it as fast as I could and after I threw up, Jennifer asked me what was wrong and I yelled at her and then I cried.

"I've been doing a lot of crying. I don't know how to get myself together. When you asked me to write something for your newsletter, you probably expected something different. I want to know how you are going to help me. I already know that things are changing, I'm living them. I don't need talk, I don't need sympathy; I need a way out. What are you going to do? I can't wait much longer."

I guess from UTOO's perspective, what are you going to do? Are you going to be putting more people out on the streets? Are you going to be arguing the market theory to justify suffering, or is it going to be another case where people are just going to hurt?

That's about as simple as I can keep it. I can argue around in circles on values for another five or 10 minutes. I think that sums up our position. If anybody has questions, they can ask questions.

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Mrs McLeod: Maybe the first question in Thunder Bay -- as people come into this community or look at this community, they see rental vacancy rates in the order of about 6%. As vacancy rates across the province go, you'd look at Thunder Bay and say: "They shouldn't really be having any problems. Rent control shouldn't be an issue here. Finding affordable housing shouldn't be an issue here." I think you know it is. I'd like you just to say, with a vacancy rate of 6% in a community, what makes it so hard to still find affordable housing?

Mr Kucherka: The vacancy rate is kind of deceiving. The rental market is stratified and a large percentage of those vacancies are at apartments targeting people with higher incomes. For the lower-priced apartments, the vacancy rate most likely is maybe 1% or 2% and it becomes a struggle. Some of the rules around assistance are also a problem in finding an apartment, because it becomes more difficult to find a landlord, at times, willing to accept you. You wind up sometimes falling prey to people who prey on people on assistance, if that makes sense. First and last -- these are all obvious things.

The direct answer to your question is that the market is stratified, that vacancies vary at different price ranges in apartments.

Mrs McLeod: Does it concern you, then -- you may consider this a leading question, but so be it -- that with the rent control proposals, people who are now in an apartment which they may feel is affordable, if they leave that apartment and look for another one, could be facing significantly higher rents? Does the market become more stratified?

Mr Kucherka: Yes. That's obvious. That's the whole purpose of changing the rent control and the protections, so that can happen. In that slippage there will be more money, more profits made for the landlords. That's the only purpose I can see to what's happening here.

Mr Rosario Marchese (Fort York): Thank you for your presentation. Do you see anything in this so-called Tenant Protection Act that protects tenants?

Mr Kucherka: No.

Mr Marchese: You asked a very good question, and I paraphrased it, but it's a fair thing when we talk about value and rights. The question that comes to my mind always is, who protects those who are most vulnerable? The point is that affordable housing is a continuing great need. It's not going away. If governments don't worry about them, who's going to worry about them? Do you think the private sector, the market, is going to worry about affordable housing?

Mr Kucherka: Traditionally, I don't think the market worries about values too much. No, what has happened is that the organizations which have traditionally protected tenants have been defunded and are falling by the wayside right now. UTOO is a very graphic example. When you have a minister sitting around comparing his knowledge to the head of a pin, it's not very promising for tenants.

Mr Marchese: The package, as I read it, offers little for tenants.

Mr Kucherka: There are allusions to a conflict resolution process, maybe a secretariat being set up or an organization to look after disputes between tenants and landlords, but there are no specifics. How they would make that workable on a province-wide level, I have no idea. It's not practical.

Mr Marchese: The other question that quickly comes to mind is, who's going to help the tenants when they defund organizations like yours and they cut funding for legal aid that helps, ordinarily, people like tenants who are not looking so good in life?

Mr Kucherka: That's a good question. They can defund organizations. The people still stick around. We're not dying. We're looking at presently setting up a province-wide landlord registry to register landlords and to have a reference base for tenants, which is a small step. As far as organized representation is concerned, there are some federations in Toronto that will still be around, but for how long I don't know.

Mr Bart Maves (Niagara Falls): Good morning, Mr Kucherka. In Toronto last week we had a lot of discussion about the fact that there are good landlords and bad landlords and good tenants and bad tenants. Several witnesses talked about the state of disrepair of a lot of the units. Do you have that problem in Thunder Bay?

Mr Kucherka: It varies. In Thunder Bay there are approximately three or four large holding companies that are running some rental units and it is an issue in some of their units in Kenora in particular. In Thunder Bay, it's a hit and miss thing. The rental situation in Thunder Bay is much different than Toronto. There are a lot more standalone apartments, a larger proportion of the renters are in those types of situations. It's not quite the same. I think probably in Toronto they're talking about the public housing situation more than rental units, or am I wrong here?

Mr Maves: No, it's usually some of the private sector older buildings, built in the 1960s and 1970s. Actually, I think the public sector buildings are in quite good shape there.

Actually I think 75% of apartments are in units of four or less, or something like that. Even in Toronto, it's quite a large number, but you're right, there are a lot more major apartment complexes in Toronto.

I'm wondering, then, with that in mind, the maintenance provisions we have in the discussion paper, are much tighter on landlords and call for offences. Would they be of much use to the renters in Thunder Bay?

Mr Kucherka: Depending on how they're applied and monitored. It's one thing to have guidelines or a structure, and the other thing is how it is going to be monitored and policed. I don't have much faith in that happening. I have to reflect back to what I said earlier. Policy is based on value. If the value isn't there, the policy is not going to go that way. It's simple. It's not magic or anything.

Mr Ernie Hardeman (Oxford): Going back to the vacancy rate in Thunder Bay and the fact that such a high vacancy rate does not have the landlords bidding against each other to try and rent their units, it would seem if I owned a building, which I don't, that I would rather have a lower rent than no rent at all. It would seem a competitive edge there. Have you got any idea in statistics how many of your units in Thunder Bay now are actually at maximum allowable market rent?

Mr Kucherka: No, I don't have that. I was discussing this with someone else recently, and there's an interaction between the market and demand and there are also benefits to having empty units. Empty units can be used as write-offs and can be used to offset money being made in other areas, so it's not strictly supply and demand there. As you're probably aware, business is always looking for that bottom line, and if it's better for you to keep a place open rather than reducing the rent, then you keep it open.

The Chair: Thank you, Mr Kucherka. We appreciate your input into our process.

THUNDER BAY ACCESS TO PERMANENT HOUSING COMMITTEE -- LAKEHEAD SOCIAL PLANNING COUNCIL

The Chair: Our next presenter is from the Thunder Bay Access to Permanent Housing Committee of the Lakehead Social Planning Council, Brenda Reimer. Welcome to our committee.

Ms Reimer: As indicated, I'm the chairperson of the Thunder Bay Access to Permanent Housing Committee. This committee was formed in 1988 as part of an initiative of the Ministry of Community and Social Services and the Ministry of Housing at that time. Their challenge to communities was to form committees to come up with some creative solutions to find more affordable permanent housing for their citizens.

In Thunder Bay, our committee over the years since 1988 has included citizens concerned about housing, landlords, tenants, people from the various government agencies, service providers and virtually anyone concerned about adequate, accessible, affordable housing. Our goals are to advocate and lobby for more adequate, accessible and affordable housing; to assist individuals with limited resources to locate permanent, adequate, accessible and affordable housing; to provide public education on affordable housing issues; and to provide a network for those concerned with housing needs and issues.

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I thank you for the opportunity to participate in this public consultation. My comments will be made in the context of our goals, so I will be looking at the proposed changes as they affect low-income people, those people in our community who are very much in need of housing.

Our first concern is one that I'm sure you've heard from many groups, that the protection of the tenant but not the unit will drive rents up. We don't believe it will solve the housing problems for the people that we work with. In 1990, we did a report to city council. At that time, the vacancy rate in Thunder Bay was 0.9%, and there were 1,377 households on a waiting list for public housing through the Thunder Bay District Housing Authority. That's a fairly combined waiting list. About 57% of the people on that list were classed as being in desperate need or in immediate need of housing.

Today we have a 6.4% vacancy rate, so one would assume that the number of people on the list for housing through the housing authority would have decreased. In fact, it has risen considerably and now stands at 1,658 households, and 75% of the people on that list are now considered to be in desperate need, whereas in 1990 it was a smaller list and only 57%. So despite the higher vacancy rate, the vacancies are not at the affordable end of the scale. These figures, I think, deal with the two aspects of housing; one is supply, but the other is affordability. We have the supply, but it's not affordable for the people who need it.

We feel that there are a number of factors in these proposed changes that particularly will affect low-income people adversely; one of them is that low-income people, because of their circumstances, because of the fact that they are existing on a low income, because many of them have related problems in their lives, statistically move much more often than other people. So their rent is going to be going up much more often, because no longer will the units be protected, but every time they move they will be facing another increase.

A second way in which we feel that low-income people will be perhaps adversely affected by the proposed changes is that presently we're finding that individuals who need to find housing in this community, and who have only a disability allowance or other form of social assistance, cannot find an apartment they can afford. If they're going to live in an apartment, they have to do it by sharing the rent with someone else. Some of our agencies that are helping people move out of institutional situations into the community are using this creative solution of trying to pair two people together so that the rent on a small apartment then becomes affordable.

But with these changes, what will happen if, for one reason or another, that original pairing changes and one tenant moves out? When a new tenant moves in, will their half of the rent then go up? What about the changes that are being suggested to sublets? If there's a change, will then the landlord say, "No, I agreed to rent to these two people originally, but if there's a change, I'm going to have some control over the sublet"? It's very difficult, as it is, to find housing for people or to help people find their housing. The kind of people I'm talking about here would be people with developmental disabilities, for example, moving out of small group homes and into the community. So these proposed changes may create some very difficult situations for low-income people.

You probably also will have heard from other people that we're worried that the proposed changes will put tenants in a very vulnerable situation versus harassment. We're pleased to see that this has been taken into account and measures have been suggested, but harassment is a very grey area, and I think it will be very difficult to determine. Landlords who want to vacate a unit so they can raise the rent on it would be able to find ways of making it very difficult for people to stay without it being able to be proven as being absolute harassment. I think that's a problem.

I think that tenants, particularly low-income tenants, are also often extremely unsure of themselves, extremely unsure of their rights. I think they do now and they would continue to put up with a great many things rather than risk losing the housing they have already or, alternatively, move right out even if they don't have something as good or better to go to rather than try to raise complaints against the landlord and expect that anything will happen about those complaints. In that whole area of the tenant being protected rather than the unit rent being protected, our feeling would be, for the reasons I've outlined, particularly for low-income tenants, this will not serve to be protection for them.

Our second area of concern is property standards, because as we go around the table at our meetings, we become very aware that there's a huge backlog in our municipality, and I expect in other municipalities as well, in being able to keep up with property standards complaints. A second problem here is that more responsibility is going to be given to the municipality, but at the same time municipalities are experiencing considerable cuts to their moneys, so it's expecting them to do more with less. I'm not sure it's realistic. If, as is suggested, landlords don't make repairs and the city comes in and does it and then puts it on the tax bill, will this not go directly back to the tenants, because taxes are covered as part of their rent? That doesn't seem fair. So we have some concerns in that area.

Our next area of concern would be the repeal of the Rental Housing Protection Act. Because a significant number of people on low income are renters, they need decent housing. The realities right now are that they simply don't have the money to meet market value rents, but they still have to live somewhere. It would seem that it's virtually impossible for the private sector to build housing at a cost that they can make a profit on it and still make it affordable to a certain group of people, the people at the lowest end of the income scale. But nevertheless it's not acceptable to have those people simply living on the streets. It's not acceptable to have those people living in emergency shelter type of situations. Emergency shelters are for emergencies; that's not long-term, affordable housing.

We're concerned that part of the job of government is to make sure there is some kind of housing available to people at the lowest income level. We feel that if the Rental Housing Protection Act is repealed, then there still has to be some other mechanism in place to ensure there is housing for people at the lowest income level.

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Many members of the Thunder Bay Access to Permanent Housing Committee serve clients who are in need of supportive or supported housing. We're aware their particular concerns have been forwarded to you in a brief by the Ontario Non-Profit Housing Association. We would like to underscore their request that perhaps a separate section of the Landlord and Tenant Act be developed to address the unique needs of both tenants and landlords in supportive and supported housing situations.

My last point is that on behalf of the Thunder Bay Access to Permanent Housing Committee we request that you look at the proposed changes in the tenant protection package in the context of all the other changes that are being brought about by the present government. There's no doubt, we feel, that if these proposed changes go through, one of the effects will be to drive rents up. In a sense, that is what they're supposed to do to encourage landlords to invest. However, at the next hotel down the road this morning, labour standards, employment standards are under discussion, and one of the results of those discussions or proposed changes is likely to be to drive wages down for people at the lower end of the scale, and perhaps to get rid of the minimum wage altogether.

Hundreds of government and public sector service workers in our community are threatened with job loss or early retirement. People are starting to sell their more expensive homes and move down to something less expensive.

Hospital restructuring has resulted in fewer people being housed in institutions and more people being housed in the community. This trend is going to continue, and these people moving out of institutions do not have the rents to pay rental at the high end of the scale. Some of them are extremely vulnerable people.

We see, for many different reasons, more people having less money available to cover the cost of the housing they need. In many cases, people are paying far more than the 30% of income that is the target figure of what should be paid for rent. We see a housing market that's unable to respond to this need, unable to supply affordable units and still make a profit.

In this context, if you look at this whole wide picture, then I think the proposed changes being discussed do not strike a balance. They may strike a balance in your mind between tenant and landlord, but they do not strike a balance in terms of the needs of the community. They may end up offering high-end renters in Toronto more choice in housing, but they will certainly make it much more difficult for people on moderate or low incomes, including people in need of supportive and supported housing, to find any decent affordable housing at all. Where is the balance for these people and what are their options?

Mr Marchese: Ms Reimer, your worries are well founded, in my estimation, and one of the things I try to talk about is giving a wider context of things, which I think you've offered. The problem as I see it is this: The Conservative government says, "We're not going to build housing any more." The kind of housing we built was at the low end -- the kinds of worries and concerns you were raising.

The rental housing protection will be a terrible thing, we argue, because it will get rid of rental accommodation. Even the condominium association is worried because there is a glut now and they're worried a lot of that stuff will become condominiums. So they're concerned about that.

If the private sector as well is not building -- they've had a year and over the year they're not building in this climate because they want a big, long red carpet to build -- what will happen to the needy people you just talked about, those at the low end?

Ms Reimer: That's exactly my concern.

Mr Marchese: The other concern you talked about, harassment, is very difficult. Although they've strengthened that whole area of harassment, your point is well taken. It's a grey area and most people will talk about, "How do you prove that?" Although it appears they're getting protection from that, it's a very difficult thing to prove. I want to agree with your statement, and you have a lot more experience than I do, and we're worried about the uneven relationship between tenant and landlord.

Mr Hardeman: Thank you for your presentation. I still have a little question on the vacancy rate. If we go back in time, rent control was brought in because there was a very low vacancy rate in the province and landlords seemed to have the ability to charge whatever they felt was an appropriate return on their investment, because of the inability to find other accommodations. It's been in for a number of years. The vacancy rate in those areas we're having the problem with is still very low, so the system hasn't been working. If that's the case, I find it hard to understand why, in an area where we have over 6% vacancy rate, controlling the top of the system, or the allowable rent, would have an impact. It seems to me we should still have a market-driven rental policy in areas such as this.

Your presentation deals with the opposite to that, that that's not the case, that we have an inability to pay rather than a lack of accommodation. Do you think it's appropriate the housing industry should cover that inability to pay, that in fact we should have a system where the housing has to be provided at a level people can afford as opposed to having another way of dealing with that shortcoming?

Ms Reimer: I believe there has to be housing that's available, and adequate housing that's available at all levels. I agree with you that this makes a difficult situation. I don't expect somebody who builds apartment buildings to make a profit to build a new apartment building here and then rent it out at rents that are not going to give them that profit. But I would also argue that the government of the province has a responsibility to those people who do not have enough income to pay for units in that new apartment building to be able to find adequate, decent housing that's fit to live in at some level within the community. I think that at the present time this is becoming more and more difficult.

Ten years ago, the vacancy rate in Thunder Bay was almost zero. It had been that way historically for a long time. It's only in recent years that condominiums have become popular and more of those have been built and some new rental units have gone up. We've historically been a home ownership community at a higher than average level as opposed to renters. This is something else that's changed over the last five or six years.

Mrs McLeod: I was caught up with your response to Mr Hardeman, which I think underscores what you said in your presentation, which is it's a combination of initiatives that are compounding the problem we're seeing right now. But I want to come back to something else, a point you made in your presentation, and that was the fact that there are 1,658 families, households on a waiting list for housing that they can afford right now even though we have a vacancy rate of 6.5%. It seems to me that's where the theory that a vacancy rate based on market conditions is going to solve all the housing problems -- the waiting list, as you said, has gone to a higher level even though the vacancy rate is higher. That must be because of what our first presenter was saying of the stratified nature of the market here, that it's high-end rental housing that's being built --

Ms Reimer: Exactly.

Mrs McLeod: -- that it's not low-end housing. You said 75% of those 1,600-plus households were in desperate situations. Could you say where they are housed now.

Ms Reimer: I think many of them you would find are housed in overcrowded conditions where you'll have two families sharing a house that's really only suitable for one, or an apartment, as the case may be. You have families housed inappropriately, say where there's been marriage breakup and either the husband or wife and the small children will go back and be living in the parents' basement, which really isn't satisfactory for either generation. You have people who are moving from one room to another at a fairly frequent rate; certainly single people living in hotels that are not really set up for adequate, permanent housing. I think there is a whole variety of things.

I think there are other people who will be making presentations today who can answer that even better than I can, but I know there are many rental situations in Thunder Bay where when people go in they're shocked that anybody can live in these conditions.

The Chair: Thank you, Ms Reimer. We appreciate your input this morning into our deliberations.

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VERNON KIMBALL

The Chair: Our next presenter is Vern Kimball. Good morning, Mr Kimball. Welcome to our hearings.

Mr Vernon Kimball: I'm not one for speaking in front of people, and another thing, too, I'm supposed to be on my holidays but this is very important to me so I'm here doing this presentation. I've circulated to you all a piece of paper outlining some of what I have to say.

Good morning ladies and gentlemen of the standing committee on general government and members of the audience. My name is Vernon Kimball and I work as the aboriginal healing and wellness coordinator for the Thunder Bay Indian Friendship Centre. The people we service live in the city of Thunder Bay and are a very transient people. They come from reserves and remote communities. It has been estimated that the native population in Thunder Bay is as high as 12,000.

I would like to inform the members of the standing committee on general government of three items about this presentation and the presenter. First, this presentation will not dwell on or give you dry statistics, as that kind of information is readily available. Second, I would like to indicate at this point that although I work for the Thunder Bay Indian Friendship Centre, the views I express in this presentation are my own. Third, because this proposed rent control restructuring will affect all tenants, I will speak out of concern for all that will be affected, not just for my nation but for all nations, be they family, single-parent family, elderly, disabled or the destitute. With this in mind, I sincerely ask you to listen to what I have to say.

The current provincial government was elected on its platform of the Common Sense Revolution. So far there have been cuts that have affected the social structure developed by previous governments. The cuts intended to alleviate the debt have had more of an impact on the already impoverished people of this province as opposed to the large business interests. When we consider the cuts made to the social welfare program, we must consider the impact that those cuts have on those who are collecting welfare. After all, the majority of the people on welfare are living in rental units. Yes, it can be argued that there are those who are taking advantage of the welfare system, but to punish all to save dollars in order to reduce the deficit is a method that defies one's common sense.

Consider the cuts this government has done since it has come into power. Front-line workers have only to look around to know the impact of the cutbacks made by this government and what these cutbacks have done to the people. Suffering and undue hardship is the end result. People in larger numbers are trying to access services that can no longer be provided because of cutbacks to programs that were created to service people in need of assistance.

Now this government wants to take away rent control measures. Rent control measures protect those on fixed incomes from facing rent increases and harassment from rental unit owners. When these rent control measures are taken away or altered to be of benefit to the owners of rental units, it does not take much common sense to draw a conclusion about what will happen if the tenant moves out. Greed will step in and the rent will increase. When the rent is thus increased, the next tenant will end up paying a higher rent, and when they are evicted for some rudimentary reason, rents will likely be increased again. This process will continue for each successive tenant. After all, rental unit owners are in the business to make as much money as is possible. That is what capitalism is basically about.

When one considers that in this country of wealth there are men, women, children and, yes, even babies who are hungry; that there are women and children who are joining in throngs those men living on the streets -- we are talking homeless families here, and one has to only visit the streets of Toronto or any large urban setting to see that this is so, that there are people of all colours, from all walks of life, including the elderly, people with disabilities, people with needs, people who at one time had jobs and a source of income, people who are now on a fixed income and in many cases no source of income, who are asking for assistance, and that organizations and municipalities are helpless to help them, we have to come to the realization that something is amiss. Something is terribly wrong when we in this country of wealth allow people to be stranded and their needs avoided.

According to Maslow's hierarchy of needs, it is a given that in order for a person to grow they need to have their basic needs met. One needs to have food, one needs to have warmth and one needs to have shelter, basic needs that every Canadian should have access to without denial. One may ask, what has all this to do with rent control?

A basic need is in potential jeopardy from this government's proposed rent control changes. Need for shelter, especially in these cold Canadian winters, is at risk of being taken away. When this government takes away structured rent control measures, it will be leaving those unfortunate poor people at the mercy of a market driven by the almighty dollar. We have resources in this community of Thunder Bay, but these resources are being stretched to the limit. When rent control measures are taken away, families will be trying to access these resources, and then criteria will have to be implemented and those at the bottom will end up unassisted and left to fend for themselves.

What happens when these resources are depleted? People will be turned away from doors that have traditionally been open. People will end up on the street. It has already happened. Instances of people left to fend for themselves in the harsh winter environment are becoming evident, as noted in the media last winter. Institutions such as our police stations, court systems and local district jail will have their hands full. Once again I will refer to the street people of Toronto, some of them just young children, living in sleeping bags on the street corner and asking for loose change from strangers. This is something that is not too common in Thunder Bay, and prevention of that state of affairs is what I am speaking up for. I will not be complacent and sit back in the comfort of my warm home and allow this government to make changes that will have adverse effects on people who are already at their ends.

People on welfare have had their incomes slashed by up to 20%, as noted in media releases. There have been people who have had their social assistance cut off completely. What are these people to do? One only has to use common sense to realize that these people who are deprived to such a state will retaliate in a way that nature demands. To survive, people who are in need will resort to deviant behaviour if that is their only viable option. People will prey on each other, will prey on those who have what they need. Deviant behaviour will increase many times over. The cost to society for reprimanding these survival acts will be far greater than keeping the established order in place.

A wise man once said to me, "You cannot tell the future." There is truth to that teaching, but we must consider what we have and realize that what we do today affects people today and tomorrow.

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Rent control as it stands now is a protection for people who are in the low-income bracket, people who are living at and below the poverty level. It prevents rent from being unaffordable to them.

Let us face it: There are a number of factions involved here. On the one hand, we have people who are impoverished. Their incomes, as noted earlier, have been reduced; the cost of living continues to rise; services in the community are being lost. These are some of the variables they must deal with. On the other hand, we have property owners who rent units to these people. Rent is set, and they are allowed to have an annual increase. Their argument might be that the increase is not enough to offset the rising costs of maintenance, taxes, mortgage payments or whatever.

Both factions have needs. What the government is proposing favours the owner. If the government changes the rent control policy, the people who move will be subjected to abuse. It is only natural for an owner of a rental unit to increase rent to the level that people will pay. Remember that there are people looking for rental units who never had the need to look for rental units before. The number of people who are looking for accommodations to rent has increased. People have lost their homes or been forced to sell their homes because of job losses. There is a new wave of richer poor people in this country who are on the verge of becoming impoverished.

What the government is inadvertently proposing is to push the current poor people to a further level of deprivation, to make more people, more families, homeless. It is said that this will not happen. Well, who, what government, what organization will pick up the difference in rental costs that a family with children will incur because they have to move to another rental unit, for whatever reason?

Again, it is only natural for a property owner to realize economic growth by raising rent to what the market will pay. People who are property owners are usually in it for the money. There are property owners, such as non-profit housing units, that are a blessing to the poor, but one must remember that the waiting lists to get into these units are quite lengthy and that the wait to get a unit can end up being months. With these proposed changes that the government wants to impose, the waiting lists will get longer.

People who can no longer afford to pay for rental costs in the future will be forced to access accommodations at the local shelter or Salvation Army. When these places become so full that they have no place left for those seeking accommodation, it frightens me what will happen. Use your common sense to draw the conclusion: If the government continues on its current course, it will create a Third World environment in this country of wealth.

This kind of action by the government is forcing people to come together, forcing people to unite, forcing people to retaliate against the Common Sense Revolution of this current government. It does not take much common sense to realize that people will come together, and together they will unite across this province, across this great country, to make it a better place for all. We are in this country all together and we all must realize that there is enough wealth in this country to support all if it is wisely and fairly distributed to all of its citizens and not just to multinational corporations that want to take the country and drain it dry of its natural resources.

Rent control is a basic mechanism that is a protector for those on fixed incomes. It prevents people from losing their accommodations because of high rental increases. It keeps people in a safe environment, away from the cold and harsh environment of the Canadian winter. If people are homeless and out on the street, they will do something to get warm. What will be our cost then?

Mr Bruce Smith (Middlesex): Thank you for your presentation this morning. It was very thorough and touched on a number of areas.

I note with interest that you raised the issue of jobs. While we were in Toronto last week, the Ontario Home Builders' Association raised that very issue as well, and in fact identified that under the current legislation some 5,000 jobs were lost. Equally important to that statistic is that they estimate that perhaps only 30% or 40% of those jobs can be recaptured with some changes to legislation. Most significantly, they suggest that perhaps we've lost a pool of skilled tradespeople in this province, and I think that's fairly significant.

One of the other issues -- and you raised the Toronto example a number of times throughout your presentation. We've heard on numerous occasions examples of poor maintenance, existing harassment, some of them quite surprising, to be honest with you. I'm just wondering, from your perspective, how possibly could tenants or others endorse the current situation we have today, given all the tragic examples we have of living accommodation in the province currently?

Mr Kimball: I'm sure all the people who rent, who are protected by the rent control measures, don't complain about them. It's a tool and measure they can use to their advantage, and just using that to their advantage and knowing it's there endorses it. But if that's taken away, these people who are renting units will be left at the mercy of the market and they won't be able to come together as a collection of individuals to protest.

How can we endorse it? I don't know how we can endorse it, because we're not organized enough. The people, the tenants, aren't organized enough. There's an individual family here, an individual family renting units, and we're not organized. This is what will happen: When the government takes away these rent control measures, people are going to get to the point where they will start becoming organized, and then you will get the kind of endorsement you want. There will have to be some kind of measure taken, and rent control probably will come again if this one is taken away. People will be forced on to the street.

Mr Alvin Curling (Scarborough North): An excellent presentation, Mr Kimball. The $10 billion they quote from time to time, the situation where those rental units are in terrible disrepair, did not come about overnight; it came about because of landlords not taking the full responsibility when they had those increases built into the guideline, plus extra money they could get. They did not do anything about that, and now they're saying: "What do you want us to do? Cancel rent control and do that."

One of the things New Directions did not take into consideration or did not highlight was the speculation of selling off 84,000 non-profit housing units, which they'd like to do, which are in terrible disrepair and which they intend to fix up and sell back to the private sector and take off rent control. What New Directions also did not state was the 365 non-profit housing projects that were in the system to be built for those on the lower end. Do you think any part of these New Directions, any semblance at all, indicates that when this is in place, people at the lower end of the market who need access to affordable rental units will get any access at all? Any percentage? Do you see any sign of that happening?

Mr Kimball: I can't really answer that. All I know is that as many rental units as are built geared towards lower-income families in this country and this province will be snapped up, because there are people on the waiting list to get at the lower-rental units. If not enough of these units are built, then these people who can't afford to pay for them -- if the rent continues to go up, what are these people going to do? They're going to have to go somewhere, and if they have to go to a shelter, if they have to go to friends or relatives, as they're doing now, it's just going to get out of hand.

Mr Marchese: Mr Kimball, some of the statements you make, in my view, are very real. Need for shelter is at risk. That's true. The waiting list for those who require affordable housing is growing; it's not diminishing. We're into a society where needs are becoming greater, not less. What they're proposing in fact is going to hurt those whom you are trying to protect.

There's a transfer here of moneys from renters to the landlords. They argue, as you just heard Mr Smith say, that the buildings are in a bad state of repair, and part of the argument is that if somehow we remove rent control they will repair the buildings and that's why we need to do this. I haven't read any evidence that says if we remove rent controls the landlord is going to put money back into the building. In your experience, is it your sense that if we eliminate rent control, all of a sudden the landlord, who should have done the repairs 20 years ago or 10 years ago, is going to do it today?

Mr Kimball: I doubt it very much. As I stated earlier, landlords are in it to make money, and what they're saying is that the money they're getting from the rental units is not enough to pay for all the repairs they may want to make to their structures. That may be the case, but often dollars were available through different government programs for these rental operators to fix up those rental units, and if they didn't take advantage of them at that time, that's their fault. Why should they cry for taking away the rent control measures now to raise the rents so they can fix their accommodations? I think it's kind of backwards.

The Chair: Thank you, Mr Kimball. We do appreciate your input this morning and your involvement in our process. Have a good day.

Mr Kimball: Thank you for listening.

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PERSONS UNITED FOR SELF-HELP IN NORTHWESTERN ONTARIO

The Chair: Our next presenter is Marilyn Warf, representing the Persons United for Self-Help. Good morning, and welcome to our committee.

Ms Marilyn Warf: Thank you and good morning. My name is Marilyn Warf. I'm the regional director with Persons United for Self-Help in Northwestern Ontario. Persons United for Self-Help in Northwestern Ontario is an organization of persons with mobility, hearing, vision, psychiatric, developmental, non-visible disabilities and seniors who work together to address issues that impact directly on their lives, rights and freedoms. PUSH Northwest and the community-based Disabled Alliance Network groups include consumers in the geographic area of northwestern Ontario and the Nishnawbe-Aski nation, which, by the way, represents about three quarters of the geographic size of this province.

Many sections of the discussion paper New Directions are of concern for persons with disabilities and seniors, who are often made vulnerable by the very laws that claim to protect them. Under the section "Care Homes," the rights of care home operators far exceed the rights of tenants.

The care home operator is entitled to enter residents' units without notice to provide care or perform bed checks if it is agreed to by the tenant. While this type of arrangement may be required and requested by a tenant, there needs to be provision for formal agreement between the operator and the tenant to set the parameters of the entry and protect the rights of both parties. If the home operator does not have to give notice prior to entry, a written agreement would allow the tenant to specify their own terms regarding entry. What mechanism is in place that gives the tenant the right to spontaneously refuse any prearranged access for personal reasons or to spontaneously change the terms and conditions for access?

The tenant may wish to restrict access only to one or two individuals on the service staff or place restrictions for access specifically by gender. What policy will be developed to protect the tenant should the operator not be the provider? Will the rights be assigned to the operator or to the service staff? These details must be specified to ensure that issues of privacy, independence, health and safety be acknowledged and accommodated.

The discussion paper states that tenants in care homes may reduce their notice period to end tenancy to 30 days when they are giving up their housing involuntarily. This may be of great benefit to those who must make rapid decisions when changes in health dictate the need to move to a long-term care facility, but there is no definition of what does or does not constitute "involuntary," which leaves the interpretation open for potential conflict and/or abuse.

The operators in care homes will have the right to transfer residents to alternative facilities when the level of care needs change. The operator is charged with the responsibility of determining when the level of care needs changing. Have care operators indicated the desire to assume this responsibility? What happens in a situation where the operator, again, is not a member of the care services? There must be comprehensive guidelines specifying the process for ensuring that any assessment is done by competent and credible professionals who are chosen by and/or with the individual. If there are no specific terms and conditions under which this process may or may not happen, then the operator has the right to use this as a means of eviction.

There must be rules and regulations as to who is qualified to assess the need for change of care and under what specific circumstances the landlord has the right to transfer a tenant. How will the government ensure that there is full professional assessment regarding the individual's needs, as well as mandatory documentation, prior to any transfer in order to protect the rights of the residents? Where is the provision which allows the tenant to hire external agencies to provide the service that was determined to be the reason for the change of care? If outside services are purchased, would the tenant not be allowed to remain in their residence?

For some individuals, a forced move from a care home to an expensive facility will mean financial hardship. How can care operators be given the right to transfer a resident when they are not only making health care decisions but also financial commitments, without any legislated requirement for the individual's consent? People with disabilities living in care homes live independently because of their ability to access services onsite. The provision for the rights of operators to make transfers and determinations of need for these individuals undermines the very concept of independent living.

The discussion paper says that transfers would be subject to appropriate protection but does not specify what these protections should be or what level of protection would be considered appropriate. There is also nothing under the tenants' rights to ensure that the tenants themselves are the ones who have the right to determine if the protection is appropriate.

Giving the right to transfer residents to the operators of care homes violates the Health Care Consent Act that requires the person must consent to admission to care facilities. The suggestion that the operator even have rights over all persons in care homes illustrates this government's inability to see people with a disability as equal to tenants in all other types of housing. Do persons with a disability not qualify for tenancy rights because they use care services?

The government is proposing to establish a totally different set of rules for tenants in care homes and tenants in other types of housing and separates references to housing and the provision of services, which is in direct conflict with the Long-Term Care Act, under the Ministry of Health, for long-term care reform. In fact, the long-term care planning committees are mandated to address the issues relating to care homes.

The Ministry of Housing should not even be addressing the issues of levels of care and the assessments of care needs. Why would housing be addressing health issues? Tenants are tenants, no matter where they live. Care homes are housing just like any other type of housing, except that the apartment comes with access to care services. The Ministry of Housing should only address housing issues and tenants' rights, and all tenants should have the same rights regardless of where they live.

One of the most disturbing parts of the discussion paper relates to the care home operator's ability to fast-track evictions of tenants who "pose a threat to other residents." Why is there provision for fast-tracking of evictions solely for persons in care homes? The government is implying that individuals in care homes pose more of a threat to other tenants than individuals living in any other housing. This type of thinking supports old myths and misconceptions that persons with disabilities, particularly those with psychiatric or developmental disabilities, are more violent than the general population. This has been proven to be untrue over and over again, and unfortunately, the myth is fortified and discrimination continues because of proposals such as this.

Are there not tenants in other types of housing who exhibit threatening behaviour to others? Would those landlords not ever encounter a situation where they wanted to fast-track the eviction of a tenant because of threatening behaviour to another individual? Our question is, why are care homes and the tenants in care homes singled out in this particular instance?

There is a long history of abuse, harassment and intimidation of persons with disabilities by landlords, which led to the provisions in the Residents' Rights Act. Under the proposed law, care home operators could deem a tenant's complaints about service or maintenance and their general assertiveness for their rights as a need for care change or as a threat and fast-track the eviction of a tenant from a care home. Where is there any consideration of the tenant's rights to a hearing due to fast-tracked eviction from a care home that equals the rights of tenants in any other eviction process?

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Many consumers see this as an opportunity for home operators to remove an individual they consider to be a problem tenant, one who complains about services and maintenance when they consider it to be inferior, in order for the operator to lower the standard. In other words, if you can evict a person in a care home because they're the ones who are constantly complaining about the fact that the services provided in that care home are inadequate and continually talking about the maintenance that needs to be done, under the terms and conditions under care homes, that operator can determine that tenant to be needing changes to their care or in fact being a problem, being a threat to other individuals, and evict them on that basis.

This scenario may be dismissed as not probable or possible, but these are the actual expressions of concern from tenants in care homes, who are very frightened and threatened by the potential for abuse due to the power proposed to be given to the care home operators.

Operators of care homes are given the right to convert, renovate or demolish facilities as they see fit on condition that they find alternative, comparable accommodation for the residents. Persons with disabilities and seniors, many of whom have low incomes, are often forced to move several times in a year from one care home to another as operators of facilities decide to privatize to attract tenants who can pay higher rents. In some cases people are forced to move to another community because there is no other appropriate facility, which means they leave their support networks, family and friends.

This discussion paper states that alternative, comparable accommodation must be found when an individual is forced to move. What process will be put in place to ensure that the accommodation found is suitable? Where is it stated that tenants will have the right to determine whether or not the alternative accommodation is suitable and meets the needs of that individual? What consideration is there for the amount that the individual can afford to pay? Does "suitable and comparable" also apply to the cost or the condition of the facility? What process will be in place to ensure that cost is a major consideration as the right of a tenant? It is often difficult to find accessible housing and supportive services in smaller communities. What kind of consideration will be given to the length of time the operator must give notice to the tenants?

There is no definition in this discussion paper about what constitutes a care home, but the references throughout lead consumers living in supportive housing and group homes to suspect that the intent of this government is to include tenants in these types of housing under the directives regarding care homes. Is the government's intention to protect the cost of rent in these types of housing but make residents subject to the conditions under care homes? If this type of housing is exempt, then please specifically state the exemption as it was stated for the short-stay facilities.

Under the section of this discussion paper dealing with abandoned property, there is a provision for the landlord to obtain a writ of possession and dispose of the tenant's property after 30 days when personal property is left behind and it is unclear whether the tenant has moved out. This is of particular concern for persons who live independently in the community but from time to time check themselves into facilities that provide psychiatric services as required and often for more than 30 days. This is also a problem for persons with developmental disabilities. Not all tenants will remember to, have an opportunity to, or be able to notify the landlord prior to leaving for 30 days; therefore, the landlord can state that it is unclear whether or not the tenant has left and has the legal right to evict the tenant whom they may consider to be unsuitable because they have a psychiatric or developmental disability. The landlord can now also renegotiate for rent with the incoming new tenant.

If you think this is not a realistic scenario, talk to persons with psychiatric and developmental disabilities about the difficulties they have in obtaining housing and retaining housing once the landlord determines that the tenant has a psychiatric or developmental disability, often not because of the tenant's personal behaviour but because of the community's misconception that all individuals with psychiatric and developmental disabilities are violent. Where is the built-in safeguard for tenants in this situation?

Access to affordable housing has always been a problem for persons with disabilities because their income is usually 60% to 70% lower than persons without disabilities. This also applies to seniors who are on fixed incomes. This government has already issued a moratorium on not-for-profit, geared-to-income and supportive housing, which has meant that many people who need this type of housing cannot be accommodated and are forced to rent elsewhere. Rent increases every time a rental space is vacated, which means escalating rents with no ceiling. The government says that the market will set the price ceilings. Consumers in northwestern Ontario do not believe that will happen. They believe this legislation will mean that they will have no access to affordable housing. The potential is great that this legislation will cause a major housing crisis. Has the government considered the full impact of this legislation on people with disabilities, seniors on fixed incomes, low-income families and the general population?

Our organization acknowledges that the government's primary goal is to rev up the economy and decrease the deficit. But removing rent controls will not mean that the private sector will build more rental property; they've already made those statements. Other factors such as municipal taxes must be reduced before they can be enticed to build.

The majority of the presentations to this committee have illustrated the negative impact on the people of this province if rent controls are removed. This government cannot go forward with the plans to end rent control, make people more vulnerable or reduce the rights of tenants in care homes. The people of this province have told the government loudly and clearly. The Harris government does not have the mandate to destroy the quality of life of this province.

Mr Curling: I just want to say you're on the right track when you speak about the government developing a housing -- it's not even a housing policy. If there was a housing policy, then we could understand all over factors and facets of what constitutes housing. But developing a policy like this in isolation, without any consultation and input from the Ministry of Health, is telling how vulnerable those people with caregivers are. Thirty days? As you pointed out very well, many of these people sometimes are located two months afterwards in the hospital, and the caregiver did not even know, or in jail or some other kind of situation or institution. This is quite a devastating blow to those most vulnerable people in our society. Your presentation was excellent and right on the mark.

Mr Marchese: Ms Warf, thank you for coming before this committee. We have seen you often, and if I recall, it was at the other hearing on the Advocacy Act. Or was it employment equity?

Ms Wart: All of the above.

Mr Marchese: Your advocacy around issues of people who are vulnerable is impressive and we're happy that you continue to do that. Many organizations are being de-funded, so they won't be able to advocate except where volunteers will put in the time to do so. It's a big loss for many vulnerable people when we don't give the funding that allows to help out.

Your statement is very critical and I believe it to be so. "The potential is great that this legislation will cause a major housing crisis." I believe that to be true. The question they never answer is, "Has the government considered the full impact of this legislation on people with disabilities, seniors on fixed incomes, low-income families and the general population?" There are no studies and they never addressed that question.

The Chair: Thank you, Mr Marchese. Mr Parker.

Ms Warf: May I respond to that before we move? I also want to indicate that one of the things that's not considered when you're looking at rental rates is the fact that that does not indicate rental accommodations for a person who requires accessibility. That's a whole other ball game. People who require accessible accommodations do not have the same opportunity to just go out and look for apartments. Their needs are very specific. They're not considered independently in any of this proposal and they are extremely vulnerable. With an aging population, this will become far more of a crisis, and that's not addressed here either.

The Chair: Guess what, Mr Parker; you just lost your minute. Thank you very much. We appreciate your attendance here this morning and your input into our discussions.

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THUNDER BAY HOME BUILDERS' ASSOCIATION

The Chair: Our next presenters represent the Thunder Bay Home Builders' Association: Fiona Skogstad, executive officer, Dave Specht; president; and Harry Jaspers, past president. Good morning. Welcome to our committee.

Mr Dave Specht: Good morning. My name is Dave Specht. I am the president of the Thunder Bay Home Builders' Association. With me today are Harry Jaspers, our past president, and Fiona Skogstad, our executive officer. We represent over 40 members who are builders, land developers, renovators, suppliers and those in the service and professional category.

We support the comments made by the Ontario Home Builders' Association to this committee last week. While we appreciate the opportunity to address the committee on this important topic, I should state up front that our members were somewhat reluctant to attend this meeting. Very few of our members are currently apartment managers and there is no one I know of who is contemplating building rentals. As well, business has picked up for many of us and we all have time constraints.

I should also point out that our new housing market is much different from southern Ontario's. I understand that when OHBA's president met with Ernie Eves during pre-budget consultations earlier this year, he made reference to housing starts in a number of market areas across the province. Thunder Bay was at the top of the list because our improvement was 100% year over year. We doubled our number of starts from three to six in the January-to-March period. According to CMHC statistics, the Thunder Bay CMA recorded 121 total new starts to the end of July. There are probably another 30 to 40 starts for this month, so things are looking up.

We believe it is important to support the attempts of the Harris government to correct the rent control system. The rent control system is in need of a major overhaul. The introduction of rent controls in 1975 and the tightening of rental legislation, particularly over the past 10 years, have severely diminished the incentive for builders to expand the stock of rental housing in Ontario.

In our community, only 15 units of private rental were built in 1995 out of a total of 289 starts. To the end of July this year, there have been only 16 private rental starts out of a total of 121 starts. These have been fourplexes which were primarily built because of the Bill 120 legislation allowing apartments in houses. There were 20 assisted starts in 1995; that's 10 semi-detached units and 10 apartment units. This year, there are none. We applaud the government for taking swift action to cancel the non-profit housing program last summer.

The vacancy rate in Thunder Bay is 6.2%, according to CMHC. This is higher than many other markets across Ontario. In most communities in the US there remains healthy construction of rental by private interests even when the vacancy rate is 8% to 10%. It is clear that the rent control regime has been a major contributing factor to suppressing private rental supply.

A variety of factors have boosted vacancies to a higher level than any time since CMHC began doing October surveys of apartments in 1978. According to CMHC's local housing market report, the higher vacancies are because of sagging employment among young people, who are typically renters; favourable mortgage rates, which have encouraged renters to become homeowners over the past two years; and additions to the rental stock. I was going to add another comment, in that there have been a lot of lower-priced condominiums built in this area too, so it's been bringing the younger people and other people into a more favourable situation to own something of their own. That hits the rental market also. The average rent for a two-bedroom apartment based on last fall's survey was $676. Most rental rates have remained unchanged in the city because of our higher-than-average vacancy rates.

It is because of this soft market that we in Thunder Bay are concerned about the potential loss of our legal maximum through this new legislation. We believe that when an apartment is vacated, and we will not even be able to get the present rent let alone negotiate an increase, our present legal maximum will be adversely affected.

Certainly, it is a critical element for there to be investment in new rental buildings. We are confident that the government's proposals are going in the right direction to restoring balance in landlord-tenant relations and encouraging new supply. The removal of all rent control provisions for newly constructed units is helpful to our industry but does not provide the certainty which is required for investors; controls could be re-established at a later date.

The Thunder Bay Home Builders' Association has reviewed the consultation paper and, as we have said, support OHBA's position. In addition, we would like to comment on the following:

Repealing the Rental Housing Protection Act: Repeal of the RHPA will act as an incentive to improve existing apartment stock through conversion to other, more appropriate uses. A building owner was very restricted under the RHPA and could not make decisions on the renovation, recycling or alternative uses of the buildings in their portfolio. The RHPA ignored the natural life cycle of buildings and extensive capital repairs were not possible because of the capital cost pass-through restrictions.

The proposal the government has put forward will allow tenants to purchase units in the case of conversion. We believe that if the majority of tenants are supportive of conversion, the owner should be allowed to proceed in a timely fashion. For tenants who wish to remain as renters, there are possible benefits, such as better maintenance and repair of the building through reserve funds set up for this purpose.

Building regulations and the construction process: OHBA has communicated to the government's Red Tape Review Commission that the regulatory environment in construction is stifling and adding unnecessary costs. For instance, ASHRAE 90.1 energy-efficient standards added roughly $1,000 to the construction of a typical two-bedroom apartment.

The industry has made a number of recommendations which are contained in Lampert's report: consolidation of responsibilities governing the design, construction and safe use of buildings under one ministry, eg, building code, fire code, technical standards statutes and even health and safety; minimizing enforcement overlap; reducing overly restrictive site plan control requirements; and allowing greater discretion on the part of officials with regard to alternative designs.

I would like to add that sprinkler requirements would not be cost-effective and would be a deterrent to our industry. We advocate a back-to-basics approach to the Ontario building code, with cost-benefit analysis.

As a specific example, sales taxes in Ontario combined with the federal GST have resulted in a level of tax on building materials which is 2% higher today than in the mid-1970s. This assumes that materials account for 30% to 40% of the final value of the rental project. The combined provincial-federal sales tax rate since 1991 has been 17%.

A major change occurred when the federal sales tax was replaced by the GST in 1991. The 7% GST is now payable on the full value of new rental projects; for new ownership housing, the GST paid is 4.5% for homes priced up to $350,000.

Landlords must pay GST on inputs purchased to operate the project; eg, management fees, maintenance contracts, supplies etc. Most of these operating inputs were not subject to FST. Unlike other businesses, residential landlords do not collect GST. The GST must be borne by the landlord as an extra cost and is not applied as a credit against GST collected. On the other hand, commercial and industrial landlords receive credit for the GST they incur on inputs.

A further threat to the entire new housing is the possibility of harmonization of provincial taxes with the GST. We commend the provincial government for the stance it has taken with the federal government to date, but our industry continues to be leery of the detrimental affects that harmonization could have.

Lampert's report states that "rental housing is clearly one of the areas where a strong provincial government initiative could redress the wrongs suffered in the current design of the GST -- and ensure that they are not repeated in the new harmonized tax." The construction industry recommends that if harmonization does proceed, it should be, at a minimum, revenue neutral with respect to our industry.

Preferably, the following will be implemented: extend the GST rebate to private rental constructions; increase the GST rebate enough to offset the full combined impact of harmonizing the GST and the provincial sales tax; remove land from the tax base; and eliminate the discriminatory treatment faced by private rental landlords with respect to GST paid on operations.

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We encourage the provincial government to remember the interests of our sector in discussions with the federal government.

In conclusion, the Thunder Bay Home Builders' Association urges that reform of the rent control system proceed. At a minimum, the private sector needs this assurance in order to begin building again.

There has been too much rhetoric about tenants being evicted from their units as a result of this legislation. Our reading of the proposals would indicate that there is ample protection for tenants. In fact, the penalties which are contemplated are unnecessary in our opinion. The vast majority of landlords have been unable to achieve the legal maximum rents. Landlords prefer to keep tenants in their buildings rather than absorbing the costs associated with tenant turnover. In our opinion, tenants will not be dislocated under these proposals. For the majority of sitting tenants, we predict that there will be no noticeable changes whatsoever.

Thank you. We would be pleased to take questions.

Mr Marchese: Thank you very much for your presentation. You state that there is ample protection for the tenant, yet all the tenants who have come before this committee are very worried. What you're saying is: "Don't worry. There are protections for you." Is that correct, more or less?

Mr Specht: More or less. Everybody would like to raise the rent under the criteria right now, if it's 4.8% or 2.8%, each year, but today we're not doing that because you want to keep the tenants you have. Because there's so much vacancy rate, it seems like tenants can go back and forth now and even negotiate with landlords and say, "He's renting that for $600; can you do better?" So I think some of the tenants have protection as far as that is concerned.

Mr Marchese: That could probably happen every now and then where you could negotiate that in some parts of Ontario. Tenants are very worried that when this climate changes, they won't have the protections any more. But I want to get to another question.

You mention in four different places that, "particularly over the past 10 years," rent control "has severely diminished the incentive for builders to expand the stock of rental housing in Ontario." In four places you raise this over and over again. Mr Lampert, the person whom you cited, and many others that I have read say that rent controls in and of themselves do not give the incentive, do not in fact create more housing stock. But you say that with some certainty, so that somehow if we do that, some of you, or many of you, will build. Is that correct?

Mr Specht: I have apartments and if I'm, say, using the same rate as I did five years ago -- and three years ago the price of lumber doubled within months, right? Plus, the price of labour has increased, and everything else, so the incentive to build is not even there, because it doesn't balance out.

Mr R. Gary Stewart (Peterborough): Thank you, sir, for your presentation. Two questions: I'm looking at some statistics here in Thunder Bay, where back in 1990-91, when there was a 1% vacancy rate, there was a 5.7% increase. In 1994-95, when there was a 6.2% vacancy rate, you've got a 0.45% increase. So my first question is, does this not prove that the market will drive what the rental rates will be?

The other question is, you're saying now that there are a lot of individual new home building starts, and there have been and appear to be this year in a lot of other areas. Do you feel that new building starts will help to make more apartments vacant, because the younger people are finally getting a bit of a down payment, low interest rates will allow these people to buy homes and will offset or will make more apartments available, which could in turn drop the rental cost?

It's a long way around of asking two things: Will the market drive it? But you're saying new home starts are there this year -- good rates, good mortgages -- and those younger people are coming out of rental units. Will that not make the vacancy rate go up and the price come down?

Mr Specht: A lot of the new homes being built today are being built by private people, though. They aren't being built by contractors.

Mr Stewart: I appreciate that, but are many of them not coming out of rental units?

Mr Harry Jaspers: Yes.

Mr Stewart: That's my point. So there should be more rental units available.

Mr Jaspers: There definitely are. I'm a landlord too. I own rental apartments and they're hard to fill at the present rate. So you don't have to even look at the increase we can get. We are going backwards here, big time, and it's about time we have some control. If there is a time when we can catch up, we've got to catch up.

Mrs McLeod: I'd like to pursue that same line of questioning because I think it comes back to the interesting factor of what happens in one of those rare communities in Ontario where we do have a 6% vacancy rate. One of the things you're saying is that we're building more single residential housing and not many people are building rental housing. Part of that reason is, as you've just said, the rental units are not being quickly filled at current market rates. Given that fact, that we can't fill the existing units that we have at current market rates, do you think it's unlikely that taking rent control off is going to mean that anybody's going to get into building new rental units?

Mr Jaspers: Not right now, but hopefully in the future we can get some catch-up. Right now, it would not pay. The investment to build apartments would be ludicrous at this time in Thunder Bay.

Mrs McLeod: Theoretically, with a vacancy rate of 6.2% or 6.5% we should actually be seeing rents coming down significantly so that the units can be filled. I don't think we've seen that in Thunder Bay. I'd be interested in your comments because I think Dave's made a couple of comments about the other costs that are built in that make it not profitable for people to be building rental stock. You've got a certain market level and if you go below that, you're not going to make a profit.

Mr Jaspers: Can I comment to why I think we have our rental vacancy so high?

Mrs McLeod: Yes.

Mr Jaspers: Because of the past government. The subsidized housing that's been put up in Thunder Bay is our main competitor. We, as private sector landlords, can't compete against subsidized housing.

Mrs McLeod: Could the existing vacant units then be filled by some of the 1,600 households that are waiting for housing?

Mr Jaspers: I would like to see, if you want to subsidize, go subsidize the sector people to go find apartments with the private sector people. We can't build. You have to make a dollar, let's say; otherwise, why would you build?

Mrs McLeod: So you'd be advocating a shelter allowance concept that was large enough to be able to put some of those families who are on the waiting list --

Mr Jaspers: Right.

Mrs McLeod: -- into existing rental units at current market rates?

Mr Jaspers: To the private sector.

Mrs McLeod: Right. I guess my point is, you almost have to keep the subsidy enough to go in at relatively close to current market rates because it's not profitable to build anything at lower than current market rate. Is that fair?

Mr Jaspers: Sure.

Mr Specht: Could I make a comment also? If we're not building new units here and the price of our rental units goes down, it's going to be very hard to maintain the existing buildings that are already there. Some of them are getting older and older and the cost of repairing them is getting greater and greater. I guess if we keep our rentals where they are, then at least maybe there will be a little incentive later on to build.

The Chair: Thank you, folks. We appreciate your input this morning.

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THUNDER BAY EMERGENCY SHELTER

The Chair: Our next presenter is Keith Milne, representing the Thunder Bay Emergency Shelter. Good morning, Mr Milne. Welcome to our committee.

Mr Keith Milne: Good morning. I guess one question, as I sat and listened to the previous presentation, was whether or not that group had consulted with its own membership. There are a number of strong contracting companies in town that were very upset with the withdrawal of the supportive housing and non-profit housing projects that were keeping them going and giving them good business.

One has to also remember that the population of Thunder Bay has been static for more than a decade, so the market is different from that in southern Ontario. If you were to divide the statistics and actually analyse where the vacancy rate is in Thunder Bay, the vacancy rate is on the high end of the market, not on the low end. If you were to analyse the number of classified ads in the paper, what's available is all on the top end of the market. That's where your vacancy rate is.

Shelter House/Thunder Bay, or the emergency shelter, represents a population group of homeless and marginally homeless people, and the proposed vacancy decontrol legislation has a number of implications for the homeless and marginally homeless people of Ontario. While the vacancy decontrol policy has potential for great negative impact on Ontario's poor, this impact will be even more severe for the homeless and marginally homeless.

The most outstanding component of the vacancy decontrol proposal is that rent controls are being eradicated. Each time a new tenant occupies a rental unit, the landlord will be able to charge whatever they can get for that space, up to 10% over the previous tenant. The problem is, how is that tenant going to know what was being charged ahead of time? The rent increases may be as high as 10%. For the homeless and the marginally homeless, who may move frequently, this means frequent rent increases beyond the range of their income. Rent control during a tenancy period will be of little help to a homeless person who cannot put together enough money for the first and last month's rent in order to secure an apartment. We have to remember that this potential 10% increase in rental costs comes hard on the heels of a 22% decrease in social assistance payments, on which many homeless and marginally homeless people depend.

The proposed closing of the rent registry means that tenants will no longer be able to find out what services a landlord has previously offered at a given price. This may seem irrelevant to tenants moving into a new unit with no rent control; however, the information the registry provided would be helpful for a tenant in negotiating the rent in a new space. This information has historically been a source of protection for those seeking new housing. If the registry remained open, tenants and housing activists would know if the rent increases resulting from this bill were within the estimated 10%. Without the registry, it will be much more difficult to monitor the activities of landlords and the impact of this legislation on renters.

Thirdly, the proposed legislation seeks to make it far easier for landlords to evict problem tenants. While the current eviction procedure may take up to five months, the government is hoping to make this a much faster process. Many homeless people have problems in living and that may make them seem like problem tenants. Since landlords can raise their rent whenever a tenant moves, this may cause some landlords to harass vulnerable tenants and evict people more frequently. The homeless and marginally homeless are a vulnerable segment of our population, and this will only serve to increase their vulnerability.

Another major implication of this proposal is a reduction in the amount of affordable housing in the province, not only through rent increases but by the reduction of the number of units available for rent. This can be achieved through two means. The government is discussing the selling off of Ontario public housing and putting a stop to non-profit housing, which they've already done. Any new housing built will not be under current rental housing guidelines.

In addition, the government wants to dismantle the Rental Housing Protection Act, which will make it much easier for owners to convert rental housing into condominiums or to tear down rental units and put property up for sale. This will mean that unless a renter has the resources to purchase their home, which is highly unlikely for a marginally homeless person, they will be out on the street. At that point, they will be searching for an apartment which has recently had its rent raised by as much as 10%.

Finally, where a rental unit is in serious disrepair, tenants will no longer be able to legally withhold their rent until repairs have been made. This will have a particular impact on the marginally homeless. For people with low incomes who live in rental units in serious disrepair, withholding rent is sometimes the only viable tool for forcing the landlord to take action. By making such a move illegal, the government is likely forcing the marginally homeless to continue living in unsafe conditions which will only worsen as the tenant loses their only bargaining tool.

All in all, if the proposed vacancy decontrol proposal goes through, the homeless and marginally homeless will suffer greatly. This legislation will make it much harder for the homeless to secure decent, affordable housing. It will also make it much harder for the marginally homeless to improve their living conditions and stay in their housing. This proposed bill will have a serious negative impact on each of these two very vulnerable groups in our society.

Mr Maves: Thank you for your presentation. I have just a couple of quick comments about builders who made a lot of money with the previous government. We have testimony -- and I've spoken to several people in my own riding in Niagara Falls who have told me the high amounts of money the government paid, substantially above what the market would bear, and that was at the taxpayers' expense. They paid more than they should have been paying. I wouldn't be surprised that there would be some builders out there who would like to see that program continue.

My first question is that you said there's a high vacancy rate in high-income units. One of the problems with rent control is that people with stable jobs and stable incomes get into a rent-controlled unit and never move. Landlords have said several times to us, "You're subsidizing the wrong people; you're subsidizing wealthy people." I wonder if you had any comment on that.

Mr Milne: First of all, I'd like to comment on the comment about contractors. True, the non-profit housing needed to have some refinements because the guidelines and the costs that were usually established in southern Ontario were not always reflective of what could be done more cost-effectively in other regions. That did need some work, although I don't know of any contractors who were really getting rich on that program, but they were keeping their staff and their labourers working and we were able to produce and have some adequate non-profit housing.

I'm not convinced that we were at any time subsidizing the wrong group. However, with rent geared to income, it is the landlords who are being subsidized. If that's the wrong group to subsidize, then yes, I'd agree with that.

Mr Maves: One of the things we've talked about this morning quite often is that the rental rate for an average two-bedroom unit in Thunder Bay is $659. If a landlord over the last five years had taken his allowable guideline increase, the rental rate would be $704. Doesn't that indicate that the market will only bear $659 and that therefore the market is working? Most landlords would have a legal maximum. They could charge probably higher than $659, can't get it, so aren't charging it. Why would you believe that they would try to evict tenants and jack up rates if right now they know the market won't bear it and they could be charging more?

Mr Milne: I'm not sure that the landlords of Thunder Bay are necessarily analysing it in that way, that they're keeping the rents down because that's what the market will bear. First of all, I am talking from a perspective of low-income people who are probably on assistance, so the rental for a two-bedroom is above what their shelter allowance is, as it is now.

We've seen an influx of people coming from southern Ontario, particularly Toronto, because there is a little bit more affordable housing here than there is in Toronto. However, condominiums might be cheaper in Toronto. I've seen some for a lot less than $100,000.

Probably the vacancy rate is more because of the dynamics, the fact that in northwestern Ontario people are still very much able to access the dream of owning their own home. People, after they've been living in an apartment for a number of years, if they're in a stable situation with a stable income, have been able to put the resources together to move into their own home. There isn't any kind of program where that's available to lower-income people. We're ending up, I think, with a market where if you have an adequate income, the first thing you do is move into your own home.

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Mr Mario Sergio (Yorkview): Thank you for your presentation. During the past week in Toronto, we heard from landlords, tenants, builders, developers. No one likes the proposed legislation. It doesn't do anything for tenants and it doesn't do anything for developers to come back on the market and build affordable units.

We heard from the Urban Development Institute, UDI. They said that if the industry's recommendations were to be accepted by the government, they could start to build some 10,000 units immediately. What are those requests from the industry? He said red tape, elimination of rent control, realty taxes, provincial taxes, GST, education levy, development charges, house taxes, land levies, lot levies, and even with that, they still would like to have a subsidy. Do you think the government could afford to do all that and still have builders not able to start to build new affordable housing?

Mr Milne: No, I don't think the government can afford to subsidize people who are supposed to be in the capitalist system. If anyone's going to be subsidized, it should be the population on the lower income and those who are vulnerable. If you're a capitalist and if you're a builder, you should be in the business of trying to build within the marketplace with what's available privately.

Mr Sergio: But even with all that, if the industry still is not able to produce affordable housing, do you think this is the right time to eliminate rent control and for the government to completely get out of the affordable housing business?

Mr Milne: No. I think the government has a responsibility to realize that they are governing the entire province and the entire population, not just those who are at the higher income level.

Mr Sergio: The province, if you will, the government, has a responsibility to stay in the housing business to provide for those who need affordable housing?

Mr Milne: There will always be a segment of our population in need of the support of the general society. That's not the contractors and the builders and those who are in business so much as people who do not have the skills and have disabilities and have experience barriers that have limited them in their ability to have a better quality of life.

Mr Sergio: One of the objectives of the proposed legislation is to put more protection on the tenant than the unit. Being familiar with the proposed legislation, do you think that as it is proposed this will have more protection on the tenant or the unit?

Mr Milne: I think the protection will be on the unit. It scares me when I see the first line of the title saying, "Tenant Protection," because I think it has nothing to do with tenant protection.

Mr Marchese: Mr Milne, that was the somewhat related question I wanted to ask you. This tenant protection proposal does a great deal to protect the landlord, and you pointed out a few of them. First of all, rent decontrol is coming in, which transfers wealth from tenants to the landlords, because they haven't been making enough. They are not doing very well and they want to build, so they need a few more dollars.

Second, they want to get rid of the rent registry, as you pointed out, not to protect the tenant but to protect the landlord. It has serious implications. The Rental Housing Protection Act is gone, permitting more of that rental accommodation to turn into condominiums. We believe that to be true, and the condominium association is very worried that it's going to happen, that it will create a glut. Also, the withholding of rent is sometimes the only viable tool for forcing the landlord to take action, and they're eliminating that. Is there anything in this proposal that's going to help the people you're here advocating for today?

Mr Milne: Nothing I've seen will be beneficial to the population I see most: the homeless and the marginally homeless.

Mr Marchese: Mr Milne, I want to ask you a favour. You see, I can't ask this question because they won't answer it, so I want to read the question, and if it suits your interest, perhaps you can ask it of government. This question was raised by Marilyn Warf. The question is, has the government considered the full impact of this legislation on people with disabilities, seniors on fixed incomes, low-income families and the general population? Would you mind asking that question to the government?

Mr Milne: In fact, I would maybe reword it to ask the question of whether any study has been done into the implications of this proposed legislation and if that study has gone beyond consultation with landlords and private interests.

The Chair: Mr Hardeman, do you want to take a shot at it?

Mr Hardeman: As it relates to studies, obviously, to gather the information is part of this process. It's a consultation paper to hear the input from all the parties that are going to be impacted by any change in the legislation. That's why we're happy to be in Thunder Bay to hear what the people of northwestern Ontario feel about the proposal. We have had consultations with some 60 different groups, including the advocacy groups for the tenants, the advocacy groups for the landlords, landlords themselves, the builders. There were some 60 different meetings the ministry held to get the input to put this discussion paper together so we could take it out on the road and hear what the public has to say, and hopefully when it's concluded we will come up with legislation that will protect the tenants and meet the need of our industry.

Mr Marchese: Since you get no answers in that regard, I wanted to ask another question.

Mr Peter L. Preston (Brant-Haldimand): You said he wouldn't answer. The guy was answering, but you won't listen.

Mr Marchese: I heard the answer. The answer is, "We're consulting you. Thank you, Mr Milne, for giving us your consultation ideas."

Wages are down, unemployment is up; a lot of people are not faring very well in this economy. You heard some of the developers who were here before. They want to be able to catch up. As they catch up, how are people whose wages have been frozen, who are losing their jobs, going to be able to cope with what developers say, "We want to catch up"?

Mr Milne: If we truly have a capitalistic system, which I'm not sure this government is capable of understanding, then the market would wait until those who are unemployed have caught up and the market truly can handle the input of more housing units. I don't think there's really been a lot of in-depth thought involved. When you mentioned that 60 groups were consulted, what are the majority of those groups saying? Even in these hearings you're having now, it seems to me that the majority of presentations are coming from tenant groups and groups that are vulnerable and they are very concerned. I trust that the government is listening.

The Chair: Thank you, Mr Milne. We appreciate your input today.

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CANADIAN MENTAL HEALTH ASSOCIATION, THUNDER BAY BRANCH

The Chair: Our next presenter is Maurice Fortin, the executive director of the Thunder Bay branch of the Canadian Mental Health Association. Good morning, sir. Welcome to our committee.

Mr Maurice Fortin: Good morning, Mr Chairman and members of the committee. Welcome to Thunder Bay. We appreciate the opportunity to be consulted and the recognition of Thunder Bay as a regional centre for the northwest.

By way of a little bit of introduction, I want to talk about the organization I work for. The Canadian Mental Health Association, Thunder Bay, is a branch of the national volunteer association. We are dedicated to maintaining, enhancing and promoting the wellbeing of individuals, families and communities.

As a community mental health agency in this city, we provide a number of important functions. Our direct care services are targeted towards people with a serious mental illness. We provide a clubhouse model program with a pre-vocational day component, community support case management, supported employment, which we know the current government supports, and social recreational opportunities. We have a volunteer-based program which provides one-to-one support and group opportunities, which promotes social integration. Our other services include community-wide information and referral and public education in the area of mental illness, mental health, such as suicide intervention courses, which is a grave concern in the northwest.

We've been involved in development and provision of non-profit housing with support services since 1988, and in fact have been providing support to individuals living in a variety of housing situations probably since 1980. Currently, in conjunction with the Ministry of Municipal Affairs and Housing, we own 12 supportive housing units and provide support to another 20 individuals with psychiatric disabilities living in units owned by non-profit housing organizations. Our perspective regarding the proposed tenant protection legislation is drawn from our experience as a landlord and as a support provider to tenants living not only in subsidized situations, but in market rental situations.

By way of background, I just want to talk a little about who are individuals who suffer from a mental illness. They really reflect a broad spectrum of our society and include people of all genders, race and social strata. The various mental illnesses include the major affective disorders such as depression, the schizophrenia disorders and the personality disorders. I take the time to do that because people often get us confused; they're not sure if we're working with the developmentally handicapped, the mentally retarded or people with a mental illness, so I take the time to make that distinction for you.

Some illnesses, such as schizophrenia, are the result of a biochemical imbalance, and others are environmentally rooted. Often people who have suffered years of abuse as children and young adults come into the adult mental health system.

A number of well-known individuals have publicly acknowledged that they suffer from a mental illness. In fact, the list is quite endless, but I'll note a couple. They include actor Rod Steiger, country singer Charlie Pride, TV newscaster Mike Wallace, and Nobel Prize winner in economics John Nash.

The reality, however, for most of the estimated 118,800 people with a serious mental illness in Ontario is one of poverty, unemployment and a lack of treatment and rehabilitation. Of the total number of individuals on social assistance under family benefits Gains-D, which is an issue I know the current government is concerned about, people with psychiatric disability are 25% of that number. The rate of unemployment for the mentally ill runs in the 70% to 80% range. The estimates for people who are homeless with a psychiatric disability range between 30% to 50%, and some people say it's 60% and 70%. Clearly, issues of income, decent affordable housing and community supports are important for people suffering from mental illness.

I just want to respond to a few of the key issues in the discussion document. With respect to protection from unfair rent increases, included in the rent control elements of the legislation is a proposal to remove rent controls from rental units once vacated, allowing landlords to negotiate rent with incoming tenants. We can foresee a number of problems related to this approach. According to a report commissioned by the current government, the Lampert report, it is estimated that some 25% of tenants move annually and some 70% relocate over the period of five years. The potential for rents to be set outside of rent control on most rental units in Ontario is very likely to occur over the next few years.

According to the Social Planning Council of Metropolitan Toronto, an estimated 40% of people on social assistance already pay shelter costs in the private rental market in excess of their shelter allowance. We believe the lack of rent control will only exacerbate that problem.

Many individuals with psychiatric disabilities face repeated hospitalizations, often referred to as the revolving door syndrome. They're in and out of hospital repeatedly. One of the benefits of coming in and out of hospitals is that you lose your rental income. We wonder whether people with a psychiatric disability will find themselves in situations in which they are regularly being asked to pay rent increases well above rent control guidelines.

There's a reference in the document to the possibilities of individuals negotiating for new rents. People with psychiatric disabilities, regardless of whatever label they've been targeted with, suffer from two things: lack of self-esteem and self-confidence. I don't believe they're going to do very well in negotiating with landlords around rental increases. Can they expect to pay an even more disproportionate portion of their income for housing?

We understand it's the intention of the current government to implement a guaranteed income supplement for seniors and people with disability. The absence of rent control introduces the very real danger of providing a secure income on the one hand and seeing a disproportionate loss of that supplement to rental costs on the other.

With respect to the Landlord and Tenant Act, we appreciate the commitment of those aspects of the current legislation which continue to protect the rights of both landlords and tenants, including notice to terminate, the requirement for reasonable grounds for the termination of tenancy and the tenant's right to privacy. We support changes to the act, especially the establishment of an enforcement unit to investigate complaints, an increase in fines for harassment and the fast-tracking of such investigations, although we do have some concern about the fast-tracking of such investigations with respect to vulnerable adults who may have difficulty defending themselves.

With respect to the dispute resolution system, we agree that the current dispute resolution system which adjudicates rent control matters within the housing ministry and landlord and tenant matters within the court system is complex and slow and problematic. We endorse the establishment of a dispute resolution system that is indeed at arm's length from government and includes the balanced representation of both landlords and tenants.

With respect to security of tenure and conversions, the housing protection section of the package proposes to eliminate the requirement to have property owners seek municipal approval when seeking to convert rental properties to condominiums or cooperatives.

We are gravely concerned with the potential for current rental housing stock to be converted to other uses, or in some cases to be demolished to make room for other kinds of projects. According to Paul Carling, a leading expert in community mental health in Vermont, when property owners in various parts of the US no longer were provided subsidies to rent to low-income tenants and were allowed to convert properties to other uses, "affordable housing declined so sharply that only about 10% of the affordable housing stock lost to those trends has been replaced." We ask you to rethink and relook at this issue.

The Lampert report recognizes that new private rental units will target the high end of the market, resulting in higher than average rents.

With the termination of the non-profit programs, the gradual elimination of rent controls and the absence of a rent supplement program, people on low income, including seniors and the disabled, will be destined to either spend too much of their income on rental housing or be forced to live in substandard housing. Substandard housing in Thunder Bay is a real problem. There are a number of places known throughout the community that are easily identified, a number of rooming houses, in which a variety of people, including the psychiatrically disabled, live, on both sides of town.

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Care homes: We are pleased to see the renewed commitment to continue support for rent control in care homes. As previously stated, we are concerned with the section of the proposal which will eliminate rent control for units vacated in care facilities. Individuals on fixed income need the protection of rent control.

We strongly urge you to consider what mechanisms could be put in place to monitor tenant protection issues in care homes. Minimally, we think you need to be doing some education if you're going to provide that kind of protection in care homes.

Many individuals living in care homes may be vulnerable and have limited capacity to advocate for themselves in areas such as negotiation of fair rent. How will their concerns be heard? Can this be an additional role to be assigned to the dispute resolution system?

Much of the proposed tenant protection package has the potential to significantly meet the ministry's goal of increased tenant protection from evictions and harassment. We fully appreciate the inclusion of increased property maintenance standards and the proposed dispute resolution.

We believe the discussion paper falls short in two areas.

Specifically, the proposal relative to protection from unfair rental increases will eventually lead to the elimination of rent controls and lead to both a lack of affordable housing and an ensuing disproportionate payment of rental income for Ontario's working poor and disadvantaged.

We are also concerned that changes to those sections of the rental housing act restricting conversions, renovations and demolitions will lead to significant reductions in affordable rental housing.

For individuals suffering from psychiatric disabilities, decent affordable housing is critical to their rehabilitation and subsequent return to full citizenship. We urge you to consider the concerns we have raised and to ensure the necessary changes which will indeed create legislation providing full protection to tenants.

The Canadian Mental Health Association, in closing, would like to thank the Ministry of Municipal Affairs and Housing for the opportunity to respond to the proposed tenant protection legislation.

Mrs McLeod: One of the challenges, obviously, that pervades your paper is, how do you find affordable housing for people in lower-income areas and particularly those who are living on disability pensions? I come back to a continuing challenge of the inability of psychiatric patients and former psychiatric patients to be able to find housing even in a community like ours. I hear it in every community I visit, and it goes back to 1973 and the deinstitutionalization. We've never seemed to be able to respond to the housing problems that created, and as you know, we're facing a potential for another loss of psychiatric beds in our community.

Could you say, based on the people you're working with -- you've been facing these challenges for some years -- in a community with a vacancy rate of 6%, why is it still so hard in this community for those with psychiatric disabilities to find suitable accommodation?

Mr Fortin: There are probably a number of reasons. I guess one of the major reasons still, unfortunately, is the issue of stigma. For a variety of reasons, people with a psychiatric disability from time to time are identifiable. Perhaps that's a result of side-effects from medication. Perhaps it's a very unstable housing record: "Who was your last landlord? Where did you live last?" Certainly they have struggles in finding rental accommodation. It's unfortunate; in the past month they've just announced the loss of the housing coordination program, which is a meagre $40,000 funded community partners program under the Ministry of Municipal Affairs and Housing. It was one of the services we were able to use because they kept a list of how much rent costs, and addresses and names of landlords who would indeed take on people with psychiatric disabilities, among others.

In short, I think it's going to get harder, not easier. We were starting to see a little light at the end of the tunnel because we were seeing more and more rent-geared-to-income properties and rental units being constructed by the various non-profits and we were pretty excited about where that was going. But as you know, a moratorium has been placed on that and that's no longer happening. Really, I'm not very optimistic or hopeful about the housing situation improving for people with psychiatric disabilities.

Mr Marchese: Thank you, Mr Fortin. The point you make at the end where you urge the government to create legislation providing full protection for tenants is a good urging of the government. Even if they provided some protection, it wouldn't be so bad. If ever they would go to full protection, that would even be better.

But you raise the concern around harassment, and you say that the measures they are talking about are good. On the other hand, you know very well that vulnerable people have many problems dealing with this particular issue. Do you anticipate that a senior citizen or a person with a mental illness somehow would be able to deal with a landlord that mistreats them? How would they ever prove harassment if that were to be an issue?

Mr Fortin: That's a very good question, and I think it goes back to a couple of statements I made earlier about some concern specifically within the care homes. You need to find some mechanism, whether it's through the dispute resolution system, whether it's through a tribunal, not only to be available to accept those concerns but to actively solicit those concerns either by making that part of the job, in an advocacy sort of sense, of the tribunal, because if people are not going out and soliciting, I do not see vulnerable adults, whether they be seniors or people with a psychiatric disability, soliciting help for that. They will do whatever they need to do; they'll pay the rent and they'll be quiet.

Mr Marchese: Mr Fortin, part of the problem is that we're in an era of declining resources, particularly from this government. You're talking about asking the government to be proactive. I'm not sure that's ever going to happen. When they're cutting people, that certainly is not going to happen.

In terms of your suggestion of a dispute resolution system, I support the court system in general because they are more likely to be neutral in terms of the decisions they make. But if this government decides to do that, hopefully it will be at arm's length. I'm not sure how the whole appointments process is going to be neutral.

You make a good point about Monsieur Carling in Vermont raising this particular concern. "Various parts of the US no longer were provided subsidies to rent to low-income tenants and were allowed to convert properties to other uses," and what happened is that "`affordable housing declined so sharply that only about 10% of the affordable housing stock lost to those trends has been replaced.'" That's a very good concern that is being stated, and you're citing a man obviously who has a great deal of knowledge in this regard.

When you add to that the Rental Housing Protection Act that's gone and the government no longer building and the private sector saying, "We're not going to do it unless you give us a hell of a law," we have a problem. Don't you agree?

Mr Fortin: Yes, I would agree. I think we have a serious problem that's only going to get worse, and we need to do something about it. We have a number of problems here: We're going to lose rent control; I'm not sure that you're committed to rent supplement for market rents; and the moratorium, we believe, is the death knell for non-profit housing. For vulnerable adults and the working poor, I see the situation getting only worse.

Mr Smith: Thank you for your presentation. Mr Marchese sort of brushed across the issue of dispute resolution quickly, and I want to come back to that for a moment if I could, because we, as a committee, have heard a lot of technical input on that particular section of the paper. You recognize that there are complexities and a great deal of delay within the current system. Have you given any thought as to whether or not mandatory or voluntary mediation should be a part of the process up front, before the court system kicks in?

Mr Fortin: I haven't given a lot of thought to it, but I guess I would answer the question this way: I think there's a lot of lead work that would need to be done before that decision is made. The paper raises a number of questions about a tribunal, an appointment system, whether indeed it would be at arm's length. I think those are the kinds of questions that need to be answered first in order to determine whether you could indeed establish a fair and equitable tribunal to deal with those kinds of situations.

Mr Smith: Thank you for the answer. Do you see mediation being an effective tool, based on your personal experience and the experience you've had with your clients?

Mr Fortin: I think mediation has a very real potential to work very effectively and keep us out of a system, whatever system, whether it's the court system or where it's lengthy, burdened down with all kinds of paper. I think there is a potential for mediation to be effective, again given there is equitable representation of various stakeholders, one that's at arm's length from government and not seen to be a part of government. I think the potential is there, provided a number of key things are put in place.

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The Chair: Mr Maves, you've got 45 seconds.

Mr Maves: Quickly, do the Canadian Mental Health Association and your branch, the Thunder Bay branch, have many discussions with landlords to explain psychiatric disabilities or, maybe if someone's trying to rent an apartment and having difficulties, call the landlord and explain the situation to them? Does that happen very often?

Mr Fortin: Yes, it has happened in some cases. We have worked effectively with the local regional office of the Ministry of Municipal Affairs and Housing when there are rent supplements, trying to get in to landlords and talk to them about the possibilities of taking on some of our tenants, talking about who people with psychiatric disabilities are and who they aren't and trying to do some work so that they really understand what it is they're working with. In some cases, that's worked very well for us.

The Chair: Thank you, Mr Fortin. We appreciate your input into our process this morning.

HOUSING ACCESS THUNDER BAY

The Chair: Our next presenter is Sandy Parsons, representing Housing Access Thunder Bay. Good morning, Mrs Parsons. Welcome to our committee.

Mrs Sandy Parsons: I work at the Lutheran Community Care Centre. That's a social service agency in Thunder Bay. Right now I hold the position of housing access worker with Housing Access Thunder Bay; that's a program that helps individuals in the community find housing. I've also worked as a social worker with individuals who are developmentally handicapped. So I have had experience with trying to help them find housing as well and worked with landlords. In the position I hold now, as I said, I do help individuals find housing. So I'm here basically to talk about the main issue that I have with the proposed changes: the fact that landlords may be able to increase the rent once a tenant moves out.

Right now in Thunder Bay housing is quite expensive. I don't know exactly what it is compared to some of the other cities. I work with a lot of individuals who have special needs. I work with a lot of single moms, families on assistance, the developmentally handicapped, individuals who have psychiatric illnesses. Sometimes for them it is difficult to find housing that is affordable, because they are on assistance. I work with individuals from crisis housing, the emergency shelter. They seem to have a real difficulty finding housing that is adequate as well as affordable. I found that a lot of single mothers, for example, if they have two children, initially they are looking for a three-bedroom apartment, and in a lot of cases they realize that they just aren't able to manage that financially. We're finding that people are going to, for example, a two-bedroom. So they're having to make do.

The issue with landlords increasing the rent, I think that might put some individuals more at risk. I certainly have worked with clients who may have been in a situation with a landlord and because they have special needs sometimes the landlords get overly involved. At times, I've certainly seen that landlords have taken advantage of individuals. My concern is that if someone is in a tenancy with a landlord and they realize that they have a good rent but there might be some issues going on that they're not really comfortable with between them and the landlord, they might be afraid to move out, because they know that the rents are quite a bit higher.

The Chair: Okay. Ready for some questions?

Mrs Parsons: Sure.

The Chair: We've got about five minutes per caucus, beginning with Mr Marchese.

Mr Marchese: Thank you, Mrs Parsons, for your ongoing advocacy work in the field. We certainly need advocates and people who are there to support people who are more vulnerable in society. Without that, we'd be in worse shape.

Several things: We build housing, non-profit and cooperative housing, to address and to accommodate the various needs of people. What we did in cooperative housing in particular is to build in the various ranges of incomes but also to make sure that the people with disabilities and people with HIV, for example, would be part of that community, and so I'm responding quickly to your sense of making sure that we find or that we build accommodation that's both adequate and affordable. Sometimes we don't take that into account, so that even if we don't have a problem of affordability, we still have a problem of adequate accommodation.

Do you think that if the private sector were to build that somehow they would build with people with disabilities in mind or people with HIV for example? Do you think that is likely to happen if we let the private sector take care of all of these things?

Mrs Parsons: I guess from my experience and dealing with landlords, and I don't like to categorize people, but it's almost like some landlords want the ideal tenant. They want a tenant who is working, has a steady income. If someone is coming from crisis housing, for instance, they want to know is there an ex or a boyfriend who is going to stalk them, who is going to come into their apartment and destroy the place. There are some landlords certainly who are willing to look at individuals who are more vulnerable, who do have special needs, but again, when I was working directly with developmentally handicapped and I was trying to help them find accommodation, there were a lot of questions, and it's really difficult because you want to be honest, but you don't need to go into your whole history with a landlord. I just found that sometimes it's more difficult for individuals to find affordable as well as adequate housing with the private sector.

Mr Marchese: My sense is it's going to get worse. As we create a crisis where there's going to be a shortage of housing, it will make it much worse for the people you were just describing.

Mrs Parsons: Yes.

Mr Marchese: On the issue of mobility, once tenants learn that if they move they're likely to get into another situation where the rent is going to go up, is it not true, as many have said, that those in abusive situations are likely to think twice about whether or not they can do that or should do that?

Mrs Parsons: Yes, because if an individual is in an abusive situation, it is certainly difficult for them to leave if someone realizes, "If I move out, my rent is going to be much higher; maybe I'll just stay where I am and just put up with what I have to deal with," which is really sad, because our job as social workers is to help empower people so that they are able to get out of those types of situations, but they certainly do exist. As I said, landlords do sometimes -- I've seen it in the past where they have taken advantage of clients and they've controlled their money and it's totally beyond their role, but it does happen.

The other issue is that if somebody is in a housing situation and they move out but they need something that is accessible, it is very difficult to find accessible housing in Thunder Bay. I've certainly had clients who have been in wheelchairs who have had to climb up stairs to get to their apartments, and then when they have come to me for help finding housing, finding everything that they are looking for as far as the main floor or a place with an elevator that is in an adequate area of town, where the rent is affordable, within their means, because they are on assistance, it is very, very difficult. I've had people having to wait months, five or six months, trying to find something like that.

Mr John L. Parker (York East): Thank you for your presentation, Mrs Parsons. I represent the riding of York East. That's an urban Toronto riding. We have a great many residential tenants in my riding. I have a large number of high-rise buildings in my riding. Many of those buildings are quite old now. There are no new rental buildings in my riding. Many of the rental buildings in my riding are in serious need of maintenance and repair. There have been occasions where people have suffered injury as a result of the disrepair of some of the buildings.

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I asked to be put on this committee as part of my personal search for some solutions to the problems. I'm looking for answers; I'm looking for ways out of the problems that we have now; I'm looking for better ways into the future. I'm also concerned about how we're going to house people in the future, how we're going to find accommodation for them to live in, not enough just to protect people today -- I want to protect people today -- but we also have to find a way to house our increasing population into the future. It's not enough for me just to answer today's problems now. We have to look to the future and anticipate tomorrow's problems and address those.

Under the current regime we have the situation I just described to you, and the vacancy rate in Toronto is nothing as enviable as it appears to be in Thunder Bay. In Thunder Bay you appear to have quite a comfortable margin of vacancy, but in Toronto that's not the case. It's tight and tenants feel quite exposed under the current regime. There's no place for them to turn, no place for them to go if they're unhappy with their current situation.

Can you help us with solutions to that problem? Do you have any suggestions as to how we can go forward and address the problems we face right now?

Mrs Parsons: I realize that in Toronto there is a need for affordable housing. In Thunder Bay I see a lot of individuals, some homeless, who don't have anyplace to go. The population I sometimes work with, maybe their money skills are not as good as yours or mine, so if they are alone and they don't have a lot of support services, they might spend a good portion of their cheque and they don't have rent money. That is why we find that some individuals are having to go to our emergency shelter.

Looking down the road at the future, I think the problem is just going to continue. There certainly is non-profit housing, rent geared to income for individuals, but the reality is that they have a very long waiting list. I had someone a few days ago telling me that they'll be waiting maybe five years to get into affordable housing. I think the issue is just going to continue to get worse because there just are not a lot of places out there that are affordable. I don't think necessarily that's the fault of landlords. They certainly have to pay the mortgage on their building.

I've seen places in Thunder Bay that sometimes are not adequately kept. I've gone into some rooming houses in various parts of town, and it's amazing that people can actually live in that type of environment. A lot of times we go home to our nice houses and don't really realize some of the conditions that other people live in. They either feel trapped or dependent emotionally on the landlord or they just can't get out of that situation, so they learn that they have to put up with conditions that are substandard.

Mr Parker: I share your concern for vulnerable people and for people who need protection. I'm not sure that includes all tenants, however, and I'll give you an example.

One phenomenon I see -- I don't know if it's on the increase, but I'm certainly aware that it's quite substantial -- is well-to-do people, people who can afford their own homes, people who have their own homes who either choose not to live in their own home or choose to sell their home, take a rental apartment and get the advantages the current tenant protection and rent control laws give them. Then they put the money into a home in the country or a condo in Florida or something like that and get the same benefits and protection from the laws that we are trying to direct towards those in need. I don't know that we want to give them the benefit of that protection.

Can you give us some guidance on how we can direct our assistance to people who need it and not see it spill over to people who frankly don't need it?

Mrs Parsons: We have to be careful when we classify people and say these are deserving individuals and these are non-deserving. Protection is for everyone; it is not just for vulnerable individuals. Anyone renting an apartment or a house has the same rights and responsibilities as individuals who are more vulnerable When I was renting an apartment before I bought my house, even though I had the knowledge and the skills and the information, I wanted to know that those laws and guidelines protected me as well as individuals who have special needs or are more vulnerable. I would want to know that security exists too. It's our responsibility to not necessarily classify individuals who are more vulnerable and say that "normal people" don't have these rights but more vulnerable people do.

The Chair: Thank you very much. Mr Parker, I want you to know I've given you back that time I cheated you out of earlier.

Mr Sergio: I thought you were taking it off my time.

Mrs Parsons, thanks for coming to present to us. A lot has been said about the 6% vacancy rate here in Thunder Bay. Why 6%? Can it be that people just can't afford the rent of those units or just can't afford a high rent, regardless of the 6% vacancy rate?

Mrs Parsons: Yes, I know it is 6% and I don't really know that this is necessarily accurate as far as looking at people's lives is concerned. Numbers are really good, but when you start looking at individual lives and you sit down and talk to them I think it's very different. I have seen that people are really struggling.

The program I presently run at Lutheran Community Care Centre/Housing Access Thunder Bay will be completed or stopped on Friday because of funding cutbacks, so that will have an impact as well. I served as an advocate and as almost a go-between for clients and landlords, and now that isn't going to be there for individuals. I've seen that people need that kind of intervention. I've had a lot of people come to me and say: "I don't really think it is right that my basement apartment gets flooded and that there are things hanging from my ceilings when my two-year-old daughter is trying to get in. Is that right?" Then I would help them to fix some of those things with the landlord. So yes, even though it looks like 6% really isn't that much, I think that affordable housing, adequate housing is certainly lacking.

Mr Sergio: Just for your knowledge, we were told this morning that there is a waiting period of probably a few months for really affordable accommodation. In Toronto we are talking about a four- or five-year waiting period, so you can imagine the demand.

Let me ask you another question. We have been told that we need some fine-tuning with respect to legislation in the area of tenant-landlord disputes. The government is thinking of putting in some new system. We were told this morning, for example, by a previous deputant that the system should be an arm's-length system. In your view, do you feel that every board and commission is practically filled with parties' friends or appointments, stuff like that? Do you think this would be a good thing to have, and how should it be formed to be really at arm's length to be efficient?

Mrs Parsons: Tenants need to feel comfortable in using a system they can access where they don't feel intimidated. A lot of individuals I have worked with who have had major concerns I've certainly referred to landlord-tenant people and made suggestions about going to court, either trying to get their money back or whatever the situation is. Most times, usually about eight out of 10 times, people are too intimidated to follow through with that. I think a system has to be developed where people feel more comfortable, where they don't feel threatened, and they do want to exercise their rights.

The Chair: Thank you, Ms Parsons. We appreciate your attending with us today and being part of the process.

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JOHN STREET TENANT ASSOCIATION

The Chair: Our next delegation is from the John Street Tenant Association, Teuvo Helenius and Tracy Crosson. Good morning. Welcome to our committee.

Mr Teuvo Helenius: Thank you. Welcome to Thunder Bay. This brief is being submitted on behalf of the John Street Tenant Association, which represents 46 units, not 45. I'm Teuvo Helenius, a volunteer with the association, and I am with Tracy Crosson, the current chair of the association.

John Street Tenant Association is a housing venture with 46 units which are listed with the Thunder Bay District Housing Authority. We are considered to be in a low-rental building. The association has been active over the years in keeping our tenants advised on issues that relate to them. We have, through our own resources, provided workshops on budgeting on less than $12,000 per year and strategies to make our neighbourhoods safe and free of discrimination and violence.

The provincial government, with its discussion paper New Directions, is planning to attack tenant rights to the core. This is why we have decided to come and speak today. Premier Harris has been quoted as saying, "No tenants will have their rents go up any more under the system we're proposing than under the current system." We wish that this statement proves to be true.

With what is being termed as vacancy decontrol, how can rents go anywhere but up? Vacancy decontrol will allow landlords to increase rent to whatever the market will bear when tenants moves from their current units. Landlords will also be allowed to apply for an above-guideline rent increase because it was, for example, an unusually cold year and the utility costs increased. Tenants will not be able to apply for a rent reduction the following year, when utility costs go back to their normal levels. This will create additional fixed costs that will be borne by tenants, which here in the north is quite possible and in fact probable.

The government's own study, the Lampert report, outlines that 25% of tenants move every year. The study also estimates that over a five-year period about 70% of all tenants move at least once. Effectively this means that over five years, 70% of all units in Ontario will have their rents decontrolled. For tenants who stay in their units, the availability of affordable housing will diminish as the majority of units will have been decontrolled. This will in reality force tenants to consider carefully whether or not to move. If landlords are getting rents they feel are below the current market value, they must get current tenants to move so the rents can then be adjusted to whatever the market will bear. This undoubtedly will lead in certain cases to the tenant having to choose between harassment for staying in the unit and going into the new rental marketplace to look for affordable housing.

Tenant-landlord relations in this province will definitely suffer as a result of this proposed legislation.

The government's proposed anti-harassment unit to deal with harassment to tenants will definitely have its work cut out for it. The possibilities of illegal harassment to get the tenant to move will increase significantly. To deal with this possibility, the government is looking at creating another entity to deal with harassment while at the same time it is eliminating the rent registry office, which is considered a valued service especially by those tenants who do not belong to an organized tenants' association. We wonder if tenants will follow up on harassment claims or simply look for another apartment in the now decontrolled market.

In our community, we are seeing crucial cuts of services and programs to tenants. Most recently, Lutheran Community Care Centre's housing program has been defunded. This service was vital to all tenants looking for reasonable housing, but especially to those tenants who face additional barriers. This was a place where, regardless of age, source of income, amount of income, racial heritage, ethnicity, sex or religion, services were provided to help these individuals locate affordable housing.

In my personal, paid job as a counsellor for youth, this housing registry was the prime source of information for young people to find affordable, updated housing. The updated referral listings of affordable housing in the district of Thunder Bay were a valuable resource to young people looking for their first apartment, and this service was provided free of charge.

Where are these individuals to turn now? Is the government expecting current and existing resources to provide this service when these organizations have already made changes due to declining financial resources? It seems we will be expecting organizations such as Shelter House to further increase their workload to deal with the rising client loads they will invariably see in helping people find suitable and affordable housing. Like all services, they are facing financial hardship, and to expect them to do more with less is unrealistic.

Another cost that is incurred by the tenant surfaces from the Rent Control Act's guidelines in reference to maintenance and capital repair work. Currently the landlord must show that when he or she applies for an above-guideline increase based on capital repair, the 2% has been spent on capital repairs. Under the government's proposed plan, this 2% will not have to be accounted for.

The government believes that the current system does not provide any incentive for landlords to put investment into maintenance of their buildings. Under proposed changes, municipalities will be given new powers to punish landlords who do not do repairs on their buildings. The problem is that our municipal government is already dealing with a shortage of inspectors who give out work orders and ensure that work orders are being carried out. This is just proposing that the problem be transferred from the province to the municipality. The province would therefore lose some of its responsibility when it comes to ensuring safe, affordable housing. To expect that each municipality treat the work orders in the same manner, with the financial hardships of municipalities across Ontario, and especially in northern Ontario, is totally unrealistic.

It also appears possible to increase the rent if a tenant has moved from a unit that is in disrepair without the work ever getting done. If this is the case, then the landlord has a choice between doing repairs that may be very costly or getting the tenant to decide to move out and then possibly not do the repairs and re-rent the unit at a higher rent.

The government is proposing to change the Landlord and Tenant Act to "give both the landlord and tenant improved ability to enforce their rights." We do not see how this proposal improves the rights of tenants.

With respect to the current right of assignment of lease, the landlord will have complete power to approve or disapprove the sublet, and if a higher rent can be obtained, the chance of being allowed to sublet will decrease significantly.

In respect to a tenant who has decided to move to another unit or apartment and has given notice of termination, the proposal seems to allow unlimited access to the landlord to show the unit to prospective tenants. This means that all privacy is forsaken. Would the tenant then be eligible to file harassment charges should they feel that the disruption to their lives is not warranted?

As to the question whether tenants should be paid interest on their last month's rent deposit, we feel that fair market value interest should be paid annually to the tenant as this is his or her asset which, if the tenant is not moving out, is being used by the landlord for their own purposes.

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With respect to the proposed new dispute resolution system, we are in favour of a system that ensures quick, efficient and fair decisions. We understand that the ministry has not yet developed a proposal for the new dispute resolution system. We feel that under any new system the tribunal decision-makers must be neutral and not political appointments made by the government of the day.

The idea of introducing application fees to initiate a dispute application may recover some of the costs but would be another difficult burden for some tenants to face as their finances are already stretched to the limit.

This tribunal, to initiate and get operational, is not necessarily cost-effective. It seems the mediators who would be required before it goes to an adjudicator must be carefully selected to ensure fairness. Decisions that arise where dollars are awarded will probably still require the courts to ensure compliance.

The proposal speaks of security of tenure and conversions; in the same breath, it proposes to end the Rental Housing Protection Act. This will allow a much easier process for rental units to be converted to use as condominiums. The protection will change from protecting the unit to protecting the sitting tenant. As more and more rental units disappear and turn into condominiums, the availability of rental stock will disappear. With declining units for rent, this will definitely increase the demand for rental units while at the same time not increase the supply of these units, so the price of each unit, according to demand-supply economics, will increase. Many tenants in these conversions will not be in the position to purchase the new unit as a condominium because of an inability to secure the needed funds.

The proposal as it relates to care homes leaves the residents with less of a right to privacy and provides a quick method of eviction for these tenants. The care home operator will be allowed to enter the resident's unit to provide care or perform bed checks if the tenant agrees to this. Why do these tenants receive less protection under the law?

Here in our city of Thunder Bay government cutbacks to primary health care facilities such as Pioneer Ridge, Alpha Court, Canadian Mental Health Association Services and Lakehead Psychiatric Hospital have created a sense of fear in the community due in part to decreasing residence spaces. Clients from these centres face further obstacles when forced to leave these facilities. Housing becomes an issue due in part to the lack of information and advocacy these residents so dearly need. Here is where services such as Shelter House will be expected to house and provide ongoing support for these residents. Problems arise when we look at the number of people served and the availability of bed spaces at this facility.

Some of the residents may not have any family or next of kin in Thunder Bay, yet the philosophy of our current provincial government transfers the care of the residents back to the family. Who is going to care for the residents who have no immediate support? Also, are the families now going to be expected to support financially and socially these residents when the cost of living and unemployment are all very high? Is the government going to subsidize these families and individuals to care for the residents?

Recent studies have also stated that having a family member who requires ongoing support can be very taxing emotionally, spiritually and financially to the family. In most cases, the studies have further illustrated a precipitation of psychological, verbal and physical abuse to the residents who have been forced to move back into the family home because of changing dynamics within the family itself. Who is going to protect the rights of the tenants who have been forced to move back into the family home due to recent cutbacks?

Other sectors of the population that we feel are going to be affected are single parents, individuals on Gains, youth and general welfare recipients. We feel they are facing two dilemmas, the first one being the requirement here in Thunder Bay to have proof of residency to be eligible for social assistance. Problems will arise in securing housing due in part to the lack of available affordable housing. The second one is the allocation of funds through the Ministry of Community and Social Services. Here the provision of the housing allowance is at a ceiling of $325 per month, which makes it extremely difficult locally to secure anything more than a room or shared accommodation. If we are talking about quality of life, the tenant has to use more of the income supplement to secure affordable and adequate housing. It is not uncommon to have the tenant pay more than 50% of their monthly income just to have a roof over their head.

Surprisingly enough, what we believe to be an inherent component of one's basic living is now becoming an issue facing tenants which we are going to have to be prepared to fight for.

As an advocate on youth issues, I am aware of the problems facing our young people. Those between the ages of 16 and 18 are not eligible to collect social assistance and their choices for housing are very limited. If they cannot support themselves by their own resources, they will be forced to live with whoever will accept them. Sometimes these young people can move back into a family home, but when this is not a possibility they must do whatever it takes to survive. If anyone has spent a winter here in Thunder Bay, they will quickly realize that the climate is not very hospitable for those with no residency.

In Thunder Bay, we see a trend in the housing sector. Areas such as the east end-Simpson Street, County Park, Limbrick-James and Bay-Secord have changed from first-generation family dwellings to rental units. With more people demanding affordable housing in these areas it is creating a demand on rental units such that, with the elimination of rent control for vacant units, the price of these rental units will no longer be affordable and the tenants will be forced to move or pay the new price, if they are able to do so.

In conclusion, the proposed legislation does little to ensure the stock of rental units. It takes away tenant rights to affordable housing and severely restricts the services that have kept tenants informed of their rights. This government must be reminded that as northeners we deserve the same access to services as anywhere else in the province. We do not have a tenant federation here as of yet to keep tenants informed and educated. We are being asked to do more with less, but we are already stretched to the limit.

In addition to these hardships, many of the services which tenants could access in regard to housing issues have been cut or have already disappeared. Here it is not a possible solution to live on the streets over the winter as it seems to be in some places. To continue living here, one does need to be housed on a continuous basis, and the resources to see this happen are quickly disappearing.

At one time, unemployment in this province and country was a sociological issue we felt was an ill of our society, not a mainstay of our economy. Recently, the federal government has changed its economic priorities to control inflation and interest rates as opposed to the rate of unemployment. What this has done is make unemployment -- or more appropriately, the unemployed -- a tool of this inflation and interest control fight. Now an unemployment rate of close to 10% is normal and even accepted. To keep inflation and interest rates in check, an unemployment rate of nearly 10% ensures market control of wages and definitely affects people's negotiating capabilities because there is a lot of fear of job loss.

It may also be true that this provincial government is looking at the housing market in the same manner. With rents being decontrolled in the vacant units, and no other forms of limiting rent increases on these units, it may be left up to the marketplace to determine what is a fair rent. If this is the case, we will soon be discussing the homelessness rate, as this would be the market factor that limits what can be charged for fair market rent. It will no longer be an inherent right to have housing.

To close, we would like to comment on this process of being allowed to have our input heard. We, as tenants of Thunder Bay, have never as of yet been contacted in regard to changes in legislation that affect renters, so this is the first opportunity we have had to comment on these proposed changes. We feel that the time frame for this consultation is very short and therefore limits the opportunity for all tenants to have their voices heard. We believe those most affected by this proposed legislation have been given the least opportunity to speak in their own behalf. This particular location for the consultation is not close to most tenants in this city. To us, it is clear that the government is not really interested in the opinion of all tenants and is using the process to fast-track the proposed legislation.

We hope that the government listens to our concern and uses this consultation as the beginning, not the ending, of the consultative process. The proposed legislative changes will affect many people who live in Ontario currently, and even those who do not live here as of yet. We firmly believe that before changes are implemented, and then people forced to live with the changes, the government is well advised to continue to consult tenants across the province.

The Chair: Thank you. Basically, you've used up all but a minute of your allotted time, so there's really no effective time for questioning. Did you have a final comment you wanted to make?

Mr Helenius: No, I that our paper says it all.

The Chair: Thank you very much. We appreciate your interest in our process and your input this morning.

We are now recessed until 1 o'clock.

The committee recessed from 1159 to 1303.

RAINY RIVER DISTRICT COMMUNITY LEGAL CLINIC

The Chair: Good afternoon, ladies and gentlemen. Our first presenter this afternoon is Sally Burns from the Rainy River District Community Legal Clinic. Welcome, Ms Burns. We appreciate your being here today

Ms Sally Burns: How do you do? My name is Sally Burns. I'm from the Rainy River District Community Legal Clinic and I'm a community legal worker there. I'm presenting this submission on behalf of Mr Koprowski, our executive director, who prepared it but was unable to attend today.

We are making this submission on behalf of the many people who live in the Rainy River district of Ontario who seek our assistance at the Rainy River District Community Legal Clinic in Fort Frances and in the satellite office in Atikokan. Our clinic is one of about 70 in the province whose staff provide legal advice and assistance to the poor and disadvantaged people of our province: those who cannot afford to retain a lawyer privately and whose legal issues very often do not qualify them to apply for a legal aid certificate under the Ontario legal aid plan. Many of these people are tenants, more often than not because of the fact that they simply cannot afford to purchase and maintain their own residence, and who often are just barely able to afford their current rental accommodation.

Although Mr Koprowski was not able to attend before this committee in person, he did write this submission, and we at our clinic felt strongly that the proposed legislation was of significant importance to have me come and address this committee.

We understand, from having read the government discussion paper, that the proposed Tenant Protection Act is intended to consolidate six pieces of legislation, including the Rent Control Act, and is also intended to remove the hearing of landlord and tenant disputes from the current judicial process. Although it is difficult to know exactly what issues these submissions should deal with, because we have not actually seen any of the draft legislation, nevertheless I wish to focus on two matters today; namely, the rent control provisions of the proposed legislation and the establishment of an administrative tribunal to deal with landlord and tenant disputes.

On rent control: The news release dated June 25, 1996, and the discussion paper both state that when a tenant moves out of an apartment the landlord will be free to set a new rent with the new tenant, the so-called market rate rental. Once the new rent is set, the new tenant will be protected by rent control. Rent control will still apply to tenants who remain in their current rental premises, which I can only assume to mean those premises that they are living in at the time the proposed legislation actually becomes law in the province. I can also only assume that though it is "apartment" that is referred to in the news release and discussion paper, this proposal on rent control will also apply to mobile homes in mobile home parks and houses that are rented premises as well.

The material also states, "For tenants, choice...is as important an issue as rent control or maintenance." Despite this statement, we have a major concern: The fact is that the likely result of these proposals will be that the landlord will be in a better position to set a higher rate of rent than our clients can pay simply by virtue of the landlord's superior bargaining power and by the fact that it is very likely that there will simply be available to the landlord other tenants who are better able to afford the rent. These will, in all probability, be those tenants who are not on social assistance or who are not unemployed or who are not receiving benefits under the Workers' Compensation Act of Ontario and who will consequently be better able to pay the higher rent.

Some of our clients have already had to leave their rental units simply by virtue of the fact that the current amount of the shelter allowance portion of their benefits under the Family Benefits Act and the General Welfare Assistance Act does not even match their current monthly rent amount as a result of the changes in the allowance which came about on October 1, 1995. How much more difficult a time will they have to make their rental payments if the landlord can negotiate market rents which will be significantly higher than current rents when the tenant moves to new premises? If the tenants cannot move for fear of being unable to afford the higher market rent, then they must remain where they are, regardless of whether they might have to move to find a job or because of the poor condition of their units. If they are forced to remain because of their inability to pay possibly higher rents, then where is their opportunity for choice?

The ability to change market rents on turnover of apartments will be a window of opportunity for landlords but a dead end for many of our clientele. For those tenants who cannot afford a higher rent, they will be virtual prisoners of the premises they are living in if the legislation is passed as proposed.

In the discussion paper it is also stated, "There are many aspects of rent control that work -- those we will not change." But what aspects are considered to work, and for whom? We have found in our line of work that rent control -- that is, the limitation of rent increases -- in fact works, and works well, for our low-income clients. If rent control works, why change it to allow the imposition of market value rents to incoming tenants? Is it the concern that rent control does not work for landlords? Is that the reason market rents can be charged? Granted, I understand that rent control will also be applied to the market rental amount after it is set, but what good is rent control for our clients at that stage when they probably won't be able to afford the market rent in the first place?

Some people also probably won't be able to afford accommodation in newly constructed units because it is proposed, according to the discussion paper, that rent guidelines will not apply to new construction.

If rent at market rates can be imposed on vacant units, will there be any corresponding increases to the amount of the shelter allowance permitted to tenants who are receiving benefits under the Family Benefits Act and the General Welfare Assistance Act to at least allow the choice you wish them to have? This would be especially imperative if the number of rent-geared-to-income units is also reduced in the coming years. Market rents and reduction of rent-geared-to-income units would be a double whammy that few, if any, of our clients could handle financially, and who therefore would be placed into a totally untenable situation. For them, where is the protection in the Tenant Protection Act?

To go on to the dispute resolution system, our second area of concern, we understand that the Tenant Protection Act is intended to replace the current access to the Ontario Court (General Division) in landlord and tenant disputes, with access to an administrative tribunal dealing exclusively with landlord and tenant matters. This reform, according to the discussion paper, is intended to ensure quick, efficient and fair decisions, and to reduce costs.

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In the clinic system, we have a great deal of experience in appearing before administrative tribunals such as the Social Assistance Review Board, rent control officers, the Workers' Compensation Board, the Workers' Compensation Appeals Tribunal, boards of referees and administrative review panels. Although members of those administrative tribunals develop a fair amount of expertise in their particular areas of adjudication, one of the major drawbacks in dealing with these boards, not only here in the northern part of the province but also in other parts of the province as well, is that, first of all, we and our clients often must wait several months, not just days, to even have a hearing scheduled. Significant costs are also expended on just getting the board member or members to the place of the hearing. Secondly, even after the hearing is held, we must often wait several months before we even receive a written decision from the board member or members.

The point is that in landlord and tenant matters, tenants, and even landlords, cannot afford to wait months for a hearing date and then more time after that to receive a decision. Issues such as the need for the landlord to make significant repairs, for the unscrupulous landlord to resume the supply of water and heat to the rented premises, for decisions on whether a tenant must move out of the rented premises or pay an above-the-guideline rent increase, are among those issues that cry out for speedy decision-making while still allowing parties to adequately present their cases.

Currently, we have relatively quick access to judges who sit or who are responsible for hearings in each district or county of this province. The judges are already in position and the facilities in which the cases are heard are already in place. However, if this system is to be replaced, I cannot see how speed in handling disputes can be achieved without having an administrative board member or members also sitting in each county and district of this province. To do otherwise will only leave us with the same problems we now have with the other administrative bodies we have to deal with and which basically are headquartered in Toronto.

Unless such a person or persons can be so placed, then we see absolutely no reason whatsoever to replace our current court system. Any delays that are experienced are not necessarily caused by delays in access to the court system; they are the result of the time periods outlined in the governing landlord and tenant legislation. We are not at all advocating a change in those time periods; we are only suggesting that it is not access to the court system that is the cause of any suspect delays. Any replacement system would have to seriously address the time element in access and decision-making.

As for the question of costs, the judges are already in place and so are the facilities. If the current judicial process is maintained for hearing landlord and tenant disputes, there will be no increase in cost to the taxpayers of this province as there would be if an entirely new administrative tribunal and staff were set up.

As for the issue of costs or disbursements for the tenant in having the matter heard in court, such costs are either minimal on non-existent already, so that I foresee little or no savings in costs in setting up an entirely new system.

In short, as far as process is concerned -- as opposed to time periods set out in the landlord and tenant legislation -- the landlord and tenant court is about the fastest court system in Ontario. Why is there such concern in changing it? If anything, this government should just simplify the court forms that have to be filed in landlord and tenant disputes if it is truly interested in speed and cost-effectiveness. It should also have each county and district designate a judge or judges to hear only landlord and tenant disputes. This will solve any uncertainties about expertise, speed and cost-effectiveness.

In conclusion, after having read the entire government discussion paper, I feel that I could take up more time of this session just with our own submissions were we to deal with every matter raised in the paper. However, with the time constraints we have, and having consideration for the likelihood that other groups will deal with these other issues, we wanted to have this committee focus on the two issues we raised today.

I do not feel the procedure for hearing disputes is a problem, subject to the suggestions I made earlier. I also have a great fear for the welfare of many people -- not just those who are or who may become our clients -- in this province if rent control were amended as this government proposes. The poor we will always have with us; a sensitivity to their plight would surely be the mark of a caring and understanding government.

Mr Maves: Thank you for your presentation today. With regard to the dispute resolution system, we have had testimony from folks on all sides of the issue and there has been a substantial amount of support for the existing court system. Some folks have also talked about mediation services which are in place in some communities now and seem to be working quite well and very cheaply and effectively. I wonder if you have any experience with that in this area.

Ms Burns: I think it's a good idea. It's quite often a way of getting things solved without getting into the court system, and it can, of course, settle things more quickly because it's usually not the waiting period for the court that there is for the person who's the mediator. We have had people coming around doing pre-trials, and that speeds the whole process as well. Quite often it spurs the parties on to try to solve it themselves.

Mr Stewart: Just one comment regarding this. There is not any draft legislation yet. This is strictly a discussion paper, and I want to emphasize that fact.

The other thing I want to mention very quickly is that we're hearing this morning about great waiting lists for affordable accommodations now. In my mind that says the past legislation hasn't worked either, so should we not be looking at something new to make some of those changes?

Ms Burns: Something new is probably necessary, but I think the dispute resolution can be maintained the same way.

Mrs McLeod: I commend you for trying to pull together some very separate pieces of the government's housing policy, or non-policy. Unfortunately, in this particular discussion paper we tend to focus only on the rent control, or the loss of rent control, and what you've done is try to put that into the context of the clients you're dealing with. You touched on one issue that I think is really critical when you mentioned that the amount of shelter allowance is not likely to increase to allow your clients to go into the units made available at what would be market rents.

Ms Burns: It did, in fact, decrease.

Mrs McLeod: Yes. Do you have any idea what kinds of shelter allowance the government would have to be prepared to pay if your clients were able to go into existing rental units at market rates?

Ms Burns: I'm from Atikokan, and it's very difficult to relate that to the rest of the province. I do know that some of my clients are in rent-geared-to-income and some aren't and they're on assistance. In Atikokan, rent-geared-to-income can mean rents of $150, whereas rent in Atikokan can be $500 or $600. I imagine it's a higher range we're talking about in Toronto, but it probably shows you the kind of range difference they'd be talking about paying. Otherwise, people would be on the streets trying to live.

Mrs McLeod: I think that's the thing. If you relate taking off rent control with no controls over rents, just substituting non-profit housing with a shelter allowance approach, is the shelter allowance really going to be large enough to allow people to go into the existing housing? I think it's critical that those two issues be looked at jointly or it would be a disaster, even for the clients of the government.

Mr Marchese: Ms Burns, I'm one person who believes that the present court system is a better system to pursue, that if there are problems there you make the system a little more efficient. To create a tribunal causes several problems: (1) the whole issue of the delays you talked about, which are very likely to be likely, and (2) the whole issue of neutrality in the appointments process. Many of the legal things that have come before this committee have spoken about that particular concern.

The other part I want to ask a question around is that Mr Stewart said: "We have waiting lists, so isn't that a problem? Isn't that an indication that the present system is failing?" So what do they propose? They propose something to help landlords. They want to decontrol the system which transfers money from the tenants to the landlords; they want to get rid of the rent registry, which gives no protection to tenants any longer; they want the Rental Housing Protection Act to be abolished, and for all effective purposes, rental housing accommodation is likely to disappear by and large; and they talked about the legally withholding of money when buildings are in serious disrepair as something to do away with. All of these are designed to help the landlord, and none, as Mr Lampert said, who wrote the report for the government, is going to create any housing. Do you see anything in this report that's going to make the system better in terms of more housing availability for the working poor, or that there's anything here that helps the tenants?

Ms Burns: No, not really.

The Chair: Thank you, Ms Burns. We appreciate your interest in our process and your input today.

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THUNDER BAY COALITION AGAINST POVERTY

The Chair: Our next presenter is Christine Mather, coordinator of the Thunder Bay Coalition Against Poverty. Good afternoon, and welcome.

Ms Chris Mather: I'm Chris Mather, coordinator for the Thunder Bay Coalition Against Poverty. This is Doug Powell, the treasurer of our board of directors. On my far right is Beulah Besharah, our board president; next to her is Christine Scheibler, one of our food security workers; and next to me is Barb Carignan, one of our most dedicated volunteers.

The Thunder Bay Coalition Against Poverty is a non-profit community organization concerned about the depth and extent of poverty in our community. The majority of our members are people whose incomes fall below the Statistics Canada poverty lines. Many of our members are on some form of social assistance. One of our primary activities is the operation of a food bank at which we serve approximately 400 people a month. It is from our contact with these people and our knowledge of the difficulties they face that our concern about the proposals outlined in Tenant Protection Legislation -- New Directions for Discussion arise.

Here I want to make the point that one of the primary responsibilities of Ms Scheibler is to attend the food bank and to solicit poor people's opinions on various issues. That's how we put our stuff together. We go to the poor people; we ask them their opinions. So any members present here today who really are interested in what poor people think, you're getting it.

There is indeed much to be concerned about in the discussion paper. Because of time limits, however, we've chosen to limit the presentations to those issues which were of most concern to the people we serve, people not generally heard by governments.

Concerning the issue of rent control, we have five points to make.

(1) Allowing landlords to increase the rent they charge on a unit once it becomes vacant will lead to a steady increase in rents overall, and this will obviously result in a decrease in the number of homes poor people will be able to afford to rent.

Our members are already experiencing difficulty in paying for appropriate, safe housing. High rents are one of the primary reasons they use our food bank.

(2) If landlords are allowed to increase the rent on vacant units, it will be to their advantage to have a high turnover of renters and to their disadvantage to maintain positive relationships with their sitting tenants.

The people we serve are already having to change residences an inordinate number of times. At our food bank we regularly hear of single mothers moving two or three times a year in a seemingly endless search for a relatively permanent home. Some of the reasons they move is that since the 22% cut to welfare payments, for instance, the maximum shelter allowance payable to a single parent and one child is $511, which is well below the average rental price in Thunder Bay, according to CMHA. Another reason they would move, for instance, is that one young woman we know moved into what she thought was going to be a permanent situation, but come winter the apartment was so damp -- the carpets, you'd put your foot on and the water came out of the carpets. Another reason they might have for moving would be, one of our members was being harassed by drug dealers who lived in the same building.

(3) If it becomes to a landlord's advantage to have a high turnover of tenants, it will lead to harassment of sitting tenants. This is not an illusory concern. In jurisdictions where this system has been allowed, it has resulted in tenant harassment. We don't need the experiment; we know it's not going to work.

Low-income people are particularly vulnerable to harassment. They are already involved in an ongoing struggle to provide the necessities of life and have little energy left to fight other battles. Thanks to the provincial government's introduction of the welfare fraud snitch line, single mothers on welfare are sitting ducks for harassment.

(4) The government is proposing that landlords be allowed to increase rents over the usual maximum allowable amount to compensate them for increases in property taxes. This government's policy of downloading on to municipalities makes property tax hikes inevitable. Allowing landlords this latitude will ensure that, yet again, low-income people will carry an unfair share of the province's financial difficulties. We would suggest that if poor people can be penalized to "help the province" by a cut of 22% in their incomes, then landlords can also afford a cut in their profits to help the same province.

We are deeply offended by a statement which appears on page 2 of your discussion paper. It states that rent increases resulting from this measure will "tend to be very low." We are not reassured. Many people who come to our food bank are now living on less than $550 a month. In fact the maximum allowable amount for a single person in this province is now $520. At that depth of poverty, there is no such thing as a very low rent increase. An increase of $5 a month is significant. We give people about $8 worth of food, and they queue up around the block to get $8 worth of food.

(5) The proposal that new buildings not be subject to rent control will result in less affordable housing being built, as developers will concentrate on building high-rent units. Therefore, a poor person's chance to live in a modern, safe building will be lessened. After all, developers don't have a responsibility to look after the disadvantaged; the government does.

One of the primary concerns of the parents with whom we come into contact is their desire for a safe, clean, well-maintained, modern home for their children.

Concerning the proposed anti-harassment measures, we have two points to make.

(1) Page 7 of the discussion paper proposes the establishment of an enforcement unit to investigate tenant complaints of harassment. We are sceptical of the level of protection that such units will provide. In the 1995 speech from the throne, the provincial government stated that it wished to "demonstrate its commitment to northern Ontario" and that it would "give northerners a greater voice." So far this commitment has been realized by such measures as the gutting of our women's directorate and health care system and by the replacement of our child support enforcement office with a long-distance phone number.

In light of our northern experience, we would like to ask the government members present today when these anti-harassment units will be established. We want a commitment that an enforcement office will be located in Thunder Bay. We want a commitment from these government members today that low-income people in Thunder Bay will have better anti-harassment protection than a 1-800 number to an understaffed office in Toronto. Please bear in mind that page 9 of your discussion paper talks about the need for public input to be balanced by cost-effectiveness and posits the closure of some existing rent control offices. You'll appreciate where our scepticism comes from.

(2) We believe that by proposing the establishment of anti-harassment units, the government is admitting that its policy of allowing rent increases on vacant apartments will make harassment of sitting tenants inevitable. This government knows it is leaving tenants open to victimization and is issuing vague promises that it will close the stable door after the horse has bolted.

The discussion paper addresses the conversion of rental units to other purposes. We have two points to make on this issue.

(1) In his preamble to the discussion paper, Mr Leach mentions that, "Builders are not building new rental accommodation," and "The private sector has no interest in investing in rental accommodation." Why then does the government propose allowing landlords complete freedom to change existing rental accommodation to other uses? If Mr Leach recognizes that builders are not interested in building new affordable rental units, why does he think doing away with existing units will be good for the province? Could it be that the government intends to look after developers at the expense of the supply of affordable rental homes?

(2) Page 11 of the paper says that should a landlord wish to demolish rental housing or change its use, sitting tenants will be given extended tenure. We have a series of questions from our food bank customers here. How long is "extended"? Under what conditions? Where will they move to? What will the supply of housing be in their community? Will people on social assistance or the working poor be given help with moving expenses?

Finally, concerning the proposed changes to the dispute mechanism, we have two points to make.

(1) We are not in favour of the adjudication of evictions being transferred from the court system to some form of tribunal or board. We compare this proposal to our experiences with the Social Assistance Review Board since this government came to power. The government appointed as its chair of the board a failed Tory candidate who was well known in Thunder Bay for her inaccurate and derogatory comments about social assistance recipients. From January to June of this year, only 12 of the 53 appeals she heard were resolved in the appellant's favour.

(2) Page 9 of the paper proposes user fees for the dispute resolution system, and I'm getting really tired of telling this government what I'm going to say yet again. User fees affect poor people to a greater extent than they do more affluent people. User fees are a form of regressive taxation. User fees are a barrier for low-income people to obtain justice. User fees cause low-income people to pay more than their fair share of the provincial debt.

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In summation, the Thunder Bay Coalition Against Poverty believes that, taken as a whole, the proposals contained in the paper Tenant Protection Legislation -- New Directions for Discussion do not represent the best interests of low-income tenants. Rents will increase; tenants will be harassed; the stock of affordable housing will decrease.

When these proposals are viewed in conjunction with this government's cancellation of most subsidized housing projects in Thunder Bay, its closure just last week of the access to housing program and its stated plan to divest itself of all public housing, the future for low-income tenants in our community looks bleak indeed.

One issue about process: It's very difficult for small community groups such as ours when public hearings on two issues are scheduled on the same day. We spent all morning at employment standards and then we came right over here. We can't help wondering if that was deliberately done.

Thank you for your attention to our presentation.

The Chair: Just a comment: I'm sure there was no deliberate attempt to make it difficult for people by scheduling both hearings simultaneously. It did cut down on some travelling expenses for the government.

Questions begin with the Liberals, for two and a half minutes.

Mrs McLeod: I would love to see a commitment to not having a 1-800 number for this, Chris, but I'm not optimistic, given what we've just gone through.

Brenda Reimer was here a little bit earlier, and she used a figure of 1,658 households that are on a waiting list for accommodation that they can afford, 75% of whom are categorized as desperate. We have a 6.5% vacancy rate in Thunder Bay. Theoretically, we shouldn't have a problem. Tell me why the people you work with on a daily basis are not able to find affordable accommodation in Thunder Bay.

Ms Mather: Because there isn't enough affordable accommodation. Landlords are there to make money, so they charge as much as they possibly can, and this government has cut people's income by 22%, so they don't have enough money to afford the apartments that are vacant. It looks really great when you say Thunder Bay has a large vacancy rate, but you've got to look at what those vacant apartments cost and compare them to the income of poor people.

Mrs McLeod: Do you have any sense of how large a shelter allowance would have to be in order for your clients who aren't in good housing now -- I think you called it relatively permanent housing -- to be able to move into relatively permanent housing?

Ms Mather: That's a real tricky question that I'm desperately thinking quickly of a safe response to give. It depends on the size of the family. A person with one child probably needs around $800 in this community. I did hear that, next to Toronto, we had one of the highest average rates in the province.

Mr Marchese: Ms Mather, I thank you and the whole group for coming. It's my belief that the users and those who help the users are the best and most informed about what's happening. One of the things this package does is to help the landlord more than it helps the tenants, as I see it. Although it's called the Tenant Protection Act, in the view of many it should be called the Landlord Protection Act. When you enumerate a whole list of benefits -- as examples, rent decontrol, which only transfers wealth from the tenant to the landlord; the rent registry is gone, no more protections for the tenant; the Rental Housing Protection Act means most units will be converted into condominiums; and the disappearance of our ability in the past to legally withhold money when the building was in serious disrepair -- we see these as things that help the landlord. In your reading and in your talking to the various users of the program, is there anything in this proposal that helps tenants?

Ms Mather: I couldn't find anything in it that helped tenants. We had to pick and choose from things that seemed to harm tenants and pick the ones that we thought were the worst.

Mr Marchese: They have cancelled all the non-profit and cooperative housing. The private sector says: "Rent control is not enough. We want more. We want a long carpet of tax breaks in order to be able to build." The private sector isn't building, isn't likely to build in many years, there's a diminishing supply, there's an affordability problem. Is there anything in this proposal that you think is going to build housing for those who need affordable housing?

Ms Mather: There isn't anything in this that's going to build housing for low-income people. What I think should happen is they should cancel their blood money tax cut and use that to help poor people.

Mr Marchese: Thank you very much for coming.

Mr Hardeman: First of all, thank you for coming in and making your presentation. You mentioned the tenant having problems because they were living next door to a drug dealer. Would you not suggest that there's a need to change the system so landlords and tenants together can deal with those types of situations to remove the drug dealer out of the complex?

Ms Mather: Absolutely. The problem with the things that you guys are suggesting, though, is that the percentage of tenants who are problem tenants is minuscule, so you don't put a whole pile of punitive conditions on the majority of people in order to deal with the minimum amount of disruptive tenants.

Mr Hardeman: But you would suggest that it does need addressing, that it is an issue.

Ms Mather: I think drug dealers could be dealt with by giving adequate resources to our police forces and paying attention to our criminal justice system.

Mr Hardeman: The other issue you brought up was the fact that if you decontrol the rent on vacant apartments, they will dramatically increase. Of course, the rent control has been put in place over the years because of low vacancy rate. We've heard a number of presentations this morning suggest that because there is a high vacancy rate in Thunder Bay, that doesn't change the fact that when the apartments are going to be reoccupied, they will still charge massive rents. But we have some numbers that suggest that in the past year, even with the controls, the landlords have not been raising the rents in Thunder Bay to their allowable rent increases. In fact, they've gone up 0.5% in the last year on average. Could you explain why, with decontrol, they would raise it far beyond what the market would support if they are presently allowed to do that but they're not doing it?

Ms Mather: Nowhere in my presentation do I express the concern that they'll raise the rents massively. A small increase is significant for a low-income person. We're talking about low-income tenants. I don't believe that anywhere in my presentation do I talk about massive increases.

Mr Hardeman: So you don't see that as happening, that there would be massive increases because of the deregulation.

Ms Mather: I don't know whether there would be massive increases. I do believe there would be increases and I believe there would be a cumulative effect. An apartment becomes vacant, it's raised $25; an apartment becomes vacant, it's raised $25. Most single mothers stay on welfare something like 3.5 years, so the accumulation of those increases over 3.5 years that a woman is on social assistance would then become significant.

Mr Hardeman: Recognizing that under the present regime the landlord has the ability to do that without vacating the apartment. This year they were allowed to raise it 2.8%, under the present regime. That is considerably more than they have been raising it. They've had the ability to do it, but they're not doing it. Could you tell me why?

Ms Mather: I'm sorry, I'm not understanding the point you're making. I've lost you. Could you try again?

Mr Hardeman: Presently, this year, a landlord in Thunder Bay can raise the rent by 2.8%. They're not doing it because the market forces do not allow them to do it. Some would be suggesting that if that restriction is removed, they will all of a sudden raise it 2.8% or more because they're not restricted. I have trouble understanding that, and I wondered if you could explain.

Ms Mather: No, I don't understand the logic.

The Chair: Thank you, folks. We appreciate your input this afternoon.

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OUR KIDS COUNT

The Chair: Our next presenters represent the organization Our Kids Count: Silvia Silver, Estella Howard, Tara Silver, Jerri Lyn Towell, Sheryl Flank and William Roberts. Good afternoon, and welcome to our committee hearings.

Ms Silvia Silver: My name is Silvia Silver. I'm the chair of the planning team committee for the County Park Community Family Resource Centre here in Thunder Bay. This community family resource centre is sponsored by the project Our Kids Count, which is funded by Health Canada. I am a woman living on a limited income, and I'm very concerned. I'm concerned for myself, my family, and for the community I live in. I am more than concerned. I'm afraid. I'm afraid of government policies such as tenant protection legislation being destroyed, all in the name of deficit reduction.

This government does not exist to serve the needs of Ontario citizens. This government does not exist to create an environment that is nurturing to our children. This government exists to reduce the deficit. We are talking about cold hard cash, and the cold hard fact, to use Mr Al Leach's term, is that children are suffering.

When the cuts to welfare happened and the public spoke out, you didn't listen, and I have no reason to believe you'll listen today. Yet I am committed to social change and I believe, as a citizen of a democratic country, that I have the right and responsibility to speak for those who are either unable or too fearful to speak for themselves. I am speaking for our Ontario children. I am speaking for Sean, who is four. I am speaking for Amber, who is 12. I am speaking for Alisa, who is 16 with a newborn baby to take care of. These are real people. These are real lives, and these lives count.

The major goal of Our Kids Count is to promote the health and development of children ages 6 and under who are in need of support.

There are 3,220 low-income families and 5,385 low-income individuals in the city of Thunder Bay. These figures were taken from the 1991 census, and I suspect those numbers would be much higher today. There are presently 2,320 families and individuals on general welfare and 2,124 sole-support families in this city. Much of my volunteer work is with low-income families, families that will be affected by the proposed New Directions for tenant protection legislation.

In reading through this paper, I decided I would focus on a particular word and/or concept. The word or concept I am focusing on is "negotiate," meaning to "transfer or assign to another in return for something of equal value." I use this term because it was used in the New Directions discussion paper, and I quote: "When a unit is vacated, the landlord will negotiate the incoming tenant's rent without regulatory restriction."

What we are talking about is equal value between how much a landlord believes the living space is worth, in terms of dollars, and the amount of money a person is able or willing to pay to stay in that same living space.

As I see it, the landlord's goal is to get a return on an investment, perhaps to simply cover the mortgage payments, taxes, hopefully upkeep, and then profit. The tenant's goal is to acquire a decent and safe living space that's affordable. What I believe you are suggesting is that the landlord would be willing to sit down with the potential tenant, each of them look at their financial situations and then negotiate a fair monthly amount for both of them.

Wow, that's incredible. Do you really think they would do it? Hello out there. Maybe it's time for a little reality check.

Try to imagine a scene in Safeway with a lineup of customers who would like to negotiate the price of milk or eggs or, better yet, tuna. Try to imagine negotiating the price of gas at your local Petrocan: "Excuse me, sir, I've noticed the price of gas is a little high this week. I had to do some major repairs on my car lately, so would you consider dropping the price a little, just this one time maybe?"

Landlords are business people, some small business and some big business. Not unlike large grocery chains or your local gas station, they are in business for profit. Why else would they be renting a home or building?

I believe it would be a rare instance that anyone on this committee would be renting a home. People who rent homes are most often people who cannot afford to buy a home. We're talking about low-income families, students, people with disabilities and others. Have you considered the impact such decisions could have on their lives?

We present a skit:

Interjection: "That's right. You're talking to me. I'm no pretty lady from the bourgeoisie. I'm a working-class mother with a family of four, and I don't need no landlord at my door."

Interjections: "To negotiate, to negotiate, to negotiate."

Interjection: "Knock, knock, knock, knock."

Interjection: "Oh, someone at the door. Oh, hello."

Interjection: "Hello. I read the ad in the paper for your apartment."

Interjection: "Are you sure you have the right person?"

Interjection: "Yes. Isn't this 204 Smith Street?"

Interjection: "Yes. My name is" --

Interjection: "Your name is Mr Bloodsucker, right?"

Interjection: "No, no, Bloodsucker. It's French."

Interjection: "I'm sorry, I didn't mean to say it the wrong way. Anyway, the point is, I'm here to negotiate the rent."

Interjection: "Negotiate?"

Interjection: "Yes, yes. I would like to sit down with you and maybe you could tell me what your financial needs are and I could tell you what my financial needs are and we could work it out together. Isn't that a neat idea? You know, him and I together, sharing, working out the rent. That's really fair. I like it. Will you do that with me?"

Interjection: "In a word? No."

Interjections: "Negotiate, negotiate."

Ms Silver: There are 3,700 rent-geared-to-income units in Thunder Bay, with a waiting list of 1,685 people. Public housing and/or Ontario housing, social and co-operative and/or non-profit housing and tenant protection legislation exist because the private sector failed to meet the needs of Ontario citizens.

Let's look at the average rent here in the city of Thunder Bay. The average rent for a one-bedroom unit is $518 and the current market rent for a three-bedroom town house is $840. If you're living on a limited income, which is often the reason most people cannot afford to buy a home, you're forced to pay rents that often exceed monthly budgets. Rent must be paid. Shelter is essential, and sometimes meeting the monthly rent means not meeting the nutritional need of a family, and we're talking about children here. We're talking about hunger. We're talking about abuse and neglect, not by parents but by a system whose provincial prayer begins with "We must reduce the deficit," and whose god is private business.

If you're receiving social assistance, the maximum allowable rent for a family of four is $602. This amount includes all utilities and heat. Those of us living in this northern climate know that we require heat seven to eight months of the year and heat is expensive.

Now let's look at a single parent with three children renting a three-bedroom apartment -- one room for the parent and two more to share with the three children, not unreasonable. If the current market rent for a three-bedroom town house is $840, this does not include utilities and heat. The tenant must come up with the additional money. Have you considered how they do this? A significant number of families I work with are without telephones and vehicles. They're often isolated in their homes and, because of poverty, isolated in their spirit. Food is often limited and of poor quality. What you are asking now is for this mother to pay even more for her rent. Think about it. Where is this money going to come from? The private sector? Big business?

We present a skit:

Interjection: "That's right. You're talking about me. I'm a single parent with a family of three. My social worker gave me $602. If my rent goes any higher, I don't know what I'll do."

Interjections: "Negotiate, negotiate, negotiate."

Interjection: "Knock, knock, knock, knock, knock."

Interjection: "Why, hello, Miss Tenant."

Interjection: "Mr Bloodsucker, I'm busy right now. My kids are sleeping and I'm not feeling well."

Interjection: "Yes, I know."

Interjection: "This is about the fifteenth time you've been here this week. Now what do you want?"

Interjection: "A terrible thing has happened. You see, my mother is sick and all of her little animals are sick too. The bird is sick, the dog is sick, the cat is sick."

Interjection: "Excuse me, but what does that have to with me?"

Interjection: "I need your apartment for my mother because when she's going to die, she has it in her will that she wants to die in the place that she used to live in. She used to live here. She wants to die here with all her little dying pets. So please, please. I'll give you 24 hours. It's plenty of time. You just go out and -- I actually have another place for you, a nice little place, I emphasize the word "little," but it's a beautiful little place."

Interjection: "You are trying to get me to move just so you can increase the rent. Get out of here."

Interjection: "I'll have to try something else, won't I?"

Ms Silver: You may respond to this by saying that sitting tenants would not be affected. The ministry's proposed tenant protection package states: "The current rent control guideline formula will be retained for sitting tenants. The 1996 guideline is 2.8%. It will be about the same in 1997."

As I see it, sitting tenants could become sitting ducks for those landlords whose sole purpose is to turn a profit on their investment. Who is going to protect tenants? Getting rid of tenants and raising rents will happen. Harassing vulnerable people and hurting children will happen. The slogan "Ontario, we are back in business" clearly stated where this government's support sits.

We present a skit:

Interjection: "That's right. You're talking about me. I'm a teenage mother with a tiny baby. The roof is leaking badly and I can't afford a phone. If the rent goes any higher, we won't have a home."

The Chair: Thank you. We have about two minutes per caucus left for questions. We'll begin with Mr Marchese.

Mr Marchese: Thank you very much for the presentation. I think often we need to do that simply to get a sense of how things are likely to happen in the real world -- and they will happen, no doubt about that.

On the whole issue of negotiation, we had a Mr Burton in Toronto who was a developer and a landlord, and he said that it was an insult to tenants in particular to somehow suggest that they wouldn't be able to negotiate with a landlord. For the rest of us in the real world, it's easy to be able to understand that if you don't have the power, the relationship is unequal. That person has the right to tell you whether or not you're going to be staying, under what conditions. That person is likely to harass you in ways that you can't even defend yourself from, so it's not an equal partnership.

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Ms Silver: Right.

Mr Marchese: Do you all agree with that?

Ms Estella Howard: Absolutely.

Mr Marchese: One of the comments that the Conservative members say is that we've got a big waiting list, and you've just pointed out we've got 1,600 people on the waiting list. Isn't that an indication that the system has failed us, the present one? So what do they have? They have a tenant protection package that serves to protect the landlord, by and large. You were probably here before when I asked the same question about --

Mr William Roberts: I heard that.

Mr Marchese: Okay. Rent decontrol is gone, and people are saying once you eliminate rent control itself, it's not going to create the housing. The rent registry is gone; no more protection for tenants. The Rental Housing Protection Act will disappear, which means that rental accommodation is likely not to be there in the present form but likely to be converted to condominiums. So if waiting lists are a problem now and the private sector says, "We're not building because we need a big carpet for you to give us," on that red carpet lots of tax giveaways, and the government isn't building any more, how is that waiting list going to get any better?

Ms Silver: It isn't going to get any better. It's going to get bigger.

Mr Marchese: That's our view and it's certainly the view of tenants, and what you're sharing with us isn't singular or particular. All of you are saying very much the same thing. The only people who agree here are the Tories and the landlords, and they seem to have the same interest. That's all I seem to be getting from this whole presentation so far. Thank you very much for coming.

Mr Parker: Thank you for appearing before us this afternoon and for your presentation. I want you to know I have a keen ear for subtlety and I picked up the message that you don't much like the proposal that's being put forward here. There seems to be agreement across the board that there are problems under the current regime. Certainly I am hearing that there are problems with the current regime. We have problems with low vacancy rates. In Toronto, where I come from, vacancy rates are alarmingly low. We have problems with maintenance; we have problems with the condition of apartments. In Toronto that's a problem; I'm not so familiar with the situation here in Thunder Bay.

I'm looking for solutions. I'm looking for some answers to those problems, a way out of the difficulties. Can you help us with some ideas of your own as to how we can solve the problems of today and also address the need for increased housing in the future? I'm thinking in particular of the urban areas, which are the fastest growing areas of the province. Again, I come from Toronto, where people are coming from all across the province. We have a population boom in Toronto and we have to provide housing for those people. Can you help us out with how to address those challenges?

Ms Howard: I am a community support worker with Our Kids Count. Off the top, I don't believe lifting rent control and having people on low incomes struggle to pay rent is the answer; definitely not. I'm not sure, I'm not an economist --

Mr Parker: I appreciate that. You made that point very clearly in your presentation.

Ms Howard: So what's the solution? Off the top of my head, I guess you would have to create incentives for builders to want to build homes. There would have to be a way that people in the trades and contractors could do that, but not on the backs of low-income families -- absolutely not.

Mr Sergio: How much?

Ms Howard: How much what?

Mr Sergio: Incentives.

Ms Howard: I don't know. I'm sorry, I can't answer that.

Mr Parker: You'll get your chance, Mario.

Mr Roberts: I think maybe what you're looking at as we move into the next millennium is that because we're such a wide and spread-out province -- and Thunder Bay is not experiencing any kind of boom in population. In fact, I think they may have to lower the signs that you may have seen as you came into town. No, you didn't come over land. You came by air, didn't you? I'm sorry.

If this is to be a new, market-driven North America with everyone believing that we have no boundaries any more, it's going to be a new social network that is going to have to save the businesses and the business people in this small area that's falling way below the people who have plenty of money to encourage growth in that.

We may be talking about right now eliminating the social fabric for -- we are talking about that -- the population, but you may have to think of a social fabric for the entrepreneur and the new thinking about that in some way that actually provides for a morality towards people that gives them something to grab on to, some sustenance that makes them actually believe that we are all working for the best province that we could possibly have.

Right now, there is no belief and there are very few politicians, if any, who say, "I want to make this the best city; I want to make this the best province we can actually live in." Right now, all we're struggling with is minutiae and trying to save money by cutting small costs everywhere.

Mr Curling: I think your presentation was excellent in the sense that I hope it gives the message. It wasn't subtle. I didn't think your message was at all subtle. I hope we get the message loud and clear.

Greg Lampert is a consultant this government had paid big bucks to get some advice from. We asked that he come before us to explain some of his conclusions, but they turned it down. They didn't want him here. Let me tell you what he said. He said:

"Other measures are required to make private rental investments more attractive. Investors in new rental housing, like most investors, are seeking a return commensurate with the returns available from alternative investment. Recognizing the risk inherent in the investment, they will not invest in new rental housing unless it makes economic sense.

"Many potential investors have indicated, as a result of an examination of the cost and revenues associated with new rental housing, that the investment is not attractive in many parts of Ontario at present, even if the regulation environment is relaxed."

This government will tell you that taking off rent control would help it. It won't. They tell you it will not. It will not do anything at all. They talk about negotiators -- your point. They have taken away all the equipment, all the resources of the tenant and then say, "Go and negotiate." They took away their money, 22% of the lowest-income people in our society. They took that away, and they're going to dismantle the rent registry and then say, "Now go and negotiate."

So the message you said was not at all subtle; it's direct. They refuse to hear, they refuse to listen, and I want you to continue your struggle. I'm sorry to be lecturing like that -- to them, not to you -- but I want you to continue that struggle and to tell those tenants they will not take away rent control because it's not the tool to build any new, affordable stock for people in Thunder Bay.

They try to impress upon you that this is a Toronto issue. It's an Ontario issue. It's Thunder Bay, it's Windsor, it's all over. It's an issue for the people of Ontario that they should not dismantle the best protection we have for the most vulnerable people in our society.

The Chair: Thank you, folks. We appreciate your input here this afternoon.

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PEOPLE ADVOCATING FOR CHANGE THROUGH EMPOWERMENT

The Chair: Our next presenter is Len Maki, representing PACE, People Advocating for Change through Empowerment. Good afternoon, sir. Welcome to our committee.

Mr Len Maki: Good afternoon. PACE stands for People Advocating for Change through Empowerment. We are a psychiatric consumer-survivor group whose purpose is to increase the quality of life of consumers by removing the stigma, myths, prejudices and misconceptions associated with mental illness.

Thank you for this opportunity. I will be direct and to the point. Some of the proposed changes we see as being able to protect the rights of tenants, but only if they're followed through with. To increase fines for harassment of tenants by landlords is a good idea on paper. However, what will the reporting mechanism look like? How will allegations of harassment actually be investigated?

The move to a market rent model has serious potential for the rights of tenants to be abused. People who refer to themselves as psychiatric consumers, that is, people with psychiatric disabilities, often have a hard time finding reasonable, affordable and healthy places to live. Often they end up in substandard housing. When landlords learn of their disability, they often react out of fear and stigma and start to harass these tenants. Often it is other tenants in a building who begin to harass psychiatric consumers. Has there been any consideration given to this?

Psychiatric consumers often feel disempowered. Due to this, they often would rather move than face a difficult landlord or going to court. If a landlord wants to charge a higher rent, it would be very appealing to get rid of the previous tenant.

I would like to see a thorough public education program tied in with the announcement of the changes to landlord-tenant issues when it is complete. In this program, I would like it made clear that harassment of tenants due to their disabilities will be punished.

Organizations such as PACE and other groups representing the view of consumers can be part of a process of educating and reporting such harassment and abuse. Training sessions between the Ministry of Housing and community groups would provide working linkages within the system.

The market rent philosophy may work for people who are able to pay a higher rate for a better place to live. People who have to rely on family benefits or even GWA benefits do not have expendable income to move up to a nicer place.

The potential scenario may include a ghettoization of persons with disabilities. They will end up in lower-standard housing while those who do not face the same socioeconomic barriers will have better housing.

This situation will be brought home with the provincial Hospital Services Restructuring Commission's decision to close the Lakehead Psychiatric Hospital. The need for affordable public housing will never be greater. There will be more people who face the challenges of their disabilities. Trying to find affordable housing will become extremely difficult in a purely market rate system. There has also been no announcement at the time of this being written regarding community support programs to replace the programs from the LPH.

I will ask the members present, where will these people live? I would like to see this committee liaise with the Ministry of Health and Ministry of Housing to help prevent what could become a community disaster. That disaster will be people with disabilities of various degrees on the street without decent, affordable housing.

It is clear this government is not interested in providing money to communities for public housing. Would it consider the establishment of a working group of community stakeholders, including consumers, to establish some workable solutions?

This group could possibly become a regional dispute resolution system. This system could include business, consumers, community legal clinic representation and tenant groups. It could be a first-tier mediation with decision-making power. Appeals of their decisions could be made to the Ontario Court (General Division).

Regarding care homes, while there currently are no units which fall into this category in the Thunder Bay area, I feel there needs to be much clarification regarding entry rights of landlords in this area. The potential for abuse in this area is great.

Thank you for listening and I'd be happy to answer any questions.

Mr Maves: Thank you, Mr Maki, for your presentation. I have two quick questions: One's from the very first paragraph and one's from the very last paragraph. Earlier today, we had the Canadian Mental Health Association here and I asked them this question; I'll ask you the same. Are there occasions where your group would try to educate landlords or discuss with landlords and try to remove the stigmas surrounding psychiatrically disabled people?

Mr Maki: I would welcome an opportunity to do that. I haven't had an opportunity in my position with this organization to date. If there were some way of promoting that idea I would be very much in favour of it.

Mr Maves: The other thing was -- now with the last paragraph -- in care homes, with wanting to make it possible for the resident to request even that there be a bed check at night if the person has very fragile health. The example was they had just had a heart attack and they wanted someone to check on them in the night. Under the current legislation they can't do that and we've put that in the discussion paper to try to address that. We had a group in Toronto which brought up the same concerns you had about the abuse of this. Is there any way you can think of that we can try to balance those two obvious points of view that both have merit?

Mr Maki: I think it's a matter of making sure that the individual understands the full implications of what they agreed to, that by agreeing to allow a landlord into their dwelling they are doing just that, that they are basically waiving their right of a tenant's privacy and that they be fully aware of that before they agree to it. I would also add that they have it in writing and that it's clearly written out exactly to what extent and what window that individual is agreeing to.

Mr Smith: Thank you for your presentation. I as well want to make reference to the last page of your presentation. I am concluding from the second paragraph, where it says that "this government is not interested in providing money to communities for public housing," I am assuming that deals with new housing, because I think it's important to realize that the government funds approximately $1.5 billion in housing subsidies in the province and that there is still a commitment in that regard.

The second sentence of your statement deals with the establishment of a working group of community stakeholders and leads into a regional dispute resolution process. How come that hasn't materialized to date and what encumbrances or barriers do you foresee in your own community from that happening?

Mr Maki: Before I answer that I would like to ask you about your initial comment about the $1.5 billion. I'm wondering if you have any idea if the government is going to continue with that figure. Is that a guaranteed figure to follow through for future funding towards community housing?

Mr Smith: That's a fair question; there are no guarantees. I just want to suggest to you that perhaps it's unfair to suggest that there's no commitment in public housing presently, and that's what the amount is for some 225,000 units. That issue aside, I was drawing the conclusion from your statement that you were referring directly to non-profit, where we've obviously made a withdrawal.

Specifically with the dispute resolution, I'm interested in this because it's one of the areas of the paper that's very open to suggestion and I think groups should be taking every advantage of designing a vision or designing a system that they think is most appropriate. We've heard very clearly some strong support for the current court system. You suggested mediation and I would like you to develop some further thoughts on that if you could, to suggest how that might look and work.

Mr Maki: I haven't had enough time to give it more thought. I think one of the important points from the people I represent is that when you have mediation it be as fair and impartial as possible. The people I represent, due to the nature of their disabilities, often have a lot of difficulty in understanding legal concepts and representing themselves in a good fashion. So any kind of mediation should include the possibility of supportive representation on behalf of people with disabilities.

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Mrs McLeod: I don't want to pursue the dispute resolution issue with you because there's another issue I'd prefer to get you to comment on, although I think the presentations that have been made up till now which reflected concern about the dispute resolution are not that mediation can't be a good thing, but that it would be instead of access to courts, particularly on stopping things like evictions which are not legitimately being carried out.

I am increasingly concerned as I sit around the committee today. It's like we're talking about people in essentially two different worlds. One of the frustrations with the discussion paper and the fact that we're only dealing with one component of the government's approach to housing is that you can't somehow relate the issues of the two different worlds. We've got the fact that we're in a community where we have a high vacancy rate compared to other communities in the province, 6.5%, where theoretically taking rent control off shouldn't matter a lot because if there are choices for the tenant to move and go somewhere else, the landlord is not likely going to raise his rent and lose his tenant. It has been pointed out that the rents are not increasing here to their maximum.

But I guess the point is, neither are they decreasing. Even when the units can't be filled, the rents are not going down and they're certainly not going down enough so that people who can't afford the market rent are able to go into those units. I think those are the people you are speaking for today. I guess I'd just like to ask you to expand a little bit more. Here we are, and I've asked this question of others, in a community with significant vacancy rates and yet we have psychiatric consumers who cannot find housing.

Mr Maki: It is a common topic among the membership of our organization that they just cannot find decent, affordable places to live. There is a high vacancy rate here and I am sure that previous presenters and panel members have commented on that.

My own personal experience is that I pay $500 for a small one-bedroom apartment. I lived in Toronto for three years and when I moved back here five years ago I was really quite amazed at how much rents had gone up in Thunder Bay. The prices in Toronto are definitely high, but given the size of this community, I think rents are already too high here.

I came across Canada from British Columbia on some vacation and during that time I looked in newspapers. If you contrast it with the city of Winnipeg, Winnipeg enjoys very favourable rental rates. I think Thunder Bay is much higher compared to Winnipeg. In terms of socioeconomic and particularly geographic things, Winnipeg might even be a better example to draw from than Toronto. Things in Thunder Bay are quite different than in Toronto, the point being that while there is a vacancy rate, people who live on various forms of assistance have a hard time finding affordable housing.

Mr Sergio: I have another question for you, Mr Maki. Mr Chair, if we have time, I'll jump to my second question. One of the objectives of the reform is to protect tenants from unfair and high rent increases, harassment and unjust evictions and to provide strong security of tenure. Another one is to focus more protection on tenants rather than on the units. I'll read you a third one: provide a faster, more accessible system to resolve disputes between landlords and tenants. In your knowledge of the proposed legislation, is this going to be better or is it going to be worse than what we have now?

Mr Maki: I think there are some things that have the potential to help protect some tenant rights if they're followed through with. If this government is serious about fining landlords who abuse tenants' rights, then that is not a bad thing, and I hope landlords will listen to that. Money is the bottom line here. Money talks. People are not in the business of housing to lose money.

Mr Marchese: Mr Maki, several things: With respect to care homes, that particular page in the proposal is called "Rights of Operators." It's not balanced off at all by putting in there "Rights of Those Who Occupy Those Care Homes." You and others have raised questions about some of those protections, and I think they're very legitimate questions. They've heard them from many people already. I simply wanted to say that.

I don't want to touch much on mediation tribunals or the courts, because although they're part of the report, the significant parts of this have to do with affordable homes and whether or not someone is going to create them. That's really the guts of it. What they've done is effectively remove rent protection by deregulating, where eventually, if 70% move over a five-year period, you're effectively removing rent controls. That's really the guts of this report. In addition, they want to get rid of the Rental Housing Protection Act, which will allow those who own rental buildings to convert them. So the housing stock is about to disappear.

This government says to you: "Mr Maki, we want to hear from you. We want to know, how do we build?" But their paper doesn't even raise a question about how to do that. They simply say: "It's not working now. We have high vacancy rates, in Toronto in particular. We have waiting lists. My God, the system is failing." What do they do? They stop building. They say: "No, we don't want to build housing for the poor. That's wrong. We think the private sector should do it. We're going to get rid of rent control." So you have no basic protection. Then you're stuck. Who's going to build?

Their report says the private sector is going to build. But every now and then you hear the members saying: "Oh, but we can't afford it. We don't have the money." But to afford it, Mr Lampert says you've got to do a whole lot of things for the private sector; they want a whole lot of taxes taken off in many ways, reduced development charges, equalized property taxes, have the GST paid, a whole list of things that they want. So we're not going to see any housing in five years. So when they ask you, "What do you think? How do we solve this?" -- Mr Smith is tired because the poor man doesn't have any suggestions to give to you about how to solve the housing crisis.

Mr Preston: There's a difference between tired and bored.

Mr Marchese: Yes, Mr Preston is bored too. This poor man has just joined us today, and he's bored. The other man is tired, and he's bored too. Why are they bored? Because they're tired of listening to people like you, who come and ask questions like, "I ask the members present, where will these people live?" Have you ever heard any of these people answer your question? Please ask them for me. Take my time and ask them, "Where will these people live?" Can you do that for me?

Mr Maki: I am very concerned about where the people that I represent will live, particularly in light of other policies that the government of the day is pursuing, such as hospital restructuring, taken in the context of housing.

Mr Marchese: So, Mr Preston, you're bored. I know you heard this. Answer the question. Where are these people going to live? Mr Smith, you were bored, where are these people going to live? You answer that question for him. Mr Parliamentary Assistant, he asked a question. I will ask the members, where will these people live? Please answer that question.

Mr Curling: Good question.

Mr Marchese: Answer that question. Where are these people going to live? They have no answers for you. You see, they can't answer a very simple, basic question about where vulnerable people are going to live, and then they're bored because I keep on asking the same questions.

The Chair: Thank you, sir. We appreciate your input here this afternoon and your interest in our process.

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KINNA-AWEYA LEGAL CLINIC

The Chair: Our next presenter is Dan Cox, staff lawyer of the Kinna-aweya Legal Clinic. Good afternoon, sir. Welcome to our committee.

I would like just to remind people that we are here to listen to ideas and input from the people of Thunder Bay, not from one another. We can do that at our leisure, but we're here to listen to the people of Thunder Bay, so I would just remind you of that. The floor is yours, sir.

Mr Dan Cox: Good afternoon. I'll try not to be boring or put anybody to sleep. I'm coming at this from a legal perspective, obviously. I've been at the legal clinic for 15 years. I've done tenancy work on a weekly basis during that time; my other colleagues have as well. We have about 60 years of experience between us with our existing Thunder Bay legal staff at this time, and the clinic has been around for 18 years.

I'm not going to read from my brief, because I don't generally present that way; I'm going to highlight some of the things in it. We give summary advice to about 2,000 people a year. We open about 500 or 600 files a year, all low-income people, poor, disabled, a combination thereof, from basically minority groups, native, non-native etc.

I'm not going to be subtle. I'd like to get right to the point. I do not, nor does my organization, support anything in the proposals that are before this government at the present time. It is an unqualified formula for disaster as far as I'm concerned. I don't see anything in it that's going to improve the lot of tenants, particularly low-income tenants. When you talk about a vacancy rate in Thunder Bay, that may be true for what I would call middle-class or luxury accommodation. There is certainly no high vacancy rate in this city for people with $520 a month on welfare, which is what a single, employable individual on welfare receives. There is no decent, affordable housing for those people, despite the high vacancy rate. My organization certainly believes that there ought to be decent, affordable housing for all citizens of this province. That's where we're coming from.

To remove rent regulation and rent controls on units when they become vacant is an incentive to landlords to get rid of people. As you will hear, of course, I think the statistics are that 20% of people move in any given year anyway. They move to take jobs in other parts of the province, they move to get away from abusive spouses, they move to go to school, for any number of reasons. When they move, their vacant unit will be up for grabs on the market, in terms of what the market will bear for rent, and they're going to move to a vacant unit that's also going to be up for grabs in terms of rent level.

Just so you'll understand where I'm coming from in terms of the comment that there's an incentive to evict, a landlord has to put a form 1 agreement to terminate in front of a tenant and say: "Here. Sign." All that form has to say is: "I'm a tenant. Joe Blow tenant. Joe Blow landlord. The rental unit address is such-and-such. I agree to vacate on September 30." If I had a dollar for every time I've seen a tenant sign that because a landlord stuck it in front of them and said, "Here, you have to move; here, you have to sign this; I'll give you two months and you're out of here," and they sign it without legal advice, under duress, perhaps arguably, I'd probably be able to retire. It's very easy to get somebody to sign one of those things if there is an imbalance in the bargaining power between the parties, the landlord and the tenant.

I've had clients get a notice of eviction that says, "I want you out at the end of September" because of blah, blah, blah, "You don't have to move; you can go to court and have your day in court." They come in to me and ask, "Do I have to move?" They think they have to move just because they got the notice. This is the level of understanding that we're talking about with people. In my view, it would be very easy to get somebody out.

The other scam that landlords use to get people out when they want to get rid of them is the personal use one. They give a notice saying: "I'm going to move in my mother, my son, my sister, my brother. I need a unit vacant." The person moves out, and the other family member doesn't move in. It is not difficult to circumvent the court process and get a vacant possession of an apartment.

I've also seen an enormous increase in lockouts and illegal evictions in the last year such as I have not seen in the last 10. In the mid-1980s, it was very common. For some reason it died down. I had a woman phone me about two months ago, a mentally ill woman, who was out on the lawn with her furniture, saying, "What do I do?" The landlady, who was represented by a local nurse acting as her trustee, had put her stuff out on the lawn. The police were there and said: "We're not going to get involved. We'll just make sure nobody gets hurt." That's the level of protection tenants have now from eviction in this province. You might say that they can run down to the legal clinic and we'll somehow make it all work, but we're so short-staffed and overwhelmed doing welfare appeals, they're not going to get us rushing off to court to get an injunction.

The other myth I find in the proposals here is that somehow if landlords get more money from tenants through a bidding war for vacant units -- and a bidding war, I might add, that low-income people aren't going to win, which I'm sure you'll hear is going to lead to increases in discrimination against low-income groups, disabled people and racial minorities in the province -- if a landlord gets more money coming in as a result of the unit becoming vacant and somebody getting it through this bidding war, somehow this is going to translate into repairs being done. With all great respect to the government, that simply isn't going to happen.

There are bad landlords; there are good landlords. The good landlords are going to continue to be good landlords and do repairs, and they're going to get more money for rent to do that, and the landlords who just say, "Go whistle, I'm not fixing anything," are going to continue to do that whether the rents are increased. I've seen landlords fail to obey property standards orders. I've seen landlords fail to fix leaking roofs when the living room is full of water. To say that somehow those kinds of landlords are going to take this increased rent money and translate that into improved rental conditions strikes me as a fantasy. I guess what I'm saying in a nutshell is that giving more money to people without any mechanism to ensure their accountability to use it in the way that one would hope they would use it perhaps isn't going to work. It has been suggested that licensing of landlords might be one way to regulate maintenance and repair problems in the city.

If you have time on your way to the airport, take an extra $5 cab ride and go by Winston apartments. It's not far from the airport. It's housing accommodation that's now shut down, empty, boarded up, 100-plus units. This is after the landlord got a half million dollar forgivable loan from one of the previous governments to do repairs in that particular building. It's empty and the state of repair before it was emptied was appalling. That's the kind of affordable housing that we had in this city and that no longer exists.

I'm going to anticipate your questions in terms of how we create more affordable housing by referring to David Hulchanski's excellent paper on rent decontrol in Ontario, that was delivered to you folks on August 22, and which I had the pleasure of reading this morning. He said if you want to have affordable housing, you have to turn a social need into a market demand. How do you do that? You put money in people's hands.

A third of tenants in this province are on social assistance. Most of them had their social assistance rates cut 21.6% last fall. They have less money in their hands, and if their rent goes up when they move to a vacant unit, they're going to have even less to spend in the local community, in the supermarkets and the clothing stores and the gas stations. Everybody suffers. You want to talk economics here. If you want to grease the wheels of the economy, you don't take money away from people. You put it in their hands or you retrain them so they can get back into the workforce. That's where I'm coming from.

Just before I make one final comment about the access to affordable housing program that recently got defunded in the city, and you may have heard about that, I want to bust the myth that the court process is too complex. It isn't. It's a very streamlined summary procedure, very little in the way of pre-trial disclosure, examinations for discovery etc. I've heard this a million times, that the system favours tenants. It favours them because they have rights. They actually get notice before they're evicted and they get to go to court and tell the judge their story, and it's not a cumbersome process, it's not a complex process and it need not be a lengthy one.

If a landlord wants to take a tenant to court, they give them a notice. The tenant doesn't move. They serve papers four days in advance of the first court appearance. If the matter isn't resolved in front of the court clerk, it goes, in this city, very quickly into the pre-trial stream. Within a week or two, you're in front of a pre-trial clerk. If it isn't resolved at that point, particularly if there are arrears of rent, you'll be in court in front of a judge so fast your head will spin. This nonsense about it's difficult to evict is exactly that, nonsense. It isn't. I don't think tenants are overprotected and I certainly don't see any additional protection for them in anything that's in this proposal here.

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I'm not normally a harsh person when it comes to politics but I have to express my disgust at the cutting of the Lutheran Community Care Centre's access to affordable housing program. Forty-eight thousand dollars in annual funding from the Ministry of Housing was taken away from that program, which issued its last list of affordable housing about a week ago. That is the only, other than perhaps some of the student organizations, viable agency in the city of Thunder Bay that has such a program. My office sends people there every day. We won't send them there any more because it doesn't exist. Where am I going to send them now? Nowhere. I'm going to send them out to walk the street or read the newspapers to try and find a place to live. I think it's appalling, for $48,000, that that program has been cut. There's nowhere else to send people, and these are the people on social assistance, on fixed low incomes who need that service so they don't have to pay 50 bucks to one of these rental agencies that will phone them once a week and say, "I've got a place for you."

I would urge, among other things here, that if anything can be done to reinstate the funding for that program, it be done. I understand it was defunded because Thunder Bay has a high vacancy rate. It doesn't have a high vacancy rate for low-income housing, and that's what this agency provided to the consumer -- a vital service.

I have no other comments at this point. I'll let you read my very brief paper. I'm probably repeating some themes that you'll hear across the province. I'll maybe share one experience with you.

I'm very active in the injured worker community and when the Workers' Compensation Act was going to be changed in the mid-1980s there was a fairly Torontocentric approach to protesting that. The government said, "People are complaining in Toronto so there must be no problem up north." So when the next go-round came in 1990, we dotted the map with advocates saying what they thought of the proposals to change workers' comp in 1990 and the government said, "Well, this is an NDP conspiracy because we're hearing it everywhere." If you're hearing the same thing everywhere, maybe there is some truth to it. There is absolutely no evidence that I have seen that anything in these proposals is going to create affordable, decent housing for low-income people. You show it to me and I'll vote for it.

Mr Curling: Maybe I can ask a question from a legal perspective of harassment. Is there any way you could define that, or could the government really come up with a definition of what is harassment?

Mr Cox: Whether or not harassment can be defined, my suggestion was you're creating an incentive to harass people so they leave their unit. I've seen as an example a landlord serving a 24-hour "I'm coming in to inspect the place" notice every day for a month. That's harassment. Violating somebody's right to privacy is harassment. Treating them differently because of their colour, income, family -- it's defined in the Human Rights Code. I don't think the issue is how to define it; it's how to avoid it and not to create an incentive to make it happen, to drive the person out because the landlord is driving them crazy.

Mr Curling: You're saying too that it's no problem at all for this process to go through the courts --

Mr Cox: That's correct.

Mr Curling: -- while the Conservative members are saying that people are complaining and they have full support on both sides of this harassment, and you say the court situation is quite easy to process these cases.

Mr Cox: There are a lot of landlords that can't afford to hire lawyers every time they want to evict somebody and there are a number of landlords that are too cheap and there are other landlords that simply wait six months when they're having a problem before they even serve a notice. I've seen that happen a million times, and then they say, "The process is too slow." If I were a landlord, I'd serve a notice of eviction for rent arrears the minute somebody went in default, and then you've got your meter running if you want to go to court, but people don't do that. For some reason they try to resolve things informally and often without legal advice.

Mr Marchese: Mr Cox, thank you very much. I have two questions, if I can fit them in. First of all, what we've seen in the last six years -- it's going to get worse, in my view. Wages are down. Unemployment is excessively high; it's at 10% just to keep inflation down, because these are the policies largely of the federal government. The firings are going to be to the tune of 15,000 -- I suspect they'll go up to 20,000 -- federally and provincially. There's a lot of part-time work. This government proposes through this proposal to increase from the guideline to the extra 3% yet another 1%, which would bring it to a potential 6.8%, and on top of that wants to add taxes and hydro as an extra burden.

The developer who came here this morning said, "We need this deregulation because we've got to catch up." How are people going to cope if this happens?

Mr Cox: They're hanging on by their fingernails, and I'll tell you very simply what I tell people who argue with me that there are welfare bums who should be out working: People who have no money are going to turn to crime, frankly. They're going to rob milk stores, deal drugs, turn to prostitution. That is the kind of society we are creating here. And I'm not saying this to be inflammatory or controversial. I see this happening. I read the newspapers. I see what's happening in a community and I see people sleeping on the park benches like I see them sleeping in storefronts in Toronto. This has got nothing to do with politics or ideology or anything else here. It's got to do with, is this the kind of society we want to live in? Frankly, I don't.

This used to be a safe city, but you read the paper: There are armed robberies every week; there's drug dealing; there is a prostitution problem here. If people are broke and can't pay the bills, what are they going to do? I don't know how anybody can live on $520 a month, whether they deserve it or not, or whether they've created their own problems or not. How can you live on $520 a month? That's what a welfare recipient gets who's a single, employable person. Go figure.

Mr Stewart: Two things: First of all, in your first page where you're saying that files keep on going annually, and I guess one of the concerns I have personally and that is the fact that the availability of legal aid and the number of things -- these files can go on and on and they indeed go on annually. One of the concerns I have -- and you mentioned the word "accountability," the accountability of landlords -- what about the accountability of tenants --

Mr Cox: They are accountable, sir.

Mr Stewart: -- where landlords have to go in and spend $2,000 and $3,000 to recarpet because of dog doo-doo all over, cat doo-doo all over, holes in walls, and they leave? I'm not trying to be confrontational, sir.

Mr Cox: No, that's fine.

Mr Stewart: How do we put accountability on the tenant? If we're going to have a level playing field in some type of new legislation, how do we protect both parties?

Mr Cox: There is accountability for the tenant now. They're responsible for cleanliness. They're responsible for damage done by themselves, their family and their guests. They're financially responsible. With any problem where you owe me money and I want money from you, if you don't have money I'm not going to get it.

Mr Stewart: That is a make-work project for lawyers, sir, because that --

Mr Cox: No, I don't think so.

Mr Stewart: -- is not what's happening. You know the amount of trashed apartments in some places --

Mr Cox: I've seen that happen, yes.

Mr Stewart: -- and the landlord either can't take them to court or can't be bothered and goes ahead and fixes it. That's the type of thing I'm talking about and I believe if we're going to have a level playing field we must have it for both parties.

Mr Cox: If I were a landlord I wouldn't rent to somebody without references, and that's legal, to check references for people. I would also have insurance on my building and I would also expect that if there were damage done and I couldn't recoup my cost from the tenant that would be a cost of doing business, which is a tax write-off.

Frankly, I would never want to be a landlord, all right? I don't disagree with you there are bad tenants. But there is protection in the legislation. The law says that a tenant is responsible for damage. If they don't make good on fixing up problems that they've caused, either by giving money to the landlord or doing the repairs themselves, they can be evicted for damage to the property, and the landlord can get a court judgement against them, seize property from them etc.

Landlords are like anyone else, faced with collection problems. But tenants aren't the only deadbeat debtors, if there are some tenants who are deadbeat debtors. There are creditors after debtors for money all the time and they can't collect. But I don't see anything in the proposals here that's going to make it easier for a landlord to collect when somebody puts a hole in the wall, which doesn't happen that often.

The Chair: Thank you, Mr Cox. We appreciate your input this afternoon.

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THUNDER BAY AND DISTRICT LABOUR COUNCIL

The Chair: Our next presenter is Michael Poleck, the treasurer of the Thunder Bay and District Labour Council. Good afternoon, sir. Welcome to our committee.

Mr Michael Poleck: The Thunder Bay and District Labour Council would like to thank you for the opportunity to present our views on this important discussion paper on tenant protection.

We are glad the hearings are being held across the province. However, to state up front, we object to them being restricted to the 9-to-5 scenario. Many people who rent their accommodations work during these hours. Getting time off to attend a public hearing or a consultation such as this is difficult and in most cases impossible, so you don't hear from the people who are really affected. How does this government expect to hear from those who would be most affected by any changes to the legislation if they're denied access to the consultation process?

We recommend that in the future these types of hearings be held with both day and evening time spots for presenters. For example, if there can be only one day in each location, instead of spending 9 to 5 in Thunder Bay on one day and rushing off to Sault Ste Marie for another round of 9-to-5 hearings the next day, why not start the hearings in the afternoon at one location, go through the evening and repeat the process at the next stop in the tour?

Today we'd like to focus our presentation on a few main points raised in the New Directions tenant protection legislation discussion paper. The areas that we're addressing would be: (1) the end to general rent control; (2) the profits for landlords; (3) new housing construction, and (4) housing strategy.

In addressing the end to rent control, the proposed legislation continues the rent cap brought in by the NDP government in 1992 which covered all units, but the changes being planned include only renters in their current units. Once they move out, for whatever reason, there is nothing to prevent the landlord from jacking up the rent to any level they feel is possible to demand. With no cap for all units, there will soon be no cap for any unit. Furthermore, it appears that the new units will be exempt from rent controls forever. What kind of tenant protection is there there?

The discussion paper states that people looking for a place to live negotiate an appropriate rent with those who have rental accommodations to sell to the highest bidder. This is political propaganda at the level of garbage. In the real world, two parties who negotiate each have some power that they can levy. When a prospective tenant wants to rent a particular dwelling, what power is there against the amount of rent a landlord wants to charge?

Scuttling a universal cap on rent increases puts undue hardship on the working poor and on those who are forced to rely on some form of government subsidy because they can't find work. The cancellation of rent controls will hurt women and children disproportionately, because most families who have to rent their living quarters are headed by women. Numerous studies have shown that children who grow up in poverty have a very difficult time escaping from it. With virtually no rent controls any more, families who have to rent will wind up spending more on housing, which means less on food, health care and other necessities. If this results in increased social and health problems, it further taxes the already overburdened and ever-shrinking social safety net.

Eliminating the rent registry is referred to in the discussion paper as a way to simplify administration, thereby saving the taxpayers money. But in reality, what it does is make it impossible for renters to know what the previous tenants paid, so they will have no way of knowing if the amount of rent being asked by a landlord falls within reasonable limits, and not only reasonable limits, but it doesn't give them a base to draw on when they're doing their negotiating.

Profits for the landlords: Landlords claim that the existing legislation restricts them from spending the money necessary for proper maintenance and improvements on their rental units. The reality is that landlords never provide anything for low-income tenants except when forced to do so by legislation, in most cases. Landlords welcome the changes proposed by their friends in government, because with every changeover in tenant, they have another opportunity to increase the rent and therefore increase profits. There is nothing in the legislation that protects tenants from landlords harassing them, whether verbally or by not keeping the units in safe and proper condition, until they have no option but to leave.

The proposed legislation gives municipalities increased powers to inspect and enforce building repairs. That sounds good -- giving more powers to local governments, bringing governments closer to home -- however, there isn't any mention of increased transfer payments to pay for the enforcement officials that would be required. Also, by weakening the province-wide minimum standards, tenants are left to the mercy of the landlords and fragmented efforts of municipalities to enforce the standards. What might look good at first glance turns out to be another one of the Conservative government's attacks on the living standards of the people of Ontario.

In terms of new housing construction, we condemn the Conservative government's cancelling of most of the not-for-profit housing initiatives so soon after taking office last year. These units would have provided accommodation for many families who rent. The local Labourers' union project alone would have resulted in construction of 20 new units especially geared towards working families, including those whose members have disabilities.

Not-for-profit housing construction creates many jobs for the community, first in the actual building of the units, then in the materials and services needed to furnish them and to make repairs. The unemployment rate in our community is around 10%. Some of those who are out of work are experienced construction workers. Instead of relying on federal unemployment insurance or municipal social assistance, it would be better for unemployed workers to be working and contributing to the community.

Housing strategy: We would like to be able to commend the government on its dual initiatives of trying to protect tenants and at the same time proposing a strategy to address many of the housing needs in the community. However, we cannot find any reference to a housing strategy in either the discussion paper or any of the accompanying legislation; for example, the Landlord and Tenant Act. This is a golden opportunity for the government to make good on its election promises of looking after Ontarians better. All we see is the government eliminating barriers to higher profits for the rich through increased exploitation of the poor. So far we have seen no evidence that the Conservative government cares a whit for the people of Ontario, while we see example after example of where the government caters to demands by its rich friends to relax or cancel legislation ranging from protecting the environment to protecting workers on the job, to protecting tenants from unfair rent increases.

There are many other points mentioned in the discussion paper which we are certain other presenters will refer to in their interventions; and I've heard some. We will conclude our contribution by saying that the people of Ontario have worked hard to create a society where we can grow and thrive, knowing that many basic human needs -- for example, health, education and shelter -- are being met through good and progressive legislation, and we refuse to allow a pro-big-business government to bully us into accepting anything else.

That's the extent of our presentation.

Mr Marchese: Mr Poleck, the Conservative government says it doesn't want to build non-profit housing and cooperative housing. In fact, they say very strongly that what we have done is a failure. The developers say that it was a failure, that it competes with the private sector, is a boondoggle and just a waste for taxpayers. Is it your sense that the private sector is going to build housing for the working poor?

Mr Poleck: To go by past practice, I would say no. The reason that it was done was to meet different legislation that provided some ways of providing housing for people who needed assistance. There was legislation there. By relaxing that legislation, if that is relaxed, there's no driving force to have private interests provide that. They'll be looking for the profit only.

Mr Marchese: This present government said, "We need to create incentives for the private sector to build," so they've introduced this proposal which effectively gets rid of rent control by decontrolling. The report done by Mr Greg Lampert, that government report, says that's not going to do it. They know that. That's why they didn't want to invite that fellow here when Mr Curling made that motion to invite him to come before the committee.

He says what the private sector wants is the following: eliminate provincial capital tax; lower administration due to reform of rent regulations; halve the CMHC mortgage insurance fee; streamline regulations on building; cut in half the GST payable; equalize property taxes; reduce development charges. That will eliminate that gap per unit -- $3,000. That's a lot of money.

Mr Poleck: We allude to that in the presentation, where the changes that you see are designed to help the landlord to increase his profits, but the protection for the tenant is not there as a counteractive measure. It's one-sided.

Mr Marchese: Professor Hulchanski, who was quoted by Mr Cox earlier on, also says that even if you give all that away, which is something we have to absorb as taxpayers, the only thing built will be at the high end. It won't take care of the needs that so many here today have advocated on behalf of.

Mr Poleck: That's the point we were trying to make, that the landlord is not trying to accommodate the lower end; he's there only to operate where there's a for-profit area. If he can't make the profit, then he doesn't want to be concerned with it. That is going to leave out a very large segment of the population of Ontario who have worked, paid taxes and contributed to the standard of living the province enjoys right now.

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Mr Parker: Thank you, Mr Poleck, for appearing this afternoon and for your presentation. You've delivered a very clear message this afternoon: You don't much like the proposal that's being circulated right now for consideration.

I represent the riding of York East. That's a Metropolitan Toronto riding. I have a large number of tenants in my riding. I have a large number of rental buildings in my riding. Many of these buildings are high-rises. Many of them are getting quite old. I have a virtual parade of tenants to see me in my riding office each week telling me of the problems, frustrations and concerns they have under the rental regime we have right now. They tell me of problems of maintenance in their buildings. They tell me of problems of vacancy rates. They have nowhere to go. They feel they're held hostage by their landlords now because they have nowhere to go and no alternative to their present situation. They tell me that the landlords know that and they feel that the landlords have them over a barrel. They feel quite victimized and quite vulnerable under the current rules, the current system we have in this province.

I'm here to look for answers. I'm here to look for solutions. I want to help those people. Can you help us with some ideas as to how we can move forward and help those people who feel victimized and vulnerable under the current rules that we have at present? Remember that at the same time we've got to provide for the future as well. The population in my riding is increasing constantly. The Metropolitan Toronto population generally is increasing at quite a substantial rate, largely from people from communities like this who seek to pursue their future in the Metro Toronto area. How can we provide for the needs that we're facing now and address the challenges of the future?

Mr Poleck: To address those needs there's a cost factor. It has to be determined what cost that's going to be and how much society today is willing to put into it. One of the things that would address their concerns is that it would be nice to hear from them, as I alluded to earlier, at the start, if the tenants themselves could come here, rather than people like myself representing an organization. What you need to do is hear from the tenants. They're the people who are living in the situation. They're living out the real horror stories that happen in the apartments in the different complexes.

As it was pointed out in the previous presentation, if society isn't prepared to pay for people, or to put some money towards giving them some basic provisions of life such as shelter through apartments, they're going to turn to a life of crime. They're going to look after themselves in the only way that is left, and in a lot of cases it does include turning to crime, which is going to reflect and affect all of us. No matter whether you're in a position where you have to rely on subsidized housing or not, it's going to reflect on the whole community and it's going to reflect on our living standards.

Mr Parker: What's the solution? That's what I'm here to find out.

Mr Poleck: The solution would be to enforce the standards that are there and to maybe put some more money into providing some of this housing through the general revenue of the province.

Mr Parker: So more money is the answer.

Mr Poleck: That's one of the answers, yes. How much and where it's going to come from have to be worked out. I'm not saying I can tell you all that in two minutes, but the feeling we have is that there has to be a certain amount of money put into it. As people living in Ontario, there's a certain amount they're owed. Through no fault of their own, a lot of people who are looking at low-income housing now are people who have lost jobs through the different downsizings and closures of companies and what not. They're not in there by choice; they're in there because of circumstance.

Mrs McLeod: Just to pick up on the last question, which we've heard several times, it seems to me that at least a part of the answer was offered to the government in the paper that was done for it. Reducing the cost of construction is one of the things which would be part of the answer.

I get increasingly cynical about whether this is really a discussion paper or whether the government is looking for solutions when we see it already acting on things that are part of the discussion paper. You particularly mentioned that the rent registry here in Thunder Bay disappears as of Friday, so it's no longer a matter for discussion -- it's gone. I find myself wondering when they say, as you've noted, that it's a way of simplifying administration and saving money, whether or not the administration of that was going to become impossible because rents are going to fluctuate so much when they go ahead with the other part of their discussion paper, which is taking the rent controls off. How would you maintain a rent registry if the rents are changing on a fairly frequent basis? It seems to me the government is already paving the way for fulfilling the rest of its discussion paper and we are going to see a lot of rapid fluctuations in rent.

I think if you saw in this paper some solutions that were going to lead to increased building of accommodation, and particularly of rental accommodation, members of the council would want to provide support for at least those parts of it, because we've been seriously short of construction jobs in our community. Do you see anything in the paper that is likely to lead to increased building of rental accommodation in our community?

Mr Poleck: Quite simply, no; not to address the issue that is there now, the low rental. There may be some building done to accommodate the high end where they can get more of a profit, where they can charge more for the rental units for the high-income earners, the people who have jobs. But when it comes to the other segment, as I call it, the people who can't afford the high rents, then there won't be. It's as simple as that.

Mr Curling: I think charity begins at home really, because when we look at government handling of some of this non-profit housing and even legislation and enforcement, even Lampert himself said that the duplication was atrocious. Therefore, duplication means cost. Would you feel that a better approach would be for them to sort of clean up their act inside first -- get rid of duplication, get the enforcement matter going? As the lawyer said before, the system is there, but it's not used effectively. If that is done, it may help to reduce that cost and that kind of money could be used to put towards the affordability issue.

Mr Poleck: That is one thing we would think the government would do. If you're a company, if you are having trouble generating money or there is a problem with it, first you look internally and solve those problems. I didn't see anything in the papers that looked at an internal reorganization or an attempt to solve the duplication that you're talking about or to streamline the system. What's there is just one aspect of it: to allow the landlords to do what they want to do and just put it totally in their hands.

The Chair: Thank you, Mr Poleck. We appreciate your input this afternoon.

THUNDER BAY REAL ESTATE BOARD

The Chair: Our next presenter is Art Lannon, president of the Thunder Bay Real Estate Board. Good afternoon, sir. Welcome to our committee.

Mr Art Lannon: First of all, I'd like to thank the committee for allowing us to present this report. If there was ever a time or need for rent controls, that has long since past. Today, rent controls form a major barrier to new rental apartment construction and they contribute to the decay of the existing housing stock because landlords do not have the revenues needed to maintain buildings properly.

The Thunder Bay Real Estate Board and the Ontario Real Estate Association favour the phasing out of rent controls and their replacement with a new consumer protection package that would allow individual tenants who believe their rent increases to be exorbitant the opportunity to appeal rent increases to the government-appointed Ombudsman, who would have the authority to roll back any increases they deemed inappropriate. The best way to keep the cost of rental accommodation down is to ensure a good supply of units.

The Ontario Real Estate Association supports the right of Ontarians to own property free of unreasonable controls. We therefore oppose rent control legislation and the use of government funds to finance rent control regimes. The Ontario Real Estate Association bases its opinion on rent controls to the following.

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Rent controls inhibit new construction. By forcing rents below the market price, rent control reduces the profitability of rental housing, diverting investment income capital out of the rental market and into more profitable markets.

Rent controls lead to the deterioration of existing housing. By reducing the return on investment in rental housing, rent controls can also lead to a drop in the quality and quantity of existing rental stock. Deterioration may occur as landlords, faced with declining revenues, reduce maintenance and, at worst, lead to eventual abandonment of the property. We saw that here locally with Winston Hall.

Rent controls incur substantial administrative costs. The administrative costs of rent control are substantial. Rent controls require elaborate bureaucratic systems, and it is estimated the existing rent control bureaucracy costs the provincial government in excess of $40 million annually.

Rent controls cost the poor. Higher-income households receive the lion's share of the benefits of rent control, but the cost of rent control falls disproportionately on the poor. Poor families suffer the market decline in existing housing as the quality of existing housing fails to respond to reduced maintenance expenditure. Higher-income tenants can simply move out of these circumstances while poorer families may lack this option.

Rent controls contribute to homelessness. The reduction in available rental units caused by rent control often leaves poorer families with no substantial housing at all. As a result, the direct cost to government in welfare and shelter programs increases.

Rent controls unfairly tax landlords. Rent controls are designed to subsidize tenant income at the expense of landlords by reducing the permissible rate of return on rental property investment. But just as important, such income transfers possess fundamental questions of fairness. Why should the burden of providing low-cost housing be borne solely by providers of rental housing?

The Ontario Real Estate Association believes effective alternatives to rent controls do exist. In our opinion the answer to the problem of scarce low-cost housing is increased housing supply, not rent control. Over time the expansion of rental housing supply will lead to a decline in rental costs. In the interim, financial assistance to the needy may be more effectively and economically provided through rent supplement programs.

Given all the above, continued reliance on rent controls as a solution to the problem of housing affordability can no longer be justified. Locally the vacancy rate has been hovering between 6% and 8% for the last two years. Rents charged have either been maintained or lowered by the majority of landlords during this period. Instead of the government building brand-new apartment units at high costs, you might consider filling the vacant, privately owned units by offering a rent subsidy for certain income people.

The Thunder Bay Real Estate Board supports the recommendations of the discussion paper.

Mr Parker: Thank you, Mr Lannon, for your presentation this afternoon. I favour rent controls. I don't see that there is scope for eliminating rent controls in this province. Certainly under the current situation I don't see that it can be done, I don't see that it should be done, and I part company with you on that submission.

I represent a riding with a great number of tenants and I shudder at the thought of the vulnerability they would feel if rent controls were immediately eliminated and made to disappear, but I share with you a concern over how to address the need for housing our people over the long haul. Under the current system we have a situation where construction has ground to a halt. People at present feel captive in their units, certainly in my riding of York East, within Metro Toronto, where they have no place to go. There is a negligible vacancy rate, and even someone who has a dispute with his landlord or has a degree of dissatisfaction with the unit he lives in has no alternative. He has no place to go. That is a concern that must be addressed now and it has to be addressed in the long term.

Mr Lannon: That's correct.

Mr Parker: That is a concern that will only increase with time as the population increases. In my riding, in my community in Metro Toronto we are growing at a substantial rate, both from a natural increase in the population and from people moving to Toronto from elsewhere in the province and elsewhere in the world. We have been told that eliminating or relaxing or changing rent controls will not, of itself, yield an increase in housing construction. Can you help us with some other changes that would be necessary.

Mr Lannon: Yes, I'm glad you brought all those points up. I think the reason the board is going to different parts of the province is to see what Thunder Bay wants, what Sault Ste Marie wants, and we're in Thunder Bay, so I appreciate your tenants, and possibly if there was more competition, as there is in Thunder Bay now -- remember, Thunder Bay used to be the lowest vacancy rate in Canada, less than one half of 1%. You are lucky. Being a landlord myself, we had lineups, people waiting to get into apartments. That is all gone because of the other non-profit housing coming in and everything else.

We have had a vacancy rate here in Thunder Bay of between 6% and 8% consistently for the last few years. We've got people who need affordable housing. Somebody brought up, can they bring up cheap housing? You can't build new, cheap. You figure that one out. I think the point is that in Thunder Bay we have vacancies; we have people here who need housing. Instead of spending $60,000 to $80,000 per unit to build these units for people -- that are brand-new, and I can't figure out why they have to live in brand-new anyway -- why not subsidize specific people for units in Thunder Bay? That solves all the problems we have locally and solves the tenants' problems and the landlords' problems. No problem.

In Toronto I assume that you don't have any competition, and the reason for that is that there's been no supply put on the market because there's no incentive. From the landlord's point of view -- my mother-in-law lives in Toronto. She doesn't even see her landlord because there's just no money to do it. If there was competition you would see what happened in Thunder Bay, which was less than one half of 1%, now to 8%. We haven't raised -- in fact, last year we lowered our rent in Thunder Bay, the first time in 30 years of being in business. That's insane. If you have competition you'll do that, and maybe that's what Toronto needs, but in Thunder Bay, where we are, and this is where the hearing is, this is how we can attack all the problems, in this room, quite simply without spending a lot of money on units, which I can't believe was even thought of to start with. The people in construction -- that's fine. There's lots of commercial out there to build. They can do different things. They don't have to just build apartments.

The Chair: Mr Maves, have you got a quick question?

Mr Maves: I was going to ask for an explanation of what exactly happened at Winston Hall, but I hope you can give a really quick answer.

Mr Lannon: Actually, I can. What happened at Winston Hall, in my opinion from reading the paper, was that the landlord pretty well -- there's no one living there now. I don't think he could afford to maintain the building. It was an older building anyway.

Mr Maves: Because of rent control?

Mr Lannon: I don't think it's because of rent control. I just think that his maintenance costs were probably too high. I shouldn't speak for him; I was simply setting an example of someone who pretty well walked away from the building because he just couldn't handle it any more.

Mr Curling: Mr Lannon, the guidelines that are put in place, even now that it's 2.8% -- look at it that way -- included in that are all the building's operating costs and also the fact of a fair return on investment. All that is taken into consideration. Even with that, you said that's not good enough. If we remove rent control, in which the rent guideline gave all landlords provisions to make a profit, $10 billion worth of repairs are there and no repairs were done, what will they do with the money?

Mr Lannon: What are landlords doing with this money?

Mr Curling: The money that was being calculated in the guidelines in order to do repairs.

Mr Lannon: You've got little guidelines that go up 3% or 4% every year, whatever it is, you've got municipal taxes going up, you've got utilities -- they used to go up except for last year.

Mr Curling: They're taken care of in the guideline, all of those things.

Mr Lannon: If they were, there's still not -- in fact, when they dropped the MURB program, things went down too. You're aware of that program.

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Mr Curling: I'm glad you said that, because you said that those are incentives that government was giving to the private sector to build --

Mr Lannon: That's correct.

Mr Curling: -- and they were only building affordable housing when they got government incentives.

Mr Lannon: Not affordable housing; any kind of housing.

Mr Curling: I'm saying that our clue in all that funding where taxpayers' money was given to the private sector to make affordable housing accessible to those who --

Mr Lannon: They were taxpayers' credits that were given to developers, not taxpayers' money. They didn't have the money to start with, so they didn't give it to them. The MURB program was a tax benefit, if you recall.

Mr Curling: Of course. Regardless of what it did, government supported that.

Mr Lannon: Oh, definitely, and that stimulated the growth. What we need in this province is long-term solutions, we need a rent supplement in Thunder Bay -- I don't know about the other part of the province; I don't speak for them, but in Thunder Bay we need long-term solutions. I think we need that throughout here, and this is what I'm hearing through this whole thing. We need rent supplements for lower-income people that will fill the buildings that the landlords are just scraping by to get on now; so now you've got the tenants happy because they've got a place to go, you've got the landlords happy because their buildings are full again and you've got the government spending less money building these -- I can't believe that they spent money building these new buildings. So you're saving money all the way around. I do not see a loss. You're looking for solutions? There are some solutions.

Mr Curling: A 6.8% vacancy rate came about, let me tell you, by rent control, because you're saying that when it started at 1.8% there was rent control in place. Rent control continued and this government intends to stop it. It's 6.8% now, but rent control was the great monster. How, if it was such a great monster, did the vacancy rate become 6.8%?

Mr Lannon: Why is it 6.8% in Thunder Bay today?

Mr Curling: Yes.

Mr Lannon: I'm assuming your figure is correct. I know my own buildings are over 10%, if you want to know.

Mr Curling: Okay, 10% then.

Mr Lannon: Okay, whatever it is. Lower interest rates, people bought houses, that sort of thing, and they also talked about people who are only building for higher-income people. If you take someone from unit A and move them into, let's say, a higher-cost unit B -- which they probably won't anyway; they'll probably buy a condominium, but say you're building these luxury apartments -- that creates a void that can be filled by somebody else. You get the higher vacancy rate at that level and it brings the rents down. This is simple market economics. It's very simple.

Mr Curling: So rent control was not the monster that it is --

Mr Lannon: Initially when rent control came in it was a feared monster. In fact, as a landlord even at that point, in my early career in real estate, I never raised the rents until rent control came in, and then I had to raise them because if I didn't jump on, I would lose every year. So yes, rent control in the beginning initiated, for certain landlords or tenants, an increase in rent automatically, because if you didn't jump on, you weren't going to get it the next year.

Mrs McLeod: The definition of a shelter allowance program essentially is that it would pay the difference between what is considered a reasonable proportion of your income to spend on housing and the market rent.

Mr Lannon: Sounds good.

Mrs McLeod: First of all it's an uncontrollable cost for the government. If a government were to say, "We're going to replace all non-profit housing with shelter allowance and we'll go with the classic definition, which is that X percentage of a person's income would be spent on housing; here's the market rent in this community, therefore our shelter allowance will be the difference between what that person can afford and what the market rent is," that's an open-ended budget for the government. Do you think the government can afford that kind of program?

Mr Lannon: First of all I don't know whether that's an open-ended budget, because you've got individual people and, as somebody else said here, 20% move, come and go all over the place anyway. You've got 20% of the market moving around constantly. You've got people who won't be spending their whole life getting this money from the government and they hopefully won't need it any more, so that takes care of that. All I know is that when you started building non-profit housing and stuff like that, the price of vacant land per unit tripled in Thunder Bay, and I can show you. You used to pay $3,000 per unit for a piece of property. That went up to $10,000 in a few years.

Mr Marchese: Mr Lannon, you began your discussion by saying that rent control is a major barrier to construction. I have read much of the Lampert report; I've read very closely Professor Hulchanski's article which he submitted to this committee, and Lampert was hired by this government to do a study for them, and even he says that rent control is not the barrier. The major barrier, as he says, is one of the things you probably touched on, which is that you've got a whole lot of problems to eliminate to reduce that gap that it requires to build to make it affordable.

Mr Lannon: Oh, definitely, there's not just one solution.

Mr Marchese: But you said --

Mr Lannon: But I don't see the need to build either, so --

Mr Marchese: The real question for me, the first part at least, is, what evidence do you have that rent control is a major barrier to construction? Because I haven't read any in that regard.

Mr Lannon: When rent control came in, and that's been a long term, maybe rent control was one of the barriers to that problem. The problem that we have here -- and we can debate opinions back and forth, but I think you're looking for solutions, and the solutions to me are extremely simple. You've got apartments in Thunder Bay vacant. You've got landlords who haven't raised their rents at all. You've got people on the streets who haven't got a place to live, but the previous government insisted on building apartment units, brand-new, at about $80,000 or $70,000 a crack, on average, for these people to live in. That to me does not make any sense whatsoever. These are very simple solutions.

Mr Marchese: I understood that. Oh, no, I understood that. I made note of your solution to that regard. But I also made note of your assertion that rent control is a major barrier to construction, so I ask --

Mr Lannon: Yes, it is. It's one of the barriers. It's not the only barrier.

Mr Marchese: You said "major barrier." We don't see in any of the literature that I've read that it is a barrier.

Mr Lannon: They're welcome to their opinions. That's my opinion.

Mr Marchese: I understand, okay. So it's an opinion that's not shared by any evidence I have read. Okay.

The other problem is that they're not building. In basic conservative kind of economics, where there is supply, there is demand, no? You would admit that?

Mr Lannon: Yes, definitely.

Mr Marchese: If there was a demand, would you not say there would be a supply?

Mr Lannon: Real estate moves slowly. If there's demand, then it takes sometimes two to three years to fill that demand. What we're talking about here is long-term solutions. Housing isn't like a car, where you go down and buy it: "I need a car; I'll go buy it." Housing has to be planned years ahead. A planned subdivision takes two years to get through.

Mr Marchese: Oh, I understand that too.

Mr Lannon: An apartment building needs at least a year to get through.

Mr Marchese: I understand all of that. That's why it's going to be a disaster, in my view, in most parts of Ontario in the next many years, because there won't be any construction, because there's no demand.

Mr Lannon: There hasn't been any construction.

Mr Marchese: Exactly, but because there is no demand.

Mr Lannon: In Thunder Bay there used to be demand. There isn't any more.

Mr Marchese: All right. Professor Hulchanski says if there was a demand --

Mr Lannon: If there was a demand --

Mr Marchese: If people had money --

Mr Lannon: In his riding he's got a demand, so they should stimulate those landlords to build buildings.

Mr Marchese: I see. So in his riding, and I'm in downtown Toronto in Fort York --

Mr Lannon: Okay, so probably your riding too.

Mr Marchese: We have a problem in terms of meeting the needs of the working poor. So what you're saying to them is, "Don't build in Toronto." You're saying, "Build there and give them all the incentives they need."

Mr Lannon: Why not?

Mr Marchese: So when the government builds, it's not incentive, but when we have to give to the private sector a whole list of things which I can read, but you're probably familiar with them, you're saying that's incentive, that's okay.

Mr Lannon: I'm actually not familiar with any of that stuff.

Mr Marchese: Let me read them to you.

Mr Lannon: But I'll tell you, if you want the government to build something and you want the private sector to build it, I'll tell you right now, the private sector, and this is no secret, will build it a heck of a lot cheaper than the government.

Mr Marchese: So why aren't they building?

Mr Lannon: Because there's no incentive to.

Mr Marchese: What do they need?

Mr Lannon: They need tax breaks.

Mr Marchese: Oh, I see.

Mr Lannon: Not the money that they had; the money that they didn't have to stimulate tax breaks. If you don't have an investment, I don't care if you're real estate investing or stock market, if there's no incentive, no one's going to build.

Mr Marchese: So the private sector will build much better than governments if you give them tax breaks.

Mr Lannon: No, I didn't say better; I said more economically.

Mr Marchese: More economically?

Mr Lannon: That's right.

Mr Marchese: If you give them the tax breaks, however.

The Chair: Thank you, Mr Lannon. We appreciate your input this afternoon.

1520

DUKE'S TRAILER COURT

The Chair: Our next presenter is Bill Duke and Ellen Duke from Duke's Trailer Court. Good afternoon and welcome to our committee.

Mr William Duke: Good afternoon. It's a pleasure to get on this board. I've had a problem for a long time. As far as being a landlord is concerned, I've been a maintenance man, a tenant and I've travelled across this country and I've seen good landlords, bad landlords and I've seen good NDPs and bad NDPs. As far as I'm concerned, you forget it. You're lost. You blew everything.

Mr Marchese: Thank you very much, Mr Duke.

Mr Duke: I've listened to you, all your hearings, on television; I didn't miss any. I appreciate a lot of people coming up and voicing their opinions. But there's welfare people who've been on welfare so long they know the system inside out. They come in, they get rent. If they don't like the landlord, they trash the place.

I know fellows in town who are selling their apartments because they can't do anything with them because this Landlord and Tenant Act, it's deplorable, as far as I'm concerned. It's all for the tenant. You've got good tenants and bad tenants. I've thrown tenants out. Before they brought this landlord and tenant bill in, as being a worker, and a hard worker, in equipment and everything, I've been called the villain.

But some people don't understand English, just like the other day I had a problem. If I stole a glass off you, I'd be thrown in jail. Some people can get away with it. I can't do anything about it, because I'm small.

But I appreciate this interview. I feel sorry for some of the landlords, because I know just what the heck they're going through. But I don't want to take all the blame, and neither have the landlords got to take all the blame. We can't build houses and give them away for nothing. Do you own an apartment? Do you work for nothing?

I worked for $1.65 for 38 years for my parents, and I've been stuck under trailers. I've taken them to the hospital and everything. So nobody can call me a bad landlord. When a person who owns something can come in and then rent it up for more than I can and he doesn't do anything to his building, and then I've got to go to court with him? I've got to spend $10,000. That's it. I'll let her read it.

Mrs Ellen Duke: Our names are William and Ellen Duke. We're the owners of Duke's Trailer Court, which is situated on Lakeshore Drive in the township of MacGregor. It's approximately three miles from the city of Thunder Bay.

We purchased the trailer court last November from the estate of Bill's parents. Even though we knew of existing problems with rent control and everything, we went ahead with it. This is not only a family heritage, but Bill's and my own sweat, blood and tears and a lot of long hours dedicated for the future of our children and grandchildren.

Bill's mom and he started the trailer court in 1958. There were originally 30 trailers. These were cut down to 13 sites because of the size of the increase of the mobile homes. At the beginning there were overnight trailers. With the construction of the expressway going through, we lost all that trade, so we then went into the permanent trailers. The contractors messed up the septic systems, which failed and had to be redone.

Mobile parks were not favoured 30 years ago, so we worked with all the ministries concerned to build a model park that would be over and above regulation standards. To comply with government standards in the early 1990s, Bill's parents were required to install a water treatment system. Now, Bill's mom and dad opted for the ultraviolet laser system, rather than the chlorine. This ultraviolet system would supply quality water free of harmful bacteria and minerals to our tenants. The septic system also had to be replaced at this time, and then in 1994, the existing water lines were all replaced. Our son did this contracting work at cost for him.

These two major repairs were not paid off when Bill's parents both passed away, and loans were obtained and we had to assume them also when we bought the trailer court.

Bill personally did the majority of the work: the grading, the snowplowing of the roads, maintenance of the water supply and the sceptic system and maintained the grassed areas separated and apart from the trailer lots.

In 1987 Bill had a motor vehicle accident in which he had a broken neck and became disabled. Our son and daughter took over the majority of the upkeep of the trailer court at that time. I'm sure the majority of you have done extra stuff for your parents for which you did not receive anything, and this we did for Bill's parents for that too.

At the time we bought the trailer court it was in debt but we believed we could turn it around, not making a huge profit, because we're not that kind of people, but enough to pay for the maintenance costs and a cash account to cover possible major expenditures such as in the future maybe there might have to be water lines laid or a sewer field or maybe the pumps and everything in the utility room might have to be replaced, which is a lot of money.

Our court consists of 13 trailer sites and three service lots. Presently, our basic rent is $109 -- and this trailer court has been in existence for 30 years -- plus we get $3.13 a month for garbage pickup and approximately $13.11 for an above-the-guideline raise which was for the installation of the water line and the sewer system. This totals $125.24 and breaks down to $4.17 a day. I'd say that's pretty cheap rent for anybody. Daily income totals approximately $50.04.

Our mortgage payments run $48 a day, roughly breaking down to $1.96 a day, but it doesn't leave much for things like grading the roads, snowplowing, heating fuel for the utility room, hydro for the utility room, the plumbing, the water system maintenance and the cost of weekly water samples. Now that there's no provincial lab here, we have to send our water samples out of province or down into eastern Ontario at a cost of $30 per sample, so there's another $120 a month that goes for that. The garbage collection brings us in $37.50 a month. In order to have somebody collect this, we have to pay them $100 a month. At this point, we are now in debt about $120 to $125 a month, and this doesn't include any legal or professional fees.

As new owners, knowing the history of this park, we were granted the above-board increase of $3, which was really not sufficient to keep up any maintenance; like, you're paying $100 a month for grading of the road. To the present date, Bill and our son have supplemented the trailer court from their own incomes, and Bill is a disabled pensioner. We sort of have asked, does the rent control board feel we are able to sustain the guideline quality operation on a negative income?

To provide the same service, we would like to at least try and get $50 a month more per mobile unit. This would bring us in maybe a couple of hundred dollars to put away in the kitty for maintenance or big expenses, to cover our expenses.

Through inquiries that we've had through Thunder Bay, we have discovered that most of the trailer parks charge for an eight-foot-wide trailer $130 a month, and then for the wider trailers they go up to $214 a month. This is quite a difference in rental area and we would like to try to get it so that it's on a comparable measure. One unit in our trailer park pays rental fees for a year of $1,520.

1530

On top of financial issues, there is also the issue of tenants and landlords. There seems very little in the act pertaining to mobile home parks. When we checked into this about a year ago, we found one little blurb I think about three lines long and that was it. The rest of it we have to take on a basis of apartments, the same rental as apartments and what not. The rights have been shifted extremely from the landlord to the tenant. The board handling the complaints and rulings should include in their examination of facts a field trip out to these things and not let issues go to court when landlords comply with the guidelines.

At present we have two privately owned trailers. Some gentlemen previously spoke of the old age thing of having tenants move because we want to use the land for ourselves, which we do. We are living in Thunder Bay, in the city, and we want to move back out where our business is. This one trailer has been sitting empty for over a year. Although he does pay his rental every month, he's not there so there's no yard maintenance, there's no maintenance to the trailer. It's sitting empty where we could use it. We have sent him the eviction notice and put on there, "60 days, for the landlord's use." They were supposed to move the trailers on June 30. One on site 2, as I said in here, has been vacant for more than 12 months. The second one on the site has had tenants until June 30. Both of these units are owned by one family and they have really not been very cooperative in the least. We can't even talk to them. So as a result of this, we have to take them to court, which is going to cost us anywhere from $1,000 to $10,000.

As new owners we required leases be signed. They refused to sign. We had a revised lease drawn up, reviewed by our lawyer. Refused to sign; they were out of town until March 15. It's now August; they still haven't signed it. This is not their primary residence; these people are living within the city limits.

I put in here, one of these tenants, one member of this family, has been slandering the operation of the trailer court and everything. Even though we are owners of the trailer court, we do not directly have any mail or anything come to us. It comes to the caretakers of Duke's Trailer Court, which we are not. We have sort of been viewing this behaviour as harassment to us and overstepping the guidelines of the Landlord and Tenant Act.

The buildings, units and grounds have little or no maintenance. The grass has been cut twice this year. The pre-existing bylaws, which he did sign prior to Bill's mom's and dad's death, require that the owners keep their units at an optimum state of repair and the grounds around them the same.

I could go all through these things that have been done, but we sort of feel that our hands are tied. We can't even move on to our own property because somebody has signed a lease with the previous owners and not us. That really doesn't seem fair to us.

We as landlords are legally bound by the government legislation, the caps on rent and by tenants who seem to have more rights than us. We have given more than we can afford and cannot give any more. Do we have any alternative or do we adopt government policies in accordance with their cutbacks to decrease the quality of service in Duke's Trailer Court?

Mr Curling: Thank you for your presentation. I am glad you could make it here. There's no time for a question, but it seems to me that the problem, as I read this -- and it's very unfair for me to make any extended comment on this, but it seems to me there's a breakdown between the landlord and tenant; as a matter of fact, the tenant themselves not adhering to the court situation.

I just wondered too though that if you have a lawyer in this to carry it through the court, because the person must carry through the court the decisions and actions that are taken by the court. As I said, it's such a short time to comment on this, but there seems to me personally -- and I know that the Landlord and Tenant Act did not cover very much of mobile homes.

Mrs Duke: No, there was just three sentences.

Mr Curling: It is one of the areas itself that should be --

Mr Duke: This fellow stood there with a tape recorder taping me. He told the Landlord and Tenant Act over here on Victoria Street that -- I've got a stock of letters that he wrote. He's never done an honest day's work in his life but he seems to know more about my business. He even accused me of using water from my other property, which I gave to my daughter. I used my well when they blasted on the expressway, and when Hydro blasted that blew my wells all to hell. It cost $35,000 for water and then he's accusing me of using water and he doesn't even pay for it. I can't charge for water because the Landlord and Tenant Act says I can't, but the government made me put in an ultraviolet system. I've got to go by your rules, but --

The Chair: Mr Marchese.

Mr Marchese: Mr Duke, I guess there is something that I have been saying all along that has displeased you. Is that correct?

Mr Duke: That's right. I've listened to you on the radio and you don't make me happy. You never make me happy because I live under fear of governments.

Mr Marchese: I can understand. So what specifically did I say that makes you unhappy?

Mr Duke: Just what you're saying and the way you present yourself. You're cutting everybody down, but you were for unions and I formed a seafarers' union, the hoisting engineers, and the unions screwed themselves. Now they've got those high wages. There are people out there who don't want to work. I've never been on welfare, I've never been on pogey or whatever you want to call it, but I've worked all my life and I wasn't scared to work. I worked for less than minimum wages. If you call $1.65 an hour for the last 38 years and using the scythe to cut grass, and subsidizing -- I built the fire department out of my own pocket. It cost me $700 a month for phone calls to get a volunteer fire department going. I fought for unorganized townships. I've worked hard in my community.

Mr Marchese: I believe you.

Mr Duke: But a lot of these kids I feel sorry about. I've got grandchildren who are too lazy. It's like flogging a dead horse. They don't want to work.

Mrs Duke: I think what we'd kind of like to see if the rent basis -- like somebody said, it's going to be 2.8% this year -- I'm sure, every trailer court if they could get here -- should their rent increases not be over and above places like apartment buildings, condominiums? Trailer courts have to supply their own water so they require more money. They have to do all their own maintenance for roads and things like that, which is all out of their own money.

The Chair: Maybe Mr Smith might be able to shed a little bit of light on what the -- we're a little over our time, but can you --

Mr Smith: Well, perhaps. First of all, I would like to thank you for coming forward because it's important for us to hear from small-based, family-owned businesses. You've raised an important issue with respect to services. What this position paper does is address your ability as a property owner to pass through costs to tenants resulting from a public agency order such as the one you referred to with respect to water treatment and the ultraviolet. So this paper is addressing that issue on your behalf.

What we have asked you, though, is: What is the appropriate cap level that might be applied to that type of pass-through cost? Certainly in my riding, we have parks of this nature that have some substantial infrastructure costs. Not only are we looking at municipal water supply, but the provision of a full municipal sanitary sewer. So that particular type of issue is in this paper and we certainly welcome any thoughts you might have as to how those costs could be recovered and if any cap should be applied to flow-through dollars on infrastructure improvements.

The Chair: Thank you very much, Mr Smith. Thank you very much, folks. Unfortunately, we've been pretty tough on the 20-minute thing. Maybe Mr Smith could answer a couple more of your questions outside, or Mr Hardeman. Thank you very much.

Mr Duke: I'd appreciate it.

The Chair: By the way, Mr and Mrs Duke, Mr Marchese's not really that bad a guy.

1540

WOLFGANG SCHOOR

The Chair: Our next presenter is Wolfgang Schoor. Welcome, sir, to our committee.

Mr Wolfgang Schoor: The review of the documentation pretty well speaks for itself, but I will read the material that I have presented to you because I believe the tenant protection package is incomplete, but at the same time, a good start.

I requested to participate by way of this consultation paper on rent control. This contribution will add another dimension to striking the desired balance. Although my experience as an independent landlord and ergonomic design specialist for built environments encompasses all aspects related to the Landlord and Tenant Act, the focus of this presentation chronicles around landlord and tenant relationships and ethical issues associated with rooming- and lodging-houses. These types of living arrangements are not mentioned in the minister's document but they are indeed an important overlooked segment in the housing market, as well as in the Landlord and Tenant Act.

Problems: In the past, conditions such as frustrated landlords, poorly kept buildings and certain unruly destructive tenants have resulted in debilitating accidents, deliberate destruction and even fatalities in lodging-house fires. For example, two people died in a lodging-house fire in 1993 here in Thunder Bay. Since then, many other lodging-house fires have occurred here in Thunder Bay and elsewhere in the province.

The Ontario Landlord and Tenant Act spells out the legal rights and obligations for both the landlords and tenants. Landlords feel there is an imbalance in the act favouring tenants. Tenants in contrast feel that landlords are favoured. These conflicting attitudes often reflect in destructive and violent behaviour. These problems are more visible and apparent in rooming- and lodging-houses. Facing these hazardous, unhealthy and dangerous conditions, typical landlords become frustrated, lose confidence in the legal system and eventually move elsewhere, or sell the building outright.

These events earmark the end of destructive cycles and can often be the beginning of new violent destructive cycles. At times, these new cycles are reflected in even more severe destruction when tenants continue in their destructive and anti-social behaviour. As a result, landlords take steps which are illegal at times to protect their property.

Preamble: We must stop these vicious trends of people's continued destruction, which is fatal at times. We must also stop the senseless anti-social behaviour within lodging-houses. Specific tenant behaviour creates notions and a stigma for the absence of any human rights. People directly affected by these unruly and deadly -- I repeat "deadly" -- notions are innocent inhabitants of rental units, people within and among the neighbourhoods and, of course, our own families and friends.

Many of these types of problems cannot be solved by simply adding more laws, which are broken and not enforced anyway, but within a framework of moral and ethical issues which are the emphasis of this presentation.

In general terms, main issues of ethics are tenant satisfaction versus landlord profitability. This analogy leads to two critically important questions: (1) What are the legitimate needs of the tenants? (2) When is it justifiable to put the tenants' needs aside in favour of the profit needs of the landlord? And this is what we've been hearing all along.

The answer cannot be found by simply manipulating and changing the Landlord and Tenant Act. Important issues have a tendency to crop up between the rules -- in other words, it falls through the cracks or it comes up through the cracks -- in the presently uncharted territory of rooming-houses, where there is no clear precedent, no obvious right or wrong answer.

The next question can be, are sincerity, goodwill and common sense enough for the landlord to create a harmonious relationship between the tenant and the landlord? The so-called golden rule is just too simple an approach, mainly because it assumes that everyone has identical needs.

A great deal of insight into the tenants' situation would be required before the landlord could make truly ethical decision. For example, when is it ethical to evict a tenant or when is it ethical to refer a tenant to an organization which perhaps would be in the position to make better or well-informed decisions with the best interests of the tenant in mind? This leads to yet another question. Does the tenant then become a client? Does the landlord then become a social worker, should he or she be paid for their efforts, and who will pay them?

The landlord cannot know whether he or she is acting to the advantage or to the detriment of the members of the entire cohabitation system or of the rooming-house. For example, many disastrous mistakes are made with the best of intentions. A kind-hearted landlord decides not to act upon a tenant who may be feeble-minded, young, old or frail, or may have alcohol or drug-related problems, even though he or she persistently defies the house rules or the Landlord and Tenant Act. The situation grows worse and worse until finally a disaster occurs. Then people suffer or die, which they have before, and criminal charges are laid as a result.

Were the landlord's intentions good? Of course they were, but still this led to the disaster. Landlords are motivated in many ways. The ethically motivated landlord believes that he or she should take into account the welfare and safety of others along with a multitude of other factors.

In many cases landlords and tenants intend to manipulate one another to adjust to what they think is reality and to make them conform to a pattern that seems logical from their own top down, to make the others accept unquestioningly what they tell them. The evil of this method is repeated violations of human dignity, human rights and freedoms. It becomes a technique for manipulating one another, which often requires, as it does now -- it's very important -- new laws.

There are, however, differences. Critics and special- interest groups may ridicule landlords for resorting to manipulation whenever they try to minimize conflict and gain acceptance for gaining positive changes. But is there anything objectionable about efforts to weigh and quantify alternative courses of action and to select the one that avoids problems? Is it not highly desirable for the landlord to enlarge his perspective to include rational solutions to its problems?

This brings an entirely new question. Does the humanistic approach impair the landlord's efficiency? In the process of trying to understand tenants, the landlord may lose sight of his or her primary objective, and this is "housing people profitably." Does this mean that the landlord's job is to house people exclusively for the sake of profits, while at the same time let the tenants worry about themselves? Historically, our legal system has encouraged such attitudes.

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In conclusion, in the past many techniques have been developed by landlords and tenants alike.

(1) In the manipulatory process some problems are created and other problems are magnified by misunderstandings and poor communications. Many of the problems cannot be solved by better understanding alone. They can be solved only by carefully considered changes.

The discussion paper is a good start, but also by the application of practical or applied environmental ergonomics, by incorporating analyses, design, as well as testing and evaluating living arrangement systems. A restructuring process is required. This restructuring process should include creating new social and physical living environments, new directions in the Landlord and Tenant Act, make full use of municipal bylaws, organizational restructuring as in legally enforcing the act by changing statutes from the Landlord and Tenant Act to the Criminal Code. For example, on page 6 of the discussion paper "unauthorized tenants," in my view, would become trespassers.

(2) Counselling and training may improve communications and may even help people develop new skills, and that's what we need. For example, tenants need to learn appropriate behaviour in landlord and tenant living arrangements, especially in areas of life safety systems.

Landlords need to learn to renovate their buildings for the best use by the client and tenants in ways that encourage improved behaviour. That's what's needed. We don't need to throw a lot of money at things. Groups of tenants who need the encouragement are people who live in rooming- and lodging-houses, because rooming- and lodging-houses are used in place of care homes and short-stay facilities.

(3) Human relations is not an end in itself. For the past 20 years the objective of the independent landlord and organized landlords was not to make people happy, though some have argued otherwise, but to achieve its overall goal of providing housing with problem-free profitability.

The rooming-house landlord of today cannot ignore the tenants' problems by concentrating exclusively on gaining profit and by increasing the rent, and this is what we're talking about here. Real gains and long-term profit are dependent upon getting cooperation out of tenants and other people, both inside and outside the formal boundaries of rooming houses.

In contrast, the rooming-house tenant of today cannot assume that by freezing and halting rent increases or even reintroducing subsidized housing will provide them with long-term quality housing. No, it won't. These concepts have not proven successful in the past. Destructive tenant behaviour has caused the subsidized housing effort to be reduced to substandard housing.

My recommendation, my suggestion, in addition to the restructuring process before mentioned and the New Directions for tenant protection legislation in Ontario is to, first of all, improve tenants' and landlords' understanding relative to tenant satisfaction and landlord profitability.

I am hopeful that in the future we will see increasing, not decreasing, attention paid to the concept of rooming- and lodging-houses. This concept, which I have described, has been tried in my own pilot project for the past eight years, and for close to 80 Villa Street satisfied rooming-house tenants, this concept proved itself workable within the framework of the desired balance.

I'm happy to have had the opportunity to make this presentation.

Mr Marchese: Mr Schoor, what you practise in your own place is this concept of incorporating analysis design as well as testing and evaluating living arrangements, so basically you learn from the interrelationship between yourself and the tenants?

Mr Schoor: Yes. It's a process of experiential learning.

Mr Marchese: So you've learned a great deal as a result of that?

Mr Schoor: I've lived there for eight years. I have lived with the people who needed the help and I've been there.

Mr Marchese: So this counselling and training that you're talking about as a way of improving communications is something that you're urging landlords and tenants to do and having the government say to landlords and tenants, "Create ways of communicating with each other"?

Mr Schoor: Yes, it creates a bond. Doing things together creates a bond.

Mr Marchese: And it doesn't have to cost money is what you're saying.

Mr Schoor: Not that much, no.

Mr Marchese: It just takes the government to simply instruct landlords and tenants somehow to create a better communication system between each other. You don't see that as a conflict. You don't see the interest of the owner and the interest of tenants sometimes being in conflict?

Mr Schoor: No, it's not necessary.

Mr Maves: Thank you, Mr Schoor, for your presentation. I'm just going to follow along Mr Marchese's line. How would a government facilitate that kind of communication? I agree with you that better lines and more open lines of communication between landlords and tenants would solve a myriad of problems that we have with the system right now. How could a government encourage that to happen?

Mr Schoor: Some systems here you're already putting in place; for example, workfare. Many of the people who live in rooming- and lodging-houses are in some type of a program. They are either on FBA, family benefits, or they're on welfare or whatever and, as a result, they're not as employable as you think they are. Some can't read, with some their dexterity is off.

But to make a long story short, for example, if one was to employ workfare in dilapidated buildings and people live there, well, let's work together and make this place a better place than it is and learn the concept of, "If you can't make it better, leave it alone." The things that people will learn by using those applications is, even if they don't learn to be a carpenter or a painter or an electrician or a scientist or a politician, people learn what they like and what they don't like. Now that is quite an achievement for some of those people.

Mr Maves: You're saying that just encouraging that participation and that interaction alone will --

Mr Schoor: Will help them make up their mind that yes, they do have a place in our society and there are people who do care for them. Not all landlords are as bad as I have heard.

Mr Sergio: Mr Schoor, a couple of the objectives that are proposed within the legislation here -- if they will work, at least they are being proposed -- one of them is to provide for a faster, more accessible system to resolve disputes between landlords and tenants. In order to do that, I suppose, and disputes are between small landlords and big landlords, it would have to be a mechanism that would be free from political interference or political patronage. How would you see a system like that?

Mr Schoor: The first thing is, what I have done is that I'll teach the tenants what is expected of them. They have rights and obligations. Personally as a citizen I really struggle with the thought of having to evict a tenant because the tenant who is not good enough to live in my building, I will have to dump this individual into your lap or Ms Lyn McLeod's or anyone else's. I really struggle with that thought.

What I have done in the past is that I have arranged for meetings with the judge, and the judge has laid down the law to them literally and said: "Now you're on notice. These are your requirements." So education. If we just move these people from one place to another to another, the only thing that has happened is that I have resolved my problems, but the other person who will be replacing the empty space will have been evicted somewhere else. What have we gained? We haven't gained a thing.

Mr Sergio: Have you been successful?

Mr Schoor: Yes.

The Chair: Thank you, Mr Schoor. We do appreciate your input this afternoon.

1600

DRYDEN AREA MOBILE PARK ASSOCIATION

The Chair: The subcommittee has agreed to accommodate a couple of late requests for presentations this afternoon because we didn't have a full schedule here in Thunder Bay. We have Lauretta Wesley and Nola Hill from the Dryden Area Mobile Park Association. Welcome.

Mrs Lauretta Wesley: I'm pretty nervous about this. I was asked to find enough volunteers to put a new roof on the church and I thought that was a big job, but this looks bigger.

We represent the newly organized Dryden Area Mobile Park Association. We've been in business five days. I am Lauretta Wesley. I'm a tractor operator and a licensed pesticide technician by trade, and my husband owns a trailer park. We have 24 units in ours. I noticed that there is protection for the tenants. One of the things we would like is fair and equitable treatment for both.

The other thing is, we would like to separate the mobile parks from the apartment buildings. A 2.8% increase on $1,200 for an apartment is $33.60 a month. A 2.8% on $135 is $3.70 a month. We're getting further apart. The rich get richer and the poor get poorer. Also, we have in our area a mobile park at $135 a month and one at $229 a month. We would like somebody to look into fair prices.

We're sort of a unique situation where most of the mobiles in our area are in rural areas, which means we don't have municipal water and sewers. We have drilled wells, storage tanks, our own chlorination system and do our own water testing, which we send to the Ministry of Environment and Energy in Thunder Bay -- or did -- our own septic system, snowplowing, road maintenance and garbage pickup. The government closed the rural dumps and we had to hire garbage pickup at $1,200 a year. Then the MOEE office that did the water testing in Thunder Bay closed, and the first price I received was $10,000 a year to test water out of province. This is an increase of $11,200.

We applied to the rent review board. I have the letter here, and the things that you can raise the rent for are heat, hydro, water and taxes. Unfortunately, the rent review board does not consider testing water as anything to do with water. It says, "It does not appear that your operating costs increases qualify for the above guideline application."

We are making approximately $42,000 a year. We are in a loss situation and the government would like to add another $11,200 to our cost. The owners of all the parks in our area are working on other jobs.

On pages 4 and 7 you have fines for the landlords only. Why are there no fines for repeatedly not paying the rent, building unapproved structures, damaging mobile homes that they rent? I would like to see 1% per day for every day they don't pay their rent.

There is no real way to evict a problem tenant. The courts don't enforce eviction notices. The landlord can't afford the legal fee, the sheriff to come 90 miles, putting wheels back on a mobile home, having a moving company move the mobile home off your property. Storing it, you pay rent by the day. It's not allowed to be stored on your place. Then if it's sold, you have to split the money with everybody who has a lien against these tenants, but you've paid the cost.

We are not allowed to expand. We have no government subsidy. We can't compete with government-sponsored low rentals.

An example would be one tenant who rented for years at $300 a month and then gave his notice because he could rent from a government-subsidized home for $100. We are forced by the government to take on the costs of the government closing their facilities, but we are not allowed to pass these on to the tenants.

Red carpet: I would like to say that I hope at 61 you're not out climbing 95-foot hydro poles to subsidize your business. The "red carpet" remark waved red flags.

One park has gone bankrupt in our area and the other owners are all working out to support the mobile parks. I don't think you have to build high-priced apartments with government money. Let the people invest their money in cooperative apartment buildings. Make it possible for smaller landlords to build lower rental units. Subsidize the tenant, subsidize the needy, not the greedy who own another building and are renting in something else.

All parks in our area were built by the owners. We were trying to build a business that would support us, not one that we had to work outside to support it. Maybe you could loan us the money a little cheaper; we could hire workers and create more jobs. I want protection for the tenant too. I don't want to see any tenant overcharged or abused or harassed, but then neither do I want to be harassed.

If you're looking for fair housing, mobile parks are the best way to go. Allow the development of new lots, give us fair rent, create more jobs, and subsidize the people who need it.

I suggest that you start up a committee -- I don't know if you would need it in the south -- dealing with fair rent for mobile parks, the expansion of mobile parks. We haven't had vacancies in 25 years. There are people who phone us and have a mobile and want a lot. We don't have them.

Also, the committee could deal with intimidation of mobile park owners. Some of you people have policy-setters at the top of your government who don't happen to know what the guys at the bottom are doing or how they're threatening other people.

Why are we being deprived, at the benefit of apartment building owners? Maybe deal with the landlord-tenant problems; maybe this committee could deal with it. You could look at repairs the landlord needs to do, but also keep an eye on what goes on in the tenants' -- some of them aren't keeping up either. We would appreciate helping you any way we can with any knowledge that we have. We don't know much about statistics, but we certainly know about cold, hard facts.

I've forgotten something -- it's a sign of age. Oh, yes, the man who was talking about talking to your tenants. I have nothing against the landlord and the tenant group getting together. I have never turned down anybody in our park who needed to be listened to. I'm a very good listener. The people in our park have definitely come to our aid many times. Over half of them came out and helped us at 40 below zero with the water line that broke. I just think people need to be listened to. Our little trailer park is like a little community and they're concerned for each other. If an ambulance comes, there'll be people there to help load them on. It's very nice. Your turn.

Mrs Nola Hill: I just have a few points. I don't want to go through all of this; you've been listening all day. I just have some points on things that were already brought up. I don't understand why you don't set up an arbitrator, an inspector, to go into, let's say, an empty apartment. You know that you have all these welfare people waiting, or low-income people or someone who needs a home real quickly. Go into these apartment blocks with this inspector and have the inspector say, "Okay, the rent should be, looking at the place, $500 a month." If this person who needs it can't afford it, then the government can subsidize it. That's a win-win situation. The apartment that's sitting empty gets rented, and then the person who needs the place can also afford it.

I've got lots of land in the rural areas but I am unable to subdivide and expand my park. I would even put up low-rental housing if I was subsidized, but what happens is the big developers hear about the new laws that come up and stuff like that, so they're the first ones to get these grants. By the time I hear about it, it's already shut down or it's already full, something like this meeting. I've only been in business for two years and it was due to health problems, as well as the other couple -- my mother was quite sick.

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I'm learning right from the bottom. I have no idea what I'm doing. I'm just trying to do the best that I can. You need government subsidy to help you out and there is none. I've been looking for two years. I might be looking in all the wrong spots but I don't know who to call. It would really be nice if something was set up where a new businessperson knew where to go and what was out there for them. In that way, the public always will get helped and so will the business owner.

I don't want a lot of money but I do want to make my payments on my place; otherwise I'll lose it as well. There have to be some answers. I think helping the little guy will help the big guys too because we'll still have to hire these developers to build these places, so they'll get income from us.

You'll create all kinds of jobs by letting us develop in the rural areas. A mobile home park puts a lot of families into a small area, so you don't have any increased maintenance costs to any of the taxpayers because they're all in a small area, sort of like an apartment block, only it's on a plot of land. I don't know, I think it would be very beneficial, but unfortunately we're in unorganized territory. The government has told us on many occasions they don't want us to expand there. Thank you for listening.

The Chair: We've got about two and a half minutes per caucus for questions, beginning with the government.

Mr Smith: Thank you for your presentation this afternoon. I think you've raised some points, because the type of business you're in I personally don't believe is very well understood, to start with. So some of the questions you have are very appropriate. I'm certainly pleased as well to see that the report the parliamentary assistant filed with this committee indicates that the Ontario manufactured housing association, which represents some of your interests, was consulted as part of the original stakeholder review.

Some of the issues that you've raised are very important to me as well, because I have a home-owned/leased-lot community in my riding and the challenge I have is the same that you have in terms of trying to address the landlord's concerns, but at the same time the tenants or residents in that community are seniors and primarily on fixed incomes. That's why I was interested to hear from the Dukes in terms of what the appropriate capping mechanism might be or how we might address costs which are identified in this paper that are imposed on you by a public agency, such as the water testing you've raised, how those might be addressed through an expenditure mechanism or pass-through. Do you have any thoughts in general about that? The paper speaks to the very issue you've raised and we're hoping to find some conclusion there.

Mrs Wesley: I wonder why you decided to close the lab in Thunder Bay when it's the only one around here, and I wonder too, why mobile parks are the ones that have to test their water. Why not tourist camps, restaurants out of town, motels? The other thing that concerns me a little bit is, more than six mobiles, you have to test the water. If you don't have six, you don't have to test the water. Does that mean that if you don't have six, those people aren't important? It just amazes me that you can say: "You have to do this, but we can close our lab and you have to go out and pay privately for it. Plus, you can't send this down to the renters. They're not going to share the cost with you."

Mrs Hill: By the government closing that lab in Thunder Bay, not so much my trailer park, because I only have about nine trailers in it, but most of the bigger parks lost a value of close to $100,000 per park off the value of their property. Before you closed that lab, that park was worth $200,000 and now it's only worth $100,000. This was their retirement.

Mrs McLeod: I'll pick up on that because I think you've made, as the Dukes have, a strong case for the need for special attention for trailer court rental situations, as well as the frustrations of small business people. I guess, for me, you add another frustration that doesn't often come out and that's the frustration of people in northwestern Ontario, where our reality is so different. I'm not sure how many people would know what the point is that you're making, that one hand doesn't seem to know what the other hand is doing.

So when Mr Smith says, "What can we do about the water testing cost?" it wasn't a problem to you until government shut down the lab. It was formerly done by the Ministry of Environment at no cost to you because it was seen to be something government does for the health of its citizens, not something which was a cost to be borne by the landlord, in this case. Now the Dukes are paying $30 to have their water sample tested because there is no private sector lab to do it here. There's no cost-efficient way to do it and there's a user fee attached to it for you. How often, for example, would you have to be sending that water sample out?

Mrs Hill: The ministry told us that we were the same all across the board. However, when we formed this association, we found out that wasn't the case. I've been doing two water bottles per week and then at the end of the month I was to do four. The lab contacted me and advised me that I would be paying $60 per bottle now, that I normally only paid $5.90 to have shipped away. That's a big difference.

Mrs McLeod: I haven't seen your income figures; the Dukes set out theirs. But when you look at the income figure they're getting on a weekly basis and you take that off the top of it --

Mrs Hill: I'm in a $10,000 overdraft right now.

Mrs McLeod: So when government says, "What can we do to help?" there's an obvious one.

Mrs Hill: So I don't have the time -- yes.

Mr Marchese: Let me understand. The water testing has caused serious costs and it's $60 per bottle. How many bottles?

Mrs Hill: Two per week and then on the last week of the month I'm supposed to do four.

Mr Marchese: So you've got to do two a week?

Mrs Hill: Yes, one from my kitchen in my restaurant and one from my public bathrooms.

Mrs Wesley: But every trailer park doesn't do the same amount of testing, even though the Ministry of Environment told us we were all treated the same. Somebody with 16 mobiles is testing every week, four bottles at a time. Somebody with 65 is testing twice a week with two bottles. The town of Dryden, with 7,000, is testing four bottles four times a month. There's no consistency in anything they tell us.

Mr Marchese: Were the ministry officials aware of the kinds of costs that would be involved once this lab was no longer here? Were you aware of that?

Mrs McLeod: It was certainly raised, Mr Marchese.

Mrs Hill: Not until the lab contacted us, the lab that closed down, and they gave us a report on the different private labs we could contact. Once we started contacting these labs, they started telling us the rates and we went, "Oh my God, we've got to do something."

Mr Marchese: I would definitely support something that speaks to a group of people, a consultative group that you mentioned -- the others mentioned that as well -- that would deal specifically with issues of mobile home parks, and I hope the government members will take that into account.

The Chair: Thank you very much, ladies. We appreciate your input this afternoon, and your concerns.

1620

PINE TREE ESTATES MOBILE PARK

The Chair: Our last presenter is from the Pine Tree Estates Mobile Park, Danny Mosa. Good afternoon, sir. Welcome. Any time you allow for questions would begin with the Liberals. The floor is yours.

Mr Danny Mosa: Thank you, Mr Chairman, for the opportunity to speak to this committee. Unfortunately, I wasn't aware that you had to present a presentation beforehand, but basically what I want to do is just concur with what the Dukes had to say about their trailer park, and the last presenters.

My concern, basically -- I would refer to Mr Stewart -- is accountability on the tenant and the landlord. Being a trailer park owner, I don't think the Landlord and Tenant Act should apply to a trailer park as such because in the majority of trailer parks we don't own the trailers; all we're doing is renting out the land.

My concern is that I have drawn up leases. I've also had rules of the park that were handed down to me from the previous owner of the park. When I try to enforce these rules and the lease conditions, I am told by the Ministry of Housing locally that they're not worth the paper they're written on because the Landlord and Tenant Act supersedes whatever's in there, because there are only certain conditions such that you can evict a tenant from the property. Being a park owner, I feel that it's my land. When I attempt to get some help in regard to bylaw enforcement and what not, I've been told by the municipality: "You're out of luck because that's private property. We can't come on to your property." "I'll give you the permission to come on to my property and enforce these acts." "No, we can't do that."

What I would like this committee to consider with regard to trailer parks -- I can agree with rent review. You need some sort of legislation in regard to costs for both parties. But I still think the tenants have more control over the parks than the owners do if I turn around and tell my tenant-owners that they have to fix their trailers up, that they can't use the park for a used car wrecking yard etc. If they abuse some of the uses of the park, I'll say: "Fine. You're inconveniencing the other tenants. I'm going to have to evict you." I go through the process of trying to draw up the papers and find out that I come to a dead end street saying, "These aren't some of the conditions such that you can evict a person."

All I'm doing is renting out a space. I'd love to be in the position of the Ontario government, at the Ministry of Natural Resources, and tell somebody, "We're going to increase your rent this year by $7 and at the end of October you have to be out of the park." If I have a tenant who doesn't abide by my rules and regulations, which they agreed to when they first came in, then I should have the right to say: "Fine, you can go. You have to go because you're disturbing the tranquility of the park." We don't have this right.

There was talk here today about rent increases when a tenant moves out of an apartment, that if a new tenant comes in the landlord is promptly going to have that opportunity to raise rent. What I find out in my trailer park is that I don't have any control. If Mr Marchese owns a trailer and he decides to sell it to Mrs McLeod, I have no control over that sale. If he decides to rent it to her, he can increase the rent to whatever he wants, yet I'm controlled by rent control. He's making three times more on that trailer than I'm making renting him the lot. He's making a business out of using my property. I have a tenant on my trailer court who owns three trailers. He pays me rent for that lot and yet he's collecting three times as much rent by renting out that trailer to a third party. I never see the guy; all I get is this cheque for the monthly rent. I have no control over my property whatsoever.

I think with the Landlord and Tenant Act being in place as it is now, it should not relate to the trailer parks. We're not landlords in regard to apartments and what not. All we're doing is renting them a piece of land to put their trailer on. I agree with that. Let them put their trailer on there, but I don't see how they can take advantage of us and we have no control over what they do with their property once they put it on our land. As long as they pay the rent, I can't evict them.

All I can do is more or less concur with whatever the other presenters said in regard to trailer parks. My concern is that the Landlord and Tenant Act, the way it's legislated now, should not apply to trailer parks if the landlord of the trailer park doesn't own any of the units. If he does own the units, fine, let the rent review or Landlord and Tenant Act apply to him as a regular landlord. As it stands now, we have different costs than apartment building people and yet we can't do anything to upgrade our trailer parks.

I'll give you a good example: People say to me, "Why don't you upgrade your trailer park?" I'll say: "Why don't you fix your trailer up? It's a shambles. If I pave this road in this trailer park and I put in night lighting and I put in security, you would put your trailer up for sale. If it was only worth $5,000, you would turn around and sell it for $15,000 because you'll say to that prospective buyer, `Look at what I'm giving you.'" That prospective buyer knows there's no other place in the community to go and build a trailer park or put a trailer in because of the municipal bylaws.

What trailer parks you have in the community now are what there are, and the municipalities won't allow any expansion. These people who live in your trailer parks won't fix their trailers up and yet they expect you to do all the maintenance work. If they sell their trailer, they're just enhancing their pocketbook and the landlord gets nothing out of it. There's no advantage at all.

Mr Sergio: Mr Mosa, I think there is a shared view here, especially with respect to trailer parks and that there are problems associated with the rules governing trailer parks or mobile homes. We have heard this in Toronto from a couple of presenters.

One of the examples you have given I think has got to do with subletting.

Mr Mosa: Yes. I have one tenant who owns two trailers in my park. He sublets them to a third party and he's making more money than I am.

Mr Sergio: You're saying there is nothing in the laws that protects you from somebody having two, three trailers, and he can make money and you can't.

Mr Mosa: That's right. Apparently, I can't even have a new tenant coming in sign a lease because they're not obligated by law to sign the lease. They just take over the existing papers, whatever they did when they came into the trailer park. Some tenants will sign a lease, but they don't abide by anything in the lease.

Mr Sergio: I believe that's my recollection as well. Also, mobile homes are taxed at the same level as residential or commercial?

Mr Mosa: We're taxed commercial.

Mr Sergio: Which is a higher rate than the residential.

Mr Mosa: Yes.

Mr Sergio: Which of course adds to the cost of your operation.

Mr Mosa: Yes.

Mr Sergio: As I said before, I think it's a consensus that something must be done to improve and give assistance to the operation of the people who run small businesses such as yours and others. That is one way of assisting you people. But the government must also listen to you people. You are, if you will, a special-interest group because the government has been attaching this connotation to various groups. So if we may say for this particular instance, in your particular special group, I think the government must look seriously in a different way than it looks to condominium and large high-rise buildings and something like that.

Mr Mosa: I was hoping they would look at it as more of a condominium aspect.

Mr Sergio: Perhaps that is one way, but also the government must not put you and the other lady and the other lady out of business. We cannot have continuous double-talk, especially from our own government. We have to assist small businesses. We have to create jobs. Then they come and close a lab up here, which is costing one particular park $100,000 a year. I am sure $100,000 a year must be costing a few jobs in that particular park.

I think you've got to work both ways. It is good that we hear from you people with this particular concern. It is a serious concern and I'm sure that the members of the government side have an open mind and will be taking this to the minister himself. We hope something good will come of it.

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Mr Marchese: Mr Mosa, how did you become aware of these meetings?

Mr Mosa: I read it in the paper on Thursday of last week and I found out this weekend that it was at 9 o'clock this morning. That was the first of my hearing of it.

Mr Marchese: It was interesting as well, because the two previous speakers said that by the time they hear about something it's usually too late. That's always a problem in terms of how we consult. It's not just this government; all of us, all governments, at times have a problem. We put information in newspapers and sometimes we simply assume that people will read them, and that's not always the case. Different people read different things. That should always be a concern to us in terms of how we reach those communities that sometimes are the last to hear about it, and you're one of them.

Is the testing of water as serious a problem for you as it is for the other two?

Mr Mosa: Yes. That was brought up by my wife the other day. We were told when the lab was closing in Thunder Bay that there would be a cost involved. I said, "Well, that's part of doing business." But we didn't realize how costly it was going to be. When I contacted the local people here who are testing our water now, I asked them how much it would be. This is on a weekly basis and it's four bottles a week. They said it would be $12. I said, "Well, $12 isn't bad." Then I found out it was $12 per bottle, so I'm looking at $48 a week for testing the water.

Mr Marchese: Yes, that can be costly. Did you get a chance to read the document the government has produced?

Mr Mosa: No, I haven't seen it at all.

Mr Marchese: So you haven't seen the page or so that speaks to this. My only suggestion is that a group be set up to look at mobile home parks. Perhaps other people have more knowledge than I do, coming from the city. I'm not sure; maybe the others do. I don't know. But from what I've heard from the three of you, it seems to me that there's a little more that we need to know about this than we can gather from a page or two of information. I don't think it's bad for the government to set up some group that would review this quite separate from everything else just to see how things affect you in a general way, specifically but also generally, and see how we can relieve the load so that some of you can survive as small business people up here. Anyway, thank you for coming. I wish you the best.

Mr Hardeman: Thank you for making your presentation. I think it's quite obvious, particularly from the last two or three presenters, that there is a great difference between the mobile home parks and the other types of housing, high-rise housing in particular. One of the concerns -- and we talked about the level playing field -- that has been expressed on behalf of people who live in the mobile home parks is that there are no criteria that limit the ability of the mobile home park owner to deal with the rent increases. The people who own the trailer are far more tied to that spot; they're not like other tenants who could go into the free marketplace and quickly look for another place to live. They would have the expense of moving their mobile home, so they become a captive customer. Do you have any direction that we could use that would help deal with that, to give that level playing field, to provide you with the direction?

Mr Mosa: I don't want to evict anybody. All I'm asking for is: "If you're going to live in my park, these are the rules. Abide by these rules and there's no problem." Like I said, there are only a few people. But some trailers in that park of mine, I'm ashamed to take some of my friends and say, "Hey, I own that place." These people don't fix their trailers up.

Mr Hardeman: Going further, you said that you believed the trailer park owner should not be covered by this legislation. Do you believe that the owners of the trailers should be held independently responsible?

Mr Mosa: I think they should be. If they rent their trailer out, they automatically fall under this legislation.

Mr Hardeman: The other issue I'd just quickly like to touch on is the issue of the testing, recognizing the cost that's implied with that. At least from what I've heard so far, there seems to be an indication that all this has just come to light now.

Mr Mosa: I think it was July 1 we had to start taking our water.

Mr Hardeman: But I think it's fair to suggest that the requirement for the testing came some time back. We talked about the different criteria for different camps, and villages have to have different testing done compared to larger centres and so forth. Those criteria did not come into existence just recently.

Mr Mosa: I'm not aware of that, because I've only had the park for six years. All I know is what I was told I had to do, and that's what I've been following.

Mr Hardeman: Recognizing it's a major cost, a lot of our small municipalities in rural Ontario are facing the same challenge that you're facing with the lab closing. They are being asked to go to the private labs. For small units, it's a major cost to do this testing to make sure that good water stays good.

Mr Mosa: I believe if there's something with the water, then something should be done. But to have it tested every week, I think that's ludicrous, really. Sure, all of a sudden the water could turn bad -- okay, fine, let's test it, let's find out what the cause of it is and let's get it corrected -- but to test it every week at these costs --

The Chair: Thank you, Mr Mosa. We appreciate your input here today.

I guess Mr Hardeman has agreed to meet for a few minutes with you mobile home folks to maybe answer any other questions. He is the parliamentary assistant to the Minister of Housing, Mr Leach.

Mr Hardeman: Mr Chairman, could I just have a moment for a point of clarification? I think this afternoon during one of the questions Mrs McLeod referred to the fact that the rent registry had been eliminated for the Thunder Bay area last Friday. I want to make it clear for those who were listening that the registry was not eliminated for Thunder Bay last Friday; that was a different issue. The rent registry for the province of Ontario is still in existence, including for the people of Thunder Bay.

The Chair: We are now adjourned until 11 o'clock tomorrow morning.

The committee adjourned at 1637.