TENANT PROTECTION ACT, 1996 LOI DE 1996 SUR LA PROTECTION DES LOCATAIRES
PROVINCIAL COUNCIL OF WOMEN OF ONTARIO
OPTIONS BYTOWN NON-PROFIT HOUSING CORP
WEST END LEGAL SERVICES OF OTTAWA
NATIONAL ANTI-POVERTY ORGANIZATION
CARLETON UNIVERSITY STUDENTS' ASSOCIATION
STUDENT FEDERATION OF THE UNIVERSITY OF OTTAWA
QUEEN'S UNIVERSITY APARTMENT AND HOUSING SERVICES
ACTION CENTRE FOR SOCIAL JUSTICE
COMMUNITY LEGAL SERVICES OF OTTAWA-CARLETON CLINIQUE JURIDIQUE COMMUNAUTAIRE D'OTTAWA-CARLETON
OTTAWA REGION LANDLORDS ASSOCIATION
EASTERN ONTARIO LANDLORDS ORGANIZATION
FEDERATION OF OTTAWA CARLETON TENANTS ASSOCIATIONS
CONTENTS
Friday 8 August 1997
Tenant Protection Act, 1996, Bill 96, Mr Leach / Loi de 1996 sur la protection des locataires, projet de loi 96, M. Leach
Provincial Council of Women of Ontario
Mrs Beth Cook
Mrs Helen Saravanamuttoo
Options Bytown Non-Profit Housing Corp
Mr Michel Lefebvre
West End Legal Services of Ottawa
Ms Mary Garrett
National Anti-Poverty Organization
Ms Lynne Toupin
Ms Linda Lalonde
Minto Developments Inc
Mr Roger Greenberg
South Ottawa Legal Clinic
Mr Gary Stein
Ms Melony Priest
Carleton University Students' Association
Ms Heidy Van Dyk
Student Federation of the University of Ottawa
Ms Nathalie Carrier
Mr Alain Gauthier
Queen's University Apartment and Housing Services
Mr David Wright
Ms Dianne Kelly
Action Centre for Social Justice
Ms Lise Gervais
Mai
Ms Valarie Gray
Ms Aline Akeson
Community Legal Services of Ottawa-Carleton /
Clinique juridique communautaire d'Ottawa-Carleton
M. Daniel Gagnon
M. Michel Landry
Ottawa Region Landlords Association
Ms Valerie Wiseman
Mrs Bonnie Hawkins
Ms Joy Overtveld
Mr Frank Haboly
Fringewood Corp
Mr Philip Sweetnam
Housing Help
Mr Bob MacDonald
Mr Craig De Fries
Eastern Ontario Landlords Organization
Mr Luigi Caparelli
Federation of Ottawa Carleton Tenants Associations
Mr Dan McIntyre
STANDING COMMITTEE ON GENERAL GOVERNMENT
Chair / Président
Mr David Tilson (Dufferin-Peel PC)
Vice-Chair / Vice-Présidente
Mrs Julia Munro (Durham-York PC)
Mr Mike Colle (Oakwood L)
Mr Harry Danford (Hastings-Peterborough PC)
Mr Carl DeFaria (Mississauga East / -Est PC)
Mr Ed Doyle (Wentworth East / -Est PC)
Mrs Barbara Fisher (Bruce PC)
Mr Tom Froese (St Catharines-Brock PC)
Mr Steve Gilchrist (Scarborough East / -Est PC)
Mr Michael Gravelle (Port Arthur L)
Mr Rosario Marchese (Fort York ND)
Mrs Julia Munro (Durham-York PC)
Mr Mario Sergio (Yorkview L)
Mr R. Gary Stewart (Peterborough PC)
Mr David Tilson (Dufferin-Peel PC)
Mr Len Wood (Cochrane North / -Nord ND)
Substitutions / Membres remplaçants
Mr Dave Boushy (Sarnia PC)
Mr John C. Cleary (Cornwall L)
Mr Jean-Marc Lalonde (Prescott and Russell / Prescott et Russell L)
Mr Wayne Wettlaufer (Kitchener PC)
Mr Terence H. Young (Halton Centre / -Centre PC)
Clerk / Greffier
Mr Tom Prins
Staff / Personnel
Mr Jerry Richmond, research officer, Legislative Research Service
The committee met at 0831 in the Westin Hotel, Ottawa.
TENANT PROTECTION ACT, 1996 LOI DE 1996 SUR LA PROTECTION DES LOCATAIRES
Consideration of Bill 96, An Act to Consolidate and Revise the Law with respect to Residential Tenancies / Projet de loi 96, Loi codifiant et révisant le droit de la location à usage d'habitation.
PROVINCIAL COUNCIL OF WOMEN OF ONTARIO
The Chair (Mr David Tilson): Good morning. The standing committee on general government of the Ontario Legislature is holding public hearings on Bill 96. This committee will be sitting all day. The first delegation this morning is the Provincial Council of Women of Ontario, Beth Cook and Helen Saravanamuttoo.
Mrs Beth Cook: We appreciate the privilege of appearing before your committee. The council is over 100 years old and has been presenting on issues concerned with a healthy society for that length of time. The provincial council is made up of local councils and affiliated organizations. We have no landlord or tenant organizations in our group so we are serving no self-interest. We come before you because we are concerned about the need for decent, affordable accommodation for individuals and families. We think it's essential to the kind of healthy society we all want to live in to have that, especially for low-income families.
As you listen to all the groups that come before you today, I would like you to keep a few things in mind. With this lovely weather we don't think of problems with sleeping outside, but we all know that housing is essential to survival in Canada; that's a given. But most of us either own or rent very comfortable accommodation. If we decide to move, we do not think of anyone preventing us from renting the accommodation we can afford because of the source of our income, our race, our culture or ethnic background. Homelessness is far from all of our thoughts, as is the thought of being forced to pay high rents for cramped, dirty rooms in need of repair.
Because of this, for many years the council has supported the provision of social housing for low-income and special needs individuals and families. But you all know that with the end of construction of social housing most of these people are forced to rent in the private market. However, Bill 96 will change many of the protections which made it possible for low-income people to locate and keep affordable housing.
We are especially concerned about the provision in section 200, and also section 36, with regard to human rights, the addition of the income information as something allowable by the landlords. We all know there's a certain amount of discrimination right now by landlords on the basis of a variety of things. We know that because after they've been refused other people go back and find that the place is still vacant. There have been studies which show a tremendous number of people could be excluded if the 30% of income were used as a level at which landlords would cut people off. We feel that this would open the door for discrimination not only against social assistance recipients but against people on the basis of race or ethnic background, immigrants, a whole variety of things.
I think you know that studies have shown there is no real difference between people of income levels, that default mainly occurs because people's circumstances change, that it's quite sufficient for them to have good credit status and good references and this really provides for reliability of payment. Of course, landlords deserve to be paid. My parents and my grandparents were landlords and they certainly would have been unhappy if they were not paid. But you don't need to ask people's income to do that, and I consider that a violation of human rights by category.
We are also concerned about some of the time lines on references that you have in the act, because if they were to use a lengthy time line that would mean young renters and new immigrants would be totally out of luck.
We have long supported the rent registry. We feel that the rent registry was a very useful tool for people to locate the type of accommodation they could afford, let alone look at whether they happen to be paying a legal rent.
We also have concerns around the repair-maintenance provisions. A number of larger cities have property standards bylaws. Most of the places in the countryside do not have such property standards bylaws and there's already a great deal of difficulty enforcing them. Most landlords are good landlords and keep their places in repair. But we've had some record with really bad landlords in this particular community and it has been a very difficult process to force them to repair the property.
Therefore, we feel that your sections 135 and 146 of the act really make it cumbersome and difficult for a tenant to obtain vital services if the landlord should decide to cut off the power. These things can be pretty desperate in the winter and to find repairs in municipalities where there are no bylaws. We think there should be a provincial minimum standard.
With regard to equity and fairness, we believe that your time lines are really very tight, especially on eviction. There seems to be a difference in the standards you are setting for landlords and tenants. We question this on the grounds of fairness. If the tenant is to sue, there is a different time line for the tenant to sue than there is for the landlord to sue, and that just does not seem to me to be a fair matter.
We are really concerned about the overall impact of these provisions on the most vulnerable people in our society and the low-income families. Helen has a lot of experience in this area and she will speak to that aspect.
Mrs Helen Saravanamuttoo: My name is Helen Saravanamuttoo and I'm also very pleased to be here today. Thank you for the opportunity to present to you. I'm a social worker who has worked with families who have been in shelters.
I'd like to say, first of all, that we're really concerned about the effect on the supply of affordable housing. This may seem a little bit of a red herring, but I remind you that the Honourable Al Leach, Minister of Housing, introduced these hearings with the words, "The whole purpose of this is to get more units built so that tenants have more choice." We believe that this bill is going to have the opposite effect.
0840
First, housing will decrease because it will become more expensive. I'd like to put this in a context. At the present time, salaries of working people are going down so that affordable housing, by definition, is not housing that becomes more expensive. The second thing is that I think it would be a good idea if the minister consulted with the Minister of Community and Social Services because we talk about 30% of income being affordable rent. For families on social assistance, for instance, a two-parent family with two children, if they pay average market rent in Ottawa-Carleton, they are paying 61% of their income in housing; a single-parent family with one child would be paying 63% of their income in housing. These are just extraordinarily high percentages. It means that money is being taken from other essentials such as food and clothing.
We have a supplementary couple of sheets to our brief. I hope you all have it. I won't go over it, but I'd like to emphasize the importance of permanent housing. As I said at the beginning, I have worked with families in shelters. These families become totally disorganized simply because the burden of the insecurity of housing really takes a tremendous toll. This puts enormous barriers in the way of people getting jobs. It's documented that the effect on children is quite severe. There are emotional consequences plus the health of children. A number of these families are in motels with no adequate cooking facilities. The effect on nutrition is just incredible. Altogether, the lack of affordable housing is bound to push more families into homelessness. It's already a major issue, it's already a major cost to municipalities. We urge you to look at this.
Mrs Cook: I'd just like to add something on the provision with regard to removing rent control on vacant apartments. I see a great potential for harassment to make tenants leave the premises. If vital services are turned off and other things are done, by the time they could go to some property standards place, it's really much, much too late to do anything. The drafters of this legislation must have felt that this was a possibility or else they wouldn't have doubled or more the fines for harassment, but the record here is very poor.
Hardly any of these cases have ever been able to get very far because it's a question of one person's word against another person's word. Over the past 10 years there have been very few cases and the maximum fine has been around $300, so this isn't much of a disincentive to using harassing methods to get a tenant out. I think you really have to look at those measures and look at some better way of preventing this kind of harassment to vacate because of vacancy decontrol.
The other issue is that, when the minister proposed this legislation, he felt that decontrol on these units would increase the production of low-cost rental units. I'm sure this committee heard last year from developers and others that the situation was far more complex than that and rent decontrol for these units would not really increase it. For years there was no rent control on new units and it didn't increase the production of them.
Roger Greenberg, whom you are going to hear later today, in 1995 wrote a lengthy article in the Citizen outlining all the disincentives that are there to prevent production of low-cost units, and I think the province should really look at all those other disincentives rather than focusing on this, which will actually reduce the number of available units.
I think that's all we want to say. You have our brief to read further on it. If anybody has any questions --
The Chair: Thank you, Mrs Cook and Mrs Saravanamuttoo. Mr Cleary.
Mr John C. Cleary (Cornwall): I just wondered what your opinion was on the tribunal. If you think you're speaking on behalf of the tenants, will they be better used by the tribunal, or how do you feel about that?
Mrs Cook: I think it really depends upon the they have experience perhaps as judges and if they are not merely political appointees, that will make a great deal of difference.
I think the way it is being arranged in the few places where these are located and the reduction in the number of offices where there is access to all the procedures is going to be difficult too.
The tribunal could be a speedier provision if it works, but I suspect that the tribunal -- I have no way of knowing until we have some experience -- might be weighted on one side or the other, depending upon what party is in power at any particular time, and parties do change in power, so it might actually end up unfair in some eras to both sides.
I would hope it would be a speedier resolution and that the mediation procedures that are included would be useful. But I think beforehand, it's really hard to say how good this is. Court costs are very steep for low-income people and there's less legal aid. I think the tribunal costs might be less but I can't be sure in advance. Your experts from various legal aid groups who are on your list for today could probably give you a better answer than I could.
Mr Rosario Marchese (Fort York): I want to thank you both for a very thoughtful presentation. I agree with almost everything you've said.
With respect to the issue of supply, I have been arguing for the last week that we're going to see fewer apartment buildings being built in the next many, many years. The government cancelled housing projects. They don't want to build; they want the private sector to build. Yet we know the private sector is not going to build affordable housing. You've heard it and I've heard it, but they have a different view of this.
You talked very well about harassment. The fact that they have doubled the fine is a recognition that it will go on, but doubling it doesn't mean that harassment will be abolished simply because it's a heftier fine. I think your observations in that are very good.
Salaries of people are not going up, they're going down, yet decontrolling means higher rents and those who stay in the apartments are going to face higher increases because the property taxes are going to be passed on and utility costs are going to be passed on, including capital costs, which will be increased by one more per cent.
Everything leads to a problem for tenants. Is it possible that people like yourselves and myself are so completely misinformed that we are not understanding the effect of this bill?
Mrs Saravanamuttoo: We certainly hope that we can bring some understanding to this, and I think Beth has done a very good job on that. The effect on families and children I cannot emphasize enough. Permanent housing is so important to the wellbeing of children. You get children who have been doing reasonably well in school and they get shuffled into a shelter and their marks just plummet and they start to show evidence of emotional disturbance that has not been seen before.
The number of accidents among low-income people is much higher. One of the reasons is because they live in more hazardous housing. Beth referred to the fact that we've had some landlords that have not kept their places up to standard. This happens and low-income people are sometimes paying exorbitant rents for housing that is not secure, that is unsafe, that by any standards is really not liveable.
0850
Mr Steve Gilchrist (Scarborough East): Thank you both for your presentation. I must rebut something Mr Marchese said in part of his comment, and he followed up on yours. StatsCan just last week reported that in Ontario in the last year average salaries are up 3.9%. I think that has to be taken into context.
Ms Cook, you said one of the most honest things today we've heard in the hearings here so far: You have no way of knowing. None of us do. Our goal is to put in place a mechanism that will have speedier processing of disputes, to have less harassment by changing the mechanism.
With all the days of hearings, we've had not one person who has sat there and faced us and said they're happy with the status quo. Surely, if you recognize there is harassment of tenants right now, and you did in your presentation, and surely, if you recognize the cost of going to court -- and the cost in other terms of landlord and tenant disputes is very high and very debilitating in the relationship -- then clearly a different path must be taken.
We believe we've set out a path that will accomplish those goals and we're prepared to be judged by the results as time goes by. But I think at the outset what really profits all of us most is people looking at the proposed legislation, and if there are means of improving it, and you made a number of suggestions for which we express our appreciation, that's what this is all about.
To speculate, as my colleagues opposite do, that the glass is half-empty instead of half-full I think is just as inappropriate as our speculating that the world will become a perfect place. This is our attempt to remedy the existing situation. In Scarborough, when we were elected, the waiting list was seven years for public housing. No one with any social conscience can accept the status quo as an option. We've set a goal and I hope you'll recognize it in that context. I appreciate your comments.
The Chair: Very briefly please, because we're really out of time.
Mrs Saravanamuttoo: I'd just like to say very briefly that it may be true salaries have gone up in the last year, but the gap between the rich and the poor continues to increase and the bottom 60% of people continue to lose. I think that's a very important distinction.
The Chair: Thank you very much, ladies, for your presentation this morning.
OPTIONS BYTOWN NON-PROFIT HOUSING CORP
The Chair: The next presenter is the Options Bytown Non-Profit Housing Corp, Michel Lefebvre, the executive director. Good morning, sir.
Mr Michel Lefebvre: Good morning. I hope everybody got a photocopy of my text.
The Chair: Yes, we do, sir. You may proceed when ready.
Mr Lefebvre: Good morning. Bonjour. I am a landlord and my name is Michel Lefebvre, as you know, representing Options Bytown Non-Profit Housing Corp. I thank the government of Ontario for this opportunity to express myself concerning the possible elimination of rent control by the new Tenant Protection Act, Bill 96.
First, I want to say clearly that I am against the abolition of rent control. I believe that regulations and controls are necessary. I am here to offer the view that the abolition of rent control will have a very negative impact on our agency and our social housing environment.
Options Bytown is a non-profit housing corporation whose mandate is to provide supportive housing to homeless residents of shelters seeking permanent and semi-independent living accommodation.
Since the inception of Options Bytown in 1986, we have received 1,600 applications but have housed only 400 tenants. Options has always maintained an extremely low vacancy rate and tenants typically wait two years before being offered a one-bedroom apartment. Two years is a very long time, considering that 70% of our tenants come from the streets and shelters like the Shepherds of Good Hope, the Salvation Army, Mission for Men and the YMCA.
Eighty per cent of Options Bytown's tenants live on disability pensions and GWA benefits -- welfare -- 49% of all tenants have a self-disclosed history of alcohol or drug abuse, and at least an estimated 60% have a diagnosed mental illness.
Options offers non-judgemental intervention and a flexible format which allows tenants to live in a pleasant, secure and communal environment. Eighty per cent of our tenants have maintained a successful tenancy with us and in subsequent low-income housing following their move from Options.
In the last decade, our tenants' capabilities and willingness to pay rent have been decreasing. Rents in new buildings far exceed the market rate and are inaccessible to the vulnerable members of our society. That is why I foresee increasing homelessness resulting from the abolition of rent control. We will have more homeless than we have ever seen before in Ontario. Developers were losing money in 1996 and will probably lose money anyway, with or without an unregulated market, in our depressed economy, simply because the majority of tenants cannot afford to pay excessive rent any more.
The organization of Options Bytown is therefore against the abolition of rent control and privatization of public housing for the following reasons:
(1) As I said already, more homelessness will result from the abolition of rent control, and Keith Norton, chief commissioner of the Human Right Commission and former Conservative cabinet minister, made it clear that Bill 96 will discriminate against tenants because income criteria will severely restrict housing opportunities for seniors and people with disabilities.
(2) In Ontario, we will not be able to take care of all of our homeless population because there are no new subsidies for new social housing projects to take care of the poor, and certainly Bill 96 will only decrease affordable housing.
(3) Bill 96 has uncertainties and is unfair. For example, without rent control, incoming tenants could be charged and treated differently from existing tenants.
(4) Retaliation on maintenance issues could be devastating for tenants.
(5) Bill 96 could allow unfair eviction powers to landlords also. For example, in care homes landlords can evict tenants who no longer require a level of care provided by care home landlords, or evict tenants who require a level of care that care home landlords are unable to provide. Will vulnerable adults and seniors be able to discuss new rents with their landlord in a fair and equal manner? Bill 96 allows landlords to apply to a new tribunal for an order to take possession of an apartment if, for example, the tenant moves out in the middle of the night, and the landlord would be entitled, without notice, to throw out the tenant's property within 30 days.
(6) Because of the state of uncertainty and anxiety created by Bill 96 within the most vulnerable, weakest members of our society -- studies show that vacancy decontrol was a proven disaster in New York City. The rents increased by 52% and the level of harassment of tenants doubled without producing any increase in the building of new rental housing. There was an article by Tim Collins, the former New York City Rent Regulation Board director.
(7) Because landlords have enjoyed a 10-year winning streak where annual rent guidelines exceed inflation -- I cite Dan McIntyre from the Ottawa Citizen last year -- we believe that landlords have been making a profit and still can make a profit within rent control guidelines. Bill 96 will only encourage landlords to push for more giveaways like the power to have rent increases through private agreement.
(8) Bill 96 seems to violate tenants' civil rights and privacy. Landlords will have the power to enter an apartment without notice any time during the day or even after dark. Landlords will also be able to change locks without notice. A tenant who does the same could be fined to up to $10,000. That's pretty unfair.
(9) We believe bureaucratic flaws can be corrected to the satisfaction of all parties.
(10) Ontario tenants want and deserve fairness, security and certainty. Effective rent control is necessary to prevent exploitation of vulnerable tenants like ours. Rent control was created to prevent exploitation and government should stand by it.
As landlords ourselves, Options and I are asking the government of Ontario to vote against Bill 96 and to maintain our present law.
If rent control procedures are to be modified, perhaps only a few measures should be taken to decrease legal bureaucracy and improve the lengthy entanglement involved in administering the law. These often prolonged legalities, such as the difficulties with eviction, have greatly contributed to the loss of faith from landlords in rent control.
Yes, we need changes in our present law, but also we need more skilled advocates to ensure fairness for everyone. Please don't throw the baby out with the bathwater. I am asking this government not to abandon the social housing mandate because there is simply no safety net any more in the economic marketplace.
My last word is, justice involves protecting the rights of others. It protects against everything that destroys human dignity. In our world we need some guidelines to ensure fairness and satisfaction to all.
0900
Mr Marchese: Thank you for the presentation. You heard Mr Gilchrist in the previous remarks he made to the other deputants. He says that things haven't worked, that the system is broken, so that what this bill tries to do is restore some balance and bring some solutions and we're not going to know whether this works or not, so we're just going to have to be patient and wait. What do you think?
Mr Lefebvre: I think we should improve the law but we should stand by it. We don't have to change everything around. I disagree with Mr Gilchrist.
Mr Marchese: I have a serious concern around issues of housing supply and we have a disagreement with the government. Their argument is that things didn't work before, that we still have a lot of people on the waiting list, so that if it didn't work with our government, the NDP, and the housing we built, then we should let them, through the private sector, try to solve it. How do you feel about that?
Mr Lefebvre: I'm against the private sector taking social housing, for example. I feel it's the government's job and responsibility to take care of social housing, not the private sector's. I only foresee disaster if the private sector gets into social housing.
Mr Marchese: I have to tell you that the private sector probably doesn't want to get into that field. One of the reasons they don't really want to get into the field is because to build affordable housing would mean absolutely no profit margin whatsoever; in fact, they probably would lose money. So they're not going to build. If they don't build and this government says, "We don't want to build," what's left?
Mr Lefebvre: Exactly. I agree.
Mr Gilchrist: Thank you for your presentation. I appreciate it. Let me just correct one point in your presentation, point 8. As you would see in section 20, you're incorrect. Landlords will not have the ability to enter an apartment without the tenant's permission, except in the case of an emergency. I hope you would agree with me that in a fire or a flood or something that's not unreasonable. By the way, that's virtually word for word exactly the way it is in the Landlord and Tenant Act.
You also said to Mr Marchese that you didn't see why we were changing everything. Quite frankly, in the Landlord and Tenant Act, if I had to pick a percentage, I would say that with the exception of the fact that we're moving from forcing people to go to court to resolve these issues into a streamlined and specialized tribunal -- that's the only substantive change to the entire existing Landlord and Tenant Act. On the rent control, I appreciate there are changes in that, but the basic law, the Landlord and Tenant Act, the oldest one, survives virtually unchanged and is really just being renamed.
Mr Lefebvre: But we have a good court system. We don't need another tribunal. We have enough.
Mr Gilchrist: It's not a question of whether courts are good. It's a question of the expense and it's a question of the delays. I'm glad to hear that in Ottawa it's good, but we've heard different stories in other parts of the province, particularly in Toronto, where there are significant delays. That is not to the benefit of either the landlord or the tenant. If there's a dispute of some kind, it's appropriate that it be resolved, hopefully at no cost or very low cost, particularly to the tenant.
Let me just go back and ask you another question. You say since the inception of Options Bytown you've received 1,600 applications but housed only 400 tenants. Am I to understand that ratio of one in four has been in place since day one, since 1986?
Mr Lefebvre: There are so many needs; there's no new housing, no new social money, nothing, so that's why we can't afford to house all these people.
Mr Gilchrist: Are you aware what the waiting list was in Ottawa, say, two years ago for public housing?
Mr Lefebvre: For public housing for all Ottawa I don't know exactly. I know for Options. Two years ago for Options there was a four-year waiting list; nowadays it's two years. It's getting a little bit better. But in all Ottawa -- I know for Ottawa-Carleton housing it was five years for some, but it was different in other kinds of housing, depending on whether you wanted a bachelor, a one-bedroom or whatever.
Mr Gilchrist: I'm not trying to paint a picture that everything is rosy out there. It's getting better, but it's not perfect by any means. But you've just said the waiting list has been cut in half here in the last two years, yet many people have come before us in this committee and said things are actually getting worse.
On the day we were elected there were 1,000 people in transient or emergency shelters in my riding alone. They had converted virtually every motel on Kingston Road into a shelter. That 1,000 is down to 400 today, because those people have been placed in housing as others have left that housing because single-family homes are more affordable, because of the price of a mortgage today. There has been that movement through the system and they've literally been able to shut down over two thirds of all the shelters.
Mr Lefebvre: They move on, but sometimes in Ontario laws change and they receive less income or they pay more for their rent, so people have moved out of Ottawa or out of Ontario. I don't know, perhaps they find a better place to live, because it's very hard to live. Perhaps that's why there are fewer people -- they're moving around. But there are still a lot of poor people not in homes.
Mrs Julia Munro (Durham-York): Thank you very much for bringing our attention to these issues. I wondered if you would care to comment on your point 9. You refer to bureaucratic flaws. I wondered if this had something to do with the process that currently exists and if you see some virtue in the tribunal process, if that was the point you were trying to make there. I just wondered if you'd clarify that for us.
Mr Lefebvre: As a landlord, we know it takes time and we have different forms to bring to the court for the Landlord and Tenant Act and so on. Sometimes it's very frustrating for the landlord to evict people. Perhaps the flaw is we should speed up the process -- not change to another tribunal but speed up what we've got right now and perhaps forget about a few forms and go faster in the process; less cost for both. Then we can decrease the legal costs by doing fewer forms and more affordable, more rapid service, speedier service. But we don't have to change what we've got.
M. Jean-Marc Lalonde (Prescott et Russell) : Merci, Monsieur Lefebvre, pour votre présentation. Je crois que vous venez de toucher un point qui est très, très important, la partie 10 de votre présentation. Part 10 is the most important one I could see in your presentation today: "Ontario tenants want and deserve fairness, security and certainty. Effective rent control is necessary to prevent exploitation." At this time, with this rent control, you probably know that municipal taxes will increase anywhere from 20% to 30% as of January 1, 1998. We have all the proof to prove it.
Who is going to be suffering from this part? Really, in the urban sector, like the city of Ottawa or the Ottawa-Carleton regional government, we know outside a 15-mile radius, especially towards the east, there's no public transportation. What's going to happen to our seniors? They will have to move out of this city, and when they move out of the city, there's no public transportation. They need public transportation for doctors' appointments; they need public transportation for anything that is required that is not available in the rural area.
At the present time, we know that the landlord is expecting those tax increases. This is the only way the government is going to protect landlords, so they will increase the rent to the poor people, low-income and senior citizens. I'm glad to see here this morning -- I think it's the best time to get the seniors, because we know they're up very early in the morning. They were here this morning for the first presentation, and it shows they are worried. I would be worried, and I am worried for them too.
Do you think there will be more demand in the rural area due to the fact that we will remove rent control at the present time?
0910
Mr Lefebvre: Sure, because when people move, landlords can raise the rents. People won't be able to afford the new rent any more, so they move out. I guess we'll have more and more demand for services and for other affordable housing. I guess seniors will be touched more than any other population; seniors and the psychiatrically ill and the homeless population.
Mr Lalonde: We all know what the government's plans are.
The Chair: Very briefly, Mr Lalonde.
Mr Lalonde: The mega-week we went through in January, what was promised at that time, is on top of what's happening here. Losing rent control is really going to affect everywhere, not only in the urban sector but also in the rural area. There are fewer apartments available for rent-geared-to-income in the rural area, but in the city of Ottawa we know there's a waiting list. Mr Gilchrist just mentioned that in the Toronto area there's a seven-year waiting list. We know why there's a seven-year waiting list. It's because at the present time la Société de logement de l'Ontario administre ces appartements à et actuellement le tout va être tranféré aux municipalités. When it is transferred to municipalities, municipalities won't be able to afford what it is going to cost the low-income and also the seniors.
Mr Lefebvre: I agree.
The Chair: Sir, thank you for coming and giving us your presentation this morning.
WEST END LEGAL SERVICES OF OTTAWA
The Chair: The next presenter is the West End Legal Services of Ottawa, Mary Garrett, community legal worker.
Ms Mary Garrett: It's nice to see some of you again.
The Chair: We just saw you yesterday.
Ms Garrett: I think so.
The Chair: You're following us around.
Ms Garrett: We're trying to.
West End Legal Services of Ottawa is a general poverty legal clinic. We have operated in the west end of Ottawa since February 1982. We have staff composed of four case workers; two of the case workers are lawyers and two are community legal workers. We have two support staff as well.
Our office assists low-income people to deal with problems in income maintenance, welfare, family benefits, EI and CPP, immigration, debtor/creditor, workers' compensation and housing issues, such as the Landlord and Tenant Act, the Rent Control Act and the Rental Housing Protection Act.
The majority of the work that comes to our clinic is in the area of housing issues. I should point out that our clinics in Ottawa do little with regard to the Rent Control Act and the Rental Housing Protection Act, since we have been fortunate enough to have the Federation of Ottawa-Carleton Tenant Associations doing such a fine job assisting tenants in these areas. We do not know how long that will last, with the provincial government's defunding of this organization.
In 1996, West End Legal Services opened 405 files. Of these 405 files, 136 files, or 34%, were related to problems under the Landlord and Tenant Act. We did not open any new rent control files, although we remained active in a rent control file which affects rents of 616 tenants. In this same year, we provided summary advice to 3,955 persons. Of these calls, 1,938 of these calls were in housing-related areas. Most involved problems with the Landlord and Tenant Act and only 31 involved rent control. I threw that bit in because statistics make it sound like a better brief.
We have not only been involved in delivery of services in the area of housing issues, but our clinic, in conjunction with other clinics in Ottawa and throughout the province, as you saw yesterday, has been involved with law reform issues. We have appeared before other government committees and have been consulted by the government on other issues, such as funding for the tenant movement and the Rent Control Act.
We believe that we and other legal clinics have a broad background of knowledge in the area of housing issues. Our knowledge is theoretical and practical. We not only believe but know what we speak of.
West End Legal Services of Ottawa supports the brief presented by Legal Clinics' Housing Issues Committee, LCHIC, which I spoke to yesterday. We have not, therefore, attempted to duplicate it, but will rather be complementing it.
West End Legal Services is one of four Ottawa clinics that will be speaking this morning. I will not be addressing all the concerns about the Tenant Protection Act because my friends from the other three clinics will be addressing the issues I do not cover. I have been designated to speak to you about the portion of the Tenant Protection Act now under the Rent Control Act.
We do not believe that decontrolling rents for the first contract with landlords will stimulate the building of new residential rental units. We have never believed this would work and were delightfully surprised last summer when developers stated the same opinion to the government committee hearing opinions on the Tenant Protection Act before it became Bill 96.
We do not believe that decontrolling initial rents will give tenants better bargaining power with their landlord. Since the base rents for the tenancy will be structured on the initial rents bargained for, the landlord will have no choice but to bargain the tenant up as high as possible. We submit that the decontrolling of rents on initial contract does not do anything to achieve the government's stated goal of encouraging new construction of rental accommodations. Decontrolling of rents on the initial contract does not protect tenants.
The government stated that it proposes to keep rent controls on units that continue after the initial contract. While this legislation talks about rent controls, it does not provide it when we take a closer look at the legislation.
Under both the Rent Control Act and Tenant Protection Act, a yearly guideline rent is set and announced in August of the previous year. Under both legislations, a complex formula is used to establish a rent control index for operating cost, which is tied to the cost-of-living index, and then 2% is added to this amount. This is where these two legislations differ. Under the Rent Control Act, this 2% annual increase was for capital expenditures and maintenance. Under this act it is for "just because." No reason is given for the 2%. We have had problems understanding why the government would give landlords an annual 2% increase for capital expenditures that they did not have to justify or verify it was used for. We have even more problems understanding why the government would give landlords a 2% increase for no reason at all. The annual 2% "just because" rent increase does not protect tenants.
The present rent control legislation allows increases above the guidelines. These increases are limited to 3% above the guidelines, for a maximum of 12 to 24 months. As well, allowances for capital expenditures are granted after taking into account the 2% allowed on the guideline increase for capital expenditures and after adjustments for costs no longer borne. The Tenant Protection Act proposes that these increases be increased to 4% above the guidelines, and there is to be no adjustment for the 2% "just because" increase which had been allowed for capital expenditures under the Rent Control Act, nor for costs no longer borne.
The increase will not be limited to the two years under the Rent Control Act, but instead will continue until the total increase has been taken. That is, if a landlord can justify a 15% increase, he can take a 4%-above-the-guideline increase the first year, the second year, the third year and a 3% increase the fourth year, compared to the 3% increase allowed for two years under the present law. This could be a hardship for tenants. This does not protect tenants.
One of the reasons a landlord can apply for rent increases above the guidelines is if there is an extraordinary increase in property taxes. Downloading of social services, social housing and other programs to the municipalities will no doubt create a very large extraordinary increase in property taxes, which will again pass along above-the-guideline rent increases to the tenants. This does not protect tenants.
Under the present legislation, tenants can continue to volunteer to pay rent increases. That is, if the tenant gives a paper to the landlord saying they agree, their rents can be increased if a capital improvement is allowed.
I live in a 30-year-old building and, naturally, parts are breaking down and replacement parts are getting harder to find. My bathroom floor had two years of repeated repairs when one tile after another would chip, break up or turn to dust. Finally, my landlord informed me that they could no longer find replacement tiles, but they would put in a new floor for me if I agreed to sign the form stating that I would agree to the increase above the guidelines. I did not sign and I got a new floor, but many of my neighbours who do not work in a legal clinic, and who do not know their legal rights, did sign.
0920
Why should this legislation allow a tenant to volunteer to pay a rent increase because the landlord does not want to pay for maintenance they already receive money to do? This practice does not protect tenants.
Under the Rent Control Act, a tenant has six years to make a claim against his or her landlord for either the determination of legal rents or for making application for a discontinuance of service or for a charge of an illegal rent. Under this legislation, the limitation period for tenant claims against a landlord is one year. This is a drastic reduction in time for a tenant to enforce their rights. This does not protect tenants.
The process: Under rent control, if a tenant makes an application for an abatement due to discontinuance of service or maintenance, which would or could affect more tenants in rental complexes, all tenants are added as parties to this action. Under this legislation, each tenant would have to make their own separate application. This would cause a great deal of hardship for the tenants and a huge administrative nightmare for the tribunal.
If I could, I'll just use as an example the rent control case I referred to in the beginning of this presentation, when I mentioned that our office maintained an ongoing rent control case. Just for your information, that's been ongoing since March 1993.
We represent 19 of 21 tenants who brought rent control applications against their landlord, Redwood Residences, for lack of services and poor maintenance. As a matter of course, all 616 tenants residing in the complex were added as parties since the majority of the complaints involved common-area issues. While not all tenants were represented by our clinic, I attended one meeting called by the tenants' association which over 250 tenants did attend.
If this application was brought under the Tenant Protection Act, each of the 616 tenants would have to apply separately. Each would have to pay their filing fees. Now, we know that not all would make applications, but if we assume that the least number to apply is the number who attended the tenants' association meeting, we can assume there will be over 250 applications. That is 250 files; 250 calls for a mediator; 250 individual notices of hearing to the landlord; 250 different possibilities on the handling of each of these files; 250 individual orders -- all of which could clog up the operations at the tribunal.
However, worse yet would be that 366 tenants would not be served. This would not necessarily mean that the landlord provided services to these 366 families. It would mean that this amount was unable to participate due to lack of knowledge, lack of money, lack of use of the English language, lack of emotional or physical ability or some other valid reason.
Under the Tenant Protection Act, tenants who now would be protected by inclusion would lose out because they are not aware of their rights under the legislation to bring an application. If these tenants do not know their rights under the Rent Control Act, they will not know their rights under the Tenant Protection Act.
Should a landlord who is found in violation of the law be protected from a larger penalty just because the system has made it harder for tenants to take action against their landlord? We must remember that the adding of parties to an application does not penalize a landlord who is not in violation of the law. Not adding all tenants as parties does penalize tenants who are not receiving the services and maintenance they are entitled to. To not add all tenants as parties to an application that affects the whole rental complex does not protect tenants.
Conclusion: It is the position of West End Legal Services that Bill 96, the Tenant Protection Act, 1996, is flawed. In particular, there are problems, from our standpoint, with regard to the portions that will replace the Rent Control Act.
We, however, are realists and understand that Bill 96 will pass. We are hoping that you will make some of the changes that will make the legislation fairer to tenants. We believe many changes are needed, such as:
Rent control means no increases above the guidelines.
There should not be a 2% "just because" increase allowed in guideline increases.
If landlords are allowed to apply for capital expenditures to raise rents above the guideline, consideration should be allowed for the 2% "just because" allowed on guideline increases that landlords have received over the years, costs no longer borne and whether the repair is required due to neglect.
Tenants should not be allowed to relieve the landlord of his or her responsibility to do repairs simply by signing a paper to allow increased rents in order to get repairs done.
All tenants should be added as parties to applications affecting common issues.
Limitation periods for tenant applications should remain at six years.
If, however, the government should decide to make only one amendment to this legislation, it should be to its name. This legislation does not protect tenants. It should not presume to suggest it does in its name.
Applause.
The Chair: Please, ladies and gentlemen, the rules of the Legislature and the rules of this committee do not permit applause, negative or positive.
We have time for one question. Mr Marchese, please.
Ms Garrett: Mr Marchese, before you start, can I just thank the tenants who have shown up and those who will show up to show the government that they don't support this legislation? Thank you.
The Chair: We heard from you yesterday, but we'll hear questions again. Mr Marchese?
Mr Marchese: I think it's the government's turn, but I don't mind going ahead first.
The Chair: If you want to pass --
Mr Marchese: I'm not passing. I started, then the government, then the Liberals.
The Chair: Mr Marchese, you have one question.
Mr Marchese: You heard Mr Gilchrist earlier saying that there are very few changes made to the existing law, yet you just made reference to only some of the major changes. What do you think of his remarks about the changes they're making?
Ms Garrett: There have been a lot of changes made. I think they're shadowed to look like there are no changes, and I think the changes that have been made subtly have been very devastating. If we look at the change, which I didn't mention, to section 121 of the Landlord and Tenant Act, where tenants have been protected from eviction for enforcing their rights, the change of the word from "a" reason for being evicted to "the" reason has effectively stopped tenants from enforcing their rights. That's a major change in the legislation, no matter how well the government tried to hide it.
The Chair: That's all the time we have. Thank you very much for coming.
NATIONAL ANTI-POVERTY ORGANIZATION
The Chair: The next presenter is the National Anti-Poverty Organization, Linda Lalonde and Lynne Toupin. Good morning. We heard from your organization yesterday.
Ms Lynne Toupin: Yes.
The Chair: What does that mean?
Ms Toupin: That means there are many of us across Canada. My name is Lynn Toupin, the executive director of the National Anti-Poverty Organization. With me is Linda Lalonde.
For those of you who do not know who we are, we're a national non-profit, non-partisan organization. We have been in existence for 26 years, and our mandate is basically to represent the interests of low-income Canadians on issues and matters that affect them directly. You heard from Mr Barry Schmidl in Sudbury yesterday. He is one of the three members representing Ontario on our board. We are aware of his submission. We are focusing more specifically this morning on the issue of discrimination against low-income people. To that effect, I would not delay any further, and I ask Linda Lalonde to do the presentation.
0930
Ms Linda Lalonde: Bill 96 represents the first attempt by a provincial Legislature in Canada to legalize discrimination against the poor and effectively remove human rights for poor people in housing.
NAPO is here to urge this committee to revise sections 36 and 200 of Bill 96 to preserve the protections in the Human Rights Code as they currently exist.
Sections 36 and 200 would permit landlords to refuse applications for tenancy on the basis of income information. Landlords would be free to disqualify low-income applicants, such as people on social assistance, on the basis that their income is lower than other applicants or on the basis of arbitrary income criteria, such as the requirement used by many large property managers in Ottawa and elsewhere that the applicant be paying no more than 30% of income towards rent.
The Conservative government in Ontario in 1981 was the first provincial government to recognize the necessity of protecting people on social assistance from discrimination in housing. The standing committee on resources development recognized at that time that people on welfare were being refused housing by landlords largely because of their poverty or economic status. The proposal to include receipt of public assistance as a prohibited ground of discrimination rather than source of income, as other provinces had done, was designed to prevent discrimination based on level as well as source of income.
There is a major housing crisis facing poor people in Ontario. In October 1995 social assistance rates in Ontario were slashed by 21.6%. The maximum shelter allowance for a parent with three children was cut to $602. All municipalities have stopped providing special assistance to cover the cost of last month's rent deposit.
We would invite the committee members to try phoning around landlords here in Ottawa, in Toronto or in any of the other cities you are visiting. Tell them you're on social assistance with three children, that you can't get assistance with last month's rent, and see if you can find a landlord to rent an appropriate apartment to you at $602. This government has put thousands of families in this impossible situation and thousands are now running out of options. They've exhausted any savings. They've exhausted the hospitality of any friends or acquaintances. They're at the end of their rope. Thousands of families are now homeless in Ontario, desperately trying to find an apartment.
Two thousand families representing approximately 3,000 children are now warehoused in hostels or in welfare motels in Toronto. This is only a small portion of the homeless. Families will sleep on the floor of a friend or cram themselves into a basement before they will resort to living in a hostel. There have recently been two deaths of children in Toronto, one in a hostel from starvation, the other in a welfare motel from drowning. We can only assume that unless something is done, there will be more.
I'm going to go to the area of economic evictions now. Why would the government give a landlord the power to directly negotiate with the tenant for a rent increase of up to 4% above the guidelines without a hearing? The imbalance of power between a landlord and tenant would suggest that the negotiation might be a trifle one-sided. When an independent body is not involved, there will be no control on coercion, threats or harassment. In addition, tenants with language or literacy barriers will not have the benefit of a third party ensuring that they understand what's going on.
Who will ensure that tenants are not being taken advantage of or even know that they do not have to agree to the landlord's request? We remind you once again that laws are put in place to regulate the behaviour of those who would not behave reasonably otherwise, not the good and honest landlords. It is the unscrupulous landlord who will take advantage of a tenant, and the more vulnerable the tenant is, the more obligation the government has to provide protection. Although it's an offence to coerce a tenant into agreeing to a rent increase which is above the guideline, do you believe that the tenant will be informed of this protection by the landlord? How does one prove coercion if it took place as part of negotiations between a landlord and tenant in private? Will the government make any effort to provide education for tenants on these and other rights?
It will be possible for a landlord to use the rent increase system to economically evict a tenant under this bill. This is a particular danger when municipal governments are being required to finance more and more of their expenditures out of property taxes, with the resulting potential tax increases which will now be directly passed on to tenants. Using the 1997 permissible increase of 2.8% with a rent of $500 a month, property tax increases of 3% and an operating cost increase of $600 per year as an example, a landlord could increase the rent by 2.8% plus 4% at a hearing plus $50 per month for operating costs. The new rent would be $599, which is almost a 20% increase and would be perfectly legal under this bill. A tenant who could not afford $99 more per month would have to leave and effectively be economically evicted.
There are a number of parts of this legislation where lack of information and bars to the accessibility of justice will take away tenants' rights or hinder tenants' ability to enforce their rights under the bill. These issues have a particular impact on rural tenants, those without telephones or transportation and people with language or literacy issues.
If eviction notices no longer have to provide details of the reasons for eviction, how can a tenant or his or her representative prepare a defence or even decide if there are grounds to fight the eviction? Removing the requirement that tenants be informed they don't have to vacate the premises if they are fighting the eviction means that many uninformed tenants will lose their housing unnecessarily. When combined with the lack of power of the tribunal to restore the tenant to the unit in a case of wrongful eviction, the landlord will get away with unlawfully removing permanently many tenants who do not know their rights.
Some processes for the tribunal seem to be set up to create bars on access to justice, particularly for low-income tenants. For many people, filing a dispute to a landlord application within five days will be nigh on impossible. Unless you have a copy of the act and the appropriate forms at home and are able to interpret the landlord's application, you may not be able to properly represent your situation in the correct way. This is of particular concern when the tribunal can dismiss applications without a hearing and award costs to the landlord if they deem the tenant to be misusing the process. The fact that the tribunal can demand that a tenant pay money into court before it will hear the case could effectively deny a low-income tenant access to the justice system, regardless of the merits of the case. For tenants with literacy issues and those whose first language is not the language of the court, there is no guarantee in this bill that translation, interpretation or other support services will be made available. There is also no guarantee that the tribunal will be geographically accessible to tenants, and that is of particular concern for low-income people.
The right to adequate housing is recognized in the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights and in other international human rights treaties which have been ratified by Canada. In 1976 when Canada ratified the Covenant on Economic, Social and Cultural Rights, Ontario agreed to ensure that these basic human rights were protected in areas of provincial jurisdiction. Discrimination because of economic status is prohibited under article 2(2) of the covenant and Ontario is obliged to provide protection from such discrimination.
Perhaps the Ontario government doesn't care about the views of the UN or the international human rights community. In our view, it should. Where have we come to as a society when we have so lost touch with fundamental human rights that we are prepared to legalize discrimination against poor people in housing and condemn them to homelessness?
Poor people are asking for nothing in this instance other than a fair chance to pay their rent along with everyone else. The recent hearings into income criteria in which NAPO was granted intervenor status found no evidence of any correlation between being low income and defaulting on rent. The evidence showed in fact that income criteria excluded half of qualified applicants and increased vacancy costs significantly, at a greater cost than any purported savings in default.
Section 200 addresses no rational business concern. It legalizes prejudice and discrimination against the poor. It is a reprehensible attack on our basic human rights.
Since the provincial government determines the maximum amounts to be allowed to social assistance recipients for rent, all of which are above 30% of the total allowance, they have a duty to ensure that these individuals are able to obtain housing with that amount of income. Sections 36 and 200 should be replaced with a section stating that a landlord cannot refuse to rent for income-related reasons to a prospective tenant whose shelter allowance is as high as or higher than the rent and utilities for the unit. This means if the rent is $500 and utilities are $70 per month, a family with a $602 shelter allowance from social assistance can afford the unit even though the cost is more than 30% of the tenant's income.
There are a number of places throughout this bill where a tenant's access to information has been reduced and the ability to avail oneself of the protection of the law has been curtailed. There is great potential for harassment of a tenant by a landlord, often with the possibility and incentive of financial gain for the landlord. A landlord is also given several means of using economic evictions through this bill.
We would like to draw attention to the fact that we're referring to the possibility of "a landlord," not "landlords," using this act inappropriately. Many landlords are fair and reasonable members of society and carry out their affairs with due regard for the provisions of the law and human decency. It's not for these landlords that strong tenant protection laws must be enacted but for those who abuse their position and power. The law must provide protection against abuse of that power, particularly for people whose economic power is not great.
We urge this committee to make significant revisions to sections 36 and 200 of Bill 96 as well as making additional changes to the bill in order to address the concerns that we have expressed. Thank you.
Mr Gilchrist: I don't quite know where to start. You indicated at the opening when the Chair greeted you that there are many of you. I don't know if you're aware that so far this week, we haven't heard from a single tenant speaking for themselves. I must say I somewhat resent groups coming forward and taking two slots and taking extra time. Because groups are allowed 20 minutes and individuals are allowed 15, that quite frankly deprived anyone of having that spot in Sudbury or here today.
0940
Having said that, I'm even more upset at what I must assume is the lack of attention to what's really in the bill. For example, you make a major point here about information: Eviction notices no longer have to provide details of the reason for eviction. Section 59, section 60, section 61 and section 62, the four sections that deal with eviction notices, all say "set out the grounds for termination," and I think this kind of fearmongering and misstatement is totally inappropriate.
Your group has now spent 40 minutes of this committee's time, which means three tenants, effectively, couldn't speak, and all you have asked us to do is take out one section. You've made no other suggestions about how we can improve the relationship between landlords and tenants. You haven't told us one thing that you think could be done to improve the lot of tenants, to reduce waiting lists, to reduce the problems we face in this province. I must admit I don't know why you've come before us here today. You've heard other groups say, "Take out section 200." I would have thought you could have used your 40 minutes to far greater value what you've done here today.
Ms Lalonde: First of all, I'm a tenant, as is Barry Schmidl, and I'm --
Mr Gilchrist: So am I, and I don't presume to speak for other tenants.
The Chair: Mr Gilchrist, let's hear the presenter.
Ms Lalonde: You've accused us of presuming to speak for other people, and I'm correcting you to tell you that I am in fact here as a tenant. Barry Schmidl is also a tenant. So we're not taking up the time of -- you don't have enough slots to allow every tenant in Ontario to come forward, and we didn't make the choice --
Mr Gilchrist: So you think none should come forward.
The Chair: Mr Gilchrist.
Ms Lalonde: -- of who should or should not be heard. I think we have made reference to other issues besides the 200/36 issue.
Mr Gilchrist: My point is if NAPO is making a presentation, then NAPO makes a presentation; it doesn't make two. The previous proponent has spoken twice before us as well. What are we to deduce when it's the same people who go and speak at hearing after hearing and we don't hear from other tenants? It sends a very interesting message, I must say.
Mr Cleary: Mr Chairman, just a point here that I wanted to correct. The Liberals started at 8:30 -- they were the first to comment -- then the NDP second, and then it was supposed to be the Conservatives and you went on to the NDP. Are we not going in rotation here?
The Chair: Mr Cleary, it's a good point. This is your first time before the committee --
Mr Cleary: I've sat on lots of committees, believe me, as many as you probably.
The Chair: Mr Cleary, I don't mean to offend you. This is the first time you've been on this particular committee for this particular bill. What we're doing is, if there isn't enough time, I allow one caucus to speak and I try to share those one-time sets of questions among all three caucuses. The New Democratic caucus has now had their one-shot question. The next turn will be either your caucus or the government caucus. I'm sorry, I certainly don't mean to offend you, but that's the practice that this Chair has been following, so that we try and get as many questions in as possible.
Mr Cleary: Okay. This Chair is different than some of the others.
The Chair: Life is different, isn't it, Mr Cleary, but that's the way we're running it today.
Mr Cleary: My question to the presenter: I like your comments on the new tribunal that will be set up. Do you think that will be an asset or a liability to the people you represent?
Ms Lalonde: I think part of the problem is that we don't have all the information about how that tribunal will be set up and will operate. Again that will be determined a lot in regulations. In many cases tribunals are better than court systems because they're more informal, they're more accessible for people who don't have three years of law school. But they do need the supports that we mentioned there, the translation, and they have to be geographically accessible to people.
Mr Cleary: Thank you. That was my only question.
Mr Marchese: I want to thank you both for coming. Your organization represents a significant portion of the population that is going to be seriously affected by this bill. I know they don't like to hear some of the views you represent. They would rather, I suspect, have more landlords coming to tell us how great this bill is. But I think your job is to identify problems. It's their job to come up with solutions. I don't think you in your deputations have all the time not just to identify problems but also to come up with solutions. I think once you've identified the problem, they've got to work at finding the solution.
What you have presented with other people points to the flaws of this bill. It's not balanced. It doesn't fix anything for tenants; in fact it makes their lives a lot more miserable. More and more tenants will not be able to afford the decontrolling of rents. More and more tenants who are sitting ducks are going to face increases they will not be able to afford. We are going to see the effects of this bill down the line and we are anticipating these problems before they happen. What you're doing is alerting them to it, and I hope they will listen to you as a tenant and as a member of an organization that is facing these problems.
Ms Toupin: If we came here today and we came here yesterday, it's in fact to address the very serious concerns that we have with this bill. We have focused particularly on the issue of sections 36 and 200 because of the discrimination low-income people will face by virtue of the changes that are being made to this law, in addition to all of the other issues. When you look at this in its entirety and you look at the context in which low-income people are living in Ontario at this point in time, I am very fearful what this bill will do to people when income information is allowed to be used.
We hope there are sufficient landlords out there who are fair, but the reality is, and we know -- and there are a number of cases cited; there have been cases cited by CERA, there have been cases cited by the Ontario Human Rights Commission -- that this is not always going to happen.
I think there's a huge amount of fear out there among low-income tenants, and as Linda has pointed out, there's a huge amount of lack of information or misinformation about this. Add all of this and for us the equation is quite simple: You're going to have more people in the streets, you're going to have more people who will not have access to affordable accommodation. This is what this committee is supposed to be here today to address, because I think the outcome of this is going to be disastrous.
The Chair: Thank you very much, ladies, for coming.
MINTO DEVELOPMENTS INC
The Chair: The next presenter is Minto Developments Inc: Roger Greenberg, president, and Guy Godin, who I believe is a vice-president. Good morning, gentlemen.
Mr Roger Greenberg: Good morning, ladies and gentlemen. Thank you for allowing me an opportunity to appear before you today. My name is Roger Greenberg and I am the president of Minto Developments Inc. Beside me is my vice-president responsible for our rental property management group, Mr Guy Godin.
I see a number of familiar faces that were also members of this committee approximately one year ago when I made a presentation on the government's paper entitled Tenant Protection Legislation: New Directions for Discussion. For those of you I haven't seen before or met before, please allow me to outline briefly Minto's and my own credentials to appear today.
Minto is a fully integrated, family-owned real estate company headquartered in Ottawa with operations in the greater Toronto area and south Florida. I have been actively involved with the company for 15 years, the last six as president. In our 42 years in business we have built more than 45,000 homes of which some 15,000 are rental homes. We continue to own and manage in excess of 10,000 rental homes in Ottawa and a little over 1,500 rental homes in Florida. In addition, we are the managers of some 6,000 homes on behalf of other owners. In Ottawa-Carleton, Minto is the largest provider of rental housing, ranging from bachelor apartments all the way to four-bedroom homes, with a majority of units renting for less than $650 per month.
I state these numbers not to be boastful, although I am fiercely proud of our company's accomplishments, but rather to demonstrate Minto's experience and my own personal knowledge of the industry I have chosen to make my life's work. I am not an economist, someone who claims to have a great understanding of how a developer operates yet has never heard the hammering from a framing crew as it builds a new house, never felt the dampness of newly formed concrete of a new apartment building, let alone ever had to worry about meeting a company payroll. Rather, I head up a team of some 700 dedicated individuals who are proud to work for a company whose motto is "Welcoming families for over 40 years." We consider our tenants to be our customers and treat them with respect. We work hard to meet their expectations.
As you might suspect, I am here today to state my company's support for Bill 96. However, our support for the bill is not unqualified. There are many areas where the government has unfortunately not had the courage to do what it said it was going to do while it was in opposition. It is not even doing what it said it was going to do in the early days when it came to power. That having been said, the current legislation represents a significant improvement over the existing Rent Control Act for the citizens of Ontario, landlords and tenants alike.
0950
Unfortunately, time constraints this morning do not allow me an opportunity to address in detail all my comments and suggestions regarding Bill 96. Rather, I wish to go on record as wholeheartedly endorsing the positions put forward by the Fair Rental Policy Organization of Ontario. I do so not because the chair of Fair Rental happens to be my brother Alan, who had the pleasure of addressing your committee on June 19 -- he looks a lot like me; people get us confused -- rather, I want to address some of the misconceptions I have read in the press about the bill that are being propagated by various interest groups, some of which I must say I've heard again this morning.
(1) That Bill 96 eliminates rent control. Of course it does not. As I mentioned earlier, we own and manage some 1,500 rental units in Florida. Believe me, we do not experience anything like the kind of government regulation in the setting of rents there that we will here in Ontario. With Bill 96, we will have vacancy decontrol, but then recontrol. This is a far cry from the elimination of rent control.
(2) That the changes will result in massive rent increases for tenants, 20% or more across the board. This is utter nonsense. Rents in Ottawa have been falling in the last couple of years as our marketplace suffers the highest vacancy levels in the last 20 years. If anything, rents may gradually recover to their previous levels as the economy improves. Rather than making exaggerated claims, we should look to the experiences of other jurisdictions, such as Quebec and British Columbia, where vacancy decontrols exist, to put this myth to bed.
(3) That the Rent Control Act is the best means to ensure that capital repairs are undertaken by landlords. Surely our own province's experience of the last few years has clearly demonstrated the fallacy of this myth. Capital spending by landlords in the last five years has been marginal for all the reasons that we know about: the 2% dilution, the 3% cap, ridiculous deemed interest rates etc. The changes in Bill 96 on capital expenditures will allow real cost recovery where and when markets allow it, freeing landlords to make normal investment decisions.
Indeed, the experience of Minto is instructive. In the next two weeks, Minto will be announcing a three-year, $25-million capital improvements program for our Ottawa portfolio. To be clear, this is an expenditure above and beyond what we normally spend to maintain our portfolio on a day-to-day basis. I'll leave it up to the economists to calculate how many hundreds of jobs such an expenditure will create. I know it's substantial. Bill 96 is one of the main reason why we've got the confidence to make such a massive investment.
It highlights an important issue. With all the talk of the need to build new affordable housing, what often gets lost is a recognition that more than 95% of the rental stock which will house Ontarians in the year 2020 is in existence today. Preservation of this existing stock is clearly the critical issue for the future, not just the construction of new housing. Overall, Bill 96 represents a major improvement in the investment climate for landlords in this province.
(4) That Bill 96 makes it easier and faster to evict tenants on a variety of frivolous grounds. Whenever I see this comment, I wonder if these people have read the same bill I did. The reality is that Bill 96 provides no new basis for evicting a tenant; the grounds are identical to those in the existing Landlord and Tenant Act. As for the timing, the notice requirements are virtually the same. All the government hopes to do is to reduce the time delay in actually getting a hearing. The tenant argument seems to be the exact opposite of the traditional wisdom that justice delayed is justice denied.
(5) That Bill 96 guts human rights protections in housing. Critics are suggesting that if sections 36 and 200 are included in the new legislation, hundreds of thousands of Ontarians will be thrown into the streets. My response is: Who's going to take their place? Are landlords going to allow their units to remain vacant?
Let's be clear: For as long as I can remember, Minto has used income criteria as one of the many measures to judge a tenant's suitability for a particular home. Yet we also have a large number of customers who are in receipt of public assistance. The two are not in conflict, nor do I believe that Minto has ever engaged in discriminating practices, either actually or constructively. Contrary to the critics' claims, the provisions of this bill will sustain the status quo, not alter it. There is no threat in these provisions to protected groups.
Finally, the absolute level of a prospective tenant's income is an important indication of that person's capability to handle the rent of that particular unit. What is not relevant is the source of that income. The issue is: How is a landlord to determine his or her customer's ability to pay? This is a fundamental principle for every businessperson.
(6) Finally, that the bill will do nothing to stimulate new rental construction. That is a very simplistic conclusion to take to a very complex problem facing our province today. As I've said publicly many times, and indeed to this very committee last year, government policy at all three levels, in a host of areas over the last 10 years, has completely shut down the construction of new private sector rental housing, a once vibrant segment of the housing market.
The Lampert report delivered to the government in 1996 clearly addressed the many areas that need reform: property taxes, equal application of the goods and services tax, development charges, the elimination of unnecessary regulation and red tape, and a rationalization of building codes. In and of itself, will Bill 96 stimulate new rental construction? Obviously not; however, ameliorating rent controls is an essential prerequisite to achieving new supply, though the cost issues I referred to earlier must be addressed as well. Bill 96 represents an important, symbolic first step to providing tenants with truly their best form of protection: choice, like they temporarily have in Ottawa-Carleton and a few other municipalities today.
I thank you for the opportunity to speak this morning. I'll be happy to try to answer any questions that members of the committee may have.
The Chair: Thank you, Mr Greenberg. Mr Marchese I'm sure will have some questions.
Mr Marchese: Mr Greenberg, I sure do. Like Mr Gilchrist, I don't know where to begin because you raised so many questions. I'll tackle the income criteria one first because it's of serious concern to many who are here. The government says in the new section that you can use income information -- and it was legal before -- but you can't use it to discriminate. That's the basis of the law. If you were to use income information, based on section 200, in a way that discriminates, you'd have a problem. How do you use income information that will not discriminate?
Mr Greenberg: Income information in and of itself is but one of many factors that we would use to judge whether a person is going to be able to afford the particular apartment which they are going to choose.
Mr Marchese: I understand that, but we have a problem. This government is saying they recognize that some people have used income information, and that's quite legal. But they've now said, "To make it safe for tenants, we're going to make it illegal for them to use it in a discriminatory way." My sense is that some of you use income information -- why else would you use it? -- to discriminate based on who you think is going to be able to pay. How are you going to use income information that will not be discriminatory? I'd like to understand that.
Mr Greenberg: As I said, we don't use income information in and of itself as a selective criteria. It is one of a basket of items that we use to determine whether a tenant is going to be able to afford the house they desire to select. It's one of many items. Tenant history is another item. In and of itself, if that were the only criterion, there perhaps could be a problem. But we want to be able to have that as part of a basket of items to look at.
1000
Mr Marchese: I understand you very clearly.
Your second point says: "That the changes will result in massive rent increases for tenants, 20% or more across the board." Somebody may have used that figure. We don't know how much that rent will go up, but I can guarantee rents will go up. It happened in New York when they removed rent controls. Capital repairs went down, harassment went up and rents went up 52%. We're not sure what's going to happen here by way of percentages, but I can guarantee, Mr Greenberg, the rents will go up. If tenants can't afford it now, they won't be able to afford it later. It'll get worse. Do you disagree with that?
Mr Greenberg: Who's going to occupy their units? If you say the tenants can't afford it and they have to move out, where are people going to come from to fill these units up?
Mr Marchese: Why do you, therefore, want to remove rent control? If rent control seems to be working now --
Mr Greenberg: It isn't.
Mr Marchese: Why would you want to remove them if rents are not going to go up?
Mr Greenberg: I didn't say rents won't go up. What I'm saying is, allow the market to operate; allow landlords and tenants to choose freely what they want to do and let the market operate. You're suggesting that rents are going to go up and that people are going to move out and then the unit is going to sit vacant.
Mr Marchese: No, rents are going to go up and people will not be able to afford it -- not move out; they will not be able to afford it. They can't afford it now and it's going to get worse later, is the point I make.
Mr Greenberg: Yet rents in Ottawa in the last little while have been going down. Why is it that rents have been going down with rent control? Because in Ottawa today we happen to have a market system that is operating as it should, but it's only for a limited period of time.
Mr Marchese: I see. In terms of the comment you make, "That the bill will do nothing to stimulate new rental construction," that's a comment I make on a regular basis. This does nothing for the stimulation of new supply, absolutely nothing.
The problem we've got is that you're not building these days because it costs too much and the person who would otherwise come and rent your place can't afford it. It's that kind of demand. It's a kind of affordability that would permit you to build, and you're not building because people can't afford it. Is that not the case?
Mr Greenberg: I find it very interesting, and I say this with the greatest of respect, when people such as you are trying to suggest why developers who have built many rental homes for many years would or would not do something. Yet you don't ask me. I'm telling you right now --
Mr Marchese: I'm referring to Mr Lampert.
Mr Greenberg: I'm referring to what my comments are. I am a developer. My company has built thousands of rental apartments. What I'm saying to you is that this is an important first step in getting new rental units built in this province.
Mr Marchese: I hear you. Mr Lampert says that first step is only worth $200 out of that $3,000 gap you have, unless this guy's wrong -- he's an economist; he's one of theirs.
Mr Greenberg: It's the first step. But if you don't start somewhere, where are we going to go? Then everyone looks at each other and says, "We can't reduce realty taxes and eliminate the terrible discrimination."
Mr Marchese: That first step is only worth $200 out of so many others that are much more complicated to get where you want to get to.
Mr Greenberg: It's a start.
Mr Marchese: It's not a start for tenants. It may be a start for you, but it's not going to help them, Mr Greenberg. Thanks for coming.
The Chair: In future, you people are going to have to stop interrupting each other, because the people who are trying to record all this will never get it all down. You're going to have to let one finish before the other starts.
Mr Marchese: Thank you, Mr Chair.
Mr Gilchrist: Thank you both for coming before us. It's most intriguing that Mr Marchese doesn't want to take you at your word. Maybe he missed part of your presentation. I must say I'm very impressed: a $25-million capital improvement program over and above your normal expenditures, all of which will go to the benefit of the tenants, presumably. The bottom line is that it totally and utterly rebuts everything Mr Marchese has been saying throughout these entire hearings, that no one will change their practice as a result of passing this bill. I thank you very much for proving him wrong.
Let me just ask your response, because he's suggested that we shouldn't start somewhere. Right: The finger-pointing should continue and tenants should continue to have a seven-year waiting list in Toronto. The Massachusetts Institute of Technology, a pretty respected group, reported on June 13, 1997:
"Those who envision catastrophe if rent regulations are undone can look to Massachusetts for reassurance. A rent control phase-out there is bringing more benefits and less disruption than expected. There has already been the creation of 2,500 new housing units," mostly rental, "the largest number of conventionally financed rental housing units since the beginning of rent control 25 years ago." And that's just in a couple of months after scrapping it.
Do you see other developers following your lead as greater confidence is restored in the marketplace that government will not interfere with the day-to-day affairs of your business?
Mr Greenberg: I do. To be fair, though this is an important symbolic first step, there is still much that needs to be done. Mr Marchese is correct in his analysis, in some measure, of the Lampert report, which indicates that there is an economic imbalance. These imbalances have been created by all three levels of government over the last 10 years. It did not happen overnight. It has gradually happened in a variety of areas. Your government has taken a few important first steps, not only with this legislation but with other pieces of legislation. I wish you had gone further. You know that I wish you had, for example, mandated local municipalities to eliminate the discriminatory impact of realty taxes. I don't believe tenants know that they pay two times the realty taxes that a similar homeowner would pay for an identical condominium unit.
Mr Gilchrist: Mr Greenberg, we've been trying to raise that point in every town and city we've gone to. I find it very interesting that there are no municipal politicians here speaking to us today. I think that's the first time I've ever come to Ottawa on a committee hearing and not had one of them out politicking. Maybe they're afraid to answer the questions on this issue.
The reality is that tenants all across Ontario are paying on average $100 a month more property tax than if they were taxed at the same level as private homeowners, and municipalities have allowed that to be perpetuated. More important, all these groups that have come forward and suggested that the provincial government is the villain -- I accept that; we've got thick skins -- every one of them has told us they have never once raised the issue with their municipal council. I would welcome your comments on whether you've ever been joined by all these other lobby groups in terms of making that point with the city council here and the regional government.
Mr Greenberg: To be honest, Mr Gilchrist, we have been making this point to municipal politicians since 1978. We have maintained a variety of lawsuits against all three governments to try and bring before the courts this terrible discriminatory practice. We have never been joined by any tenants' groups in this endeavour. It is something, though, that I intend to make as an election issue, if I'm able to, in the fall, because I think you have now clearly given that power to the local politicians to eliminate this terrible injustice.
Mr Gilchrist: Very briefly, because my time is up here: You have absolute willingness that this is a complete flow-through to the tenants; that if the property taxes go down, the benefit goes exclusively to the tenants in Ottawa and every city.
Mr Greenberg: Yes.
Mr Cleary: Thank you for your presentation. Do you, as a developer, see more activity in the conversion of rental units into condominiums?
Mr Greenberg: Some of the pieces of legislation are going to make it extremely difficult to allow for conversions. There are going to be actions by various local municipalities, such as Ottawa, which is relooking at its own policy and its official plan, that I think will significantly reduce the opportunity for tenants to purchase very affordable housing. I am in favour of the elimination of the prohibition of conversion of rental units into condominiums. I think it's an excellent opportunity for tenants to buy very affordable homes, and I hope that trend we've seen in Ottawa, where there have been, I'm going to guess, about half a dozen projects in the past two years that have gone through city council because our vacancy rate was in excess of the 3% threshold -- I am hopeful that we'll see more examples of that situation taking place.
Mr Cleary: Do you think it'll be easier under this legislation, with the support of the local municipalities, to do that?
Mr Greenberg: It will be easier, yes.
Mr Cleary: It will be easier. Thank you.
Mr Chair: Thank you, sir, for coming.
Mr Wayne Wettlaufer (Kitchener): Mr Chair, on a point of order: Mr Marchese stated that in New York state rents are going up. I want to point out that on PrimeTime Live, ABC News, on February 19, 1997, it was stated that where there's rent control, landlords don't want to build. In unregulated cities like Dallas and Chicago lots of apartments are available, but in rent-controlled cities like New York you may have to bribe someone to get an apartment.
The Chair: That's a point, Mr Wettlaufer, but it's not a point of order.
1010
SOUTH OTTAWA LEGAL CLINIC
The Chair: The next presenter is Gary Stein, who is a staff lawyer with the South Ottawa Legal Clinic. Also with him is Melony Priest. Good morning.
Mr Gary Stein: Good morning. Thank you very much for inviting me to come speak to you today. I am a lawyer at the South Ottawa Legal Clinic. Melony Priest is a tenant in Ottawa. I'm going to speak first of all about some very specific problems that I see with the proposed legislation and then I will turn over some of the time to Melony to finish off, to talk about her specific direct problem that she has had as a tenant.
In my office there are three case workers. All of us do landlord and tenant work. We are the ones in the courts. We are the ones on the ground trying to resolve problems or, if necessary, appear before a judge and have it decided. We know how the system works now. I have reviewed these procedures. I have several problems with them which you've heard, I'm sure, over and over again, and I won't go over the litany of them except that I'd like to point out to you that the Legal Clinics' Housing Issues Committee has appeared before you. LCHIC has presented you with a brief. I support the proposals in that brief and would ask that you consider them carefully.
What I want to comment on are only certain specific issues that relate to access into the system for tenants, specifically, in one case, that deals only in Ottawa.
There are three problems I want to focus on. The first problem is the timing issue in the act in which tenants need to respond to a landlord's application for eviction. The second problem, the one I will focus on, is the duty counsel program that we have here in Ottawa in which tenants can get advice right at the courthouse door, and how, given the way you've structured the new system, we will not be able to maintain that program, which is hugely successful. I'll give you some of the statistics regarding that. Third, we'll refer to the suggested amendments to the Human Rights Code, which have been a major issue for your committee, and Melony Priest will speak directly to that issue.
First of all, on the timing of documents: I've already heard speakers here today refer to it. I won't go on at length except that the way the law is now written I think poses a major problem for tenants in simply trying to respond. You're requiring a written dispute, for one, as opposed to a written dispute or showing up or somehow communicating information to the new tribunal.
Second, by deeming documents to have been received within five days and then only giving a tenant five days in which to respond, I think there will be many instances in Ottawa, but particularly outside of Ottawa, in which tenants will simply not have the time to get a written dispute in, let alone have the opportunity to seek legal advice about their particular situation. I don't understand why you have such strict time limits, especially given that you're focusing only on written disputes.
My recommendation would be that you recommend the legislation be amended to allow disputes in writing or simply by appearing, as the vast majority of tenants do now, or by faxing in a document, or perhaps even phoning in their dispute to a particular phone line. That way there is much less risk that there will be a default judgement issued against somebody, which takes a lot of energy and a lot of effort and sometimes money to overturn.
The other point is that the way the act is now written, it deems a document to be received within a certain period of time. I would ask the committee to consider the possibility of making that subject to a tenant's right to prove that they did not receive the document in that particular time period. I think it only makes sense.
I'm going to turn to the bones of what I wanted to talk about, which is the duty counsel program here in Ottawa. I'm duty counsel. I appear in the courts, as do all the case workers out of the Ottawa legal clinics. We are at the courts at the first-level hearing to ensure every single tenant has at least a couple of minutes of legal advice.
What has that meant? The statistics which the Ministry of Municipal Affairs and Housing has provided to us in its recent examination have shown that in Toronto, 63% of cases don't get past that first stage, so 37% do. In Ottawa, 93% don't. There's only 7% of all cases going on to the next level, which is trial.
Why the difference? I don't know of any particular difference between Toronto and Ottawa except for the fact that we have this ongoing duty counsel program where we are there right outside the courtroom door, present ourselves to the tenants and tell them they're entitled to have a few minutes of legal advice.
What do we do? We give advice. We give the landlords and their representatives -- lawyers or agents -- a knowledgeable person to deal with. We give the courts a resource person for landlord and tenant matters, as we would for the new tribunal. We also represent, of course, if need be, on that very day if there's an emergency before a judge.
This program has been in place since 1990. It's highly successful. We avoid unnecessary evictions. Importantly, we often re-establish the relationship between the landlord and the tenant. We ensure there are agreements made between them instead of sending it on to a trial. We ensure that tenants' rights are respected and, where necessary, enforced.
I think landlords' agents and landlords' lawyers who I see at the courthouse would agree that duty counsel is an effective program for them as well. It keeps the tenant in the unit. It reduces costs for everybody: for the tenant, of course, in possibly being evicted; for the landlords in having to potentially eat those costs that they cannot reclaim from tenants; also, it saves the landlord the cost of having to find new tenants for the particular unit; for the taxpayer, of course, because most claims get settled or get resolved in some way because there is legal information available to the tenants.
There's no cost to the system for us. We have a budget. We don't charge any more. No one is paying us more than our usual salaries. There's no additional cost to the system of having duty counsel.
The other result of all this is that there is no delay in how the system works. In Ottawa, if you go to court today, you will have a trial in one week. That's what it's come down to. There have been ups and downs but now there's absolutely no delay and it's wrong to suggest that the system is now causing delays in Ottawa.
What is the problem? The problem is that the way you've set up your legislation doesn't provide for an entry point, a window, like you have under the current Landlord and Tenant Act. The way it works now is you've got a list that appears before a court official called a registrar, which you may know. Every single case must go on to that list. In Ottawa it happens on Tuesdays and Thursdays, mornings only. Duty counsel can be there. We've got the staff power to be there at the courthouse for those two or three hours, twice a week. This system is divided up between all the clinics in Ottawa. We've got a rotation to make sure there's always someone there.
The problem is the new system is not designed to have this window of opportunity. It's simply designed to have ongoing hearings. Unfortunately, Ottawa clinics don't have the staff to spend five days a week, all day, sitting at the tribunal waiting for tenants to come in to give them advice. We can't do that. We don't just do landlord and tenant. We cover a myriad of legal problems and there's no way we can afford that time.
We talked to the Ministry of Municipal Affairs and Housing officials very recently about this particular problem and asked, can they design a system, a practice, in Ottawa that would allow us to be there to give the legal advice so that problems can be easily resolved and evictions avoided if possible? The officials have told us it's not possible. They've said the legislation as it now is allows only straight to a hearing. They can't create a practice that would allow that to exist. The likely result, and I'm sorry to say this, is that the duty counsel program is likely to collapse. Tenants will not be able to get the advice there at the courthouse, which saves everybody costs.
1020
The most crucial thing I think is going to happen is there are going to be unnecessary evictions, even some illegal evictions. That's why duty counsel was set up in the first place, because there were unnecessary evictions and some evictions happening that were not going according to the rules. When we're there, we make sure the rules are followed. We enforce them. If we don't have some window where we can appear, then I'm afraid that's going to happen again.
My recommendation is simply to ask this committee to recommend legislation or regulation which would allow for a local procedure whereby all hearings would first perhaps go to some type of pre-hearing appointment. Create some kind of list where people would need to appear or have settled a dispute prior to that date, so at least there is a time when we can be there to give tenants advice so they've got some way of accessing the system. Without that, I'm afraid we will not be able to participate at the same level we are now doing. I'm afraid that will lead to not only what I've referred to, but also backlogs, right away, in scheduling the hearings.
There is mediation available. Tenants are entitled to have mediation. That's been a pilot project. It's worked well in Ottawa, and with sufficient time in advance of hearings, it can work., as long as tenants, as well as landlords, have access to legal advice before they sign on the dotted line to an agreement negotiated by an independent mediator. The thing that's important is that mediation without the parties knowing what their legal rights are is meaningless. Mediators cannot give legal advice. That would be a conflict, for them to tell the tenants what their rights are. Without duty counsel or clinics providing that kind of advice there at the courtroom door, mediation is not going to work the way it's working now. It's not a substitute for proper legal advice.
The third point I want to refer to is the Human Rights Code amendment which is being proposed. I am concerned about it. I have the same concerns you've heard here today and yesterday and in your other appointments. I don't think it's appropriate to allow landlords to obtain income information, and Melony Priest will speak directly to that point. Before I turn it over to her, I'd just like to conclude by asking this committee to take seriously your role of hearing from the public, of hearing from tenants, to hear what they're saying, hear the actual specific proposals that are being recommended, and consider amending the law so it is not one-sided.
It is not fooling anybody to call the law the Tenant Protection Act now. It is not protecting tenants. I would urge you to take your responsibility seriously and to amend the law to make it more evenhanded, more balanced than it is now.
Ms Melony Priest: Good morning. I have been subjected to low-income discrimination by Minto here in Ottawa. I'm a single parent of a child with a disability. While living in Calgary my son and I had been forced to leave the armed forces housing we had been living in because my husband and I had separated. A year later, my son and I made our way across Canada to Ottawa. We shared a home with another couple until circumstances made it necessary for me to look for other living arrangements.
I found the perfect home for us. It wasn't an apartment. There wasn't a balcony. I didn't have to worry about him thrill-seeking to walk on the balcony railing. Our prospective home was a town house. It was in the same area I had been living in. It had large windows, a small yard, two large bedrooms and, best of all, I could afford it. I was receiving $645 a month for rent from welfare in my previous place and this new home was only $585 a month plus utilities. My son would be able to stay in the same school. He would be able to walk to his French immersion school two blocks away. He would be able to come home for lunch. He was able to keep the same friends. Important things for a child who has lost his father, who was forced from his home and trying to cope with a disability. I have an R1 credit rating. I would like to read you a short letter of recommendation I tried to give to Minto.
The Chair: Excuse me. I just want to caution you on one thing. I know you have a lawyer beside you. While members enjoy parliamentary privileges and certain protections pursuant to the Legislative Assembly Act, it is unclear whether or not these privileges and protections extend to witnesses who appear before committees. For example, it may very well be that the testimony that you have given, or are about to give, could be used against you in a legal proceeding, so I caution you, as the Chair of this committee, to take that into consideration in making your comments. I know you have a lawyer with you but I just bring that to your attention.
Ms Priest: I understand.
The letter of recommendation:
"To Whom it May Concern:
"This letter is to recommend Melony Priest as a tenant for a suite or home. She is impeccable in her living habits and would enhance a property by living there. She is conscientious of her neighbours and respectful of their needs. Melony Priest rented from me for approximately four months when she decided to move to Ontario. She left her suite in a clean and rentable condition upon her departure. If you should require further information contact Heather Wentz, property manager at Daveco Holdings."
I asked the clerk to accept my application for consideration at Minto to rent the town house. Minto wouldn't accept my application. I was devastated. Another new school for my son. That meant three new schools in one year. I was emotionally drained trying to care for him and find a home. It became necessary for him to enter a program at the Royal Ottawa Hospital because of severe emotional problems. Please don't allow this minimum income criterion to become law. Please don't allow this to happen to other families that might be affected by a turn of circumstances such as a marriage breakdown.
Mr Lalonde: Thank you for coming down and taking the time to do this presentation this morning. A previous speaker mentioned a little while ago that the average cost for rental in his building was in the area of $600. You just mentioned, Madam, that you moved from another part of this country to Ottawa and the cost at that time was $580 a month, I believe it was that you mentioned. I don't know if you're aware what effect this removal of rent control would have to a person like yourself when you move to Ottawa or any other part of this province. The government will be allowed to increase the rent.
I know Minto is known to be a very good landlord, but still, they will have to recover the cost of any of those renovations that will be required. A family of two at the present time I believe is less than $1,000 if you're on social assistance. I don't know how the family or the seniors are going to be able to afford paying an increase in their rental at the present time.
How do you feel about this removal at the present time of the rent control and allowing the developer or the landlord to increase according to the renovation that will be done? Will you be able to afford being a single mother?
Ms Priest: I'm no longer on welfare. I was paying the $645 a month here in Ottawa before I tried to get the other unit, but I find it very frightening that rents would rise that way, even on my income.
Mr Lalonde: Especially in the urban sector.
Ms Priest: Yes.
Mr Lalonde: Thank you.
The Chair: Thank you very much for your presentation this morning.
1030
CARLETON UNIVERSITY STUDENTS' ASSOCIATION
The Chair: The next presenter is the Carleton University Students' Association, Heidy Van Dyk, president. Good morning.
Ms Heidy Van Dyk: Good morning. My name is Heidy Van Dyk. I'm the president of the Carleton University Students' Association in Ottawa. Thank you very much for the opportunity to speak with you this morning and to address some concerns we have as a student organization about Bill 96, the Tenant Protection Act.
There are five main concerns that I want to talk to you about. The first is the ability for landowners to raise the rent of new or newly vacated buildings to market value; the second is maintenance of rental units; the third is the subletting practice; the fourth would be basement apartments; and the fifth would be the dispute resolution system.
When students move away from home to attend post-secondary institutions, often it's the first time they've lived apart from their parents and the first time they have to search on their own for housing. There are many things they have to take into consideration. They're looking for housing that is affordable on a fixed income, that is close to school, bus routes, laundromats, grocery stores, their friends, who are often their social network to survive at university or college; and they're looking for housing that is of high standard, a quiet, safe place where they can study.
If students have to concern themselves with dealing with a negligent or harassing landowner or deal with issues of maintenance requirements, these are things that can distract them from their studies, which is the main reason they have moved away from home in the first place.
The first concern we have about Bill 96, as I said, would be the ability of landowners to raise the rent of new or newly vacated rental units to market value. We would like to propose that a maximum percentage by which a landowner can increase rental rates be applied.
The student population tends to be somewhat of a transient one, where students move away from home for eight months of the year and then go back to their permanent residence for the summer. The turnover rate of renters within the student population is relatively high. This leaves students very vulnerable to facing rent increase after rent increase every year. It could be difficult for students to find housing with acceptable living standards within rent that they can afford.
We also have concerns that landowners who might want to evict tenants or have them vacate the premises to be able to raise the rent would become harassing to students. If students were to face any sort of user fee to use the dispute resolution tribunal, then we are concerned that they would not do that and would instead be living in a harassing environment.
Second, we would like clarification on how a rental unit can be declared vacant in a shared accommodation situation. If there are four or five people living in a rental unit, which is very common within the student population, we would like to have it be absolutely clear that the landowner can only declare the rental unit vacant if all of the tenants have moved out.
In regard to maintenance, we feel it's very important that orders prohibiting rent increases remain in place so that student renters can ensure that necessary repairs are completed on a rental unit before they face rent increases. Second, we feel the tenant should be given the opportunity to give prior approval of the repair or capital expenditure before it is made if they are going to face a rent increase as a result. We have concerns that landowners would be going ahead and spending money for repairs on rental units that don't necessarily need to be made in order to be able to increase the rent of the unit.
As well, we feel it's very important that if utility prices that might be included in the rent go down, tenants have an opportunity for a rent decrease as a result of that. If utility prices increase on a rental unit, which would mean that tenants would be facing a rent increase, then we would like to make sure tenants are given proof that the utility prices have in fact gone up and that their rent has only been increased in the same proportion that the utility prices have increased.
Next I'd like to talk about the issue of sublets. This is a practice that is very common within the student renter population, a practice where if students find an apartment or house that they're happy with but they're going back home for the summer, they would like other tenants to move in and take over their lease for the summer.
We would like to see standard guidelines which stipulate the occasions on which a landowner can refuse to sublet an apartment. Examples that we think would be appropriate are if the current tenants have a history of not paying their rent or of damaging apartments at great length or if the landowner has serious concerns that the current tenants would not provide appropriate sublets.
As well, the current tenant is responsible for anything that happens once a subletter moves in. We don't really see why a landowner should have the right to refuse sublets when the current tenant is still going to be held responsible for any rent arrears or any damages or problems that arise.
The next issue is basement apartments. Basement apartments are often the most affordable for students, yet they can often have lower living standards. We would like to see some very clear legislation on basement apartments in order to stipulate definite health and safety standards, to ensure that students are not living in unacceptable conditions in order to have a rental unit they can afford.
Last I'd like to talk about the dispute resolution system. We have concerns that the proposed legislation would allow landlords to increase rents. We are worried that students could be living in harassing conditions or renting from people who are very negligent as far as repairs and maintenance to try to get student tenants to move so they can raise the rent. With this possibility, we would like to see a dispute resolution system that is very user-friendly, with absolutely no user fees.
We also have concerns about the ability of the tribunal to declare disputes to be frivolous or trivial. Students have a very difficult time in the rental market because they face the stigma that a lot of people don't want to rent to students because they're dirty or because they're noisy or because they don't pay the rent. Students are constantly having to fight those stigmas. As a result of that we have concerns that the tribunal would declare a lot of student complaints to be frivolous or trivial and they would never actually see any resolution of the situation.
In conclusion, we feel that the Tenant Protection Act is overly generous to landowners. We would like to see some amendments to it, such as some I have proposed today, to have it be a more fair and balanced system for both the tenants and the landowners. Thank you.
Mr Gilchrist: Thank you, Ms Van Dyk. We appreciate your coming forward this morning and particularly for making some specific suggestions on how the bill could be improved. That's what the hearings are all about. Let me just go through in sequence and invite a couple of comments or maybe answer some of your questions.
Vacancy decontrol: You ask about clarifying when a housing unit is vacant. There are two scenarios. If it's five students renting a house and they each have a separate lease to rent a room, only the room would be deemed vacant if one tenant moves out. On the other hand, if five students go together and sign a common lease to rent the entire house, you're absolutely protected. One tenant can move out; four of them can move out. As long as the fifth person is still there, it isn't vacant. Hopefully that clarifies that point.
Ms Van Dyk: Can I respond to that scenario?
Mr Gilchrist: Sure.
Ms Van Dyk: In the scenario where there would be a common lease with five students and all of them would have to move out in order for the dwelling to become vacant, I hope the students continuing to live in the dwelling would be given ample opportunity to find another roommate or to have input on the time line in which they would have to completely fill the house. The concern I see is that if one person moved out there would be four people who would then have to cover the rent that five used to, which would then cause problems between the landlord and the tenants, which would again sort of lead to the four students remaining in the house to leave the house earlier than they might have anticipated.
1040
Mr Gilchrist: But that's no different than contract law today, and that's the difference: If students want to sign separate leases just for their room and the five of them wind up in effect having the whole house, that's fine. Then they have no obligation to worry about the others. If they want to go in as a group, then that's part of the responsibility of having taken on and signed that contract. Nothing in this bill will change that at all. So they will have no greater concerns.
I'd be more than happy to take back your suggestions about the conversions of houses and smaller units. You're the first person to raise that issue and I'd be more than happy to take it back. I think it would be best covered in the regulations that will define exactly what a renovation is and when a new unit is created, when it's an old unit fixed up and when they've actually spun it off into a different unit.
Subletting: The rules haven't changed from the existing Landlord and Tenant Act. The landlord cannot deny anything. The test there is that he cannot be unreasonable or arbitrary, so nothing in this bill changes the existing relationship if a tenant wishes to sublet.
Basement apartments: Absolutely, positively in this act, section 24(1), there is very explicit instruction to landlords that they must maintain health and safety standards, and you will have all the remedies available to you whether it's a basement apartment or anywhere else. Anyone who deviates from that, I don't think the bill could be clearer than it actually is, so hopefully you're protected there.
The dispute resolution system: We recognize that there's always that tradeoff. You don't want frivolous cases brought forward, which would be more likely if it were free and there was no cost to people, but you also don't want the cost to be very high. What will happen, though, is that the tribunal has the right to award costs. So if you genuinely believe you have a case, yes, you may have to come up with a few dollars for the filing fee, but you'll get those dollars back when the tribunal rules in your favour.
Finally, the repairs and capital expenditures: Absolutely, positively the tribunal will be able to rule. If you believe that the landlord has asked you to pay a rent increase for a repair that you don't think is reasonable, all you'll have to do is send that notice. As soon as you disagree with him, he'll have to apply to the tribunal, which means he pays the fees, and you'll have a chance to then go back and simply say, "We don't need a new air conditioning system." The onus will be on him to prove to the tribunal that repairs are necessary and try to meet a municipal work order or some other test of essential services.
We don't have time for your other points, but we'll take those back. I appreciate your submission to us.
The Chair: I think there are a couple of more questions. We can't let you go yet.
Mr Lalonde: Thank you for making this presentation. You are concerned about the dispute resolution system at the present time. Do you feel that Bill 96 should allow for a mechanism that will allow people to be heard before it becomes an official complaint? This way students on low income or senior people would not have to deposit a certain fee for an official complaint, if within Bill 96 there would be a clause for a hearing before you proceed officially with the complaint.
Ms Van Dyk: That would be a very good idea and I think that would help address our concerns about the tribunal arbitrarily deciding that a student's complaint was frivolous or unnecessary.
Mr Lalonde: I do feel there should be protection for a landlord, because time means money. At times a lot of complaints are not valid, but all complaints should be heard. If there was a mechanism in place that would allow for a hearing, would you be in favour of it?
Ms Van Dyk: I think that would be a very good idea.
Mr Marchese: I have a question with respect to vacancy decontrol. I'm not sure that this is what you mean or intend by it and I'll raise the points so we'll see whether we have the same understanding of it.
Vacancy decontrol, in our view, will mean higher rents for most people. There's no doubt in my mind about that in spite of the fact that Mr Greenberg differs in this view, he and many others as landlords. I'm not sure I've heard other people make this suggestion, but because we don't know by how much rents will increase, many tenants are worried that there is no control in that regard. Is your first point suggesting that somehow this government should consider a cap as to what landlords could charge when the vacancy occurs? Is that what you mean by the first sentence?
Ms Van Dyk: Yes, that's what we would like to see. We would like to see some form of rent control stay in place. We're very concerned, because of the nature of student tenants, who tend not to stay in a unit for more than one year, that every year they come back to school they will be facing higher and higher rents that they simply cannot afford.
Mr Marchese: I find that a very useful suggestion. I'm not sure, the government hasn't commented on it and I was going to ask Mr Gilchrist to comment on that suggestion because he may have missed it, but I think it's a very useful thing for the government to consider. It may be something that is control and they may not want to pursue it, but I think it's something that they should consider very strongly. I'll try to bring it back if I can today.
The other matter of dispute resolution system: Mr Stein made a good point today. You must have been here for his presentation. He said that 93% of all cases get dealt with very expeditiously here in Ottawa and only 7% -- I had heard 5% in the past -- 5% to 7% are troublesome and require a more detailed consideration of the problem, but by and large the system works. One of the things he talked about was the duty counsel program. He suggests that the duty counsel program has probably expedited a lot of cases.
Do you have a comment in that regard with respect to that particular program and the fact that this government has got rid of that?
Ms Van Dyk: I think if there's a program in place that is accessible and affordable to students it should remain in place. As I mentioned earlier, students are constantly fighting against feelings that they're not good tenants, and when a dispute arises they have to prove themselves that much more, I think, than the average tenant. Often there aren't enough avenues they can go to for help. I'm not familiar with that particular program, but the statistics you've quoted me sound very good. If it is affordable and accessible to students, then I would very much like to see it remain in place.
The Chair: Thank you for coming, Ms Van Dyk.
STUDENT FEDERATION OF THE UNIVERSITY OF OTTAWA
The Chair: The next presenter is the Student Federation of the University of Ottawa, Nathalie Carrier, vice-president of external affairs. Good morning to you. I'll ask you to introduce the other speaker.
Ms Nathalie Carrier: This Alain Gauthier. He's the president of the Student Federation of the University of Ottawa.
My name is Nathalie Carrier. I'm presenting here on behalf of the students at the University of Ottawa. I'm sure you'll find that some points Heidy has highlighted are quite similar to ours.
Today we'll be focusing on five main points: rent increases, subletting, maintenance, the Human Rights Code, as well as another concern that we have. Before I start I want to highlight that I won't be reading right through the package, but there are some things we've highlighted about the realities of students in regard to being tenants.
Students have low or no incomes and the concept of student loans doesn't apply to the concept of income, which is the first problem students have. A lot of first-time renters don't have credit; they haven't yet established their credit. So on the basis of being a student, it is quite difficult to prove that you have good credit when you have no credit.
Student housing is substandard. It's dingy, it's dilapidated and it constitutes between 40% and 60% of a student's annual income. Students need housing that's conducive to studying. This includes quiet space free from disturbances, harassment and substandard landlords. Students move an average of twice a year. Students pay, on average, $3,400 a year in tuition, and $600 in books. An average cost in Sandy Hill, which is the student slum area of Ottawa, is about $350 a month, equalling about $8,200, and the average student loan is $9,000. That is just to give you a brief outline of where we're coming from in terms of being students.
1050
The first problem we had was the new tenant policy and how a landlord could increase the rent once a tenant leaves a particular unit. The problem we foresee with that is that students move, on average, twice a year, which means that students will move in in September and move back home in April. The concept of this rent raising could become a serious problem and could increase a lot faster in areas that are prominently dominated by students because of the rapid turnover in rental units.
Our recommendation on that is that in Quebec they have la Régie du logement, quite a similar act to what the government of Ontario is proposing. The government of Quebec in this particular area mandates landlords to tell new tenants what the previous rent was. We feel this is very important; it would influence market forces in a much stronger way because students would then have the right to negotiate. For example, if I'm paying $375 a month and the previous tenant was paying $300, then I have the right to know why that $75 is there and I then have a bargaining tool. Not having this information permits the landlord to have the monopoly and the only bargaining tool in terms of this. If the landlord would be able to prove that he has put $75 a month's worth of work into the place or has repainted or fixed the walls that were falling apart, students would then have a much better chance at bargaining and much better conditions in that sense.
The second problem we had with the act is in terms of subletting. Subletting is something that is quite evident to students. It happens every summer. If any of you go through the student-populated areas in the city, you'll notice that in the summertime you can get quite affordable rents. You can get places anywhere from $100 to $300 a month, and these are quite nice places. The reason students do this is because every April they will move out of their previous place and move either back or move to a different city to work. They'll sublet it to another student because they can't afford to cover the rent. The concept of a summer and a working term in the summer is to make money for school, so a lot of students can't afford to pay rent over the summer.
The problem we had with the act in terms of this is that there were no grounds established on which a landlord could refuse a subletter. It just said that the landlord had the right to refuse a subletter, should he or she choose to do so. We recommend that you establish grounds on which landlords would have the right to refuse subletters, because subletters are quite vital and crucial to student budgets, both for students subletting in the summer and for students needing to recover the cost of summer rental. The academic term is eight months and we are often forced into one-year leases, so that's a problem.
The second one was in regard to the Human Rights Code. According to the proposed changes you're making, a landlord would have the right to check a student's income as well as a student's credit line. As previously established, most students don't have a credit line and have little or no income. We've already seen the government of Ontario tax us on anything we make over $600, and that is being used against us right now in terms of our loans. The problem we have with that is that loans aren't considered income. A landlord could technically refuse a tenant who is a student because that student does not have an income; however, that student could be receiving a $10,000 loan that year.
Our recommendation in regard to that is to remove that from the act and go in conjunction with the Human Rights Code and allow students to have the right and the opportunity to that. The second point we'd like to raise in regard to that is that there are students who are not only students but single parents and things like that. These are people who would be hit twice as hard. Presently, many students live below the poverty line. That's quite detrimental because it would prevent students from having access to proper living quarters, and that is a problem in terms of education. On top of that, we could use the argument that it costs the government a lot of money for students simply to stay in school, so if it's taking you an extra year because you've had problems with your landlords or because you're living in a horrible place or because you've gotten flooded, that costs the government twice.
Mr Alain Gauthier: I guess I get to continue. Another point that was brought up that we feel is important specifically for students is the entire issue of maintenance. We notice there are a lot of changes in the act in terms of trying to encourage landlords to upkeep their properties to a much higher standard than before.
In Sandy Hill alone 60% to 70% of the housing stock available for students is below even acceptable health standards. If an inspector were to walk in, the buildings could quite often simply be shut down. It's quite bad in many cases. We have to look at the fact that the government wishes to upgrade standards with a bit of a grain of salt because you've offloaded the responsibilities for enforcing those standards strictly to the municipalities.
I'm not saying that the whole issue of transfers from provincial to municipal and what not is not important, but in this case what is happening is that the municipalities already have quite a charge on their shoulders. To simply transfer provincial codes for these new standards to municipalities that don't have any more money than the provincial government has and don't have the resources in place to deal with that simply means it's quite often going to be set aside.
Already the city is supposed to enforce a couple of basic standards and they're having a hard time doing it simply because the funds aren't there. While we applaud the intent of the act to create these higher standards and maintenance, offloading the enforcement to the municipalities in the way it's being done in the act is a guaranteed recipe for disaster. I don't think you're going to see the maintenance standards go up; you're going to see them go down, and considerably down, because of it.
We recommend that the committee review the act and the maintenance standards either by putting them back into provincial domain, making the provincial government responsible for the enforcement again, or that the municipalities should be getting some type of funds specifically for that to make sure they are upheld. The new standards look nice on paper in terms of the fines and penalties, but there's nothing there.
Probably the weakest point is that by removing the orders prohibiting rent increases that were in the previous act, the single best tool the government had to enforce the maintenance standards is gone. If it can no longer be said to landlords, "Unless you fix the windows gaping open in the middle of winter, we're not going to allow you to increase the rent on your property," you've got a problem, because there's no incentive there except through some process where you hope the city catches it and goes into it. It's not going to work.
We also strongly recommend that the new housing tribunal be required to create information pamphlets specifically on the maintenance standards expected of landlords and have those available in ministry offices and in as wide a distribution as possible. That's also one way to help.
Ms Carrier: If I can add something on that as well, students don't necessarily know their rights. Most of them are first-time renters, and a lot of them don't even know that there is such a thing as a Landlord and Tenant Act. Unless you're in law, it's very difficult. We would strongly encourage the government -- either online or different things or allocate funds to student federations -- to disseminate this information to first-time renters. It is important that students know their rights, and not everybody is willing to go and read the entire law. That is another serious concern for us, because otherwise you're just offloading it on student federations to promote this information for you.
Mr Gauthier: The last major concern we had with this -- I'm sure many groups have testified in front of the committee with a host of concerns. In our case, when we looked at the actual law -- going through it was no easy task, mind you -- the landlord is entitled to increase the rent even above the guidelines when the cost of things like municipal taxes or the utilities go up significantly. Although in certain cases this increase must be made through a process, going to the tribunal etc, it is fairly automatic. If you look at the procedure, and it's similar in Quebec, with something like that, yes, your rent would go up and there's not much you can do about it. On the other hand, should these same taxes or utility bills go down, the tenants are in no way entitled to a rent reduction, which begets the interesting question of, why two standards?
1100
Normally, if your municipal tax bill goes up by $1,000 a year, maybe there is a rationale for increasing the rents on your property, but if they go down $1,000, I think there's also the responsibility, or at least the entitlement, to have some way of passing on those savings. Right now, while the landlord gets an automatic increase, the tenant is completely refused; there are no processes in this act for the tenant to get a rent reduction based on lower costs. To us, that's a dual standard that will particularly affect students, because a lot of the student housing in our areas come with heat, hydro and what not included, simply because they're old homes that have been converted into apartments or semi-apartments or what not. This is the prime population that's going to be impacted by this change. We think the government should seriously consider amending the act or changing it to allow the process to happen both ways.
Ms Carrier: On top of that, if things are being done within the tribunal area, that also incurs fees and different things. I know students who don't even buy their books because they can't afford to, so dishing out $50 to try and sue your landlord is not even a reality for us.
In conclusion, there are a few things we wanted to say. The general perspective we had on it was that students weren't thought about at all, not to anyone's detriment, but trying to write something for everybody else, and everybody wants to be particular about some things.
We just wanted the committee to take a strong look at the fact that students are doubly hit. They're hit by tuition increases, they're hit by rent increases, they're hit by taxes on books. There should be somewhere where we could stay somewhat stable and that we can be assured about. Also, the concept of moving to a better area of the city isn't at all relevant to students. If you're saving $50 because you're not living in Sandy Hill, then you're paying $50 for a bus pass or whatever.
We also feel that the kinds of concerns we have could be dealt with, with a very minimal amount of effort and possibly a change here and there on certain things. That's not to downplay the amount of work you're putting into this. However, we don't feel they are drastic changes we are looking for, but simply a little more attention to the points we have raised here today.
That's about it. Thank you very much for your time.
The Chair: Good presentation. I can tell you, I'm a father of a university student and I've heard many of your concerns before. But I'm also aware that I'm supposed to be independent as Chair, so I won't pursue that. I'll allow other members of the committee to do that.
Mr Cleary: I'd like to thank you for the presentation. As the father of four who went to one type of university or another, I've heard a lot of the concerns too. I think you mentioned that you feel students are sometimes taken advantage of by the landlords, and then you commented a little bit on the dispute resolution system. I would like your comments a little bit more on the tribunal, whether you think that would be in your favour.
Ms Carrier: I think the tribunal is good for the entire province because it will definitely ease up the amount of time being used in courts, which can focus on something else. We have certain concerns about who sits on the tribunal, how impartial it is, concerns I'm sure you've heard from other people. In general, our major concern with that was the fees and costs related to it. That is one problem we have with the concept of the tribunal.
The second is in regard to information. If you don't know what your rights are, it's very difficult to fight for those rights and file a complaint and possibly get legal advice. That's where we're coming from as students, the fact that most students don't -- I'll speak for myself. Until I read this document I didn't even know half the rights I had, and I've been renting for five years. I realize now that I've rented from some horrible people who weren't necessarily fulfilling their duties as landlords. That's the other concern we have, the amount of information students will get. That's our recommendation, to either provide funds to student federations or allocate specific funds to first-time renters so they get information. That is vital to us. Does that pretty much answer your question?
Mr Cleary: Yes, thank you.
Mr Marchese: Thank you both for coming.
Ms Carrier: Nice to see you again.
Mr Marchese: Me too. Students are not alone in not knowing their rights, as you would imagine. The majority of tenants, I suspect, have no clue about what their rights are, and no one helps them to understand them. When this government defunds a number of tenant groups that have been there to support them, they're on their own, essentially. Other than the few groups that are working voluntarily or are somehow getting some money from some sources to help tenants out, many of these people are in the dark, so it's pretty hard.
Ms Carrier: Do you need some water?
Mr Marchese: I'll get it in a second. You don't need to.
Ms Carrier: That's okay. I'm a student and a waitress. Sorry, there's no ice left, though.
Mr Marchese: This is what students have to do to survive, right?
Ms Carrier: We have to be extra nice to you because we'll be back at this table or at a different table later on and you might be there.
Mr Marchese: You're right.
On the utility increases, you correctly say that landlords can pass it on but you have no right to have access to it if there is a decrease. Others have mentioned that. It's a reasonable request. The parliamentary assistant is not here, but we're assuming that the other members who apply the principles of common sense generally will apply it in this regard as well.
Your suggestion on orders prohibiting rent increases has been mentioned by almost everybody. We're assuming they will apply common sense to that issue as well. I'm not convinced they will, but I hope they will listen to you in that regard.
The decontrolling of rents is going to be a serious problem for everybody. The rents have been up and they have always been higher than people have been able to afford, by and large. If these rents go higher, which we suspect they will -- your salaries as students, or anybody else's, are not particularly high -- I'm not sure how you're going to cope. I know you're not just speaking for yourselves; you're speaking for so many who are facing that particular problem.
The other student mentioned that there should be some controls when you decontrol the rents. When vacancy decontrol happens, we're not sure how high rents will go. The student before you said there should be some cap on that. I find that a reasonable suggestion. Do you agree?
Ms Carrier: We aren't particularly happy about the rent control cap being taken off. However, we're not extremely confident that it's not actually going to go through that way. The proposal we have made and what we stick to is that if a landlord was mandated to tell the new tenant what the previous tenant was paying, as they must in Quebec -- in Quebec, although similar things are happening and rent is somewhat deregulated there, that maintains standards quite low, because tenants now have the right to negotiate. From our perspective, that is the point that we would rather -- actually, we would much rather have a cap. If we could, we would much rather have a cap, because that ensures that regardless of who the landlord is, this is the maximum amount you could charge. We definitely agree with that.
However, we don't feel that's the way the government is going. Knowing that, we suggest that they mandate landlords to tell new tenants what the previous tenants were paying. In doing so, they would allow new tenants to know why there's an increase and negotiate on that. If there's a $100 increase, "What have you done that I should be paying $1,200 more a year than the previous tenant?" That would give the tenant a bargaining tool, and the landlord would then have to prove that he's actually done his job and put some work into the place or added a security system or replaced a window that was broken.
Mr Wettlaufer: Thank you both for appearing before the committee. I'm not going to try to patronize you. What I'm going to say is very sincere. The two of you are obviously very intelligent and you are indicative, I believe, of the quality of students that we have in this province. I think it speaks very well for the future of our people.
1110
Ms Carrier: Thank you very much.
Mr Wettlaufer: I mean that sincerely.
Mr Marchese: However --
Mr Wettlaufer: No "howevers." You make a comment in your conclusion that it seems that the only concerned group consulted while the act was being written were landlords. This seems to be a misconception that many groups appearing before us have. I can tell you, I've been both a landlord and a tenant, and I didn't like being either. It's difficult.
The previous act was written from one perspective only, and that was the tenant's perspective. Many of the groups appearing before us have been tenants' groups and they are constantly saying that they have rights. I want to say that tenants are not the only ones who have rights. Landlords have rights too. Some of the tenants' groups have been asked what rights the landlords have. Of course, we haven't had a response yet. I might ask you, what rights do landlords have?
Ms Carrier: I would agree. I think maybe what you've sensed in the conclusion is a general disillusionment from students in regard to the government. Please don't take that personally.
There are some good things that we've found within that act in regard to landlords, in regard to tenants. I believe that what the government is trying to do is create a symbiotic relationship where tenants give and landlords give and they can live together.
However, I do believe that to a certain extent it is very much in favour of the landlord. The reason for that is because I think the act presents a lot of good, fundamental ideas. However, there are a lot of things that are lacking. For example, downloading on to municipalities to check maintenance and become the policing of that without additional budgets doesn't give us very much assurance that that will be done and that there's actually going to be landlord-tenant policing out there.
As far as landlords go, I would say that landlords have the right to provide good accommodations. They also have the right to be paid on time. They have the right to not necessarily be harassed, just as tenants have the right not to be harassed.
My landlord right now is wonderful. He's a wonderful old man who owns a pub and we sit down together and sing Irish songs. He does great stuff. He's a wonderful man. When we need things changed, he does it quickly and we respond by paying the rent. However, the place that I am presently living in is a fraternity house that is dilapidated. There are no locks on the doors, there are windows that are broken, there are bugs, you name it. In that case, on one hand, as tenants we're not exactly demanding very much from him, but on the other hand, I don't think anybody should have to live in those kinds of conditions.
I just found an apartment, so I'm right in the middle of this landlord-tenant thing. I visited houses where at the end of the day you end up at a place and you're like, "It isn't that bad. There's only four cockroaches in this place and the carpets aren't that stained," and you start lowering your standards of living tremendously. I would say it's a relationship that goes both ways.
Mr Gauthier: I'd agree.
Mr Wettlaufer: Would you say that the landlord --
The Chair: Mr Wettlaufer, we've run out of time, unfortunately. I know Mrs Munro wants to ask a question, but if we want to hear the other presenters, we have to cut you off. Thank you very much for one of the better presentations certainly that the Chair has heard.
QUEEN'S UNIVERSITY APARTMENT AND HOUSING SERVICES
The Chair: The next presentation is the Queen's University Apartment and Housing Services, David Wright, director, and Dianne Kelly. Good morning.
Mr David Wright: My name is David Wright and I'd like to thank you for the opportunity to address the committee. I'd like to introduce Ms Dianne Kelly, who is the executive assistant to the vice-principal of operations and finance at Queen's University. Ms Kelly will start our presentation this morning.
Ms Dianne Kelly: Our focus is quite narrow. You'll probably be delighted to hear that. We are following along with student-related issues, interestingly enough, but the focus here is purely the termination agreement provision and the impact that is going to have on Queen's University housing.
Queen's University is a residential university: 89% of its students come from outside the greater municipality of Kingston; 85% of first-year students are accommodated in dormitory accommodation. In Kingston, there is a viable private rental market to accommodate the more than 9,000 post-first-year students. Queen's supplies additional quality accommodation in close proximity to the Queen's campus and, in particular, accommodation for married students. This is in addition to the dormitory accommodation, which we recognize is exempt currently. Queen's operates 550 self-contained apartments and houses accommodating approximately 1,000 post-first-year students. These units accommodate couples, student families and singles.
Queen's has developed its student rental units with a particular focus on the age and needs of its tenant students. Projects are developed, located and designed with appropriate features targeting the student market. Queen's has adopted administrative procedures to assist student tenants in their transition to independent living and processes that ensure that the rental units are available for the normal student rental cycle. The Queen's student rental operation is administered by Queen's apartment and housing services, which reports to the dean of student affairs.
The university has established an apartment and housing board to advise the dean of student affairs on the operation of the apartment and housing service. That board membership includes student tenants, students who are not tenants and members of both the Queen's and Kingston communities. There is a consultative process which takes place, and the consultative process involves all major decisions regarding the operation of that apartment and housing service.
Queen's apartment and housing service rents its units for 12-month terms and it gears its rental terms to the demands of the students. The majority of the rental terms are from May 1 to April 31. This term is the most convenient for returning students, and most of those students will make arrangements in February or March of the year before. They'll then have their lease run from May through April 31. The September 1 through August 31 term accommodates first-time students to Kingston and the Queen's campus.
In order for the student rental program to remain financially viable, the university must have consecutive 12-month leases. Accordingly, all students sign a termination agreement when they enter into the lease, agreeing that the lease will be terminated at the end of the 12-month term. If the students wish to stay on, they sign another 12-month lease, and so on. Students may stay a couple of years in Queen's rental units and their graduation usually coincides with the end of the 12-month term, at which time those vacated apartments are available for other students. Because they've signed a termination agreement, they must vacate at the end of that 12-month term.
If students were allowed to hold over on a month-to-month basis at the end of their first 12-month term, there would be three negative consequences for the housing service: (1) The university would have a reduced pool of units to allocate to incoming students; (2) the university would not be able to recover its student units from non-student tenants; and (3) the university would find itself with vacant units when the month-to-month tenants did vacate which it would be unable to lease. Since the university does not rent its units to non-student tenants, it would have to wait until May or September to lease those vacated units. The result would be an eight-month rental period, and such a short period of time is not financially viable for the university.
It is estimated that the result of this month-to-month tenancy would be to increase the vacancy rate from the current 1% to 2% to 25% during the year. The loss of revenue to the service would be in excess of $500,000 a year. It would be impossible for the university to continue its student housing project given that kind of loss.
1120
The university has looked at the issue of the 12-month term, recognizing that many students find it difficult to carry their rental units over the summer term. Although the university assists those students in subletting and subletting is permitted, some students find it difficult to sublet.
Those issues have been recognized, and the working group studied and analysed the various possible options available. These are outlined in the written submissions. The options were to increase the rent for eight-month tenants and do various other things to try and recover the loss. The working group in the end decided that the 12-month term remained the most viable.
Section 37, as you are well aware, prohibits the use of the termination agreement if it's signed at the time the lease is signed or is required as a condition of entering into the lease. Without being able to use the termination agreement, the university will no longer be able to ensure that its units are rented only to students, which is the reason the university has this housing pool. It is not interested in being in the rental business; it is not interested in being a landlord other than a landlord of its own students. It will be unable to allocate its student units at appropriate times. It will be unable to ensure that when students cease to be students on graduation, they will vacate. And from a financial point of view, it will be unable to ensure that it has a 12-month rental term.
We have two recommendations to suggest to this committee which are quite narrow in focus and we think could be quite easily achieved, and we hope this will be the result.
We would suggest that section 5, which is the section that incorporates exemptions, be amended to provide that section 37 of the act would not apply to university-owned student rental accommodation.
Alternatively, the university could be exempt under section 3 for its self-contained units, as are the dormitory-style accommodations currently. But we realize that this exemption is broader than we need and we would be satisfied with an exemption with regard to section 37 so that Queen's, which is a rather unique university because of the number of out-of-town students -- those of you who have ever been to the Queen's campus know that the students live down around the campus -- can continue with its housing service.
If there are any questions, I would direct you to David Wright, who is the director of the apartment and housing service. Thank you.
The Chair: Thank you, Mr Kelly and Ms Wright. I'm sure there are questions.
Mr Gilchrist: Unfortunately, the rules of procedure only allow us to speak in English and French, so I really can't say [Remarks in Gaelic]. Both the Chair and I are not only graduates but former clients of the housing at Queen's.
Thank you for your submission. I know you've had a chance to discuss it with staff. Let me just say we're quite keen to find a solution to this.
Personally, I think the section 37 amendment is probably more appropriate, because to do it in section 5 also exempts things such as the rent increases, and I don't think it's been part of your submission that Queen's needs any extra rights. We certainly don't want to create a second class of tenant, and you have not made that any part of your submission. I appreciate that.
I think if you would agree, we'll take that back to review, most appropriately under the regulations. It would seem appropriate to exempt university-owned student housing, particularly from subsection 37(3). I don't know if you have a copy of the bill in front of you. That's the section that says:
"(3) An agreement between a landlord and tenant to terminate a tenancy is void if it is entered into,
"(a) at the time the tenancy agreement is entered into; or
"(b) as a condition of entering into the tenancy agreement."
That is the clause specifically related. I think you've made your case well, and we'll take that back.
I appreciate very much your taking the time to come up and make the presentation.
Mr Cleary: I have no questions, but I'd like to thank you for your comments. If the parliamentary assistant said he's going to solve your problems, we have no problem. Anyway, good luck.
The Chair: Thank you for coming.
The next delegation was to have been Levinson-Viner Ltd. We received a telephone call from the president of that company indicating that they would have difficulty attending this morning. Very kindly, one of the groups that was to appear later on this afternoon has agreed to take their place.
ACTION CENTRE FOR SOCIAL JUSTICE
The Chair: The Action Centre for Social Justice, Aline Akeson, who is the executive director, Lise Gervais and Valarie Gray. Good morning. Thank you for coming from this afternoon to this morning.
Ms Lise Gervais: I would like to take this opportunity to thank you all for listening to me. The experience I'm about to relate to you is my own but it is typical of many people in my situation.
The Chair: Could I ask that each of the speakers identify themselves?
Ms Gervais: My name is Lise Gervais and I'm a tenant. In April 1993 I responded to an advertisement in the Ottawa Citizen for a two-bedroom apartment located in Ottawa. The rent at the time was to be $561, including utilities. At that time I was living in Navan, paying $600 plus utilities, which made it over $700 a month. At that time my rent allowance was $600, including utilities, so I thought the apartment with this major commercial landlord for $561 would be ideal.
I called them. The woman was quite pleasant and told me there were several units still available in that price range and she kept asking me how much money I made. At that time I was trying to start my business anew and I told her I was self-employed but I did not tell her how much money I made. She continued to be quite pleasant and wanted to know how many children I had and why I responded to this particular ad. Then she asked me finally how much money I made and I told her that I was on assistance. Right away her tone changed. She said: "Well, I'm sorry. If you're going to rent here you have to have a co-signer who makes more than $30,000 a year."
I was appalled by this because I knew I had a certain amount for rent and I knew I could meet it, and I told her this. I told her I had excellent references but she didn't care. They refused me housing because I was on assistance. When I asked her for the reason, she said it was because my income could not be verified. I had statements. I could prove I was paying rent. I had very good references. My landlord could tell you this. But she said no. I hung up the phone, very frustrated.
With my previous lease about to run out, I was forced to take an apartment in Vanier. It was for $600 plus my heat and hydro. If I had been allowed to take the apartment for $561, FBA would have saved on me alone $40 a month. Multiply that by several hundred other people in this city who are refused decent housing. For me alone it was $40 a month. I had to take this apartment for $600. I had to pay my heat and hydro. The difference between what I ended up paying and what I would have paid with this developer was a total of $3,000, which had to come out of my food allowance.
I called the Canadian Human Rights Commission and was told that this was not the level I needed. I told this to a friend and she suggested I call CERA.
The rent I ended up paying was more than 50% of my monthly allowance at that time, and I had a problem. I did not have a problem meeting the rent, but I had to depend on food banks and family to buy food and pay for my utilities.
I would like to now tell you some of the conditions I had to endure for 13 months in this apartment that I was forced to take. The locks were inadequate and didn't work. I had to replace them all myself. The trim around the fire exit was cracked and you could see outside through the crack. In the winter snow came in and frost built up. The entire two-bedroom apartment was heated with a space heater designed for one room. The seals around the windows and doors were damaged, crumbling and peeling. When I moved in there were dead mice in the cupboard and live ones came to visit once in a while. The wiring was hazardous and often caused shorts. When I called the fire department to come and inspect, they told me it wasn't that bad. I lived in constant fear of burning alive. The floors in my son's room were separated from the wall, which caused cold air to creep in constantly during the winter. The floors were tilted at a convenient angle which made all my furniture roll to the centre of the room.
1130
Finally, after 13 months I was accepted into subsidized housing. I pay 27% of my income. I have no problems meeting my rent. I am a good tenant. I respect other people's property. I was forced to live in conditions that I or my son never should have had to endure. Allowing landlords the right to accept tenants based on income is discriminatory. It is wrong, plain and simple, to refuse accommodations to someone based on their income. Everyone is deserving of common decency and respect. Just because someone is in receipt of government assistance, that does not make them irresponsible. We all want to live in decent accommodations. For many people on assistance, paying our rent takes first priority above everything else, even food.
I would like to throw this out to you: If you had a choice of taking 30% of a $10,000 income or 30% of a $25,000 income, what would you take?
The Chair: Does anyone else want to make any comments? I see three other people.
Mai: My experience --
The Chair: I'm sorry, could I have your name, please. The committee wishes your name so we know who we're speaking to.
Mai: My name is Mai. At that time I was on welfare and I looked for an apartment. I saw an apartment on Bronson, beside Somerset Street. I was so happy. I thought, "I can find one." I went to fill out the form. Then I phoned the landlord and I asked if the apartment was still available. She said yes. She said I had to pay first month and last month. Then I told her okay, but I had to say that I was on welfare and there is no guarantee from welfare for last month and first month. She said she couldn't rent to somebody who was on welfare assistance.
I still wanted to fill out the form, and I brought it to Housing Hhelp. Bob MacDonald helped me to fill it out. So I filled out the form because I knew I was a good tenant and never owed the landlord one penny. I always pay. At that time I had no apartment at all; I was homeless. Bob MacDonald helped me to fill it out, and he wrote a little note saying I was good tenant, that it's good to rent to me. I brought it there and that lady took my form and put it in the garbage. She was yelling: "Do you understand what I told you on the phone? I told you I don't rent to those on welfare assistance." I told her I understood that, but I thought if we met face to face she could understand me better and because I need an apartment so badly. I'm a good tenant and never owed a landlord one penny at all. I came back that time and my two kids were out of school because they weren't allowed to go to school because I had no address.
I asked my brother, who stays with roommates. We had eight people in just one room. I came out of that building. It was my idea to go back to Housing Help to tell them I couldn't find an apartment because they won't rent to me. I felt at that time, it was my idea, that I had no hope; I didn't know where to go. My kids had no school, nothing, no friends. I was hurting so badly and I didn't know where to go. I felt the landlord was discriminating against poor people and discriminating against those on welfare.
People on welfare are not mean and that they don't like to work. I like to work very much but I can't find a job. I moved from Sudbury to Ottawa because I would like to have a job. I came to look for a job. I left my apartment there. Two days ago I had a call from CERA and they said the government can't do anything about that. But I feel the government is supposed to do something about this. I don't agree with the landlord's behaviour. I don't agree with that.
In Canada here I can see a lot of people who are on welfare and poor. I tried to look for a job; I can't find a job. Thank you so much.
Ms Valarie Gray: My name is Valarie Gray. I'd like to take this opportunity to thank you for listening to me today. I'm currently receiving social assistance with my four children, who are suffering from the discrimination I have suffered from. My husband is working part-time. We get $1,371 a month and he is making $600 a month. That puts our income at $1,971. I'm currently renting a house and paying $900 a month and I also have to pay hydro and oil. I receive a shelter allowance of $673 a month. I have to take $227 away from bills and food to be able to pay the rent so I can have a good roof over the children's heads.
Due to the discrimination I have received in the past, I am unable to rent a cheaper place, because my income is not high enough. I have been refused a four-bedroom semi-detached house for $875 per month because I was receiving social assistance. I have also checked with Minto on renting a four-bedroom town house and they told me my income had to be $28,000 or higher. My personal opinion is that instead of using income -- as you can see my income is not high; I am paying $900 a month. I just signed a lease last night to be there for another year with a $25-a-month increase. I think references should be a top priority.
Just because you have a low income does not mean that you cannot pay a higher amount of rent. I don't feel that the discrimination about income is fair. Also, tenants like myself, if I don't feel I can afford to pay the rent on the place I am applying for, then why would I bother applying to begin with? Thank you.
Ms Aline Akeson: I'm Aline Akeson and I'm with the Action Centre for Social Justice. I was very pleased when we were able to meet with these women because you hardly ever hear that story. People are so busy looking for housing, moving from place to place that I really want to say thank you for coming out and speaking on behalf of a lot of women who are in your situation.
1140
I'd just like to wrap it up. The action centre deals more with poverty issues than housing, because we have such fine housing people in the city of Ottawa. I'd just like to read you a little thing around what we believe about human rights and what you need to do at the provincial level.
Section 200 allows landlords to refuse tenants based on income information. A disaster looms for low-income and working poor households. If landlords are allowed to disqualify applicants for rental housing on the basis of arbitrary income levels with no further social housing being produced and the private rental market taking steps to cream their tenants, it can be said that the housing situation will become truly desperate for thousands of families in the Ottawa-Carleton area. Social assistance recipients, who make up approximately one third of the rental market, will automatically be disqualified under this legislation.
It can easily be imagined that the next step will be to have applicants for rental units prove they have secure incomes before being able to rent a unit. In the present economy, where job security is declining for everyone except a select group of high-tech professionals, security of employment is rapidly disappearing. Part-time and contract employment is rapidly growing and even persons with adequate income may soon be declined rental tenure.
The choice of affordability for even the minimum ability to achieve rental tenure, even if you have the income to afford rents, is threatened by the principles being supported in Bill 96 amendments to the Human Rights Code. One wonders just who had the right to be human under this philosophy of this new legislation.
Under the legislation, a person who has a good credit history and a record of paying rent can be denied a unit if their current income is deemed to be too low, or perhaps their current employment is seen as not being secure. It goes beyond the principle of the right of a landlord to rent to financially responsible people and allows them to decide that a significant proportion of the population below a certain income level is inherently not worthy of housing.
The chief commissioner of the Human Rights Commission of Ontario, Keith Norton, a Harris appointee, has condemned these amendments in the strongest terms, and publicly. The implications of this legislation for a society with any pretence to equality and caring are immense. One can only hope that the blind ideologues within the Harris government will come to their senses before Ontario becomes a truly frightening place for all people to live.
The Chair: I regret to tell you that you have two minutes.
Ms Akeson: I'm finished. Just give me a second.
We must work together to help each other. If we don't work together to develop new ways to live, people will become even more divided and we truly will be a society at war with ourselves. We really want you to take a look at the human rights aspects of what's going on with all these changes.
The Chair: We have an opportunity for one question from the committee.
Mrs Munro: Thank you very much. I want to be on record as making note of the fact that you have brought to us those people who have had the personal experience that we certainly want to hear and want to recognize.
The issue you've raised is obviously a problem under the current legislation. The evidence you've provided clearly demonstrates the fact that there are changes that must be made. I want to just draw your attention to the actual piece in the legislation. First of all there is no suggestion in that legislation that 30% is there, so it's not in the legislation.
The second thing is that clearly, by the wording of the legislation, there is specific reference to the fact that it is not grounds for discrimination. Because of your circumstances, that is, the collective experience, I want to ask you about whether you see tenant history or credit rating as being a legitimate thing for potential landlords to inquire about.
Ms Gervais: I don't feel the fact of whether I have outstanding debts has anything to do with whether I can pay my rent. My rent is the very first thing I pay, above and beyond everything else, and then whatever I have left is divided among whatever is left.
The Chair: I know we could go on, but the time has expired. Thank you very much for coming.
COMMUNITY LEGAL SERVICES OF OTTAWA-CARLETON CLINIQUE JURIDIQUE COMMUNAUTAIRE D'OTTAWA-CARLETON
The Chair: The final presentation this morning is Community Legal Services of Ottawa-Carleton: Daniel Gagnon, community legal worker, and Michel Landry. Bonjour.
M. Michel Landry : Bonjour. Je suis Michel Landry. J'ai à mes côtés Daniel Gagnon. Je suis avocat et co-directeur à la clinique juridique communautaire de l'Université d'Ottawa. Daniel, comme vous l'avez mentionné, est travailleur en matière juridique à la clinique communautaire d'Ottawa-Carleton. Nous avons décidé de faire une présentation ensemble parce que les deux cliniques, avec les deux autres cliniques de la région d'Ottawa-Carleton, représentent plusieurs locataires.
Most of our presentation will be done in French. Therefore, for those who need interpretation, I would encourage you to take the proper devices.
Ce matin je tenterai de faire un point particulier. C'est la question d'utilisation des formulaires en langage lisible, clair, dans les deux langues officielles des tribunaux de l'Ontario, et certainement l'utilisation efficace du français au sein du ministère du Logement.
Before I get into my main issue, which is the need for English and French forms in clear language and the need for adequate services in both official languages of Ontario's courts, I want to express the Ottawa clinic's concerns that the Legislature did not use the opportunity of its overhaul of the Landlord and Tenant Act to provide some form of protection for women tenants who are being abused in violent co-tenant situations. As Ms Lori Pope of our clinic had noted last year in her submissions to this committee, the Landlord and Tenant Act does not provide any way for tenants to take direct action against someone who is endangering their safety or who has committed an illegal act against them.
As noted previously, common-law couples are not eligible for Family Law Act remedy of an order of exclusive possession of the matrimonial home. Therefore, unless a landlord cooperates -- and many feel this is a private matter, so they don't want to concern themselves with this -- nothing can be done. We are very concerned that the Legislature has failed to change the law to allow victims of violence to protect themselves within the context of the Landlord and Tenant Act or the new Tenant Protection Act.
Mon point principal est sur la question des formulaires lisibles dans les deux langues officielles. Les formulaires qui sont prescrits par la présente loi sont écrits dans un langage archaïque et qui porte souvent à confusion même en anglais. Quand la traduction française d'un document est illisible en anglais, ceci porte doublement confusion à la version française. À notre avis, le langage ambigu de ces formulaires a apporté des désavantages importants, surtout pour les locataires.
Un exemple de cette ambiguïté est noté à la formule 4, l'avis de résiliation anticipée, donnée par le locateur en cas de non-paiement du loyer. Vous êtes probablement très familiers avec la formule 4 ; c'est la formule la plus utilisée dans le domaine.
1150
Le langage utilisé dans la formule 4, autant en français qu'en anglais, porte vraiment confusion à nos clients locataires, qui pensent qu'ils doivent quitter leur logement dès la date inscrite dans le document. On dit, _Vous devez payer à l'intérieur de 14 jours, sinon on vous amène en audience._ La part des clients pensent qu'ils doivent à l'intérieur de 14 jours quitter les lieux. Donc, on a eu un problème sérieux dans le passé où les locataires ont quitté tout simplement les lieux. Pourquoi ? Parce que le formulaire, à notre avis, n'est pas clair, car le formulaire induit en erreur. Si on regarde la formule, la première partie dit ce qui suit : _Avis vous est donné que vous devez remettre la libre possession et occupation des lieux_, et ensuite on met une espace pour l'adresse, _qui m'appartiennent et que vous détenez à titre de locataire_, et encore une fois on met une espace qui indique que le locataire doit quitter à telle date, _en raison de non-paiement du loyer_.
C'est seulement à la prochaine ligne qu'on indique que le locataire a 14 jours de la réception de l'avis pour payer son loyer et éviter la résiliation. Le formulaire en anglais pose le même problème.
Beaucoup de nos clients à travers des cliniques qui ne lisent pas ou qui lisent très peu le français ou l'anglais croient que ceci veut dire qu'ils doivent quitter les lieux dans les 14 jours de la réception de ce document, et beaucoup de ces clients, ces locataires, verront à quitter les lieux. Ce qui arrive c'est que finalement ils vont quitter les lieux, il va y avoir un jugement par défaut noté contre eux, et suite au jugement par défaut, on verra aller poursuivre bien souvent en cour des petites créances.
Même si au bas de la page, au bas de chaque document il y a un avis, bien souvent on ne comprend pas l'avis à cause de l'ambiguïté du langage. On devrait dire quelque chose de très simple. Dans tous les documents que le ministère, en vertu de sa nouvelle loi, va émettre, il faut vraiment que le langage soit lisible, ce qu'on appelle en anglais _plain langage_. Il est très important que toute la documentation qui est présentée, autant pour les propriétaires que pour les locataires, se fasse de façon lisible, de façon claire, nette et précise.
Donc, en raison du langage du formulaire 4, et de l'ensemble des formulaires, je dirais, notre expérience à la clinique et dans l'ensemble des cliniques communautaires à travers la province est que les locataires quittent de façon trop rapide leurs lieux sans vraiment percevoir leurs propres droits.
Donc, en conclusion, il est primordial que le langage dans les formulaires soit lisible -- encore une fois, _plain language_ -- clair, précis, concis, et ce dans les deux langues officielles des tribunaux de l'Ontario. Pour les locataires qui ne comprennent ni l'anglais ni le français, on souhaite même qu'il y ait possibilité d'avoir une traduction dans les langues utilisées dans les centres urbains, par exemple, où il y a une grande population de nouveaux arrivants, d'avoir même une traduction au sein des bureaux régionaux du ministère.
Un autre dernier point sur les formulaires, et ceci n'a pas été mentionné aujourd'hui et je ne sais pas si on voulait le mentionner dans le passé, c'est la question d'avoir un bail standard déjà préétabli, encore une fois dans un langage simple et précis. À notre avis, ce serait d'une grande utilité et pour les propriétaires et pour les locataires. On suivrait la loi telle que la loi est prescrite. Ça devient aussi un outil d'éducation où les locataires vont savoir exactement, sur le bail, leurs droits. La même chose en est pour les propriétaires. Donc, ça faciliterait de beaucoup la tâche. Il y a plusieurs juridictions au Canada qui ont adopté un bail standard, je pense dans notre province voisine, et ceci nous serait très utile.
Mon dernier point est au niveau des services en français. À notre avis, il est primordial que les services en français se poursuivent au sein du ministère du Logement. Je pense qu'on a un ministère qui a quand même démontré une ouverture au niveau des services en français dans la province. Une chose qui est primordiale avec tous les changements qui s'en viennent au sein de ce ministère : il est important d'avoir des personnes cadres francophones qui connaissent bien les besoins des francophones dans l'est ontarien, dans le nord ontarien et partout. Donc, c'est important. Ça ne s'applique pas au sein de la loi, mais le comité devrait fortement recommander d'avoir des personnes cadres qui connaissent bien le milieu francophone. Là-dessus, j'ai déjà trop parlé. Je vais laisser la parole à mon confrère Daniel Gagnon.
M. Daniel Gagnon : Je m'appelle Daniel Gagnon. Je suis ici au nom de la Clinique juridique communautaire du centre-ville d'Ottawa. Comme les trois autres cliniques juridiques qui vous ont adressé la parole aujourd'hui, la Clinique juridique du centre-ville d'Ottawa ne représente que des gens à faible revenu, dont la grande majorité sont des locataires. En plus, le gros du travail fait à la clinique juridique touche sur la location mobilière, et sur un ton encore plus personnel, je suis moi-même un locataire. Alors, comme vous le voyez, ce projet de loi 96 est quelque chose qui affectera non seulement ma vie personnelle mais aussi celle de mes clients. Cette loi me cause beaucoup, beaucoup de soucis.
Notre clinique juridique appuie fortement le document qui a été préparé par LCHIC, the Legal Clinics' Housing Issues Committee. J'aimerais relever pour vous deux points mentionnés dans ce rapport : premièrement, la section qui adresse la façon dont un propriétaire peut disposer des biens personnels d'un locataire ; et deuxièmement, la façon dont fonctionnera le tribunal qui a pour but de gérer ce projet de loi.
Avec ces deux exemples, j'aimerais démontrer que si des règlements très précis ne sont pas rajoutés à cette loi, ce projet de loi sera non seulement inefficace, mais servira de carte blanche aux propriétaires sans scrupules. Ceci me fait très peur.
Depuis 1970 il est illégal pour un propriétaire de prendre possession des biens d'un locataire pour non-paiement du loyer, mais sous le projet de loi 96, un propriétaire aura maintenant le droit d'avoir accès et contrôle des biens d'un locataire lorsque ce dernier (1) quitte son appartement à la suite d'un ordre de la cour, (2) abandonne son appartement, ou (3) ce locataire finit par mourir. Regardons de plus près chacun de ces scénarios.
Dans le premier cas, lorsqu'un locataire quitte son appartement à la suite d'un avis de résiliation ou d'un ordre de la cour, un propriétaire peut prendre immédiatement possession de tous les biens du locataire sans être dans l'obligation de faire un compte rendu. Un propriétaire peut donc prendre les biens pour lui-même, les vendre ou même les jeter à la poubelle.
Ceci me fait très peur, car dans mon métier je vois toutes les semaines des locataires venir frapper à notre porte qui arrivent tout juste d'être expulsés par le shérif. Souvent ces locataires sont pris au dépourvu car ils n'avaient aucune idée que leur propriétaire avait entamé un procès juridique contre eux. À maintes reprises nous voyons des propriétaires ne pas servir des documents de la cour à leur locataire pour pouvoir ainsi obtenir un ordre non contesté. Pour d'autres locataires, malgré le fait qu'ils ont reçu un avis d'expulsion, ils ne comprennent pas l'importance de ce document car ils sont illettrés ou mal éduqués en cette matière.
Qu'importe la raison, dans la grande majorité des cas un propriétaire aujourd'hui sait très bien qu'il est illégal de prendre possession des biens d'un locataire. Présentement, un propriétaire se contente uniquement de reprendre possession de l'appartement. Or, j'ai bien peur que ce projet de loi 96 ne fera que motiver un propriétaire sans scrupules d'expulser un locataire et de s'accaparer de ses biens. Et des propriétaires sans scrupules, mes amis, il y en a. Il en existe beaucoup. Vous n'avez que faire une randonnée pédestre le long de la basse-ville de Vanier et du centre-ville d'Ottawa pour constater qu'il y a des propriétaires qui ne respectent pas les droits et leurs obligations.
Dans le deuxième scénario, lorsqu'un locataire abandonne son appartement, un propriétaire doit attendre 30 jours avant de prendre possession de ses biens personnels. Il m'est difficile de comprendre pourquoi un locataire qui est expulsé par un ordre de la cour aurait moins de droit vis-à-vis ses biens comparé à celui d'un locataire qui abandonne son appartement. Cette section de la loi a besoin de clarté dans son raisonnement ainsi que des sauvegardes contre les abus d'un propriétaire.
1200
Je me rappellerai toujours la première année quand j'ai travaillé à la clinique juridique communautaire. Nous approchions les fêtes de Noël et une locataire avait payé par chèque postdaté son loyer pour les mois de novembre et décembre. Elle avait aussi avisé son propriétaire qu'elle partait en vacances pour deux mois pour aller visiter sa famille, qu'elle n'avait pas vue depuis 10 ans. Une tante lui avez payé ses dépenses de voyage comme cadeau de Noël. À son retour, le fils du propriétaire avait reloué son appartement à un autre locataire. Le propriétaire, qui lui aussi était parti en vacances, avait oublié d'aviser son fils que la locataire avait payé son loyer. Le fils avait donc tenu pour acquis que la locataire n'avait pas payé son loyer et qu'elle avait abandonné son appartement, malgré le fait que ses biens étaient à l'intérieur de l'appartement.
Sous le projet de loi 96, non seulement cette locataire aurait-elle été expulsée illégalement de son appartement, mais tous ses biens auraient été vendus ou même jetés à la poubelle. Ce projet de loi ne protège pas les droits des locataires.
Dans le troisième scénario, si un locataire meurt, c'est la succession qui devient automatiquement responsable des biens personnels du locataire. Mais sous le projet de loi 96, si la succession n'a pas pris possession des biens dans l'espace de 30 jours, le propriétaire peut prendre les biens personnels du locataire. Comme un préalable, un propriétaire peut garder ou vendre les biens du locataire sans être dans l'obligation de faire aucun compte rendu de quoi que ce soit. Si dans 60 jours la succession finit par réclamer les biens, le propriétaire doit retourner les biens qu'il a gardés et retourner toute somme d'argent faite avec la vente de ces biens.
Le problème ici c'est que, encore une fois, il n'existe aucun règlement en ce qui concerne la vente des biens d'un locataire. Il n'existe aucune obligation pour le propriétaire de faire de la publicité pour la vente des biens. Il n'existe aucune obligation pour le propriétaire de vendre les biens au plus offrant. Il n'existe aucune obligation pour le propriétaire d'obtenir la valeur réelle des biens personnels. Il est donc possible sous cette loi pour un propriétaire de vendre à son meilleur ami la grosse télévision en couleurs du locataire pour la somme de cinq dollars. Si jamais la succession contacte le propriétaire après la vente de la télévision, le propriétaire sera obligé de remettre la somme de cinq dollars, c'est tout.
J'aimerais vous rappeler que cette loi n'oblige en aucune façon un propriétaire d'avertir la succession du décès du locataire. Cette loi ne protégera pas les locataires.
Dans mon point final j'aimerais soulever aussi le fonctionnement du tribunal. J'ai un document à vous faire circuler.
The Chair: Malheureusement, nous avons seulement trois minutes.
M. Gagnon : Ça va. Je ferai ça très rapidement. Nous avons obtenu ce document à travers d'autres membres de la clinique juridique communautaire. Malheureusement, le projet de loi 96 n'apporte aucune explication sur le processus de fonctionnement d'un tribunal, à l'exception de mentionner qu'il va y avoir des règlements qui seront peut-être discutés ou gérés plus tard. Ceci est le seul document que nous avons devant nous qui parle du fonctionnement du tribunal.
Si vous regardez très bien, il mentionne le temps qu'un propriétaire doit apporter pour une motion ou une application et le temps qu'il a pour un procès. Alors, comme un exemple, si un locataire veut apporter une application à la cour ou au tribunal pour un manque de réparations, on lui alloue seulement 40 minutes. Dans mon expérience de travail, ça demande trois à quatre ou même cinq heures pour pouvoir faire correctement un procès de ce genre. Quarante minutes, ce n'est pas assez.
Donc, je pourrais continuer, mais en conclusion j'aimerais vous demander de bien regarder ces règlements, de faire attention qu'ils respectent les droits des locataires et, une fois qu'il seront gérés et écrits, de bien nous aviser pour qu'on puisse les étudier et apporter nos commentaires et que l'on puisse vous laisser savoir si c'est raisonnable.
Merci beaucoup.
The Chair: Nous n'avons pas le temps pour des questions. Merci.
Ladies and gentlemen, that concludes the presentations for this morning. I wish to remind the members that checkout time for their hotel is 2 o'clock, so you must be out by that time.
This meeting is recessed until 1:30 this afternoon.
The committee recessed from 1206 to 1332.
OTTAWA REGION LANDLORDS ASSOCIATION
The Chair: Good afternoon, ladies and gentlemen. I'll resume with the proceedings from this morning. The first presenter is the Ottawa Region Landlords Association and I have three presenters: Valerie Wiseman, Joy Overtveld and Bonnie Hawkins. Good afternoon. You may proceed when ready.
Ms Valerie Wiseman: I'm Valerie Wiseman from the Ottawa Region Landlords Association. The association is 10 years old this year. We spoke to you last year about harassment and chronically depressed rents. Thanks for inviting us back. I have with me today a landlord who will speak to you about her personal situation and a lawyer, Joy Overtveld, who will suggest specific solutions for mobile home parks and more general changes for all landlords in the draft legislation. There is information about ORLA and the presenters in the written submission on the first page.
The average landlord is not what people think: 46% of Canadian landlords are 50 and over; 40% of Canadian landlords are women; 51% of Canadian landlords have a total income from all sources of $30,000 per year or less. Almost half a million people in Ontario are landlords. This means that about one out of every six voters in this province and region is a landlord or the spouse of one.
There are about 50,000 landlords in the Ottawa area, so typical landlords are tradespeople, retirees, pensioners, young families with mortgages, visible minorities and a large proportion of women. The only major difference between them and their tenants is that they tend to have a more permanent personal connection to the local community tied by property ownership, whereas the tenant population is more transient.
ORLA knows these statistics all too well, because we receive many calls every day from people just like this. Right now there are many who are desperately trying to keep their businesses afloat. Let me introduce you to one such typical landlord. She is not unique. Her name is Bonnie Hawkins and she runs a mobile home park in Smiths Falls.
Mrs Bonnie Hawkins: Hi, I'm Bonnie Hawkins and I'm here today because I heard when Mike Harris got elected that Ontario was open for business. I still hope this is true.
I'm a mother of two young children and the owner, along with my husband, of a 26-unit mobile home park in Smiths Falls. My husband is an electrician, currently unemployed. We purchased the mobile home park in 1992 under a power of sale for the long-term investment and hopes to expand. It's been nothing but a financial disaster. Everything we own is now for sale. We would be all right financially if we did not own this park. We are both self-employed small business people, started out with a lot of ambition, but with all the legal battles our finances and our drive are fading fast.
Upon getting our first tax bill, it was extremely high. We found out that we were being charged for the taxes on the tenants' homes as well as the land. We asked that the tenants pay for their own portion of the tax bill, which is about three quarters of the bill. Why should I as a landlord pay taxes on houses I don't own? They only pay $100 per month per site to live there, taxes included -- $100 a month is the cost of parking alone in Ottawa.
Tenants assume they are paying for taxes, lighting, roads, septic systems and common areas, all for $100 a month. These tenants all own their own mobile homes that I as a landowner pay the taxes for. They have cars and some have cottages. Many have full-time jobs and more than one income earner per home. One owns a new home in Smiths Falls and sublets his trailer home for $500 per month. I only get $100 per month. But they have received legal aid for the last four years to fight the battle over taxes. We have won 15 small claims court judgements against these tenants, but they are appealing these decisions with legal aid again.
These tenants have paid nothing and have delayed legal proceedings six times, which has cost me greatly in legal fees, time and emotion. Not only did they get legal aid but they have called every government agency to slap us with court orders and other orders. We have been able to overturn all these orders successfully, but at great cost. A rent officer then decided that they, the tenants, had already paid taxes as part of their rent even though the act says that is impossible. So the rent is now supposed to be about $75 a month.
We had our rents frozen until we got rid of stagnant water on vacant land next door. This park is in a swampy area in the country. I had to get other government agencies, municipalities etc to point out that getting rid of the swamp water was impossible. But this took me at least a year to overturn.
Then we had a tractor that broke one of the pipes in the septic system in 1994. Instead of asking us to repair, the health department condemned the bed, forcing us to pay $1,000 a month in pumping charges. They also wanted an engineer's report and a new design. The design came in at a cost of $100,000. This is impossible to pay for when the rents are $100 per month.
We tried to shut down these sites, but got a letter from the RHPA telling us that we could not evict or if we did follow procedures then we would be fined $50,000. Obviously we stopped the proceedings.
Then we asked the municipality for permission to shut down these concerned sites under the Rental Housing Protection Act. They refused to decide this issue because they do not want to lose the votes.
Landlords should have some say in what they can and cannot do with their own land. Meanwhile we're still paying pumping charges of $1,000 a month. In spring 1995 the health department ordered us to put in a septic system or face criminal charges for failure to provide the necessities. This would result in a fine and/or jail term and definitely a criminal record. We are not criminals and this really scared us. So we were forced to privately borrow money, $25,000. We were not eligible for a bank loan. There is no way to recapture this expense from the tenants.
Now the municipality is threatening a tax sale or attornment of rents. Our future and the park's future look very bleak. The bank is threatening to foreclose. We as landowners have for the last five years paid our portion of the land taxes but the tenants have not paid for their home portions. The municipality wants us to pay the house taxes and get reimbursed by the tenants. At $100 a month, it's impossible to run this park.
1340
Everything is coming to a head financially and emotionally. If the municipality attorns the rents, we cannot afford to pay the mortgage. If the mortgage company forecloses, then we not only lose the park but also our credit rating and probably our home.
I know you cannot help me as an individual with my personal plight, but perhaps you could do something to help all mobile home parks stay afloat.
We have continued to fight this long because we have had hope for Ontario's small businesses and landlords with the commonsense approach. However, without changes very soon it may be too late for us and many others. Thank you for your time.
Ms Joy Overtveld: My name is Joy Overtveld. Generally ORLA applauds the intent of the government to help the average landlord and we support the submissions of other organizations that we know you've been hearing from in the other cities throughout Ontario.
ORLA is not just for mobile home owners. As a matter of fact, most ORLA members are not mobile home owners, but we chose Bonnie because Bonnie typifies the profile of the average landlord. You're looking at someone who is an average landlord in Ontario. It's also because her situation happens to highlight an area in the legislation where intent has not translated into the draft. Mobile home parks really need your help and the provisions as now drafted will not save many parks in Ontario.
There are two key issues with parks across the province. One is the problem with taxes and rent, and the other is the sewage and infrastructure problem. Both, by the way, are dealt with under the Tenant Protection Act in some fashion. Bonnie happens to have both problems.
Mobile home parks and land-lease communities represent the only affordable form of home ownership for the working classes in Ontario. This is without a doubt affordable housing. The problem is that "affordable" has to mean affordable for both the landowners and the homeowners. When the homeowners are paying less than a third of what a welfare recipient gets for shelter, this is not affordable for the park owner.
The bottom line is that there's got to be a way for the park owner to recoup at least the costs of running the park, plus a bit for profit. Otherwise the parks will soon cease to exist. They'll be wiped off the map. Revenues must exceed costs. There cannot be parks operating at permanent losses. The current draft provisions do not help people like Bonnie, even if they are intended to do so.
First, the sewage and water infrastructure problem: There are many, many park owners across Ontario that over the past five years were hit very hard and were forced to do extremely expensive repairs, renovations and upgrades to sewage and water systems. There was no common sense in many of the orders that were issued, like Bonnie's requirement to remove swamp water from about 500 feet away from where the park was, but the money is already spent.
The numbers bandied about for capital expenditure windows -- you're talking about 12-month retroactivity, maybe 18-month retroactivity -- don't help these parks, and many are very desperate. We've got a sample provision in our submission here that will help. It's patterned on section 15 of the current RCA. There are several ways to fix this problem but the easiest way -- and it doesn't need to be confined to parks; this provision could help other chronically depressed rent areas where huge expenditures were required -- is to start with the date Ontario became open for business, which is the date of the election, and to create a very temporary transition phase where there's an opportunity to make an application that allows for costs retroactive to June 1995 where there were huge expenditures that were totally unwarranted based on the amount of the rents.
This temporary transition phase would come to a close and then they'd go into the normal capital expenditure window, whatever you're planning to go for.
There are other problems with preventing cost recovery in mobile home parks. For example, percentage increases on rent when you've got superlow rents are virtually meaningless. When you're talking about a $50,000 repair on a septic system with 3% or 4% annual increases on $100 a month, it just doesn't add up. The math doesn't work.
Vacancy decontrol has been eliminated on parks. Why? This was the only possibility for some park owners to have some long-term possibility of getting out of this situation.
The second major issue is the conflict between the taxes and rent provisions. This is a lot more complicated because the problem is every park in Ontario has a different situation. They're all over the map. Here it would be great if you could work out some kind of comprehensive approach. I think all that's needed is a committee with people from all of the different ministries that are proposing amendments right now. You've got a huge number of pieces of legislation that are moving forward with changes under way. If they all come through the way they're planned now, it's going to put parks in a worse position rather than in a better one. The Tenant Protection Act, the Rental Housing Protection Act, the Condominium Act, the Municipal Sales Tax Act, environmental legislation, the Assessment Act, the Planning Act, the building code are all listed in our submission here in a summary of what's happening.
Finally, any landlord should have the opportunity in some kind of last-ditch effort -- if you can't find a way to put yourself in a position where costs are lower than revenues, there should be some sort of legal euthanasia, mercy killing, for parks and for chronically depressed rental units that just can never make the grade. You should be allowed to either shut the units down or change the use.
The ministry officials seem to think the Condominium Act changes are going to provide this opportunity for parks. It's not true. You can't convert to condominium use and sell off lots in old parks because they're not big enough. They don't meet the current size requirements. The lots are too small. You'd need to allow severance for undersized lots if Condominium Act changes would be the thing you'd be going for.
Overall, parks need to be treated comprehensively, and as far as I can tell they never have been. There's no integration between the legislative reforms. They need reforms to work together on all aspects and to respect key principles: (1) keep the parks afloat; (2) maintain and increase affordable housing in Ontario; (3) revenues have to exceed costs; (4) a change of use must be allowed in situations where costs will never be less than revenues; (5) past money spent must be recovered fast, particularly in the case of parks because they were forced into situations that other landlords were not forced into.
I'll just point out that the submission you've got in front of you has a couple of things. You've got our newsletter and you also have the submission for today. Bonnie's presentation is in it and the statistics that Valerie quoted are also in it, and pages 8 through 12 or 8 through 14 or something talk about the mobile home park revisions. Then we've got a whole other series of general revisions that we're advocating or supporting and we're giving you some documentation to support that later on in the submission that deals with all landlords in Ontario.
Mr Cleary: Bonnie, who forced you to move the swamp water 500 feet away, and why?
Mrs Hawkins: That was the Ministry of Housing, standards and maintenance. They put a work order on and said I had to remove the water from the ditches or from around the park because it was stagnant and could cause harm to the tenants. That's the land. If you go to the park, it's a swamp in the front, all around.
Ms Overtveld: It's been there 50 years.
Mrs Hawkins: It's been there 100 years.
Mr Cleary: If you had one change in legislation, what would that be?
Ms Overtveld: The suggestion that we made, to get the retroactive increases, would help her, and there are several others in here that would help her as well. But her situation is typical; that's the problem. It covers a lot of parks. The provision where we're talking about the section 15 thing, where you have a temporary window that goes retroactive to June 1995, would help Bonnie.
The Chair: Thank you, ladies, for coming this afternoon.
The next delegation is the Fringewood Corp, Philip Sweetnam. The delegation after that, which is the Psychiatric Survivors of Ottawa, Mark Parsons, has indicated that they're unable to attend this afternoon. Would Housing Help be here?
1350
FRANK HABOLY
The Chair: Mr Haboly, you're prepared to proceed now and perhaps you could. Thank you, sir, for saving me. You may proceed when you're ready.
Mr Frank Haboly: My name is Frank Haboly. I am just a small landlord. I got some paper that the Mike Harris government will bring in a new form of tenant protection. I ask the Premier, how about landlord protection? I gave you some kind of paper.
A friend of mine with four bounced cheques went to court. She hired a legal aid lawyer -- was supposed to go. No, she doesn't go, is still there. Three days ago he went again and wanted to collect the first month's rent. No rent again. It was very nice of her: She had all the cigarette butts, dumped them in his car and over the coffee, and no rent again. Again, go back to square one: Go to the court, she might pay. It's going on. It costs the landlord lots of money.
There is another one over here from another rooming-house. He paid for three months, and for two months nothing. When he was forced to move, he did all the damage. I ask you again, where is the landlord protection?
Also, I wrote a letter to the minister before, what to do with a so-called welfare crisis. If you go through a Stop sign or a red light you will get some points. If the welfare people do some damage, should they too not get points? Should they get any money before all the damage is paid? They do damage of hundreds of thousands, tens of thousands, thousands of dollars for a landlord and they get away with it because nobody does anything about that.
I ask you, ladies and gentlemen, do you believe you have a right in your own house to let anybody you want to live in it or not? That's what I want in my own apartment too.
I have tenants for 12 years, 11 years, 10 years. Do you think any landlord wants to get rid of any tenants now when there are too many empty apartments? I don't believe so. Do you think any landlord brings in a cockroach to the apartment? I don't think so. Do you think any landlord is going to break a window in the house and then call up the health department to fix up a window? I don't think so. It is all done by the so-called bad tenant. Sure, there are bad landlords too, but I'm talking about the bad tenant.
I wrote a letter, on this paper. You have it in your hand. All those people on social assistance or welfare who damage any apartment should have deducted 20% each month from their allowance or what they get from city hall until the damage is paid. That's the only way to hold them back. It is like the Young Offenders Act: They get away with it because nobody does anything. Yes, gentlemen, we want protection; me, a landlord, yes, I want it, I want it very bad.
The Chair: Thank you very much. Members of the committee, sir, may have some questions if you're prepared to entertain those questions.
Mr Haboly: Go ahead.
Mr Cleary: I just wondered, do you belong to a landlords' association?
Mr Haboly: Yes, sir.
Mr Cleary: Have things improved since you joined?
Mr Haboly: As I look at the new tenant protection from the so-called -- the socialists and pinkos call them a right-wing government -- sir, nothing, nothing. Harassment, $50,000. If I go collect the rent they could say I harass them or want to rape them or anything like that and I am liable for $50,000. What kind of policy is coming from the so-called right-wing Harris government? I ask you again, where is my protection? Me, as a landlord, or all of the landlords?
Mr Cleary: So you don't think there's anything in Bill 96 that will improve it?
Mr Haboly: Zilch, nothing for me. You are able to raise the rent if the tenants move out. I ask anybody over here with a sober mind, if they pay $400 now, do you think they are going to move out in the next 10 years? No way. I have some apartments that I registered rent for from $730 to $650, because everybody did that. That's about $3,000 a month for me -- not me, everybody was forced to because that's the way it is. Too many empty apartments; 25,000 people got laid off from the government in Ottawa. That's what it is.
I see nothing on that one. It is similar to the pink Davis government that brought in rent control and that other guy who is talking about pink in Toronto. I believe in capitalistic enterprise. I come from a country, Hungary, where I know what the socialists did for 40 years to those countries. I do know. A socialist idea never works. It's Utopia, it's a dream world. Even good old Sweden is finished, threw them out. It doesn't work. Gentlemen, you have to change if you want to keep our country going.
The Chair: We still have a couple of more questions, sir, if you're prepared. You've stirred them all up here. They all want to talk to you.
Mr Marchese: I think Mr Haboly has raised some concerns about the socialist government in power. They've written this act that discriminates against landlords, because it's called the Tenant Protection Act. I think they should be held to account. I think they should answer the questions. I want to hear from Mr Gilchrist.
The Chair: Do you have a comment, sir? Did you have a response to what he said?
Mr Marchese: No, I want to hear from them.
The Chair: Oh, you'd like to pass. Mrs Munro.
Mr Haboly: You want to hear it from the right wing.
Mrs Munro: Thank you very much. I think one of the efforts that has really been uppermost in the creation of this legislation is to look at how we can create a balance between the issues that arise between landlords and tenants. I guess one of the marks of achieving that balance is to come to hearings such as this and have criticism presented from both sides.
I want to ask you a question on your experience. One of the issues tenants have raised here in the hearings over and over again is the question in section 200 which deals with the kind of information a landlord may or should or possibly can use in making a determination as to the suitability of a prospective tenant. Currently, obviously landlords do ask questions. They tend to centre around the issue of tenant history, credit rating and income, not source of income but income. We've heard many people who have expressed concerns about this. I wonder whether or not you could give us a comment, based on your personal experience, in the area of asking prospective tenants questions.
Mr Haboly: Gladly, lady. When people fill out an application form I ask them -- they have two children -- what the income is. If they say $25,000, I am not able to rent to them because they are not able to pay rent and have two children. In my book, if a tenant, one man working is making $30,000, then I rent for them with two children. If it's less than $30,000, for two children, for a $730 apartment, I am not able to rent to them because I know he is not able to pay. He's just not making enough money; it's as simple as that. Why should I go through all the hassle, go to court. As I told to you before, I have tenants for 12 years. I don't want to do that.
My dear lady, last year I paid $3,000 to the Ottawa Citizen for advertising. That's $300 a month to rent an apartment. Do you think any landlord with a sober mind wants to kick tenants out and pay $300 to the Citizen for a month? No, we don't want that, but we are forced to do that.
Also, we had a meeting. There was a lady from the social assistance service. They called me up to ask if I'm willing to rent to people on social assistance or welfare. I told them yes. Guarantee the first and the last month's rent, number one. Number two, guarantee all the damage which is done by them; if the welfare office is going to pay for it, then I am willing. Instead of having 10 or 13 apartments empty last year, yes, I would really like to have them. But not in that way, when they do damage and they don't do anything; they steal a fridge, they steal a stove, and even a garbage box. No. I would rather have it empty and avoid a problem later on, because that's what you are going to have. They go with legal aid, which should be put into the garbage, number one, garbage for the legal aid. Then I have to pay a lawyer. No, my dear lady, no. That's the reason I don't rent them out for them.
1400
Mr Marchese: Any other questions, Julia?
Mrs Munro: No, that's fine. Thank you.
Mr Wettlaufer: Mr Haboly, I'd like to thank you for coming here today. I think what you have done is point out some of the problems facing many of the landlords in Ontario. Many of the landlords, 80% of the landlords in Ontario, own buildings of 10 units or less. Many of these landlords are immigrants like yourself who came over here after the Second World War. They built up their life's savings, they tied it up in an apartment building like yours. I know many of you rely on that income for your pension.
What we have heard a lot of from some landlords is that this legislation does not go far enough. We've heard from tenants' groups that the legislation goes much too far, that it favours the landlords entirely. What we tried to do with this legislation was steer a middle ground, to provide some protections for the landlords and some protections for the tenants.
What in particular do you find offensive about the legislation?
Mr Haboly: Let's put it this way. They raised it 2% or 3%. That was never the landlord's big idea. We are afraid to get involved with the tenant. They have all the rights and they could go to the legal aid and to the court. As I told you before, the eviction notice comes back. That's the biggest problem. As I said before, all the tenants who don't pay their share, evict them on their own expense, not on mine. I don't have to hire a sheriff, I don't have to go into court. That gentleman, he went into the court, paid $250 and the tenants are still in it, and they spit at him and they poured coffee and dirty cigarette butts on his own car on the 5th of this month. That's what we want, sir: We want to avoid all the nonsense.
If you have some kind of meeting -- never mind the court now, I'm not talking of court -- if she doesn't pay her rent for seven months, goodbye, arrivederci, auf wiedersehen, out at their own expense, not on mine; no legal aid for that one. As I told you before, nobody wants to get rid of the tenants now. There are so many empty apartments. Who wants to get rid of them?
Big men in Ottawa, working for the CBC and working for city hall, are losing apartments because they're not able to rent them. On Merivale Road a $500,000 apartment is on power of sale for $360,000. Do you think any landlord wants to get rid of the tenants? No way, José.
Mr Wettlaufer: Mr Haboly, one more short question: Mr Marchese of the NDP would let everyone think that landlords are getting rich, that landlords are making lots of money. Would you like to tell us about that, about your experience?
Mr Haboly: Oh, yes. Why, I'm very rich. I go everywhere, to California. I drive a new car, everything. He's NDP. That's a socialist. Go to hell with them. I know what they are. Everybody knows what they are. We don't need any more pinkos. It's enough. You know what they want? They want to bring in estate tax. If you make over $1 million, you pay a so-called estate tax. Why the hell would anybody want to save? Let the government pay for everybody. Why would anybody want to save, if you make over $1 million and you have to pay estate tax on it? Why would anybody want to save? We came away with it saved, we worked very hard, and as far as I know -- it's my house; I worked for it -- It was never nationalized. If they want to dictate a tenant, nationalize and pay us and take it over. I am not against it. Take it over. Lots of landlords are to you, "Take it away, nationalize it." But don't tell me what I am doing in my own house, because I worked for it. I am doing the cleaning.
The pet law: Peterson brought that one in. They sign a paper, "no pets." After three months they bring in a pet and they are able to keep it because the stupid Peterson government did that one. If they sign a paper, "no pets," that should be no pets. We are fed up with it. All of the landlords are fed up with these pinkos.
The Chair: Mr Haboly, thank you for coming. We appreciate your comments.
FRINGEWOOD CORP
The Chair: Fringewood Corp, Mr Sweetnam: Is he here yet? Good afternoon.
Mr Philip Sweetnam: Good afternoon, Mr Chairman. Sorry. I started to make this presentation to Hitachi down the hall and they didn't appreciate it.
The Chair: They didn't? Oh, we're more receptive than that. Thank you very much for coming.
Mr Sweetnam: While I waited here I had the opportunity to scan through the Ottawa Region Landlords Association brief. I was reading Bonnie Hawkins's presentation. I would just say to you, in my experience that's not a unique situation in terms of the mobile home situation. Generally speaking, the rents are really undervalued in the area.
We've been landlords here in the Ottawa-Carleton area. My family operates a couple of mobile home developments in the Ottawa area called Fringewood. There's an older development that was done in the mid-1950s and a newer development in the mid-1970s. Of course the one in the mid-1970s has municipal water, sewer, street lighting, wide streets and all those sorts of things, while Fringewood North has only the municipal water.
Fringewood North is in desperate need of modern sewer and hydro services. In the case of each service, the relevant authorities have tolerated the delays in installation in anticipation of the legislative changes that would allow a fair capital cost pass-through. Without that pass-through, I can't justify it before our banks. Really it's more cost-effective to shut down the Fringewood North development, the older community, and we could then develop higher-cost, traditional type of housing which would be more acceptable to the local municipality. In this way we could derive the revenue to cover new services rather than upgrading the present mobile home services. However, as you would understand, that would be terribly disruptive to my tenants and something I wouldn't want to undertake.
Therefore, I want to say it's important that the new legislation allow a large enough cost pass-through that it will make it financially viable for landlords to make the required upgrades to services which will maintain the stock of affordable housing.
To summarize my point, Bill 96 should allow adequate rent increases so that landlords can pay for the service upgrades ordered by government departments. I'm sure some people would say, "That's great for you as a landlord, but what about your tenants?" I've discussed with my tenants in the Fringewood North community about the possibility of a $40 or $60 rent increase to pay for modern sewer systems and road and hydro. If that increase meant an increased security of tenure that would last 15 or 20 years, the association feels it would be a good way to ensure their investment in their homes. This feeling is shared by tenants of other mobile home communities such as the Cobden mobile home park. It's called Lakewood. I've enclosed in my brief something from the owner of that development. There's a compendium there.
I think tenants realize that landlords can't pour money they don't have into mobile home developments. I noticed in the Hansard record that opposition members at Queen's Park are concerned that the new legislation just benefits the rich rental corporations. In my experience here in Ottawa-Carleton and in other areas in the Ottawa Valley, most of the apartment, and especially the mobile home, landlords are struggling business owners. If they're denied the resources to run an adequate operation, they'll be forced to provide an inferior product.
1410
I'd like to provide a personal example. If you'd look at the photographs that I've provided for you, one is the older development. It's called Fringewood North. In spite of the decaying infrastructure, the people certainly take great pride in their homes and they look after them well. If you look on the back side of that framework, it's pretty difficult to explain to you that the sewer services are in a situation where I'm using sump pumps or effluent pumps to pump up into a township sewer, or you can get a little bit of the road cracking that's there. Certainly this is in contrast to the next page, if you look at the wide streets that are in the Fringewood South development where you put the money in and you get a product that's really quite pleasant to live in and one I'm proud to put my name on.
If you look on the back page, the one about Fringewood South community, you'll see there's a 1,200-square-foot community centre. You can see some of the playground equipment. The lower photograph here has a picture of the ball diamond backstop and the community centre. Between the two developments, the best I can do for you here, this is sort of the road pattern of Fringewood. There's one street called Lazy Nol, another called Cloverloft. There's an open space of about 100 feet between the two areas, and that's the photograph that's in here sideways. It sort of illustrates that between the rear lots there's ample open space, the kind of thing that I'm certainly proud to have said my family has been associated with. The one that we bought in the 1950s, as I said, is in desperate need of infrastructure upgrade. The thing is that we started later, had the higher rents to start with, and rents go $250 to $300, whereas in Fringewood South you're looking at rents of around $210.
I think I've demonstrated, or I hope I can in a small way demonstrate to you, that in this case the less than satisfactory result isn't the result of a schlocky landlord. It's a result that you don't have the income and banks are really pretty tough people to deal with today. They don't say: "Gee, I know you'd like to put sewers in there, Phil. Just go ahead and do that because it makes good social sense." You have to be able to show them there's a plan and a cost pass-through basis.
I've written down most of the stuff here, but I want to just give another example. That's at the bottom of page 3. There's a chap who owns a park in Elgin. His name is Bill Beaton. He also owns parks in New York state. When I say parks, it's 65 units. This is a retired serviceman. During his eight years of ownership where the rents are $200 a month, he has managed to put pavement in, put municipal water service in, upgrade the street lighting and that sort of thing, really a place that he's proud to put his name on, as he has said to me.
On the other hand, in Elgin he gets $80 a month: $110 total, and $80 is the net result after he pays the taxes. You have gravel roads, no street lighting, and he says: "I don't even want my name on it. I'm really ashamed." But he's forced to spend $39,000 because the health department has a gun to your head saying, "Look, if you don't, you'll be fined."
I know there's a social responsibility to do those things, but there's also a responsibility on the part of you as legislators, I believe, to try and make it so that there is a fair cost pass-through situation. As I say, in the end what you have in Elgin is gravel roads, no street lights and really a disillusioned land owner who puts his efforts where it rewards him, in New York state.
Those are the track records of those two communities.
Capital expenditures: I've enclosed an appendix that has a list of some of the other mobile home parks in our area that are having these same kinds of problems. The time constraint doesn't permit me to go into all of those, but basically we're looking at cases where people have been made to put municipal water into their developments because it was their time. Mobile home parks which are on the fringe come to the point where water service is available and the municipality says you must put it in or they have to upgrade decrepit septic tank systems.
The proposed legislation should allow a pass-through of costs dating from the date of the last election. I notice the proposal was just to go back 18 months. I know of a development in Trenton where, as I say, the water was there in September 1995 -- there was an expectation that this government had suggested that there would be a fair treatment of landlords -- a $35,000 capital cost which really can't be recovered if you cut the window to 18 months. I would propose to you that what you ought to consider doing is saying, "Look, if a government organization has ordered you to do this, then it wouldn't hurt you to go back to the start of this government."
I've provided for you an example. When the Liberals were the government and introduced the RRRA, the time of registration went back two years to 1985 even though the legislation didn't come in until 1987. They even allowed you to go back a couple of years if you had some capital costs. So I would think it's not something that you would have to say is way off the wall or has never been done before.
Vacancy decontrol is the other one that's unique for the mobile home community. Your legislation doesn't propose to extend that to mobile home parks. I think it's a fair way of trying to progress towards the market value for rents. However, I would say that since the rate of turnover in mobile home parks is rather low, it probably isn't going to do very much for somebody who has an $80-a-month rent. Let us say that he can move it from $80 to $150. It probably doesn't have the infrastructure to even justify that. I think it would be far better if you were to consider a one-time capital increase for those who are chronically depressed in rent. You ought to say, "Look, 50 bucks is an appropriate pass-through."
I say that for what I hope is the betterment of the industry that I've served my life in, not because I would classify my rents at $200 and $300 as chronically depressed. I say that on behalf of Bill Beaton, Bonnie Hawkins and all the people down the valley, Sue Stackhouse, those people who have really put their life into trying to do something in the community. That's the main point I would like to get at.
In every situation you like to say something good. I think there tends to be more of a direction towards mediation, which I applaud. With the help of my legal team we've managed to win about 85% of the battles before the rent review tribunals, but I've got a $50,000 legal bill for my efforts. Mediation has got to be the way to go.
I don't find tenants to be really, on the whole, obstreperous. You get one or two ding-dongs in every group, but on the whole, people tend to understand the problem. I think mediation is far more cost-effective for both sides, because it's not only my $50,000 you're spending. You as a community spend $40 million to run this housing bureaucracy. I serve as a past chair of a conservation authority; 15 years I'm a member. The whole commitment through this province is $10 million to conservation authorities. It's four times as much to run the housing bureaucracy. Mediation is really, gentlemen, the way to go.
In conclusion, I want to congratulate the government for taking a complex issue and trying to steer that fine course. Not everything in this bill is the way I'd like it to be, but a reasonably fine course that would allow the level of this type of housing stock to remain in Ontario. I think Bill 96 can do this if the legislation and the regulations are carefully drafted.
The Chair: Mr Sweetnam, thank you very much. I know there are some questions.
Mr Marchese: Mr Sweetnam, I just notice you live at 8 Sweetnam Drive. How did you manage that?
Mr Sweetnam: Here in Ottawa-Carleton, as I'm sure in every other way, we've done a plan of subdivision. That's where my office is, not where my residence is. But when you do a plan of subdivision, you have to have a unique street name, like you couldn't do another Cedar Street. At the time we were trying to think of something, my dad had just died. I thought it was an appropriate memorial to him to name the street after my dad. He had more foresight than I did and bought property in the right location at the right time.
1420
Mr Marchese: There was a lawyer who came in front of our committee yesterday from the Muskoka area, and I'd like your response to this. She said:
"In rural Ontario there are a number of mobile home parks where the landlord has ignored public health and environmental regulations for years. They have refused to abide by section 128 of the Landlord and Tenant Act on the specious excuse that repairing a sewage system to code would simply cut into their profit margins too much. No landlord who has abused his or her tenants by allowing disrepair to occur over years of neglect should now be rewarded by being able to obtain even higher rent increases than other landlords. That would be completely unacceptable acquiescence to rural landlords' greed.
"Infrastructure upgrades have not been done in a number of these communities for decades. For those decades, the landlord profited enormously. The Legislature should find a way to force these landlords to pour some of their profits into the upgrades on a systemic and timely basis and not wait for crises to happen like burst sewage pipes and polluted water systems."
Mr Sweetnam: Certainly I would concur that there's no reason for a landlord, outside of the fact, as I say, that banks are extremely tough -- if you're talking about normal infrastructure upgrades, in other words, where a landlord has to go and repair a simple septic tank system, you've got a 2% capital cost and it should be done as part of that.
During my ownership, I didn't come back and say to the rent review bureaucracy of the day, "I want some more money to put municipal water in." The time had come when encroaching development and the septic tank effluent in the wells were such that municipal water had to be there, and I put it in. In my case, I'm talking about three years' total commitment of all the money I put in to sewers.
I think it's important to understand that all the rest of my community in Stittsville got 75% provincial dollars. They left one community out, and that was the Fringewood community which I represent. I went and did the battle of the day and said, "Look, it would be appropriate for the tenants," because the day is going to come, if the province doesn't subsidize it, that the tenants are going to have to pay for it.
I'm simply saying, yes, you're right; you can't let your infrastructure go way down. Even doing something as simple as pumping out a septic tank with an effluent pump, a sump pump, gets it up to the township sewer, but as the Ministry of Environment says, "Phil, this is not an approved system." I want to put in a $250,000 approved system, and that's not what 2% can do, or 2% plus add your 3% that they used to allow us. It won't do it. The banks laugh at you, and they're powerful people today. You're at their mercy to say, "I need to be able to pay for this." They don't say, "Well, this is the right social thing to do."
I'm somewhat sympathetic with what your person has said, but I think she has a somewhat rosy view of the world and the reality of trying to operate in it, Mr Marchese.
Mr Gilchrist: Thank you very much, Mr Sweetnam. While Mr Marchese would like to deal with unsubstantiated generalizations that paint a pretty bleak picture, you've shown something very different. I must say you've got the most colourful presentation we've received so far. I appreciate your sharing that visual evidence of exactly what's taking place in your community.
You mentioned the 18 months. Perhaps word has reached down here. I announced at the annual meeting of the Multiple Dwelling Standards Association that the minister was amenable to an 18-month retroactivity.
Mr Sweetnam: Yes, I saw that in the purple memo.
Mr Gilchrist: Excellent. I appreciate there are those who would like us to go back even further, but that would take us back, assuming the bill is passed late this fall, to the middle of last year. Coincidentally, June 1996 was when the first discussion paper was introduced.
Let me ask you if it would be safe to say that at that point people had a pretty clear idea of the direction the government was inclined to go in and may at that point have started to make decisions about adding services. Would June 1996 be a date that you think is defensible?
Mr Sweetnam: If I were in your position, trying to steer the tight course, I might compromise at that. I simply put to you that I think there was an expectation as early as -- my recollection is even in 1995 going to some conferences which Mr Leach addressed and I think there was the expectation that there was going to be fairer treatment of cost pass-throughs. I think there was a recognition that the old system of trying to do it with all co-op houses and stuff wasn't appropriate and we were going to try to do something a little different than that.
As I say, in the cases I know, Trenton and I think the one at Cobden might just squeak under your 18 months back, depending on when the thing is implemented. I don't think there's a lot of political cost to going back to the start of the government. My suggestion is that it's been done before. Those capital costs were legitimately incurred. If the landlord went ahead and did something because he wanted to beautify his entrance and put a nice sign up and so on, I wouldn't think that would apply, but it certainly seems to me it would be appropriate to treat people fairly if they were required to do that.
I know in the park in Trenton, the chap had spent his 3% putting sewer upgrades in and then he was forced to put in water. Under the old system, that's all you get for 10 years. With a very low capital upgrade, you blow that whole cost pass-through thing that was permitted. When you're talking rents of $120, as they are there, 3% isn't much of a cost pass-through. So I would encourage you to look at going back to the inception of this government. I think it would be fair.
It doesn't affect me personally. I can live with either situation. I just know people like Bonnie Hawkins have had -- I don't know whether she complies with that 18 months or is outside the 18- month window.
The Chair: Thank you. Mr Cleary?
Mr Cleary: No, I'm fine.
The Chair: Thank you for coming, Mr Sweetnam.
HOUSING HELP
The Chair: The next presenter is Housing Help, Bob MacDonald and Craig De Fries. Good afternoon, gentlemen. You'll have to tell us who's who, and then you can proceed when ready.
Mr Bob MacDonald: My name is Bob MacDonald. I'm the acting director at Housing Help. This is Craig De Fries. He's a board member.
I've been with Housing Help since around 1988. I've had a lot of grass-roots experience working with clients with low incomes, so we want to discuss the issue of income criteria. I'd like to be looking at how it's affected clients in our office throughout the years, and Craig will be looking more at how we can see that trend, how that would apply in broader terms across the province.
Since we opened our doors in 1986, the issue of income criteria has been of great concern to us. It's safe to say that 100% of our client contacts have been affected by this legalized form of what we see as discrimination. In the Ottawa-Carleton region, landlords regularly ask for co-signers and do not accept the letter of guarantee which is provided by social services for the last month's rent.
The most common method of determining eligibility for a unit is the 30% rent-to-income ratio. Income criteria has been one of the hardest obstacles for our clients who need immediate or long-term housing.
We received 35,000 contacts in 1996 from people who were having difficulty finding adequate and affordable housing. Of those, 73% of the households identified social assistance as their primary income. Other sources included workers' compensation, disability, student loans, alimony and child support. The application of income criteria automatically discriminates and rules out those people and eliminates any protection they have under the Human Rights Code. Therefore, single parents, seniors and the disabled will lose their protection under the code, which will leave them more vulnerable to becoming homeless. It will also be a deterrent for women leaving abusive relationships to return to their partner. In addition, a person who does meet the 30% income criterion at the time of renting a unit likely will not meet it in the following years as rents continue to rise above the rate of inflation while the wages of most working people remain frozen.
1430
Ottawa currently has one of the highest vacancy rates in the country. A quick glance at the classified ads in today's newspapers will reflect this. Landlords are offering up to three months of free rent, free microwaves, free refrigerators and discount rents for signing long-term leases. Prospective tenants have more to choose from now than ever before. Unfortunately, our clients are still not considered for those units because they are told they don't make enough money. As a result, they are forced to stay in rental units paying an even higher percentage of their income on rent.
As a case example, last week I had a woman in my office with two children. She'd given notice to her landlord because she couldn't afford the rent there any longer. She was paying $750 for rent, plus hydro. The rent was always paid on time. She was able to provide good landlord references. She found an apartment renting for $550 with all utilities included, but she was told by the landlord that this unit would be too expensive for her. Those are the problems that occur when decisions are being made for prospective tenants.
Landlords have other means to ensure that tenants are able to pay the rent, the best one being a landlord reference which verifies that a prospective tenant has a good rental history and credit checks. Such policies are practised regularly to ensure that landlords will receive their rent money on time. In a time of such high vacancy rates in this region, we believe it will be of no benefit to either landlord or tenant to continue imposing income criteria on a group of people whose options are already severely limited.
Mr Craig De Fries: If the income information criterion is allowed to remain in section 200 of the proposed bill, we fear low-income tenants will have more difficulty accessing housing. Out of an approximate total population of 750,000 in Ottawa-Carleton, approximately 16,000 people are on waiting lists for social housing. Therefore, the majority of low-income tenants are forced to rent on the private market, and as we have heard today, many are increasingly being, and we suggest increasingly will be, forced to live in inadequate housing while waiting for social housing because they will be deemed not able to afford a more adequate apartment on the private market. Therefore, we also fear an increase in homelessness or the extent of homelessness occurring in Ottawa-Carleton. In Ottawa, we see the numbers climbing despite the high vacancy rate.
We know we are not alone in our concerns. In July, the regional municipality of Ottawa-Carleton council sent a letter to Premier Harris expressing its concerns about section 200. One of those concerns was the potential increase in shelter allowances and emergency shelter provisions. We understand that Metro Toronto council also passed a similar motion and that the Metro Toronto children's aid society has expressed concern in terms of the potential of an increase in children being taken into care because of their family's inability to access housing or to maintain adequate housing.
Also, you are aware of Mr Keith Norton's concerns in terms of how section 200 affects the Human Rights Code. In response to Mr Norton, we understand Mr Leach indicated a willingness to amend this criterion of section 200, seeing that the main purpose of this clause is to ensure that landlords can check a tenant's credit-worthiness, which they can already do through credit checks and landlord references.
Therefore, we thank you for the time to present and we would urge that this section on income information be removed.
The Vice-Chair (Mrs Julia Munro): Thank you very much. I believe, Mr Marchese, we're starting with you.
Mr Marchese: I think it's their turn. I started last time.
The Vice-Chair: My apologies. Mr Wettlaufer.
Mr Wettlaufer: Gentlemen, I want to thank you both for coming. I know it's inconvenient for everybody to appear before a committee, but it's nice to have your input.
I wonder if you could comment on whether you feel that unemployment and the recession we had over the last six years are the root cause of the poverty we have in our province today.
Mr MacDonald: I don't know that you can bring it down to a single cause. I think unemployment's very serious. The way it's happening right now, I think we're always going to have people who are unemployed for one reason or another. There are people on disability. There are single parents who are raising their children. There are always going to be people who will need help for a period of time.
Mr Wettlaufer: Many of these single people raising children, however, would love to have jobs. Agreed?
Mr MacDonald: Yes.
Mr Wettlaufer: They haven't had them up to this point in time. I don't know if you know, but the province of Ontario is undergoing the second-greatest economic boom in the last 50 years right now. A thousand new jobs have been created daily for the last five months. We see numbers indicative of a tremendous amount of confidence in the economy of this province.
The amount of investment that auto makers are putting into the province -- for instance, auto makers announced $1.8 billion of investment in Canada for the next six months. General Motors, Honda, Toyota and I believe Chrysler have announced record sales for the first half of this year. Home sales are up 13.4% for the first six months of this year, and it has been predicted that they'll be increased 13.7% for the full year. Non-residential construction is up another 13% over the same period last year and, even more important, it went up 25% from May to June. This indicates a great deal of expansion going on within the province. It indicates that there is going to be a tremendous number of jobs.
We have an increased amount of immigration coming into the province. I recently presented awards to some immigrants, during the last couple of weeks. One lady in her late twenties, from Yugoslavia, from Croatia, her husband was killed in the war over there. She brought her four children here with her. She has upgraded her talents such that she was offered a job. Only four months after getting here she's been offered a job making nearly $40,000 a year.
I would like to ask, if this is happening, do you not feel this will result in a tremendous decrease in poverty in Ontario?
Mr MacDonald: I don't think we're seeing that in our office at this point. We're seeing more people coming in on a regular basis. Our region has been hit so hard by the federal government in terms of layoffs, unemployment. We're not seeing that in our office. We're seeing people who have been on the street. We're daily seeing people who have made those incomes of $40,000 losing their jobs. Home sales are up? That doesn't mean anything to our clients. They can't afford a room these days. We're not seeing it in our office.
Mr Wettlaufer: It means an increase in employment, though.
Mr MacDonald: Not in this region.
Mr Cleary: I'd like to thank you for your presentation. Is your association all across the province or just in the Ottawa area?
Mr MacDonald: We're an association; we work for the region. There's another one in the area too, called Action-logement. There are agencies that are quite similar across the province, but it's not a chain of McDonald's or anything like that.
Mr Cleary: Where does your funding come from to operate?
Mr MacDonald: It comes from the province, the city and the region.
Mr Cleary: You mentioned some of the things you didn't like in the bill. If you were to get your way on one change, what would that be?
Mr De Fries: I think this afternoon the change we were focusing on is in terms of removing the income information criterion from section 200 of the proposed bill, seeing that many landlords now rely on credit checks and landlord references to assess potential tenancy as opposed to income information.
1440
Mr Marchese: For at least 90% of the population, it's good to know that 10% are doing really well. That's important for us to listen to. Unemployment is at its highest in our history, yet they're producing jobs. Did you hear the rates? It's just amazing. Part-time jobs are increasing; wages, as I see them, are going down; entry-level jobs are very difficult for young people; and the salaries of most humans I know, particularly those starting out, are getting smaller and smaller.
Mr MacDonald: I just wanted to point out as well that in this booming economy the increase in people applying for social housing is greater than ever. As Craig indicated, it's up to 16,000 now, and that's definitely on the rise. There are more people in need.
Mr Marchese: Section 200 is really something I've been focusing on, and the government members too, by and large. We have heard today two people -- were you here for Mr Haboly's presentation?
Mr MacDonald: No. I just got here.
Mr Marchese: You missed it. Okay. I asked Mr Greenberg from Minto Developments about his usage of income information, because the government argues that they use income information now and it's not illegal. What is illegal is whether they use it to discriminate. For me, it's hard to figure out how you use income information and not discriminate. How do you do that?
So when I asked Mr Greenberg whether he uses it in ways that could be discriminatory or are, he says, "We just use it as one tool." He never answered my question. But Mr Haboly was rather different. He clearly declared that he's a landlord and he can do what he wants. He says that if somebody comes in who only makes a certain amount of money, he's not going to let them in.
Julia asked that question before; the parliamentary assistants are not here to defend this. Section 200 is supposed to protect tenants, the people you represent, from that kind of thing. Mr Haboly came here declaring quite clearly that he does it now and he intends to do it in the future. With this section now, they argue, you could take them to the Human Rights Commission or to court. Do you feel any better protected now with this section than before?
Mr MacDonald: No.
Mr Marchese: That's really the point I wanted to make. If they didn't have protection then, they don't have any now. The fact that this section says they can't discriminate doesn't mean a landlord doesn't use that information to do so. How are you ever going to prove that? That's my difficulty.
Mr De Fries: That's certainly what our concern is.
Mr Marchese: My sense is that if they're going to do anything, they should say outright to people that they can't use income information so as to clearly indicate to landlords that they cannot do it. Not that they can but that they can't do it, because if you allow them to do it, they use that information to discriminate. Thanks for coming.
The Chair: Thank you, gentlemen, for coming this afternoon and making your presentation to the committee.
As I indicated earlier, Mark Parsons of the Psychiatric Survivors of Ottawa, as shown on the agenda, telephoned and indicated they weren't able to attend this afternoon. As you know, the action centre for suicidal justice -- good heavens. They'll shoot me if they heard me say that. I apologize.
Interjection.
The Chair: That will probably make a headline, won't it, Mr Marchese? While we all compose ourselves, I'll try again. The Action Centre for Social Justice spoke this morning, so we now have two presenters left.
EASTERN ONTARIO LANDLORDS ORGANIZATION
The Chair: The Eastern Ontario Landlords Organization, Luigi Caparelli, president.
Mr Luigi Caparelli: My name's Luigi Caparelli. I am a small landlord here in the Ottawa area, and I'm here today on behalf of the Eastern Ontario Landlords Organization. We have been in existence since the fall of 1990. We currently have over 200 members who own or manage over 40,000 rental units in eastern Ontario. Our membership includes many landlords with one, two or three rental units, as well as several landlords with several thousand rental units.
We have appeared before this committee before and have presented the committee with detailed presentations. The main amendments we would like to see in the proposed Tenant Protection Act are set out below in three groups: changes to the landlord and tenant rules, changes to the rent control rules, and changes to the procedural rules. Together with each requested amendment, we have set out the reasons we believe the amendment is appropriate. I'll begin with the landlord and tenant rules.
The proposed Tenant Protection Act does not shorten the existing notice periods, so for non-payment of rent an eviction application cannot be started until 15 days after the notice of termination has been given. There will be five days for the dispute, and the government is saying that a hearing should take place two to three weeks after that. That means that an eviction hearing will not be held for at least five or six weeks after the tenant's breach of obligation. We request that the notice time periods with the time delay to obtain a hearing be shorter. We also request that the shorter time lines be mandated in the Tenant Protection Act.
Eviction time lines need to be faster to allow landlords to protect other tenants and to allow landlords to be spared the loss of more rent upon default. We thought that the government appreciated these concerns because of its various policy announcements indicating that the process would be speeded up. However, as the proposal stands, the time lines have not been speeded up and there is no legal requirement for speedier hearings.
The proposed section 172 allows the tribunal to require a respondent to pay a sum to the tribunal. We request that the Tenant Protection Act be amended to require that rent be paid to the tribunal whenever the tenant has not paid it to the landlord. We also request that this be made a condition of setting aside the part of any default order that relates to eviction.
The proposal is weaker than the current law. Public housing authorities and private landlords are in agreement that the requirement to pay rent into court should be strengthened, not weakened. Unless that is done, landlords will be providing services, namely, the rental unit and often the utilities, while the tenant does not pay for those services. The proposed subsection 79(1) applies once proper grounds for termination have been proved. The subsection gives the tribunal broad power to refuse to grant an application for termination unless it is satisfied "that it would be unfair to refuse" to grant the application. We request that this be changed so that the tribunal may only refuse to grant a properly proven application for termination if it would be unconscionable for the tribunal to grant the application.
The legislation requires the landlord to have a reason to terminate approved within the Tenant Protection Act. Once the landlord has established a valid reason to terminate, the tribunal should not have a general discretion to refuse the termination. Reducing the general discretion will allow landlords to better protect other tenants from bad tenants, and to exercise their rights.
Landlords' rights are already heavily constrained within the act, especially by the requirement of having a reason for termination specifically listed in the act.
The next few points I'll be making deal specifically with rent control.
Sections 116 and 196 provide for vacancy decontrol "unless otherwise prescribed." The ability to eliminate vacancy decontrol by regulation must be removed from the act. We believe that you intend vacancy decontrol to work and that the legislative draftsperson erred in presenting such a broad power to prescribe vacancy decontrol out of existence.
The proposed Tenant Protection Act eliminates the concept of maximum rent, while providing landlords a new right to set a market rent on turnover. This will create difficulties for landlords who rent units in the down cycle of the rental market. We understand that the government intends to allow a rental discount of one month on new tenancies to alleviate the problem landlords face in the down cycle.
Our first preference would be that maximum rent be retained, which we believe can be done without maintaining the rent registry. Failing that, we request that a discount of one month's rent be allowed to be applied to any month the landlord and tenant agree and that an additional one month's rent discount be allowed, which must be applied in the first or last month of the tenancy.
The rental market is currently very depressed in Ottawa. The removal of maximum rent will penalize many landlords who performed capital expenditures or otherwise justified rent increases which are much higher than the market now allows them to charge. Allowing landlords to offer a second month's rent as a discount only in the first or last month's rent should remove the negative reactions which tenants could experience from the discontinuation of a two-month discount spread over the whole tenancy.
1450
The proposed section 133 provides for a tenant to apply for a reduction in the rent charged if the landlord experiences a reduction in municipal property taxes. We request that this provision be removed, or at least that a rent reduction only be allowed if the pre-reduction municipal tax level has already been incorporated into the rental structure. We believe the whole notion of a reduction in the rent because of a reduced municipal tax bill is inappropriate in the context of rent being set at market levels on renewal. As is the case now in Ottawa, landlords may well be forced by the market to accept rents which are below the cost of operating the rental building. If the municipal taxes decrease, that is more likely to reduce the landlord's current loss rather than to increase a profit. The tenants gain the benefit of the market conditions when market rents are below costs. They should not have a rent reduction when the costs decrease.
This issue is of critical importance to property owners in the Ottawa-Carleton area. As you may be aware, the regional municipality of Ottawa-Carleton went through a region-wide reassessment in the late 1980s. This caused the municipal taxes to increase dramatically in many cases, in some instances tripling. The previous NDP government passed a regulation which prohibited landlords from applying for a rent increase to cover this increase in taxes if the tax increase was due to a municipality-wide reassessment. Unless the proposed section -- I'm sorry. There seems to be a misprint in the document you have in front of you. What we are trying to say is that unless the proposed section is changed, we could end up with a situation of having had to absorb a tax increase and now having to reduce the rent should reassessment result in lower taxes. This must be changed.
Under the proposed subsection 128(7), the tribunal is to disallow a capital expenditure if in its opinion the capital expenditure "is unreasonable or of no benefit to the tenants affected by it." We request that this provision be removed.
As it stands, the provision is a major attack on a landlord's ability to manage his or her rental building. The landlord's above-guideline increase is already limited to 4% and to the cost of the capital expenditure amortized over its useful life. These limits mean that landlords have every incentive to do only reasonable or necessary work. It should not be for the tenants or the tribunal to second-guess the landlord as to the benefit of the work. Giving tenants that defence will lengthen hearings and increase the workload of the tribunal, increase the animosity between tenants and landlords, and put the tribunal in the position of substituting its opinion on property management for that of the landlord.
The proposed subsection 54(3) provides that where a landlord has performed renovations so extensive as to require vacant possession and a building permit, the landlord is not allowed the benefit of vacancy decontrol if the tenant exercises the right of first refusal. We request that the landlord still have vacancy decontrol in this situation.
To eliminate vacancy decontrol as proposed will dramatically reduce the renovation and repair work which is performed on many buildings which need that work. A significant number of units are so run-down that they need work in the order of $10,000 to $15,000 to be rehabilitated. This work cannot be funded at the limit of 4% extra rent increases, especially since the units in question often have depressed rents. Four per cent of $400 is only $16 per month, which will only pay for about $1,200 of the work. The proposed restriction will cost many jobs and contribute to continued urban decay. The tenant's legitimate interests can be protected if the Tenant Protection Act provides that the landlord must meet a dollar test of the substantial nature of the work. Tenants will also still have the right of opposing a termination if the intended work is not sufficient to require vacant possession.
The proposed section 122 allows landlords and tenants to agree to capital renovations and increase the rent up to a maximum of 4% above guideline without an application to the tribunal. We request that in these situations, the 4% cap should not apply. Given that the landlord is only performing work that the tenant has agreed to for a rent that the tenant is willing to pay, it is not reasonable that the government impose such a severe limit. This clause assumes that tenants and landlords are incapable of negotiating fairly and is an insult to both tenants and landlords. Allowing the two parties to agree on a rent conditional on the landlord performing the work that a tenant desires would be a major step towards improving landlord and tenant relations which have suffered because of rent control legislation.
The next set of suggestions I'm going to make deal with procedural rules.
The proposed section 168 does not include posting on a tenant's door as a means of service. We request that this means of service be included. Posting has long been a means of service under the Landlord and Tenant Act. That means of service is necessary if the tenant is not at home when a landlord calls by and the landlord cannot obtain access to the tenant's mailbox, which is often the case, and the landlord wants to save the five days that would be consumed by mailing the notice. We understand that the government is concerned with the disputes which sometimes arise as to whether a notice was or was not pulled down by other tenants. We submit that the tribunal can readily deal with such disputes, particularly since in an arrears application the tenant can pay the rent and reinstate the tenancy at any time until the eviction order is enforced.
The proposed section 178 provides for the tribunal to ascertain the real substance of all transactions. We request that it be amended to add that all decisions shall be on the real merits and justice of the case. This was included in all rent control legislation until the NDP's Rent Control Act. It has always been a feature of the jurisdiction of the courts. We submit that cases should be decided according to their real merits and justice and not on procedural or other formal criteria.
Finally, the proposed section 200 amends the Human Rights Code to confirm that a landlord has the right to request income information, credit checks, references, rental guarantees and rental history of a tenant applicant. We request that this section remain as it is. Current legislation and the proposed Tenant Protection Act do not alleviate this in any significant manner. Evicting a tenant is a lengthy and complicated matter, even in a straightforward case of a tenant not paying rent. A landlord's only defence is to properly screen an applicant before they become a tenant. Over the past few years, some groups, with the assistance of the Ontario Human Rights Commission, have attempted to prevent landlords from screening prospective tenants. This would prove disastrous not only for the landlord but also for tenants who are already residing in the building. Landlords must have the ability to check a prospective tenant's income and rental history.
In conclusion, we believe these changes will result in a decision-making process which is more efficient for the tribunal, as well as fairer to landlords and to tenants who respect their obligations. The current system allows a few bad tenants to impose high costs on landlords and great inconvenience on responsible tenants. We understood that the purpose of the reforms was to allow responsible tenants and landlords to make their own agreements and to live in a better environment by enabling landlords to act more quickly and more effectively against the bad tenants who make life difficult for everyone else.
We believe the changes we have proposed will make the Tenant Protection Act better able to meet the goals of the government, as well as the goals of responsible landlords and tenants in Ontario.
The Chair: Thank you, Mr Caparelli. I believe there's time for a few questions.
Mr Cleary: Thank you for the presentation. You say eastern Ontario. Is that just the Ottawa area that you represent?
Mr Caparelli: No, we actually have members from as far away as Pembroke and as far east as Cornwall and that general area.
Mr Cleary: You request that the notice time period and the time delay to obtain a hearing be shorter.
Mr Caparelli: Correct.
Mr Cleary: Than it is at the present time or than it is in this legislation?
Mr Caparelli: Both. The way it stands right now, a landlord can't take any action until 15 days after he has served a notice. The problem then becomes that he can't get a hearing for, in many cases, several weeks. By the time all the proceedings are done, it may easily be three months before a tenant can be evicted. In the meantime, the tenant has not been paying any rent. If you own a duplex or a triplex, that rent that you're not receiving could represent 30% or 50% of your income, and banks are not in the habit of waiting for their mortgage payments.
Mr Cleary: I guess you're all in favour of speedier hearings?
Mr Caparelli: Correct.
Mr Cleary: On page 3 you say, "The proposal is weaker than the current law."
Mr Caparelli: Correct.
Mr Cleary: Another thing I was going to say about the tribunal: Is that any assistance to you as a landlord or is that better or worse than the present situation?
Mr Caparelli: We think the tribunal has the potential to be better for both landlords and tenants, simply because of the fact that it would be less formal and perhaps less costly.
1500
Mr Cleary: How do you feel that should be set up? Who should sit on that?
Mr Caparelli: Obviously we want well-qualified individuals to sit on this tribunal. We believe the tribunal itself should be provided with the proper resources so that hearings can be provided on a timely basis and so that landlords and tenants don't have to wait several weeks before they can get a hearing.
Mr Marchese: Mr Caparelli, what you really would like is no rent controls at all. Wouldn't that be the better solution?
Mr Caparelli: From our point of view, we believe the market would be the best system, correct.
Mr Marchese: You really don't like too many government interventions in the field of housing as it relates to landlords. Is that true?
Mr Caparelli: I think the experience of jurisdiction after jurisdiction has shown that the private sector can provide housing at a cheaper cost than the government can. I will grant that there are times when what we seem to have is an affordability problem. I do not think that cost should be borne entirely by landlords. That is a cost that should be borne by society as a whole.
Mr Marchese: I was going to ask you another question, but given that you said that, in terms of affordable housing, can you deliver affordable housing on your own?
Mr Caparelli: I think you've heard from other people already today that in order for the private sector to deliver affordable housing, several changes have to be made. This is only one of those changes which have to be made.
Mr Marchese: But simply with this change, affordable housing won't happen.
Mr Caparelli: This change by itself will not be sufficient.
Mr Marchese: And not in the near future.
Mr Caparelli: Not until other changes are made as well.
Mr Marchese: I think you're saying that for you to be able to provide affordable housing, some costs have to be borne by the general society, meaning the government, of course, because we collect money through taxes.
Mr Caparelli: Precisely. Or you have to lower the costs.
Mr Marchese: So governments should get out of the business because they can't do it. You can do it better, but you can't do it without them bearing some of the costs. Is that what I hear you saying?
Mr Caparelli: The reason the private sector can't do it is because of some of the costs that have been imposed on it by different levels of government.
Mr Marchese: And those are not some things that you would consider advantages that are given to you as a subsidy. You would consider that as almost a gross thing that happens, that things are added to your costs which are unfair and should be taken away. Is it something like that?
Mr Caparelli: I don't see how property taxes averaging twice on apartments what they do on single-family homes is a subsidy to landlords.
Mr Marchese: Has this government treated landlords fairly, do you think, or have they done you an injustice, or what? Do you think they represent you well these days?
Mr Caparelli: I think this proposed legislation is a step in the right direction. It's an improvement over what's there now. It certainly does not go nearly as far as we had thought it would.
Mrs Munro: I wanted to thank you for your presentation and the way you've been able to organize it so clearly for us in very specific areas. People have frequently come and talked more in terms of generalities. In this process, the more specific anyone can be, obviously, the better it is for the process.
I just have to comment on your final remarks, although they weren't what I intended to start my comments on. When you say you have a sense of disappointment that we haven't gone far enough, I think it reflects the concern we have in making a balanced piece of legislation. One of the tests of that is to have people on both sides who certainly can find reason to be critical.
I want to come to the question you have raised on page 12, because it is certainly one of the things that we as members of this committee have heard over and over again. It seems to be a very sensitive issue for many people.
You have suggested here that you want to see retained this opportunity to ask for the variety of things that are suggested here. I wonder if you have any comment for us as a committee in terms of the issue that so many raise who see this as a point of discrimination; for instance, the question of income, someone else making the assessment as to how much of their income is to be spent towards rent. I just wondered if you had a comment in regard to that issue that has been raised.
Mr Caparelli: There are a couple of comments. First, the thing that has to be stressed is that this is not something new; this is not a new right that has been given to landlords. Landlords, as we have heard already today, have always used a list of criteria, a list of questions they ask prospective tenants before they agree to enter into an agreement with them. Income criteria is simply one of many things that go into it.
We are well aware that some tenants will be able to easily maintain an apartment while paying 40% or 50% of their income in rent. Some tenants don't have the ability to do that. That's why, as I say, I'm not aware of very many landlords who would only use that criterion. If they did these days, I'm sure that they would have a lot of vacant units.
It's crucial that a landlord be able to continue to ask rental history, that they continue to be able to verify where tenants have lived in the past, and that they continue to know what kind of income is being made by the tenants. When you take all of these together, a rational decision can be made as to whether the landlord is in a position to rent to this particular tenant.
The Chair: Thank you, Ms Munro.
Mr Marchese: There's no follow-up?
The Chair: We're out of time, unless the committee -- I'm at the pleasure of the committee. If I have unanimous consent, again, we can do anything, but the time has expired.
Mr Caparelli, thank you for coming.
FEDERATION OF OTTAWA CARLETON TENANTS ASSOCIATIONS
The Chair: Dan McIntyre, executive director of the Federation of Ottawa Carleton Tenants Associations, has been patiently waiting all day. Mr McIntyre, welcome again to the committee.
Mr Terence H. Young (Halton Centre): Mr Chairman, on a point of order: I wonder if Mr McIntyre would let the committee know how many active members he has and how a tenant can become a member of his association.
The Chair: I don't think it's a point of order. I can tell you Mr McIntyre has appeared before this committee many times and the Chair is satisfied that he represents a number of tenants in this area.
Mr Young: I don't doubt that. I'm just wondering if --
The Chair: Let's wait and see what he has to say. But I don't believe you have a point of order.
Mr Dan McIntyre: I might have a short point of order. I hope that doesn't count against my time.
The Chair: You don't have a point of order, Mr McIntyre.
Mr McIntyre: Secondly, I did want to go on the record saying that we are early by about 45 minutes. I just want to note that, because some of our tenant association leaders were hoping they could come by a little later, when we were going to be on. Frankly, we would have preferred an evening hearing, but c'est la vie.
I'm going to be very brief and allow lots of time for questions. In fact, I'm offering to the committee that I will stay here as long as you want to answer every single question you have and to answer as truthfully and frankly as I can, based on 15 years of experience representing over 100 tenant groups at rent hearings and working with thousands of tenants in this region alone. I'm at your disposal for the day.
We're here to tell you, the Ontario government, that the Tenant Protection Act is insidious and cancerous. It will drive up rents, reduce maintenance and other rights and not result in more choice for tenants. That's a professional assessment we're giving you, based on our experience. In our brief, which we're not going to read -- you can read that on the bus or the plane -- we're condemning the government for being afraid to listen to us and to look at the real facts about rent control protection for tenants.
The minister and the parliamentary assistant have never offered to meet with me, and I don't mean to be immodest, but I have more experience than anyone else from the tenants' side on rent control. I'm prepared to face any challenge, any argument, and I am still offering to meet with the minister, the parliamentary assistant, the government caucus or all of them to discuss at any length and to deal with each and every issue on a factual basis, because we've done our homework.
There are myths that this bill is based on. Those myths include rent control unfairly reducing rents, landlords getting no money for repairs, annual rent increases having been fair and just and that tenants have too many rights. These are the same myths we've been hearing for those 15 years. Finally, they've got a government that seems willing to act on those myths.
Notwithstanding our frustration and anger so far, we are proposing 35 specific recommendations to improve the bill within the spirit of the bill. I'm aware of parliamentary procedure. It's passed second reading. That means the House has approved it in principle. We're offering you 35 ways to improve your bill, but we also need to take the time to put our feelings on the record, and the fact that the bill is built on false premises and therefore cannot survive. We wonder what's going to happen when it fails.
The reason that it is the ending of rent control -- and people say, "No, it isn't, because we have this recontrol" -- is this: What landlords have wanted for as long as I can remember is exactly what they get from this bill, and that is as a matter of right the ability to charge the last single dollar they can extract from the tenant's pocket. In other words, if the last single dollar is X -- say X is $900 -- there is no check to see is that fair, is that reasonable, is that necessary, is that earned, what has been the history here or any kind of other thing. A proper rent control system would bring X into question and may lower it to Y.
1510
It permits landlords to do a number of things, to charge different things to different folks. It permits them to use advantageous negotiating abilities because they're holding the cards, they're in the business of being landlords. We're not in the business of being tenants. I've heard "professional tenant" cracks before, but we're not in the business of being tenants. The imbalance is startling between the parties. Sure, we want tenants to do as best they can within any system. We want to help them. But if you set up the system so it's going to fail, it's going to fail. That's what we have. You've given them this right.
It's so frustrating to us to have seen three different acts in action, and I've been very critical of all three acts. There was a myth put out this morning that the previous act was only put in from the tenant perspective. I spent most of our time last year in the discussion paper going over the history and some of the background of rents. The NDP was going to bring in a system far stronger than what they eventually brought in and the reason they didn't was because the landlord community got all over them like a dirty shirt and did their thing and there were some compromises struck. We don't need to dwell on those. That's that legislation; this is this one.
We have questions for the committee, mainly for the government. Why have you not tested your theories with experts in the field? Why are you afraid to talk to us? What analysis has been done about rent increases over the last several years? We have had legislation that has built-in allowances for different things. If you just do a simple spreadsheet and you look at for every dollar of rent that was being charged 12 years ago, what has happened to it with the guideline increases, what has been put into it for capital components?
We worked it out last year and we shared it with the committee: 17.6% of rents is already there for capital expenditures. It's a simplified accounting thing. I realize there can be some ebbs and flows here. If you take the FRPO number of $10 billion needed in capital expenditures and you take the fact that there's $10 billion paid in rents, you can do all the capital expenditures in five years, unamortized.
We don't look at amortization costs when we're looking at the costs -- or I don't think the government has. I hope I'm wrong. We don't look at compounding. That's what rents have done for the last 20 years. Put it on a graph again, put the amount of rent increases permitted just as the floor on the guideline, put it against inflation, compare it to the real costs and increase in rents for landlords and, as a whole -- and there are always a few exceptions -- they've done very, very well.
Then if you put in some of the history from the mid-1980s, when landlords were applying successfully for 30%, 40% and 50% rent increases which have compounded and compounded on costs that are now or soon will be no longer borne, those are the real facts. We invite you to look at that. I would love to sit down with you and take on every single issue that you can raise around this. We tried to do that last year. We offered to do that.
Somebody asked, "What rights does a landlord have?" They have a right to charge and collect rent. They have a right to get the last month's rent. There are several rights contained in the thing. We don't say to somebody who goes to Canadian Tire to buy something, "What right does the Canadian Tire store have?" It's the consumer who has rights because they pay the bill. That's how the system works: consumer protection. That's why this isn't.
The suggestion that you can't recover costs is totally disprovable when you look at the systems that have been in place. In fact, what has happened is costs have been recovered without being spent by putting in allowances that weren't checked on the rent control side.
Another myth we want to deal with is that tenant groups are philosophically driven and we just want to drive landlords into the ground. If that were the case, I would have been discredited years ago. In 15 years I have never had a tenant come up to me and say: "That's what we've got to do. We've got to drive all the landlords out of business. We've got to drive them into the ground."
They've said they wanted fairness and every piece of our work has been addressed to that. Yes, a little bit of a taffy pull, arguing with the landlord lobby in terms of what's right and what's wrong. But this suggestion that somehow tenants are being protected, some suggestion that this be in rent control, it's something that should have been dealt with, time should have been taken and we should bring in a system of real rent control. I don't think we're going to get that but we are proposing 35 recommendations.
I'd be delighted to take any and all questions and stay as long as necessary, including the question that Mr Young posed.
The Chair: I believe Mr Marchese is first.
Mr Marchese: I'll waive my time for the government.
The Chair: Very well. Mr Gilchrist is next.
Mr Gilchrist: I heard a reference that Mr Young had a question.
The Chair: Why don't we try Mr Young first.
Mr Young: My interest is how you communicate with your members. Do you have tenants who are actual members?
Mr McIntyre: Yes.
Mr Young: How do you communicate with them and how many tenants are members of your organization?
Mr McIntyre: We communicate by way of newsletters, by way of general meetings, by going out into communities meeting with tenants, meeting with tenant associations, helping them organize, helping them deal with the processes that affect them and so on.
Mr Young: How many tenants are members of your organization?
Mr McIntyre: We don't keep strict membership records. All tenants are eligible for our services. We offer, for example, a hotline service which handles about 5,000 calls a year. In our peak year we worked with over 30,000 tenants. They do not need to pay to be a member of the federation. It's not something that we're particularly concerned about. We are particularly concerned about fairness. We're particularly concerned that the government of Ontario has a system in place that is fair and equitable to all tenants.
Mr Young: So if they don't pay any membership dues or anything, how do you finance your operation?
Mr McIntyre: Right now, that's a loaded question. After several years we established a lot of credibility with the government of Ontario and got a contract with them that enabled us to do a lot of this public advocacy work that we've been able to do and we have been a partner with the city of Ottawa for about 14 years right now and we raise some money ourselves. The government of Ontario has cut us off completely and we won't be here next year, as it stands right now, to help tenants. They'll be at the whim of the Tenant Protection Act.
Mr Young: So you're funded by the province and the city of Ottawa?
Mr McIntyre: Not any more. Mr Leach cut us off in the middle of a contract.
Mr Young: So you're funded by the city of Ottawa?
Mr McIntyre: We have money from the city of Ottawa.
Mr Young: Thanks. That's all I need to know.
Mr Wettlaufer: Mr McIntyre, thank you for appearing once again. You say that landlords have rights. One of the rights you did not mention was that they have a right to make a profit. Do they?
Mr McIntyre: No, you do not have a right to make a profit in Canada in a capitalist system. You have a right to pursue a profit.
Mr Wettlaufer: Okay, they have a right to pursue a profit. You also stated that all the moneys that they have been receiving over the years they should have been pumping into maintaining their buildings.
Mr McIntyre: The current law says that 2% of the annual guideline is for capital expenditures. Many of them have received generous allowances over the years for various capital expenditures. There's also depreciation allowance.
Mr Wettlaufer: Perhaps you could enlighten us on how they might have saved the money for these allowances, given the view that they pay taxes on their income and given the view that the federal Income Tax Act does not allow them to build up a reserve to pay for these capital repairs.
Mr McIntyre: I would agree with you if you said to me there should be some changes to the federal Income Tax Act on the question of reserves. Nevertheless, the money was specifically allocated. It's like giving your kid a $10 allowance to spend on a haircut and they go and play pinball with it. They're not doing what they're supposed to do with it. It was specifically allocated for that purpose. Their tax problems notwithstanding on the reserve question, it was an allowance for a specific purpose. Not only that, another allowance has been given to them and that needs to be taken into account. Second, the federal Income Tax Act does provide for depreciation allowances and capital expenditures actually expended.
Mr Wettlaufer: And some of those increases that they had received of 2% or 3% were during times of high inflation when their costs were increasing by 20% or 30% or 40%.
Mr McIntyre: No, that's incorrect, sir.
Mr Wettlaufer: That's not incorrect.
Mr McIntyre: Since 1986, the annual guideline has exceeded the rate of inflation 12 straight years.
Mr Wettlaufer: That's not incorrect, I'm sorry.
Mr McIntyre: Look it up.
1520
Mr Gilchrist: I appreciate your pointing out that the NDP campaigned that when they were elected they'd bring in rent control that would be tied exclusively to inflation. The guideline they drafted in fact was far from that, and I appreciate your pointing out it has been twice the rate of inflation.
My question to you, as somebody who is very familiar with the situation and in fact has taken this on almost as a profession, is that I would have to ask you whether you're aware of the unfairness that currently exists in the property tax treatment of apartments vis-à-vis the treatment of single-family homes. Are you?
Mr McIntyre: Yes, and I'm sure Mr Greenberg would want me to correct the record from this morning. In fact we made presentations for the Fair Tax Commission, we served on a committee of the regional municipality on tax reform and have been making this point to various ministers going back to Mr Curling about the unfairness of the property tax system. We would have liked this government, which tells municipalities, for example, they're going to have to, whether they want it or not, take certain services on a downloading scheme, to dictate to the municipalities that they have to make the change.
Mr Gilchrist: In fact, the province is drafting the ratios that will become the standards for the municipalities. Let me just ask you, then, if you recognize it is the problem --
Mr McIntyre: It is a problem, yes.
Mr Gilchrist: It is a problem. Okay, that's fine. Given that -- let me use Toronto figures as an example -- every single tenant would see savings in the range of $100 to $125, which would work out to about a 20% decrease for the average apartment overnight, without cutting into the landlord's profit but simply by restoring fairness, I'd like to ask you what steps you are currently taking with all the city governments in Ottawa-Carleton, in this election year, to make sure that the tenants are aware (a) of the unfairness and (b) of the positions being taken by the prospective mayors and councillors.
Mr McIntyre: As I said, we have taken the same position for 10 years, that it's an inequitable tax, and we agree with your conclusion. If you made that as a first step, then we might be wanting to talk a little bit more about some of these things. However, we are on record, and every municipality knows we're on record -- we're also on line, by the way. My colleague Stephanie David maintains a Web site for the federation, which has an article specifically on this point. We have made this point to every single municipal politician in this region and in the city of Ottawa over the years.
You know and I know what the truth is. The truth is that in order to make a correction in the tax system, you've got to raise the taxes of homeowners, and you know homeowners aren't going to stand for it.
Mr Gilchrist: That's their problem.
Mr McIntyre: I know. Our problem --
Mr Gilchrist: Can I expect to see you print a list of which councillors are or are not in favour of bringing tax fairness to the city of Ottawa?
Mr McIntyre: As a matter of fact, Mr Gilchrist, as a result of working on a committee at the region, this was brought to the region in terms of the proposals they would make to the Fair Tax Commission. Originally, my pushing for this resolution was defeated on a tied vote at the region and later was passed, if somewhat watered down. The region's position is that there ought to be a fair and equitable system for tenants paying taxes. Now, that's not quite as far as I would like them to go, but you can check with several councillors about my record on this issue.
Mr Gilchrist: That's fair enough, but I think I can make the point that there is nothing that would have a bigger impact on affordability. We're talking 20% reduction, particularly at the lower end and those that are geared to low-income families and those on government assistance. It has the biggest percentage impact on them. I would think, over and above the sitting councillors, you would want to assess the positions of all the prospective councillors this fall.
Mr McIntyre: Absolutely.
Mr Gilchrist: I would entreat you, not just here in Ottawa but with your colleagues across this province, to raise that issue, find out that position and publish it, because we are completely in sympathy with that goal of tax fairness.
Mr McIntyre: As a matter of fact, United Tenants of Ontario, which we are part of, published an extensive brief on this, with input from groups around the province, and submitted it to the previous government and to the current government. We are on record on this. I think your math is pretty close in terms of reduction. I agree with you and I would call on this government to have the courage to force the municipalities to equalize taxes across the board. Passing the buck doesn't work in this case.
The Chair: The final word goes to Mr Cleary.
Mr Cleary: Thank you for your presentation. You say, "We've met with every Minister of Housing since Alvin Curling, but Al Leach ignored my offer to meet." Well, this side of the committee would give you permission to meet with him, but I don't know if that's any good to you or not.
Anyway, the other thing is the tribunal. How do you feel that should be set up? Do you think there's support there, that it will be better for your tenants?
Mr McIntyre: There is a specific recommendation we have in the brief. I would say, compared to some of my colleagues, that I probably have more of an open mind on that one than some others may have. I see it as possibly something that could work if given enough time to be put together properly, if checks and balances are in as to the people who are running the system and how they're running the system. The problem is that it's happening so fast that if this bill is enacted, say, January 1, 1998, which is predicted by many, the tribunal will just have to go holus-bolus and there may not be some of the systemic things done that could make it work properly and fairly and put in the proper protections.
But I'm saying to the government I'm open-minded on this and I would be happy to sit down and see if we can find a way to make it work. You had some excellent suggestions from the legal clinics today and excellent points about the duty counsel system, which has been a godsend to Ottawa tenants, who often call me on Monday saying, "I've got to go to court tomorrow. I don't know what to do. I don't know where to go," and I say, "Here's where you go and ask for the duty counsel." It solves so many problems.
There are so many things we can do to help, but unfortunately the government is sort of pitting us, because we're the ones who called for rent control and they're not too thrilled about that, and they don't want to look at the practical advice, at least not so far. Maybe Mr Gilchrist will change his views on that, and maybe he'll accept my challenge.
Mr Cleary: The fallout from mega-week and the extra responsibilities municipalities will have, does that concern you?
Mr McIntyre: Absolutely, because according to the regional municipality, hardly a hotbed of socialism, chaired by Mr Peter Clark, this will lead to tax increases of about 10%; not my figures, Peter Clark's figures. All of those increases can be passed through to tenants in one fell swoop in the first year. The interesting double whammy is that this will then wend itself into the guideline calculations a year or two down the road, so we'll pay twice for it. I don't think that's fair. I don't think that's protection.
Mr Gilchrist: Mr Clark was wrong.
The Chair: Mr Gilchrist, please. Thank you, Mr McIntyre, for coming this afternoon.
Mr McIntyre: I take it you don't want to take my offer. I've got half an hour, an hour.
The Chair: Thank you for your brief. I know members of the committee will take the time to read it. Thank you, sir.
That concludes the public hearings of this committee in Ottawa. Before I adjourn until Monday, I wish to advise the committee that the hearings in Hamilton will start at 11 am at the Ramada Hotel, 150 King Street West. Unless there are questions about the Hamilton hearings, and seeing none, I will adjourn these hearings until 11 am on Monday.
The committee adjourned at 1528.