[Report continued from volume A]

1820

RENT CONTROL ACT, 1991 / LOI DE 1991 SUR LE CONTROLE DES LOYERS

The Acting Speaker (Mr Villeneuve): A quorum is now present. The honourable member for Dufferin-Peel had the floor at the time of the quorum call. You may now resume your participation in the debate.

Mr Tilson: The best deal in town is in the city of New York as a result of rent review, according to Mr Tucker. What he is saying makes sense as to the number of wealthy people who are literally abusing the rent review system in the city of New York. Mr Tucker states in his chapter dealing with this:

"The outcome of rent control is that long-tenured or affluent tenants get reduced rents. In New York, the remarkable result has been that some of the best deals are held by the city's cultural and political luminaries.

"Former Mayor Edward Koch himself is one of the biggest winners. He has a rent-controlled apartment on Washington Street in Greenwich Village. Koch pays $441.49 a month for a large, one-bedroom apartment with an outer terrace that would probably be worth $1,200 in an unregulated market. He kept the apartment for the entire 12 years he lived in Gracie Mansion."

That was the mayor of the city of New York taking advantage of the rent review system. There are going to be people in these cities, in the city of Toronto, the city of Ottawa and the city of London, who are going to do the same thing as a result of the policy of this government.

Ms Gigantes: That's slanderous.

Mr Tilson: It is here in the book. Read the book.

"Supermodel and actress Lauren Hutton and her husband, Robert Williamson, have title to a rent-controlled chalet in the rear of a small apartment building in Greenwich Village. They pay $469.70 a month. (Rent-controlled rents are always calculated to the penny, since they are raised by annual percentages.)" Sounds familiar? That is the policy that is being suggested by this government.

"The chalet, built as an artist's studio in the 1920s, has floor-to-ceiling mahogany panelling, a fireplace, and a loft. The couple also own a home in California and ocean-front property in the Hamptons and on Long Island. Williamson has another rent-controlled apartment in the neighbourhood that he uses for storage. Strangely, both his landlords independently sued Williamson for non-primary residence without realizing he had two apartments. Williamson won both cases."

It goes on and on about other well-known personalities that are literally taking advantage and paying unbelievably low rents as a result of rent review in the city of New York. It goes on for a great number of pages. It is almost like one of the scandal magazines, and it is scandalous when we hear of wealthy individuals taking advantage of such a system, but that is predictable in Ontario. It makes sense, because the exact system that this government is suggesting has been going on in the city of New York for years.

Mr Tucker comments:

"For many years, Shelley Winters had a rent-controlled apartment near Central Park, paying only $839.93 for two bedrooms. She also owned a home in Beverly Hills. She finally bought her apartment in 1987 -- four years after the building went co-op -- when the new management board proved in court that the Beverly Hills home was her primary residence. Farley Granger, another old-time actor, remains in a rent-controlled apartment in the same building, paying $916.75 for a two-bedroom apartment...."

"Politicians in New York make out equally well under rent control. On the city council, many of the most outspoken advocates of rent regulations are beneficiaries themselves. Of the seven representatives from Manhattan (where most of the best rent-controlled deals are located), three have benefited substantially from rent control." Sounding more and more like Ontario? I can assure members it is.

Finally they conclude, and this is the best story of all, where Mr Tucker talks about one of the Rothschilds, who was a descendant from the real Rothschilds, another Manhattan artist who has built a career around a rent-controlled apartment.

"An art appraiser with a modest reputation, Rothschild has what both the New York Post and Fox Television's A Current Affair called 'the best deal in town.' The 73-year-old Rothschild is the sole tenant of an eight-room duplex featuring a 2,000-square-foot living room that has a 22-foot ceiling, plus hand-carved woodwork and cathedral windows, all in an ornate building just off Central Park. He pays $568.24 a month.

"Divorced three times, Rothschild said he is fairly certain that his last wife married him in the hope of eventually getting the apartment. 'When I die,' he added, 'I just want to be cremated and have my ashes buried right here under my living room floor.'

"Even in death, New Yorkers rarely want to give up their rent-controlled apartments."

That is how preposterous rent review has become in the city of New York.

The government has taken over and that is what this government wants to do. It has become quite clear from the Premier's statement to Mr Melling, which has gone uncontradicted in this House, so I therefore conclude, as does everyone else in this province, that the New Democratic government wishes to take over the housing industry.

Mr Tucker talks about that to a certain extent in chapter 22 and the downfalls of that. He states, "Once a municipal government has stifled private enterprise in housing, the other shoe drops." I ask when the other shoe is going to drop in Ontario.

Mr Tucker continues by saying:

"The government must now become the 'supplier of last resort.' The private sector can no longer provide housing, so the government must. The process can be observed in England, where rent controls were first imposed during World War I. By 1980, almost 80% of Great Britain's housing was owned by the government. Only Prime Minister Margaret Thatcher's well-received policy to sell public housing to its tenants has begun to reverse the process.

"New York City is going through the same transition. 'Private developers cannot even build middle-income housing in New York,' said Abe Biderman, commissioner of HBPD. 'The numbers just aren't there. By the time you factor in land costs, construction costs and property taxes, you're already up to $800 to $900 a month rent. If we're going to have low-income housing in New York, the city is going to have to build it.'"

That is exactly what is happening in Ontario. The minister's agenda is quite clear: He intends to build all the housing in the province. That is what he is proposing. He is driving the private sector out of business.

Hon Mr Cooke: David, he is talking about costs.

Mr Tilson: The minister keeps talking about how he is planning to support private housing, how he favours everyone. I would like to know where his legislation encourages the construction of new housing in this province by the private sector. There is not one iota of evidence that it is going to happen.

Mr Tucker does continue with some paragraphs about where the government takes over and he states --

Hon Mr Cooke: You are more right-wing than the Reform Party.

Mr Tilson: The truth hurts, I know. He states:

"Perhaps the most interesting question, though, is this: Where is the city government ever going to get all the vacant and half-vacant buildings that will be reconstructed and rehabilitated into low- and moderate-income housing? We have already heard the answer. It is to be 'torn from landlords' bleeding hands.'" That is what the minister is suggesting in this province.

"In 1986, New York City owned 9,000 buildings, containing 50,000 vacant and 50,000 occupied apartments -- 9% of the city's housing stock. Seventy per cent of central Harlem is now owned by the city government." The city of New York is the largest landlord in the city and this province is going to become --

Mr Turnbull: Once again it appears that the government has so much disrespect for this House that we do not have a quorum.

The Acting Speaker ordered the bells rung.

1829

Mr Tilson: I was just describing very briefly how the city of New York has in fact become the largest owner of apartment dwellings in that city and how that obviously is the plan of the Premier and the Minister of Housing.

This is all well documented. Mr Tucker has not just made this up. This is quite factual. He proceeds at page 312, where he states:

"Only about 100 buildings are auctioned back to the public each year, all of them very small structures with only one to four units. The remainder are being held as a war chest for the city government's future housing programs.

"The mayor's 10-year program, in fact, is nothing more than a blueprint for taking more buildings out of the hands of private owners and turning them over to the growing legions of politically connected non-profit organizations that are going to be the city's new landlords. Half the money in the $5.1 billion will go to non-profits." That is a fear that I hope does not happen in Ontario. I think we all acknowledge that there is a need for non-profit housing, but it is getting out of control in this province, and it is as a result of legislation such as we are seeing before us today.

The best statement of all comes from Assa Lindbeck, chairman of the Nobel Prize Committee for Economics. His brief statement on the subject of rent controls is referred to in the text. I think this sums up why we should not proceed with the rent review legislation being proposed by Bill 121:

"The effects of rent control have in fact been exactly what can be predicted from the simplest type of supply-and-demand analysis -- 'housing shortage' (excess demand for housing), black markets, privileges for those who happen to have a contract for a rent-controlled apartment, nepotism in the distribution of the available apartments, difficulties in getting apartments for families with children and, in many places, deterioration of the housing stock. In fact, next to bombing, rent control seems in many cases to be the most efficient technique so far known for destroying cities, as the housing situation in New York City demonstrates."

I heartily recommend that this text be read by members of the government. Obviously they have not studied other jurisdictions, such as the various American cities that have got into rent control. They have not studied the situation in Europe, in England and in Sweden. They simply think it is a good idea and that is how they are going to solve the housing problem. They should look at some of these issues, because their legislation does not deal with the types of problems that exist in New York. Their legislation is completely silent on these and I can assure them that it will be raised in the committee hearings.

The Minister of Housing, who is prattling on now, talked back in December with respect to the subject of rent review. Having talked about some of the horror stories that have been going on in other jurisdictions, I would like to refer the minister to where he states in Hansard, as a result of a question I asked him back on 3 December 1990:

"I think one of the difficulties that all of us have had under the current rent review legislation is that it has been so complex that it has cost the taxpayers of this province $40 million a year to administer an incredibly complex system.

"I think one of the prime goals of this government is to develop with landlords and with tenants, over as short a period of time as possible, a system of rent regulation which will be simpler and clearer to both landlords and tenants and which will result, in fact, in some of the bureaucracy in the rent review system being able to be downsized so that we will have a simpler system."

Is that what Bill 121 is going to do? In the months ahead we will be debating that and I think the minister will find that we are not so far from the problems that have occurred in the American cities, in England and in Sweden that have been described to him here today.

I would like to refer to some of the sections in the bill, specifically the time-limited exemption which is referred to in section 3, the subject of time allocation which is dealt with in subsection 3(5) and the whole issue of new buildings.

After five years, new buildings will be subject to controls and there will be little incentive as a result of that. In other words, the definition section talks about how new buildings will be exempt for five years, and after five years they will be subject to rent control. There will be no incentive for individuals to build new buildings, knowing perfectly well that they are going to be constructing buildings that will be subject to rent control in five years. Why would they do that? There is no reason why they would do that. I would submit it is a ploy to give the impression that they are getting out of rent control. In fact, they are going into it even further.

I think some of these sections would be dealt with more appropriately in the clause-by-clause discussions at the committee, and that certainly will be done.

I would like to make a couple of comments specifically with respect to the extraordinary operating costs that have been referred to by the minister in his opening comments. We in our party, of course, referred to the subject of garbage tippage fees, and we put forward an amendment, which I do not think we got a chance to make in the House as a result of the closure.

The very thing our party predicted is starting to happen already. The city of Scarborough has insisted that one particular landlord create a garbage structure outside his apartment building at a cost of $25,000 to $30,000. The rents currently in this building are $504. I guess the reason I am giving this example is that there is nothing in the legislation that allows for that type of expenditure. In other words, where a municipality or some outside force comes along and passes legislation, this must be done. I would submit that hopefully there will be some amendments to deal with that.

When we look at section 14, we must also look at subsection (2) that talks about an increase in cost being considered extraordinary only if the taxes, heat, hydro and water for the whole complex increase more than 50% of the average over the past three years for that specific category. We have to look at that subsection. I think it is slightly misleading to say that those types of expenditures are allowed, as stated by the minister, without further explanation from him, and I would invite him to do that this evening.

Throughout the act there are definitions whose meaning, I hope, will come out in the hearings. Specifically, I have raised in the House the issue of neglect. I have raised the issue in subsection 15(3), where it states:

"(3) A capital expenditure is not eligible if,

"(a) it became necessary as a result of neglect in maintaining the residential complex or a rental unit in it...."

We do not know what "neglect" means. We do not know what is "necessary." We do not know what that is. I suppose the minister is going to tell us, "Oh, well, that will come forward in the regulations." But the unfortunate part is that we will not see those regulations until the bill has been passed. Being a new member of the House, that is my understanding as to the procedure. It is very difficult to support legislation when you know these strange definitions are going to come out.

There is the other subject of conditional orders that does appear in subsection 15(4). It would appear that conditional orders would continue under certain circumstances, but if they are not allowed, I would submit that those facts, where people are trying to do certain things as a result of conditional orders, could be used against the landlord to prove neglect or inefficient maintenance or reduction of service, if the orders are not granted and they do not have the funds to do it. So it is a catch-22 situation that I would submit the government is putting forward.

Section 16 talks about the transitional capital expenditure period. In other words, to be fair to the minister, he did attempt to make some allowance for the problems of people who were caught under Bill 4 and the financial difficulties they have encountered. I will admit one thing to him: He has at least tried with that section to alleviate some of the problems.

However, due to the time that has elapsed since the work was completed and the application processed, the amount received in most cases will not even cover the interest. The amount that is being allowed will not even cover the interest that has been the result of this delay, so the moratorium would appear to remain in place, obviously, until royal assent for Bill 121 is given. If Bill 121 does not pass before 1 June 1992, I believe the capital expenditures incurred between 7 June and 31 December are lost. They are lost for ever. Again, that section is rather misleading.

I will not proceed with other sections in the act, but I would submit it is a terribly drafted piece of legislation. The lack of definition is rampant. It is very difficult to define to tenants and landlords exactly what is meant. There is no question, as I said in my response to him, that tenants' and landlords' associations are going to have to hire experts to determine where they are going with this specific legislation.

I will hold the minister to my bet of a loonie because I believe the administration and the bureaucracy will be rampant as a result of this legislation.

Bill 51, of course, had a Residential Rental Standards Board where members were appointed by the Lieutenant Governor in Council and were assisted in the performance of their duties by such officers and employees of municipalities as were required. It was this board that set the minimum maintenance standards. Property standards bylaws also involved the municipalities, and as well, provincial property standards employees could conduct inspections.

Landlords could appeal an order by filing a notice with the board, and this appeal could be heard by a single member of the board or by a panel of three members. Along comes Bill 121, and as I understand it -- if I am incorrect I am sure the minister will tell me -- the director of rent control is the administrative head, not the minister, as was the case in Bill 51. The director assumes -- this is contrary to what I believe the member for Eglinton has indicated -- responsibility for the administration of the act and has the authority to direct actual applications, inspections and orders.

The next issue is rent control officers, who receive applications and judgements and issue work orders. I would be interested to know -- I challenge the minister to tell me -- what type of bureaucracy will be created by this legislation. How many new people are going to be created as a result of Bill 121? How many rent control officers will there be? How many rent inspectors will there be? Rent inspectors will inspect the buildings to determine the need for or cause of capital repairs and report the findings back to the director or rent control officers. There is no appeal process in this legislation, only with respect to that in a court of law.

I can tell members that already there are ripples in the economic system of this province. People are already having difficulties with the proposed legislation. Before, with respect to Bill 4, work and job losses were simply postponed; now, with Bill 121, if Bill 121 is passed, they are being cancelled --

Hon Mr Cooke: David, look around you.

Mr Tilson: If the member is not getting letters, I can assure the member that I am. People are simply telling me that jobs are going to be cancelled, contracts are going to be cancelled and suppliers are going to be cancelled, so all the problems created by Bill 4 are continuing and are worsening with respect to Bill 121.

One letter I would like to refer to is from O'Shanter Development Co, which talks about, again, the definition of "adequate" in section 25.

He states: "How does the minister expect the rental industry to trust a rent review system where the rent review officer will first decide whether he should lower a landlord's rent?" He refers to subsection 13(7) of the bill before he considers any possible increase. This is a dramatic variance from the previous legislation. "In section 25, a tenant must apply to lower rent based on whether the standard of maintenance is adequate. What does the word 'adequate' mean?" He goes on that he believes this will be the basis of kangaroo court proceedings, where tenants vandalize their apartments to get their rents lowered. "Ample evidence of this exists in Berkeley or New York. Perhaps Bill 121 should be named Pacific Heights à la Cooke."

The people in the housing industry and the private sector industry are looking at other jurisdictions. They are looking at New York, England, and Sweden and they are very concerned where we are going. I must confess that certainly people on this side of the House are concerned as well.

I would like to refer to one further piece of correspondence, from Sifton Properties of London. These types of correspondence are coming from all across this province. I hope the minister is receiving similar pieces of legislation and will consider them before implementing Bill 121.

The specific correspondence I am referring to has just recently come to me from Barry Parker, vice-president of residential income properties, who talks about what Bill 4 did to him and what he expects Bill 121 is going to do to him. He states:

"As owners and managers of 3,000 pre-1976 rental units in southwestern Ontario, we are writing to complain about the NDP's latest disaster for our industry -- Bill 121.

"Our stock of units now averages about 20 years in age and has been subject to the full effects of Ontario's rent control system since 1975. During that time, rents have failed to even keep up with the inflation since the guideline increases were well below the inflation rate throughout most of the 1980s. In other words, like many owners of the older buildings, unless we have received approval from rent review services for an above-guideline increase, we must now rent our units for less money in real dollars than was being charged in 1975. Compounding this problem is the fact that due to the age of our stock of housing, we must now plow millions of dollars back into our properties in order to ensure that they remain functional and attractive for the next 25 years. Bill 121, if passed, will make that impossible.

"Our company had earmarked $13 million to be spent on units after the Residential Rent Regulation Act, 1986, was passed. While the act was in place, we spent $2.5 million and had filed conditional applications for another $3.7 million with plans to continue with our renovations until all of our units had been refurbished. All of these plans were postponed until Bill 4 was introduced, but will be cancelled if Bill 121 is passed. Please understand that this step will be taken with great reluctance, as we take great pride in offering clean, presentable units to our customers, but Bill 121 gives us no choice. First of all, the guideline increase has been reduced from the amount allowed under the current formula. In 1991, for example, the amount available to pay our operating costs and minor capital would be reduced by 8%, which translates into a reduction of $175,000 of working capital, if the Bill 121 formula were in place.

"Secondly, the 3% cap on capital, after incurring a 2% penalty, could not allow us to recover our costs, nor will we be able to find a lender to provide funds for this work. Simply put, we will not be able to afford to do the work we wish to perform, notwithstanding Mr Cooke's utterly ludicrous contention that Bill 121 creates more funds for capital expenditures when the exact opposite is the case.

"The most frustrating aspect of this entire situation is that the NDP has demonstrated a complete lack of understanding of the realities of operating income properties. While they smugly assert that our industry always complains when rent control bills are passed, they fail to acknowledge that we have every right to complain. The fact that we have not supported rent controls in the past does not take away anything from the fact that Bill 121 represents a disaster to our company's plan to continue to operate well-maintained, attractive buildings for our customers."

That is the gist of where we are going with Bill 121. What is going to happen to the quality of life of the people of Ontario as a result of Bill 121? I look forward to the public hearings taking place. I look forward to debating all of these issues at the committee and hearing the concerns of the people of Ontario, the problems Bill 121 and Bill 4 have caused and that Bill 121 will cause. I look forward to that and reporting that information back to this House.

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Hon Mr Cooke: First of all I want to say that while I totally disagree with the approach taken by the Housing critic for the Conservative Party, I certainly will recognize he has done a lot of work on the preparation of his comments today, and a lot of research. I am not really sure, based on the kinds of comments the critic and some of his colleagues have made on this legislation and other legislation, exactly where the Conservative Party is going in 1991.

Whether it is employment equity, the principle of pay equity or things like support and custody legislation to protect families, or some of the comments they have made on social assistance benefits for families in this province, I do not know what happened to the old days when there was the Davis approach, where they were Progressive Conservatives, where there was an approach and an appeal to urban Ontario. I think it is very clear that the Conservative Party has made a strategic decision in this province to write off urban Ontario and isolate itself to try to polarize the province. Based on the speech the critic made today, I tell members they are really going in the wrong direction for the people of this province.

On the language that is used, can members imagine coming in here and talking about housing and saying that Thatcher is a model, and that is supposed to be modern 1990? I think there are only a few words to describe the direction of the Conservative Party: "extreme" and "fringe." That is exactly where the Conservative Party is clearly going. Members are going to hear that more and more often because it is clear it is their approach. It is a fringe party in Ontario. Its policies show it.

Mr Tilson: I would like to thank the Minister of Housing for his kind comments. I think housing is no different from a number of other policies this government is embarking upon. Whether it is the deficit, I think the government has seen -- and if it has not seen, it will be seeing very shortly -- that the people of Ontario do not like the high spending it is getting into. They believe it cannot literally take over housing, long-term care, day care and insurance. It simply cannot do everything. The taxpayers will not stand for it and they will turf them out at the next election.

Ms Gigantes: I have not been able personally to sit through the comments of both critics opposite, though fortunately I have had the chance to take a look at the Instant Hansard of the remarks by the member for Eglinton on behalf of the Liberal Party. I did get a chance to hear the comments by the member for Dufferin-Peel. As I review the comments of both these members of the opposition, what strikes me, certainly on the part of the member for Dufferin-Peel, is a total lack of understanding of how we got to the point where Bill 121 is being put forward very proudly by this government.

It was in fact the Conservative Party of Ontario, under the leadership of William Davis -- I must say with the firm opposition leadership of Stephen Lewis and inspired by my predecessor representing the riding of Ottawa Centre, Michael Cassidy -- which brought in the first rent review legislation in this province. It was brought forward during a period of minority government precisely because it had become clear by 1975 that the private rental market, unless we had some kind of regulation through public office, was not going to permit people to have affordable rental accommodation in this province.

It was the Conservatives who introduced the legislation to meet that problem; again, as I say, guided and inspired by our party. It was the Conservatives who recognized that the problem had to be dealt with, that we were facing in the mid-1970s a situation where people were undergoing economic eviction, where there were devastating effects happening in the middle of our large urban centres. People who had been able to find affordable rental housing in our large cities were no longer able to live in the centre of these cities with the trend of the increase in rents going on in that period.

The legislation that was brought in during that time was not bad legislation. It could have been better, but I will give this to the Conservative Party: The legislation we had in those days was better than the legislation we got under the Liberal government, which was supposed to be a reform government, in 1985. It actually worked better. But the problems continued. I speak from a very personal sense of what those problems are and have been over the last decade and a half.

In the riding I have the honour of representing right now, Ottawa Centre, 69% of the households are rental households. For the overwhelming majority of households in Ottawa Centre, what happens with rents is of critical importance to how people can live their lives -- whether families can afford to stay in the centre of the city where we have built up schools, we have built up parks, we have sanitary sewers, we have water supply and we have roads, or whether they are going to be driven by high rents out into the outer fringes of suburbia where -- guess what? -- they will need schools, they will need parks, they will need sewer systems, they will need a water supply, they will need transportation to the city core for their work. We cannot allow the private market to make those decisions for us without asking ourselves what the public responsibility is for the shape of the cities that we see in the future of this province.

I put it to the member for Dufferin-Peel that had we not had rent control and rent review in the past -- not as good as what we are proposing now -- had we not had the systems we had in the past, we would have seen even more drastic effects in our major urban centres.

I also want to point out to that member that when we talk about rent control, we can see a direct link to other matters such as the environment. If we have people living where they work, we do not have people having to use cars to get to their place of employment. If we drive families way out to the urban fringe, the suburban fringe, and to small towns around major centres -- that is what the effect of unregulated rent is -- we are, without any shadow of a doubt, injuring our environment.

1900

If we take planning and the environment seriously, if we say we want the cities we have to grow and develop in ways that make sense for people and for the environment, we simply have to accept the fact, which the member for Dufferin-Peel quite clearly does not, that there has to be good regulation of rents. There is no way around it. It is an elemental part of our responsibility at the provincial level.

The city I come from is the fourth-largest municipality in Canada. The Ottawa-Carleton region, depending on where you cut off the fringe, can be judged to be anywhere up to 600,000 people. In that whole area what happens with rent review and the quality of the system we have for regulating rents makes an enormous difference to the quality of life of people. It will inevitably also make an enormous difference to the quality of our urban life, to the quality of our environment in the larger sense, over the years to come.

I am very proud of this legislation. I am speaking to it in principle on second reading. I know the minister and his staff, both within the bureaucracy and his personal staff, have worked exceedingly hard talking to landlords and tenants, consulting with municipalities, talking to financiers. This legislation is not perfect from the point of view of the majority of the households I represent in Ottawa Centre, because for my taste and for their taste and for their style of life and quality of life, I would actually like to see a lower cap. But while I would like to see this and that, I know this is not a bad settlement on behalf of tenants.

Tenants to whom I have talked in and around the area I come from are feeling pretty satisfied. They can tell now what the basis for the rent is going to be. They know there are not going to be huge increases such as they have seen in the past, particularly in the last five years under the Liberal regime. I think they feel on the whole that the proposal this legislation represents is a fair one.

I believe that to be true, and that is why I am very proud to rise in support of this bill. I know the tenants from Ottawa-Carleton will participate vigorously, vocally and with great goodwill in the discussions that go on in committee.

Mr Tilson: The member says there are a large number of tenants in her riding, and I understand that there are a number of ridings on all sides, of all parties, that have a large number of tenants. I think the member is forgetting why we are raising these issues, why I spent so much time dealing with the problems in New York, in Sweden, in England and in all the various American cities, the problems of the deteriorating quality of life. The quality of life has deteriorated in those jurisdictions to such a great extent that they are now slums and no rent review legislation will stop the creation of those slums.

The member seems to ignore that factor. She and other members of her party have refused to deal with the whole subject of the fact that there are many, many tenants in this province who cannot afford any increases, and at the same time their legislation is benefiting the rich. There is a whole slew of tenants in this province who are well-off and are making a lot of money and simply do not need their rents to be frozen. But what the government is doing is freezing their rents and the rich are getting richer and the poor are getting poorer.

Ms Gigantes: I will be very brief. The member for Dufferin-Peel talks as if we have had no experience in this province. Let me point out to him that we have had 16 years of experience in this province and that one of the reasons we have affordable housing in our downtowns across this province is that we have had 16 years' experience with rent review. I will say to him again that without that, we would have a kind of economic apartheid in our cities which has disastrous planning consequences, both social and economic. We would drive every person who needs an affordable rental housing unit out of the centres of the cities. If he is willing to contemplate that, fine.

I would also point out to him -- it was drawn to my attention by the Minister of Housing -- that Detroit is a city with no rent controls. Is he going to tell us Detroit has no slums? All the problems of low vacancy rates exist in British Columbia, where there has not been rent review for years.

Somehow members such as the member for Dufferin-Peel and the people he speaks for tend to confuse the difficulties which have existed in the housing market -- the price of land, inflation, interest rates, all these things -- with the regulation system we have had to use and I know we will have to continue to use on behalf of those people who need affordable rental housing in this province. I am quite proud of and pleased with the bill the minister has brought forward here.

Mr Curling: This is almost déjà vu in some respects for me. I first want to compliment the minister. As I said to him when he was appointed, the dear Premier likes him tremendously for his ability or it is the kiss of death in the sense of taking on the Housing portfolio. It is a very difficult portfolio. I think, too, he said to me that he looked forward to dealing with a portfolio with a lot of challenges.

As I see him standing defending the portfolio, as I have said, in my days of walking into this House and having this vast portfolio to defend come back to me. I can recall the member -- he was also a member at the time -- and his colleagues throwing all the darts and my realizing the challenges I had ahead.

We came out, as members can recall, with this great Bill 51. What we found, first, as the government of the day, was this confrontational and adversarial attitude of bickering and fighting between landlords and tenants. To find a compromise bill that would satisfy landlords and tenants, I am sure, feels like someone walking on water, doing the impossible, because each has its own interests so entrenched for its needs, and rightfully so. Many tenants were being subjected to rather abusive treatment by some landlords -- gouging and living in some very awful situations. When we discussed this more, we found out, too, that the landlords themselves had been subject to some rather abusive situations by some awful tenants. So to come to that balance was rather difficult.

We felt, of course, that the only way to do this was not to stand in this Legislature as those who had all the answers, but to get together with landlords and tenants to draft that bill and make recommendations to the government.

We were not the first ones talking about consultation. Neither were we the first ones to feel that bringing parties together -- I hope the government side realized that too -- or landlords and tenants together in what we call consultation is not sufficient; as members know, the recommendation that comes forward should be listened to and administered in the proper way.

When we brought Bill 51 through -- I say this because it has a lot of bearing on Bill 121 -- sometimes the parties here cringe at the fact that all tenants agreed on that consultation and the recommendation, and all landlords agreed: the seven landlords and seven tenants. Some would say, of course, with the exception of one.

I recall that when we consulted with the Conservative Party its members were pretty nervous about it. They were forced to introduce rent control at the time. They did it for political reasons. They felt that the polls were not showing favourably for them and maybe they could get some tenants on side if they brought in rent control. What a hatchet job they did there.

Mrs Y. O'Neill: On a point of order, Mr Speaker: I do not think there is a quorum present.

The Deputy Speaker ordered the bells rung.

1913

Mr Curling: I know all the members hurried in here to hear the remarks and the bit of history of what the Conservative government of the day had done in regard to rent control. As I was saying, when they saw it was politically opportune for them to bring in rent control, hoping that it would carry them over the hill to win another election, they decided to bring in rent control. They really did a botched-up hatchet job on rent control. So what we faced in 1985 was this awful legislation to bring the post-1975 buildings into what we call rent review.

Mrs Y. O'Neill: On a point of order, Mr Speaker: I find it very offensive that members returned just for the count and have now gone to other responsibilities or entertainment. We are now one minute later without a quorum again. There is something wrong with this kind of discipline.

Interjections.

The Deputy Speaker: Order. There is a quorum.

Mr Curling: The importance of tenants and the importance of landlords ultimately is in the minds of Liberals too. When we were bringing in Bill 51 we always had a quorum in the House. It is the government's responsibility to have a quorum in the House, and it is not here.

However, I know they are quite literate people. I hope they will not only read my remarks, but also listen to the content and, I hope, the amendments to Bill 121, which needs quite a few amendments to it to make it more palatable to all those whom it will serve.

As I was saying before we were interrupted by the fact that there was no quorum in the House at the time, we used Bill 51 to bring everyone on side to understand what rent control or rent review was about and we renamed it, of course. "Rent review" took away the adversarial aspect of it.

I recall that the NDP, the government today, loved Bill 51 so well that it wrestled with it to find out how it could vote against it. I recall there was one gentleman, Dan McIntyre from Ottawa, who was on the committee. He was the only person who did not sign to make Bill 51 unanimous. He did a remarkable thing with those recommendations that were brought forward. I would like the members, especially the members from Ottawa, to remember this. He said: "I did not sign the recommendation. I will not explain that to you in detail, but I will sign your copy, Mr Minister." Whenever there are members who would like an inspection of that bill and the recommendation, they may see it in my office, where all tenants signed that unanimously. Of course, one was pressured after a time not to sign the original, but signed mine.

The reason I said that is that it is very important that we take the politics and the adversarial aspect out of this game. When the minister himself was appointed and told me he had this challenge ahead of him and that he looked forward to amending Bill 51 to make it better, we on this side of the House, the Liberal side, felt it was okay. We never thought Bill 51 was perfect.

Then he had the open consultation process. He said nice words, inviting all the people to come forward for his consultation paper and have input. Of course my colleagues in the House have mentioned before and I have been mentioning it again -- because I think one of the most appalling acts that has been done, one of the worst blows to democracy, one of the worst blows to the words "consultation" and "open government" which they have come to voice and mouth so well but have no action about; they usually talk the talk but they cannot walk the walk -- is that when the practical aspect of it came, they fell down.

What did they do? My colleague the member for Oriole attended one of those open consultation meetings. They shut her out. She could not attend. I thought maybe my colleague, in her eagerness, had gone to the wrong meeting. Even now, if you ask members of the government of today what I am talking about, they say, "I don't know what you are talking about." I myself was appalled and could not believe that even my friend the member for Oriole was locked out. Maybe, as I said, she went to the wrong meeting.

I called to go to the meeting, went to the meeting. They opened the door for me nicely. I went in and sat down and wanted to participate but was told that I could not participate in this democratic open discussion of consultation. Imagine that. This present government, which spoke about openness and hearing from the people, refused to let those who were elected by the people even speak. That is democracy for them. Maybe that is socialism for them. I do not know, but it was a new twist.

1920

The consultation paper process started off very badly. Here we are now, we have Bill 121 and while we were in caucus we debated and discussed it and we think we made a good attempt to make this amendment to it. But there are so many flaws in that bill. Our able critic the member for Eglinton, who is one of the most dedicated individuals, one of the most knowledgeable persons in this House about housing, went through that in detail in caucus and pointed out the flaws, and we saw them readily.

We hope that muzzling those people will not take place in the consultation process when people come forward and amendment time comes about. We also hope the time will come, when we ask for and make recommendations, that this government will listen and realize we want to take the partisan game out of it so we can have a good rent review.

Even the name, which reverted to "rent control," started this adversarial fighting aspect of, "We're going to put controls on this" -- not a review, balancing both sides of it, taking into consideration the landlord and the tenant, because both interests must be protected. That is what government is about: protecting all people, not just coming in to defend one area or one interest group. In so doing, Bill 121 does not in any way protect tenants or landlords. It hurts both landlords and tenants. It does not provide funds that are needed to complete the necessary repairs on the province's aging rental housing.

When I was the Minister of Housing I toured many buildings, a number of buildings, and have seen the underground garages that will take thousands, even millions, of dollars to bring them back to proper standards. We will be losing some of that housing stock. This government did not do that. The opposition in those days spoke very highly about that. They said, "We must address those issues."

My disappointment in this party is that over the years it has considered itself an advocate for the underdog or the ordinary people and said it understood those issues. It is an advocate more than anyone else. Listening to this governing party when it was in opposition I thought it understood these issues. I am extremely disappointed and the people are disappointed that it has no depth and no knowledge of the housing situation in this province. It does not listen so it can have a better bill coming forward to serve all people.

I just want to talk a little about properly maintaining buildings. We wrestled with that in 1986 when we were the government of the day. We spoke to the municipalities about enforcement of those work orders that were given out to buildings needing repairs. One of the things we found was that while landlords were given work orders to repair those buildings, they did not carry them out. There was no enforcement. The municipalities tell us they are prepared to see that maintenance is carried out, provided the province will give sufficient funds not only to relay and enforce those repairs to be done, but to raise the standard of the building and make sure that people get what are paying for.

I would ask the government members, while they are going about debating this bill and looking for consultation, that they take into consideration that the enforcement aspect of it is extremely important. It needs people and it needs money. I strongly believe we cannot look in the pockets of people to say that we have to bring rents down to find the needs of individuals.

I think it is a matter of product. On any product you buy in the shop, none of the shopkeepers say to you: "Let me see what salary you make. Let me see if you can afford it." The product itself must be a value that you pay for. Some of that product of rental accommodation that we have is extraordinarily high and some is way below the rent someone should pay.

I will warn the government of the day. I gather the Conservatives have asked that maybe we should give cash to people so they will pay their rental accommodation, for those who cannot afford it. What will happen then is that eventually the rents will go up and the government of the day will continue giving people money while the rents go up. It will give more money and the rents will go up, but they will be screaming, of course, that we cannot tax the people. Where are we going to get the money to do that?

We have to take into consideration that is not the way to do that. That was not a Liberal philosophy. We believe in rent review. We believe the product of rental accommodation must be fair, and if the building is to deliver proper elevators and a proper garage, these things must work and people must get the value for their money from the landlord.

I say to this government, as it brings about the final drafting of this bill, that we will listen carefully, that we should take out the adversarial aspect of it, take out the confrontation that goes on, take out the aspect that it is only representing tenants in this, so that it is representing landlords and tenants.

I recall that at one of the consultation processes in 1986, I had put landlords and tenants together in Niagara Falls for a weekend to come up with resolutions. A remarkable thing happened. As the landlords listened to tenants, to their woes and the slum conditions some had to live under, some landlords literally cried, realizing what they had subjected some of the tenants. They said: "This must stop. Some of the bad landlords are making it worse." It was an environment for them to discuss in an amicable way.

1930

When the landlords spoke about the problems they had with terrible tenants in their buildings, with people who ran away with three months' rent and did not pay, and they had to mortgage their home and put a lot of money out in order to just keep their investment going, some of the tenants understood the conditions under which some landlords had to operate. They fully agreed that we must come up with a system that is fair for landlords and fair for tenants. In those days, we called it a delicate balance.

We also realize that government must be very active in assisting to build affordable housing, because affordability in this province for many people far outstretches the pockets of people who would like to live comfortably, in the cost of labour and the cost of land. Unless some of the developers get some assistance to build affordable housing, it will be far out of the reach of those who would like to live in an environment that is clean in providing for their families.

There is a myth that we feel all tenants are temporary people on their way to ownership. This is one of the greatest myths we must destroy, because there are people who rent accommodation and that will be their way of life for ever. There is nothing wrong about renting. It is like people leasing cars instead of buying cars.

People will continue to rent without looking forward to buying a home. Of course the dream we hear about is this dream of owning one's home. Not everyone has the same dream at all. Everyone has his priority. Each person's priorities are different. Therefore the protection of tenants is extremely important. It is important because that is the way they want to live and government is about that -- to protect all, landlords and tenants.

There is the aspect of that as we go about bashing landlords and think that there are bad people out there who are landlords; there are excellent landlords.

I remember going to a meeting in Flemingdon Park with a lot of tenants. I was rather concerned about going to this meeting that afternoon because I knew how upset many of the tenants were and the conditions they were living in. When I got there, I am sure there were about 250 people who were tenants. I was prepared, properly briefed by the ministry about the questions that might came about. As I had been around the province hearing many of the concerns, I decided I had most of the answers and hopefully I could respond to the questions they were putting forward.

A remarkable thing happened. The tenants talked about their landlord, what a wonderful individual he was, how he looked after their concerns, how he made sure things were working, or he understood some of the social problems they were having because he found that if these people were living in this building, they were all one family, and what they paid for they should get.

There are many landlords who will make sure that they squeeze every penny out of that tenant, who will make sure they make as much profit as they can out of the real agony of those tenants, but there are other landlords who are good ones.

I feel a government must protect both. I have a peculiar feeling, a gut feeling here, as the minister and his colleagues opposite speak on behalf of this bill, that they are defending tenants and that it is a tenant issue. If they take that attitude, we are back to square one, where we are pitting landlords against tenants or tenants against landlords and the matter will be worse. The matter will be a fact that they feel tenants have all the rights and landlords have no rights. Both landlords and tenants have rights.

The minister has made this bill too complex. He criticized Bill 51 as a complex thing that no one could understand. I recall -- and my colleague the member for Ottawa Centre was in the House in those days -- when they were talking about BOCI and RCCI. Those were the formula used to calculate the rental guideline. As a new minister, I remember trying to explain in a minute and a half what the building operating cost index was all about and how we applied the residential complex cost index and got this guideline. They said it was too complex, no one would understand that. Although the recommendation came from both landlords and tenants, they said it was too complex.

I agree it was a rather complex formula, but it was a fair formula. Of course as time went on, it gave provisions for amendments, and this is why Bill 121 has come about today. We knew that after a time it would be amended to fit the time.

We had built in there, at the recommendation of the consultation group, an appeal process that, should tenants and landlords not like the administrative process, they could take it to the Rent Review Hearings Board, comprising people who have been appointed to look objectively and take it out of the rigid administrative process so that people feel they have a fair hearing. I have learned, alas, that the minister is going to take that away and there will be no appeal process any more. What is said by the bureaucrats, what is laid down by the bureaucrats of the time is it -- no appeal. I do recall how active the NDP was about having an appeal process put in place. Now, lo and behold, the power of governing comes to them and they have wiped out the appeal process.

I ask the minister to take a second look, a third look, a fourth look at that. It is extremely important. As the purging goes on at the rent review board, they have rather qualified people there who have lived with Bill 51, who have seen some of the flaws but know some of its strengths and know that the minister is walking down the wrong way. If he feels there are Liberal appointments on that board, he should know that the Premier of the day, David Peterson, decided not to put the political process into it, and we found excellent people from the NDP, excellent people from the Tories and of course some people from the Liberals to put on that board.

Now I gather the vendetta is out that, "We shall scrap it," but the minister should keep the process in mind. That appeal process served an extremely important role, and by taking that away, he is taking away a democratic process that had a lot of consultation and a lot of thinking go into it. Just to feel that power has come to them, they will wipe it away.

The minister does have excellent people as civil servants over at the Ministry of Housing. I worked with them for two and a half years and they worked pretty hard assisting us in writing good policies. Regardless of anyone's intellect, one has to have a vision. The civil servants ask all members opposite to have that vision, that leadership which is so lacking in the government of today; no vision, no thought that they have carried through from the beginning to the end. Bill 4 was like that, hurriedly put in place so that they would seem to be doing something. It was so bad that they decided to put this green paper through. They decided to hurry through Bill 121 so that they would seem to be doing something. But there is hope because of the process where we have opposition members on this side who are strong advocates for tenants and strong advocates for landlords. They serve the purpose of bringing about a good rent review.

1940

We are not fooled by the fact that the government calls it rent control, not at all. They can call it what they may. It is a review process, and that is what they are doing. They are reviewing Bill 51, and this is Bill 121, and it will be reviewed again. So whether they want to call it rent control or not does not bother us over on this side, but let us be very careful; let us be diligent about the fact, when this bill comes through, that it has that balance and is not one of those that seems to be vindictive by wiping out the appeal process and some of things that have played an important role in bringing about a rent review process that today covers all buildings.

Sure, the government said that the small landlords or the small complexes were left out of the process. We recognize that. We debated that and said something should be done. But now we have two guidelines, one for small buildings and one for tall buildings -- and the government said it is much simpler. I cannot understand that process. I tried to look at it very carefully. I asked the expert, the honourable member for Eglinton, because she has a full knowledge of what they are not doing in the government. What they should be doing is having somebody advising how we can correct this bill. As I said, I pray that they will listen so that we can bring about a sensible bill to protect landlords and to protect tenants.

Earlier on, I spoke about the conditions of the stock. You may not know, Mr Speaker, that 60% of the stock in this province is over 20 years old. What that means is there is a lot of maintenance to be done. Even with this wonderful building here, the Legislature -- I sometimes think it could be turned into affordable housing -- the government is wrestling with over $100-million worth of restructuring to be done. We have to find the money from somewhere in order to do that, so it will of course be coming from the taxpayers to pay for that, because you, Mr Speaker, being the landlord here, realize that the tenants may get rather restless if it leaks and we are not properly air-conditioned.

While you are thinking very much about that, you go to the Treasurer or the Premier, and he may say to you that he does not have the money. The only way you can get the money is to tax the people of the province more, so that you, the landlord, will be able to bring about the necessary repairs so that the tenants here can be happier, because we were elected to serve the people well.

The landlords out there, with their buildings too that are in bad shape because of age, have to start thinking that they will need, not $100 million like here, but about $7 billion to $11 billion to get the stock in shape again. Then they ask themselves, "Where do we get this money to do these repairs?" The minister should be listening very carefully and ask, "Yes, where will that money come from in order to repair these buildings?" Of course, built inside the formula is that of the rent. There are moneys there with which to administer maintenance and repairs. But is there $7 billion or $11 billion in that to bring it up to scratch or bring it up to a level? I say no, there is not sufficient money and we should really look at that maintenance cost.

From the research that has been done, it would take about 10 years to do this. We are not talking about going to the landlords or tenants to find $7 billion to $11 billion. That could be spread over time with a formula. I am telling the members that if those units are in good repair, tenants will be happier. They do not mind at all paying a bit more, I am sure, if the accommodations --

Mr Tilson: On a point of order, Mr Speaker: I do not believe there is a quorum.

The Speaker: I have a quorum. The member for Scarborough North may continue.

Mr Curling: As I was saying, one of the most important bills that has been discussed in this House is this rent-review/rent-control bill. I hope all the members will be here to participate and listen to some of the very small recommendations I am making, not so much recommendations but experience. I think housing is about people, the first issue, not buildings and bricks and garages that need repair. It is about where people live and enjoy spending most of their time, where people retreat and have the comfort of their day running from hard work or whatever it would be. That is what housing is about. The first thing we should do is to make sure the parties that are involved get along. We as legislators have that important role to play regardless of government or the opposition.

During the regime of the Liberal government we built more non-profit housing and co-ops than any other government in this province. Of course the present government expounds on the fact that it believes in co-ops. I am glad it does so, because we built a lot and we would have continued building more and we support that. We need the non-profit housing to be built. We do not need the promises or the type of rhetoric we have been hearing here.

The private sector builds for a certain market; we know that. They are into this game, if you want to call it that, to make money. While the government may be uncomfortable with the fact that landlords are in here to make money from their investment, it must accept that. The government must accept that. It is not a bad word, "for profit." Of course we do not want this gouging to go on at any level. As I said, tenants themselves must get value for their money, which they pay for.

1950

I noticed -- and I spoke to the minister about this and hope this has changed -- when this government came in, some of the attitudes of the non-profit groups that feel their government is now in power. I have received many complaints in and around my riding of people in co-ops. Some people are being pushed out and feel they are not a part of the game. When I spoke to the minister about that, he quickly told me he does not support that kind of attitude and I commend him for that.

Non-profit housing is not built for partisans of certain parties but for all people in need. It will be a sad day if we start building accommodations and channelling people who support certain parties into those houses. It would just defeat what it is all about. Non-profit housing is something for all people, not partisans who join what party.

While this government may think this is outrageous, I raise this not on a partisan level, but because I see signs that could cause damage to all of us here. While the minister may feel it is a rather silly thing to raise, I tell him it is extremely important that people feel there are cliques within non-profit housing and that it is a club itself. It is not a club.

We know and have seen that even many of the non-profit groups themselves would have their own waiting lists. It is not the NDP that causes that. We can see this kind of élitism developing. I am saying it will defeat that purpose, because non-profit serves an extremely important role regardless. Some of the things I may say this government does not like to hear. While the minister may feel that is not accurate, I am just relating to him issues that come to me in my constituency. I can give him names for all that if he wants. I share that experience with him and he can use that information to the best of his ability.

Of course, when I was a minister that could exist too. Maybe it did. I am saying that whether it existed in the regime of the Liberal government, it exists in the time of the NDP that feels within its time it cannot exist, and it could exist in the time of the Conservative government. It is bad. It is peculiar because I report as one of the advocates for concern in certain areas. The minister may feel I am sick. I am sick about what may happen and hope this will not perpetuate and destroy the efforts we are trying to make here in protecting landlords and tenants in private investment accommodation and in the non-profit, or we could have problems in both areas.

I say also that it existed, in my regime and my time as a minister, that some of the non-profit homes were in awful shape and needed improvement. Some of the areas where people live in the non-profit are areas where people are refusing to go, although they are in desperate need. The safety of these people is important. As I said, while we look at controlling and improving the rental stock in every environment in the private sector, we must take a serious look at government-subsidized housing because some of those units, I say again -- in my time, in the time of ministers who have come afterward and now -- were and are in poor shape and need to be improved.

We in this province are the second-largest landlord in North America. We own a lot of property. We, the people, the government, and the NDP government of this province, are the second-largest landlord. While the government is responsible for all those units, it should set an example there. I look forward to improvement in that area.

In summary, I will say, let us not be adversarial and confrontational about this bill. Let this bill reflect a balance of representation of landlords and tenants. Let us show some leadership, that we can do so without jeopardizing the interests of either party. Let us be open, not narrow-minded and undemocratic, so that we allow all those to make their presentation when we go public, so that people will come in and give their views.

Let us hope this government will listen not for listening's sake but to take the suggestions I have given to it and utilize them. When Bill 151 came forward, we had no qualms at all. We will not be playing the same type of games that we played when Bill 151 came about, where we get to some of the tenants and say, "Don't support this." No, we feel that the tenants know best.

Let us put a bill in that will not only reflect Toronto. Let us put a bill in that reflects all of Ontario and is sensitive to all, because some areas I am quite sure will not show great interest in Bill 121 as will Toronto, Ottawa, London and areas like that. Government is there to protect all people. We must make sure we are not seen as having only interest groups to protect -- just those interest groups that gravitate to the NDP. They are looking to the government with high expectations.

We have seen the letdown of people who had expected more. We have seen people who expected a government to understand what rental accommodation was all about. We have seen, as I said, that Bill 4 was a hurried process. I ask that Bill 121 not be hurried that way, that it be listened to, and that we have a province of rental stock that people are proud to live in and tenants will want to invest in. Let's not go about insulting investors and landlords. Let's not feel that tenants are the only ones to be protected in this process, but all.

I am concerned, of course, that at the end of the day both parties -- landlords and tenants -- will not be protected. I have hope though. I have known many of the members over there, although some of the things they would not like to hear. They have to listen. The fact is that it will come home to them. Many of them are landlords, and we hope not slum landlords, heaven forbid, because they should understand the problems of tenants. Over here, of course, some are landlords. I hope that we can set the example.

2000

But I say there is hope. Hope lies in the fact that members on this side will give the government good suggestions. The problem I have is, will they be listened to and carried out, or will they just be feeling they are above it all, that they know it all.

Interjection.

Mr Curling: Of course, we listened to the Conservatives about rent review and we did what should be done. And we listened too, in the days of the accord -- of course the NDP applauded the accord, the things we did. The fact is we moved a bill through that reflected both landlords and tenants.

I said I am very hopeful that we will see a bill that is fair to landlords and tenants, and I look forward to the days of open consultation and debate.

Mr Tilson: I must confess it has been an exciting time listening to the member for Eglinton and the member for Scarborough North, listening to whether they are for the legislation or whether they are against the legislation. I have listened with great interest. I suppose a lot of it depends on where you sit or where you stand, or whatever that expression is.

One of the issues no one has raised at this point is employment: the employment losses that have occurred as a result of Bill 4 and the anticipated losses that are coming as a result of Bill 121. Certainly it is becoming more and more clear that no work is under way with respect to capital renovations around this province. From all indications it is very unlikely, as long as Bill 4 is in place and Bill 121 is being debated, that any substantial repairs will be made in this province.

This means job losses are continuing in the middle of a recession. So people who are out of work as a result of Bill 4 and who are continuing to get out of work as a result of the uncertainty of Bill 121 have long since exhausted their unemployment insurance and are now on welfare rolls.

Companies of course are teetering as a result of the uncertainty of Bill 4, and may collapse as a result of Bill 121. So I challenge the member for Scarborough North, in his comments in response, as to how he feels that this legislation, if he is indeed supporting this legislation, will deal with the unemployment crisis that has been caused by Bill 4 and now Bill 121.

Hon Mr Cooke: I do not know if I will take the whole two minutes, but when some Liberals speak, this is what brings the Tories and the New Democrats together. At least the Tory party is straight up front. They put their position forward and we do too.

I challenge members of the Legislature and anyone who is watching this on TV to get the Hansard for Monday 24 June in the evening and review the speech of the member for Scarborough North. Because if anyone can comprehend what his position is on this bill after listening to that speech, then I congratulate them -- because he did not say anything.

But he did say one thing about non-profits that I really take offence to. The former Minister of Housing said something in this House that about which, if we had wanted to, we could have got up on a point of privilege. To make some kind of an accusation that he hears that non-profits in his riding or some place are manipulating their waiting list and who is in non-profits along political lines -- even though I have never thought much of the content of some of the speeches from the member, I thought --

Interjection.

Hon Mr Cooke: Hey, wait a minute.

Mr Curling: On a point of order, Mr Speaker: I did not say that they were manipulating the waiting lists. I did not say that, and I would like the member to withdraw the fact that --

Interjections.

The Speaker: We are into a difference of opinion with respect to what was or was not said.

Hon Mr Cooke: However he worded it, and again I ask people to take a look at Hansard, he talked about waiting lists and he talked about politics and NDP membership. I really thought the member had a little bit more to him than that kind of thing. I really did not think that he of all people would do that. That just goes to show that you learn something new every night in this place. The member for Scarborough North has moved slightly down in my estimation in this place tonight.

The Speaker: Are there any other members who wish to participate?

The member for Scarborough North has up to two minutes to respond.

Mr Curling: I do not come in here and talk about rumours. As a matter of fact --

Mr White: Mr Speaker, I rose in my place.

The Speaker: I am sorry; somehow I missed the member for Durham Centre.

Mr White: I wish to continue from the minister's statement because, as I noticed, he lost a fair bit of time with the member opposite rising on a rather postured point of order.

The issue of the flip-flops that we have seen from the party opposite was extremely evident with Bill 4. At one stage in the proceedings they vote in favour of Bill 4 and at another stage they vote against it so that they will have the opportunity of showing landlords how strongly they have defended them, and another time show how strongly they have defended tenants. I am sure the same thing will occur here.

The minister's comments I think reflect very accurately the member for Scarborough North's point, which is simply that throughout the entirety of his speech he was all over the place. You could take bits of that to appeal to one group, bits to another, and in such a way appeal to all parts of the populace without actually offering the people of Ontario anything substantive, certainly without offering the tenants of this province anything substantial in terms of security.

This bill offers tenants the capacity to live in security in their homes, something which has not been present in this province for many years. I think that issue of security -- those limits on increases, the issue of fairness for both parties -- is crucial, an essential issue to our bill, something which we can stand proudly in support of.

Mrs Y. O'Neill: I just want to comment briefly, if I may. I find some of the remarks by the government members on the comments from the member for Scarborough North confusing, to say the least.

The member for Scarborough North suggested there should be a balance to this bill, that it should be non-confrontational. Certainly just in the very last remarks that were made -- there seems to be always in the presentation of legislation, particularly on housing and indeed on many other items in this House, a confrontational attitude set up in every piece of legislation.

This party, the party that the member for Scarborough North and I represent, wants a balanced piece of legislation. I think that was mentioned well throughout his remarks.

The Speaker: The member for Scarborough North, with up to two minutes for his response.

Mr Curling: I am appalled. We are all honourable people in this House. I ask the minister any day to deny the fact that I approach him in the House and tell him that I come to know of situations where people have come to my constituency and complained in this nature -- not rumours, facts -- that people came to me and said that. To stand in this House and to say that I am speculating and I am doing all that --

I went across and spoke to the member because I did not believe in raising a question in the House, to make it in the public air, but to see if we could resolve this. When he implies that I went low by speculating and what have you, my advice is that when I share this with the member, it is to make a better bill, not to confront people with these issues and make it sort of personal.

I see the indication here is that the minister himself will not listen --

Hon Mr Cooke: On a point of privilege, Mr Speaker: I will be the first to admit here tonight that the member did speak to me about this a couple of months ago. I specifically said, I believe as a responsible person, that if the member had any specifics to bring to me, he should bring them to me and they would be investigated by the Minister of Housing.

To date, he has never come back and talked to me and never brought any specifics. I think it is outrageous that he can make these kinds of comments about manipulation of people in non-profits without bringing substantiated evidence here tonight in order to have them properly investigated. It is outrageous and it really is cheap.

Interjections.

The Speaker: If I could have the attention of all members, including the Minister of Housing, obviously a contentious issue has been raised by the member for Scarborough North. I would ask members on all sides to temper their language as we attempt to debate the bill that is before the House.

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Mr Curling: I raised that point in order to say that we must have this balance. We must be careful because we are, as a government itself, the landlords who are responsible for non-profit housing. He has challenged me. I will give him names of the people. I approached the point so that we could clean up all this and make sure it does not happen. To imply here that I am just bringing gossip or innuendo is so irreponsible for a government minister. It is the same way this government has behaved: irresponsibly.

Mr Turnbull: Let me start out by saying where we do agree with the government. We share the concern that tenants have clean, safe, well-maintained and affordable housing. Where we differ is the way in which it is delivered.

Let's have a look at what socialism has done since it hit the rental housing industry.

We remember this document, this sham, called An Agenda for People. In it we are told there will be rent legislation brought in where there would be one increase per year based on inflation and there would be no extra bonuses for capital expenditures. It would be fair, it would be simple and it would avoid the bureaucracy that has frustrated both tenant and landlord. I would suggest that none of these objectives has been reached.

When the Premier spoke to the press the other day, he talked about the need for partnership. I cannot imagine how he believes this kind of legislation is consistent with partnership.

We know what terrible havoc Bill 70 and the budget have caused to the whole of the economic community in Ontario, and the fact that many companies are leaving the province or are not going to increase their investment during the mandate of this government. But the Premier says he needs partnership.

How does he engender partnership? Certainly not by bringing in legislation that is very one-sided.

We have seen that the Minister of Housing stated publicly that he is allergic to landlords. I have never heard a more outrageous statement by a minister, and I think he should publicly retract that statement.

The legislation is certainly allergic to rental accommodation. The legislation ignores those people who are paying 40%, 50% and even 60% of their income. The Conservative approach is to target those people in most need and make sure they have enough money to pay their rent. This legislation does nothing of the sort.

At the Bill 4 hearings, ministry officials gave evidence that the average amount of gross income expended on rent in this province is 17%. If we have a situation that the average is 17% of gross family income and yet we know that many tenants in Metro and other places in the province are paying 50% and 60% of their income, then quite clearly in order to have a 17% average there must be people who are paying 9% or 10% of their income or even less. I urge the Minister of Housing to take a trip around some of the apartment buildings where there are Mercedes and other expensive cars parked in the garage. Is this the kind of legislation we want, legislation that protects the people who are already extremely well off? I suggest what we should be doing is applying the money we have in this province to help the truly needy.

I am alarmed that, more and more, this is a government that is taking away the meaning of the word "profit." It is being removed as being an evil word. Let me tell members, when the Premier talks about co-operation and the need for partnership, inevitably he must accept the need for profit, because industry, when it goes into investing money, is putting all of its own money in or is borrowing money on its own recognizance. They are not in partnership with the government at that time. It is only when you make a profit that you suddenly become a 50% partner of the government. It simply is not enough money to be able to build all of the affordable housing we need, unless we get the private sector involved. In a word, instead of having profit, we have only risk and penalty left. There is no incentive to invest. With this kind of legislation, we ensure that there will be no new multiple-density residential units.

Turning to the legislation itself, in reading it through I can only comment that it is complicated, confusing legislation. Indeed, it is poorly drafted. It is going to be a gold mine for accountants and lawyers. They should be throwing a party for the government, because they are going to get rich fighting all the mistakes in this legislation.

There are no definitions in this legislation for such basic terms as "neglect," "inadequate maintenance" or "necessary," as in eligible capital expenditure. It is unclear if in-suite capital expenditures are limited by type or not.

I would like to read an extract from a report that was put together by the prominent law firm of Gardiner, Roberts, which specializes in this type of legislation. They say:

"The bill would permit a rent increase based on in-suite capital expenditures which do not seem to be limited by type. However, to be eligible to claim an in-suite capital expenditure the landlord must have informed the tenant of the 'particulars in writing.' The bill does not define the particulars and, accordingly, a landlord runs the serious risk of the capital expenditure not being allowed if subsequently the particulars were found to be insufficient. A tenant must consent in writing pursuant to a prescribed form. An advanced determination is possible. If an advanced determination is obtained then the tenant's consent to the subsequent application is not necessary. Finally, neglect does not appear to be a ground of ineligibility."

We are going to need to go to court in order to understand what all of these terms are and get the definitions.

Let's talk about the failures in the legislation. It ignores the increases for things the landlord has no control over, such as insurance, salaries for maintenance workers and management costs. It ignores style and standards of obsolescence -- out-of-date fixtures, for example. A tenant may want to have a new kitchen or a bathroom designed for today's standards and yet he is stuck with a 20-year-old kitchen or bathroom. That would be defined as not being necessary.

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Turning to the situation of rent decreases, this is the first time in the history of Ontario rental legislation that a landlord's maximum base rent can be reduced as a result of a whole-building review application. An example of this would be for energy conservation. It is very expensive to retrofit a building to be more energy-efficient. Has the Minister of Energy, who I see is in the House at the moment, not spoken to the Minister of Housing? The maximum that is allowable here is the 3% increase for that retrofitting. There is no way that is going to cover the cost of retrofitting a building. It can lead to a potential operating cost decrease, which would then of course just simply mean the landlord's rent would be reduced. I ask the Minister of Energy, why on earth would a landlord pay more money than he can recover to make the building energy-efficient when the net effect is going to be that he not only loses money retrofitting it but he is going to be penalized by having his rent decreased?

Energy efficiency is something our party wholeheartedly supports the minister on, but we are not going to be able to achieve it unless we can pay for it. I wish I could say that some wonderful force was going to come down from the heavens and give us this money. It is not going to happen. If we are to achieve the energy goals we have in this province -- we do not completely agree with how she is going to achieve them but nevertheless we applaud her for the fact that she does want to make Ontario energy-efficient -- how is she going to pay for it? She is certainly not going to pay for it with this legislation. We have over one million households in this province living in rental accommodation which is in the private sector.

The legislation is just poorly written. The impact on mortgage renewals or decreases in rent is rather frightening. If there is a rental decrease possibility, does the Minister of Housing have any idea what this is going to mean when you go to a mortgage company and say you want to renew your mortgage? I recognize that most of the people across the aisle do not have large property holdings or have not been involved with the management of these things, but nevertheless they have to learn the reality of it. If you are going to have mortgages coming up, and they come up every single day of the week, you as a landlord have to be able to prove you can pay the mortgage. With this legislation and with it hanging over your head that you can have decreases, you may find it difficult to be able to replace the mortgage.

In the Bill 4 hearings I made a motion that we ask a representative of the Trust Companies Association of Canada to come forward and give us some expert testimony on what the implications of Bill 4 would be on mortgaging. The NDP denied us this application. They did not want the public scrutiny of an expert witness to come forward and tell us what would happen.

Let's talk about some of the ambiguity in the legislation. Once again, I will quote from Gardiner, Roberts:

"Most critically, in our opinion the bill contains a serious ambiguity that if enacted as drafted could cause every landlord to automatically lose two points from guideline where the rent increase sought is found to be justified by a capital expenditure. In this regard subsection 20(3) of the bill provides as follows:

"'If a capital expenditure is claimed and allowed for the whole residential complex or an amount to be carried forward is allowed for the whole residential complex, the amount allowed in respect of the guideline for all of the rental units in the residential complex shall be reduced by 2%.'

"On the other hand, subsection 21(2) of the bill states, 'The rent officer shall not order a maximum rent in an amount that increases the previous maximum rent by more than the sum of the guideline and 3%.'

"This latter subsection does not require guideline to be first reduced by 2%. The ambiguity needs to be addressed. As well, landlords may be required to prove they spent the 2% on capital."

Let's move on to the penalty for unrenovated buildings. We have at the moment a whole group of apartment buildings which have been renovated substantially in the last few years and have had the largest rent increases. Quite clearly, in fairness to the government, this is why it feels it needs legislation. They are concerned about those rent increases.

But the fact is that money was put into capital expenditures, and all rental controls that have ever existed in this province have always contemplated that major capital items should be paid for by way of rent increases.

Ms Gigantes: Marble hallways.

Mr Turnbull: There is somebody across the floor talking about marble floors. During the Bill 4 hearings, we had some testimony from --

Ms Gigantes: Marble floors.

Mr Turnbull: Maybe the former Minister of Health would like to pay attention and I will answer what she is saying.

During the Bill 4 hearings we had officials from the Ministry of Housing and we asked them about their definition of "luxury." It was a very fuzzy definition and they could not give us a precise definition, but they said that two thirds of all of the renovations in this province were of an essential nature. Where we had some rental increases of 50%, remember, two thirds of them were of an essential nature.

If the government wants to bring forward legislation where it says that there shall be no marble halls or walls, that is a different thing to what it is doing here where it is just holus-bolus bringing in legislation which is, quite frankly, a bonanza for landlords who have buildings which have substantially been renovated and the rents increased. For those other buildings where renovations are due it can mean ruin.

Within the legislation, the government has created two classes of buildings: those buildings which have up to six units and those buildings which are larger. If we are going to have guidelines like this, I would say it is probably sensible to have some differentiation between large and small buildings because, quite clearly, you do need more money to renovate a small building that you do a large building because a roof costs a lot more on a per-unit basis to replace on a fourplex than on a 100-unit building.

The government has some sensitivity to the difference between large and small buildings, but there is no sensitivity between those buildings which have been substantially renovated and those which have not. In other words, if you have a draughty, inefficient building which still has low rents because this is tied to a percentage increase, the amount of money available to do renovations is going to be much smaller than the amount of money available to do renovations on a big, substantially renovated building.

I do not think you have to be a rocket scientist to figure out that there is something wrong there. It is going to be very easy for those buildings which have been substantially renovated to be able to afford, within these guidelines, to make out during the term of office of this government. However, it is going to be exceedingly difficult, if not impossible, for the majority of buildings which are unrenovated to have substantial renovations.

As was mentioned earlier by the Housing critic for the Liberal Party, you can spend as much as $1 million on redoing an underground parking garage and it is not a luxury feature. It is not something which is optional. If you do not do it, the building will start crashing down on you. Big chunks of cement will delaminate some of the reinforcing bars and it will become structurally unsound. You cannot pay for it out of these guidelines. It is that simple. You cannot pay for it.

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Maybe this government will say, "Okay, we'll force you, Mr Landlord." If this government is honest with itself, if that is what it is going to do, it is confiscating property from landlords. If that is what its intention is, at least be intellectually honest and admit that is its intention, that it is going to drive down the value of all buildings and essentially have expropriation without compensation.

On the issue of chronically depressed rents, during the Bill 4 hearings we heard witnesses, and there was one particular one which struck me, where there was a landlady who was renting units in northern Ontario for $50 a month. If this government applies its guidelines plus the renovation costs to it, I do not know how it thinks it is going to replace a roof, whether it is under six units or is more. Is it going to do a new roof one shingle at time, one unit at a time? That is what it is talking about. I think what it is creating is the ultimate in non-profit housing, but it is not the idea that the landlord is to be providing that.

Once again turning to the Gardiner, Roberts report, they are saying, "Not unsurprisingly, the bill will create rent police with the power to enter with respect to alleged failures to comply with the act, orders to prescribe standards of maintenance and repair and to inspect and remove the records as evidence that the landlord has not complied with the act, an order or prescribed standard of maintenance and repair."

I am worried when we start creating a police state. We have protected tenants to the extent that we are saying we must give tenants 24 hours' written notice that the landlord is going to enter. I suggest this government should think very seriously that it should at least extend the same kind of treatment to those people who have invested, in many cases, their life savings in providing housing.

Gardiner, Roberts goes on to say: "One supposes that these provisions of Bill 121 constitute the government's vision of paradise in the people's state. For the first time, Ontario tenants can apply for a reduction in rent (other than an abatement) and not just a reduction or backing out of a previously justified rent increase. Moreover, while an individual tenant, whether disgruntled, bona fide or an officious intermeddler, can trigger an application for rent reduction, a rent officer can turn that application into a whole-building (reduction) review if it is determined all tenants would be directly affected by the application. We suspect that this provision will be used liberally (no pun intended)."

In concluding, I would like to just once again reiterate that the Conservatives' plan as to how we would effect affordable, clean, safe housing in this province is by targeting those people who are in the most need, the people who are paying 40% or 50% of their income, who will not be helped under Bill 121, and making sure that they are helped because they need help.

All of the problems of our society can be traced back to the need of these people, the fact that we need proper education and education requires a suitable home environment for the children. We need enough food. We have to address this pressing problem. The Minister of Housing has, on several occasions, said to us that it cannot be afforded. I put it to this government that we cannot afford as a society to miss this important opportunity to help those people. Do not help the people who are driving Mercedes. Quite frankly, they can stand on their own two feet.

Bill 121 will not deliver the specified objectives and I would put it to the government that the minister should withdraw this legislation in the same way that most of Bill 70 was gutted and we see that the government is finally beginning to back off on the budget items: because it is bad policy and it will be ruinous to giving good, clean, affordable housing in this province.

Mr Carr: I rise just to add a couple of brief comments. I notice the Minister of Housing is still here and I just want to point out that the problem we have in this particular province is that I have some tenants in my area who are facing a very serious problem with some of the increases. This legislation is probably too late for the people of the Diplomat in the Burlington portion of my riding. They had increases of about 88%. For some of the people there, the seniors and so on who have been affected, what I would suggest we do is maybe take a look.

I notice the minister had a little bit of a debate with one of the other members about who was told what. I have sent a letter over within the last little while to him. What I would like to do is see if there is anything that can be done in these particular instances for some of the people who have come forward. I say to the minister, who is interested in helping out some of the groups in this province, that we will be looking for some additional help and support on this, because unfortunately what happened with some of the other legislation that he brought in is that some of the people got missed.

When we try to make fairness, what we need to do is try to make it fair for all sides. There are some who are left out, for whatever reasons, when legislation is put together. Unfortunately sometimes it is the ones who are at the end of the scale, the ones who can least afford it, so I would say to the minister, in all fairness, that we will send over some information. I know his group has been looking at it, some of the Housing officials, and a lot of the situation has been tied up. They are going through case after case with this before the rent review board. If there is anything he can do to help in this particular situation, we will look for his support over the next little while.

Mr White: I want to pick up on one point that the member for York Mills made. His concern about the very needy, I am sure, is very genuine. However, it speaks to me of a very major issue, which I think our government is dealing with. This legislation does not speak to issues of homelessness. It speaks to the needs of a broad spectrum of our population. In terms of non-profit housing, social housing and a number of various areas, we have made significant investments in those areas and those are the kinds of programmatic addresses to the issues of homelessness that are important.

However, when the member refers to the people pulling up in their Mercedes, it reminds me very much of a couple of letters I have received from a major landlord in the Oshawa area. This particular landlord and his agent actually are not of the member's political persuasion. I believe this landlord has run against the former member for Oshawa on four or five different occasions at different levels and is of the same persuasion as the members of the official opposition. Regardless, they make the same point: They talked about all these very wealthy people in these apartment towers. Yet I have canvassed those towers. I spoke to a large portion of the tenants this man was talking about. These tenants were not rich. There were perhaps a few elderly retired people who were reasonably well off, but very few of those. If they were there, they simply did not answer the door. It strikes me as strange; we are talking about a situation as if these residual grants exist for some sort of strange group. We are talking about legislation for all of Ontario, where up to 50% of our population lives in apartment towers, in town houses, and are tenants.

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Mr Turnbull: The member for Durham West must not have been listening to what I was saying. I said that the Minister of Housing had his experts in during the Bill 4 hearings and we asked them what the average amount of rent was that was being paid in this province. They said the average amount of household income spent was 17%. Now I know people who are paying 40% and 50% and 60% of their income. Just basic mathematics tells you that if you have reasonably large numbers of people -- in fact, one third of all the people in the province, by the Housing ministry's own definition -- who cannot afford the rent they are paying now, in other words, it is 30% or more, the whole point is that when you have people who are paying more than 30% of their income and yet you have an average of 17%, then it just stands to reason that a lot of people are paying 10%, 11% and 12%.

We are saying the government should address the people who are in need. That is the imperative. We cannot afford to subsidize everybody. There are many people who are paying mortgages on houses they are buying and they are paying 40% and 50%. Are you proposing that you now subsidize those people? There is not enough money to do this. We have to help those people who are in most need and we cannot do it under this legislation. The government is making no attempt to help these people and it is really amazing that it is not listening to the core message we are giving it, because it is just good sense. We want to help those most in need.

Mr Bisson: It is with pleasure that I have the opportunity to take about 10 minutes and go through a couple of parts of Bill 121 in regard to this whole issue.

Some of the issues that have been raised on the part of some of the members from the opposition have been somewhat interesting. One of them I would like to touch on in a little more depth than others is the whole question of how landlords are able to recoup the amount of money that they have in order to be able to work on their particular buildings.

What my parents did for a number of years is basically rent out buildings. I am fairly familiar with that whole system, having been in the business myself at one time. The whole idea of why a person collects rent on his rental unit is to be able to have the money not only to pay his mortgage but also to be able to do the maintenance on the building. That has been the whole idea of why we charge rents of our tenants. It is to pay for the mortgage on the building, as well as to keep the building up to snuff when it comes to the maintenance of it, and being able to turn somewhat of a profit so that we can afford to put some of that money aside to be able to do the work.

The problem I have with what some of the people are insinuating when they talk about the inability on the part of landlords to get money out of the rental units in order to do the work on maintenance is that I seem to have the impression that what they are saying is that you have to be able to recoup that money over a one- or two-year period within the rents. We know that is what has happened under the past rent review legislation.

What happened in a lot of cases is that a landlord would sometimes decide he needed work done that was legitimate to the building and decide that what he needed to do was come before the old legislation. He would say, "I have to do some work on my building. I have to fix the roof on the building. I have some windows I have got to change. I've got some creaky floors. I've got some hydro that needs to be changed," or whatever the question might be. He would come before the old legislation and he would ask to have increases above what the guidelines were, and in a lot of cases those were given. I think a lot of tenants who look out there and some of the landlords, if they look honestly, see that the rental increases they got were in some cases 20%, 30% and 40% for work that was done on their buildings.

Now the idea is that if you have a rental unit out there, as a good business person you take a portion of the money you collect in rent and you put that aside over a period of time in order to be able to do the work to your building. If anybody would come to me and say that the whole idea is that you can recoup the cost of maintaining your building over a two-year period, I would beg to wonder exactly what kind of mathematics or good business sense that is, because I think tenants pay a fair market rent. If I am in the community of Timmins or the community of Toronto or wherever I might be, and I am paying $700 or $800 to rent a two-bedroom apartment, I would expect that my landlord would take portions of my rent away to put that aside to be able to do the regular maintenance that has to be done to the building so that he is not faced, over the long term, with having to rebuild the whole thing all over again.

Ms Gigantes: And those are Timmins prices.

Mr Bisson: Those are Timmins prices, I might add. In Metro Toronto, as we know, the rents are higher.

But the idea is that this legislation says that nobody will have a rental increase above the guidelines unless there are situations that can be warranted in regard to the maintenance of the building. Then we put a cap on that and say that in no term can you go over that 3%. I think that is only fair, because I think landlords in the end -- and most of them are very responsible business people -- I think 90% of them understand that if you want to be able to do work on your building, it is something you plan for; it is not something you decide you are going to pay over a period of one, two or three years. It is something you plan for and you pay over a period of time.

The return on your investment on rental property is not just the money you get in the rent, it is the return you get and the equity you build in your building over a period of time.

If I go out and buy a four-unit apartment building and I pay $250,000 or $300,000 for it, I understand that I am not going to make all of that money back within one or two years. I understand that is long-term investment. The money I get from the rents within that particular unit is going to be able to pay down my mortgage over a period of time, normally 10, 15 or 20 years, depending on how much money we come in with when we buy the building. That is where I make my money back. We are basically investing, putting that money out for the future so that you can build equity within your building. That is what the whole rental business is about.

But to say we have to allow landlords to recoup the cost of major renovations over a short period of time is not only unfair to the tenants but also it is very unfair in regard to good business practices within this province.

The other thing I think tenants want -- and I think it is the same thing as people who own their own homes want -- is to be able to budget over a long term what it is going to cost them to live in a particular place over a period of time. If I move with my family into a unit and I am paying $600 or $800 a month for rent, whatever it might be, I expect that rent is not going to go through the roof. My wages are tied normally to the cost of living through my collective agreement or through my employer -- whatever the situation might be and how I get my wages -- and I get 4%, 5% or 6%, depending, every year in increase in salary and I hope that my rent does not increase above that too much.

If I want to be able to get into a unit that is bigger, that is nicer, that has more and better things to offer my family and me, then I make that decision to go to a more expensive unit. But if I decide to stay in that one, one of the things I want to be assured of to a certain extent is that my rent is not going to go through the roof, that if I am paying $800 this month, I hope that by next year I am not paying $1,000 or $1,200, that a reasonable rent increase might be up to $850 or $860, somewhere in that area.

That is basically what this legislation says. It says no tenant will have a rent increase more than the cost of living. The idea behind that is that most of our wages as people who work in this province -- whether we are managers of business, civil servants of the government or we work within the private sector on the shop floor -- normally our wages are tied to the cost of living. It is only fair that if my wages increase somewhere around the cost of living for next year, I would expect and hope that prices do not go up above that particular point because then you come to the chicken-and-egg syndrome.

If rents go up too much above the cost of living, it forces workers and managers and everybody else to go and ask for more money to make up that difference. That is purely inflationary. I think this bill accomplishes a couple of things on that particular point.

If you look back at the moratorium, the government decided at the time that the moratorium was necessary to give time to bring this legislation forward so we did not have landlords out there who would go out and try to raise the rents above what the guidelines would have allowed them with the old legislation.

Through that whole process of consultation, we were able to sit down with landlords, we were able to sit down with tenants and different people and members of the opposition who brought forward suggestions, as well as members of our own caucus, who brought forth suggestions of how good rent review legislation can be put forward for the people of this province, recognizing that there are two sides to the story.

For anybody to come before this Legislature to say there is only one side, I think would be wrong. We need to recognize the basic fact of what rent regulation is supposed to be about: it is to protect the tenants, to make sure that in the end the tenants are paying a fair market rent, that they are not being put in the situation where they are going to have to pay more money for rent than what they expect to, above the cost of living.

The other side of the story is that we also need to recognize that landlords have a stake in this. I think this legislation speaks to that. We allow landlords, in cases where their taxes go up, the water bill goes up or other items go up that are not in their control, to pass on some of that to their tenants. We recognize that.

Some landlords may argue they would want to have more, but we have to keep things within a balance. We have to be able to say to the tenants who are sitting out there renting a unit that they are not going to have rents go up, as in the previous legislation, in some cases by 20%, 30% and 40%.

That is not to say that all landlords out there were doing bad business when it came to rent, but it did happen, and it forced this particular legislation in place by making sure that we protect those people out in the rental market, to make sure that their rents stay within an adequate level.

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With that, I would like to conclude my remarks. I promised in the beginning, and I like to keep my word, that I do not want to speak on for another 30 minutes, taking the time of other members. I want to recognize just a couple of points. Rent review legislation is about protecting the tenants, making sure the tenants do not have to pay rent too much above the cost of living, so that they are able to plan their budgets into the future. The other point is that if a landlord expects to be able to recoup the total cost of being able to do work on his building over a two- or three-year period of time, that is bad business on his part. If I go into business and I buy a rental unit, I expect that is a long-term investment. The equity that I build with my building over a period of time is where my money is made.

With that, I will let the members go back and will respond to any concerns they may have.

Mrs Caplan: I rise today to participate in this debate on Bill 121. I would like to begin by saying that my history in this province in the whole question of rent review began some time ago, in 1985, when I was a successful candidate in the riding of Oriole. In fact, we were debating rental policy, rent control, in 1981 when I was a candidate for the provincial Legislature. This is not a new issue.

In the election last summer, in 1990 -- I notice that my colleague opposite who just finished speaking, the member for Cochrane South, remembers that well. He remembers that during that election campaign of the summer of 1990, as a New Democratic candidate in the riding of Cochrane South, he was sending out literature. I read now from the Agenda for People, dated 18 August 1990. He and his colleagues said:

"New Democrats would bring in rent control. That means one increase a year based on inflation. There would be no extra bonuses to landlords for capital or financing costs. It's simple, it's fair, and it avoids the bureaucracy which has frustrated both tenants and small landlords."

I found it interesting, as the member was speaking a few moments ago, to hear that he was not speaking about rent control; he was speaking about rent review, rental regulation. He was also talking about the goals and the purposes of this piece of legislation.

In my riding, Oriole, last summer this was a very important issue. Some 48% of my constituents live in rental accommodation. Because we debated this for quite some time during last summer and in previous elections, they know this is a complex and difficult issue. What we see before us today in Bill 121 represents a significant departure from what was promised by the New Democratic Party last summer. It is a significant departure from the very simplistic approach of last summer. It is not simple. It is questioned by both landlords and tenants as to its fairness. It certainly does not avoid bureaucracy, which has frustrated both tenants and small landlords.

Hon Mr Cooke: Guidelines don't supersede government policy.

Mrs Caplan: I can see that the Minister of Housing is quite defensive about this. This is an important and friendly debate and I would say to the minister that I did not support his policy of last summer. I argued very strenuously during that election campaign. I had quite a debate. We had all-candidates meetings where I said that what was being proposed by the NDP in that election campaign was not only unworkable, it was simplistic. In fact, it was not good housing policy and it was not in the interests of tenants in this province and certainly not in my constituency.

I can say that having served in this Legislature in 1985 when we debated the rent regulation bill, which was then known as Bill 51, we realized as we began with tenants and landlords discussing this very important, very emotional, very contentious and very complex and difficult policy, because this is a matter of public policy, that there were different interests that had to be balanced. How many times during the debate and the discussion on Bill 51 did we hear about that delicate balance of interests?

I know that if members were to look back in the Hansards of those days they would find me on record, as I was a member of that committee in 1986 looking at the legislation in depth. What we called for was the kind of ongoing review that would lead to the kind of changes in that legislation that would ensure that tenants were protected, that landlords had a fair rate of return, that buildings were well maintained, that tenants had stability and choice of accommodation, and that our aging stock of rental accommodation in this province was not only preserved and maintained but would afford tenants a decent place to live and a quality of life. We really wanted a system that was not too bureaucratic, but unfortunately any regulation framework brings with it bureaucracies just by its very nature of regulation.

But the one thing that I have heard consistently from tenants in my riding, from people generally interested in the policy issue around rent review, is that the people in this province and tenants want to know that they are getting value for their money and are being treated fairly. Tenants whose apartments are well maintained and who feel they are paying fairly for their accommodation are generally content with a rent review system that achieves those goals.

I was very proud today to be sitting in this House and hearing the remarks from the member for Eglinton, the very able Housing critic for our caucus, as she talked about the goals that she has, we have, and I think all members of this House have, when it comes to dealing with this important public policy issue. She talked about the need for stability for tenants. She talked about the need to be able to preserve our aging rental housing stock. That really also speaks to the whole issue of improved maintenance and appropriate maintenance for those people who want value for their money in the rental market in this province. She spoke about the fact that in order to ensure we have a healthy investment climate in this province, investors need to feel that they are going to have a fair and reasonable rate of return. They need a process which is as unbureaucratic and as simplified as a regulatory regime can be.

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I would add to that, as I said before, that this legislation speaks to the interests of tenants who are today living in Ontario and living in rental accommodation, to landlords who own apartment buildings today and have an investment in this province, but it also speaks to the interests of our children and our grandchildren and those who will be moving to this province who will want the opportunity to rent an apartment, to live in rental accommodation that is not necessarily government-run and government-subsidized.

We are also speaking to the landlords, to the potential investors who will want to look at Ontario as a place to bring their capital for investment.

The question is, in principle, on second reading, can we support this bill?

My constituents in the riding of Oriole often ask about the legislative process. If I can, for the record, I would like to very clearly outline that process for my constituents and for any of those who happen to be watching this debate. I know there are many across the province who not only find question period a time of high theatre, but find the debates in this Legislature quite entertaining.

We all know that the process of first reading of a piece of legislation is automatic tabling. We know that this is when the government presents its proposal and its policy.

Second reading, which we are having today on Bill 121, affords us the opportunity to speak to the principles of that legislation. That is what we are doing this evening. We are also questioning some of the provisions in that legislation, voicing the concerns that we have and the concerns that we hope we will be able to hear from those people who have an interest in this legislation.

We hope, and we have heard from the Minister of Housing, that this legislation will be able to go out to committee for a full and extensive open public consultation so that people can come forward and have their say. I would point out to the minister how disappointed many of us were in the process around Bill 4, where many of those who wanted to be heard at public meetings were denied that opportunity. We hope the public hearing process following second reading on this piece of legislation will be an improvement over the process on Bill 4.

We know that during that committee hearing process there is an opportunity for amendments to be tabled by the government, for amendments to be proposed by the opposition members of that committee, and for suggestions for improvement to the legislation by those who come before the committee.

We also know that following second reading, following committee debate, the bill will come back to this House for discussion by the committee of the whole House. Here once again, if the government is so inclined, it can permit additional amendments to make this legislation achieve its goals and meet its principles. Hopefully, since we know that nothing is ever perfect and nothing is ever really carved in stone -- I often say that the only thing that is carved in stone here in this Legislature is the names of the members on the wall downstairs; everything else is subject to change and everything else is subject to the kind of amendment and open discussion that I would hope we would see during the process of this bill.

Following committee of the whole, a bill is proposed for third reading. Usually the debate on third reading is not as comprehensive as the debate on second reading. We also know that following third reading debate there is both royal assent and proclamation before the bill becomes law.

That is a lengthy process. It is one that allows the ideas that are put forward by the government to be fully examined. It is one that allows the government, if it will, to accept changes to its legislation that will be in the public interest.

I would point out to the Minister of Housing that in my opinion this is a modification of what now exists in a rent review process, and I will go through in a moment why I have come to that conclusion. But when we look at housing policy and closely examine rent regulation and the policies of rent review, we will all have the opportunity to participate in a very important public debate on the public policy issues that achieve that balance between the interests of tenants who need protection from unconscionable and unreasonable rent increases and the balance that will ensure that those who invest in this province are entitled to a fair and reasonable rate of return on their investment; that tenants today and tenants in the future will have a well-maintained place to live, as I have often said in this House, a decent place to raise their families, to have the kind of quality of life we all aspire to here in Ontario; that they will also have choice of accommodation, and that tenants in the future will have opportunities and choices. That is something I think tenants today in Ontario feel strongly about. They do not want to be forced to live in one place because they cannot move because there is no other place they can find to move to in their community if they are unhappy where they are.

I point out all of this because, having served on the Bill 51 committee, on the legislative committee that spoke about the delicate balance of interests and in the development of housing policy and rent review legislation, I know the reason nothing is ever carved in stone in this Legislature -- except for the members' names on the wall downstairs -- the reason we are debating this in this House today is because nothing is ever perfect.

Every piece of legislation passed in this House is open to constant scrutiny. We said at the time that Bill 51 was working its way through the cumbersome legislative process that it was not perfect. We called for an evaluation of that legislation to see if it was achieving its goals.

One of the things I found most interesting, over the past eight months since this new government took office, is not just the retreat from the election promises, which I believe has created a level of cynicism in this province that is unprecedented -- and I have spoken about that several times in this House --

Interjections.

Mrs Caplan: I find again that the minister and members of his caucus become quite defensive when I mention cynicism. I say to them that in fact in their very own throne speech last fall they acknowledged a level of public cynicism.

When I travel this province and speak to people -- and I visited many of the communities across this province; I was in Ottawa, Peterborough, recently Kingston and Barrie, Smiths Falls -- I hear the same thing everywhere I go. What I am hearing right across this province, as I visit with the mayor and regional councillors in my capacity as critic for Municipal Affairs, is that they are very concerned. They are concerned because quite frankly they do not like any politicians very much.

They feel what they were told last summer by the now government, the then NDP, the now socialist government in Ontario, is very different from what they are seeing today. Those of us who argued against that policy --

Interjection.

Mrs Caplan: We said last summer that yes, there were many policies that required amendment in order to see that they achieved the objectives and goals we had established. But what I am hearing is a new level of cynicism that I think the government caucus should take very seriously.

I say to the members that the people in the riding of Oriole who believed what the NDP candidate had to say last summer are not only cynical; they are very disappointed. Even though I told them last summer that this policy on rent review was not good housing policy and they would see that if the NDP formed the government it would not bring that forward, the people believed it. Many people believed what they read in the Agenda for People last summer. They believed the NDP would bring in rent control; that that would mean one increase a year based on inflation; that that meant there would be no extra bonuses to landlords for capital or financing costs; that whatever was brought in under the rent control policy of an NDP socialist government would be simple and fair and that it would avoid the bureaucracy that had frustrated them since Bill 51 had become law.

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What we find is that Bill 121 in fact has many of the same goals and many of the same principles that we found in Bill 51. We find that this legislation includes an inflation-based annual guideline. It includes a rent registry system to help keep track of illegal rents. It has a system of appeal for those landlords who attempt to raise their rents above the guideline. The bill also contains maintenance standards, as did Bill 51.

We know that many landlords and many tenants reacted very strongly and very forcefully and very negatively to this piece of legislation when it was tabled for first reading. Some landlords are saying that Bill 121 hurts landlords because it does not provide them with the funds they need to complete needed repairs in the aging rental housing stock. Some tenants are saying Bill 121 is not good for tenants because it will not ensure that their buildings are properly maintained and will leave them to face above-inflation rent increases over a number of years.

I know that of the tenants who voted NDP in the provincial election of last summer in the riding of Oriole, many are angry because this Bill 121 is not what the NDP under their leader, now Premier, and the NDP candidate in the riding of Oriole had promised in the election campaign of last summer. This is not "one increase based on inflation."

We see a bill in which new buildings are exempted from this legislation for five years. Some tenants are asking why the New Democratic Party is creating one set of rules for tenants in existing buildings and then providing no protection for tenants in new buildings.

We have heard the minister say that the five-year exemption for new buildings is good because it will encourage more rental housing construction. He has also said that most tenants should not be concerned with the new-building exemption because these will likely be higher-priced units targeted to high-income earners.

If this last statement is correct, and I have no reason to believe that the minister is not correct in his assessment, the Minister of Housing's statement that the exemption will create more rental units is in fact a meaningless commitment. Not only will these units not be affordable, but we are finding in the province today, because of the construction of condominium units, many vacancies at the upper-end range of market cost in rental units. We all know of situations in our constituencies where condominium units are available for rent. They are very expensive and high-priced, and this provision does not seem to make a lot of sense if the minister's goal is to achieve more affordable housing units. We know that this will not do it.

We see that Bill 121 continues to use an annual guideline similar to the Liberal legislation, the Residential Rent Regulation Act, known as Bill 51. Now we see that there are two different numbers for landlords and tenants to be concerned with and also to be confused about.

We know that there will be one guideline, one number for large buildings and one for small buildings. This does nothing, I would point out, to simplify the process or make it less bureaucratic in any way. As I said before, in a rent review and regulation system you must have a bureaucracy to enforce it; but if the goal is to simplify matters, then this provision, while it may be helpful to tenants in small buildings of less than six units -- it may be, but I have heard some question that -- it adds to the complexity of an already very bureaucratic system. Simplification was clearly stated by the minister himself as one of the important goals of this legislation.

I know there are people scratching their heads and saying, "This doesn't make any sense," and they will be looking very carefully at that provision as this piece of legislation continues through the legislative process. Two different annual guidelines will probably have a differential of less than one percentage point. That is a very minor adjustment, given the amount of confusion that it will likely cause. I would just point this out to the minister as one of the concerns that I know will be expressed during the hearing process.

We have heard over and over again in this House that some 65% of Ontario rental stock is more than 20 years old. We know that one of the goals of good housing policy is to maintain and preserve that rental stock, not only for the people who are living here today -- that certainly is an important goal; as I said, we want people to have a clean and decent place to live, a building that is not falling down around their ears -- but we also maintain that rental housing stock for people who will live there tomorrow and the day after, to give them the choice of rental housing in the future.

Preserving the stock we have is also extremely important because of the limited new supply of rental housing, other than condominium, which is at the high end of the market. There has been some over the last few years. We started to see, particularly in centres like London and some of the urban centres on the periphery of Metropolitan Toronto -- and even in my riding of Oriole, where we have substantial density, one of the highest in the world, actually, there was discussion around some additional housing to be built that would be considered to be rental. We know that this is unlikely, given the climate in Ontario today and given the concern that investors are showing in response, not only to this government's housing policy, but also to its fiscal and economic policy and its budget.

Business is very reluctant to invest in Ontario, and the chances of new rental supply in the province of Ontario in the foreseeable future is very, very slim. No matter what this legislation says, because of the fiscal policy of this government, because of the socialist policies of the NDP, because of its economic policies we will find that there will be virtually no new rental supply.

It will be extremely important for us to listen very carefully through the public hearings as we discuss the proposal for a cap on capital repairs, which is proposed under Bill 121. I know that when we debated Bill 4 in this Legislature, there were a number of proposals and amendments that were not accepted by the government. Many of those proposals appear in this legislation in one form or another, adjusted in ways which are causing great concern among both the proponents and the opponents of this legislation.

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I know there will be a great deal of discussion around the cap provision. I believe it will become one of the most contentious issues in this legislation. That is why I believe it will be very important that the hearings on Bill 121 be held not only here in Metropolitan Toronto but across this province in different regions so that members of the public, landlords and tenants and those who have an interest in housing policy -- municipal representatives, perhaps regional chairmen, regional councillors, mayors and others -- will have an opportunity to appear in their own communities and let those who are on the committee hear what they think about this important proposal. We know it is important to hear what landlords and tenants have to say about the idea of having a cap, about how it should be implemented and what level it should be set at.

We know there are some significant changes in this legislation from what exists within the rent review system in Ontario. I personally believe that one of the more positive features -- and I would like to point that out right now -- is the definition of necessary capital. The fact that there is a new definition which will clearly define what would be considered a luxury renovation, is an important feature of this bill, I think, and it is important to tenants. I know the frustration the tenants felt when they were faced with renovations they believed were absolutely unnecessary and luxurious, far beyond the point of benefiting anyone in the building. They felt that those renovations were simply used to jack up the rent.

I believe that is an important improvement in this legislation. It is also the kind of improvement that both landlords and tenants have advocated for some time. I believe there are many opportunities, when we discuss capital renovation, to listen very carefully so that we can ensure that this piece of legislation will have the right incentive. One of the concerns that tenants have is that there must be an incentive in the legislation for the landlord to maintain the building. If you do not have a situation where, before you can apply to rent review, your building is properly maintained, then many tenants worry that their building will deteriorate before their very eyes, that they will not be able to get the building maintained.

I have some examples in my riding of Oriole of buildings that are seriously run down. Those buildings may not yet qualify for a municipal building work-permit order to get them into shape, but anyone looking at those buildings can see they are in decline and in need of repair, and tenants worry that will happen to their buildings and that it will affect their quality of life, and they feel they are not getting value for money.

We know it is important that this legislation provide protection that is needed for tenants while still allowing landlords to make important and needed repairs. We want to see legislation that has that incentive to ensure that buildings are well maintained.

The maintenance and standards provisions of this legislation are of some concern because the minister's intention, I believe, is to ensure that basic standards of building maintenance are maintained to protect the health and safety of tenants. Now, I know that particular portion of the bill sounds very familiar to all members of the House, because it was debated at length during the discussions on Bill 4. I wish the minister had accepted that amendment under Bill 4, but I am pleased to see it in this piece of legislation.

This bill abolishes the Residential Rental Standards Board and in fact what it does in its place is it works in reviewing substantive outstanding work orders.

As I pointed out, one of the concerns is, sometimes buildings in need of repair may not have substantive work orders already in place. Tenants want to know what incentive there will be in this legislation to ensure that buildings are properly maintained.

As I said, it will be important for the committee in reviewing this legislation to examine whether the new maintenance provisions are workable -- some have their doubts -- whether they will indeed provide additional safety and security for tenants -- some have their doubts -- and whether they do not unfairly punish landlords for minor standard infractions. That is a real concern and not only for tenants, because most tenants want to have a good relationship with their landlords. They do not want to constantly be at the municipality for work orders. They do not want to constantly have to go to court. They do not want to constantly have to go to rent review.

Part of the frustration of Bill 51 that we see repeated here in this legislation is that kind of requirement for an ongoing interchange, I guess is the word, with levels of government and bureaucracies. People want to know, if we are seeing changes in this legislation, if they will be better protected and able to have a better relationship with their landlords.

Certainly there have been a number of opportunities in this bill for discussions of what the formulas are. That is very complicated, and I know from our discussions on Bill 51, back in 1986, that often the actual formulas themselves and how they were arrived at were very confusing to many people.

I can say that there are a number of provisions in this bill which are eminently supportable in principle but which, when it comes down to the implementation provisions, cause some very grave concerns to a number of people and will require considerable study and analysis at committee.

I would point out that the exemptions under this legislation, the double guidelines, the caps, the restricted operating and capital cost increases as well as new maintenance enforcement provisions are all areas where landlords and tenants will have a lot to say, and I know the minister will want to hear what they have to say. I was a little disappointed this afternoon when he said he would not be present at all of the hearings this summer. I know he has confidence in his parliamentary assistant, but as the drafter of this legislation and the minister who takes carriage of this legislation, I know how important it is to tenants and landlords in this province that the minister be at those hearings to hear what they have to say and hear their presentations.

I know there will be many provisions tenants' groups will support and I think there are some provisions tenants' groups will oppose. I can tell members, I do not think there are going to be many provisions in this legislation that landlords will support, and part of that, I would point out to the minister, is an attitude problem. I want to tell him how disappointed I was, during the process of Bill 4, with some of the things that he said that were deliberately inflammatory.

I would point out that this is an opportunity for him to think twice before he says things such as that he is allergic to landlords. That does not help in the drafting of legislation that is supposed to be balanced in the public interest. That is the kind of message that says to investors in this province, "You're not welcome in the province of Ontario." That is the kind of message that speaks to government insensitivity, government arrogance and the kind of attitude from government that will say to investors, "Go look elsewhere."

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In this climate at this time, as we are hopefully starting to come out of the recession that we have been suffering from now for over a year, there is an opportunity for this government to send out the right messages.

Everything they say and everything they do will be scrutinized by those looking to invest in our province, whether it is in the construction business or the service industries or manufacturing. Every utterance from ministers of the crown in this socialist government, this NDP government, sends out messages to potential investors in the province of Ontario. So I would urge the minister to be moderate and to calm down his rhetoric a little bit. He must remember that he is now a minister of the crown. He is no longer a petulant member of the opposition.

Many of us on this side of the House watched very carefully how the now Minister of Housing behaved in opposition. There are some days, quite frankly, when I know that he forgets himself and he thinks he is still in opposition. So I would urge him to be temperate in his responses; to be conciliatory; to try, as this piece of legislation goes through the process, to be open to ideas and suggestions; to seek always to balance those interests to find the delicate balance which is in the public interest, and to do that in a way which, quite frankly, was missing from Bill 4.

I hope we will never again see a situation in this province when a member of the provincial Legislature is barred from a meeting in her own riding. That was a serious mistake in judgement by the minister's parliamentary assistant. I would like to think that the minister would not have done that. He apologized in this House. I accepted his apology. But that is a signal and an attitude I think they must always be on guard to change and to send a message out to the tenants of this province that they are welcome, to the landlords of this province that they must be heard, and to all members of this Legislature that we have a responsibility to speak on matters of important public interest.

I want to sum up by saying that Bill 121 has been a long time in coming. I have done an analysis of this bill and I find it contains many of the same provisions, certainly many of the same goals, objectives and principles, that we found in Bill 51. I find it has many of the amendments that were proposed by my colleague the Housing critic for the Ontario Liberal Party and our caucus.

I will also say that this piece of legislation as proposed today is not perfect. There are many aspects of it which cause great concern to both tenants and landlords across this province. I have tried, in the few minutes I have had in the second reading debate on Bill 121, to point out some of those. As this bill goes through the legislative process and completes second reading debate, goes out to committee for full public hearings, comes back into this House -- and we know that it will because the NDP has a majority government and we know that it can determine what amendments it will accept -- I would point out that to this point in time this government has not had a good record in accepting proposals, ideas and suggestions from the opposition parties. No legislation is perfect and certainly this legislation is not perfect. In fact, I would say there are very few pieces of legislation that achieve proclamation and royal assent that are perfect. I would urge the minister to be open to ideas to improve this legislation, whether those ideas come from members of the opposition parties, from tenants' organizations across this province or from landlords across this province.

As I conclude in today's debate, I would remind members of this House that I have been a tenant activist for some time. I was the founding vice-president of my tenants' association in the early 1970s. I believe the tenants of this province need the kind of protection a good rent review system will afford them.

Back in the mid-1970s and early 1970s we saw situations where there were unjustifiable and unconscionable rent increases that placed many tenants in jeopardy. We also know there is an affordability problem by a significant portion of tenants in this province, and we know the solution to those affordability problems really lies in governments, this government and previous governments before it, accepting their responsibility to ensure that those in need of social housing have access to social housing, those in need of assistance have that assistance.

I was pleased to see the minister build on the strong foundation of the Liberal government before him in the continuation of strong support for the non-profit housing sector and for the co-op housing sector and for the kind of assisted housing which would help those who have a real affordability problem.

I know the complexities of this legislation. I have lived for many years, as I pointed out at the beginning of my remarks, with the whole issue surrounding housing policy and rent review in particular. It is my hope as this legislation proceeds through the process that we will see the kind of housing policy that will balance those interests, because my constituents in the riding of Oriole need to know they have a housing policy in place that will protect them not only today, but will offer them choice of accommodation in the future as well.

Mr Ferguson: I am glad to hear that the member for Oriole, a former tenant activist, is going to be supporting this legislation. We welcome her support in this matter.

What we have to recognize is that any time any political party makes an announcement or set of guidelines for proposed legislation, it is relative to the situation in time. Of course the economy of this province is never constant but is always changing, and what might apply at a moment in time may not be valid some time down the road. Surely the decisions that are made and legislation proposed during a time of a booming economy should not be etched in stone and held as gospel in an economy that has turned dramatically around and all of a sudden is sluggish at best.

We have to recognize that in assuming government, as we did, at a very difficult time -- the member knows this, because of course she was on the government side at one point -- we have a sense of responsibility, and we assumed the role of government not just on behalf of the 38% of the population that supported us on 6 September but on behalf of everybody in the province, and we try to govern the province accordingly.

What I am saying is that when I look at this piece of legislation it tells me very clearly that we are economic realists with a social conscience. We are economic realists because we recognize the capital investment that is required, as well as recognizing that tenants should not pay for capital investment in landlords' properties.

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Ms Poole: It is late, so I will be brief. Not only that, but I only have two minutes, so that does put a bit of a damper on it.

I did, though, want to commend the member for Oriole for her very sensitive comments tonight. She has highlighted for us very well the fact that rental policy in Ontario does require a very sensitive balance. At times it is a juggling act. It is not easy to try to take into account the need for rental stability, the need for preserving our rental housing stock, the requirement that landlords make a reasonable return on their investment and the fact that we want a rental policy which people can understand.

It is difficult. Earlier today I commended the Minister of Housing for reversing some of his party's original policies, which I do not think would have achieved that balance which is so important.

The member for Oriole added one other item to the goals for rental housing which is a very important one, that is, the element of choice. It is very important that tenants have a choice of affordable, safe accommodation. At the same time, the only way that is going to be achieved is if we bring stability to the rental housing market and if we encourage people to build. It is a monumental task, but I think Bill 121 does go a long way towards meeting that.

As the member for Oriole has said, there are concerns we have with it. We do have a concern about whether the cap is going to be adequate to meet the needs of our aging housing stock, and we do have some concerns about some of the maintenance provisions. But I will reiterate our desire to work with the government to try to create an even better bill when we take this to committee.

Mr Bisson: I have just two quick points. I would also like to thank the member for her support on this legislation. I think she recognizes that by working together from all sides of the House we are able to bring forward good legislation to the people of this province. That is why we are trying to work in a good atmosphere within this House as much as possible, listening to what people have to say not only in this House but when we go out and consult.

What the previous member was talking about was right on, that by listening to people out in the province we came back and somewhat changed our position, recognizing that there were a few things that needed some adjustment. But the basic principle was there.

I would like to make a very brief point on the question of the rebuilding of our housing stock in the Ontario market. As I said before, when I as a landlord take money in rents -- four units, six units, whatever -- I am expected, from that rent, to put some back into my building over the long term. I have a little difficulty when some people argue that they are somewhat worried about restrictions on the amount landlords are able to pass through to their tenants to recoup the cost of the repairs they have done to their building. I think that is something that really needs to be thought about.

The whole idea of taking rent is that you are basically putting money into something in order to build equity over the long term. That rent is not only to get the equity back, but is there in case of having to do work on your building to be able to keep it up to snuff.

I thank the member for a somewhat long but very interesting deliberation, and look forward to her comments.

Mrs Caplan: I found today's debate quite interesting, because we heard many diverse points of view on a subject -- housing policy and rent regulation in particular -- that reflect the approaches.

We know rent regulation has long been the policy of the Ontario Liberal Party. We heard from the members opposite that since forming the government the New Democratic socialist government has changed its views. I think that was positive. I will say that on behalf of my constituents, because I believe very clearly that the simplistic approach provided for in the Agenda for People was not good housing policy.

We have also heard from the Progressive Conservative Party of Ontario -- which brought us rent control in 1974, I would point out -- a point of view which I think the tenants of Ontario will not only find interesting, but will give them great cause for concern as well.

We know of the delicate balance that is needed to ensure, as we have said many times, the kind of stability, the kind of environment which will ensure that tenants have a clean, safe and decent place to live. We need to have the right incentives in place to ensure that buildings are maintained. We want to have a rent review system which is as understandable as possible, knowing how difficult that is in any kind of a regulatory regime. We want people to feel they are being treated fairly. We will have the opportunity, as we debate this legislation, to attempt to achieve those goals.

I would repeat that this is a very difficult and complex issue. The only place that we differ on, the partisanship, is how to do it, but I believe there is much agreement on the goals and the principles around protection of tenants.

Mr Winninger: I am pleased to add a few words to this debate. I think it is important when debating the merits of Bill 121 to look at where we are coming from and where we are going to.

There is a popular myth afloat that in a free market economy, rents will look after themselves, that they will be a stimulus to rental housing, that rents will be competitively set by the private sector.

Back in 1975, when rent controls were first introduced by the Conservative government of the day, with a strong opposition party, housing in Toronto had become extremely scarce and rents were skyrocketing. Tenants were being squeezed. There was scarce housing and there were high rents.

The government of the day thought it prudent to introduce rent controls. The act -- I believe it was then known as the residential premises rent review act -- introduced the concept of the statutory guideline. The statutory guideline over the ensuing years varied from approximately 4% to 8%. This was a range, I would submit, that was reasonable for the tenants to pay given the average increase in the cost of living.

There were two problems, however. One was that all buildings built after 1976 were not subject to the statutory guidelines. Second, there was no system of rent registry that would enable a new tenant to determine with any degree of accuracy what the former tenant had been paying in rent.

This led to a new act, the Residential Rent Regulation Act, introduced in 1985. This act not only promised tenants a rent registry but also brought under rent control all buildings constructed after 1976. This seemed like a wonderful thing at the time. However, the tradeoff for tenants was grossly inequitable in that under the new act landlords were able to pass through all kinds of costs, including economic loss, financial loss, extraordinary loss, capital loss. They could equalize rents.

This created great hardship for the tenants. Tenants were often facing rent increases of 20%, 30% or 40%. In one documented case in Toronto, rents rose by 170% on a rent review.

In order to cushion these increases, it was thought that a system of phase-ins would effectively smooth the transition for the tenant over time. But what happened is that these phase-ins were automatically added to the statutory increase that the landlord was able to obtain by justifying the rent increase each year. What you had was a phase-in piggybacked on what might be a statutory increase or what might in fact be another justified increase from year to year. The cumulative effect of these increases was to force many tenants out of their housing.

With the change of government last September, a new, innovative approach was taken to ensure that rent increases remain within a reasonable range. Bill 121 puts the cap at 8%. I would submit that Bill 121 effectively balances the competing interests of the landlords, who want a fair return on their investment -- the landlords who incur capital costs and who have to pass some of those capital costs through to the tenants are able to do so under Bill 121, and at the same time, rent increases are maintained within a reasonable limit so that tenants are not forced out of their homes.

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The process, too, is a much better one. Instead of the landlord applying to justify the rent and the tenant responding to that application for an increase beyond the statutory guideline and having to endure at least two processes of rent review, first at the level of the Ministry of Housing -- an order issued by rent review services which in many cases was virtually automatically appealed by either the landlord or the tenant -- and it is important to remember that at the first level of application there was no hearing under the most recent legislation. The hearing was allowed at the second level of appeal.

One might well ask, why does one have to surmount the first hurdle of an application to the Ministry of Housing only to have what amounts to a hearing de novo, a whole new hearing with the same evidence or perhaps new evidence being introduced, at the level of the Rent Review Hearings Board? It just does not make sense. For that reason, it seems eminently sensible that a one-tier structure be introduced where if the landlord or the tenant wants a hearing on an application for an increase beyond the statutory guideline, that hearing is automatically granted.

No one will go without a hearing. If there is some concern that an error of law has been made at the initial level, there is recourse to the Ontario Court (General Division), what was known as the Divisional Court. The member for Eglinton earlier raised the point that she was concerned that this ground for appeal was far too narrow in that a mere error of law may be a hard one to prove, and that one should be able to argue error of fact as well. The courts for some time -- and established precedent substantiates this -- have given deference to specialized boards and tribunals such as the Rent Review Hearings Board, it being thought that a rent review board, with its expertise in rent review matters, is far better equipped to make these ultimate decisions than a court of superior jurisdiction. For that reason, it makes good sense that a tenant or a landlord only be able to appeal a decision of rent review to the Ontario Court (General Division) on a question of law.

There is ample evidence that the principles enshrined in Bill 121 are the optimum approach in balancing the needs of both landlords and tenants. Certainly the support that flows from the member for Oriole indicates that at least the Liberal Party, the opposition, has taken a close look at the bill, has examined the bill and supports the merits of the bill.

There may be some room for minor adjustments. For example, the member for Eglinton suggested there may be a problem when an inspector goes in and issues a work order and that work order is then automatically delivered to the director, who then issues a notice of penalty order. I would submit that when that inspector goes in and examines the rental property and determines there is some reason for a work order, that inspector will take into account the reasonable time required to remedy whatever defect he or she may find. So by giving the landlord a reasonable time limit, that time limit has to expire. In other words, the time for compliance has to expire before the notice from the director goes out as to the penalty order. If the time has not expired, then it would be unreasonable for such an order to issue.

A landlord may have some substantial difficulty in complying with that order within the time set out by the inspector. In that case, I would suggest it would be incumbent on the landlord to visit the inspector from the municipality and ask for an extension of time, which, I would submit, would be reasonably granted under extenuating circumstances. So the concern about a notice-of-rent-penalty order going out may not be a valid one, given the safeguards built into the act that would ensure reasonable times are allowed for compliance with work orders.

One salient provision that is long overdue is the right for a tenant to go back to rent review when increases in operating costs are no longer borne and ask that those rents be decreased. I seem to recall there was a section under the existing legislation, which I do not believe was ever proclaimed, that allowed tenants to go back and have rent increases reversed. It makes good sense that the provision be in there, because otherwise rents will continue to escalate and costs which are reduced or no longer borne would enable the landlord to make more of a profit than may be appropriate under the circumstances.

The member for Eglinton suggested that a landlord who seeks a rent increase for capital costs associated with energy conservation may be penalized by a tenant coming back to the Rent Review Hearings Board and arguing that because the energy costs have been reduced the rent should be lowered. I believe that is not a point well taken, because certainly it makes perfect sense for the capital costs incurred by a landlord for energy conservation to be passed through to the limit by a landlord, but if that results in reduced operating costs surely the tenant should derive some benefit from that decrease in energy costs.

I believe this bill goes a long way to redressing many of the inequities that tenant advocates have been highlighting for the past number of years. I have had a long and abiding interest in the issue of social housing. Some members may know that the previous government appointed me to be chair of the London and Middlesex Housing Authority in 1988, and that, too, has given me some insight into the issue of how people are housed.

Housing, I would submit, is a basic commodity, as basic as food, and for that reason rent controls must be maintained, but in a meaningful sense. The past legislation, the Residential Rent Regulation Act, did not maintain rent controls in any kind of a reasonable sense because the exceptions under that act were manifold. One only has to go back over the past four or five years to see the ravages that particular legislation caused for tenants. At the time that legislation was passed, I seem to recall there were 62 or 63 amendments proposed by the NDP which were given absolutely no consideration at the time and the legislation went through virtually as it was, to the detriment of tenants across Ontario.

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I know the tenants in my riding of London South and in London in general are very pleased to see not only a cap placed on rent increases but standards of maintenance tied into the right to seek a rent increase. For the longest time landlords have been able to come to the rent review board and ask for and receive an increase, notwithstanding the fact that their buildings were in very shoddy, slipshod shape. The reason for that was that the way you proved a reduction or a decline in standards of services or maintenance under section 74 of the existing legislation was you had to have tenants who were in the building over a long period of time to show how standards of services and maintenance had declined over that period of time.

It did not matter that tenants could come to the board and give all kinds of evidence as to poor living standards in the building. The roof could be leaking, for that matter, but it was not within the jurisdiction of the rent review board to reduce rent increases for that reason unless a long-term decline could be shown. Because of the transitory nature of tenants' lives, the fact that they come and go in rental buildings, it was very difficult to prove a decline in standards of services or maintenance. Again, for that reason, Bill 121 is to be commended.

I would also note for those members in the opposition who complain that the minister may not be available for all the committee hearings that the minister has sat here very patiently since the debate began several hours ago today and is still sitting here because of his long and abiding interest in this issue.

Ms Poole: I would like to thank the member for London South for his comments, particularly about the rent registry. Our government did bring it in and I think it was one of the strongest parts of Bill 51 or the RRR Act. I did want to comment, however, on a couple of his other points.

First of all, he seemed to imply that the majority of cases that had been through the administrative process actually went to appeal and went to the hearings board. This is not correct; the majority of cases did not go under appeal. In fact, I had many tenants in my riding who were quite pleased when they took cases to appeal, because they got a further rent reduction.

When he talked about the 170% rent increase, I really wish we would stay away from that rhetoric. The statistics show very clearly that one 12,000th of 1% of rent review applications were for over 100% increases; one 12,000th of 1%. I, quite frankly, think any applications over 100% were unacceptable, but let's not pretend they were the norm. The average rent increase across the province last year was 5.8%. The average of those cases going to rent review was 11%, and that included the guideline increase. So we are talking around 5% above the guideline. That was the average going to rent review.

Let's not forget those statistics. Let's not talk about the ravages of the Residential Rent Regulation Act and get into political rhetoric when that act protected many tenants. That is why it was 5.8% across the province.

The final point I would like to make is about the conservation costs. The member missed my point. If a landlord spent 10% above the guideline on conservation, if he carried it over for two years he would get 6% back. So he would lose 4% and at the same time get reduced operating costs. That was the point I was trying to make.

Mr Winninger: I would just reiterate that the problems with the previous act which still exist on the books, I suppose, although capped by Bill 4, are self-evident. Tenants have been going back again and again to rent review and been told that because of the way the act was structured in 1985 and introduced in 1986, the hands of the rent review officers were tied, simply because sections of that act were so skewed in favour of the profitability of landlords. For that reason, it became self-evident that this legislation had to be reformed. Otherwise, tenants would be repeatedly forced out of housing.

Hon Mr Cooke: I would like to thank the members of the Legislature, the opposition parties and the government party, for participating in this afternoon's debate. I certainly look forward to the next stage of this bill. There will be extensive public hearings, and I certainly give the commitment of this government that in the public hearings we will have across the province we will be listening for suggestions to improve the bill further.

We will not compromise the principle of the legislation, but certainly the nature of this legislation is that there will be many specific recommendations on wording and some changes in the legislation, and we will listen. If there are recommendations that make sense and fit into the principle, we are willing to listen as a government and incorporate those suggestions into the legislation.

I would like to make it clear that this legislation is part of an overall housing strategy this government is working on. I would certainly like to remind members very briefly of the other components of the housing strategy, because I think it is important to realize that this government does not see rent control as the only initiative that is necessary to solve the housing crisis in this province. That is why we have released other consultation documents on the whole question of government use of land and the housing framework, the supply question.

And in the interim, we have moved in a number of areas. We have advanced the Homes Now program so that 14,000 of the Homes Now units are now under way. We have added an additional 10,000 units in the provincial budget to the non-profit and co-op housing supply program. We moved on the Rupert Hotel Coalition suggestion of doing a pilot project in the rooming house sector to try to solve by experimenting with some suggested solutions in the whole area of rooming houses and people who need access to that sector of housing.

We are developing a discussion paper in the whole area of quality of life in the public housing sector, which I personally feel very strongly about, that the existing public housing stock needs to be preserved and that we need to take some major initiatives in the public housing sector to turn control of those communities back to the people who live in those communities, people in our public housing sector, whom I think have in the past been forgotten by previous governments.

We have announced a planning inquiry. While that is an initiative from the Ministry of Municipal Affairs, I believe it is very much part of the housing strategy of this province, because if the planning system is working housing can be developed more quickly and efficiently both in the private sector and the public sector.

If we look at the number of initiatives this government has announced, we are trying to develop a total housing strategy which can deliver on the commitment this government has made and the principle this government has announced, that decent, affordable housing is a basic human right. If that basic human right is to be delivered on, government has a major role to play along with other sectors of the economy, including the private sector.

I very much look forward to the continued suggestions of the opposition parties, the landlord community, the investment community and municipalities as we move to the next stage of this legislation.

I could quibble with some of the arguments that have been used by the Conservative Party or the Liberal Party, but the hour is getting late and we will have many more hours to debate this legislation. Again, I appreciate the involvement.

The Acting Speaker (Mrs Haslam): Mr Cooke has moved second reading of Bill 121.

All those in favour will please say "aye."

All those opposed will please say "nay."

In my opinion, the ayes have it.

Hon Miss Martel: It is my understand that earlier this evening there was discussion among the House leaders' staffs of a request for unanimous consent to defer the vote until Wednesday after routine proceedings. I would ask for that consent at this point.

Agreed to.

Vote deferred.

Le vote est reporté.

The House adjourned at 2212.