RENT CONTROL ACT, 1991 / LOI DE 1991 SUR LE CONTRÔLE DES LOYERS
CONTENTS
Thursday 23 January 1992
Rent Control Act 1991, Bill 121 / Loi de 1991 sur le contrôle des loyers, projet de loi 121
STANDING COMMITTEE ON GENERAL GOVERNMENT
Chair / Président(e): Brown, Michael A. (Algoma-Manitoulin L)
Vice-Chair / Vice-Président(e): McClelland, Carman (Brampton North/-Nord L)
Abel, Donald (Wentworth North/-Nord ND)
Bisson, Gilles (Cochrane South/-Sud ND)
Harrington, Margaret H. (Niagara Falls ND)
Mammoliti, George (Yorkview ND)
Marchese, Rosario (Fort York ND)
Marland, Margaret (Mississauga South/-Sud PC)
O'Neill, Yvonne (Ottawa-Rideau L)
Poole, Dianne (Eglinton L)
Turnbull, David (York Mills PC)
Winninger, David (London South/-Sud NDP)
Substitution(s) / Membre(s) remplaçant(s):
Daigeler, Hans (Nepean L) for Mrs Y. O'Neill
Gigantes, Evelyn (Ottawa Centre/-Centre ND) for Mr Marchese
Gigantes, Evelyn (Ottawa Centre/-Centre ND) for Mr Mammoliti
Haeck, Christel (St Catharines-Brock ND) for Mr Marchese
Jackson, Cameron (Burlington South/-Sud PC) for Mr Turnbull
Johnson, Paul R. (Prince Edward-Lennox-South Hastings/Prince Edward-Lennox-Hastings Sud ND) for Mr Bisson
Morin, Gilles E. (Carleton East/-Est L) for Mr McClelland
Owens, Stephen (Scarborough Centre/-Centre ND) for Mr Bisson
Ward, Brad (Brantford ND) for Mr Mammoliti
White, Drummond (Durham Centre/-Centre ND) for Mr Winninger
Clerk / Greffier: Deller, Deborah
Staff / Personnel: Baldwin, Elizabeth, Legislative Counsel
The committee met at 1007 in committee room 1.
RENT CONTROL ACT, 1991 / LOI DE 1991 SUR LE CONTRÔLE DES LOYERS
Resuming consideration of Bill 121, An Act to revise the Law related to Residential Rent Regulation / Projet de loi 121, Loi révisant les lois relatives à la réglementation des loyers d'habitation.
The Chair: The standing committee on general government will come to order. The committee is reviewing clause by clause Bill 121.
Section 21:
The Chair: We are presently dealing with a government amendment to subsection 21(5) as printed. I believe we have a request for a recorded vote.
Ms Poole: On a point of order, Mr Chair: I know yesterday Mrs Marland said that if she was not here on time the committee should proceed without her as a general rule, but I am not quite sure she meant that if there was to be a vote. I wonder if the clerk could check with Mrs Marland's office and ascertain whether she will be here shortly.
Mr White: On the same point of order, Mr Chair: I have brought this matter to your attention on several occasions. I refer you to the transcript from yesterday's proceedings which clearly indicates, in your own words, that there is to be a vote at 10 o'clock, not 10:20. If the opposition members do not wish to appear at 10 o'clock, that is certainly their right and their privilege. However, when they know there is to be a recorded vote, I think it is their duty, if they want to represent their parties and their constituencies, to be here, as we are.
The Chair: We do have a quorum. I will treat this as being similar to a 20-minute request that was actually made yesterday, and that means that at the precise time we will take the vote. All those in favour of subsection 21(5)?
The committee divided on whether subsection 21(5) should stand as part of the bill as reprinted, which was agreed to on the following vote:
Ayes -- 6
Abel, Haeck, Harrington, Mammoliti, Owens, White.
Nays -- 3
Daigeler, Morin, Poole.
The Chair: Now, subsection 21(6).
Ms Poole: Just before we proceed with dealing with the business of the day, I wonder if I might make some comments about the process in this committee and the lack of progress in getting through this legislation. If the government would bear with me for my comments, which will be quite brief, I think it will be pleased with what I have to say, or at least with part of what I have to say.
This legislation is quite extensive. We have talked about 130 clauses and 200 amendments. When the government tabled its amendments, only two of what were priority amendments for the Liberal Party were included in those amendments: first, to have one guideline increase and not the confusion of two guideline increases, and second, the cost-no-longer-borne section which the Liberal Party has been pursuing for some time.
Since that time we have all tabled our amendments and there seems to be a trend. The first is that all government amendments pass, and with only two exceptions, all opposition amendments fail. One exception was that by mistake, because the government did not have enough members, Mrs Marland's amendment passed. Second, there was a minor amendment by the Liberal caucus with regard to clarifying language for sections 25 and 26. It would appear to me that if we are to get to what I consider some of the most substantial parts of this bill, which include the right of tenants and landlords to have an automatic hearing, the appeals process, the standards board, some of the qualifications regarding work orders, we are not going to get to them at the rate we are going.
I am just going to notify the committee that on future government amendments, I plan to speak extremely briefly, to say whether the Liberal caucus will be supporting the amendment or not, give the reason in a couple of sentences and then withdraw from the debate. If the government amendments are going to pass regardless of the opposition comments, then it seems to me to be just taking up needless time. The amendments we will give substantive debate to are the opposition amendments, in particular on the sections I just outlined. I am hoping this will move the procedure along considerably.
Mr Owens: I thank the member of the Liberal Party for her comments. Notwithstanding the stated reasons for her proposed brevity, I think we on this side will also undertake to keep our remarks short on matters that may not appear to be issues of substance. We certainly look forward to debating those issues such as you have outlined as being substantive.
Ms Harrington: I would also like to thank Ms Poole for her very reasonable approach.
Ms Poole: Just one final comment: My comments are of course subject to the fact that George does not try to bait me.
The Chair: There is a Liberal amendment to add subsection 21(5.1) to section 21.
Ms Poole: This is an amendment which I believe related to the cost-no-longer-borne amendment we had tabled. Since the government has put in its own provisions regarding costs no longer borne, the Liberal caucus will withdraw this particular amendment.
The Chair: Subsection 21(6) is as printed, I believe, in the original legislation. Are there any questions, comments, explanations or amendments?
Ms Harrington: I would like to comment. The repayment provisions related to the amount set out in an order for an above-guideline increase are established in subsections 21(6), (7) and (8). They are similar to provisions in Bill 4. In subsection 21(6) the order may specify that the landlord or tenant pay moneys owed to each other as a result of an order.
Ms Poole: This seems to be a very reasonable section and the Liberal caucus will be supporting it.
The Chair: Shall subsection 21(6) carry? Carried.
Ms Harrington: Subsection 21(7): When an order has been delayed at least three months to the first effective date of rent increase, it may stipulate that the outstanding rent may be paid over a period of 12 months in equal monthly instalments. The tenant still has the option of paying the entire amount in a lump sum. The tenant may continue to pay in instalments where the order contains provision, even if the tenancy is terminated.
Ms Poole: Mr Chair, just on a procedural question, the Conservatives have an amendment regarding subsection 21(7). Would it be appropriate to stand the section down until they return?
The Chair: I think that would be agreeable. We need unanimous consent.
Ms Harrington: Agreed. Hopefully they will show up.
Mr White: Mr Chair, the only concern I have is the absence of the Conservative members. Has there been any registration of an intent to boycott the session, or to show up?
The Chair: The clerk will be contacting the Conservative caucus.
Mr White: My concern with standing down this issue, which I think we could, is simply that the whole bill could be held up if the Conservatives do not show up.
The Chair: We need unanimous agreement and that is what the Chair is asking for, unanimous consent to stand this section down.
Mr White: I am sorry; I still have that concern.
The Chair: If you say no, that is fine, and we will proceed. Are you saying no, Mr White?
Mr White: Ms Poole might be able to add something here.
Ms Poole: Mrs Marland spoke to me about the problem, and the problem is that in her other critic responsibility for the Conservative Party she has to be in room 151 dealing with the waste management bill part of the time. I understand it is a logistical thing. I think it is unfortunate Mr Jackson is not here, or one of them, but I do feel under the circumstances it might be somewhat unfair to have their amendment fail due to their absence.
Mr White: I would certainly agree, but your understanding, Ms Poole, is that the reason for their absence is simply the double duty they are now under? To the best of your knowledge, there is no intent to boycott?
Ms Poole: No.
Mr White: Thank you. I will agree then.
Agreed to.
The Chair: Subsection 21(8).
Ms Harrington: I will give an example. I have already stated that under subsection 21(8) the tenant may continue to pay in instalments where the order contains such a provision, even if the tenancy is terminated. For example, if an order is issued four months after the first effective date of rent increase and the tenant owes the landlord $300, the order may provide for spreading the payments over 12 months. In this case the tenant may elect to pay $25 per month over the ensuing 12-month period.
The Chair: Questions or comments? Shall subsection 21(8) carry? Carried.
The Chair: Ms Poole, I think we will entertain your motion now, if you would like to read it into the record. It is to add section 21.1.
Ms Poole: Yes, the Liberal caucus does have an amendment creating a new section 21.1. I apologize for the fact that it is hand-printed instead of typed, but it was something that came out of yesterday's discussion.
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The Chair: Ms Poole moves that the bill be amended by adding the following section:
"21.1(1) Where a rent officer orders a reduction in maximum rent, a landlord may bring an application to increase the amount of the maximum rent by the amount it was reduced.
"(2) The rent officer shall order an increase in maximum rent equal to the amount of the reduction if:
"(a) the landlord demonstrates that the standard of maintenance or repair of the rental unit or of the whole residential complex which was the subject of a previous application under section 25 is in compliance with the applicable municipal standards or the provincial standard; or
"(b) the landlord has resumed or restored a service or facility provided in respect of a rental unit or of the whole residential complex."
Ms Poole: My comments on this will be very brief because I think we covered this in great depth yesterday. It became apparent when we looked at a previous section, subsection 21(3), that there was no remedy for the situation where there had been a reduction of a maximum rent by the rent officer because there had been a loss of service or because of inadequate maintenance. In the event the landlord did remedy the situation and restored the service -- and this is not a temporary loss; this would be a service that was restored after the six-month period -- or if the building was brought into compliance and the landlord had remedied the situation, then the landlord would have the right to bring an application and the rent officer would then decide, based on the evidence, whether the landlord had remedied the situation.
What this will basically do is provide that option in fairness. I do not see that it is unreasonable. We want to give incentives to landlords to restore service when it is withdrawn and also to ensure that adequate maintenance is preserved for the building. To me, this is such an incentive. Those are the only comments I have.
Ms Harrington: I would like to comment briefly on Ms Poole's amendment. It is clearly not the government's intention to do this. Ms Poole has stated this is an option of fairness. I believe it is a perceived option of fairness. In our bill and the regulations that go with it, it does state that this withdrawal of service is permanent. I believe this covers the intention of the government and in fact will be fair and will create the balance I was speaking of yesterday.
The Chair: Further questions or comments to Ms Poole's amendment?
Ms Poole: I request a recorded vote.
The committee divided on Ms Poole's motion, which was negatived on the following vote:
Ayes -- 3
Daigeler, Morin, Poole.
Nays -- 5
Abel, Haeck, Harrington, Owens, White.
The Chair: Mrs Marland, we have stood down subsection 21(7) because your party has an amendment to it, if you would like to move your amendment to subsection 21(7).
Mrs Marland: Thank you very much, Mr Chairman.
The Chair: Mrs Marland moves that subsection 21(7) of the bill be amended by inserting after "owing" in the next last line "plus interest".
Do you wish to provide an explanation for the amendment?
Mrs Marland: Yes. This amendment evens the playing field between tenants and landlords by according them both the same privileges.
Ms Harrington: I would like to clarify. Did you say create a balance? I missed that.
Mrs Marland: It is a very much-overused phrase that is in vogue right now. Actually I do not use this phrase because I am tired of hearing everybody use it. It is like the word "networking" and all that stuff that went on a few years ago. It is called leveling the playing field, but it is just as easy to say giving both tenants and landlords the same equal opportunity of privilege when it comes to this particular section.
Ms Harrington: I want to have staff clarify when interest is collected and whether or not there is fairness on both sides here. Colleen, could you clarify when that is collected and when it is not collected?
Ms Parrish: The purpose for the imposition of interest requirements on landlords essentially relates to the fact that where the landlord owes the tenant money, it is because there has been an illegal collection of rent. The provision of interest encourages the landlord to pay promptly, whereas if you have no interest provision, the landlord can obviously benefit from not repaying promptly. In this circumstance you have a situation where the tenant owes the landlord money, but it is not due to the illegal action of the tenant. The tenant simply owes the money because there has been some period of time it has taken to resolve the case. Perhaps people have asked for evening hearings or whatever and some time has passed. I think there is a distinction in the bill between a situation where there has been an overcharging of rent and interest accrues and this situation, in which in some cases the tenants may not even know what they owe because there has not been an order. That is my understanding of the distinction in the statute as to when interest is being imposed.
Mrs Marland: I can tell you that sometimes it is more than just waiting until evening hearings can be scheduled, because in my riding there has been a hearing that has been ongoing now for some 18 months. I think a year of that delay was caused by the fact that one of the panel members had girlie posters in his office. The staff at the Ministry of Housing objected, and rightly so, to the fact that he had these girlie calendars or posters on the inside of his office door. It took the ministry a long time to decide whether he was appropriate to sit as a panel member on the rent review board. Anyway, he has subsequently been removed from that panel, but in the meantime the hearing was adjourned while this problem was resolved. It does not matter what the cause is as much as the fact that there was a delay in a hearing. The hearing had started with a panel consisting of three people. It is ironic, because it is a panel I attended for the initial two meetings.
What happens? A year and a half later the hearing is reconvened with a new panel member appointed. This can happen if there is illness. Have you heard of anything like that, where there is illness or a replacement for any reason? It is a loss -- if it is a legitimate rent increase that is then granted by the panel, it seems fair that if it goes either way it should be paid. If the tenants have overpaid and there is a measurable sum of money involved, they should get interest. If it is the reverse, with the landlords, obviously it should be the same for them too.
We are having an interesting exchange of players here. I am just watching this magical stage as the puppets move in and out.
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Mr Mammoliti: It's better than the tag team we see over there.
Mrs Marland: Yes, but there are fewer of us. I hope we all have our little sub slips and everything so we all know who is doing what and who is going to be voting. I do not know now who is going to be here voting for the government.
Interjections.
The Chair: Let's have a little order.
Mr Owens: Let Ms Poole repeat the comments she made this morning about the proposal that the --
Mr Mammoliti: Maybe you can learn a lesson from Ms Poole.
Mrs Marland: I have finished, Mr Chairman.
Mr White: Oh, you have finished, Mrs Marland. Thank you very much. I just want to ask a couple of questions of Mrs Marland with regard to her amendment.
Mrs Marland: Through the Chair.
Mr White: Through the Chair, of course. First, where were you going to insert the phrase again?
Mrs Marland: After "owing," in the next to last line. I think you can see by reading subsection 21(7) where "owing" is.
Mr White: So this interest will refer to the time from the point of application, or from the point of decision?
Mrs Marland: Whatever is relevant in the rest of that section.
Mr White: I am asking you what would be relevant.
Mrs Marland: Do you not have a copy of my amendment?
Mr White: No, I do not.
Mrs Marland: All of you have them.
Mr White: It has not been distributed.
Mrs Marland: I am sorry; every member of the committee has a copy of my amendment, Mr White.
The Chair: It should be in your package, Mr White.
Mrs Marland: It has been distributed for about three months now.
The Chair: The clerk is busily finding you a copy, Mr White. Ms Poole, just to be helpful here.
Ms Poole: This is to be helpful. This is actually a procedural thing. Mrs Marland has said that the purpose of her amendment was to balance it off either way, that if a landlord owed a tenant money or a tenant owed a landlord money, in either scenario it would include interest. However, subsection (7) only refers to the case where a tenant owes money to the landlord. It does not cover the reverse case. I wonder if it would not be more appropriate for this amendment to actually deal with subsection (6), which covers both situations.
Mrs Marland: I think that is an excellent suggestion by the member for Eglinton. Have you already voted on subsection (6)?
The Chair: Perhaps we could have unanimous consent. Yes, we have voted on it.
Hon Ms Gigantes: No.
Mrs Marland: Of course not. The minister is here. We will not get unanimous consent on anything now.
The Chair: I hear a "no." We are dealing then with the amendment as proposed by Mrs Marland to subsection 21(7).
Hon Ms Gigantes: It will complicate things.
Mrs Marland: It does not matter because this whole exercise is a total waste of time. We know the government is not going to support any of these amendments. Last week, when I was particularly frustrated, I said: "Why don't we ask the minister to come in and tell us if there are any amendments they are going to support? We'll just move right to those amendments, get them done, and we'll save all the time, money and energy of everybody involved in these hearings." At that time the committee refused to invite the minister to come and answer that question. Now, when we ask for some consideration about moving an amendment to a more appropriate section, which I agree with, the minister says, "Not agreed." This is what we are dealing with.
The Chair: Thank you, Mrs Marland. Actually, Mr White has the floor. He was just checking to get the appropriate section.
Mr White: The issue Mrs Marland brings up of an equal playing field and the interest being accrued to both landlords and tenants in an equitable way seems to be quite reasonable. What I am not clear about -- and Mrs Marland was not able to answer this question; perhaps Ms Parrish could -- is would the interest Mrs Marland suggests should be due here only to the landlord be retroactive to the date of the decision or the date the rent increase would apply back to? For instance, what if there was an application in November 1990 which has been decided now in 1992?
Ms Parrish: It would go back to the first effective date. The whole point about this equal instalment thing is that you only get the right to do equal instalments as a tenant if there has been more than a three-month lapse between the first effective date on the order. For example, if the order was given before the first effective date or one month after the first effective date, you would just have to pay it in a lump sum. This is only because you are dealing with an order that will stretch back in time, maybe over several months, and requiring a lump sum payment right up front could be very difficult for tenants. The section clearly says the tenant must be paying back at least three months in arrears, and it could be a much longer period of time.
Mr White: According to this motion then, what you would have would be something along the lines of retroactive interest.
Ms Parrish: It would be interest on a sum of money where the tenants would have no way of knowing what it was to begin with. They could never at any time have paid it in advance, because they would have no way of knowing what it was. The concern is that it is very difficult for tenants to avoid paying this interest because they do not know what it is.
Mr White: That is very helpful.
Hon Ms Gigantes: If I could just comment on the same issue, perhaps I could explain to members of the opposition, who seem horrified at the suggestion that I do not want to go backwards through this bill, putting this proposed amendment at a place we have already been, that the point of my suggesting it is better to deal with this amendment as it is placed here is that I feel it is very important to deal with the issue of what is owed by the landlord in one circumstance. I hope I have Mrs Marland's attention, because it is her amendment I am trying to address here, and its placement in particular.
The reason for payment of interest by the landlord is an entirely different one than Mrs Marland is proposing with this amendment. She is proposing an amendment because a landlord has made an application that would be effective at date X. When that application is approved at date X plus 10 months or 12 months, she is suggesting the landlord have the right to the amount of money, which would be X plus interest from the date for which the landlord had applied.
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We are saying that is a very different question -- because the tenant does not know whether that application was approved -- from the question of when a landlord owes money to a tenant. When a landlord owes money to a tenant, it is money the landlord has had in his or her possession and has had the ability to earn interest on. It is for that reason we are saying the tenant should have the benefit of the interest. Those are two different situations, and when I say I do not want to go backwards, I do not want to confuse those two different situations. In one situation we as a government will be supporting interest, and in the other not, for the reasons I have explained. They are not comparable situations and we do not intend to address them as comparable situations.
I know Ms Poole has been trying to be helpful, but to move the amendment from dealing with it as a specific and separate item as an amendment will not be helpful. It will not help clarify the issues to members of this committee.
Mrs Marland: I do not care where it goes, because it is not going to be supported by this government anyway. I cannot underestimate how useless this whole exercise is and what a terrible waste of taxpayers' money it is. It is the worst example of gamesmanship by any minister in my seven years here. Do whatever you want to do with it. It is going to be defeated in any case.
The Chair: Shall Mrs Marland's amendment to subsection 21(7) carry? All those in favour? Those opposed?
Motion negatived.
The Chair: Shall subsection 21(7) carry? Carried.
The Chair: All in favour of section 21 as printed. Those opposed. Section 21 is carried, as printed.
Section 21, as amended, agreed to.
Section 20:
The Chair: We will revert to clause 20(1)(d) and clause 20(1)(e). As members will remember, these two clauses were stood down until we completed subsection 21(5). I will give everyone a chance to find the place.
Hon Ms Gigantes: Could you tell us where we are again?
The Chair: It is clause 20(1)(d) and clause 20(l)(e), and there is a Liberal motion, if I can find it.
Ms Poole: Mr Chair, the Liberal Party had tabled an amendment, which was subject to passage of our amendments under section 21, so we will withdraw our motion.
The Chair: Thank you, Ms Poole. Questions or comments on clause 20(1)(d) and clause 20(1)(e).
Mrs Marland: There would not be anything to comment on because it is now withdrawn. Is that correct?
The Chair: Ms Poole's amendment is withdrawn, but the section itself is what we are speaking to now.
Ms Poole: One clarification: Only clauses 20(1)(d) and 20(1)(e) were stood down, were they not? The others we debated and carried.
The Chair: Yes. Shall clause 20(1)(d) and clause 20(1)(e) carry? All in favour? Opposed? They are carried. Shall subsection 20(1) carry? Carried.
I am told we still have subsection 20(8) stood down.
Strangely enough, we are moving to section 22, which is the next section.
Mrs Marland: I want to confirm that there were two sections set down, subsection 20(8) and I think subsection 22(3). They were set down last week because they were our amendments and the government wanted to look at them.
The Chair: I am told they are still under consideration and we will deal with them at the appropriate time when the consideration has taken place.
Mrs Marland: That is fine.
Section 22:
The Chair: We are going to subsection 22(1), which the government has an amendment to.
Hon Ms Gigantes: We do?
The Chair: As printed. Following our procedure, it is not necessary to read it in when we have an amendment as printed, but an explanation would be helpful.
Hon Ms Gigantes: As printed, the government amendment shapes subsection 22(1) to provide for the maximum rent for a rental unit to be increased above the guideline if it is authorized by a notice of carry-forward.
Ms Poole: Notwithstanding that this is a technical amendment to make section 22 consistent with changes the government just passed in subsection 21(5), because the Liberal caucus believes the carry-forward proposed by the government in subsection 21(5) is inadequate, to be consistent we will therefore be voting against subsections 22(1) and 22(2) and the amendment proposed by the government.
The Chair: Any further questions or comments? Shall subsections 22(1) and 22(2), as printed, carry? All in favour? Those opposed? Subsections 22(1) and 22(2) are carried.
Do we have unanimous agreement to stand down subsection 22(3)?
Ms Poole: I do not have any problem with standing down a section; I just wonder if we could briefly review the reason for standing it down.
Hon Ms Gigantes: That was as a result of a motion of amendment by Mrs Marland, if I recollect correctly, to subsection 20(8). That motion is under consideration and we would therefore propose to hold this section until that is clarified.
Ms Poole: It seems perfectly reasonable. We will agree to stand that section down.
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The Chair: We then have unanimous agreement. We will stand down subsection 22(3).
Agreed to.
The Chair: Subsection 22(3.1).
Hon Ms Gigantes: This is part of the amendment in the reprinted bill that has been put forward by the government. It refers to the capital amount identified for the carry-forward allowance. I am going to have to read it carefully.
I am being advised by staff that subsection 22(3.1) could also be affected by Mrs Marland's proposed amendment referred to earlier to subsection 20(8), I believe it is, and subsection 22(3). Therefore, it is probably in our best interests in terms of order to also stand this one aside.
The Chair: Do I have unanimous agreement to stand down subsection 22(3.1)?
Agreed to.
Hon Ms Gigantes: Mr Chair, it looks as if we are dealing with large portions of section 22 following the subsection we have just passed which might also be affected by Mrs Marland's motion. Would it be wise to set the whole thing aside?
The Chair: Could we have a moment while we talk about what sections may have to be set aside, and we can do that all at once.
Hon Ms Gigantes: Mr Chair, I apologize for the delay. I am being advised that it would be wise for us to set aside subsection 22(4) and subsection 22(5) also as a result of their linkage with Mrs Marland's proposed amendment.
The Chair: Do I have unanimous agreement to stand down subsection 22(4) and subsection 22(5)?
Agreed to.
The Chair: Then we are on to subsection 22(6), which is a section in the bill as reprinted.
Hon Ms Gigantes: That is correct. Subsection 22(6) sets the cap on the maximum rent at 3%. While there might be disagreement on this, I believe we have had quite extensive debate on previous issues directly related to that amount.
The Chair: I see that the Conservative caucus has an amendment to this section.
Mrs Marland: I move that subsection 22(6) of the bill, as reprinted to show the amendments proposed by the minister, be amended by striking out "3" in the fifth line and substituting "5."
Mrs Marland, this amendment is substantially the same as a previous amendment that was not carried by the committee on subsection 21(2), which I believe was debated extensively.
Mrs Marland: So you did not want to hear it again?
The Chair: It is a practice in committee that if the question has been decided, we do not redebate the same question.
Mrs Marland: There are some members who did not hear that debate.
The Chair: I am going to rule the amendment out of order on the basis that the question has been decided in a previous section.
Mrs Marland: All right. I accept that ruling, Mr Chairman.
The Chair: We will now debate subsection 22(6) as printed.
Hon Ms Gigantes: I think we have debated the issues involved, as I indicated.
The Chair: Questions or comments on subsection 22(6)? Shall subsection 22(6) carry? Carried.
Subsection 22(7), questions, comments, explanations or amendments?
Hon Ms Gigantes: This is part of the amendment that had been submitted by the government in this section. It provides the mechanism by which the rent officer informs the parties of the carry-forward and the dates that would apply.
The Chair: Further questions or comments? Shall subsection 22(7) carry? Carried.
Subsection 22(7.1), questions, comments, explanations or amendments?
Hon Ms Gigantes: It is part of the amendment put forward by the government to this section. Again, it provides the information on which the question of costs no longer borne will be determined.
The Chair: Further questions or comments? Shall subsection 22(7.1) carry? Carried.
Subsection 22(8), comments, questions, explanations or amendments?
Ms Poole: I wonder if I might have a second to complete reading the section.
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The Chair: Shall subsection 22(8) carry? Carried.
Subsection 22(9), questions, comments, explanations or amendments? Shall subsection 22(9) carry? Carried.
Subsection 22(10) is as printed, I believe. Questions, comments, explanations or amendments?
Hon Ms Gigantes: This sets out the intent of the legislation that if a carry-forward order has been made, the carry forward will mean that the landlord will not make an application during the period of the carry-forward.
Ms Poole: Just a point of clarification on this issue from the minister: If a landlord has a carry-forward into a second year for capital repairs and the landlord continues to do capital repairs above guideline in the second year, but they do not meet the full amount of the cap, would the landlord be able to amalgamate the repairs done the previous year for which he was granted carry-forward with the application?
Hon Ms Gigantes: I am going to ask Colleen Parrish to comment on this because I think Colleen has a better understanding of this item than I do.
Ms Parrish: In the scenario you have given, the landlord has not used up his 3% cap in the second year and the landlord does new capital repairs. The landlord cannot ask for the carry-forward. What he can do is simply make a new application, take the amount he has justified from the previous year and justify the new capital expenditure. However, if he asks for the carry-forward, he cannot make that application, so he has to decide if he wants the carry-forward or if he wants to make a new application.
Ms Poole: Just a further question along that time: Can the landlord make that decision in the second year or does he have to make that decision in the initial year when he is applying for carry-forward and does not necessarily know whether there will be capital repairs the following year.
Ms Parrish: You have to apply for the carry-forward in the second year. It is not automatic.
Ms Poole: So it is at the time of application in the second year, at which stage the landlord should know whether there will be capital work done in that particular year.
Ms Parrish: Landlords always have to indicate whether they intend to carry forward. They may have other reasons. They may decide they are not going to carry forward because they cannot get their rent increase anyway for market reasons, but they must always indicate whether they intend to carry forward. It is not automatic. It is their obligation to ask for carry-forward.
Ms Poole: Just to make sure I am perfectly clear on this, if the landlord did not make an application for carry-forward in that second year, then the portion that he or she was entitled to carry forward could be put in as part of the new application together with the new capital repairs.
Ms Parrish: Subject to the overall cap, yes.
Ms Poole: Subject to the overall cap. We will support this amendment.
The Chair: Further questions or comments on subsection 22(10)? Shall subsection 22(10) carry? Carried.
On subsection 22(11). Questions, comments, explanations or amendments?
Ms Poole: Could we perhaps have a brief explanation of the effect of this section?
Hon Ms Gigantes: I am going to ask Colleen Parrish to do that. The key to understanding what is happening in this subsection has to do with the bottom line. Colleen, you are going to tell me I am right. The first effective date set out in the notice of intent?
Ms Poole: That was an order, Colleen. You are going to tell the minister she was right.
Hon Ms Gigantes: It had a question mark at the end.
Ms Parrish: This is to deal with the situation where the landlords have not realized and have asked for the carry-forward, and that means they are not allowed to apply and they apply anyway. This says: "If you have done that, your application is deemed to be withdrawn. If you have taken your notice of carry-forward, you cannot make another application, and if you do, it will be deemed to be withdrawn."
Hon Ms Gigantes: This is sort of a double stop.
Ms Parrish: Yes. It is in case you do it by mistake, essentially. It is just a mechanism for getting rid of the application. Otherwise it sort of lies around and there is no way of getting rid of it.
Ms Poole: So this is just to reinforce subsection (10).
Ms Parrish: Yes.
Ms Poole: And to deal with the application.
Ms Parrish: We do not want to be forced into a hearing to decide whether or not the application is withdrawn. It is just an administrative mechanism where people have made errors and applied when they should not have.
The Chair: Further questions or comments to subsection 22(11)? Shall subsection 22(11) carry? Carried.
The Chair: We now have a Liberal amendment to add section 22.1 that Ms Poole will move shortly.
Ms Poole moves that the bill be amended by adding the following section:
"22.1(1) A landlord may apply to a chief rent officer for an order apportioning the total rent charged in respect of a residential complex among the rental units in it in order to vary the rents to achieve equalization of rents charged for similar rental units within the residential complex.
"(2) An application under subsection (1) shall be made at least 90 days before the effective date of the first intended variation in rent set out in the application.
"(3) If a rent officer is satisfied in an application made under this section that the rents ought to be equalized, he or she shall set the rent that may be charged for any rental unit so that the landlord may achieve equalization of the rents charged for similar rental units within the residential complex, but the amount of rent increase that is attributable to the equalization in respect of any rental unit shall not exceed 5% of the maximum rent that was chargeable for that rental unit in the 12-month period immediately preceding the date or dates of the rent increase.
"(4) In setting the rents to achieve equalization, the rent officer may set a rent that may be charged for a rental unit at an amount that is less than the rent currently being charged for that rental unit.
"(5) If the rent officer has determined and apportioned the rent charged amongst the rental units in the residential complex, the minister shall order the percentage, if any, by which the rent charged for a rental unit may be varied from the amount that would otherwise be the maximum rent for the rental unit and the date or dates on which that variation may take effect."
Ms Poole: This is a fairly long, convoluted section to basically bring equalization back into Bill 121. Equalization was a mechanism that was in the Residential Rent Regulation Act, which enabled a landlord, or a tenant for that matter, to apply for a rent order that would bring the rent in line with other units in the building.
I would like to make a couple of things very clear. This makes no change in net revenue to the landlord. It is simply a matter of changing it within the building so that one tenant pays less than he did before, and one tenant pays more. The bottom line is that when the equalization has been fully effected, they will pay the same amount.
There are historical reasons why units in one apartment building may have rents varying by large amounts. Part of it lies in the fact that until the RRRA, it was not in force that there could only be one rent increase per year, so the landlord tended, every time a tenant left a unit and a new tenant came in, to put in a rent increase and he did not have to justify it before a rent board. On the other hand, for a tenant who was long-standing, say, some of the senior citizens who had been there for 20 years and did not move, the landlord by and large did not tend to put up the rent.
At the end of the day there tended to be a very diverse mix of rents in a building, which makes it hard administratively and also makes it very difficult for tenants who know that they are paying maybe $200 more for a unit than somebody down the hall with an identical unit.
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I think equalization is something that many tenants would like to see and that many landlords would like to see. As I said, it makes no difference in the net income to the landlord. One thing you might like to keep in mind is that this is to be phased in so that there are no sudden jumps in income. Should the government members say such things as, "Yes, but one tenant might not be able to afford to pay the higher rent," I will say to you there are sometimes people in those units who are paying more who cannot afford to pay more, so it is give and take.
If the government is concerned about the fact that we have mirrored the RRRA and have a 5% equalization phase-in per year until such time as the rents are equal, I would certainly be more than willing to accept a friendly amendment by the government to change it to 3% to adhere to the cap it has set in the rest of the legislation. I am certainly not averse to that, because I think equalization is a good thing and a fair thing. If it means I would have to amend my own motion in that regard, I would be willing to do it rather than see the amendment fail. That is my last offer.
Hon Ms Gigantes: Very briefly, we will not be supporting this amendment. As Ms Poole has indicated in her laying out of the amendment, it is a very complex issue. It certainly involves a number of questions around even the tenant's right or capacity to stay in an apartment and a question of whether through such a mechanism some tenants might end up getting evicted.
The difference in rent levels in any given apartment building, rent levels among comparable rental units, is something that has been created by a number of circumstances. Ms Poole has described them as historic. I think a large number of them are a result of illegalities. Some of them may have had to do with different lengths of tenancy agreements in the early days when rent regulation was coming into effect, and in some cases I think landlords chose to leave rents at a low level for certain tenants.
We have a variety of levels of rents; that is a fact. I certainly have not had any approaches by any tenants who were paying the lower rents suggesting there should be equalization. I do not think Ms Poole would ever suggest that was the case.
Ms Poole: On a point of order, Mr Chair: Does that surprise the minister?
The Chair: That is not a point of order, Ms Poole.
Ms Poole: But it is a valid question.
Hon Ms Gigantes: I was just drawing it to the attention of members of the committee. We will not be supporting this amendment.
Ms Poole: That too does not surprise me, Mr Chair.
The Chair: Further questions or comments regarding Ms Poole's amendment to section 22.1?
Ms Poole: Recorded vote, Mr Chair.
The committee divided on Ms Poole's motion, which was negatived on the following vote:
Ayes -- 3
Daigeler, Morin, Poole.
Nays -- 5
Abel, Gigantes, Harrington, Owens, White.
The Chair: Ms Poole's amendment is lost. We will change chairs here.
The Acting Chair (Mr Morin): I believe you have some motions.
Mr Brown: They are to add sections 22.2, 22.3 and 22.4.
The Acting Chair (Mr Morin): Mr Brown moves that the bill be amended by adding the following sections:
"22.2(1) A landlord may apply to a chief rent officer for an order increasing the maximum rent for any or all of the rental units in a residential complex by more than the guideline because of an expenditure made to promote energy efficiency and conservation.
"(2) Subsections 13(4), (5) and (6) apply with necessary modifications to an application under this section.
"(3) A landlord may make applications both under this section and under section 13 and if the landlord does so, the hearings officer shall consider them together.
"22.3(1) A rent officer shall not consider an application under this section unless,
"(a) it includes a written approval from the Minister of Energy of the expenditure as an energy efficiency or energy conservation measure; and
"(b) that approval includes a statement of the amount that will be allowed for the expenditure and an amortization schedule setting out the period for recovering that amount.
"(2) The Minister of Energy shall consider any written request containing the prescribed information from a landlord for the approval of an expenditure under subsection (1) and shall give the landlord that approval if after considering the possible benefit of the measure and its cost, the minister believes that the expenditure is reasonable.
"(3) The Minister of Energy shall not approve an expenditure for which the landlord has received or will receive a grant.
"22.4(1) Before making an order on an application under section 22.4, the rent officer shall make findings in accordance with the prescribed rules and for the prescribed periods,
"(a) to determine what guideline is to be applied to the rental unit;
"(b) to determine whether an increase of the maximum rent is justified and in what amount as a result of the approval from the Minister of Energy;
"(c) to determine the amount that applies to each rental unit respecting savings in operating costs resulting from the expenditure.
"(2) Subsections 20(2) and (3) apply with necessary modifications to findings under this section.
"(3) On an application under section 22.2, a rent officer shall order the amount of the maximum rent for each rental unit in the residential complex and the date on which that maximum rent takes effect.
"(4) If the rent officer's findings justify an increase in rent for a rental unit in respect of an expenditure referred to in section 22.2,
"(a) the rent officer shall provide in the order that the maximum rent shall decrease by the amount of that increase at the end of the amortization period and shall specify the amount and time of the decrease; and
"(b) the rent officer shall also provide in the order that the maximum rent at the end of the amortization period shall be reduced by the amount determined to apply to the rental unit respecting savings in operating costs resulting from the expenditure.
"(5) The rent officer may order a maximum rent in an amount that increases the previous maximum rent by more than the sum of the guideline and 3%.
"(6) Subsections 21(6) and (7) apply with necessary modifications to an order under this section.
"(7) No order shall be made under section 28 (reduction of rent) because of savings in operating costs resulting from an expenditure that is the subject of an order under this section."
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Mr Brown: I would like to give a brief explanation of a very long amendment. The amendment is intended to take into account Ontario's policy of energy efficiency and conservation and allow it to be useful to the people in Ontario who live in rental accommodation.
We know that under Ontario Hydro's new 25-year plan, Hydro is projecting the most ambitious program of energy conservation and efficiency in the western world. Indeed, it is more than twice what Hydro thought was possible just two years ago. We know of no other utility in the world that believes these kinds of figures can be met. As legislators, we are all very hopeful that Hydro will meet these targets, but in order to do that, it has a very ambitious plan to move into rental accommodation and save energy within that particular sector.
The purpose of the amendment is to provide a mechanism whereby the landlord has an incentive to do what all Ontarians want to do; that is, conserve energy. The way the bill is presently drafted, if we see energy increases, particularly for electricity, in double-digit order over the next three or four years, the landlord has no incentive to do anything but pass those along.
As the minister will tell you, the average that determines the cost of the guideline increase includes energy costs; therefore, it will continue to escalate. It really does not make a great deal of difference to a landlord whether he is in the efficiency business or not. His rents will be increasing as the average of energy costs increase; therefore, he will be passing those directly through to the tenants.
What this amendment attempts to do is to say to the landlord and the tenant, "If you wish to participate in energy conservation and efficiency, it will be in your interests." It is, at least in my view, a significant government policy agreed to by all three political parties that we should promote energy conservation and efficiency as much as possible. There should be no disincentive to a landlord or a tenant to participate in what I believe is just plain, commonsense public policy.
I am not going to go through these sections. I will tell the minister I would not be unhappy if the government did not accept this amendment, but during the clause-by-clause would bring in one of its own which it may find to be more suitable.
What I am arguing strongly for here is the principle that energy conservation and efficiency should apply to all segments of our society, to tenants, landlords, commercial, industrial and freehold housing in this province. In my view, the way the present bill is drafted, there is no incentive, except in a very few cases, for landlords and tenants to be able to take advantage of energy conservation. That is the intent of this amendment. If members cannot support it, I hope they will talk to the ministry and see that during the clause by clause, a government amendment is placed that will accomplish the same goals.
Those are my comments, which I think were briefer than the reading of the amendment.
Hon Ms Gigantes: The government appreciates the general direction of the amendment that has been proposed by our Chair, acting as a member of the committee for the moment.
I too am gripped by the excitement of what we can do with energy conservation in this province. Without accepting the member's predictions of double-digit increases by Ontario Hydro over the next several years, I will point out to him that the guideline on which this bill really hangs its hat, as it were, is one that reflects a rolling average over a three-year period. So particularly in a case where, as he speculates -- and I think him to be engaged in an accurate speculation -- we are going to be dealing with double-digit hydro increases over the next few years, we would obviously see an increase in energy costs to landlords which would be increasing at a rate faster than that rolling average would provide through the guideline. Correct?
Mr Brown: I suggest to the minister that --
Hon Ms Gigantes: That provides in and of itself some incentive to landlords.
Now the counterbalance to that is the suggestion that the provision within this bill -- I have to remind committee members that there is provision in this bill for landlords to make above-guideline applications for energy-efficiency retrofits and renovations, and there is a fair amount of capital room there for landlords who wish to do this. It also provides that where there are extraordinary savings -- I think they have to be extraordinary savings, am I correct? -- available this way, there could be an application by tenants for some remission of rent. He wishes to remove that by his amendment.
I am going to remind him of something he knows, because he has been interested in this question of energy efficiency, and that is that we can put in all the physical changes we want in a building, and if the people who live in that building do not have an incentive to make those measures work, the whole thing is undercut. In other words, it makes sense to provide both the landlords and the tenants with the possibility of some incentive. I think it is going to be a rare kind of case where we are going to see huge amounts on either side of this equation in terms of changes in rent levels or, for example, a large gap between costs of energy to a landlord and the amount the landlord can save. But he will acknowledge, I am sure, that it is important for everyone who lives in a building that has been modified to make sure he takes advantage of those modifications in order to make sure those energy-efficiency potentials can be realized, or they just will not happen. We all know that.
We believe that we have provided good room for landlords to move in the area of energy efficiency by providing that they can recoup above-guideline increases through rent increases for energy-efficiency measures. We think it important there be some potential there for tenants to feel that when big savings can be made on energy costs, then they can share a bit of those savings. We have made a modest provision for that. We hope very much that what we have provided through this bill, along with other government measures that will be developed, will indeed see energy conservation built into the physical structure of more and more of our buildings, and that the people who live in those buildings and the people who work in the buildings we work in will use every kind of good habit we can develop so that we are saving energy.
Mr Brown: The minister and I disagree on at least some of the premises of what we are dealing with. We know on the rolling average, for example, that this year the increase in Ontario for electricity, at least at the wholesale level -- and so by community it could be much more or it could be less -- is 11 point something or other, which for last year would be an increase above the rate of inflation of at least 6%. We know that the year before, the increase was about 15% because the GST was rolled in.
We know that next year your own Minister of Energy has predicted that the numbers will be double figures, or at least very close to them, which in that year, if present projections for inflation carry on, would be 7% or 8% above the normal inflationary average. That means the landlord will be the beneficiary of a much higher guideline increase than he might otherwise be entitled to.
If the incentive for a landlord to do capital expenditure to save electricity under those circumstances is not very great because of the provision within the bill that provides that if there is a decrease in the cost of utilities -- I believe it is 10% in the bill, but I am not sure.
Hon Ms Gigantes: It is 50% of the guideline amount. That is why it is called an extraordinary decrease. It is going to have to be a pretty revolutionary retrofit for tenants to be able to benefit from this clause. It can happen, but it is not going to be the ordinary kind of methodical retrofits that landlords will undertake.
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Mr Brown: I am looking for what incentive there is to the landlord to undertake the energy conservation measure in that case or in the second case, where we have a large number of units within this province where the tenant actually pays for his or her own utility, not the landlord. I am quite puzzled why a landlord would make any energy conservation measures within the building when he can in no way whatsoever recoup his investment by way of saving energy. The tenants, on the other hand, would like to have energy conservation measures taken into account in their units so that they could save some money on electricity. I am wondering how the minister would explain that situation in terms of their legislation, without an amendment.
Hon Ms Gigantes: Mr Chair, the simple point I tried to make is that in a period which, again --
Interjection.
The Acting Chair (Mr Morin): The Chair is here.
Hon Ms Gigantes: Yes. The member for Algoma-Manitoulin is proposing this. In a period when the cost of energy, say electricity, is rising at what he considers to be a very steep rate, there is going to be a widening gap between the absolute charge to a landlord for that energy and the amount the landlord will get through the guideline, because the guideline reflects a rolling average of the previous three years. That gap is an incentive. He is suggesting it is not enough of an incentive. I think it is providing an incentive for a landlord who is interested. Further, I do not think this is the only kind of incentive we are going to see over the next few years as far as landlords are concerned.
I do not want to build this kind of proposal into the rent control situation. Without detracting at all from the intent here or the elegance of the wording, it is an enormously complex system that is being set up to achieve a relatively simple objective, which is to encourage landlords to make renovations for energy efficiency. I think we have to provide a balance that is going to say they do not take all the benefits, that tenants can take some benefits out of this. I think that is important, because those tenants live there. If they do not cooperate with the mechanisms, then it ain't gonna work. They need to feel some self-interest in this too, as well as landlords.
I believe the legislation as we now have it set out provides the ability for landlords to make the changes. I also think that in coordination with other measures that this government hopes to develop to provide incentives for energy-efficiency renovations, we will see the work getting done.
Mr Brown: I do not accept a couple of the minister's premises, but I wish she would answer the one specific question where I pointed out that in numerous cases the tenants pay for their own utilities. In that particular case, what incentive is there for a landlord to do things to save the tenant energy? It seems totally backwards to me. Could you explain to me how that might work? I would also point out that the amendment provides for the costs-no-longer-borne provisions to take effect, so down the road the tenant and the landlord are both big beneficiaries of this initiative. The tenant's rent will go down.
Hon Ms Gigantes: That is true.
Mr Brown: If the building's energy costs go down, the tenant benefits. I see this as a pro-tenant amendment more than a pro-landlord one. I do not see any real advantage to the landlord at all within the present system to do what public policy should dictate. All I am trying to do with this amendment is to have public policy and the rent control bill line up. In my opening comments, I said that I would be perfectly happy if you said: "I have some problems with a few sections of this. It is unduly complicated. We can think of a better way to do it." You can come forward with that later on. I can understand that. But I think the principle is extraordinarily important.
Hon Ms Gigantes: The principle is very important. We do believe there is room in this legislation that provides both an incentive and a mechanism for landlords to undertake work. We do not feel it is useful to try to institute the whole of an incentive system for energy conservation in rental accommodation through the rent control legislation. We have provided a base in this bill that we believe will be a good base to combine with other programs this government will be bringing forward. For some of the reasons of the difficulty of application and appropriateness that I have mentioned before, we feel we would prefer to stick with the provisions as we have set them out in the legislation, rather than get into the proposals the member has provided us.
I think it is fair to say that the member has identified an area that really does concern this government. Certainly, were I to be Minister of Housing three years down the road, for example -- one does not predict anything -- this is something I think should be reviewed. I think we have to monitor this carefully, and I consider it a responsibility of the Ministry of Housing and the Minister of Housing to monitor what happens. I believe we have made provisions which along with provisions that will not increase the burden to tenants unnecessarily -- which I believe this amendment would do -- combine with other programs that will be providing incentives in the area of energy efficiency in large residential buildings. That is something I personally will take an interest in watching. It is an area that very much interests me.
I appreciate the amendment the member has brought forward. Maybe two or three years from now we will say we are going to have to move to something that is a bit tougher, that we are going to have to make tenants pay more and faster, because essentially that is what his amendment would do. But I do not see that necessity now, and I think that to treat energy-efficiency renovations as we have in this bill will provide a good path for progress.
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Mr Brown: First, Minister, I appreciate those comments. Second, I would like to say that the idea is not for the tenants to pay more. It may be to pay faster, but we are living in difficult times and all of us, Ontarians everywhere, are having to debate these very same issues. Many of us, including myself, have taken some rather extraordinary energy conservation measures within the last year.
I really do not understand why tenants are any different than anyone else in so far as participating in public policy is concerned. I do not see this as costing tenants more; I see this as costing tenants less. I see this as an opportunity for the tenants to participate in what I think is a very important issue and that this shall not cost them more. At the very same time, they may be paying a little bit more for capital, but they should be paying a little bit less for energy. I ask the minister if she could come back and directly respond to the case where the tenant rather than the landlord pays the utility bill.
Hon Ms Gigantes: It is all very well for Mr Brown to suggest that tenants should participate in energy conservation as well as everybody else. But what he is also suggesting is that we are going to change this proposed legislation in such a way as to say that landlords can go ahead with above-guideline increases greater than the cap in order to put in renovations that increase energy efficiency and that tenants will have to pay for it.
Let's be clear about what this amendment does. I want to remind him that 30% of tenants in Ontario pay more than 30% of their income already to have a roof over their heads. For those tenants, that kind of choice, a 1% difference in a rental cost, makes a lot of difference. You and I, Mr Brown, can sit and discuss all the lovely things we do in our homes. We have the luxury to do that. But there are lots of people who are firmly convinced about the efficacy of energy conservation who do not have the dough to pay for it today, right?
Mr Brown: Agreed.
Hon Ms Gigantes: This is a wide-open kind of amendment. We have provided a cap and we think it is a reasonable cap. We think we have provided incentive through the guideline for landlords in an era of increasing energy cost. I am not willing to move off that as our framework at this stage.
When Mr Brown speaks about the case of the tenant who pays the energy bills, there are measures involved here that we will come to, which I am a little dubious about but willing to try, that would allow a tenant and a landlord to come to some agreement, for example, about a single rental unit. We will also be providing incentives for landlords through other programs, beyond the price incentive they will have when they compare their costs of operation in year X with the roll-through guideline, which may not provide full coverage of the energy cost increase in a year or in a time of increasing rates of energy cost. I think I have attempted, though Mr Brown may not be totally satisfied, to directly address the questions he raised.
Mr Brown: I would ask the minister what sections of the bill provide for this relief for tenants who pay their own utility bills. I would find it helpful if to know what sections do that.
Hon Ms Gigantes: There is no relief but there is a possibility that a tenant and a landlord could come to some agreement about a single rental unit in terms of renovation above guideline. The possibility exists that this could include energy-efficiency measures; for example, windows. That will be up to the landlord and the tenant.
Mr Brown: If I understand you, that only applies to single units.
Hon Ms Gigantes: That is correct.
Mr Brown: Just for some information, perhaps the minister could tell us how many units in this province might be in the category of paying their own utilities. Do you have a number?
Hon Ms Gigantes: No, we do not have accurate statistics on that.
Ms Poole: First of all, I want to commend the member for Algoma-Manitoulin for bringing this motion forward. He has been extremely active in the area of energy efficiency and conservation for a number of years and is quite keen to see that various government ministries adhere to a policy that is going to increase energy conservation.
I mention different ministries for a particular reason. If one ministry, for instance the Ministry of Energy, sets extremely high conservation targets, which the Ministry of Energy has done for Ontario, it makes a lot of sense to me if every other ministry tries to assist in meeting those targets. Because the NDP government has discounted expansion of nuclear power to provide more energy in the future, it has virtually doubled the conservation targets. We are not going to get into a debate here today as to whether that is achievable, although I have my own doubts, but they have set these targets. I think it is incumbent upon the Ministry of Housing and every person in this province to try to assist.
The minister has said that two or three years from now, they may find they have to do something tougher. If we are going to meet those extraordinarily high targets, we cannot afford to wait for two or three years.
Conversion can be extremely cost-effective, not only by changing to triple-glazed windows and efficient measures in that regard, but also by such things as conversion from oil to gas. I know in our own home we converted from oil to gas and there were extraordinary savings. We halved our bills. So when the minister says it would be highly unlikely for tenants to have the ability to go for an extraordinary operating decrease because of energy conservation and conversion, I do not think that is entirely accurate. I think there are going to be many opportunities. Members would be absolutely astonished to see how much can be saved by bringing in these measures.
The minister has specifically referred to the fact that the Liberal government -- sorry, I got ahead of myself by about three years there -- the Liberal caucus has put in a section that removes protection for tenants in that they could not apply for an extraordinary decrease until such time as the energy-saving measures had been paid for. I would point out to the minister clauses 22.4(4)(a) and (b) of the Liberal amendment, particularly clause (b). Clause (a) refers to a cost no longer borne. Since the government has now seen the wisdom of incorporating that into its legislation, that makes clause (a) somewhat redundant. However, clause (b) says:
"The rent officer shall also provide in the order that the maximum rent at the end of the amortization period shall be reduced by the amount determined to apply to the rental unit respecting savings in operating costs resulting from the expenditure."
When those operating costs go down, then automatically this order will apply not only to the capital in the cost-no-longer-borne scenario but also to the operating expenditures.
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The minister asked what incentive there is for tenants. There are two points I would like to make in this regard. The first is that I think there is an incentive for tenants, the same as for anybody else in Ontario, to try to contribute to the energy problem. Clause (b) means that those tenants will receive relief at the end of the day and their cost will be significantly reduced. It is particularly apropos for tenants who are paying their own energy cost and their own utilities right now, and this is becoming an increasing phenomenon. As the ministry talked about last week, landlords are converting more and more from having cable paid for in the building en masse to having it billed directly to tenants on an individual basis. This is happening more and more with utilities, and I would suspect we will find it will increase dramatically over the next few years, because of the way this legislation is set up.
When we are talking about energy conservation we are also talking about something else we have not mentioned, because I guess it is a side issue: We are talking about comfort. A lot tenants, I think, would like their windows replaced and various energy-saving mechanisms put in their building, not only because it is a good thing to do, as we all want to do as Ontarians, but also because it dramatically increases the comfort.
The minister has said there is already a section in here subject to a cap and that this in itself should be enough of an incentive for the landlord. But I say to the members of the government that I think this is such an important area that we have to provide a real incentive. We have to provide an incentive where landlords and tenants both have something to gain at the end of the day. That is why subsections 22.4(4) and (5) were specifically put in by Mr Brown, so that we could ensure that tenants did have something at the end of the day.
I concur with my colleague from Algoma-Manitoulin. If the government will bring in some other section if they do not like our amendment, the Liberal caucus has always been known to be very flexible. I do not want to hear any calls from my colleagues over there or it might make me very garrulous on this particular issue.
Mr Brown: Or your colleagues beside you.
Ms Poole: Or my colleagues beside me.
We are certainly willing to support a government amendment that you feel would achieve the objectives of energy conservation.
There is one last point I would like to make. It refers to the fact that some witnesses and some members of the government have expressed concern about, what is energy conservation, and could everything in a building be deemed to be energy conservation, depending on your particular interpretation? That is specifically why the member for Algoma-Manitoulin has put this under the auspices of the Ministry of Energy, because if we cannot count on the Ministry of Energy of our government to know what energy conservation is and to be able to determine the criteria, then I think we are in a fairly sad shape. That has eliminated one concern, that anything might be deemed to be energy conservation, and it would be very difficult to make those definitions.
I think the amendment put forward by Mr Brown is extremely good. I commend him for it, and I know there will be many people across Ontario watching this government to see if its actions match its words in regard to energy conservation.
Mr Brown: I want to come back to a point on section 22.4 that Ms Poole raised, and that the minister also raised, when she was discussing the matter of no decrease to the tenant until after the cost of the renovation was paid for. The reason for that is that energy efficiency and conservation, at least in my humble view, are two different things. Efficiency will happen in the marketplace. If it is better to do it, you will do it. In other words, if there is a market for saying, "This is a cheaper way to proceed; this makes sense," you will do it. That is the efficiency component. A landlord would use that money to apply to the cost of the renovation. That is why initially the tenant does not get that back, because that is going to pay part of the bill. The way this amendment is drafted, I was hoping that was understood. The reason the tenant does not get the money back initially is that this money is part of paying for the efficiency component of the renovation.
Conservation is a slightly different concept. Conservation says: "We're not necessarily just worried about market forces. We have a public goal." The society has decided for a number of reasons, which are not market reasons, that we want to reduce our use of energy or water or whatever in the conservation field. That means we are willing to pay a little bit of a premium for that. I think that is appropriate. That is why the two are separated here.
What I am trying to say is that we have to pay a little bit for the conservation. The efficiency is going to be paid out of the tenant initially not getting a rebate. But once it is over, the capital is paid off and the bill to the tenant for the utilities goes down. The tenant wins both ways once it is over.
The minister says 30% of tenants right now cannot afford the accommodation they are in. I agree with that. I think that is one of the problems the committee has been struggling with. The flip side of that is that 70% of them can. Perhaps the Minister of Energy in this particular situation could have a look at subsidization for those tenants. The Ministry of Energy and Ontario Hydro are doing some rather unique and innovative things in energy conservation at the moment, some of which I think are very good and some of which I am not too sure about. None the less, they are doing innovative things and they are looking for innovative ways to do things.
For the life of me, I cannot understand what is wrong with this principle. I really cannot understand who loses. If there are people who lose under this amendment, why can we not find a way to fix it for them? If the minister, as she has indicated, cannot support this particular amendment for some technical reasons, I can understand that and I look forward to voting for her amendment at a future date that deals with the same topic.
I do not think three years is good enough. If we wait for three years, we have missed a gigantic opportunity to encourage energy conservation and efficiency within this province. I support the goals of the government. I was on the select committee on energy for two or three years, whatever its term was. Not just New Democrats, not just Liberals, not just Conservatives, but all parties agreed with improving these targets. I think it behooves us all to try to reach those targets and to have legislation that is proactive and encourages all ministries of the government to participate in energy conservation and efficiency incentives.
The Acting Chair (Mr Morin): Minister, it is past 12 o'clock. Do you wish to reply now or wait until after lunch?
Hon Ms Gigantes: I believe the remarks I feel obliged to make would take me longer than we have at our disposal right now.
The Acting Chair (Mr Morin): This meeting is adjourned until 2 o'clock.
The committee recessed at 1158.
AFTERNOON SITTING
The committee resumed at 1406.
The Acting Chair (Mr Morin): Are we are all set? I believe, Minister, you had the floor.
Hon Ms Gigantes: I will be brief. I would like to assure Mr Brown in particular, who has put a lot of energy and effort into this amendment, that the government has taken very seriously the question of energy improvements in rental accommodation in this legislation. In fact, following many suggestions that arose on this topic prior to our submitting the amendments we have brought forward, there were very comprehensive discussions with the Ministry of Energy about changes we could have in this bill and changes we could have in programs that would support energy improvements in rental accommodation in Ontario.
For a combination of reasons, some of which probably are not worth getting into, we decided it was best to treat energy conservation renovations, which we obviously consider important enough to single out as a topic for landlord applications for above-guideline capital improvements, as other capital improvements which could be the cause of a justified above-guideline increase.
The question has arisen during this particular discussion about the situation where landlords are trying to get out of paying utility costs, because utility costs are rising. Certainly from the energy efficiency point of view, and I am sure Mr Brown will acknowledge this, it is very important to have the person who uses the energy pay the bill. That is the most direct method of making sure that the message about the financial benefits of energy conservation gets through. We have done all kinds of studies, which he is very familiar with, all over, not just here in Ontario, that indicate if you can connect the user to the bill you get very much better conservation effects.
We would have absolutely no objection to seeing landlords do what they can. Obviously many of them would wish to use this legislation to change the provision of energy within their buildings so that renters are directly connected to the energy bill. That is fine.
There is also a provision in here that the change in the service that is provided within the rent would be adjusted for in the rent. What would happen is that, prospectively, renters would be connected to the energy bill. There is leeway there for that very advisable thing to occur.
I believe there is incentive there. We can dispute about whether there is enough incentive, and essentially that is where we disagree. I want to assure Ms Poole that my suggestion that we would monitor carefully what is happening in this in no way should or shall, uncontested, be taken to mean that we are saying we are going to let things sit for three years. That is not at all what I said.
I will repeat what I said, which was that I personally will want to monitor the effects. The government will be informed by my monitoring, and I am sure by the Ministry of Energy's monitoring, about what is happening in rental accommodation vis-à-vis energy efficiency. We care about that matter.
We are also going to be watching how this legislation combines with other very active programs that we will be undertaking in cooperation with the Minister of Energy to increase energy efficiency within all residences in Ontario, but with some very particular concern and interest in what happens in large buildings where we can in fact achieve quite excellent returns on investments.
Let me assure Ms Poole that this is not meant to signify quiescence on our part at all. We are going to be pursuing active programs. It is just that we are not going to pursue them in the way that has been suggested here through this particular amendment.
Mr Brown said as soon as the capital cost of the renovation for energy efficiency had been paid off, then the tenants could expect to get some benefits from the drop in energy use, the payback periods. The priority items in large apartment buildings can be quite long, and Mr Brown is aware that two, three, four tenants might live in a particular unit during the payback period for a major item in an apartment renovation. So to say the tenant would get it back -- I mean, a tenant will get it back, that is true, but not necessarily the tenant who paid for it. In cases where you are going to allow the cap to be broken, which is what you are suggesting in your amendment, I would suggest to you that the payment can be quite large. We do not see that as a kind of balancing off in terms of the fairness for tenants as a class, because the tenants who have to pay the bill may not be the tenants who benefit.
All in all, I think I have attempted to respond to the concerns and issues that have been raised around the amendment. As I say, it is one of the items that most interests me in terms of what we can be doing to make progress in the housing field. I can commit to the members of the opposition that you are going to see a Housing minister who does quite aggressively pursue energy effectiveness goals.
Mr Jackson: I did not hear from the minister's commentary any response to the point I raised the other day, which dealt with the massive injection of moneys to assist the conversion for the private sector, but there was no reference to the rental sector.
Hon Ms Gigantes: Do you mean the home owner as opposed to the renter?
Mr Jackson: That is correct. As I read the article, it implied the payment of the $2 billion might come as an increase in hydro. All people pay hydro, not just people who own homes. Renters pay hydro as well in many respects. When the minister said she was aggressively pursuing that, can I ask her how she participated in that debate and how it ties to this legislation, which the Chair will ask me in a moment? Specifically, is your legislation drafted in such a fashion that you can accommodate a capital injection to a building, which is offered by the government possibly? That accrues to the benefit of the building and the tenants, but there is an impediment to that because of the manner in which this legislation is structured.
Just to review, the two questions are -- I know you find it humorous, but that is why I am repeating it in a more simple form for you.
Hon Ms Gigantes: Thank you.
Mr Jackson: The first question is, to what extent have you been successful in having access for tenants to the kind of program your Minister of Energy announced last week? Second, is this legislation structured in such a way that you could participate in such a program? Those are the two questions.
Hon Ms Gigantes: I am not aware of the program to which you are referring, quite frankly. It may simply be that I have been preoccupied with other matters over the last few days, but I do not know whereof you speak. I will inform myself and attempt to come back with an answer for you. I know of no impediments in this legislation towards energy efficiency, the use of government grants. There are no impediments in my point of view, not at all.
Mr Jackson: Let me be specific then. To give an example, most previous government programs involved a portion from the government and a portion that was put up by the private sector. In this instance, the owner of the building would have to say, "In the name of energy efficiency, I will participate in the plan, therefore I will engage in this capital expenditure." If this corresponds with the necessary improvements to a roof or something else, then they may not be eligible because they pierce a certain level of expenditure. In that sense, it would be an impediment. In the name of conservation, they would not be able to take advantage of the grant because there is an impediment in the structure of rent control to the landlord taking on the necessary retrofits -- I would not want to call it renovations -- in the best interests of tenants, because it will reduce energy consumption, and of the building, because it will be more efficient. That is the example I am looking at.
Hon Ms Gigantes: You are alluding to an example for which you provide no figures on which anyone could make any comment.
Mr Jackson: In fairness, you are absolutely right. You are unaware of what your Minister of Energy has announced, and until such time as you are aware of it --
Hon Ms Gigantes: I can say to you that I see no impediments at all in this legislation that would exist for the general outline of affairs as you have described them. They would simply fold in with this legislation, in my understanding.
Mr Brown: I might in some way be helpful. I happen to remember that when Ontario Hydro and the Ministry of Energy were before the committee, they talked about a program as yet undefined which would be targeted directly at rental units. If memory serves, they were hoping to gain 600 megawatts worth of savings through this program.
Hon Ms Gigantes: I have tried to indicate to the committee that we are working very actively in the Ministry of Housing with the Ministry of Energy to pursue programs that will be proactive. They are not passive programs, sitting back monitoring, they are proactive programs. They will support those efforts that can be made through this legislation. In my view, they will be providing a mechanism through this legislation, as far as the split on rents and benefits is concerned, for landlords and tenants. I see no difficulty in having a program work hand in glove with this legislation.
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Mr Brown: I am interested in some of the things the minister said, and I do not think we are on a different wavelength. I think we are talking about the same thing. What we are disagreeing about is whether the legislation as written will do what the minister wants it to do or whether my amendment will do what the minister wants to do. I do not think we are disagreeing about the principle. What we are disagreeing about is perhaps the incentives within it. I was interested in that way, and I think I agree with the minister, that the user of the energy is the one most likely to conserve it. The problem is that many of the things that can be done to conserve energy require capital expenditures.
Hon Ms Gigantes: Yes.
Mr Brown: The capital expenditure is something the landlord would do, not the tenant. Maybe we have a lot of altruistic landlords who are going to do for the tenant things that are not in their financial best interests, but perhaps we do not have as many as we would like. That is the problem I am trying to point out. I agree with the minister that we should be going in the direction she is saying. I just think the legislation in some ways precludes it happening to the extent that we would all hope.
The other question around that is that in some ways the minister's direction may encourage the use of electricity rather than natural gas or oil or whatever fuel as a source, because she is saying that we want to encourage the occupier of the unit, the one who pays the bill. In many ways, in large buildings the only practical alternative at this point is an electrical alternative. It is just not feasible to put a gas furnace or an oil furnace in each one. But it is feasible technically to do it with electricity, and I do not think we want to go in that direction either. I am just pointing that out as a problem.
With that I am going to give up the floor and urge the minister -- if she decides to vote against this, that is fine -- I would hope she would reconsider her position and come up with some amendment at a later date that would, at least in my view, incorporate the principle of what I am attempting to do and what I think she is attempting to do.
Hon Ms Gigantes: Mr Chair, in closing the discussion, because I believe Mr Brown is moving to that point, I very much appreciate the suggestions he has made, the points he has raised, and I look forward to working with him in this field over the next while. He obviously has both an interest and a fair amount of knowledge and with his permission I will tap them.
The Acting Chair (Mr Morin): Any further questions or comments? We will now vote on Mr Brown's motion on sections 22.2, 22.3 and 22.4.
Ms Poole: A recorded vote, Mr Chair.
The committee divided on Mr Brown's motion, which was negatived on the following vote:
Ayes -- 5
Brown, Daigeler, Jackson, Marland, Poole.
Nays -- 6
Abel, Harrington, Marchese, Owens, Ward, B., White.
The Acting Chair (Mr Morin): I am afraid the motion is lost. I think you understand that we will not be voting on section 22 for the simple reason that some of the sections were stood down, so we will now debate on section 23.
Mrs Marland: I have a question, Mr Chairman. I know that several days ago the government members switched horses midstream in the middle of the day, and I know that in the past the clerk has accepted the sub slips in the morning within the prescribed amount of time, which is within the first half-hour or 20 minutes of the meeting. When those sub slips come in in the morning and we have a full complement of members for the morning, does the sub slip have to say that they are going to be sitting as members in the afternoon session only, or does it mean that the sub slip identifies seven or eight government members for the day?
The Acting Chair (Mr Morin): My understanding is that you have to submit a form to the clerk and then that allows you to act immediately. Am I correct?
Clerk of the Committee: Mrs Marland, if I may just explain, the substitution slips have to be in to me by 30 minutes after the start of the meeting. The substitution slip can say that a particular member would be in the committee from 10 until, say, 11 or 12 and there would be another member substituting beyond that. A substitution slip is valid if it has more than one member substituting for a single member.
Mrs Marland: So there is no limit to the number of sub slips any caucus can submit to you?
Clerk of the Committee: As long as I receive them in the required time frame in the morning, that is correct.
The Acting Chair (Mr Morin): Are you satisfied with the answer?
Mrs Marland: I am satisfied with the answer, Mr Chairman. It is just that I have never seen such a retinue of changeover in a committee as I have on this committee, day by day, morning by afternoon. I think the government whip's office must be doing an ingenious amount of work trying to sort it out, because it is very hard sitting opposite to follow who the players are for the government. They change all the time.
Interjections.
The Acting Chair (Mr Morin): Order. Mr Jackson?
Mr Jackson: Punching a time card is nothing new to the NDP.
Just on that point, though, the clerk indicated that they were time-specific. Are you saying that they do not have to be time-specific, that you can, say, come in with a substitution slip with seven different names on it?
Clerk of the Committee: No.
Mr Jackson: Okay, that is what I did not hear you say. Have you received all your sub slips today in accordance with the guidelines you just shared with us, that no two persons can at any point confuse the Chair because they know specifically at what time they are not to be there and what time which member is supposed to be there?
Clerk of the Committee: Every substitution slip I have received from every caucus for today is in order and valid.
Mr Jackson: And where a second name appears, it has to explain the time.
Clerk of the Committee: It is explicit in terms of the time.
Mr Jackson: Very good. As the Chair of another committee, I was most anxious to get that ruling. Thank you.
Ms Poole: On that point of order, Mr Chair: The clerk has generously given each caucus 10 Smarties in the colour of our choice for our good behaviour this morning. I think she is going to withdraw those Smarties if we do not smarten up, so to speak.
The Acting Chair (Mr Morin): Thank you very much.
Section 23:
The Chair: The members will give their attention to subsection 23(1), which I believe is a government amendment, as printed in the bill. Questions, comments, explanations, amendments to subsection 23(1).
Hon Ms Gigantes: This is an amendment as reprinted, and what it says quite straightforwardly is that it is possible for a tenant to apply to the chief rent officer for a rent reduction.
Ms Poole: Although the Liberal caucus has expressed some reservations on how the ministry has treated rent reductions in this particular piece of legislation, we are not opposed to the principle of there being an opportunity for tenants to have a rent reduction if services and maintenance do not meet certain criteria. Our problem has been in the fact that we did not feel terms such as "inadequate maintenance" and "neglect" were properly defined in the act, with appropriate criteria to follow. Although we have problems with the way the ministry has dealt with rent reductions, we will support this section, which embodies the principle of the tenants being able to ask for a rent reduction.
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The Chair: Any further questions or comments? Shall subsection 23(1) carry? Carried.
I believe we now have a Conservative amendment. You will see it as subsection 23(1.1).
Mrs Marland moves that section 23 of the bill be amended by adding the following subsection:
"(1.1) The chief rent officer shall not proceed with an application under this section unless the tenant has provided evidence in the application to support it."
Do you have an explanation for your amendment?
Mrs Marland: This amendment provides for the fact that tenants, when applying for a decrease in rent based upon sections 24 to 26, can only do so if they have evidence to substantiate their claim.
We have had almost three months of hearing the government say why this is such a good bill and why it is so just and all that stuff, and we have certainly got lots and lots of comment on record in Hansard that the decision of the rent officer will be made based on evidence of both sides, whether we are talking about increases or decreases in rent or any other issue that is to be heard. Ms Parrish has reassured us that the decisions will be made based on the evidence, and I think this is a very straightforward amendment requiring that there is evidence in the application to support it.
Ms Poole: The Liberal caucus believes that this is a good amendment and should be added to the legislation. What this amendment basically does is say that if there is an application under the rent reduction section, evidence should be provided with the application to support the application. I would think that a lot of people would think this is common sense and that any application should be supported.
I will give you an example in kind that I think most members of this committee are familiar with. I have a number of buildings in my riding on Avenue Road which over the last number of years have undergone renovations. In the fall, a tenant made application for a rent reduction, claiming that there had been an illegal rent charged and asking for a rent reduction in a building that is owned by former Minister of Community and Social Services Zanana Akande.
We of course do not have access to this application, so we do not know what supporting evidence was provided with it, and I think is imperative that in this type of case where there is an allegation that an illegal rent has been charged and a tenant asks for a rent reduction, evidence be provided with the application to support that matter. Otherwise a person's name and integrity can be dragged down and people can be subject to the accusation that they have charged illegal rents without any evidence that this is indeed so.
This is the type of situation I think the Conservative amendment is meant to prohibit, and in no way, shape or form do I make comment on whether the tenant had legitimate reason to make this application or how bona fide the application is, since I have not seen it. It may well have provided evidence with it, but it may not. I do not know that and I would like to make that perfectly clear, but that is the type of situation where we want to ensure that the tenant is required to support the allegations with facts. This is going to be even more important in situations where you have a fairly high-profile person who is involved, like Ms Akande, so that if there is no supporting evidence, it does not take a lengthy rent review process to prove the facts. So the Liberal caucus will support this resolution.
Hon Ms Gigantes: I wonder if I could call upon members of the committee to turn their reprinted bill to page 42, on which we commence part II, procedure under the bill, and draw to the attention of members as they look at part II and the sections under part II the fact that it provides procedures governing all the operative sections of the legislation.
Interjection.
Hon Ms Gigantes: There is another amendment coming?
Mrs Marland: Will you tell us what you are reading?
Hon Ms Gigantes: I am going to stop and correct myself at this very moment. As Colleen Parrish points out to me, not only did the reprinted bill attempt to clarify procedures -- and I would refer you in particular to section 52 on page 44 of the reprinted bill -- but in order to make such procedures super clear, you will find in your books a proposed government amendment.
Ms Poole: On a point of clarification, my section 52 does not show any government amendment on the reprinted copy.
Hon Ms Gigantes: No, I am saying that you will find in your books a proposal to amend.
Ms Parrish: It was tabled last week.
Ms Poole: Oh. This is one of the newest set of amendments, which is not in the reprinted copy.
Hon Ms Gigantes: That is correct. But let me suggest that if you refer to section 52, you will see that 52 deals with applications, and the amendments to 52 which we are proposing similarly deal with applications. They describe what should be happening -- actually, 51 also describes what should be happening -- with an application by either a landlord or a tenant.
If we were to describe the way in which the application may be filed in each and every case where there is an operative section of the legislation saying a person may do this and a person may do that, we would have them scattered all throughout the legislation. I think the thinking behind the way this has been organized is to provide within one part of the bill a laying out of procedure as it applies to all the operative sections of the legislation.
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Therefore, I suggest that the addition in this section of the fact that evidence must be produced by an applicant for a rent reduction, a tenant who is making application for a rent reduction, would be redundant. Were we to put in such a requirement here, then in fact we would be changing the whole way in which the bill is organized, and in order to balance it we would have to go back through the bill and describe how to deal with applications at every step of the bill, which we have not done so far.
In any case, what we are saying in section 52, and will be saying in section 52 as we propose to amend it, is what is required of the applicant, the tenant who is making the application. Under our proposed amendment the tenant who is making the application does have to file what is called prescribed material and all other written evidence on which the applicant bases the application.
The Chair: Ms Poole, then Mrs Marland.
Mrs Marland: Just before Ms Poole speaks, I wonder if you could tell me which group of amendments this new one is in. Is it the group that was handed to us on the 20th?
Ms Poole: January 14.
Mrs Marland: Okay, and what number is it again?
Ms Poole: Section 52.
Mrs Marland: Thank you.
Ms Poole: I thank the minister for pointing out that there is a new, improved government amendment in section 52 which will make certain requirements that the applicant must follow when filing the application. In particular, the application's supporting material must be completed before this clock starts ticking.
However, I point out to the minister section 83 of that act. This is the concern that I have had. It says, "A rent officer may discontinue a proceeding if, in his or her opinion, the matter is trivial, frivolous or vexatious or has not been initiated in good faith." The Liberal caucus has an amendment to that section to change "may discontinue" to "shall dismiss." That is why we feel that, the way the legislation is right now, it does need clarification that the application shall not be proceeded with unless evidence is supporting the application. It could be a frivolous or vexatious matter and, as the legislation now stands, there is not a firm direction that the rent officer shall dismiss. It is at the discretion of the rent officer. The rent officer "may discontinue."
The Chair: I am a little puzzled here. The minister has pointed out that part II of the bill deals with the procedures. I am just wondering -- I am doing this out loud, not with any predisposition -- if this amendment can be placed at an appropriate point in part II if Mrs Marland is not satisfied that her concerns have been dealt with. Then we could go on and discuss procedure in the procedural part of the bill and discuss substance in this particular section. Maybe that is not the way to proceed, but it just seems to me that dealing with section 52 when we get there is better than dealing with it when we are dealing with section 23.
Ms Poole: We have no objection to standing this down and discussing it at the time we deal with procedural matters.
The Chair: I was not really suggesting, Ms Poole, that we stand it down but perhaps that we could consider making the amendment to a different section of the bill when we come to the procedural part.
Hon Ms Gigantes: On your proposal, I would not like to suggest, by agreeing to what you are proposing in terms of the way we order our work, that I think there is reason to doubt that section 52 as the government has proposed to amend it does not meet all the concerns that have been raised by both Mrs Marland and Ms Poole. I draw your attention to the proposed amendment by the government and Ms Poole's comment that this also relates to section 83, dealing with a vexatious or annoying or mischievous kind of application.
What we are proposing in the amendment to section 52, if Ms Poole will look at it, is the provision that unless the application is properly supported it shall be deemed to be withdrawn if it is incomplete. If it is incomplete, and here again I am referring to our proposed amendment, clause 52.1(3),
"(3) The notice shall inform the applicant that,
"(a) the applicant may file further material...; and
"(b) if the applicant does not do so within that period, the proceeding will be discontinued."
This provides an automatic recognition of what Ms Poole is referring to in section 83 as a discretionary discontinuance. I think she should feel assured that the government motion does relate to what she is talking about when she talks about section 83 and, further, that it covers not only the government amendment.
The original section 52, as had been printed, addressed the same question raised by Mrs Marland. I think that unless somebody wants to make an overall argument that we should not be dealing with procedures in one part of the bill, which to my view is a handy-dandy way for people to look things up and makes it easier for people to use the legislation -- that is my personal feeling about it -- but unless there is an argument that we should not be organizing the bill in this way, then I think they will both find that the concerns they have had around this and they have just raised really are being seriously addressed by the government.
The Chair: Minister, I was just trying to be helpful. I was not trying to predispose what the committee was deciding one way or the other. All I was suggesting was that if Mrs Marland was not satisfied with the government amendments to this particular section or indeed the way the bill was initially drafted, it might be appropriate at that point to put this amendment. But I am happy to deal with it now if that is the way the committee wants to handle it.
Mrs Marland: I will speak. Are you going to let sister speak?
Hon Ms Gigantes: Sister Margaret.
Mr Jackson: As long as she does not sound like Mother Superior.
Mrs Marland: I see you, brothers.
Mr Jackson: Just do not call her a Confederate.
Mrs Marland: I think we may have reached a point in these committee deliberations on clause-by-clause of Bill 121 where I might attempt to be somewhat gracious, because in reading the latest -- in fact they are not the latest set of amendments from the government because we have the bill with printed amendments in it, we have government amendments as of 14 January and then we have another set of government amendments as of 20 January. The only good thing was that for the most part the opposition parties stopped creating amendments, but the government is still doing that.
But I do now see, since the minister has pointed out the group of amendments submitted to the committee on 14 January, that amendment under section 52 does cover the same issue and concerns the Progressive Conservative caucus was raising with our amendment to section 23(1.1). I will accept the fact that the government has seen the wisdom in our amendment and converted it into its own amendment. I am happy about that because I can see that now that my words are in their words and it is their amendment, they will vote in favour of it.
Either way, we accomplish the same intention that we had and it covers the concern we had with regard to the need for evidence to be available as part of the hearing process in order for the judgement to be made, so applications will have to have the evidence that we are talking about in subsection 23(1.1). If you would like me to withdraw the amendment, if that would help, then I would be delighted to do that.
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The Chair: Thank you, Mrs Marland. Mrs Marland has withdrawn amendment 23(1.1).
We will then go on to subsection 23(2). Questions, comments? Shall subsection 23(2) carry? Carried.
Subsection 23(3). Questions, comments, amendments? Shall subsection 23 --
Mrs Marland: Just one second. I think this section needs a little explanation.
The Chair: Perhaps Ms Parrish could help us.
Mrs Marland: Subsection 23(3) says, "If a rent officer believes that the rents of one or more rental units in the residential complex would be directly affected by the issues raised in an application under this section, the rent officer shall add the tenants of those rental units as parties to the application." When would it ever be the case that the tenants of those rental units would not be parties to the application?
Ms Parrish: Where the reduction affects only the unit that the individual is occupying. The service or the inadequate situation may be only in my unit. Only I am affected, so only I apply. I may say the landlord has shut down the swimming pool or the garage and thereby all the tenants in the building are affected. But it is possible that it is something in only my unit and therefore I am the only person in the building who is affected.
Hon Ms Gigantes: As another example, just to add icing to the substantial cake here, if only a portion of the tenants in a building had parking service and if the parking service were somehow in question here, then only those tenants who had parking would be affected. What we are talking about is a way of making sure that we are folding in those people who should be folded in but not folding in those people who are outside the terms of the application or the matter to be decided.
The Chair: Further questions, comments. Shall subsection 23(3) carry? Carried.
Subsection 23(4). Questions, comments, amendments? Shall subsection 23(4) carry? Carried.
On subsection 23(5) we have a government amendment as printed, I believe.
Hon Ms Gigantes: Correct, Mr Chair. This section that we have proposed as an amendment in the reprinted bill -- it is marked in the reprinted bill as an amendment -- is one that would allow a person who was a tenant and who would have been affected by the matter to be decided to join the application.
The Chair: Are there questions, comments or amendments?
Mrs Marland: Can you give us an example of a person who is not a tenant? Are you talking about somebody who is an official agent?
Ms Parrish: I suppose you could imagine a factual situation where that would apply, but the person has to have been personally affected by the discontinuance or reduction of the services and facilities. What this is really covering is a situation where the application occurs after the individual has left the building.
Let's take the example that the parking is taken away on January 1 and I move out on April 1. An application is made on February 1; it is not heard until July. I can get that reduction for the period that I was in the building even though in July I am no longer a tenant.
Mrs Marland: The way it is written, I would respectfully suggest, is if you look just at the actual wording, of subsection 23(5) it says, "A person who is not a tenant may make an application" etc. It would be better I think to say, "A person who is no longer a tenant," because the way it says a person who is not a tenant, where it says, "if the person was a tenant and was affected by," I have difficulty with this anyway and I am going to vote against it. How far back would you allow this kind of clawback into previous tenancy to go? Is there any limit as to how far back you would let that clawback happen?
Ms Parrish: You have to have been a tenant who was affected by the discontinuance or reduction of the services and facilities so it is not likely people are going to reach back far into time. If your building is in very bad shape and it gets to the point where you move out because it is so terrible, I guess there is a question as to whether you should be compensated for the period in which you had to pay rent and you did not get what you paid for and whether you should be forced to stay in the building just in order to make this application.
Mrs Marland: If the application allows a rent decrease for any of these reasons, are you now saying that the decrease is retroactive?
Ms Parrish: As we discussed earlier, the reduction in rent is effective on the day that the service was first withdrawn. It does not go beyond that. It can go backwards because obviously the service has to be withdrawn and then you make the application. If you did not do that, it would always be to the benefit of the landlord to withdraw a service because he would always benefit for some period while the application was being done. In the case of service withdrawal, if there is a finding that there was a service withdrawn, it is effective on the date that the tenant can establish that the service was withdrawn.
Mr Marchese: There is a question further to that. I thought the question being posed was, how far do you go back? Is there a limit -- 1985, 1980 -- because the service could have been withdrawn at any time in the past? Are we saying there is no time limit in the past in terms of when this service was withdrawn?
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Hon Ms Gigantes: That is correct. That is what we are saying. If I could just add, there is good reason for that. If the service were withdrawn and there were no accommodation made in the rent for that, then the rent which is being charged cannot be said to be a legal rent if that means it is above what it would have been had the service not been withdrawn.
Mr Marchese: I understand your reasoning. It is just a question of whether one goes back 20 or 30 years or whatever.
Hon Ms Gigantes: No, because the definition of our maximum legal rent would go back only as far as 1986. Would they be able to go back before 1986 to seek -- yes, they would.
Ms Parrish: Yes. It would depend on whether they were a pre- or post-1976 building.
Hon Ms Gigantes: In theory, yes. The likelihood of people going very far back in time is very small at this stage because presumably the turnover among most tenants would mean that -- and even people's memories would be such that once this section is declared and operative, their recollection that cable had originally been included in the rent and was now a separate item or whatever would have faded. However, there it is, and it is connected with the concept in the legislation which has been maintained through more than one bill now of the maximum legal rent.
The Chair: Shall subsection 23(5), as reprinted, carry? Carried.
Section 23, as amended, agreed to.
Section 24:
Ms Poole: We do have a Liberal amendment to subsections 24(1) and (2). I do not know whether you would like the minister to comment on subsection 24(1) prior to my making my motion.
Hon Ms Gigantes: Subsection 24(1) is as it was originally in the bill. It is one of the basic principles we have identified as important in this legislation, which is that where there is an extraordinary decrease in operating costs the tenant has the right to make an application for a rent reduction.
Ms Poole: I move that section 24 of the bill, as reprinted to show the amendments proposed by the minister, be struck out and the following substituted:
"24(1) The tenant may base an application on an extraordinary decrease in operating costs for municipal taxes, hydro, water, heating, a land lease from a government, a government agency or a financial institution or any other prescribed operating cost category for the whole residential complex.
"(2) A decrease in operating costs for an operating cost category is extraordinary if the decrease, expressed as a percentage, is at least 20% less than the percentage set out in the corresponding operating cost category recognized in the table referred to in subsection 12(1) for that category."
Hon Ms Gigantes: On a point of order, Mr Chair: I believe Ms Poole means 50%.
Ms Poole: I do. If I said 20%, it means I probably too do need glasses and I should see to that very soon. Correction, Mr Chair: that should be "at least 50%."
The Chair: Thank you. I am sure we are interested in the explanation.
Ms Poole: I do not want to belabour this point because I believe the minister has already signified that the government is unwilling to consider this for either extraordinary increases for the landlord or extraordinary decreases for the tenant.
What this amendment would do is make two changes. The first is that it adds a category: "a land lease from a government, a government agency or a financial institution." I think it is highly unlikely this would be used on a tenant application for extraordinary decrease. However, I put it in to mirror what I had done for the other section.
The secondary part I think is very valid, with regard to tenants, and that says "any other prescribed operating cost category for the whole residential complex." What that means is that if a year from now the government felt there was another category for an extraordinary decrease application by a tenant it could do this through regulation and would not have to open up the legislation in order to do it.
The second part I may as well deal with now since it has been read into the record. In subsection 24(2) the only change is that we have said "an operating cost category" instead of just dealing with the municipal taxes, hydro, water and heating. That was changed to cover the unlikely event that the government was going to accept the first part and allow operating cost categories through regulation. I think we explored this quite fully at the time we did the increase section so I do not have any further comments to make.
The Chair: Are there further questions or comments?
Shall Ms Poole's amendment to section 24 carry?
All those in favour will please say "aye."
All those opposed will please say "nay."
In my opinion the nays have it.
Motion negatived.
The Chair: Mrs Marland moves that subsection 24(1) of the bill be struck out and the following substituted:
"(1) The tenant may base an application on an extraordinary decrease in operating costs for hydro, heating, municipal taxes, garbage tippage fees, water and sewage fees, insurance, cable television, superintendent's salary and rent, maintenance and those provincial and federal taxes the landlord must pay in order to maintain the residential complex."
Do you have an explanation? It looks remarkably similar to the increase in section 14, as Ms Poole's did.
Mrs Marland: It may look remarkably similar, but it does have a different word in it, and the word is "decrease." I wonder if the minister is willing to tell us what the word "extraordinary" means in subsection 24(1). We had to use it in our amendment because it was in the government bill, to keep the language all the same. Is there a definition or a description of what would be an extraordinary decrease?
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Hon Ms Gigantes: I will refer the member to subsection 24(2). There is a definition of an extraordinary decrease.
Mr Marchese: What is the reference again?
Hon Ms Gigantes: Subsection 24(2): "A decrease in operating costs for municipal taxes, hydro, water or heating for the whole residential complex is extraordinary if the decrease, expressed as a percentage, is at least 50% less than the percentage set out in the corresponding operating cost category recognized in the table referred to in subsection 12(1) for that item." In other words, the guideline.
Mrs Marland: Thank you for the answer. I recall back in subsection 13(7), when we had this discussion, I was referred to section 24.
Hon Ms Gigantes: I think you are looking for section 14.
Mrs Marland: No, actually subsection 13(7) deals with decreases -- decreases, increases; same thing as far as percentages are concerned -- on page 18.
Hon Ms Gigantes: Yes. If you look at section 14, you will find the converse or the reverse or the inverse -- I can never figure out which is which -- of the section 24 decreases we are talking about.
Mrs Marland: Subsection 14(2). Of course I have said before that, first of all, it concerns us that there are some other items which are not included in operating costs or not recognized as operating costs by the government. You do not recognize garbage tippage fees, do you?
Hon Ms Gigantes: That is correct. We have been around this one before. You are right on both points.
Mrs Marland: Do you think it is just that where there is a decrease one party to the contract is allowed consideration, and where there is an increase one party to the contract is not given the same consideration?
Hon Ms Gigantes: That is a very general kind of proposition. To what are you referring?
Mrs Marland: I am referring to subsection 24(1), which refers to the basis under which a tenant may make an application for a decrease. Do you have a matching clause in this bill for where the landlord may make an extraordinary increase?
Hon Ms Gigantes: Yes. I just referred you to that. It is section 14, and I believe you identified subsections 14(1) and 14(2).
Mrs Marland: Mr Chairman, are you going to say that our previous amendment, subsection 12(1), is really a corresponding amendment so this is no longer needed since we lost subsection 12(1)?
The Chair: No, I am not saying that at all. It is different because it provides for a decrease. That is substantially different, but I think the issues are substantially the same.
Mrs Marland: Yes, I agree, and the same arguments I gave on subsection 12(1) I think apply here also, even though it is in the other direction. That is why I would like a vote on this amendment, and let the amendment stand.
The Chair: Further questions, comments or explanations? Shall Mrs Marland's amendment to subsection 24(1) carry?
Hon Ms Gigantes: It is a temptation, but no.
The Chair: All in favour? Opposed? The motion is lost.
Now I believe we are back to subsection 24(1) as printed. No, subsection 24(1) is in the original bill.
Hon Ms Gigantes: That is right.
The Chair: Questions or comments on subsection 24(1)? Shall subsection 24(1) carry? Carried.
On to subsection 24(2) as printed.
Hon Ms Gigantes: This is an amendment. There is a cross-reference to the table referred to in subsection 12(1), which is the table representing costs included in the guideline. This subsection defines the decreases as "extraordinary" when there is a decrease which is at least 50% of the corresponding percentage as a portion of the guideline amount for that respective category. I hope I have made myself clear. I know what it means, but it is tricky to say.
The Chair: I am sure all members followed that. Questions or comments? Ms Poole. We found one who did not follow it.
Ms Poole: Deep in her heart, I am sure the minister knows what this is all about. If Colleen says we should vote for it, I am sure the government members will do it. Therefore it becomes quite irrelevant whether we vote for it at all.
Mrs Marland: May I ask a question?
The Chair: Sure you may.
Mrs Marland: This is an interesting example, when we were talking about who has to provide evidence. I notice that in subsection 24(3) it says, "Before making an order on an application under this section, the rent officer shall consider any evidence provided by the landlord concerning an extraordinary increase in operating costs for municipal taxes, hydro, water or heating for the whole residential complex."
If the tenant had evidence as well, which the tenants may well have -- the landlord may have evidence --
Hon Ms Gigantes: No, they are not applicable --
Mrs Marland: Would the rent officer not be interested?
The Chair: Mrs Marland, just looking at my book -- I am sorry I did not remind you -- I understand there is an amendment by your party to this section which might be more appropriate for you to put, and then we can discuss your amendment.
Hon Ms Gigantes: Mr Chair, I am afraid I have led you astray. When I look at the copy of the proposed Conservative amendment, I note that the proposed Conservative amendment to subsection 24(2) depended on passage of related amendments by the Conservatives to subsection 14(2). Therefore this amendment which I had drawn to your attention would not longer be relevant.
The Chair: From the Chair's point of view it is always difficult to make that ruling when the amendment technically has not been placed.
Hon Ms Gigantes: True.
The Chair: Mrs Marland will have the opportunity of deciding. Your logic is fine, and in that case she will not make the motion, or she will make the motion and be surprised at what I might rule.
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Mrs Marland: I have it here. Would you like to hear my amendment first? I have been advised that my amendment should read subsection 24(4) rather than subsection 24(3).
The Chair: No, I think we are on subsection 24(2).
Mrs Marland: Pardon me. No, I do not plan to move subsection 24(2).
The Chair: Thank you, Mrs Marland. We can then continue debate on subsection 24(2).
Hon Ms Gigantes: I am with you, Margaret, wherever you are.
Mrs Marland: I thought we were on subsection 24(3), but we are on subsection 24(2)?
Hon Ms Gigantes: Yes.
Mrs Marland: Okay. Well, I was not about to make any comments.
The Chair: Further questions or comments to subsection 24(2)?
Shall subsection 24(2), as printed, carry? Carried.
Subsection 24(3): Questions, comments or explanations?
Hon Ms Gigantes: Members will note that this is an amendment which is printed in the bill. It sets out the procedure that the rent officer shall use in looking at an application for a rent decrease by a tenant. It says that the rent officers shall, at the same time -- in fact before looking at the application for the decrease in rent -- look at any application or any evidence which the landlord can produce concerning a counterbalancing extraordinary increase. This is a subclause which is intended to make sure, as we have tried to do in other sections of the bill, that we are dealing with both matters which bear on a question at the same time rather than through separate decision-making processes.
Mrs Marland: Evelyn, you are getting as bad as the lawyers.
Hon Ms Gigantes: But it is going to work.
The Chair: Thank you. Questions or comments on subsection 24(3)?
Ms Poole: Any time a section tries to reduce the amount of bureaucracy and to reduce the number of decisions to a lesser amount, as long as the amendment is done in a manner that is fair to all parties, the Liberal caucus is pleased to support it. In this case we will be supporting it.
The Chair: Further questions or comments?
Mrs Marland: I still wonder whether it is possible that the rent officer might like to consider evidence from the tenants as well. I know it is the landlord in this case who is applying for the increase.
Hon Ms Gigantes: No, this is the tenant application we are dealing with in this section. Section 24 is dealing always with the tenant application to reduce rent. If you look at subsection 24(1), you will see the tenant identified as the initiator in this section.
Mrs Marland: Right. What you are saying in this section then is that the rent officer, although he is considering the tenant's application, must also consider evidence by the landlord concerning extraordinary increases in his operating costs.
Hon Ms Gigantes: That is right.
Mrs Marland: That is a very good amendment.
Hon Ms Gigantes: How about that?
The Chair: Shall subsection 24(3) carry? Carried.
Mrs Marland: That is an excellent amendment.
Interjections.
Mrs Marland: We should send this amendment out to all the landlords, because they will be very happy to see that.
Ms Poole: I think we should adjourn while we are ahead.
Hon Ms Gigantes: No, no. We have to keep going while we have --
Mr Abel: We're on a roll.
The Chair: We now have, I believe, subsection 24(4), which, just for members' information, is numbered as subsection 24(3), the PC motion. If you are looking for it in your book, it is subsection 24(4). Mrs Marland.
Mrs Marland: I do not think we could get through these 230- or 240-plus amendments without the help of the lawyers, so when I said the minister was getting as bad as the lawyers, I did not really mean that the lawyers are bad. I do not think any of us could do it without the lawyers.
Interjections.
The Chair: Order.
Mrs Marland moves that section 24 of the bill be amended by adding the following subsection:
"(4) A rent officer shall not consider a decrease in operating costs that is caused by an eligible capital expenditure by the landlord that increases energy conservation unless the landlord has recovered the costs of those capital expenditures."
Mrs Marland, perhaps you would like to present us with a brief explanation.
Mrs Marland: This amendment will ensure that landlords who undertake capital expenditures which include the implementation of energy-conserving features are allowed to realize these costs before the rent can be decreased by a tenant application. As the legislation currently stands, it is faster for a tenant to apply for and receive a decrease in rent than it is for the landlord to apply for and receive an increase as a result of capital expenditures, including the installation of energy-conserving features.
You know what is really interesting when we talk about this energy conservation aspect? The truth of the matter is that when the rent officer, this almighty wizard, considers all the evidence from both sides of the issue, the landlord will be putting forth all his operating costs, all his bills. These will include his heating and, if it is air-conditioned, his cooling bills, along with all the other costs of operating the building.
It just may be that in the long term it is in the interests of the tenants of that building to have some energy conservation methodology applied to the operation of that building, whether it be a new high-efficiency furnace or the replacement of windows, or whatever standard energy conservation methods are known, and by the application of those systems or methods, the cost of fuel for heating and/or cooling costs is reduced. I think the government would be hard placed to decide that energy conservation is not in the best interests of the tenants if it brings down the operating costs of the building by reducing those costs because you are reducing the costs of fuel.
It may be that after the capital installation of those energy conservation methods, everybody will benefit. So it seems to us that this is a very logical amendment to recognize that when we are talking about energy conservation it is a very different category than a lot of things we have talked about, because the merits of energy conservation are not debatable. In fact, we may yet be blessed with a Minister of Energy who mandates energy conservation methods in commercially leased properties, be they residential or business properties.
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I want to read a comment that was submitted to me by my colleague Charles Harnick, who is the MPP for Willowdale. It says:
"Bill 121 is a deterrent to landlords who wish to invest in energy conservation devices.
"Under Bill 121, any expenses which a landlord incurs through reduced energy consumption, specifically water or electricity, may not be collected because of tenant applications for rent reduction.
"If a landlord received any cost benefits through investments in energy conservation, the tenants could then turn around and apply for a rent reduction, thus nullifying any savings and quite possibly not even allowing the landlord to cover his costs.
"Quite simply, the government is providing no incentives for energy conservation. Landlords will not be able to benefit from the investment. Efforts by a landlord taken towards the installation of energy conservation products have to be done altruistically. What incentive is the government offering to landlords to make investments which benefit the environment? None."
In Charles Harnick's riding of Willowdale, "a company which distributes water conservation products," for example, "has been told by various residential landlords across the province that because of Bill 121 they will not be investing in any energy conservation products.
"The end result of Bill 121 will be another example of the government policies that hurt the housing industry, small business and now, though inadvertently, the environment."
Hon Ms Gigantes: Mr Chairman, I missed the name, if Mrs Marland gave the name, of the landlord involved.
Mrs Marland: No. I do not have the name of the landlord or the water conservation product.
Hon Ms Gigantes: Mr Chair, let me just say to Mrs Marland that I would be most anxious to have ministry officials speak to this landlord if the landlord does not understand how Bill 121 would work. I will leave that offer with her.
Mrs Marland: I am trying not to prolong the debate at this point. I could shorten the debate if you could tell us if you are going to support my amendment.
Hon Ms Gigantes: Thank you for the offer, but no.
Mrs Marland: You are not? Can you explain why you are not? I do not expect you to answer for the Ministry of the Environment or the Ministry of Energy, but can you explain why the Ministry of Housing is not showing leadership here by encouraging the conservation of energy through this bill?
Hon Ms Gigantes: We have provided leadership with a cap, if you want to put it that way. What we have provided is that landlords may make an application for above-guideline increases in rent. They may make an application which shall extend as far as three years in terms of above-guideline increases for the capital involved in an energy renovation. But we are not going to put tenants in the position where they lose other rights under the legislation because the landlord has made a choice to do an energy renovation as opposed to some other type of work.
It is important that we treat each of the items under this bill in a balanced way. Otherwise, we may have applications by landlords for energy measures which have low paybacks, and we do not want to induce that effect. We may have situations where landlords undertake renovations which they would not otherwise undertake if the regular application of the legislation were to apply.
I am going to ask Colleen Parrish to give an administrative understanding of what would be involved here because I think she has given it a great deal of thought.
Ms Parrish: From a straight practical viewpoint, it is sort of difficult for us to see how this can work, because in order for somebody to make an application for a decrease or, for that matter, for an increase, what you have to do is say, "Let's take year one, last year, and compare it with this year and decide whether there has been a decrease." So the first thing you have to do is say: "The fuel bill last year was $10,000. This year it's $9,000." That is the first test: Is there a decrease? And it has to be from the previous year.
If you say that you cannot apply for this until the complete cost of the expenditure is completed -- and these are amortized in some cases, for example, new furnaces, over 10 or 15 years -- essentially you can never apply because you can never compare the previous year. You would have this 15-year gap in the middle, and the likelihood that there would be a decrease during this 15-year period is remote. It just does not work. The way it works is, you have to compare one year with the next year and then you benchmark it against the amount that is allowed in the guideline to see whether or not this has been an exceptional increase or decrease.
So if you say that this capital repair for energy conservation has to be completely expended and it is paid for over a long amortization period, essentially what this means -- and this may be what you intend, but I am not sure -- is that you could never do it because you would never be able to get the comparison periods. So just from a straight, practical viewpoint, I do not think it would really work unless the amendment was reworked in some way.
The other point I would make is that the first test is that there has to be an absolute decrease in costs. Having worked with the Ministry of Energy staff, and I believe they also made representations before this committee, even with energy-efficient equipment and so on being put into buildings, it is very rare that you get an absolute decrease. What happens is you have a slowing down in the rate of increase, so instead of having a situation where your fuel bill goes up every year by 10%, your fuel bill starts to climb at a lower rate, but it is relatively rare that you get an absolute decrease. Even assuming that will happen, if you juxtapose the amortization period in here, it could simply never happen.
Mrs Marland: You talk about it from a straight, practical viewpoint. From a straight, practical viewpoint can you tell me how your bill would encourage landlords to do any energy conservation?
Ms Parrish: Again, I do not want to enter into a debate about this. I would point out it is not my bill, it is the government's bill, but what I would say is, first of all, within the group of capital which is recognized, it includes energy conservation. When a landlord reduces the rate of increase in fuel bills or utilities due to energy conservation, he will actually have lower costs than are built into the guideline. For example, the guideline will say fuel goes up on average 5% across Ontario. My fuel bill, because I have done all this energy conservation, will only go up 2%. The tenants cannot apply for a rent reduction because there has been no absolute decrease. That is my incentive as a landlord to be below the average, because I get compensated for that in the inflationary guideline and therefore I am essentially ahead of the game in terms of my costs.
Mrs Marland: Just responding to what you said a little while ago, would you agree that energy conservation does benefit the tenant?
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Hon Ms Gigantes: It depends what you mean by benefit. If you mean a draughty window is properly sealed, there will be a benefit in terms of comfort. If you mean the tenant can share in a reduction in the cost of rent, the tenant benefits. So it really does depend on what you mean.
Just as a small point, I would like to thank Colleen Parrish for that very succinct and clear explanation. I am sure on behalf of other members of the committee, I can express their thanks that she was able to do that instead of my attempts to do it. I thought that was really quite great.
Mrs Marland: Madam Minister, do you agree that energy conservation would benefit the tenant?
Hon Ms Gigantes: I gave a couple of possible answers to that.
Mrs Marland: You said it depends on what you mean.
Hon Ms Gigantes: Yes, it does depend on what you mean.
Mrs Marland: So if it removes a draughty window, you agree; if it results in a lower operating cost for the building, you agree.
Hon Ms Gigantes: If the tenant is able to share in that lowered operating cost, if it prevents the expenditure in public terms of moneys which have to be invested in capital to produce extra energy, and those costs are borne in higher rates and then reflected in rents, there is an overall benefit to all tenants and all ratepayers in the province, direct or indirect. There are many possible benefits.
Mrs Marland: You agree that energy conservation would benefit the tenants in the areas you have described. Would you agree that energy conservation also benefits the environment?
Hon Ms Gigantes: I think these are rhetorical questions.
Mrs Marland: No, they are not. They are very serious.
Hon Ms Gigantes: If tenants are called upon to pay directly and sharply for every investment undertaken by a landlord, then I would have to say you are getting into an area where for tenants the disbenefits may be greater than the benefits at the personal level.
Mrs Marland: That was not my question.
Hon Ms Gigantes: It may not be your question, but I think what you are doing through this amendment, which I hope your question is related to, is proposing that tenants should lose some rights, which we generally provide in this legislation, that relate to extraordinary decreases, because a landlord has chosen to make an energy conservation investment. The way it has been set out, as I think Colleen Parrish explained very well, it is very difficult to imagine that being applicable. What you have done in any practical sense is removed the possibility that the tenants might receive a benefit by way of a decrease because of a very large decrease in energy expenditures.
Mrs Marland: I am going to have to ask for a recorded vote on this amendment because I think it is pretty remarkable that any minister today would not be supportive of any help or incentive that can be given to have energy conservation practised in this province by any property owner.
Hon Ms Gigantes: But what about the tenants?
Mrs Marland: Excuse me, I have not finished. It is even more pertinent when it is the Minister of Housing who is not willing to look at energy conservation when her ministry is responsible for whatever the percentage of physical plant in this province comes under the category of housing, from single-family homes to multi-high-rise apartment dwellings.
We obviously can deal with this subject through the Minister of Energy and the Minister of the Environment, but when Ms Parrish says, "There is an incentive for the landlord to reduce his operating costs in his own interests by energy conservation methods because it is one of those categories for which he is eligible for his 5% operating cost" -- the thing is that energy conservation will not happen, because you only have to look at the kinds of tax increases that any property owner is going to face in this province because of the announcements that were even made two days ago where that 5% will be eaten up very quickly by the increase in the municipal taxes because of the 1% cap on transfers between the provincial government and the municipalities.
The landlord will not be in a position to do anything else if he is able to pay his property taxes at the increased rate they will be from the municipalities and the school boards, because the fact is that the municipalities and the school boards simply will not have anywhere else to get their money from. Knowing that, if we do not pass something that gives an incentive for energy conservation to property owners, it just will not happen.
This is a very reasonable amendment. The irony is that it is like a lot of things the public is willing to pay for if it is, in the long term, something that can be identified with saving the environment. The public is willing to pay higher hydro rates if the amount they pay that is higher goes totally to environmental programs in the production of electricity in this province. By not supporting this amendment you are denying the opportunity for any energy conservation, which is something I am sure 90% of all tenants would be interested in being part of even if it meant they had a 1% or 2% increase in their rents.
To say they can do this through their capital allowance, they can do this through their operating allowance, sure they can if they do not have increases in any of those other areas. But you and I know very realistically that without energy conservation their fuel costs are going to go up, because we know we are facing 14%, maybe 18% increases in electricity alone in this province this year and next year and so on. Now we know what the property tax increase will be as well.
It is pretty sad and a pretty regressive thing that we do not have a Minister of Housing who can see some way to give an incentive for energy conservation in buildings in Ontario in 1992. When we do vote on this amendment I will ask for a recorded vote.
The Chair: Further questions, comments or amendments to Mrs Marland's motion?
Mrs Marland: Can we have your substitute? We are checking.
Mr Morin: Everything is under control, Margaret. Mr Chair, could we wait five minutes for a recorded vote.
Mrs Marland: We can wait five minutes or 20 minutes.
Hon Ms Gigantes: Five, please.
The committee recessed at 1551.
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The Chair: Would members please take their seats. A recorded vote, I believe, has been requested.
The committee divided on Mrs Marland's motion, which was negatived on the following vote:
Ayes -- 4
Daigeler, Marland, Morin, Poole.
Nays -- 6
Abel, Gigantes, Harrington, Johnson, Marchese, White.
The Chair: Mrs Marland's motion to subsection 24(4) is lost. The Liberal motion to section 24.1. Ms Poole.
Mrs Marland: Mr Chairman, before we move to this motion, I have to ask one more question about process, about the government members on this committee. Where we have a split in attendees in a half-day -- we have already discussed where we have different people in the morning and the afternoon. But where we have a split between members in an afternoon coming and going -- we now have Mr Mammoliti back. We had Mr Ward here; he is gone. We now have Mr Marchese. This has all happened this afternoon and I have forgotten who was here before you. I really should have been writing all these names down. What happens where you have members splitting a half-day in terms of compensation to those members? Does that mean you all claim for the half-day, or are some of you here out of the goodness of your heart?
The Chair: Mrs Marland, all I can do is inform you that all members of the committee are properly substituted and that everything has been done according to the rules.
Mrs Marland: I am not questioning that they are properly substituted. I was assured of that earlier. I wonder how many members we can bring in and receive remuneration for in a given day and if we can split afternoons or split mornings, which is what is now happening. I have never seen in the seven years I have been here such a parade of members substituted in a given day. Then this afternoon we have it going on.
The Chair: Mr White, and then Ms Poole.
Mr White: First I would like to commend Mrs Marland for bringing out the interest and dedication of our members in this legislation and the importance it has for our government. In consequence, a deluge of members are interested, sitting on the committee without necessarily even being substituted in, but for the purposes of participating in this debate and understanding the ramifications.
Second, Mrs Marland's question, where it relates to remuneration is not, properly speaking, a procedural question but an administrative one she should probably address to the controller or some other body rather than the Chair of the committee. It is, I repeat, to the best of my knowledge, not a procedural question.
Mrs Marland: Actually, it is the Chairman of the committee who has to sign our claim forms.
Ms Poole: Mr Chair, perhaps I could be helpful. In other circumstances I have seen where this has happened. My understanding is that there is only the allocation for one member allowed, and if several members are sharing and substituting, it is up to them to work out who gets what share or whether one person would get the whole thing and the others do it as a favour, or how it would work. It certainly is up to the individual members to work it out.
The important point from the taxpayers' point of view is they would pay the same amount if there is one person sitting there for the day or if there are three people sharing that space for the day, and I think that was probably Mrs Marland's point. So what is happening is probably not inappropriate.
Mr Marchese: The member just offered an answer to the question, which is appropriate for me. Could we just have the clerk give more information, if there is any, on that?
Clerk of the Committee: In fact, any member who substitutes for any other member may fill out an expense claim for the day, whether or not there is more than one member subbing for another member.
Ms Poole: For the full amount?
Clerk of the Committee: Yes.
Ms Poole: That is not what they used to do to us.
Clerk of the Committee: Members have the option of not filling out an expense claim, and I will tell you that members have chosen not to do so in some cases.
Mrs Marland: You know, Mr Chairman, this is very significant. If we have more than the allotted number per caucus substituting in -- a legal substitution, meaning they bring a substitution slip from their caucus whip and in turn file an expense claim form -- then this is really milking the cow, I suggest, because if the committee structure is six government members, three Liberal members and two Conservative members, I would think the committee budgets for that number of members per caucus.
It would be interesting to see how many government members we have had sit on this committee today. I think it is very important when this committee approves its budget, which it does, that we have some idea how many government members are going to make claims for expenses. As a member of the standing committee on the Legislative Assembly which deals with members' services, I can tell you this will be brought before that committee. Why should not any caucus start doing what you are doing if that is happening? I have never seen it happen in seven years.
The Chair: I have a number of people still on the list, but I think we could more properly have this conversation, as Mrs Marland suggests, at the Legislative Assembly committee. The business of this committee at the moment is to proceed with clause-by-clause review of Bill 121. I am sure members who are concerned will take their concerns to the Legislative Assembly committee. Ms Poole, I assume, is going to move section 24.1.
Ms Poole: I am sure it is, whatever 24.1 is, Mr Chair. I just wanted to make one point of clarification in this regard. I do not think there should be any question that the government should be allowed to substitute people in to protect its vote. That should be perfectly acceptable and I think that is the reason they have had a number of people substituting in. If this is going to be raised at the Legislative Assembly committee, it should be on the basis of remuneration for three members to do one member's job. As I said, my own experience before is that we have shared, and maybe we can target on that particular aspect if it goes from this committee to Legislative Assembly.
The Chair: It is not in our purview to go from this committee. I am suggesting some members might want to do that. Our business right now is to deal with Bill 121. Section 24.1 is what I am looking for.
Ms Poole: That is ours.
The Chair: That is what I thought you were moving a moment ago.
Ms Poole moves that the bill be amended by adding the following section:
"24.1 The tenant may base an application on a decrease in financing costs for the residential complex of at least 2 per cent."
Ms Poole: I do not intend to speak to this at any length, because we had a very extensive debate earlier on about the possibility of including both increases and decreases in financing costs in the legislation. The minister has made it quite clear that she is not prepared to accept applications based on increases in financing costs, which would benefit the landlord, or applications on decreases in financing costs, which would benefit the tenant.
Particularly in these times where the interest rates are extremely low, it would be definitely to the tenant's advantage to have this kind of recourse. However, since the minister has already stated quite emphatically that she is not willing to extend this right to the tenants, I do not intend to engage in debate on it.
The Chair: Further questions or comments on Ms Poole's amendment of section 24.1?
Ms Poole: A recorded vote, Mr Chair.
The Chair: A recorded vote has been requested.
The committee divided on Ms Poole's motion, which was negatived on the following vote:
Ayes -- 5
Daigeler, Jackson, Marland, Morin, Poole.
Nays -- 6
Abel, Harrington, Johnson, Mammoliti, Marchese, White.
Ms Poole: Another close one, Mr Chair.
Mrs Marland: Mr Chairman, could I just ask how it was that we dealt with section 24.1 after section 24(4)?
The Chair: Because that is, as you know, Mrs Marland, the procedure for introducing a new section to the bill. It is not subsection 24(1), it is section 24.1. Shall section 24, as reprinted, carry?
Section 24, as amended, agreed to.
Mrs Marland: Did we not have an amendment to section 24 also?
The Chair: I am sorry. Thank you, Mrs Marland.
Mrs Marland: It proves that some of us are awake.
The Chair: The Chair appreciates that, Mrs Marland. So we will back up and entertain Mrs Marland's motion, section 24.1.
Mrs Marland: It is a little confusing for everybody, because I am now moving a motion that has the same number that Ms Poole just moved.
Mr Daigeler: But not the same point. It makes the same points but it does not have the same points.
The Chair: Similar but not the same.
Mrs Marland: No, but it has the same number.
Ms Poole: Similar but not identical.
Mrs Marland: But it has the same number. How does that work?
The Chair: I might ask legislative counsel, who advises us on the numbering, to explain to Mrs Marland how the Liberal motion and the Conservative motion have the same number.
Mr White: Before we do that, Mr Chair, should we not have unanimous consent to reopen section 24, having just closed it?
The Chair: I have been told that is not necessary, because this is a separate section.
Ms Baldwin: That is correct. Section 24.1 is a number all its own that when the bill is reprinted will be a number without a point. If 24 is 24, 24.1 will be 25. As to why your motion and Ms Poole's motion have the same number, at the time each of the parties was preparing them, they were preparing them alone and bringing them to committee, and both of you chose to have a motion which dealt with an issue of a reason for a decrease in rent. So it was put in the area of the bill where those sorts of things occurred. I did both of them. It does not matter, because in both cases it was a section in between section 24 and section 25, where in my view, when I prepared these motions, it belonged.
Mr Daigeler: Could you explain that again?
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Mrs Marland: Thank you for that explanation on section 24.1.
The Chair: Would you like to move it, then, Mrs Marland?
Mrs Marland moves that the bill be amended by adding the following section:
"24.1 The tenant may base an application on a decrease in financing costs for the residential complex to the extent of the amount which was previously allowed in respect of that financing cost."
Would you like to speak to that, Mrs Marland?
Mrs Marland: This amendment corresponds with the one that passed.
Mr Mammoliti: No way.
Mrs Marland: Are any of the members still present who voted and got shot in the head when you went to your caucus office afterwards? If the government intends to allow our other amendment to stand, the one that we won through a democratic vote I might add, this amendment allows tenants the same benefit. Now I am sure you are going to want to allow tenants a benefit, so I am sure you are going to want to vote for this amendment.
The Chair: Further questions or comments on Mrs Marland's amendment to section 24.1? Shall Mrs Marland's amendment to section 24.1 carry?
Mrs Marland: I would have it recorded.
The Chair: We have a request for a recorded vote.
The committee divided on Mrs Marland's motion, which was negatived on the following vote:
Ayes -- 4
Daigeler, Marland, Morin, Poole.
Nays -- 6
Abel, Harrington, Johnson, Mammoliti, Marchese, White.
Section 25:
The Chair: Section 25: questions, comments, explanations? This is a section as printed in the original bill.
Ms Harrington: Just a comment. Section 25 permits an application to be made for a reduction in rent on the basis that the standard of maintenance or repair of a rental unit or of the residential complex as a whole is inadequate.
The Chair: I see we have a Conservative amendment. Mrs Marland, would you like to place it?
Mrs Marland: Would you like me to move it now?
The Chair: Yes.
Mrs Marland: All right.
The Chair: Mrs Marland moves that section 25 of the bill be struck out and the following substituted:
"25 The tenant may base an application on whether there has been a deterioration in the standard of maintenance in their rental unit or the whole residential complex."
An explanation, Mrs Marland?
Mrs Marland: This amendment is an attempt to rectify the ambiguity of this legislation. This particular clause replaces the term "inadequate" with "deterioration in the standard of maintenance."
Would you not think that was much better? My friend Mr Mammoliti has talked a lot about the deterioration in the standard of maintenance in the buildings in his riding, so I am sure that he would rather have something that gave much more opportunity to those tenants than the innocuous word "inadequate." Here we probably have an example of another word in this legislation that, without some kind of definition or a better description, is meaningless.
Inadequate in the opinion of whom? Oh, yes, of course, the wizard, the rent officer. So the wizard is going to say the standard of maintenance or repair in the rental unit such-and-such is inadequate. Would you not rather it said "deterioration in the standard of maintenance"? It is a much broader description and certainly is a much stronger protection for all of our tenants. Dianne, are you running a lottery?
Ms Poole: First, to answer Mrs Marland's question, no, I am not running a lottery, but I am going to be able to feed my children for the week. Although it is most inappropriate for me to do this, I would like to thank all the people in the committee, all the members and staff who have supported my Walk for Alzheimer's on Saturday. You have all been very generous, and I thank you from the bottom of my heart.
Mr White: And we thank you for participating.
Ms Poole: Now I will send it down to Margaret so she can put on her $5.
Mr Chair, I am sure you want me to move quickly back to section 25. The question I had was for Ms Parrish. When we discussed inadequate maintenance earlier in the week I thought it was with reference to inadequate maintenance that Ms Parrish stated that the ministry was trying to comprise some interpretative rules. Am I correct? Was that the right reference?
Ms Parrish: As I said before, we do not think it advisable to define this term because that will constrain the situation to which it could apply. But in the course of developing regulations and in consulting we are looking at the development of interpretative rules and we will consult on those before we finalize them.
Ms Poole: Am I to take it that there is no definite commitment to have a set of interpretative rules? There is only a commitment to consult with people as to whether there should be a set of interpretative rules or you are going to consult with people on what the interpretative rules should be?
Ms Parrish: What we intend to do at this time -- and I should say that I obviously cannot commit the government; I can only explain the process that we are currently undertaking -- is that at a staff level we are going to think up some interpretative rules that we think would make sense. Then we are going to put them out and ask people to comment on whether they think this is helpful or unhelpful, whether they think this is in the ballpark, if something should be added or deleted. We expect people will probably also respond on the basic question of whether there should be interpretative rules in this area and on whether we have hit on the right ones.
Ms Poole: But at least there will be an attempt by the government to draft a set of interpretative rules and take it for consultation?
Ms Parrish: I cannot commit the government. I can only say that is what we are currently doing.
Ms Poole: Well, I am glad to have that clarification because I was quite uncomfortable with the fact that in this legislation inadequate maintenance did not have any criteria attached to it. I am not going to go into the underground parking garage example, but it is a classic example of where one person might think inadequate maintenance had caused the problem, while expert testimony might prove something entirely different.
I think it would be very important and advisable for the ministry to have this set of interpretative rules -- criteria is what I would call them -- to guide the rent officers. It is just unfortunate that those interpretative rules are not in such a stage right now that our committee could take a look at them to have an idea of what the government is planning to do.
It makes it rather difficult for us to vote on Mrs Marland's motion at this particular point. We do not know what we are comparing it to. I do agree that Mrs Marland's motion is certainly an improvement over what was in the bill, but without interpretative rules it does put us in a bit of a quandary as to how we can vote for this when we do not have the full information before us.
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Mr White: I want to thank Mrs Marland for her effort to clarify the legislation, and I am sure that is a very genuine one. I would share Ms Poole's concerns as well, because with any legislation one has difficulty in terms of how is the legislation to be interpreted, which is typically in the fullness of time, as they say, and through regulations.
I certainly appreciate Mrs Marland's attempt to clarify the intent of it, but the clause as written is I think preferable to her suggestion. The issue of deterioration speaks of a comparison between what was and what is. One would then have to have historical data to compare what has happened in a building with what is presently happening in a building to determine if something which is presently a slum was always a slum. Thus, if we have always had a slum, there is no deterioration whatsoever in the standard of its maintenance. It strikes me, for example, that if one has a broken window or a refrigerator that is no longer functioning, if that was the quality of the maintenance and repair in the past, then there has been no deterioration.
I would suggest the issue is, what is the quality of the repair of the rental unit right now in situ, and is that adequate? How one defines "adequate" of course will be difficult, but I do not think that an historical comparison would be of much help. One would then have to determine not only whether the standards of maintenance and repair are adequate, but also what level of deterioration has occurred.
For those reasons I would have to vote against this recommendation, because unfortunately, rather than clarifying the matter, it introduces another variable which is even further and more difficult to define in regulation or in any other form.
Ms Harrington: I did want to point out basically what Mr White has pointed out, that is, when you change the wording concentrating on deterioration, you are talking about a comparison in time. You would have to have dates, times and places and it would be very difficult, I put forward to you, for the tenants to prove this.
What is imaging through my mind that I cannot stop is that this past noon hour Mr Mammoliti and I went to a building on Weston Road and Finch Avenue and I toured four units in that building.
Mrs Marland: Without me? You did not invite me.
Mr Mammoliti: I invited you. It is in Hansard.
Ms Harrington: It would certainly have been a pleasure. In fact, I thought of that I believe it was yesterday. I am sorry I did not invite you.
We saw an inadequate building. If I had to ask each one of those tenants, "When did each of these things occur?" whether it is the windows, the plaster on the walls coming off, the leakage, the cupboards coming out, all kinds of different things, I think that would certainly weaken this bill in many regards. I think that is why we have used the wording that we have.
Mr Johnson: I just want to make reference to the word "inadequate." I cannot agree with Mrs Marland's choice in change, but I know the word "inadequate" could become subjective as one tried to make interpretations about it. I know that in civil law and certainly in other types of law, words in the English language are often referred to in dictionaries for their absolute definitions because they are very important. I am sure that words in legislation are very important as well.
I would think that if the word "substandard" were placed in place of "inadequate," it would have a better definition in so far as there are standards for things. There are standards for how electrical wiring is done, for example. If it was done less than the standard, then certainly it could be determined that it was substandard. But even in that it becomes vague as you deal with things that do not have standards, painting, for example. There are no standards for painting, absolutely, and there are no standards maybe for how plastering and other things are done. I think a compromise has been made here. Certainly, although there will be some subjective determination made with regard to the word "inadequate," I think we may have to live with that.
Mr Marchese: I just want to point out that Mrs Marland's focus is not so much on "deterioration" as it appears to be on "standard," because it is the deterioration of the standard in maintenance. The problem with that is that "standard" is not defined and you get into the equal problem of defining what "standard" is. For me the word "inadequate" is quite adequate.
I just want to agree with Ms Poole's point about interpretative guidelines. I think it is useful. At some point, all of us will be interested in seeing those guidelines as well.
Mrs Marland: You know the people who are going to be the most interested in seeing the guidelines are the wizards.
Mr Johnson: Who are these people?
Mrs Marland: I am really pleased that Mr Marchese and Mr Johnson are now on the record for their attendance and their participation in the committee this afternoon. Now we will have you in Hansard and we will know you were here, that you did not just waft in and out like the puppets on stage.
The Chair: Mrs Marland, to section 24.
Mrs Marland: Through you, Mr Chair, to Mr Johnson: Are you a lawyer, Paul?
The Chair: Mrs Marland, through the Chair.
Mr Johnson: No, but I have studied labour law at university.
The Chair: Mrs Marland, we would prefer that you address your comments through the Chair to the section you are attempting to amend.
Mrs Marland: I did say, "Through the Chair, are you a lawyer, Paul?"
Mr White: Mr Chair, the member is casting aspersions upon my colleague.
Mr Mammoliti: She has something against lawyers, I think.
The Chair: Order.
Mrs Marland: Mr Chairman, on my amendment, I am delighted to have Mr Johnson agree that the word "inadequate" is subjective, because that is what I have been saying all along. I have been saying that the word "neglect" is subjective, and I think it is great that I now have a government member who agrees with me.
The Chair: Further questions or comments to Mrs Marland's motion to section 25? Shall Mrs Marland's amendment carry? All in favour? Opposed?
Motion negatived.
The Chair: Now we have a Liberal motion which will be adding a subsection, 25(2), to section 25.
Mr White: Mr Chair, on a note of procedure, I thought if we were adding a section that would come after a debate on the earlier section.
The Chair: I am told this adds a subsection, Mr White. I am however as confused as you about this, but I understand that because it is a subsection it is numbered 25(2) and that this is the appropriate place to deal with it. Now, if Ms Poole will amend it.
Ms Poole moves that section 25 of the bill be amended by adding the following subsection:
"(2) The rent officer shall not consider an application under this section if a similar application respecting the same rental unit has been made under any other act."
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Ms Poole: This is just actually a cautionary section to ensure that an application is not made for relief under several different acts. For instance, the Landlord and Tenant Act provides relief in certain circumstances. I think it is a very commonsense amendment. All it does is to say that you choose the act under which you want to go for relief and that you would not have two outstanding applications under two different pieces of legislation at the same time.
If you do allow relief under any act for the same problem, then what might happen is a situation of unfairness, where one party or the other is penalized doubly or even triply if one of the parties applies under several different acts. I am hoping that the government would accept this particular amendment. I am trying to remember who suggested it. I would like to take credit for this bright idea, but I think it was either the Landlord Self Help Centre or the Tenant Advocacy Group. I think it was the landlords' self-help group.
Ms Harrington: It is my understanding from the ministry's response here that the current wording of Bill 121 already provides that an order will not be made reducing rent where a similar order is made under the Landlord and Tenant Act. Any further clarification? I would ask Ms Parrish to comment.
Ms Parrish: Subsection 28(5) already provides that if there is an order under the Landlord and Tenant Act for an abatement of rent, compliance with that order would be an adequate remedy. I think that is the important part, that you cannot make another application here. The concern we have with this amendment, from a technical viewpoint, is that first of all there may be no relief at all granted in the situation. All you have is a situation where there may have been an application under the act, but there may have been no order granting relief. Second, the order granting the relief may not have been complete.
I guess the other thing is that we are not too sure what these other acts are. For example, if there was a municipal prosecution, would that be an application under another act? If so, it would probably deal with the issues, but it would not provide the tenant with any remedy for them. That is why we think the language in subsection 28(5) sort of nails down the whole issue a little harder. It refers to the only other act I am familiar with in which you could get the same remedy and it makes it clear that it has to be a remedy the tenant gets, as opposed to for example a prosecuting municipal authority or whatever. It is not really a disagreement with the policy concept; it is a preference for the more precise language of subsection 28(5).
Mr Mammoliti: I just want to touch a little bit on precedents and talk a little bit about rent review. As in the courts, when you are in front of rent review you sometimes argue precedents and past rulings. I believe and hope that with the word "inadequate" the precedents will change somewhat, and when they change I would hope the attitude would change. I talk a lot about attitude during these committee meetings because I really do believe that attitude changes with precedents. I thought I would throw that in there.
Ms Poole: I am glad Ms Parrish gave that explanation. I am also glad I did not take credit for thinking of this, since I cannot really justify beyond what I have. Under those circumstances, I think perhaps we may as well just go ahead and vote.
The Chair: Further questions and comments? Shall subsection 25(2), as moved by Ms Poole, carry? No? Okay. All in favour raise their hands. Opposed?
Motion negatived.
The Chair: Now we are dealing with section 25 as printed, I believe. We have had an explanation, as I recall. Further questions or comments? Shall section 25 carry?
Section 25 agreed to.
Section 26:
Ms Harrington: Section 26 permits an application to be made for a reduction in rent on the basis of discontinued or reduced services with respect to a rental unit or the residential complex as a whole.
The Chair: I think we are going to have to take a short time out for just a few moments. We have a Conservative amendment, or at least I have in my hand a Conservative amendment, and it would be wise to discuss it first before we discuss the section.
Mr Mammoliti: Where are they?
Mr White: Where are the Conservatives?
Ms Poole: Could we not simply stand this section down and continue the debate on another section?
The Chair: Do I have consent to stand down section 26? Agreed.
Section 27:
Ms Harrington: Section 27 of Bill 121 sets out the findings a rent officer can make on an application to reduce rent. In accordance with the regulations under the act, the rent officer must first decide if the issues raised on the tenant's application are based on one or more of the following grounds, (1) an extraordinary reduction in operating costs for municipal taxes, hydro, water or heating, (2) inadequate maintenance or repair of the complex as a whole or of a rental unit in it or (3) reduced or discontinued services to the complex as a whole or a rental unit in it.
Having done so, the rent officer must then decide if the evidence provided supports that a reduction of the current rent charged or the maximum rent is justified, and if so, the amount by which the rent is to be reduced -- a big job for the wizards.
Ms Poole: I would just like some clarification. I am looking at section 27 as I have in my reprinted version, and I do not see references to extraordinary operating costs or some of the things the parliamentary assistant referred to. Is that covered under the subsection (b) where it talks about a reduction of the rent charged? Is that just a generic title for it?
Ms Parrish: The earlier sections tell you what the grounds are and then this explains essentially how the rent officer makes findings. It is like section 20 that we went through before when the rent officers had to make all these findings about rent increases, and now they are making all these findings about rent decreases. These just happen to be the grounds. There are only three grounds for decreases.
Ms Poole: I would be pleased to support section 27 if the government were to make one minor amendment, and that is to add the word "written" before "findings." "The rent officer shall make written findings according to the prescribed rules for each rental unit." I think it is particularly important for tenants and for landlords trying to understand the rationale behind a rent officer's decision that they have an opportunity to review those findings in writing. I think this is something tenants have been asking for for some time and I am sure landlords would also appreciate that opportunity. I wonder if the ministry might consider that as a friendly amendment.
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Ms Harrington: Ms Parrish would like to respond.
Ms Poole: This is going to be a no.
Ms Parrish: This is going to be similar to the discussion we had about where you should put procedural rules. It is our preference to put the procedural rules in the procedural section, because we think that is easier for everybody to figure out. I should point out that in section 20, which deals with landlords, it does not say "written findings." Later on I believe there is a Liberal proposed amendment that deals with written reasons. I understand that our minister is quite sympathetic to that, and I will not speak any further because it is not appropriate, but I think the issue of written reasons and written findings would be more appropriately dealt with in the context of that amendment.
Ms Poole: Since the minister is not here, I would be willing to vote on this section, on the understanding that we would have that discussion about written findings and written reasons in the procedural section.
The Chair: Further questions or comments?
Mr Marchese: I am quite prepared to accept the word "written," because it makes sense. Whether it is here or somewhere else does not make any difference to me. Is there something else I am not understanding?
Ms Parrish: The problem is that you have a drafting inconsistency. If you say here that you have to have written reasons and the other section just says findings, then it suggests that you only have to have things in writing if it is for tenants and if it is for landlords you do not, because you have this inconsistency in the drafting. If what you want to say is that you want to have written reasons, it would be preferable to deal with that and say everybody should have written reasons, because otherwise you are going to create this inconsistency in all the other sections. Then people are going to say, "That must have been for some reason," and you are going to spend a lot of time explaining why this anomaly was occurring. This is not a policy objection, it is purely a technician's response.
Mr Abel: Could there be a blanket definition?
Ms Parrish: Later on there are sections that deal with written reasons and requiring written reasons.
The Chair: Did Mr Johnson indicate he had something?
Mr Johnson: I pass.
The Chair: Further questions and comments? Ms Poole?
Ms Poole: Just to say Ms Parrish's explanation is certainly reasonable and if the government plans to deal with it in the procedural section, it certainly would make it more consistent. I had not caught that on the earlier section relating to the landlord's application or I certainly would have made the same suggestion at that time, but I am quite content as long as we do deal with it somewhere in the legislation.
The Chair: Fine. Further questions and comments? Shall section 27 carry?
Section 27 agreed to.
The Chair: Do we have unanimous consent to stand down sections 28 and 29 for the same reason we stood down the previous section and move directly to section 30?
Agreed to.
Section 30:
The Chair: I will give the members and the Chair a moment to find that section. I believe this is a section as originally printed.
Ms Harrington: Subsections 30(1) and (2) allow a tenant to apply for a rebate of illegal or excess rents paid to the landlord. Specifically, subsection 30(1) states that tenants are not liable or responsible to pay illegal rents.
The Chair: Questions, comments or amendments to subsection 30(1)? Shall subsection 30(1) carry? Carried.
Ms Harrington: Subsection 30(2) allows a tenant to make an application to a chief rent officer for an order determining that the landlord has charged the tenant an illegal rent. An illegal rent is a rent in excess of what the landlord is permitted to charge, taking into consideration all permissible rent increases and decreases under the Rent Control Act and previous rent legislation.
Ms Poole: The Liberal caucus will be supporting this section of the act.
The Chair: Further questions or comments? Shall subsection 30(2) carry? Carried.
Ms Harrington: Subsection 30(3) gives the rent officer the authority to make findings on whether the landlord has charged an illegal rent and in such cases to issue an order declaring (1) the maximum rent and its effective date, (2) the rent charged and its effective date if the landlord is charging less than the maximum rent and (3) the amount of excess rent owing that has been paid by the tenant to the landlord, provided that the amount does not exceed the monetary jurisdiction of the Small Claims Court, which for purposes of this act is $5,000, or higher, if the Small Claims Court's jurisdiction is raised.
The Chair: Questions, comments or amendments? Shall subsection 30(3) carry? Carried.
Ms Harrington: Subsection 30(4) further provides that where the amount of excess rent paid is equal to or less than the monetary jurisdiction of the Small Claims Court, the landlord will be required to repay the tenant the amount of excess rent paid plus interest on that amount. The interest will be calculated in accordance with the regulations made under this act. This is a government amendment that provides consistency with clause 30(3)(c) that the monetary jurisdiction should be based on the debt owing.
The Chair: Questions, comments or amendments? Shall subsection 30(4), as printed, carry? Carried.
Ms Harrington: Subsections 30(5), (6) and (7) together provide a remedy to the tenant in situations where the amount of excess rent that has been paid by the tenant to the landlord is more than the monetary jurisdiction of the Small Claims Court. In such cases, subsection 30(5) says the tenant can do one of two things: (1) provide proper written notice to the rent officer abandoning the amount of excess rent paid that is above the monetary jurisdiction of the Small Claims Court and request that an order for repayment of illegal rent be made on the balance plus interest or (2) commence a proceeding in the courts for recovery of the full amount of illegal excess rent paid. This is a government amendment that provides consistency with clause 30(3)(c) that the monetary jurisdiction should be based on the debt owing.
The Chair: Questions or comments on subsections 30(5), (6) and (7)? Shall subsections 30(5), (6) and (7) carry? Carried.
Subsection 30(8): We have a government amendment as printed, I believe.
Ms Harrington: Yes. Subsection 30(8) provides a mechanism whereby the tenant is able to recover the illegal excess rent paid to the landlord if the tenant's current landlord is the same landlord named in the order. In such cases, the order may provide that the tenant may deduct from future rent payments a specified amount, which does include interest, for a specified period of time until the tenant has recovered the entire amount of illegal excess rent paid. This is a government amendment that reflects the intention that an order may provide an illegal rent charged and interest related to it may be deducted from future rents.
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The Chair: Questions or comments?
Ms Poole: What this section says is that if a landlord has charged an illegal rent, and rent review has confirmed that it is an illegal rent, rent review can have an order saying the tenant can recover the amount by deducting it from his rent over a period of time. I think a number of tenants are concerned about this. They feel that if there is an illegal rent being charged, the remedy should be a lump sum repayment by the landlord, and in the event the landlord does not make that lump sum repayment, then in those instances a tenant has a secondary recourse, which is to deduct the amount from his rent.
I do not know whether the ministry has considered this particular vantage point. I would certainly not mind standing this down if they would like to take it back to the minister to discuss.
Ms Harrington: Yes, we would like to try and clarify that. I think it is in here somewhere. Could you respond?
Ms Parrish: I guess the normal order would be that it would be in a lump sum, and this gives discretion to provide it as a deduction. It seems to me that this is an issue on which you simply make representation at the time. All this says is that you may make an order providing for deduction, and since there is interest, the tenant does not lose out.
Ms Poole: This concerns me if it is an either/or scenario, because definitely from reading subsection 30(8) one would be led to believe that the recourse by the rent officer would be to have the amount deducted from the rents of a tenant over a period of time. I would be much more comfortable with this section if it did very clearly spell out that it would be a lump sum order but the rent officer does have the discretion to provide that it be over an extended period of time in special circumstances. In other words, it defaults to a lump sum unless there are special circumstances. But as I read subsection 30(8), I do not see the recourse of a lump sum amount at all; I do not see that a rent officer would take that type of direction.
Ms Parrish: I guess this is something over which lawyers can dispute, but the way I read this is that it says in subsection 30(4) that if the amount of excess rent owing is this and that and the other thing, the rent officer shall order them to pay it. So there it is; there is the order. Then it says you may provide that the tenant may recover this through this other mechanism. So then you have to say under what circumstances you would do this.
It seems to me the first one says, "You shall order it," so you have to order it, whereas later on it says, "However, you may do this in subsection 30(8)." It seems the basic rule is in subsection 30(4): You must do this. The other rule is in subsection 30(8): You may do this other thing.
I guess the question that arises is, when would you do subsection 30(8), as opposed to a lump sum? In any event, you have to provide the interest, and the interest would be calculated according to regulations in order to ensure that you do not sort of lose out in these deduction situations. I assume it is because there has been some sort of evidence given around hardship or something else that would cause you to exercise this discretion.
I am not sure I agree that there is any other way of explaining this. I think it is fairly clear that subsection 30(4) says you must do this and subsection 30(8) says you may do this other thing as well, depending on the evidence before you.
Ms Poole: I have been advised that this wording is very similar to what was under the Residential Rent Regulation Act. Under the RRRA it was virtually always interpreted to be the latter situation, ie, that the tenant would have to recuperate the amount from the rent over an extended period of time. It concerns me, because I see in subsection 30(4) that "the rent officer shall...order the landlord to pay the excess rent owing," and then I see in subsection 30(8) that "the order may provide," which seems to me to be contrary.
If you are saying in one that it shall be a lump sum and in the other you are saying you could do it another way -- you can do it, not that you shall -- would the ministry consider taking a look at this particular subsection before we next meet and thinking about whether there is an alternative way to word this to make it clear that the default position is that it would be a lump sum payment, and if there are extenuating circumstances, then the rent officer has the discretion to provide that it can be paid over an extended period of time?
Ms Harrington: I understand your concern. It sounds reasonable that we would examine it, and if it is a holdover from the RRRA, then certainly we should check that out.
Ms Poole: Certainly you should change it, right?
Ms Parrish: I just would draw a distinction, though, between practice and what the law says. I only add that caution, because I am not too sure how we are going to be able to describe in statutory language what these extenuating circumstances are. That is why you have discretion.
We certainly are willing to look at it again. It is not that this has not been raised with us before, and it is not that we have not listened. I am just drawing the attention of the committee to the distinction between administrative practice and what the statute actually says. But we are certainly willing to look at it again.
Ms Poole: Mr Chair, I would most appreciate it if we could stand down this section. It concerns me any time practice does not correspond to what the law actually says, and I would really like this to be cleared up before we vote on it.
The Chair: Are you asking that the section be stood down?
Ms Poole: To be stood down.
The Chair: Do I have agreement that this subsection should be stood down? We have unanimous consent.
Mr Marchese: Mr Chair, my point is to express sympathy for the view Ms Poole was communicating and to direct the staff to look at wording that accommodates the intent of her comments.
Mr White: We in fact are all sympathetic to Ms Poole.
Ms Poole: This is like a love-in, Mr Chair.
The Chair: With that, I think we had better adjourn until Monday at 2 pm.
The committee adjourned at 1659.