Committee Transcript 1996-Aug-30 | Legislative Assembly of Ontario

United Senior Citizens of Ontario, Zone 14; Senior and Family Network of Hamilton-Wentworth Housing Authority; Steelworkers Organization of Active Retirees

Mrs Gwen Lee

Mr Bill Fuller

Hamilton Mountain Legal and Community Services

Mr Hugh Tye

Effort Trust Co

Mr Arthur Weisz

Dundurn Community Legal Services

Ms Judy MacNeil

Hamilton-Halton Home Builders Association

Mr Gabriel Desantis

Mr Dan Condon

Mr Anthony Dicenzo

Ontario Residential Care Association

Ms Paula Jourdain

Ms Laurie Johnston

Smar Holdings Ltd

Miss Kim Carter

Mr Arun Pathak

STANDING COMMITTEE ON GENERAL GOVERNMENT

Chair / Président: Mr Jack Carroll (Chatham-Kent PC)

Vice-Chair / Vice-Président: Mr Bart Maves (Niagara Falls PC)

*Mr JackCarroll (Chatham-Kent PC)

*Mr HarryDanford (Hastings-Peterborough PC)

Mr JimFlaherty (Durham Centre / -Centre PC)

Mr BernardGrandmaître (Ottawa East / -Est L)

*Mr ErnieHardeman (Oxford PC)

*Mr RosarioMarchese (Fort York ND)

*Mr BartMaves (Niagara Falls PC)

Mrs SandraPupatello (Windsor-Sandwich L)

Mrs LillianRoss (Hamilton West / -Ouest PC)

*Mr MarioSergio (Yorkview L)

*Mr R. GaryStewart (Peterborough PC)

Mr Joseph N. Tascona (Simcoe Centre / -Centre PC)

Mr LenWood (Cochrane North / -Nord ND)

Mr Terence H. Young (Halton Centre / -Centre PC)

*In attendance /présents

Substitutions present /Membres remplaçants présents:

Mr DominicAgostino (Hamilton East / -Est L) for Mrs Pupatello

Mr GerardKennedy (York South / -Sud L) for Mr Grandmaître

Mr John L. Parker (York East / -Est PC) for Mr Young

Mr Peter L. Preston (Brant-Haldimand PC) for Mrs Ross

Mr BruceSmith (Middlesex PC) for Mr Flaherty

Mr WayneWettlaufer (Kitchener PC) for Mr Tascona

Also taking part / Autre participants et participantes:

Mr DavidChristopherson (Hamilton Centre ND)

Mr ToniSkarica (Wentworth North / -Nord PC)

Clerk / Greffière: Ms Tonia Grannum

Staff / Personnel: Ms Elaine Campbell, research officer, Legislative Research Service

The committee met at 0900 in the Sheraton Hotel, Hamilton.

RENT CONTROL

The Chair (Mr Jack Carroll): Good morning, everyone. Welcome to the standing committee on general government hearings on proposed changes to rent control legislation. We are happy to be in Hamilton on this lovely summer morning, the beginning of the Labour Day weekend. We're here this morning to listen to what the people of Hamilton have to say and give us some input into our deliberations.

Each presenter is allowed 20 minutes. We're very tough on the time frames because we do have a full day and we believe very strongly that we respect people's times and they should be allowed to present at the time that's allotted to them.

HAMILTON AND DISTRICT APARTMENT ASSOCIATION

The Chair: Our first presenter this morning is the Hamilton and District Apartment Association, represented by John Bruno and Derek Lobo. Gentlemen, the floor is yours.

Mr John Bruno: Good morning, members of the committee. My name is John Bruno and I am and have been executive director of the Hamilton and District Apartment Association since it was formed in 1960. To my right is Derek Lobo, our past president, who will make our presentation, but first I would like to tell you about our association.

We are the oldest and the largest association of its kind outside of Toronto. Our area consists of Mississauga, Oakville, Burlington, Hamilton-Wentworth, Brantford and right down to the Niagara Peninsula. We have in excess of 400 members, making up about 35,000 units. Our association, being the oldest in Ontario, is made up of landlords, property managers, financial institutions, and suppliers to our industry.

Our association, as stated, was formed in 1960 to assist landlords and their tenants to settle disputes, a service that has been ongoing up to the present. We, as an association, also hold seminars not only for landlords and property managers, but also for our superintendents. In fact, our association was instrumental in assisting some of the community colleges with their property management courses and course of studies.

Our association also has a referral information service that will assist developers who might like to build rental accommodations in our area. To this end I can recall a couple of years ago a developer by the name of Quantum Developments, an out-of-province company, requesting information. Our office forwarded to them copies of the Landlord and Tenant Act, the rent regulation act, and the Rental Housing Protection Act. Needless to say, they did develop, but in another province -- too much regulation. It is strongly suggested that all acts pertaining to our industry be reduced and refined.

In closing my portion of this presentation, it is important to remember the entire province is not called Toronto and the best tenant protection is ample accommodation.

I would now like to turn the floor over to Mr Derek Lobo, who will continue with our presentation, and we'll be happy to answer questions upon his completion.

Mr Derek Lobo: Good morning. My name is Derek Lobo. I'm the past president of the Hamilton apartment association. For a number of years I worked as a rent review consultant. I also wrote a manual back in 1988. It was titled How to Take a Building to Rent Review. It's 200 pages and it was a guide for landlords on how to fill in their application, how to go through the rent review process. Interestingly enough, the largest buyer of the manual was the Ministry of Housing at the time. In the last few years I've worked as a sales and marketing consultant to the apartment industry and I'm also a small landlord.

I've been watching the hearings on television and the presentations were very similar to the rent control hearings that went on in 1992. This is a highly polarized issue and it's a highly emotional issue. Everyone is using dramatic language. We hear people describing their buildings as "hell-holes," "deplorable conditions" etc. I really think we've got to get down to business in this province and let's just stop the nonsense.

This rent control legislation doesn't have that much to do with reality. I really think it has a whole lot to do with politics. Since 1975, there have been five pieces of rent control legislation. It seems that every time there's a change in government, there's a change in rent control legislation, if I'm counting correctly. You're all trying to make the system better, but everyone's trying to mould the system to fit their ideology. It's not working. This legislation is not going to work either. I can probably bet you that four and a half years from now we'll be sitting here going through the same kind of hearing again, if history is any kind of judge.

I think the economists know it, most people know it: Rent controls aren't working. If they were working, we would not be going through this fifth painful regurgitation of hearings and devising new rent control policy.

My guess is that you're all good people and that you want to do the right thing, but I think the answer to the right thing is difficult. What I'd like to do is just share with you some of my experiences.

I worked as a rent review consultant for a number of years and saw really an incredible bureaucracy. There was a lot of taxpayers' money being wasted. It's a system that's very bureaucratic and it's filled with many, many petty things that really pit tenant against landlord. It forces confrontation.

More recently, with the recession in Ontario, landlords have suffered unprecedented vacancy rates and I changed the focus of my business. I now help apartment owners solve their vacancy problems. I teach them about customer service. I teach them about marketing. I teach them about direct selling. In fact, my company has 30 people in it and our staff only go into buildings and solve vacancy problems. So if you're an apartment owner with 50 empty apartments, I parachute in a team of people and we lease it up for you. This has been a growth industry for us; there are that many vacancies in Ontario. As I said, we have 30 people who work in apartment buildings between Sarnia and Ottawa. Five years ago, this business didn't exist. We work for a number of companies, including companies in the private sector and the non-profit sector, representing about 150,000 suites anywhere between Sarnia and Ottawa.

There are a number of myths in the industry which I'd like to address now.

Myth number 1: Keeping rents low using rent controls helps the poor. Indeed there are some buildings -- they are a minority, a significant minority of buildings in Toronto, where the rents are significantly lower than the marketplace. Let's say the market could charge here, but the rents are artificially kept down; because of rent controls they're kept here. These cheap apartments are not advertised. They're typically not rented to people on social assistance and they're not rented to people on family benefits. These cheap apartments are rented by word of mouth and almost always go to people with good incomes. I know this. I work in the business and I see it all the time.

A turnover rate of 25% annually does not mean that all apartments are going to turn over in about four years. Expensive apartments turn over more often, sometimes annually; below-market-rent apartments turn over very seldom. They're a bargain. People don't give them up. These buildings, the buildings with the lower rents, are typically tenanted by affluent seniors and professionals. They seldom come on the market and they're filled by word of mouth. They're not going to the poor.

Myth number 2: There's a perception that high rents bring affluent residents and low rents bring less affluent residents. I think everyone in this room is familiar with the Jane-Finch corridor in Toronto, correct? It has a reputation. Would you think that the building at the corner of Jane and Finch would have high rents or low rents? My guess is you'd think that the rents were relatively low. They're not. They're very high. The rents for a three-bedroom apartment are well over $900 at the intersection of Jane and Finch.

In reality, these buildings rent apartments to people who are economically distressed and to a high percentage of visible minorities. Quite frankly, these buildings with the very high rents rent to people that other people don't want to rent to, the hard-to-house, and these people wind up overcrowding, sharing apartments and paying a very large percentage of their income in rent. They're not benefiting from those low-rent apartments that are being tenanted by affluent seniors and upwardly mobile professionals. These people don't have a choice. Rent control and the lack of supply in that area of Toronto have put them at the mercy of the market.

The point here is that suppressing rents artificially in some older buildings in Toronto does not benefit the people you think you're protecting. Indeed there's really no way for you to protect the truly needy other than a healthy marketplace with lots of vacancies where rents start tumbling. Rents are tumbling in Ottawa, they've tumbled in London, they're tumbling in Hamilton. This is the free market working. That's the best protection for the poor.

Myth number 3: CMHC data is accurate. It's not. CMHC data is useful but it's grossly understated. Let me give you a specific example. In Hamilton there are approximately 43,000 apartments. CMHC states the vacancy rate around 2%. That would mean there are 882 empty apartments. I work in Hamilton. Right now I'm working in four buildings, and in those four buildings alone there are 280 vacancies. Based on CMHC numbers, one quarter of Hamilton's vacancies are in these four buildings I'm working in? I don't think so. The vacancy rate is significantly higher. My educated guess is that it's probably 4% to 5%. If you want more proof, pick up the Hamilton Spectator on Saturday and count the number of ads. There are 600 ads in the newspaper advertising apartments. That doesn't make sense: 600 ads for 882 apartments? That would mean in almost every apartment there's just one in every building. You see what I mean?

Now, why is CMHC data wrong? Quite frankly, I think landlords just don't participate in the survey. We're overregulated. We sort of hate bureaucrats. When the CMHC guy calls up, we tend to hang up and we tend to understate our vacancies.

Let me give you another example. We worked in the city of Welland, where the vacancy rate was published around 4%. I happened to work for one of the larger landlords in Welland who did not participate in the CMHC survey. I convinced him that he should participate in it, and once he did, the vacancy rate jumped up to 7% when he put his vacancies in it. So these numbers can get skewed very easily based on sampling technique, and it's particularly easy to get skewed in smaller cities.

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Myth number 4: Rent controls keep rent down. Well, welcome to Hamilton, where rent controls are really quite irrelevant. They're also irrelevant in London, Sarnia, Ottawa and Kingston. In most cities across the province landlords are not even able to charge the maximum rent permitted by rent controls because of the marketplace. In Hamilton, what's keeping rents low is the marketplace, not your rent control legislation.

Myth number 5: Previous rent control regimes resulted in huge rent increases to residents of 200%. In 1992, the NDP casually threw around the figure of 200% rent increases when indeed the average rent increase was 11%. Everyone's been playing footloose and fancy free with the numbers in this debate.

Myth number 6: A modified rent control system with exemption for new buildings will encourage developers to build. A number of our clients are developers and I've often asked them, "What would it take to get you to build again?" because we're never going to solve the problem in this province until we get people building apartments and we have an oversupply. An oversupply creates competition and keeps rents in check. There were many answers, some that you've heard from other people who are more qualified than me to speak on it -- lot levies, land prices, unfair taxation etc -- but it always came down to one core factor. They would say as follows, and I'm quoting: "We can't trust the government any more. We've been lied to too often."

There's been retroactive legislation. They were promised that certain buildings would be exempt from rent controls that were retroactively brought under rent controls. I don't need to go through the whole history of what's happened in 20 years, but there have been many times where promises have been gone back on. I really think you would be a lunatic to believe that if you built a building now, it would be exempt from rent controls forever. The message from the development community is, "We just can't trust the system any more because it's changed too often." Five pieces of legislation in 20 years is probably a record for any kind of legal system or any kind of process.

We have to stop kidding ourselves. This is a political process and I don't think it has anything to do with economics and social justice.

There are varying points of view here from the different members of the committee. The NDP has oftentimes talked about the oppressor and the oppressed. They have an extreme bias on this issue, and I think for the purposes of this discussion, because of their bias, they are irrelevant.

The current government, I think, has recognized the folly of rent control legislation. You've tried to come up with a balanced piece of legislation, but I believe that it's fallen short. I want to ask you this question: Do you, members of the government, really believe that the opposition, if they come to power, will be able to keep their hands off this legislation? Let's say you pass this legislation. If they come to power five years from now, do you think they can resist tinkering with it and making it tougher, changing it etc? My guess is no, based on the last 20 years.

So tinkering with the system is not the answer. It's just too -- and I mean this with all respect -- politically sensitive an issue for politicians to leave alone. I think the answer would be a systematic dismantling of the rent review system during your mandate. You have an opportunity here to rid Ontario of 20 years of legislation that has been counterproductive, that's been a drain on the taxpayer. It really has not served any purpose other than creating a few low-rent apartments for the affluent.

I have a couple of comments on the discussion paper. How am I doing on time?

The Chair: You've got about seven minutes left.

Mr Mario Sergio (Yorkview): Leave time for some questions, will you?

Mr Lobo: Absolutely, Mr Sergio.

The concept of decontrol and recontrol isn't going to work. It's going to create a disparity in rents that's going to get exacerbated over time. Let me give you an example. In 1975 when rent controls were brought in, apartments charged various rents. There was no rent control. So let's say one apartment was $500 and one was $550. Then those rents were frozen. Between 1975 and 1996, those rents were increased by a fixed percentage, so that $500 rent didn't grow as fast as the $550. Is everyone with me? These rents kept diverging. So you'll find buildings in Toronto now where you've got one apartment for $600 and one for $700, exactly the same apartment. You'll find buildings in Toronto and in Hamilton where a two-bedroom apartment is cheaper than a one-bedroom apartment because you've built in this inequity.

Project out five years from now. We've got some decontrol and some control, so you're going to have apartments with different rent levels. These guys come back into power, put on rent controls, freeze them again, and the disparity is going to be worse and get worse. Do you see the point? It's just getting worse and worse, and at some point you've got to say, "We've got to stop this."

Let me suggest to you a solution on decontrol. They did this in Nova Scotia. When they decontrolled apartments they said, "When a resident moves out, you can raise the rent to the market." They were worried about tenants getting gouged, landlords taking advantage of them etc. Basically they said -- it's a small province; everyone knows everyone -- "If you guys do this, we're going to slap rent controls on you again."

Here's what I suggest. When you decontrol an apartment, you leave it uncontrolled. If you see that there are abuses in the system, put in some kind of hook to come back in and retroactively roll them back. At least that way, within five years what will happen is that we'll essentially be decontrolled. If another party comes to power, this won't be a political hot potato any more. It's only a political hot potato when it's on the books, when there's a piece of legislation there. I think if you could wind down rent controls in your mandate, there's a real opportunity to be rid of rent controls forever.

The second thing is, when you do create the system, please don't make it bureaucratic and hard to understand. I don't necessarily want to write another book.

That concludes my presentation. We look forward to your questions.

The Chair: We've got about a minute and a half.

Mr Rosario Marchese (Fort York): Mr Lobo, there is no doubt that you're over there and I'm over here. That's absolutely clear.

Mr Lobo: Yes.

Mr Marchese: And there's clearly no doubt that this paper was written for people like you. There's no doubt about that. There's nothing in here for tenants; there's absolutely everything here for landlords.

Can you tell me something? We have no time to put too many questions, but this system forces confrontation. You're saying to those friends of yours, "Deregulate completely and that will bring about a fair, balanced system between landlords and tenants." Is that what you're saying?

Mr Lobo: Absolutely. Why do you think the rest of North America can live without rent controls and only Ontario has rent controls? Is the landlord in Ontario this rapacious beast who can't be trusted? How do the rest of Canada and most of the United States function without rent controls? Answer that, please.

Mr Marchese: They function, by and large, because they have weak governments that don't have the fortitude to deal with this.

Mr Lobo: No, we have weak governments.

Mr Marchese: We have bad governments. Mr Lobo, it's quite clear that tenants, everywhere we've been, disagree with you completely. The only people who agree with you are the Tories and the landlords. That's the pact you have.

Mr Lobo: That's absolutely wrong. I think the NDP's view is, "Our constituent is the tenant; the hell with everyone else."

Mr Marchese: That's not true.

Mr Lobo: Every kind of economist -- I think behind closed doors the Liberals will say, "Look, this system isn't working."

Mr Bart Maves (Niagara Falls): Thank you very much for your presentation. It sums a lot of things up very well.

You mentioned that in Hamilton, as well as every other community we've been in, actual rents right now are way below maximum levels. That's an indication that the market is actually protecting people better than rent control would, because tomorrow a lot of landlords could increase their rents by a large amount to get to the maximum level.

Mr Lobo: Absolutely. If you took off rent controls in Hamilton today nothing would happen. Do you know what my guess is? Rents would actually go down. Here's what happens every year: Every year the government publishes a statistic that says, "You can raise your rent 2.8%." We've got the tenants believing that the rent should go up 2.8%. So it's a no-brainer. You're saying, "Here, it's 2.8%; Bob said so," or "Rosario said so," or you guys said so. The problem is, we've got so ingrained with this rent control system of annual guidelines. This should be like any other commodity where the price goes up and down based on the market.

Mr Sergio: I think you're living in their world, with all due respect, sir. You're the first one in two weeks of hearings who has been telling us that the free market is keeping rents down. You are the first person who --

Mr Lobo: I would have been watching the same hearings as you have.

Mr Sergio: Just a minute. I'm asking a question. Hold it a second. I only have a minute and a half.

I represent the Jane-Finch corridor, and let me tell you there are people who can't look after themselves. There are poor people in need of assistance, handicapped physically and mentally. There are people who have received a cut of 21.6%. What they get is less than what they have to pay for rent. You tell me: In your profession, with your experience, what would you do to help those people?

Mr Lobo: Right now those people aren't living in those low-rent apartments. That's the point.

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Mr Sergio: Where the heck are they living?

Mr Lobo: They're paying high rent --

Mr Sergio: You're living in a different world, sir.

Mr Lobo: No. They're sharing --

Mr Sergio: Oh, please.

Mr Lobo: Let me give you a really simple scenario. You're an apartment owner and you've got one empty apartment.

Mr Sergio: You've got the poorest people living in the crummiest Ontario Housing Corp units.

The Chair: Thank you, gentlemen. We appreciate your input.

I would like to request from the audience -- you may or may not agree with everything that's going to be said, but basically the dialogue is between the presenters and the members of Parliament. I ask that you respect the right of the presenters to put forward their ideas and the right of the people up here to ask them questions.

MCQUESTEN LEGAL AND COMMUNITY SERVICES
COMMUNITY LEGAL SERVICES OF NIAGARA SOUTH

The Chair: Our next presenters represent McQuesten Legal and Community Services, Madeleine Hebert, staff lawyer, and Jack Gillespie, director of community legal services. Good morning. Welcome to our committee. The floor is yours.

Mrs Madeleine Hebert: Good morning, Mr Chairman. My name is Madeleine Hebert. I'm a staff lawyer at McQuesten legal clinic. I'd like to clarify that my colleague Mr Gillespie is not working for McQuesten legal clinic. He's from Welland. He's from the Niagara South legal clinic. I asked him to join me this morning so that we would have a different perspective, a more rural perspective. It seems like a lot of the presentations are urban-oriented, and I was hoping that we could have a more diversified view.

The McQuesten legal clinic is one of 74 clinics in Ontario. We specialize in an area of law that is known as poverty law. One of the main areas we practise in is landlord and tenant. We often represent tenants in Ontario Court (General Division). Here in Hamilton we have a duty counsel program and we share it between the three clinics. We do rent control on occasion and we also do Small Claims Court applications which are often related to landlord and tenant problems.

Our presentation today will focus on pages 7 to 10 of the discussion paper. We'll be among the few who will not talk about rent control. This paper proposes a different dispute resolution system, and we feel that is a major change in Ontario and we'd like to make some comments on that aspect.

If we look at the judicial system as it is right now with respect to landlords and tenants there are three areas of remedy, which are Ontario Court (General Division), rent control and Small Claims Court. This paper focuses on the fact that there'll be a one-window access. That is impossible unless you amalgamate the Small Claims Court. A lot of contractual issues are dealt with in Small Claims Court, mainly when tenants are out of possession or prior to tenancy. Those are dealt with by Small Claims Court. So believing that you can do a one-window access legally is not possible.

The other aspect I want to bring to your attention is the fact that there are not that many litigated problems in the area of landlords and tenants. It is mostly a system based on information.

At our clinic we provide two types of services. We call one summary advice, which is information over the phone, as well as representation if the individuals meet our financial criteria. The summary advice we get in landlord-and-tenant is about 50% of our business. We also do workers' compensation, income maintenance and other areas of law, but the main area of information request is in landlord-and-tenant. As you know, rent control also gives some information.

If we look at their numbers, they've received for the Hamilton office 40,000 requests for information. If we look at the number of applications received, for 1995 there were 227. If we look at our clinic, in 1995 we had about 30 files that went to trial out of 1,200 information requests. So the numbers of litigated matters are not that high. In the province there were 40,000 applications in Ontario Court (General Division). If you look at the number of units in the province, I'm sure there are about a million -- you must have heard some numbers during the presentations -- I'm not sure about that, but I'm sure there are a lot of rental units in Ontario, and if only 40,000 went to court in the province, that's not a very large amount. You are revamping a system that may represent just a minor system in terms of the legal aspects of doing this new rent control tribunal.

The other aspect I wish to bring to your attention is that there is this perception that the current system is slow. In Hamilton, Ontario Court (General Division) is extremely fast. If you file your application on a Friday afternoon you will be before the court the next Wednesday. That is four banking days later. Often there'll be a one-week adjournment because legally it's very difficult to prepare your case in four days, but it is possible to be heard that very same day. The list is often around 100 applications and they're all dealt with on the same day.

I look at the example on page 8 in your discussion paper, the tenant who is aggressive and anti-social, and it takes five months for her to be evicted. Not in Hamilton. I can assure you that this matter would be dealt with within six weeks, easily. For instance, if last night there was an incident and the police were called, the tenant can get a notice of termination today and would have seven days to rectify the situation. If there's another incident, the landlord can give her a second notice of termination and go to court immediately and be heard within a week to 10 days. If the tenancy is terminated, if the judge feels there are grounds for the application, the time frames are very fast. If it works in Hamilton, I don't know why it couldn't work anywhere else in the province.

I suspect that the five months may come from another jurisdiction. I practise in a small area in eastern Ontario, and in that area it was slower, but it was slower because the judge who was hearing landlord-and-tenant applications had to deal with murders, family law, a lot of other jurisdictions, and simply couldn't find the time in his docket to hear a landlord-and-tenant matter. But that's not the fault of the Landlord and Tenant Act. It was the fault of the judicial system and the lack of resources in those specific areas. Hamilton, for some reason, has managed to find the resources and it's quite fast. That was the second point I wanted to make.

The third point is with respect to public access and efficiency. The paper raises the issue, should we have some major offices, eight or 10 in the province, or should we have local offices in the regular Ontario Court (General Division)? I believe it's very important that it remain close to the jurisdiction where the problem has started. It is practically impossible to make a system work if a tenant or a landlord has to travel 100 kilometres to go to court.

You suggest that you want to put it with an agency or some other arrangement. I would suggest that you perhaps attach it to Small Claims Court. That would give both parties access to your new system, and if the new system can't deal with the problem, it's probably going to be a matter of Small Claims Court, so it will be in the same building. The courthouses are the best local access points and, with the laws being changed in family law and in criminal law, I'm sure there's going to be court spaces. There's been a lot of deregulation of some of the criminal offences and therefore there'll be more court space. I'm sure you can find some space in that building and it would lower the costs.

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If you wish to put it with a governmental agency, I would perhaps suggest that you put it with the consumer and corporate affairs registry offices. They usually have an access point in those buildings and that could be a point of access for the parties. But it's very important that it not be limited to eight offices or 10 offices, as is the current case with the rent control offices. They are not used outside of the city. If you look at the applications for the rent control office in Hamilton, most of them are generated by Hamilton residents. Nobody from Halton Hills will drive an hour to come to Hamilton and anybody else in the outskirts won't; it's too far away. They usually rely on the Landlord and Tenant Act to resolve their legal problems.

I will let my colleague speak to the other issues with respect to the legal aspects.

Mr Jack Gillespie: Thank you very much. Our paper's been presented and has been submitted and it indicates that I'm the author of that report from the southwest clinics and lawyers doing work in that. That was a joint effort. There were four other lawyers who worked on it, so I certainly don't want to take all the credit, despite the fact that my name's on there alone.

I'm going to just highlight a few of the points regarding the substantive aspects of the law which the New Directions discussion paper asks us to look at. One of them is maintenance and repairs and there's a lot of discussion between pages 3 and 5 of that discussion paper about passing a lot of those powers down to the municipality where the property standards officer could then have enhanced powers and deal with all the problems that tenants may have regarding repairs. I think you have to remember that we're talking not about commercial tenancies; we're talking about residential tenancies. By and large, we're not talking about the affluent people who we've already heard are taking over all the low-rent places. We're talking about people who don't have money, who don't have the wherewithal on their own to deal with these difficulties, so they have to go somewhere. Currently, they may go to the rent control system or the courts, and there's talk of sending them over to the property standards officers.

We've also seen an awful lot of things being downloaded to the lower levels of government and the resources being restricted. If this system's going to work, putting it to the property standards officers, (1) we have to have the political will at each local municipality or a method to make that political will exist to enforce these methods, and (2) we have to have the resources, because if we have lots of legislation, it looks great on paper; if it doesn't work, if the resources aren't there to make it work, it doesn't help at all. We're going to be just having a worse system.

Also, at page 6 of the discussion paper it indicates that the substantive issues in part IV of the Landlord and Tenant Act -- those are the areas dealing with residential tenancies -- other than the areas that they've thrown open for discussion, aren't going to be affected by any of the proposed changes. One of those sections which isn't dealt with is repairs and maintenance. So we may still have a split system where repairs and maintenance may be under the control of the new agency, if one exists, once put together and there has to be a mechanism for allowing tenants to take some steps to get repairs done. I'm talking about serious repairs. I've been in this business for in excess of 15 years and I think I've got the experience and the objectivity to see when it's necessary, and I've come across a lot of cases. I would urge that aspect to be maintained and be given some substance.

The paper talks about subletting. It doesn't talk about assignments and it doesn't address the differences. I think clarification has to be made to show that there is a major difference.

Another aspect that disturbs me is when I see it being mandatory that a landlord, such as in British Columbia, has to consent to a sublet or an assignment. First of all, there's nothing mandating that the landlord has to answer, so by the landlord's silence, that could prevent a very necessary sublet, something that a person needs to move, say for a job purpose, and he's found somebody else to move into his apartment, a reasonable person. The landlord, by their very absence from answering, can put an end to that person's ability to get someone in. I would suggest that the way to deal with that is to put a positive duty on the landlord to answer within a reasonable time so that everybody knows the rules of the game, and that there be a penalty of some nature, such as the elimination of the tenant to continue to search for somebody else, if the landlord doesn't follow through. It's a simple answer to say no, and then they can go and deal with whether or not that no was reasonable.

Last month's rental deposit: That's an area that creates a lot of problems. The law reform commission, back in the late 1960s, found that it was unnecessary to have more than a last month's rental deposit, to a maximum of one month's rent, to protect the landlords. That has never changed. You should keep in mind that the tenant as a consumer is one of the very few individuals who has to pay before they get anything. When we go and buy a car, you pay the money, we get the car. What they do is they have to pay before they get the place. They're paying at the beginning of the month, not the end of the month, contrary to people who own a house and are paying on a mortgage. They pay at the end of the month.

Another difficulty I've seen over the past 15 years concerns the landlord holding that deposit. That deposit should be clearly defined to be held in trust. If a landlord goes under financially, either they go bankrupt or the mortgage company takes over the house or the landlord just takes off, it is incredibly difficult for that tenant to ever get that last month's rental deposit back. Quite often, that represents a substantial portion of the tenant's income. For a person who's on assistance, that can represent more than a month's assistance. So it's crucial that they be able to access that money.

I would suggest that much like the British Columbia system, the moneys be held in trust by a private commercial institution such as a bank, much as a trust account to the lawyer has. The landlords would get out of the obligation to pay the 6% interest, which they find onerous -- which certainly represents a very cheap way to borrow money, in my opinion. Then there would be a third party who's holding the money. The tenants would be guaranteed, if they're entitled to their money back, to get their money back and a system could be put in place where either by mutual consent that money is to be utilized or the agency or the courts or whoever is going to make these decisions would then have to go and make a decision who's going to get what portion of that last month's rental deposit. When you leave the money in one person's hands, it gives them an awful lot of power.

Finally, I'll just address the issue of privacy. Privacy has been glossed over, I believe, in this document. Privacy is fundamental to where someone lives. I think the methods have to be maintained to protect that privacy. I think we need more definition as to what is going to be done in the discussion paper before I can comment on that meaningfully.

The Chair: We don't have any effective time left for questions, with only a minute left. Did you have a final comment you wanted to make?

Mrs Hebert: The discussion paper is quite vague on this new dispute resolution system. We would hope once this system is established, if it ever is, that there's more input to look at the details. The points raised in the discussion paper are quite vague on appointment of the adjudicators, matters that are not directly impacted on the tenant who applies to this new system. We would hope to have another opportunity to give more detailed submissions on those points.

The Chair: Thank you very much. We do appreciate you coming this morning and giving us your input.

0940

HAMILTON AND AREA COALITION OF TENANTS' ASSOCIATIONS

The Chair: Our next presenter is the Hamilton and Area Coalition of Tenants' Associations, Earl Maycock, the past chair, Gord Jackson, the tenant, and Sarah Todd, a member of the board of directors. Good morning. Welcome to our committee. The floor is yours.

Ms Sarah Todd: The Hamilton and Area Coalition of Tenants' Associations, HACTA, is a non-profit volunteer-based organization and an alliance of tenants, tenants' associations and honorary supporters. HACTA provides tenants with information on their rights and responsibilities and assistance with organizing tenants' associations. HACTA also advocates for laws that will protect tenants.

HACTA formalized as a tenants' coalition in January 1991 and incorporated in 1992. We received funding in 1993, through the Ministry of Housing's community partners program. However, that funding was terminated by the Conservative government effective today.

As with past pieces of legislation introduced by previous governments, we are commenting on this government's changes to tenants' rights. We believe that this package is not, to use your words, tenant protection. In fact the name "tenant protection" is very misleading. This package, as we will explain further, will see an end to rent control in Ontario, result in less affordable rental housing, more evictions and less maintenance carried out by landlords. Tenants do not need this kind of protection. All 3.5 million of us in this province need the same opportunity that every other citizen of this province should have: the opportunity to find and keep affordable, good-quality housing.

This package makes a number of assumptions that the government calls cold, hard facts, facts that are not hard or cold at all.

The government says that landlords have no incentive to invest in their own buildings, which are becoming more and more run down. Clearly many landlords choose to keep their buildings in a state of good repair.

The government claims that the removal of rent controls will result in the building of affordable housing. There is evidence to suggest that this is not the case. Under the Rent Control Act, rental units in new residential buildings are exempt from most of the Rent Control Act for five years. Despite this moratorium, there has been virtually no new rental housing stock built in the province by the private sector in recent years. The Hamilton-Wentworth Housing Statement Update found that "much of the apartment stock that was built in the 1960s and 1970s and that now houses a significant percentage of low-income households in cities like Hamilton and Toronto, was financed with federal tax breaks and below-market loans." It appears that rental housing development has never been lucrative for the private sector, so there is no basis for the underlying assumption that the removal of rent controls will lead to the building of new rental housing stock. Why would the private sector step in and develop housing for tenants with low incomes?

Based on our experiences at HACTA working with real people who live in the community, we will reflect upon how the proposed changes to the tenant laws will affect people's lives.

HACTA believes that the government's proposals are designed to effectively end rent control. The proposal allows landlords to increase rents to whatever they can get away with when a new tenant moves into the apartment. Tenants are a highly mobile population. As relationships change, families grow, people begin new jobs or go back to school and for many other reasons, tenants move. The government's own study last fall, the Lampert report, showed 25% of tenants move every year and that during a five-year period, about 70% of tenants move at least once. Consequently, the rental housing market is decontrolled in five years. The proposal staggers the process, but the impact on affordability is the same. The result will be higher rents. Gord Jackson will speak to that a bit further.

Mr Gord Jackson: Maybe a bit of history is useful. Rent controls were first started in 1975, a year that saw, after decades of seemingly unending prosperity, a prolonged period of uncertainty set in. The Conservative government of Bill Davis, responding to highly publicized reports of landlord price gouging at the time, announced on September 3, 1975, a rent review policy. On September 8, Davis further announced that the Ontario guaranteed income supplement would be used to cushion for low-income tenants the impact of rent increases. September 13 heralded a promise to protect tenants' rights and to pay tenants' legal costs in fighting exorbitant rent increases.

On October 13, 1975, then Prime Minister Pierre Elliott Trudeau, in a nationally televised address, announced wage and price controls, reversing himself after the Conservatives under Robert Stanfield had actively campaigned on same in the 1974 general election.

All of the foregoing actions beg the obvious question of why. Why did a Conservative Premier feel it necessary to protect vulnerable people from greedy landlords and developers? Could it have had anything to do with the fact that in 1975 Canada saw the arrival of 10.2%, double-digit inflation concurrent with an Ontario unemployment rise from 4.4% to 6.3%? Did the leader of Ontario's ultimate private enterprise party not also take note that from 1974 to 1975, while the CPI rose 10.8%, rents escalated a shocking 31%?

Indeed, why did the Prime Minister feel it necessary to reverse himself after denouncing wage and price controls during the 1974 election campaign? While recognizing that the uncharitable among us might suggest that Mr Trudeau simply let Mr Stanfield take the heat for what he always knew he was going to do, clearly not only was something wrong, but something also had to be done.

Put another way, both men recognized that the marketplace was not working for the good of all, no matter what picture current ideological purists might try to paint. Still, that was 1975 and this is 1996. Are things as bad now as they were then? Aren't we back to pre-1975 economic conditions, making rent controls no longer necessary? Hasn't unemployment in Ontario at least returned to 6.3%, if not 4.4%? No, it has not. The economy, in spite of low inflation and interest rates, is a basket case with unemployment still hovering around double-digit numbers. Clearly something is still wrong, making the dropping of rent controls an ideological exercise grounded in neither practicality nor so-called common sense. Indeed, in his report, "The Political Economy: Residential Rent Control in Ontario, Research Study Number 12," October 1984, author D.G. Hartle, while arguing against rent controls, did so within the context of "full employment and no market imperfection," the two potentially important offsetting considerations. It seems to me we haven't reached either one yet.

Affordable housing is in Ontario considered a right for all and not a privilege for the well-heeled few -- a right, that is, until recent Tory good times. Now, thanks to heartless welfare cuts in our still sluggish economy, the notion that 25% of income is earmarked for housing is no longer applicable, not in the Americanized province of Ontario. As has been shown, rent controls were not imposed by a socialist government to make life difficult for landlords and developers. Rather, they were brought in by a business-friendly Conservative government reacting to unacceptable market conditions. Had this sacrosanct marketplace been doing the job many feel they are going to continue to promise to do, no vacuum would have been created. We would not have needed rent controls in the first place if the marketplace had been doing what they're all going to promise they'll do.

Regretfully, the elimination of rent controls, something about which Housing Minister Al Leach has publicly boasted, is just another indication of how low the once decent-minded Conservative Party has sunk with its slap 'em in the chops, knee 'em in the groin approach to anyone but the special interests who can afford the tailor-made pinstripes. However, individuals are willing to fight more strongly to retain a benefit they have obtained than they are for one that they have never experienced. In Ontario, where there are over three million apartment dwellers, 1.9 million of them residing in Metropolitan Toronto alone, the prudent would be cautious before antagonizing such a large constituency of people.

Ms Todd: In Hamilton's tight rental market there is likely to be upward pressure on rents from many buildings. Higher rents have a real impact on real people. Incoming tenants will be paying more rent under the government's proposals than they would have under the current law. The following are examples of how higher rents will impact people.

People with low incomes are generally accessing the lower end of the housing market or housing that is inadequate. Because the housing is of low quality, many people are forced to move from one place to another in search of better housing. Every time they move, they will be faced with looking for accommodation that is no longer subject to rent control.

Mental health consumers who are facing poverty are often desperate for adequate, affordable housing in order to gain the stability which is necessary to participate fully in society. In a province without rent control, the ability of mental health consumers to find that stability will be threatened, making it difficult for them to sustain themselves.

Higher rents will present limited options for our senior citizens, many of whom are already living in inadequate housing. Many seniors will not be able to leave their current accommodation because they face a market that is decontrolled. Also, the fear that some seniors experience around landlords who are already harassing them to leave their units will only increase. For seniors who have been living in units for long periods of time, who have developed a vital friendship network in their units and who find the physical strain of moving difficult, the increased potential for landlord harassment is frightening. In addition, the process of having to submit to a government bureaucracy to have this dealt with is difficult.

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Women attempting to escape abusive situations in their homes often need affordable housing quickly. Many women leaving abusive situations already feel economically trapped, and the decrease in affordable housing options would only exacerbate this situation. The loss of affordable housing potentially leaves women feeling trapped within abusive households because they are unable to access other housing options.

Financial discrimination is the process of excluding people from accessing their right to housing on the basis of their income. In a society where there are not enough jobs for everyone and where the work women do in their homes is not financially rewarded, certain citizens find themselves without adequate resources to gain shelter.

Many tenants cannot afford rent increases. For example, it is estimated by the ministry that 80% of social assistance recipients rent in the private market. As well, 30% of all tenants are receiving social assistance. In October 1995, social assistance shelter allowances were reduced by 21.6%, with the result that most social assistance recipients are already spending more than their maximum shelter allowance. In the Hamilton-Wentworth Housing Statement Update 1995, reference is made to a 1992 study of general welfare assistance clients which showed that over one third spent over 70% of their income on shelter, while only 15% spent 30% or less, the level generally considered affordable. The region's department of social services conducted a similar profile in the fall of 1995 and found the situation would worsen as a result of the reduction to general welfare assistance benefits.

Tenants will experience further financial hardship because the government wants to eliminate the costs-no-long-borne provision of the current law, which Earl will speak about.

Mr Earl Maycock: I would like to speak about the 3% above the guideline, which I believe most people misunderstand. This 3% above the guideline was granted to our landlord in 1992. As we understood it at that time at the hearing, this 3% would apply for three consecutive years. What happens is that the 3% is compounded for the three years and it amounted in our particular case to $57 a month and change. This remains in until such time as the $2.5 million that were spent in major repairs and lavish renovations to our apartment are paid for. It remains in there for anywhere from 10 to 25 years. I will never see the end of it.

Another point I would like to make is, if the rent registry is done away with and this law remains in and we gradually come off these exorbitant increases and the above-the-guideline increases, how is it going to be controlled to say in 25 years' time -- I won't be here, but for a tenant who is residing in the same building, how are we to say there's going to be $57 a month come off your rent because way back when the government granted the landlord a 3% above-the-guideline increase? Now the government is talking of increasing that to 4%. This is not 4% that stays on for one year and comes off and another 4% goes on etc. It compounds for three years, which is a tremendous amount when you have 50% of your apartment dwellers seniors. They just can't afford to pay that.

Ms Todd: HACTA believes the changes to rent control will set up a situation where some landlords may encourage tenants or harass tenants to leave their units so they can increase the rent. Even the ministry acknowledges that harassment will occur. It is proposing an enforcement unit to investigate tenant complaints of harassment.

CMHC's Hamilton rental market report for October 1995 lists the vacancy rate at 2%. The vacancy rate projected for October 1996 is 1.8%, and 1.6% for October 1997. In a tight rental housing market tenants are particularly vulnerable to landlord demands. In the Hamilton-Wentworth Housing Statement Update 1995, discussion around developing a more competitive housing market acknowledges that the vacancy rates must be at least 3%; otherwise tenants lose the ability to find more appropriate affordable housing. When freedom to choose is lost, tenants are far more vulnerable to harassment.

Our experience suggests that for good reasons, many tenants will not file complaints individually. They are intimidated by the process; do not have adequate information or assistance to file complaints; want the harassment to stop now, and sometimes the only way for it to stop is to leave their apartment; feel that more extreme forms of harassment may occur from a complaint; do not even know of their rights in this area; or may not have the emotional energy to pursue such a complaint. Instead, many tenants will be forced to look for a new apartment in a tighter housing market with higher rents. Furthermore, this kind of harassment will have the largest impact on people of colour, women, senior citizens, gays and lesbians and other charter groups who already experience harassment and discrimination with regard to housing.

Tenant associations have proven to be an effective way to limit harassment from superintendents and landlords. The anonymity tenants get from group action makes it safer for individuals to talk about harassment and do something about it. Furthermore, we would assume that the funding to groups such as HACTA would be a much more cost-effective way to assist tenants to deal with harassment than building a new bureaucracy to address the problem.

The Landlord and Tenant Act piece of the proposal is particularly difficult to respond to because it is not clear from the proposal how the dispute resolution system will work. On the one hand, we believe that taking all landlord-tenant issues to court is probably not the most productive way to resolve some situations. On the other hand, because of power imbalances between landlords and tenants, some issues, such as the loss of your home, are worth a court date.

We have concerns about this dispute resolution system. Will a dispute resolution system provide fairness? The system should be an autonomous organization governed by provincial guidelines with knowledgeable, neutral -- not political appointments made by the government -- decision-makers. It should also not restrict tenants from using it by charging a fee. Furthermore, there should be an appeal process incorporated into the system.

If the government understood tenant protection, it would know that it is crucial for tenants that legislation limit rent increases to a reasonable guideline. Tenant protection does not eliminate a rent control system in five years. It does not increase rents for tenants. It does not set up situations that will result in more harassment for tenants and leave tenants with no solution to stop this harassment. It does not limit the supply of affordable housing options. It does not take away tools such as an order prohibiting rent increases.

When combined with the government's decision to end the construction of non-profit and co-op housing, the possible sell-off of public housing and the elimination of funding to tenant federations, it is clear that this government simply does not care about the housing needs and basic housing rights of tenants in this province. Thank you.

The Chair: We've got a quick minute per caucus for a statement or a question.

Mr Bruce Smith (Middlesex): Thank you for your presentation. I note your concern with respect to the potential for increased rents. Quickly, I'd like to perhaps have you respond to how you come to that conclusion given the evidence we've seen as a committee by and large that shows that many landlords are in fact not charging maximum rent, that they're well below the maximum allowable rent they possibly could charge, and the fact that the landlords themselves are asking us to retain the maximum rent, in my opinion, in fear that the market will suppress those demands and not enable them to move the rents back up to that maximum allowable position. Can you give me a quick summary of how you feel rents will increase when many aren't charging that maximum allowable right now?

Ms Todd: I think having rent controls in and keeping affordable housing options sets that control that stops that market sort of competition that throws rents increasing as the demand -- sorry. With affordable housing options in the market currently with rent controls, it makes sure that people keep affordable housing options, because if they charge huge amounts, then they're not going to be able to find tenants. With the loss of non-profit housing and co-ops and other affordable housing options, it will free up the market just to keep competing and increasing rents dramatically.

Mr Dominic Agostino (Hamilton East): Just to add to what's been said, I think very clearly from the presentation we have seen that the individuals who may be the most impacted by these changes are going to be seniors, disabled, individuals on fixed incomes, individuals who have had their welfare benefits cut by 22%. Clearly the most vulnerable in our community and the people who are least able to pay are going to be the ones who feel the biggest crunch. Someone making $50,000, $60,000, $80,000 or $100,000 is going to feel a bit of pain by decontrol, by removing these rent controls over a five- or 10-year period as people move out, but clearly the pain will be nowhere near the pain felt by someone who is on a fixed income and whose pension may go up 2% or whose welfare benefits have been cut by 20%.

From your experiences and your work, what will happen to these individuals who, faced with horrendous increases, will not be able to afford the accommodation they're in right now? What is their next step and generally what do you see happening to these individuals?

The Chair: Unfortunately, Mr Agostino, the question's a little too long. Mr Marchese.

Mr Agostino: It was less than a minute on that.

The Chair: Mr Marchese.

Mr Agostino: Mr Chairman, in fairness the last one went a minute and 30 or 35 seconds with the response. I would hope that you would give that same courtesy --

The Chair: Mr Agostino, if you'd been with us for the last two weeks, you'd understand the rules that we operate under.

Mr Agostino: Mr Chairman, the last one went a minute and 35 seconds.

The Chair: Mr Marchese.

Mr Agostino: We were timing the last one and it was a minute and 35.

The Chair: Mr Marchese.

Mr Maves: Mr Marchese is losing his time now.

Mr Marchese: Thank you for the presentation. You've pointed out, as many have, that this is not a protection for tenants. In fact, it's a lie to say this is anything to protect tenants. What it does is to protect the landlord and to give rights to landlords that they feel they have lost over the years. What you've historically pointed out is that they've always had rights and tenants have very little protection. You've heard Mr Lobo, God bless his soul. You were here for his presentation. He said that this system forces confrontation between tenant and landlord. Do you think that by removing rent control somehow we will reach that ideal world of wonderful relations between tenant and landlord?

Ms Todd: No, I don't. I think it'll make it worse. It's just going to become more of a competition between landlords and tenants. It's just going to make it more difficult and put tenants in more desperate situations, which exacerbates the emotions of the situation and just makes it more difficult.

The Chair: Thank you very much, folks. We do appreciate your input here this morning.

1000

LAWRENCE ROBBINS

The Chair: Our next presenter is Lawrence Robbins. Welcome to our committee. Can I just ask the committee something, please? I would just as soon we keep conversations between ourselves and the presenter. You've got lots of time to talk after.

Mr Lawrence Robbins: You're not using my time yet, are you?

The Chair: No, I'm not, sir.

Mr Robbins: Good morning, Mr Chair and other people. This is a déjà vu. It reminds me of the NDP when they had their meetings before rent control. I'm from the Niagara region and I went to their rent control meeting. I was allowed exactly five minutes to speak, and while I was speaking I watched each of them watching the second hand on their watches tick. They didn't listen to a single thing I said. I hope this will be a better committee to listen.

I'm for the complete abolishment of rent controls. I also would like this government to stop funding all these social activists groups. Let them get out and get a job of their own. I work seven days a week to carry that dependant that I call an apartment building. My tenants drive new cars. My tenants go to Florida on vacation. My wife and I both are almost dead from working to keep that building going so we don't lose our home and the building. I am sick and tired of all these freeloaders in this country. I pay the bills, I call the shots and I treat my tenants the best I can treat them. My building is in excellent shape. I invited Bob Rae, I invited Margaret Harrington to come and see my building at any time and neither of them would come.

I'm not going to speak much. I'm going to go to questions because I've had nothing but hell since 1988. I'll answer all the questions.

Mr Gerard Kennedy (York South): Mr Leach told us in his opening statement that he thinks landlords have the upper hand right now. He's recommending that tenants consider this legislation because landlords have no reason to care about tenants. This is what he said in his opening statement. I don't know if he meant to say that, but that is what he said and it gives us a sense that we're setting up a conflict situation between landlords and tenants.

Could you comment on how you think this is going to impact the relationships if tenants feel that there's a possibility they could be harassed, if people want to convert to condominiums, and how you feel this will improve the relationships between landlords and tenants, especially if even the minister is saying -- and I hear you saying something very different so I would like to hear your answer -- that landlords have the upper hand right now and that we need this legislation to create more rental housing so that tenants can have more impact on landlord behaviour.

This is what the minister said in his opening statement to us a couple of weeks ago. Can you comment on the statement and tell us how you see this legislation affecting the relations between landlords and tenants?

Mr Robbins: Well, I'm not sure how the legislation is going to end up, so I can't comment on that, but landlords do not have the upper hand. I've had my building demolished. I just finished a rental unit where I had to go in and spend $5,000 to bring it back into shape after a tenant destroyed my building within the last two weeks. I've had to put it on financing through HFC at terrible rates. My wife and I have to pay those bills again and the tenant just walks away. The tenant is collecting a WCB pension and I can't get my money out of that tenant. He's laughing.

The system is not going to change. A landlord and a tenant will get along fine; you don't want to evict a good tenant. Nobody has ever thrown out a good tenant. If a tenant runs into a little bit of a hard time you work with your tenant. The system should be the same as any motel, the same laws.

I see the Hydro people come down. If tenants don't pay their hydro they put a thing on the door; 24 hours' notice and your hydro is turned off. Why am I any different? Can you tell me?

Mr Kennedy: Let me ask you a question about the motel. You sound like someone who takes his business very seriously. You have an idea that you're providing some service to people, you're holding up your end and you're concerned about the law in terms of how it affects you. Most people think of apartments -- probably yours too from the sounds of it -- as more than a motel. They think of it as a place where they live. They have no choice, usually economically in terms of where they're coming from, and renting is the option they've got. In terms of only wanting government to be a referee when it's necessary, we're looking at why this is necessary now. The government is proposing that it isn't. But it certainly comes down to the fact that it is more than a motel to most people. I'm sorry if you experience tenants that way, but for many tenants this is their home.

Mr Robbins: Why do you think the burden should be on my shoulders? It should be on the government's shoulders. Put out the proper social programs. Help the people who need it the most and give them rental allowances. The rest of the people, let them pay their way.

You talk about fair taxation. I have been overtaxed since the Liberal government, through an NDP government and now still through this PC government. I have had legal rental increases allowed under the Peterson government, signed by the Minister of Housing, which were taken away from me. I think this government should reimburse me for my lost income. If you did that to the Indians you would have broken a treaty with them. I don't think I should be treated any different. You should pay me back the money I've lost plus interest. All of you should agree to it.

Mr Kennedy: Let me ask you a question about taxes, because apartments are paying more taxes in most jurisdictions than others types of property.

Mr Robbins: No. I pay the taxes, not the apartment.

Mr Kennedy: You need to pass on some of those costs to the apartment, I assume, to be able to pay them.

Mr Robbins: You have no idea. Have you ever owned rental property?

Mr Kennedy: Yes.

Mr Robbins: Yes? Why don't you own it still?

Mr Kennedy: I do. I would appreciate it if you could help me with the question. Do you think it would have more of an impact to change the taxes that are higher on apartment owners, if you like, but on apartment buildings than dealing with rent control? Which would be more beneficial to you?

Mr Robbins: They've both got to change. My apartment building is a business. Let me run it as a business. My tenants will vote with their feet. If I lose my business because I'm a bad business manager, shame on me. If I lose my business because of government regulation, shame on every one of you.

Mr Kennedy: Let me ask you a question about the cuts in welfare. You said you're in favour of adequate social benefits so people can afford a place to live. Is that correct?

Mr Robbins: I'm saying I'm favour of rental subsidy allowance.

Mr Kennedy: Right, and obviously at a reasonable level, so whatever the market is charging. Is that correct?

Mr Robbins: That's right.

Mr Kennedy: Can you comment on the impact, if any, that you've seen because of the cuts in welfare rates for people to be able to support their housing? Is any of that reflected in your buildings or in the buildings of landlords that you're aware of?

Mr Robbins: Sure. There have been vacancies because of that.

Mr Kennedy: What would you say to the government in terms of what that does to the marketplace?

Mr Robbins: That has nothing to do with the marketplace. The government has got to go to a rental allowance subsidy, okay? That's what they have to do. There are plenty of tenants out there who can pay their own way who are taking advantage of the system. You are all aware of that.

Mr Kennedy: I'm just asking. I want to be clear: You would see a system of subsidy available to --

Mr Robbins: To the people who need it.

Mr Kennedy: To what level of people would that be, in your estimation?

Mr Robbins: The government will have to determine that. You could come up with an average rent in Toronto for a two-bedroom, and that's the maximum they'll go. Maybe the subsidy allowance in the Niagara region would be lower because the rents aren't as high as in Toronto. It would fluctuate, but you have to allow a marketplace to work. A market will find an equilibrium. At one time it will be up and it will be down. But economics 101 will tell you that we'll arrive at an equilibrium.

Mr Marchese: Mr Robbins, you're sick of the tenant groups, you said.

Mr Robbins: I'm sick of all these people who live off government.

Mr Marchese: That's another question I was going to ask you later.

Mr Robbins: If tenant groups are so important, let the tenants fund them. I deal with my tenants one on one. Besides, for two bad tenants that I've had since 1988, I have letters at home from tenants thanking me for providing them with such clean, safe, warm accommodations.

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Mr Marchese: I believe that. But you're sick of the tenant groups because they're assisting tenants who might require help?

Mr Robbins: They're there fattening their wallets. That's all they're there for. They're not there for the tenants.

Mr Marchese: They're not there to help the tenant who is in trouble who is facing a difficult landlord?

Mr Robbins: No. They're there to get money to pay their bills.

Mr Marchese: So they should really get a good job? They should get a job somewhere else?

Mr Robbins: Eliminate them. They're not needed.

Mr Marchese: Because the tenant could really take care of himself or herself?

Mr Robbins: Why not?

Mr Marchese: Sure. Well, the Tories agree with you.

Mr Robbins: Are you saying these people are useless?

Mr Marchese: Oh no, I'm not saying that. I'm saying --

Mr Robbins: Do you look after yourself?

Mr Marchese: Okay. When you finish, I'll ask the questions.

Mr Robbins: Do you look after yourself?

Mr Marchese: Some people can look after themselves --

Mr Robbins: Do you look after yourself?

Mr Marchese: Okay, Mr Robbins, let's work it this way. I'll ask you a question, you answer, and then I'll answer back so that we can have a dialogue.

Mr Robbins: Have you ever owned rental property?

Mr Marchese: I understand that only landlords seem to understand landlord and tenant --

Mr Robbins: Have you ever owned rental property? You said you were going to answer my question.

Mr Marchese: I have a house, yes.

Mr Robbins: Have you owned rental property?

Mr Marchese: No, I haven't.

Mr Robbins: Okay. So you're well experienced.

Mr Marchese: What is clear to me --

Mr Robbins: You know what you're talking about, don't you? What did you do before?

Mr Marchese: Mr Robbins, you probably have four or five minutes of my time. Why don't you just take it and just say whatever you like?

Mr Robbins: Okay. How about that? I used to write Bob Rae, and Bob Rae had the decency to write me back. You know, Evelyn Gigantes never wrote me a single letter. She was stuck in a little room somewhere in Queen's Park and never responded to a single letter I wrote her. That's a real government, isn't it? You don't react to the people you don't like. You hide and stick your head in the ground.

You brought in laws. I had a rent increase, as I told you before. You took away from me what was legally mine. You wouldn't do that to the Indians and you wouldn't do that to any other group. Why do you do it to me? I've got bills to pay. I've got responsibilities. I live up to my responsibilities. Why didn't you live up to your responsibilities?

Mr Marchese: You have more time.

Mr Robbins: I asked you.

Mr Marchese: Okay. Either you speak or we have questions and answers.

Mr Robbins: Okay. I asked you. Why didn't you live up to your responsibilities?

Mr Marchese: Do you notice, Mr Robbins, I'm speaking and you're just ranting on, so we can't --

Mr Robbins: I'm waiting for an answer to my question. Why didn't you live up to your responsibility as a government?

Mr Marchese: Mr Chair, this individual obviously doesn't want to have a dialogue with me, so he can have a dialogue with his friends over there. Please move on.

The Chair: Okay, Mr Marchese. Mr Stewart.

Mr R. Gary Stewart (Peterborough): Thank you, sir, for your presentation. I have a couple of questions which we don't hear very often that it appears you're concerned about. It appears that in the presentations we are constantly getting accountability for landlords. Do you feel that tenants should have a little bit of accountability?

Mr Robbins: I most definitely feel tenants and landlords should have accountability.

Mr Stewart: Right. I think that's what we are hearing as well is that if we're going to change legislation, there's got to be a level playing field for both parties.

Mr Robbins: Yes.

Mr Stewart: We've had a number of presentations from various legal clinics and the various rules and regulations they have. We heard yesterday that people were trying to evict some tenants and it took them 18 months to do it, and during the 18 months they paid two months' rent. It took another one 16 months to do it and I think they paid four months. Yet here this morning and in other areas we've heard that it's very easy to get tenants out and evicted and there's no problem, that you get to court very quickly and everything is wonderful, whether or not they've sometimes trashed your apartment.

My concern is, what have you found and what do you believe? Is there enough regulation to protect you and them? Or when we're looking at this possibility of new change and new regulation or new direction, should there be some changes in that end of it?

Mr Robbins: There most definitely have to be changes. I had to evict one tenant. I was assaulted by that tenant, so I called the police. The police would not get involved because it was a landlord-tenant situation. I filled out the proper forms to get the tenant evicted. I think I spelled one letter in his name wrong. I had to start all over, I forget what it was, 18 days before you can proceed. I went into court. I won judgement. The judge ordered him to pay me the money and gave him 10 days to get out, or whatever the law is. The tenant waited till the very last minute. I had to go hire the sheriff. It cost me another $500 to come and put the tenant out because the tenant wouldn't move.

I got a phone call just three weeks ago from another landlord where this tenant is pulling the same stunt again. He's refusing to pay his rent and he's locked his doors and he says, "Take me to court." This tenant has been known. I've talked to the sheriff in the Niagara region and this tenant has pulled this stunt all over the Niagara region and is continually doing it.

Mr Stewart: We've heard that the rates are going up constantly. Do you feel that many of the people in the Hamilton area are at maximum rates now?

Mr Robbins: That I'm not qualified to answer. But I'll tell you, as I drove down King Street West, every apartment building has a For Rent sign on it. There is no shortage of apartments for rent.

Mr Stewart: We certainly saw that over the last week or so, that as the vacancy rate goes up, indeed statistics show that the costs are going down some.

Mr Ernie Hardeman (Oxford): Thank you for your presentation. I just wanted to carry on with Mr Stewart's question. He asked about the vacancy rate in Hamilton. Do you know what the vacancy rate in Thorold is and whether you are at your maximum rent on your units?

Mr Robbins: I'm not at my maximum rents. For a while there I was running at almost a 20% vacancy rate in my building. I've just, fortunately, got my building rented out. I've never had my building rented, since 1988, for a full year. Tenants come and go as they please. There's a $500 bill every time they move out. There's an advertising bill; you go to the paper and they want $300 to advertise to rent the unit. You've brought in GST on everything I buy. You've put a provincial tax on my insurance, which I can't recover. My insurance started at $400, it went up to $900, up to $1,800, and I can't recover those costs. I've never had a claim. All insurance companies have done the same thing. I can't recover my costs. You guys can sit there and make all the money you make, but I've got to work seven days a week and my wife works seven days a week, and we've both run our health right down.

Mr Hardeman: Going on with the issue of the maximum rents, if you're not at your maximum rents, what prevents that from happening? Why is it in Welland that you are not?

Mr Robbins: Because the marketplace will dictate what you can charge. As I say, I'm for the complete abolishment of rent controls: no more maximum rents, nothing. As the market turns around, you give tenants rights, you allow them a rent increase every 12 months. When a tenant moves out, you can reset your rent to whatever the market will allow, and then that tenant is protected for 12 months before you can put through a rent increase. And the rent increase -- you know, 90 days' notice. You talk with your tenants; if they can't afford it, you work something out. You don't want to lose a tenant. It costs you more money to find another tenant than it does to try and rent your unit.

The Chair: Thank you very much, Mr Robbins. We do appreciate your input here this morning.

I would ask the people at the back with the signs -- I don't mind them being in here, but they're very distracting to those who are up here. Would you stand them against the wall, please?

Interruption.

The Chair: We can recess and let you have your demonstration or you can do what we've asked you to do, please. It's your call.

Interruption.

The Chair: Okay, we'll recess.

The committee recessed from 1018 to 1028.

HOUSING HELP CENTRE FOR HAMILTON-WENTWORTH

The Chair: The next presenters represent Housing Help Centre, Jackie Gordon and Laurie Graham. Good morning. Welcome to our committee. The floor is yours.

Ms Laurie Graham: First of all, I'd like to thank the Housing Help Centre for giving me a few minutes of their time. As a tenant, I only found out about the proposed changes a couple of weeks ago through a rent control update. I'd like to thank them for giving me a few minutes to speak. My name is Laurie and I'm a tenant, not by choice but through necessity. I'm a widow who is now a single parent with three children who works full-time.

After much searching, I recently rented a beautiful three-bedroom home near the Port Colborne harbour. I consider myself a good tenant. I keep my home immaculate and take good care of the property. I am one of the lucky tenants who have a good landlord. But now, after renting the home of my dreams, I am concerned for the first time about security of tenure. You see, I'm in the first year of a one-year lease, and under the new proposed tenant protection legislation my landlord does not have to renew my lease even though I am a model tenant.

You may say, "Why wouldn't your landlord renew your lease?" and I would answer, "Because it is in the landlord's best interest not to." Once I have vacated the unit, my landlord is free to charge whatever rent they feel they can get. Currently I pay $750 per month, plus bills, for an immaculate, three-bedroom, single-family home with five appliances. If you could see this house, you would know it's a good deal. Friends I have taken on tours of the house tell me they would pay much more.

The new tenant protection legislation should be called tenant destruction legislation. I want a safe place for my children to grow up in. I want and I need security of tenure. The proposed changes will not protect me and my family from unfair rent or evictions.

New Directions, the discussion paper on the proposed tenant protection package, states that one significant problem with the current system is that it discourages capital investment both in existing buildings and in new supply. The result is that many tenants are living in buildings that desperately need repair work. Because new buildings are not being built, tenants cannot easily find another apartment. I'm here to tell this committee that tenants are living in substandard housing because that is all they can afford to choose. In my search for rental accommodation, I saw all types of housing, some good, but most bad. Affordability means settling for something less than you would desire for you and your family, but any roof is better than no roof. There are no choices when it comes to low-income affordability. There are long waiting lists for decent, affordable subsidized housing units.

Landlords must be made accountable for maintaining safe rental premises and tenants need to be able to count on legislation to enforce this right. The changes this ministry is considering will not increase the stock of new rental housing. This government is living in Fantasyland if they feel rent regulation has prevented the industry from constructing new rental housing. Currently, builders and developers of new rental housing are exempt from controls on their rent levels for the first five years of the life of the building, but this lack of controls has not produced significant market rental housing. The proposed permanent exemption is no more likely to produce a noticeable increase in the construction of private sector rental housing. The fact is that the economic cost of building is too high to make the new apartments affordable for average tenants. The building industry's flight from the creation of rental housing is due to the high cost of building.

Lyle Hallman is a builder and the largest landlord in Waterloo region. Development and construction costs are lower there than in Metropolitan Toronto. His reaction to the discussion paper was that it will not result in new apartments in that area. He stated in the Kitchener-Waterloo Record, "There won't be new apartment buildings because people won't pay $900 a month in rent, and that's what we need to build a new building, and that's why we have a foundation just sitting in Waterloo."

According to Stats Canada, in 1993 the average income of tenant households was $34,000 as compared to over $60,000 for homeowners, and more than 35% of tenant households in Ontario had annual incomes of $20,000 or less. Since that time, more than 30% of all private sector tenants have had their incomes substantially reduced as a result of last year's 22% cut in payments to recipients of social assistance.

For the provincial government to say it is no longer in the housing business is simply not good enough. By entrusting housing to the marketplace, it is abandoning hundreds of thousands of low-income tenants who can't be adequately housed in what it can offer.

Ontario needs a rental housing strategy that will bring about the creation of enough rental housing to meet the demand, housing that low- and middle-income tenants like myself can afford. In earlier post-war history, the government acted to encourage the construction of affordable rental housing. The Lampert report states:

"It is important to note that during the period when there were significant amounts of private rental investment, government programs and policies had a prominent role in making such investment attractive. Prior to tax reform in 1972, the tax system treated rental investment very favourably."

Without government assistance, builders are historically incapable of building housing that most tenants can afford to rent. The problem predates rental controls by many years, so removal of rental restrictions will not solve it. The for-profit sector has avoided rental housing development and will continue to do so because without substantial transfer of public funds their profits are minimal.

The industry's judgement is that the impediment to building is not the rent regulation system but the cost of constructing rental housing, which is greater than the rental market will bear. The government proposals will not be effective in starting up the development of new rental housing to any measurable extent. These changes, we are being told, will protect tenants, but it's clear that the real winners will be the owners of existing rental housing in a tightening rental market. With new opportunities to convert their housing to condos, they can expect their profits to skyrocket.

The industry likes to present a picture of landlords as not making enough money. However, just last month the Globe and Mail's Report on Business stated, "Ontario's apartment sector has delivered a 10% annual return on investment over the past 10 years, outpacing all other sectors." Landlords of existing rental buildings do quite well financially under the current laws, but the government's proposals will give them an even better return on their investment, as vacancy decontrol will allow affordable rents to escalate and rents for sitting tenants will be allowed to increase more than they would under current law. It's no surprise that the landlord lobby is so anxious to have this legislation go ahead.

The Rental Housing Protection Act currently limits the loss of affordable rental housing through demolitions and conversions to other uses such as condominiums. The ending of the Rental Housing Protection Act will allow landlords, with regard only to their business interests, to convert their existing affordable apartment buildings to condominiums for quick, healthy profits. Obviously, this has nothing to do with increasing the supply of new housing and everything to do with making current owners of rental buildings more money. It will not improve the financial position of potential builders of rental housing, as registered condominiums are already exempt from the legislation.

Individual tenants like myself will pay the price for scrapping the RHPA as more of them lose their rental homes. This measure will reduce the supply of affordable rental housing -- exactly the opposite of the government's stated goal.

The premise behind the extreme measures proposed by this government is that if rent controls are effectively ended, builders will construct substantial amounts of private rental housing. It is wrong. Even the minister himself was quoted in the Toronto Star, August 20, as being under no illusions that proposed legislation will trigger a boom in new rental housing construction. Under the government's policy proposals, developers still will not build, and tenants will pay higher rents than they would otherwise have had to.

Basic rights and protections that renters have relied on for years will be removed. This spells disaster for myself and other tenants in Ontario. I urge the members of this legislative committee to please reject the proposed changes and to advise the government to re-examine its policy direction and turn its attention to providing affordable housing and true protection for tenants. Families like mine are counting on you.

Ms Jackie Gordon: My name is Jackie Gordon and I'm with the Housing Help Centre for Hamilton-Wentworth. I was going to talk about the impact on tenants, the people we see, and there are a lot of people we see. Since we opened our doors six years ago we've had contacts with over 60,000 households looking for affordable housing. In the last 12 months, we've had over 15,000 contacts with households in Hamilton-Wentworth looking for affordable housing. But I think Laurie did a really good job of explaining what it's like for a tenant to be out there looking for affordable housing and how important it is to find decent housing to live in, so what I'd like to do is take a few minutes to talk about some of the care home changes being proposed.

In Hamilton and some other municipalities in our region, we have something called second-level lodging homes. Those are licensed care homes. We have over 80 second-level lodging homes that are home to 1,600 tenants. These tenants are for the most part either frail elderly or people with psychiatric illnesses. There's a smaller number of tenants who have developmental or physical disabilities. More than half of the second-level lodging home tenants in our region live on low incomes and have a discretionary income of $112 a month, which is their personal needs allowance.

When the Residents' Rights Act was enacted in 1994, it brought regulation under the Landlord and Tenant Act, the Rent Control Act and the Rental Housing Protection Act to care homes. The Housing Help Centre supported the legislation at that time and we continue to support tenants' protection and security of tenure for care home tenants.

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Our one concern with the legislation when it was brought in was that we would have liked to have seen meals controlled under rent control for care home tenants, as they were at the time for tenants in rooming- and boarding-houses. We would still like to see the meal portion of care controlled by rent control.

At the time the Residents' Rights Act was brought in, the issue of privacy and access was important to both tenants and landlords in the second-level lodging home system. Tenants were glad to have their right to privacy enshrined and to have a mechanism for complaint if their privacy was violated. Landlords worried that they wouldn't be able to provide the necessary care services or maintain a safe home if they had to follow regulations about access to a tenant's room.

What we've found since the implementation is that it's made no real difference for either second-level lodging home tenants or landlords. It appears that tenants always grant permission for a landlord to enter their room when they're asked. What they wanted was not the right to refuse and keep the landlord out; it was simply the right to be asked, to be treated with dignity and have their right to their home respected. We have not had one complaint at the Housing Help Centre since the legislation was passed from a tenant about a violation of their privacy in the past year. Prior to the legislation being passed, we had numerous complaints from tenants about their privacy being violated.

Second-level lodging home landlords are continuing to make objections to the access requirements. However, we are only hearing hypothetical objections. Not one landlord has been able to tell us how the privacy and access requirements hindered their ability to provide care or to maintain a safe home.

Based on our experience, it does not appear to us that the legislation needs to be altered, so we would oppose the changes being proposed around bed checks and other alterations to the privacy and access provisions.

One of the other things we're concerned about is the talk about transferring and how tenants will be transferred from one care home to another. We work with second-level lodging home tenants who are looking to move from one home to another, for a variety of reasons, or to move from a home into independent accommodation. These people are perfectly capable of making their housing choices and of conducting a housing search with varying degrees of assistance. They don't need to be transferred. It's not a decision a landlord should be making; it's a decision a tenant should be making in conjunction with their family doctor or other care service providers and family members where that's appropriate. It's not an assessment that landlords should be making in isolation.

As it appears from the New Directions document that these transfers will be based on a changed need for care services, we would urge that transfers between care facilities be dealt with not in residential tenancy legislation or through the Landlord and Tenant Act but through a provincial regulation of care services. The more the government tries to fix care service problems through residential tenancy legislation, the more difficult it becomes. You're trying to provide legislation that will cover frail elderly people in homes that are almost nursing homes, as well as young, very active people with chronic mental illnesses. The needs and the care services of those two groups are so different. You really need to be looking at care services in that regard, not trying to do a quick fix through residential tenancy legislation.

Regarding fast-track evictions, we agree that when a tenancy in a second-level lodging home is not working out, it's in the best interests of the landlord, the tenant who is causing a problem and the other tenants that the tenancy be terminated quickly. However, we think it's essential that tenants be given notice of the problems they're causing, of the landlord's intention to evict, and be given an opportunity to remedy those problems.

In addition, these tenants need help in finding a new home. They need time to contact a worker who can help them locate a new home and they need time for a housing search. Remember, this will be a more lengthy housing search because they're looking for something that will meet their care needs as well as their residential tenancy needs. If we're looking at landlords evicting people on a weekend, then we're looking at people being homeless on the street through a fast-track eviction process.

We would recommend that there be a period of time where the tenant either be allowed to stay in their home while it's being resolved and they look for alternative accommodation, or that the landlord be responsible for finding appropriate alternative accommodation for the tenant while the case is proceeding through the court or the tribunal. That way, if the court finds in the tenant's favour, the tenant can go back home. If a writ of possession is issued to the landlord, the tenant has already been removed from the home and isn't causing any problems at the moment.

It's not clearly stated in the New Directions document about tenants' rights to organize. We assume, because it's not there, that tenants will still have this right, and we think it needs to be particularly entrenched for care home tenants. Because of their vulnerability and because of the loss of the Advocacy Commission and corresponding legislation, these tenants really need an opportunity for collective action. They need to be able to access people who can help them and they need to be free from the fear that they will lose their home and care services if they speak up for themselves.

We also would like to see the Rental Housing Protection Act remain in effect. I think other people will probably talk about the impact of the RHPA on the supply of affordable housing across Ontario. What we would like to tell you is that at the time the Residents' Rights Act was being discussed when it was at committee, before it was enacted, many second-level lodging home landlords in Hamilton-Wentworth said: "No problem. We'll just convert from being a second-level lodging home to being some other kind of facility. That way, we won't have to be landlords and we won't be subject to these legislative requirements." It was only the Rental Housing Protection Act that prevented them from converting those units, from turning people's homes into short-stay facilities. In that case, the Rental Housing Protection Act preserved vital affordable housing in our community, and we would strongly urge that it remain in effect.

The Chair: Just a reminder that you're down to your last minute.

Ms Gordon: I was just going to say at that point, rather than talk about some of the other issues, I'll just stop.

The Chair: There's no effective time left for questioning. Do you have a closing statement you wanted to make?

Ms Gordon: I think that was it: Keep the RHPA.

The Chair: Thank you very much. We do appreciate your input here today.

KLEIN DEVELOPMENTS LTD

The Chair: The next presenter is Kurt Klein, from Klein Developments Ltd. Good morning, and welcome to our committee. You have 20 minutes. Should you allow any time for questions, they would begin with Mr Marchese. The floor is yours.

Mr Kurt Klein: This is to express my thoughts and concerns regarding the potential impact of new tenant protection legislation as presented in your discussion brief, New Directions.

By way of introduction, I'm addressing this committee as a representative of our family operation, Klein Developments Ltd. We have been in the residential development business for over 35 years and currently own and operate five low-rise apartment buildings in the city of Niagara Falls.

At present, Niagara Falls is experiencing a vacancy crisis, with October 1995 rates as reported by the CMHC at 5%, or more than twice the provincial average. If you have my presentation in front of you, you might be able to refer to figure 1, which is a chart of the CMHC stats from October 1995 that indicate what the vacancies are in the Niagara Peninsula. As you can see, Niagara Falls is at 5% and some of the other municipalities in the area are even higher than that, for an average for the St Catharines-Niagara market area of 5.2%.

This situation has existed for the last four years, and despite attempts by landlords like myself to attract new tenants and retain existing tenants with rent freezes, reductions and move-in allowances, rates still remain unacceptable.

Figure 2, which I've also attached to my presentation, will also give you a comparison of our marketplace versus the Toronto marketplace, to show you what's happened with our vacancy rates since 1989. We've moved from a low of 1.2% in 1989 to a high of 7.4% in 1993, and we're currently at 5%.

Approximately 60% of our company's units have rents below the legal maximum allowable -- this in a market where the average monthly rent for a one-bedroom and a two-bedroom apartment as reported by the CMHC are $466 and $584 respectively.

I've heard a great deal said about some of the proposed changes contained in the discussion paper for new tenant protection legislation, and once again much of the debate has focused on Toronto, a market very different from our own.

In the last two weeks, newspaper articles have printed quotes that we in Niagara have difficulty comprehending, including: "Proposed changes will mean landlords harassing tenants into moving so they can boost their income," and "Scrapping the current rent control system will force many tenants on the street because they won't be able to afford massive rent hikes."

On the first point, let me make it clear: I'm not in the harassment business. I never have been and I never will be. As a landlord, I'm more concerned about keeping my existing tenants happy than trying to re-rent units that become vacant. Tenants are my most prized possession and losing just one is a costly proposition.

On the second point, some critics would lead you to believe that scrapping the rent control system will lead to massive rent hikes and indicate that the sky is the limit when it comes to rent hikes. I can tell you that the sky is not the limit. Every marketplace has its limitations, particularly Niagara Falls. In our community, which has been devastated by the recession, many landlords continue to charge rents well below legal maximums. Some have rents frozen for three to four years, myself included. I understand the realities of the marketplace. The scare tactics currently being used by some critics of legislative reform do not reflect my reality.

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Regarding the proposed tenant protection legislation contained in the New Directions discussion brief, I have several comments, concerns and thoughts. On proposed rent increases, the proposed legislation indicates that when a unit is vacated, the landlord would be permitted to negotiate the incoming tenant's rent without regulatory restriction and that the rent guideline will once again apply when the unit is re-rented. The problem with this proposed scheme is that it penalizes landlords like myself currently experiencing a downturn in the market.

As I've already indicated, our rental market has been depressed for over four years. Landlords have been operating for the most part at rent levels below the legal maximum. Under the current system, I would be permitted to increase rentbacks towards the legal maximum when the market improved. Under the proposed system, my entitlement to adjust the rent back towards the legal maximum would be lost.

This raises some serious questions regarding future rental strategies for our company. Can I afford to offer frozen or discounted rent in order to fill an immediate vacancy? If I do, I risk losing my rental maximum. Should I take the full guideline increase, even in a weak market? I believe that if controls are to be left in place, as is being proposed, then legal maximum rents should be allowed to increase based on the yearly guideline amount.

On the issue of maintenance and property standards, the discussion paper states that the current system does not do enough to ensure that buildings are kept in good repair. It doesn't create any incentive for landlords to put money in maintenance. As a landlord living in Niagara Falls, I take issue with this statement. Our company takes its maintenance responsibilities very seriously. We have always done our utmost to provide tenants with clean, comfortable, safe and affordable rental accommodations, whatever the market conditions. We take great pride in our buildings. Our incentives to put money into maintenance include pride in ownership, tenant retention and attracting new tenants. In a highly competitive marketplace, we understand that you can't afford to let maintenance slip. If you do, you stand to lose your existing tenants and damage your reputation. In our community, word of mouth and reputation can play a critical role in your ability to rent a unit.

There are also two sides of the maintenance coin that have to be addressed. While tenants expect that for their rent they will have well-maintained and safe homes, landlords also have the right to expect that tenants will maintain their rental premises during their tenancy. This is not always the case. A great deal of money is being spent by landlords, myself included, refurbishing and repairing units that have been damaged as a result of tenant negligence or malicious acts of vandalism. As there will always be some landlords who do not keep their buildings properly maintained, there will also be some tenants who do not maintain their units in a good state of repair.

If there is to be balance in the system, some protection beyond pursuing the matter in Small Claims Court must be provided to landlords. I could paper my walls with the judgements I've received from Small Claims Court. Collecting on those judgements is another story. I currently have over $10,000 in uncollected judgements that I may never collect on.

I'm also concerned about the regressive nature of some of the other proposed changes addressed in this discussion paper. The violation of a property standard will be made an offence, rather than the violation of a work order, which currently exists. Landlords under proposed reforms may also be subject to fines of up to $50,000 or more without receiving any notice or being given any opportunity to correct a problem. What is particularly disturbing about these proposed pieces of the legislation is that they do not promote communication and goodwill between landlords, tenants and the governments involved. Rather, they provide a disincentive for improved communications. The message that is being sent to tenants is not to try and work things out with your landlord through open and honest dialogue. Instead, it suggests that if you have a disagreement with your landlord or want something done, call the city property standards officer for a quick resolution of your problem.

I understand the importance of maintaining open communication channels with my tenants and the municipal government and have been pleased with the sense of fairness that exists under the current system. I'm therefore very disappointed in the adversarial tone of this particular piece of legislation. I believe strongly that an evenhanded approach must be maintained when addressing tenant requests/complaints regarding maintenance or property standards. As has already been stated in the message from the minister contained in this discussion brief, it is your job as the government to strike a balance and bring in a system that works for tenants, landlords and Ontario taxpayers.

On the issue of terminating a tenancy under the Landlord and Tenant Act, the process of terminating a tenancy is both costly and time consuming, and requires further amendment. It should be noted that landlords are more interested in filling vacancies than creating vacancies. We do not take pleasure in terminating a tenancy; rather we see it as a last resort if the problem cannot be resolved through normal discussions. A less time-consuming judicial process is key to minimizing revenue losses and in turn encouraging additional rental housing development.

As a start, current notice periods for termination should be reduced, including reducing the time permitted for tenant payment of arrears from 14 days to seven days and reducing the time frame for termination of a tenancy for cause from 20 days to 10 days. It is clear that provincial statutes, the Landlord and Tenant Act included, play an important role in encouraging investment. Greater confidence in the legal system and its ability to deal with a landlord and tenant issue in a quick and fair manner would act as a further incentive for development.

The pet laws under the Landlord and Tenant Act: While the issue of pet laws has not been addressed at all in this discussion paper, I have to take this opportunity to make some mention of pet laws and the implications they have on landlords in Ontario, particularly in my market. The provision in the act that prevents the termination of a tenancy because of a pet occupying the rental premises, once referred to as the Fluffy law, has opened the floodgates on pets in apartments, which has added to maintenance and legal costs. In each of the last five years, our company has had to either have a pet legally removed from a unit or has had to repair or refurbish a unit damaged by pets, including dogs, cats and ferrets.

Again, I believe there is a clear imbalance regarding landlord rights when it comes to pets occupying rental premises. Tenants and their pets have been given rights that in many cases impede or infringe on the right of the landlord to re-rent an apartment unit. Re-rental of a unit becomes more difficult and time consuming when a pet is occupying a unit or has occupied a unit. Some excellent prospects have walked away from my buildings when they have discovered that the unit was occupied by a pet. In some cases I've been unable to even show the prospect a pet-occupied unit because of the condition of that unit.

I would suggest that amendments be made to protect the landlord's investments and ensure that tenants are held accountable by law for any negligence as it relates to their pets both during their tenancy and upon termination of their tenancy.

On the issue of increasing the rental stock, the government has made it clear that it wants to be out of the business of bricks and mortar and that future growth of rental stock should come from the private sector. I agree with this position. However, to make this work, the government must take on the job of creating an environment that will encourage private industry to flourish again in the rental housing sector.

Restoring balance in the landlord and tenant relationship and phasing out rent controls are only two pieces of the puzzle. Developers and lenders need other positive signals to get back into the business of building rental units. Issues that must also be addressed include development charges. They are a burden that affect the entire industry. In Niagara Falls regional and municipal development charges for a new apartment unit total $1,869 per unit, which must be paid before a shovel is even put in the ground.

Property taxes and provincial capital taxes: There continues to be a great inequity in property taxes charged on multi-residential units when compared to single-family residences. Landlords in Niagara are currently paying 20% to 25% of their gross rental income on property taxes alone. Multiresidential units are paying a higher proportion of their market value in taxes, even though their burden on the municipality is less. Provincial capital taxes, which currently tax property owners like myself annually at a rate of 0.3% on the assets of my company, should be eliminated.

The GST: While commercial landlords may collect GST on rents and apply for GST input credits, residential landlords must pay GST on all goods and services without collecting any GST from tenants.

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As you can see, there are a number of hurdles that must be overcome to make it economically viable for the private sector to get involved in providing new rental housing. These issues are not insurmountable, but they do require the political will and courage to institute changes.

In conclusion, I appeal to this committee to consider landlords in smaller communities when developing new legislation. Many landlords like myself have been frustrated with a system that seems to have become increasingly complex, bureaucratic and tenant-oriented. Many of us live in communities like Niagara Falls which have been hit hard by the recession and are still in a recovery mode. Our situation and experiences do not mirror those of the big city. Therefore, the big city experience should not dictate legislative reform at the expense of communities like Niagara Falls.

I thank you for the opportunity to speak before you today and I welcome any questions you may have.

The Chair: We just have a very quick one minute per caucus.

Mr Marchese: Mr Klein, thanks very much. It's really very complicated to get into a lot of questions that I would have of you, but the one that quickly comes to mind is the whole issue of vacancy rates. We were in Peterborough yesterday and Mr Stewart says when vacancy rates are high, the rental rates go down, and there's evidence for that. We haven't seen evidence of that. In fact, the evidence that was shown yesterday was shown not by the developer or landlord -- in fact one landlord said the rates were going down, but three other agencies working in the field with statistical information showed the rates did not go down in a high vacancy situation as in Peterborough. Do you have a different experience of this?

Mr Klein: I certainly do have a different experience in this. I've been reducing rents for the last three to four years. Some of the rents are frozen, some of them I'm offering incentives on, which is a form of rent reduction, some units I'm offering move-in allowances. I have in the past offered one month free rent as an incentive to move into my units.

Mr Marchese: Do you think that is due --

The Chair: Thank you, Mr Marchese.

Mr Maves: Thank you very much, Mr Klein, for your presentation. I note in your graph in the back that 1991 to 1994 there's a huge increase in private vacancy rates. I'm assuming that's to the construction of socialized housing?

Mr Klein: We experienced quite a problem down in Niagara Falls and I had many presentations down there during the times when we were seeing all the social housing units coming on to the market. Between the period of 1991 and 1994, we saw approximately -- it was over 500 publicly initiated rental units come on to the market. It was very disturbing to us, because we saw our vacancy rates go up. We tracked some of the tenants who were moving out of our buildings. They were going into the subsidized buildings. I tracked 18 tenants over the period of a year and a half who had moved out of my building and gone into social housing units because they could pay comparable or less rent for a new building with more amenities.

Mr Sergio: Thank you very much for your presentation. The first presenter this morning told us that the marketplace has been keeping rents down. Can I have your comment on that, please?

Mr Klein: It certainly has, and that's what we're experiencing in Niagara Falls right now. I've indicated that 60% of our rents are below legal maximums. In many cases, we're not even taking guideline increases. Our objective is not only to retain our tenants but to attract new tenants.

Mr Sergio: So rent control is not the problem?

Mr Klein: The marketplace is controlling rents down there right now.

Mr Sergio: So we shouldn't tinker with rent control now?

Mr Klein: Pardon me?

The Chair: Thank you, Mr Klein. We appreciate your attending this morning and giving us your input.

WOMAN ABUSE WORKING GROUP

The Chair: The next presenter is Renate Manthei, representing the Woman Abuse Working Group. Good morning and welcome to our committee. You have 20 minutes, and the floor is yours.

Ms Renate Manthei: I don't have a watch on me. I don't think I'll be that long anyway.

Good morning, gentlemen and ladies. The Woman Abuse Working Group in Hamilton is a networking coordinating group of approximately 25 agencies, and you will see them listed on the letterhead that's part of the presentation. The members include shelters, second-stage housing, the police, crown attorney, a whole variety of services that are focused on coordinating services to women who have been abused.

The group is also certainly concerned with violence against women, and its major focus is both coordination and the prevention of abuse against women. Many of the members are from shelters, and housing is a very crucial issue for women who have left abusive relationships.

In terms of the discussion paper, there were a number of issues that we had some grave concerns around.

The Rent Control Act is a very significant piece of legislation in that it protects tenants and limits the power of landlords. It's designed to protect all tenants, but its most important focus, I think, is in protecting vulnerable people who are renters. By "vulnerable," I refer to those tenants who are particularly at risk in maintaining a rental home due to low income and other life situations. Included here are the working poor, the unemployed, individuals on social assistance or on disability, or people on limited pensions. Also included are many single mothers with children, who are among the lower-income levels in our communities, homeless individuals, individuals who have left institutions and are readjusting to community life, persons with disabilities, many seniors and abused women and their children. There are probably other groups as well that I haven't mentioned, but I wanted to give you a clear picture of who the vulnerable tenants may be in our communities. The Rent Control Act is required in order that safe, good-quality and affordable housing is maintained.

One of the assumptions made in the discussion paper is that the landlord and tenant relationship is an equal relationship. I would like to posit that it is not. There is a distinct power imbalance between a landlord and a tenant, and this basic imbalance in power means that a tenant is not in a position to negotiate his or her rent on an equal basis in the absence of regulatory restrictions. It states in the discussion paper that the tenant has the power to negotiate above-guideline increases. I feel that is not true. It's the power imbalance that makes the Rent Control Act necessary to create a more equal footing for landlords and tenants.

Eliminating the rent registry, as outlined in the discussion paper, is another huge area of concern. It's the rent registry right now that enables potential tenants or tenants to get a sense of the history of the unit they are looking at. Without that information, certainly any bargaining rights they have, any sense of whether there's a fair rent involved, would be lost, and the power of tenants to make applications regarding illegal rent increases will be severely hampered.

The most serious blow to tenant protection outlined in the discussion paper is the proposal to lift rent controls when an apartment is vacated. This proposal makes a mockery of any other protection a tenant may be given. We know that about 70% of Ontario moves once every five years. This was written up in an article recently in the Spectator. It is those individuals and families who find themselves in a vulnerable position economically or socially who move far more frequently. In fact, family crisis may force them to move. Certainly in the case of abused women, this is what occurs quite often. A woman who is seeking safety may be forced to move out of her home and find a rental unit for herself and her children. With the elimination of the rent control that is being suggested, many people like her are going to be unable to find suitable rental accommodation because the price may have soared out of reach.

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We are creating a climate where affordable accommodation may no longer exist for people who have to move. Tenants will live in greater fear of eviction and will be reluctant to exercise even those rights left to them for fear of landlord harassment. Requests for repairs and maintenance necessary for safe accommodation may not be made by tenants who fear eviction. Tenants who are afraid and feel powerless cannot negotiate, and if their rights are not backed by the government, they will not speak out and seek redress. Is this the kind of Ontario that we want to live in? I would say no, it is not.

The New Directions discussion paper does outline some new measures for dealing with harassment, but I would like to point out that dealing with harassment issues has been difficult for tenants and that some of those measures don't make it easier. Some of the initiatives could be useful, but they cannot be traded off for the rent control protection that is being proposed. The removal of rent control in many cases could lead to greater harassment by landlords who have their eyes on setting a higher rent if only they can dislodge their sitting tenant. Justified fear of eviction may prevent tenants from exercising these new rights or dealing with harassment and landlord interference.

Rental vacancies, even in large cities such as Hamilton, are not as low as they have been at certain times in the past, and I think we've heard differences of opinion as to that. There are certainly indications that landlords are at times giving some incentives, maybe not lowering the rent but giving some incentives to tenants in order to have them move in. We've heard that from our last speaker. Many apartment buildings in Hamilton are sporting vacancy signs, and we've also heard of certain incentives that are being offered here in Hamilton. However, an inexpensive way to keep vacancy rates from dropping too low is to ensure that rental units are not converted to other uses such as condominiums. If rental vacancy rates are a consideration either now or in the future, converting rental units to other uses can remove needed affordable apartments from the rental scene, and that has to be dealt with.

In the building industry, private rental starts have been down. This is from the chart on page 17 of New Directions. I believe there's a good reason for that. The private industry is not able to make the kind of profits they want from rental units because social housing is what's really needed in our communities. Social housing starts by non-profit agencies have been up over the last decade. The reason is that there's a demand for social housing, that people cannot afford the high rents that the private landlords want to charge at times. What we need is to ensure that low-cost, affordable rental housing is maintained.

In order to do this, the role of government should be to ensure the principle of housing as a social right. The government's role should not be to subsidize developers and enable them to squeeze high profits out of a hurting, vulnerable tenant population. What is needed in Ontario are more commonsense, caring individuals who are prepared to provide rental housing perhaps on a small scale and to maintain those buildings. Maintaining a rental unit -- there should not be an incentive for maintaining a building. That should be part and parcel of being a landlord, whether small or large. I think we need that kind of mentality here in Ontario, that maintenance of units, so people can live in comfortable, safe, good-quality housing as a right.

The high cost of repairs to current rental units is due in many instances, I think, to the aging of high-rise buildings built in the 1960s and 1970s. Even at that rate, I think the discussion paper said that 60% of buildings have been built since 1970, which doesn't make them that old. That's 20 years. In the life of a house or a building, that's certainly not old. I think we expect buildings to be around for 60 to 100 years; I don't know. But certainly maintaining a building is part and parcel of erecting it, and I would think some of the responsibility has to be put on the developers who built the high-rises in the 1970s -- mind you, with a fair bit of government support: federal tax breaks and government-guaranteed loans. Now they are looking at repairing them and maintaining them. I think that is the burden that landlords have to bear; that's a logic of building something. It has to be maintained. Building something that's 20 storeys high or 30 storeys high is going to cost a lot more than building something that's lower to the ground.

Twenty-five years of hindsight have shown us that these units are not economically sustainable because of the cost of repairs, nor are they socially sustainable. I think we have seen that many people, people with families especially but others as well, prefer to live closer to the ground, and so the popularity of town houses and smaller apartment buildings has increased in recent years. Smaller buildings are less costly to maintain. I believe that's the kind of building we should be promoting here in Ontario, the small, more sustainable types of units. Developers have to recognize that the days of building unsustainable high-rise towers, while profits in the past may have been very good, are over and that we need more people to come on board into the building field who have a social conscience and are aware of the sustainable needs of units that they erect.

Another aspect from the discussion paper referred to dispute resolution. I believe some headway needs to be made in disputes of landlord and tenant issues, because decisions are very slow in coming from what I understand. Certainly improvements in the present system are welcome. What nature that system should take, I'm not as informed of that area. I would certainly suggest that the government put their heads together with the tenants who are now embroiled in some of the disputes, and landlords as well, so that a good resolution can come from that. I believe the courts should be maintained as an option for those people who wish to use them but that an alternative system may also be in place so that there may be some choice for people as to where they would like to resolve their dispute, and that in the case of appeal, the option of courts also be retained.

I think it's really crucial that the committee look at the discussion paper, especially the aspect that relates to rent control, and that vacated apartments need to be retained in the rent control legislation. Without that we will change much of what has been good about Ontario. We will be seeing people who will be experiencing many more crises in housing and we'll be looking at many more homeless people and homeless families and families in crisis. The government needs to take that responsibility to ensure that people in Ontario are housed comfortably, safely and affordably.

The Chair: We've got about two minutes per caucus for questions, beginning with the government.

Mr Hardeman: Thank you for your presentation. We've heard considerable discussion during our time on the road with the hearings on the issue of harassment. Presently, with any harassment to tenants, the tenant must proceed through the courts in order to receive any action. The discussion paper speaks that we want to make that simpler and easier for tenants to follow through. Could you give us any opinion on whether you think the present system is sufficient to deal with the harassment that presently exists in the landlord and tenant relationship?

Ms Manthei: I think a system of choice might be useful, if another system was set out that people could apply themselves to so they have the choice of whether they want to pursue it through the courts or to use another system. A lot of people don't even pursue issues because it's such a long-winded process through the courts and can be expensive and traumatic.

Certainly another option would be useful. I think we need to leave the door open for people to have options as to which avenue they wish to pursue. Certainly having an option, one could presume that some harassment cases will be dealt with in an alternative dispute resolution and some of the time spent in courts may be minimized at that point, that there will be less of them going through the courts, and perhaps speed things up that way. I'm not thoroughly familiar with the harassment process, but I would think some options would be helpful.

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Mr Kennedy: You've made a really clear analysis of the overall rental system. I wonder if I could bring you back to the situation for vulnerable women and their families. The government makes the argument that we don't need rental protection when we're looking for new apartments and it seems that would ignore the life circumstances of many people who can't plan when they need a new apartment, who can't choose to stay in an apartment that they would be sentenced to under this when their situation can be threatening to them and to their family.

I'm wondering how severely you think this affects the mobility of women in that kind of circumstance of families, if this rent vacancy decontrol, the doublespeak the government is using for lifting those protections, takes place.

Ms Manthei: I think it will affect them very much. I think it may force some women to stay in an abusive situation and not consider moving out to a safer place. I think a certain mobility is desirable in our communities, for people to move when they're in a crisis, when the situation warrants. Absolutely I think people will be facing higher rents and will not be able to move out. When you have an abuse situation, you usually have sort of a family income that now has to be split in two, making it more expensive for each party to maintain a home, and to be facing a market where the rents are very high would discourage women from seeking that kind of safety.

Mr Kennedy: Isn't it true also that sometimes those situations are very adversarial, that there's even a break in time when family income or assets are divided and that people are on social assistance? Have you noticed a marked difficulty for families that have sought safety surviving on social assistance in the last while in terms of the 22% reduction?

Ms Manthei: That issue was brought up by members of the Woman Abuse Working Group at some of our meetings. Women in the shelters have noticed that and the executive directors have mentioned that they have found that there's more of a fear in women of leaving their situation now with the social assistance being reduced, and the rent is the major expense that a person has when going and moving out on their own.

Mr Marchese: I want to thank you for the work that you do and so many do in the field. Not all women or men are born with privilege and/or power or acquire it and so some are left very vulnerable. That's why governments are there, in my view, to protect them.

You talked about the relationship of the landlord and the tenant being unequal and I subscribe to that. The relationship is not an equal one. Landlords say we insult tenants when we say that. But I think in most of the views of those who have presented, the relationship is very unequal and that's why we have protections for tenants to limit the power of the landlord. Now they say that's unfair and so they're very happy that they've introduced legislation or a proposal that restores balance. Do you believe this piece of legislation restores balance for tenants or landlords?

Ms Manthei: No. Certainly some elements of it do the opposite. I think they put vulnerable people at greater risk. Especially the part that removes the regulation from a vacated apartment will put people at greater risk. There are some parts of the discussion paper where perhaps there is a restoring of that through some of the smaller parts aimed at that occasionally, but this piece about the rent control absolutely makes a mockery of any other attempt to redress some balance.

The Chair: Thank you very much. We do appreciate your input this morning.

MEGNA PROPERTY MANAGEMENT

The Chair: Our next presenter is Diane Linton. Good morning, Ms Linton. We appreciate your being here this morning. You have 20 minutes.

Ms Diane Linton: I'm here this morning to introduce our speaker, Bruno Megna, who is representing Megna Property Management.

Mr Bruno Megna: Mr Chairman, government representatives, delegates and other officials, thank you for the opportunity to speak to this committee today. My name is Bruno Megna and I am one of the owners and the manager of approximately 2,000 rental units in the Niagara Peninsula. I, with my brother Roy, have been in business since 1965 and have seen many changes in the rental market for Ontario during this time.

Due to the limited time available, I will only be speaking about a few issues of concern regarding the proposed rent control legislation and the changes to the Landlord and Tenant Act.

The most recent change proposed by this government has been disappointing. Since 1972, the rental housing market in Ontario has been under attack by legislation in various forms that has actually hurt the very people it was meant to accommodate. The most recent legislation fails in the following areas:

(1) The proposed rent control legislation allowing rents to adjust to market values only after the tenant moves will continue to discriminate against landlords unnecessarily and will continue to discriminate against those tenants least able to afford housing.

(2) The proposed tenant protection act institutes an environment where maintenance problems in common or private areas, unknown and/or unreported, are offences. Officers are empowered to fine without the landlord's opportunity to repair.

(3) The proposed dispute resolution system does not strictly address any concerns with the current Landlord and Tenant Act. Presently there is an environment of abuse by those who manipulate the law in ways it was never intended to, but the proposed legislation does not strictly address these concerns.

(4) The proposed Rent Control Act limits increases to 4% above the guideline effectively reducing the capital expenditure that landlords would be willing to invest in the housing stock. Even in situations where there is an agreement between landlords and tenants for particular capital expenditures, the decreased return will limit the capital investment.

I will elaborate on the points just mentioned.

Those tenants in the best financial position are always selected for those units that have lower rents due to the current rent control legislation. This leaves those tenants whom the legislation was meant to benefit out in the cold.

In the past, available units with lower rents would generate a large number of applicants. Due to the wide selection of possible tenants and the landlord's interest in minimizing financial risk, the persons most able to afford the unit would be accepted, leaving anyone with less financial means unable to take advantage of the very benefit the legislation was instituted for. The proposed legislation actually perpetuates this problem.

Since we do know that most of the units below market value are currently occupied by those tenants who are most able to afford these units, the units that remain are units that have maximum rents greater than the market value. Therefore, the units that the proposed legislation will affect are only those units that the current legislation does not affect.

Furthermore, the units that the new legislation proposes to affect will not be affected due to the fact that they are still held at abnormally low rents. Anyone living in a unit held below market value will not be making that unit available to the open market quickly; however, abuses of subletting and illegal tenancy may rise quickly.

Elimination of the rent registry and the elimination of maximum legal rents will effectively cap the units held below the market value to their new rental amount. This is unacceptable. This kind of legislation is more reminiscent of government from the past than the current commonsense policies. What did Mike Harris mean when he said, "Marketplace rent control is the best rent control mechanism there is." Is this the same Progressive Conservative Party?

In addition to rent control effectively reserving the best units for those most able to afford them, economists have agreed for years that rent controls inevitably lead to a decline in the quality and quantity of rental housing. We have seen this happen in Ontario. Even in areas of vacancy rates less than 1% like Toronto, new housing starts were less than 500 units. Surely this is not what this government proposes to continue.

I advocate a system that does not further advantage those who are already advantaged. I advocate a system that does not unfairly tax landlords. I advocate an effective targeted shelter allowance program of the same type advocated by the PC Party in opposition and by the Fair Rental Policy Organization of Ontario.

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I do not oppose improvements to the present maintenance standards in the tenant protection act; some of those proposals, however, are not improvements.

I am in favour of all changes that will empower standards officers to crack down on the few landlords that give a bad reputation to all the landlords. However, I have concerns about a system that seems to erode an innocent until proven guilty approach. The proposals in this legislation make it an automatic offence for any maintenance violations as opposed to notification of the offence through a work order. In addition, maintenance standards violations in private areas will automatically be offences.

Abuses of the current system must be eliminated. If the new proposals can reduce these abuses and help speed up the process of dispute resolution, I am in favour.

The Fair Rental Policy Organization of Ontario goes into far greater detail in their report to this committee than time will allow me, therefore I will defer to this report.

Capital expenditures will be seriously limited if increases are held to 4% above the guideline. Situations where tenants and landlords agree to invest are thwarted by this legislation. As mentioned earlier, economists have agreed for years that rent controls inevitably lead to a decline in the quality and the quantity of rental housing. We have seen happen in Ontario. In the past five years under the NDP rule independent studies have confirmed that aging apartment buildings cannot be adequately preserved with the present controls or forms of them. The housing stock in Ontario is deteriorating and the people who must make the decisions to invest in the capital expenditures cannot justify the cost based on the current limits on increases.

Let the landlords of Ontario spend the desired money in capital expenditures. Let the landlords of Ontario properly maintain the present housing stock, build new units and create jobs as a result of it.

I urge this committee to make the appropriate changes so that the trend of deterioration in housing can be stopped now.

I concur with the Fair Rental Policy Organization of Ontario and with their report to this committee. I would like to establish my full support of all the recommendations made in the report previously submitted to you by the Fair Rental Policy Organization of Ontario.

I anticipate that this government, Mike Harris and Al Leach will make the appropriate changes to this proposed legislation to ensure that the negative effects discussed and apparent will be averted to the benefit of Ontarians.

Thank you for giving me the opportunity to speak to this committee this morning.

Mr Sergio: Mr Megna, thank you for your presentation. On the first day of the hearings in Toronto we heard from Mr Goldlist who I'm sure is well-known to you in the real estate and management field. He said this legislation doesn't do anything for either one, either the tenants or you, in the business of providing affordable accommodation. It doesn't go far enough. He says that rent control is not the problem. It's a number of other things and he mentioned a number of things, such as eliminating GST and provincial taxes, lowering the taxes on the assessment on rental accommodations, of streamlining the municipal process and stuff like that, plus a subsidy. Do you think the government could afford that?

Mr Megna: In a nutshell, I'd like to believe that the government can afford it, but I'm not here to say whether they can afford it or not. What I can say is this, that this proposed legislation certainly is going to complicate life a lot worse for landlords with regard to maintenance. We believe that yes, there are a few landlords who are not doing their job and they should be punished for that, but with this legislation basically a landlord doesn't even have an opportunity to make the repairs requested.

Mr Sergio: Do you think the government should get out of the affordable housing business at all and abdicate its responsibilities strictly to the free market?

Mr Megna: To the contrary. I strongly believe that the government cannot actually supply housing more affordable than the private sector. If we look at what it has been costing on a per-unit basis to the taxpayers of Ontario for the non-profit housing versus what actually the private sector is offering, it's a lot cheaper with the private sector.

Also, I must say, though, that especially in the last three or four years at least in certain areas, such as Hamilton, Brantford, St Catharines and Niagara Falls, we have seen -- in my own company we have reduced our rent in most instances anywhere between at least about 50% or 60% of the units. I would say this, though, should this legislation go through, no, we cannot afford to reduce the rent, but what we will have to do is actually have higher vacancies in lieu of reducing the rent because once the rent is reduced, it takes a long time to bring it up again.

Mr Marchese: Mr Megna, I just want to make a few comments and then I will ask you a question. First, on page 3, you make a statement that links rent control to construction. You make it appear as if there is evidence for this. There is no evidence for that. In fact the issue is not rent control, although landlords don't like it and they want to get rid of it. The issue is whether or not the developer can afford to build at the rents that people could afford. The problem is people can't afford the types of rents that it would require to be able to build at the cost that one has to build at. But it's not rent control that causes that, it's a whole list of other things that landlords and developers want in order to build.

I wanted to put that on the record because they make this link all the time and you landlords, real estate people and developers make this link all the time. There's no evidence for that. I'm going to ask you another question in a second.

Secondly, you make a point about shelter allowance. The Tories love this because they say: "Just give them a shelter allowance and let the landlord develop. Let them build. They do it best." The problem with shelter allowance is it's probably going to be further reduced and it will never be sufficient to give enough support to people to be properly housed. Secondly, shelter allowances do not build housing and they don't build housing for those who have needs. People with disabilities, for example, can barely find accommodation for their needs. The private sector doesn't worry about those people, but those people have to worry about where to go.

You raise a point that I want to ask you a question on. You said, "Since we do know that most of the units below market value are currently occupied by those tenants who are most able to afford these units, the units that remain are units that have maximum rents greater than the market value."

What you seem to imply here is that what you'd like to do is get rid of rent control completely, then you don't have to worry about maximum rents because you can raise rates however you like, in order to be able to get at the tenant who hasn't been paying his fair share of the market. Is that more or less the point you're making? Get rid of rent control so that you can get to those people who are living in accommodation where they're not paying their fair share, is that what you're trying to get at?

Mr Megna: Let me answer as fast as I can due to the time limitation. First of all, until rent control was in place, we saw that actually there was a lot of apartment buildings and rental accommodation being built by the various developers. Since rent control came into force, basically there was only one apartment that I know of that was built here in the Hamilton area for the purpose of rentals --

Mr Marchese: That's not an explanation of why they're not being built.

The Chair: Thank you, Mr Marchese.

Mr Toni Skarica (Wentworth North): The simple problem that we're facing is that no new rental units are being built and that was not the case before rent controls were imposed almost 20 years ago, so we need a solution to that. I noticed that outside of Toronto the vacancy rates are in fact going up in virtually every city we've been in and the rental increases are less than what's permitted under rent controls. So rent control is only a part of the problem.

In Hamilton, what would it take for people like yourself to start building new rental units? Because if you look around, you can see there's nothing new been built here in a long, long time.

Mr Megna: First of all, before I answer that I would say this: The most priority I personally would have before I start building any new units is I would like to have an opportunity actually to maintain and improve the units that I do own right now. It's no use for me to build new units when actually I have units that I see I could spend a fair amount of money on to improve for the tenants who are there.

I strongly believe this legislation really is hurting the very people it's meant to help. I can see that the units right now we have at lower rent are rented mainly with the people who can afford them. They start there, they'll stay there, they will not move. Where we see the majority of the action and moving is on the units that actually are at market rent or above market rent. We have seen here in Hamilton in the last four years drastic rent increases, especially in certain areas of the city.

In reply to what would it take, at this point I wouldn't even have thought that I would be building new units, because under rent control I couldn't even afford to start the foundation, let alone to build the building. In other words, the cost of a new building, there is no way that I could get enough money even to pay for the expenses and the carrying charges of the construction itself, let alone any profit.

The Chair: Thank you very much, sir. We appreciate your input this morning.

Our next presenter, Waterloo Regional Apartment Management Association, cancelled. Unbeknownst to anybody, they gave somebody else their spot, or told somebody. Does the committee wish to hear that person? It breaks with our tradition of allowing somebody who did not go through the proper request process to have a spot. Is it the committee's wish that the person be heard?

Mr Marchese: They asked somebody else to take their place?

The Chair: They advised somebody else who advised somebody else and eventually somebody showed up here to present, but did not go through the process of asking for a space.

Mr Wayne Wettlaufer (Kitchener): Essentially they did ask for that.

The Chair: Our rule has been that we have not allowed anybody who did not go through the process. It's up to the committee.

Interjections.

The Chair: All in favour of that?

Mr Agostino: Is it possible to split? It's just a question of sharing it. Am I allowed to ask a question? I understand the change has been made, but there are other individuals and groups here who have asked for standing and could not get standing. Can we split that time in half then, in fairness, to allow one other group who has asked for standing to be here to come forward as well and split the time to 10 minutes each? Would that be fair?

The Chair: Basically the reason the rule is there is because there is a process. There were many people who were refused standing because of a lack of time. My own opinion is it's not fair to allow one to jump the queue, but it's one we're talking about, not several.

Mr Sergio: Do we have two who are willing to --

Mr Marchese: That's the problem you're raising, Mr Chair.

The Chair: That's right.

Mr Marchese: The problem is, if you allow one group then you raise the point about why not allowing somebody else. That complicates the whole issue of why we shouldn't change the system, as you were suggesting earlier on.

Mr Hardeman: I believe it is a replacement for the one that cancelled, but if it's not unanimous consent I would move that we do not have it fill in.

Mr Sergio: No, we've got the time. Let's hear from someone, even if it's one.

The Chair: I'm going to call the question. Do we have unanimous consent to hear the person? All in favour? Opposed? We do not have unanimous consent.

We're recessed until 1 o'clock.

The committee recessed from 1144 to 1300.

SOCIAL PLANNING AND RESEARCH COUNCIL OF HAMILTON-WENTWORTH

The Chair: Welcome back to our committee hearings. Our first presenters this afternoon, the Social Planning and Research Council of Hamilton-Wentworth, are Suzanne Brown and Paul Benvenuti. Welcome to our committee. The floor is yours.

Ms Suzanne Brown: My name is Suzanne Brown and this is Paul Benvenuti. We'd like to thank you for holding these hearings and giving us the opportunity to speak.

Before we go to our brief, which you probably have in your hands, we'd both like to give some personal anecdotes from our own tenant experiences. I'm no longer a tenant, but I was a tenant for 12 years, during which time I lived in eight separate units. I know that's probably above the average, but I was a student. Most of those were not bad, but I remember one particular experience.

I moved into a house that was being fourplexed. There was myself and two other roommates. When we moved in, the apartment wasn't completed. There were supposed to be two bedrooms in the basement and they weren't done, so my roommate and I slept in the living room for about six weeks. After our landlord came to collect his rent we asked him if we could negotiate a reduced rent for that month, since we hadn't had what we were supposed to have. He said no. I think if we'd been a little bit more forceful, we could have negotiated, but we were young students and we didn't, so we paid the full rent. We also found out after that the person before us had been evicted under the ownership tenancy clause. The person said he was going to move in and then didn't and they rented to us. The person who left didn't file a claim and neither did we, so that person got away with doing that. That was my one sort of negative experience with being a tenant.

Mr Paul Benvenuti: My name is Paul Benvenuti. I'm a member of the board of directors of the Social Planning and Research Council of Hamilton-Wentworth and I am a tenant here in Hamilton. Presently I am happy with my landlord. Joe has been a very fair guy, since I've been unemployed for some time, but I know there are a lot of people in this city, in this community, who are not as lucky as I. Many tenants all over this region have had to put up with scumlords, bad landlords. With the pending changes that this government has in store, I hope things don't get worse for more people, more tenants, in this region.

"Between a Rock and a Cold Place," an introduction: The Rent Control Act, the Landlord and Tenant Act and the Rental Housing Protection Act were put in place over the years to protect tenants from unscrupulous landlords, costly increases to rent and to preserve rental housing stock where it is needed. The Social Planning and Research Council mission is to act as an independent voice in the community to improve the quality of life for all our citizens. Our fundamental belief is that communities have the capacity and the responsibility to identify and resolve problems and that all citizens should have the opportunity to participate equally in this process. We welcome this opportunity for participation and urge the government to consider carefully what Ontario citizens are saying during these hearings and incorporate this information into any new tenancy legislation.

The Social Planning and Research Council believes that all citizens, regardless of income, have a right to adequate, affordable and safe housing and that changes proposed in the New Directions document will erode this right. Good housing is the foundation on which individuals and families can build healthy and productive lives. Without adequate housing, people cannot stay warm and healthy and properly feed themselves, look for work or participate in training courses to make them more employable. They subsist. People who are homeless face an even greater challenge of just surviving on our city streets and in abandoned buildings. Sometimes they don't survive at all. As a society, it is our responsibility to ensure that all our citizens have access to the most basic of life's necessities.

The social and economic situation in Ontario: The climate in Ontario, and indeed in Canada, is not hopeful for people who are economically vulnerable. In 1996 we are facing an unemployment rate of almost 10% nationwide. Although Hamilton-Wentworth enjoys a slightly lower rate, the statistics do not count the many workers who have been laid off and are no longer looking for work or who find themselves dependent on social assistance. The last resort of our social safety net is slowly being shredded under the guise that it does not allow us to compete in the global economy.

In 1991 Hamilton had a poverty rate of 15%. It is based on the abovementioned trends in social policy. It is likely that this rate is higher in 1996. In Hamilton there are approximately 160 people who are homeless, of which 36% were identified as having a mental illness. A key barrier to accessing help was lack of money and a non-supportive attitude.

In the past year the Canadian assistance plan was replaced by the Canada health and social transfer. This plan will do little to preserve the current safety net. Under this, there will be less money available for health, education and social programs. Further, under the new employment program it is anticipated that people will have to work longer for fewer weeks of financial assistance than in the past. The 22% cut in social assistance payments in Ontario has directly and negatively impacted approximately 500,000 households in Ontario, of which 80% are renters.

Hamilton had a vacancy rate of 2% in 1995. This rate is predicted to drop to 1.8% this year and 1.6% in 1997. In some areas of the city, for example Westdale, which has a large student population attending McMaster University, that rate is significantly lower. As vacancy rates continue to decline, the rental market tightens. The supply of tenants needing accommodation will force the cost of rental housing to rise if rent control is abandoned.

Municipalities, locally responsible for enforcing property standards, have had their transfer payments from the province dramatically slashed by 2.7% over the past year and now find it difficult to respond to tenants' complaints. This bleak economic forecast and the direction of social trends do not bode well for tenants, who may soon be facing excessive increases to their rents at a time when they are barely managing to survive. The rent changes to tenant legislation will further erode tenants' ability to access decent, affordable housing.

Ms Brown: I'm going to go through the three pieces that we're most concerned with: the Rent Control Act, the Landlord and Tenant Act and the Rental Housing Protection Act.

The Rent Control Act: Presently under this act landlords are allowed to raise their rent annually, and in 1996 the maximum increase was 5.8%, which is an increase that few people have seen in their salaries this year. Under the new package the government is effectively eliminating rent control through a proposal called vacancy decontrol. In essence, this means that once a tenant moves out of a unit, landlords can set the rent for whatever amount they choose. Because the tenant population is a highly mobile one, this will mean that within approximately five years, most rental units will have had their rents decontrolled.

With the tight Hamilton rental market, this sets the stage for intense harassment of tenants, as some landlords will attempt to force tenants to leave so they can arbitrarily raise rents to market levels. Recognizing this will occur, the government's proposed anti-harassment unit will not address the problem. This will set up a further government bureaucracy at a time when we are told we must accept cuts to services due to budget constraints. It will be essentially ineffective, as tenant organizers in the city have found that many tenants are already reluctant to file complaints against landlords. Instead tenants simply move to escape the harassment. This will allow landlords to increase rent and condemn tenants to looking for new accommodation in a tight market with higher rents. It is likely that groups that already experience harassment and discrimination will be specifically targeted under this system, and homelessness for the most economically vulnerable may increase.

For tenants who remain in their units, rental increases will be based on the above guideline, with an additional 4% increase for capital repairs as well as increases due to raised property taxes and utilities. Potentially in 1996, Hamilton rents could be raised by 8.6%. Considering wages have remained stagnant over the past few years and the 22% loss to social assistance recipients' incomes, an 8.6% increase in rent is astronomical.

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The rationale for the elimination of rent controls is based on the assumption that the building of new rental housing will be stimulated. However, under the current system new units are exempt from rent control for the first five years of usage, and the present guidelines for rental increases more than account for inflation, yet new housing is not being built. The new housing stock that was built in the 1960s and 1970s came about not because of the free rental market, as is the assumption in the New Directions package, but because the apartment buildings were financed with federal tax breaks and below-market loans. If low-income housing was never profitable for the private sector, they would not build it, regardless of the existence of rent control. In the Sault, the Sault Ste Marie Homebuilders' Association listed many other culprits for inhibiting private rental construction, including the GST. If the private market will not provide affordable housing for low-income people, then it is the government's responsibility to provide this basic necessity. This is the reason the non-profit housing sector was developed.

The Rental Housing Protection Act: Under this act, currently a landlord must apply to the city of Hamilton for any conversions of rental housing into other uses or for demolition. This allows the city to determine the impact of suggested changes on tenants and the city core and to temper those changes that are potentially damaging. To date the city of Hamilton has permitted reasonable conversions while at the same time protecting both tenants and affordable rental housing stock. The new package eliminates this law and allows landlords to convert rental stock without municipal approval. These changes may deplete rental housing stock and could inhibit the city from proactive community planning.

The Landlord and Tenant Act: Under this act landlord and tenant disputes are settled in court. The New Directions package suggests a tribunal system of resolution instead. This privatization of tenants' rights means that landlords and tenants will not benefit from jurisprudence, therefore the province will end up with a patchwork of inconsistent decisions. If an adjudicator is appointed by the province, there is a real danger that objectivity will be sacrificed to political ideology. Clarity around this change is needed before further analysis can occur.

In conclusion, under the current legislation tenants are protected from unfair rental increases, lost housing stock and by the justice system. Under the proposed New Directions package this protection is lost. Because our analysis shows that these changes will negatively impact on the housing situations of the most economically vulnerable in our province, we urge the government to listen to the citizens of this province and to reconsider and withdraw this proposal. We believe that housing is a right for all Ontarians. If the private sector will not provide low-income housing, then it is the responsibility of the government to do so. People must not be condemned to unsafe and unhealthy living conditions or to homelessness. They must not be forced to choose between harassment or housing, between a rock and a cold place.

Mr Marchese: Thank you very much for your presentation. I hope to have time for two questions, but first a statement. This government never talks about what happens to the mentally ill, the working poor, those who are on social assistance, people with disabilities, injured workers; they never talk about that. The only people who talk about that are organizations, tenant associations, people serving these communities. We worry about what happens to them and the affordability question.

One question Mr Hardeman always asks landlords is, "Are you able to charge at your maximum rents?" and usually the landlord says no. The follow-up to that presumably is, "If that is the case, then we don't need rent controls any more." If we get rid of rent controls, at least in the way they've done it, because landlords are not charging maximum rents, that means the present system is working, so we don't need the kinds of tenant protections that some of you speak about. What is your reaction to that?

Ms Brown: First, if the present system is working, we don't see any reason to take it apart. Second, because landlords aren't charging market rents, that's here and now, and if we look into the long term we know that the rental market changes; all markets change. We're hoping for long-term protection for tenants. As well as this year and next year, we're also looking into the future. The Hamilton housing market is getting tighter, and we know that as vacancy rates go down, prices will go up.

Mr Marchese: I'm worried about that second part. That's my other part of the question. Because we have vacancy rates in some parts of the province that are high, that doesn't mean it's always going to be like that in some parts. In fact, we're worried that this will change.

The first problem is that it's an affordability question. If they have a vacancy problem, it's because people can't afford to enter their units; that's really the problem. But in the near future, if things change as they expect and anticipate -- that's why they want to get rid of rent control -- when you eliminate the Rental Housing Protection Act, it means people will convert, so rental accommodation will disappear, and the government isn't any longer building, the private sector isn't any longer building, and we'll have the conclusion you mentioned: Rents will rise as a result, which is what they're probably hoping for in the future. Is that --

The Chair: Thank you, Mr Marchese.

Mr Peter L. Preston (Brant-Haldimand): I'd like to correct something Mr Marchese said to begin with, that we have done this. We haven't done this. This is a discussion paper. We're here to listen, to learn and make changes if necessary and if they're correct.

There's another objection I have, and I'd like to have your input on it. We've heard a number of times during our travels across the province that because 20% of the people move each year, over five years -- you extrapolate the figures; five times 20 -- 100% of the places are going to be decontrolled. You must believe that an awful lot of those units are going to be lived in for that five years; they're not going to be moving. A hundred per cent of them are not going to be decontrolled. There are certain numbers on the bottom that are changed over regularly, and therefore it doesn't work out to 100% being decontrolled. Would you agree with that?

Ms Brown: It's probably not 100%. It's probably very high.

Mr Preston: All right. Are there a lot of people looking for affordable housing in Hamilton now?

Ms Brown: Well, I just bought a duplex and I rented it in two weeks, but I live up near McMaster.

Mr Preston: Are there a lot of people at the bottom end of the scale who are looking for affordable places to live?

Mr Benvenuti: I can tell you right now, being unemployed I'd like to find a new place. It's expensive.

Mr Preston: Is that right? Why haven't you been able to find one?

Mr Benvenuti: Because landlords don't like my prospects of being unemployed. Even though we're protected right now, I still have that barrier saying, "Where do you work and how much do you make?" I'm a starving artist, and it really galls me to see that these people have the right to say, "Where do you work?"

Mr Preston: Really they don't have the right.

Mr Benvenuti: They don't have the right, but how can you answer something like that? You're pinned in a corner and you don't know how to react.

Mr Preston: So there are a lot of people right now looking for affordable housing?

Mr Benvenuti: Yes.

Mr Preston: Then it hasn't worked, has it? The present system hasn't worked. It's not serving those people. Something has to be done to make more affordable housing and put it in the hands of the most vulnerable. Is that correct?

Mr Marchese: Like what?

Mr Preston: Mr Marchese, you had your turn. Is that not correct?

Ms Brown: Yes. I understand that probably it's not profitable for landlords to build low-income housing. That's why we have non-profit housing. That's why people need to have non-profit housing. In Hamilton we have 3,000 people on a waiting list.

Mr Preston: So we have to make some changes.

Ms Brown: Yes.

Mr Sergio: Ms Brown and Mr Benvenuti, to pick up on something you said at the beginning, you had one bad experience because of your inexperience and the answer from the landlord was no. The present legislation was introduced for this purpose: to protect people like you who don't know any better, or didn't know any better, with no experience; people who have limited capacity to move around in search of other affordable accommodation; people who are on social assistance; students who move very often and stuff like that.

I agree that the majority are good landlords, and good tenants as well, but we need to protect that particular sector, the special group, if you will. If you were a person, let's say, on social assistance, you go knock at the door and say, "I want to rent your apartment." The landlord says, "Oh, you're on social assistance," and thinks about it twice. If you are a student, the landlord's going to say, "Where do you get your money?" Good luck. Is this what the government's supposed to do, relinquish all the responsibility for providing for the real needy in our society? Is there anything in this legislation that does that?

Ms Brown: That protects people? Not in our analysis of it, no.

Mr Sergio: Wouldn't that be the role of the government, to do exactly that?

Ms Brown: That's what we think the role of the government is, yes.

Mr Sergio: Do you remember what Mr Harris, prior to the election, said, that if there is any change to the legislation or the rent control system as we know it, it would have to be something better, otherwise he wouldn't even tinker with it. Do you say this is something better or we should stay with the existing system?

Ms Brown: We should definitely stay with the existing system. This isn't better. This doesn't protect tenants.

Mr Sergio: I hope our colleagues are listening. I am sure they are listening, and I hope the minister and the Premier will do the same.

Ms Brown: Thank you. We do too.

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

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SOCIAL HOUSING AND ACCESS COMMITTEE

The Chair: Our next presenters are Bonita House and Andrea Horwath from the Social Housing and Access Committee. Good afternoon. Welcome. We appreciate your being here.

Ms Andrea Horwath: Thank you. I want to thank the committee for giving us the opportunity to speak today. Unfortunately, Bonita House has had an emergency and was called away and is not able to co-present with me.

I also want to mention that I was really happy earlier this morning to see some of our local MPPs in attendance. It's unfortunate that they weren't able to stay for the day, but it was very good to see Mr Doyle and Mr Pettit and Mr Skarica stop in on the hearings. I think it's very important that they spend some time here.

My name is Andrea Horwath and I'm the chair of the Social Housing and Access Committee. SHAAC is a committee that's been operating in Hamilton for over 10 years. We consist of various interests in the community, including landlords, tenants, tenant activists, housing activists, people who are basically concerned with social housing as well as access to housing in our community.

Just another interesting point I want to make before I start the presentation is that we've been working in Hamilton on housing issues and one of the things we've done recently is speak to our local government about the potential loss of the Rent Control Act, the Rental Housing Protection Act and the Landlord and Tenant Act particularly. We were successful with the planning and development committee, who agreed with us that these pieces of legislation should be maintained. In fact, on Tuesday evening city council adopted the recommendation of the committee that indicated they would like the government to keep in place the Rent Control Act, the Rental Housing Protection Act and the Landlord and Tenant Act.

One of the things I want to do is start out with a brief overview of some of our concerns about the general package and then, as much of what I have to say has already been said, I'll probably just highlight some of the things in the written presentation.

The goals set out in the tenant protection package are stated to accomplish a few things, including protecting tenants from unfair or double-digit rent increases, harassment, evictions and those kinds of things; to focus protection on tenants rather than units; to create a better climate for investment in maintenance and new construction; improving enforcement of property standards etc.

Although these goals are commonly shared by many stakeholders in our community, the language of the discussion paper is also attractive. We have to be careful not to be misled by some of the semantics we find in the paper. The impact of the suggested changes have to be understood and our review shows that the proposals are anything but benign. Generally, the package focuses on the individual, so protection is conceived of as an individual concept. The choice of this approach denies the fact that there's a broader impact these changes will have in our community.

We also feel that there are some unsubstantiated assumptions used to justify the amendments. One fundamental assumption is that the removal of rent controls will result in the building of new rental housing stock. I've been listening to these proceedings for most of the day, and both landlords and tenants have said this is not the case. If that's one of the assumptions on which this package is put together, we have to quite quickly abandon that as being truthful, because it's not the case. That's certainly what's been heard time and time again. I am concerned also that the consultation process we're having now is not necessarily going to address those assumptions. What I'm going to do, as I said, is make some points in our written brief and try to pull out some of those assumptions on which this paper is based.

We're going to start with the Rental Housing Protection Act. As I said, I don't want to go over a lot of the points that have already been made. Suffice it to say that it's our position that the elimination of the Rental Housing Protection Act will result in the eviction of tenants from affordable rental housing as landlords seek opportunity to convert rental units to condominium use.

The other thing that's interesting -- and this is something the planning department and, following that, the city of Hamilton were very concerned about -- is that the elimination of the act does have important consequences for the local planning process. Under the Rental Housing Protection Act, the city of Hamilton has been able to evaluate the impact of converting rental units to other uses and they've been able to mitigate some of the potential damage to tenants.

In some cases the city has negotiated, reduced or waived rents for tenants and in other situations the city has approved conversions with existing tenants remaining as tenants. In short, the city has taken positions which permit reasonable conversions, while protecting both tenants and the supply of affordable rental housing. The act works for tenants and landlords and there's no justification, in our opinion, for its repeal. It is neither productive nor efficient use of valuable resources to fix a system which is working.

Affordable home ownership is cited in New Directions as a reason for eliminating the Rental Housing Protection Act. This assumes that home ownership is attainable and more desirable than renting. It's unrealistic to assume that the majority of tenants can purchase their units. It is also inaccurate to assume that the majority of tenants prefer home ownership to renting. Therefore, preserving affordable rental housing stock is critical to maximize tenants' housing choices.

Another issue is that, in our opinion, the maintenance of affordable rental housing stock in Hamilton is key to meeting the needs of new workers or new jobs coming into our economy, providing that affordable housing. As the job market increases, we expect them to be in the service sector and low-paying sector, and that's certainly not the kind of wages that people purchase houses on.

The next issue is the Rent Control Act. What we are concerned about, notwithstanding some of the comments of Mr Preston, is that tenants are a highly mobile population. As relationships change and families grow and physical needs change, or people may be beginning new jobs, going back to school -- various life changes occur. The provincial government's own Lampert report showed that one in four tenants households move annually and that during the five-year period, there can be up to 70% turnover. So no, it may not be the 100% turnover that was mentioned earlier, but 70% is still a large turnover in units. Although the stated goal is to focus the protection on tenants, the government is in effect eliminating rent control and consequently tenant protection.

Another issue with that is the rent registry. We find it is an essential resource for tenants, because what they can do is not only confirm the maximum rent but also confirm which services are included in that maximum rent. Without the registry, the landlords can be free to discontinue or to charge separately for services that were previously included in the rent. This also is not tenant protection.

We were also concerned that economic discrimination will occur if rent controls are removed. The Ministry of Municipal Affairs and Housing policy staff, in a meeting with tenant advocates, placed pent-up demand for rent increases as high as 20%. This means that rents could rise by that amount should rent controls be lifted. Few tenants can afford such increases. There is no articulated protection from double-digit rent increases despite the stated goal.

Another issue is affordability. It is estimated by the ministry that 80% of social assistance is recipients' rent in the private market. As well, 30% of all tenants are receiving social assistance. We all know the social assistance rates were decreased substantially last year, and consequently most social assistance recipients are already spending more than their maximum shelter allowance on their housing. In Hamilton a review of welfare assistance clients showed that over one third spent over 70% of their income on shelter. This is unacceptable. We're afraid that this situation will worsen with the removal of rent control.

Another issue is potential harassment. I know it's been raised today several times. What we fear is something similar to what was mentioned by the previous presenter, that in a tight rental housing market the tenants will be particularly vulnerable to landlord demands. In fact, the Hamilton-Wentworth housing statement discussion around developing a more competitive housing market acknowledges that vacancy rates must be at least 3%, otherwise tenants will be held captive to particular landlords.

We are concerned about the loss of rental housing stock as a result of conversions to other uses or condominium use. I am not gong to dwell on that. I believe it's been covered quite thoroughly today.

Maintenance and repairs is an issue we're concerned about, and it's another issue that came up at the planning and development committee meetings we had with our local government. What the discussion paper focuses on is the alleged strengthening of maintenance enforcement; enforcement officers being given additional powers; that violation of property standards will be made an offence; and that the administrative process is to be expedited and maximum fines introduced on conviction. However, with the responsibility comes a higher cost for the municipality at a time of reduced transfer payments from the province.

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Enforcement of standards is very labour-intensive, and we don't find that a maximum fine will have very much effect. Perhaps a minimum fine might be in order, as opposed to a maximum fine. There is no suggestion that the increased reliance on the courts will improve maintenance. Reliance on the courts in fact runs counter to the argument elsewhere in the discussion paper that the court system should be eliminated for landlord and tenant matters.

We also don't think these proposals will actually be an incentive for landlords to make repairs. The most proven incentive thus far is being eliminated in the discussion paper, which is the order prohibiting rent increases. This order is automatically served on landlords when they violate property standards, and until the work is completed rent increases are severely limited. In practice, this has meant more attention to maintenance by landlords.

I'll go on to the next thing, the Landlord and Tenant Act. The New Directions document contemplates the removal of landlord and tenant disputes from the courts. Going to the tribunal model is what the paper suggests. But one of the things that happens here is that we lose the jurisprudence we get from the court system, so each tenant who comes up has to make a case without the opportunity of relying on previous decisions and jurisprudence. There's also a suggestion that appeals may be reduced, further limiting the rights and responsibilities of both parties. The implementation of an alternative dispute resolution model potentially politicizes the decision-making process if the adjudicators are appointed by the province. This in itself has some inherent dangers, in our opinion.

In conclusion, I just want to reiterate that analysis of the proposed omnibus legislation affecting residential tenancies shows that the assumptions which underlie the recommendations for change are unproven. The proposals will mean the end of rent control in Ontario. Tenants will have their rent go up by more than is allowed under the current law. Together with the repeal of the Rental Housing Protection Act, the package will result in less affordable rental housing for tenants.

The use of the word "protection," in our opinion, is in fact a misnomer in this paper. The housing needs of Ontario tenants are not met by the proposals and tenants' rights are eroded rather than protected.

Accordingly we ask that the discussion paper be withdrawn. Future amendments to the current law have to be much more well researched. We would urge that if this is going to go forward, at second reading when it goes back to committee we would like another opportunity on actual legislation or proposed legislation to have a more detailed look at what is being proposed.

With that, I want to thank you very much for the opportunity to make the presentation.

The Chair: Thank you. We've got about two minutes per caucus for questions.

Mr Maves: Thank you for your presentation. First, just as a comment, thank you for recognizing the local members for being here. I want to add, so everyone in Hamilton knows, that Mr Skarica was with the committee for the past three days and Ms Ross sat on a committee for the first week in Toronto, so there has been some input from your MPPs in this area.

At the start of your presentation you seemed to be quite aware of municipal politics. The previous presenter made a statement that I was going to ask about but didn't have an opportunity. I'm hoping you might know. She said, "To date the city of Hamilton has permitted reasonable conversions while at the same time has protected both tenants and affordable rental housing stock." Would you happen to have any idea how many times they've turned down conversion applications?

Ms Horwath: I don't know that that's actually happened. I know this past year there have been 12 applications; however, the bulk of those have been from a single landlord with numerous different properties. Last year I believe there were three applications. It's my understanding that they haven't actually turned any down, that through negotiation, through that ability to have some flexibility with the landlord and the tenants, they've been able to negotiate packages that have been agreeable to both sides.

Mr Sergio: Ms Horwath, you mentioned that the city has been able to negotiate some lower rents. How did they do that?

Ms Horwath: For conversions? Is that what you're referring to?

Mr Sergio: No. I thought your comment was with respect to some tenants who needed assistance and the city got involved and they were able to negotiate, if you will. That seems to be the new word from the government: "negotiate," that if you can get the landlord to lower the rent to what you want, negotiate. Did the city do some negotiation for some tenants?

Ms Horwath: No. I was referring to the cases that have come up as a request for conversion to other uses, conversion to condominium. That's where the city of Hamilton currently has some opportunity to mitigate the damages on both sides, that the landlord can't just in isolation make a decision, because that will impact --

Mr Sergio: Okay. I thought it was related to negotiating lower rents for some tenants.

In the few seconds I have left, one of the scopes of the proposed legislation is to practically eliminate six statutes, to incorporate some of them into the proposed one and eliminate the protection of the others. I'll just mention three quickly: the Landlord and Tenant Act, the Rental Housing Protection Act and the Rent Control Act itself. Without these controls, do you think the new proposed legislation is going to have some real teeth in protecting the tenants?

Ms Horwath: Definitely not.

Mr Marchese: Ms Horwath, thanks very much for the presentation. You heard the discussion I had with the previous two speakers, and I want to touch on the last point we were getting at with respect to affordability. You make some very good points, that few tenants can afford such increases -- that's what we say -- and that there's an affordability question generally in terms of what's available on the market. Then you say there is no articulated protection from double-digit rent increases despite the stated goal. We all agree. Everyone agrees with that except the landlords and the Tories.

Then you give some interesting statistics that every now and then it's useful to be reminded of. You say 80% of social assistance recipients rent in the private market. That's a high figure. Who's going to protect them from those rent increases? You also state, as we heard yesterday in Peterborough, that over one third spend over 70% of their income on shelter. These are startling statistics. They never talk about what happens to people like that as one single group out of so many other vulnerable people.

Then Mr Preston says, when he was asking the previous unemployed artist whether he was having a hard time finding employment, that that proves the system isn't working so we have, as a result of the fact that the system isn't working for poor people, seniors, people with disability, this proposal. Do you see anything in this proposal, in this discussion paper, that attempts to deal with the affordability issue?

Ms Horwath: No, I don't. I found it interesting earlier this morning to have a landlord -- I can't recall his name; from Welland, I believe -- who was saying the same thing: that for landlords, rent control works, so why change it? If landlords are saying it's working, if some of the major municipalities that have a high proportion of tenants say it's working, then would you want to change it? I don't understand it.

Mr Marchese: That is indeed my question.

The Chair: Thank you very much, Ms Horwath. We do appreciate your input this afternoon.

HALTON COMMUNITY LEGAL SERVICES

The Chair: Our next presenters are from the Halton Community Legal Services, Marilyn King and Colleen Sym. Good afternoon, ladies, and welcome to our committee.

Ms Marilyn King: Good afternoon, Mr Chair, members of the committee. My name is Marilyn King, and my colleague is Colleen Sym. I have provided a paper which probably all of you have a copy of, so I won't go through it word for word. I know that a number of legal clinics across the province have already appeared before you. We come before you today with respect to the perspective from Halton region, which is where we carry out our services. Halton region, as you will be aware, includes the municipalities of Oakville, Burlington, Milton and Halton Hills, which includes Georgetown and Acton.

As you know, the paper proposes that when a unit is vacated, the landlord can freely negotiate with the incoming tenant, without regulatory restriction. I have brought for you some statistics with respect to the Halton region as a result of our concerns about the impact of the proposals on tenants, particularly low-income tenants, in Halton region.

As you can see, in 1991, according to CMHC, in Halton 26%, or 27,380, dwellings were rented. About 26% of private renters were paying 30% or more of their income on shelter. I did hear a comment earlier today about increasing vacancy rates in some areas of the province. Unfortunately, in Halton that has not been our experience and it doesn't appear to be an improving situation. The vacancy rate is approximately 1% or less. The most recent figures we were able to find were for October 1995. The vacancy rate in Burlington was 0.9%, and my understanding is that the vacancy rate there has decreased over the last few years; Oakville, 0.5%; and Halton Hills and Milton is a combined statistic of 1%. Certainly we find with the tenants who contact us, and they are from throughout Halton, that there is difficulty in finding affordable housing.

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Our concern is that eliminating rent control between tenants will permit landlords to increase rents in Halton, where the vacancy rates are 1% or less. Our concern is that low-income tenants in particular will not find affordable housing. Our experience in Halton is that in most cases the landlords in Halton are charging at least the maximum legal rent -- we do see some cases where it's less, but in most cases they are charging the maximum legal rent -- and we still see cases where landlords are charging in excess of the maximum legal rent, albeit illegally. I think the worst-case scenario we saw was where a tenant had been charged approximately $10,000 over the legal limit. Others have been around $3,000.

In terms of the affordability of housing in Halton, particularly for the low-income, I have provided for you some stats on page 2 on the shelter costs of housing in Halton as compared to the welfare shelter allowance. All of you, I'm sure, know what those allowances are from what you've heard and from the press. But as you can see, in all the categories the welfare shelter allowance in Halton is significantly insufficient to enable low-income people in Halton to find housing. That certainly is our experience in terms of people being evicted through an inability to pay for their housing. The statistics there are for Halton Hills and for Burlington, which unfortunately were the only statistics we were able to come up with, but Halton does experience a situation where housing is not affordable for low-income people and, as a result, people are evicted.

The concern is that if limits on rents are eliminated between tenants, rental units will become increasingly unaffordable to the poor in Halton. In Halton there is not, as you may be aware, a hostel of any type of all, other than a shelter for women. There is a women's shelter in Halton but there is not another shelter. Actually, just this week we have had experience with a woman who is, unfortunately, living out of her car with an aged mother who at this point has been unable to find appropriate housing. We do see that. That is not the only case we have had. I know it isn't Toronto, but we do see homelessness in Halton and we are concerned that it will increase.

We also have a concern that there will be increased pressure to stay in substandard housing. There is a significant tenant population in Halton region that is tolerating accommodation at a shocking level. I've only illustrated one example on page 3, but we do regularly get contact from tenants who are living in conditions that I'm sure none of us would find ourselves wanting to be living in. The concern is that with the removal of rent controls between tenants, tenants suffering like this will not have the option of moving to alternative housing because they will be locked in by unaffordable rents.

With respect to repairs and maintenance, I do have some comments, which begin on page 3. It deals with the suggestion in the proposal paper that tenants and landlords be able to negotiate above-guideline increases where they are sitting tenants. The concern with respect to that is that contracting out of the guideline amounts for sitting tenants will not result with true consent. Regularly, we see tenants agreeing to do repairs and so on because they don't realize that they legally don't have to and that they have the option of saying no. Frequently landlords unilaterally decide to discontinue services like hydro, in that the landlord decides to stop paying for it although it was initially supposed to be included within the rent. In other cases they require the tenants to do repairs in exchange for a small discount in the rent or no discount in the rent, discounts that are unrealistic given the cost of doing the repairs required.

Tenants often believe there is no choice. They agree only because they believe there is no choice. In a market where rent control is to be largely deregulated, it's essential that a mechanism be left in place to prevent abuse by landlords of this exemption to guideline increases for sitting tenants. Tenants will otherwise agree to pay for services only because they can't afford to move to an apartment where the rent increase is uncontrolled.

I would suggest to you that the agreements to be used in that situation, which will be exceptions to guideline limits on sitting tenants, must be written on a standardized form which clearly informs tenants that they do have the right to refuse to agree without risk of eviction. It is insufficient that the landlord provides the tenant with something to sign. It must be the case that those agreements have a standardized statement clear to the tenant that they need not agree without risk of eviction. Otherwise, tenants who historically have an imbalance of bargaining power in these situations are vulnerable to unfair pressure and coercion. Further, I'd suggest that in those situations tenants should have the opportunity to go to whatever independent body is going to be created to show that the agreement was without informed consent or was under duress. To deter landlords from coercing tenants into enter into such agreements, I would submit to you that there should be a provincial offence to coerce or harass tenants to agreeing to pay for services or repairs.

I would also submit to you that the provisions which currently exist in section 2 of the Rent Control Act and section 80 of the Landlord and Tenant Act must continue to exist in the new regime. Those provisions, as you may be aware, indicate that the legislation applies notwithstanding agreements to the contrary. We regularly see leases which contain illegal clauses. Tenants sign them because they don't know what the law is and they don't think they have any choice. To protect tenants in that situation who are vulnerable, uninformed or in a coercive situation, there must be a general rule in legislation that overrides agreements between the parties in order to protect the tenants as necessary.

With respect to maintenance generally and moving maintenance over completely to be enforced at the municipal level, we do have a comment on that. Should that be done, and I can't speak for the constitutional impact of what I'm about to say, there is a need that there continue to be, if legislated to municipalities, a minimum property standard level. We find even in our region -- Oakville, Burlington, Halton Hills and Milton -- that there is a fair variation between the level of maintenance required by those bylaws. I would suggest to you that the minimum standard across the province must be at least the equivalent of what exists under the Rent Control Act and regulations at this time. It's a reasonable standard of repair. It addresses various issues of repair that regularly we see as problems in apartments.

I would ask you to recommend that there be a minimum rental housing maintenance standard -- that's a mouthful -- across the province for those municipal bylaws which are going to be enacted. If they are not a minimum standard level across the province, it's of no real value in many situations to have it enforced. It has to be a decent minimum standard across the province.

In terms of enforcement of those housing standards, I would submit that the enforcement mechanism must be significant. Penalties must be very strong to send home to the landlords who don't do repairs through general deterrence that inadequate and unfit maintenance will not be tolerated in this new regime. Particularly with partial deregulation of rent controls, orders prohibiting a rent increase for a failure to comply with a work order, which does exist under the current system, will have a greater deterrent effect. If a landlord can put a rent up by an unlimited amount between tenants, then an order prohibiting a rent increase as a result of failure to comply with a work order is a more meaningful deterrent. I would suggest as a result that this type of enforcement proceeding is something that should be retained, in addition to municipal enforcement.

In terms of vital services, very quickly, it already is an offence under the Landlord and Tenant Act for a landlord to cut off vital services like heat, hydro, water and gas. I would submit to you that this should be retained because we see that happening regularly in situations where tenants fall into arrears of rent. We certainly have a problem getting police to enforce it as a provincial offence, but I would submit to you that it should be retained as an offence because we do see that as an ongoing problem.

That leads to my next comment in terms of harassment enforcement. The proposal paper acknowledges that there is a concern about harassment of tenants. I'm sure you've heard many times as well that if there's an incentive for a landlord because they can get a higher rent from a new tenant, there is an incentive for a landlord to harass the tenant out. I say that because we do see landlords who harass tenants already. I'm certainly not proposing to you that all landlords do, but particularly in some areas of our municipality -- Burlington comes to mind -- we do see landlords who harass tenants and abuse them and emotionally upset them. I would suggest that the enforcement mechanism here has to be significant enough that there are serious general deterrents in terms of this type of possible behaviour by landlords, because the behaviour is already there and my concern is that these changes in the law are going to increase that.

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There's a strong public interest in punishing and deterring harassment by landlords, and tenants certainly must have security of tenure. As I've indicated, vacancy rates in Halton are already 1% or less, and landlords in Halton are already neglecting their buildings. We have had reports from tenants, particularly again in Burlington, of incidents where the tenant's furniture was thrown off the balcony, where the landlord is breaking in the door to tell the tenant they have to get out, various things like that. It's a serious concern. These landlords must be deterred. With respect to that type of behaviour, I would submit there's a great need for change based on the landlords that we see. Again, criminal law is not there to deter all people in Ontario, but it is there to deter the potential offenders, and it's those potential offenders I would ask you to keep in mind when you're changing this legislation.

Comment has been made with respect to discrimination. It's tough to come up with a solution to that, but where a landlord has free rein in terms of setting the rent and a tenant comes who is of ethnic background or the wrong colour or on welfare or the wrong age, the potential certainly is there for the landlord to discriminate. Again, that type of behaviour we can only hope to address with respect to general deterrence and the penalties for that. Being able to prove those is a problem I'm not going to be able to solve, but I'd ask you to keep in mind again general deterrence.

With respect to the enforcement agency, I would submit to you, based on our experience, that an administrative body like rent control is not sufficient to deter landlords. The enforcement section of rent control has not, in our experience, been effective in deterring the commission of offences under the Rent Control Act. We have also found with respect to that act that providing legal advice is not their strong point. But the perception of landlords towards administrative bodies such as a government branch or an administrative body like that has not been successful. I won't go through all of the information I have in my paper, but I draw that conclusion from our experience where we did not have a municipal bylaw in Burlington requiring repairs and we were dealing with the Ministry of Housing and rent control trying to get things done. The landlords simply were not deterred by that.

Again, I won't go through all of the statistics, but I have provided them for you on page 7, where it's indicated how successful court action was as a deterrent to landlords. That is what we must keep in mind where changes are to be made at this point. The conclusion even of Burlington city staff at that point was that landlords do resist completing work when directed by the ministry, but they do it when directed by municipalities, my point being that prosecution is a successful deterrent.

Provincial offences enforcement by police is an area that also does need to be addressed in the new legislation. The enforcement agency, I would suggest, must have sufficient profile and reputation to be taken seriously. Anti-harassment provisions must be legislated as provincial offences.

I would submit to you, based on our experience and, again, some of the few but bad landlords we've experienced, that the enforcement agency must be the police. Landlords do respond to police warnings; they do respond to police charges. They are deterred by the consequences of prosecution. It's respectfully submitted to you that a provincial offence enforcement mechanism, with investigation and/or charges by the police and prosecution by provincial prosecutors, has an inherent deterrent effect. Legislation containing provincial offences offers deterrence of a possible prosecution which carries with it punishment, a trial, court appearances and potential bad publicity for the landlord. The statistics are there to show the effectiveness of deterrence in a situation dealing with a bylaw in Burlington. I'd be happy to answer questions on those if you have some.

My point is that tenants, particularly low-income tenants, must not be left vulnerable and that provincial offences, with inherent deterrence and punishment, are essential to protect them. A new enforcement agency would therefore not be required. The cost would only be a public advertising campaign about the anti-harassment offences and the significant penalties. If the campaign is successful enough in advertising and making landlords aware of this, the deterrence should have some effect, and the administration is already in there. If it's going to go to court and be prosecuted anyway, in my submission the cost is no worse than having a provincial prosecutor do it, which is somebody who's experienced at doing it anyway and is more effective than creating some new body to do it. I would ask you to consider the police in that way.

With respect to the new procedure that's being proposed, we have a few comments on that.

With respect to rent control, again I would submit that this is not the route to go. My understanding is that they had about 227 applications processed at rent control in Hamilton last year. In terms of capacity and volume and speed, we currently see approximately 50 new landlord and tenant applications at the Milton courthouse where we go as duty counsel each week. Court isn't there absolutely every week, but on those weeks that it is there, which is most weeks of the month, we see approximately 50 a week. So I would submit to you that rent control is not the appropriate body to deal with this.

We do have a concern that there be sufficient legal expertise. If you are intending to take these matters away from the adjudicative system that's there, we would ask that you ensure that tenants are protected, and landlords too, by sufficient expertise in adjudication and legal analytical ability. Particularly based on the administrative tribunals we deal with in other forums, it's very inefficient and very time-consuming to have people who don't have sufficient expertise to adjudicate and mediate appropriately.

Our other major concern in Halton particularly is with respect to access to this new system. In Halton there is no north-south transportation from north Halton to south Halton. A lot of the low-income people we deal with have a major problem even getting to Milton to the courthouse for tenant matters. Getting to somewhere like the office in Hamilton, where rent control is, or Mississauga, itself is an inherent barrier to those tenants achieving justice. I'd ask you to consider areas like that. I know people think we're next door to Toronto or we're next door to Hamilton, but low-income people do not have public transit south and north in Halton, and geographical access is an essential element of this new procedure.

As well, at our particular clinic, because of our numbers of low-income people and other tenants throughout Halton, we do promote self-help by tenants. We have developed kits for use by tenants in certain types of cases to ensure they have legal advice but also the necessary documentation to access the system without the necessity of legal representation. Any system that replaces the current structures to resolve and adjudicate landlord and tenant matters must, if you are to encourage self-help and people representing themselves, both landlords and tenants, without the necessity for legal representation, be both geographically accessible and user-friendly.

One comment on the rental housing protection. I know the comment was made already by the previous presenter and I won't go into it in depth, but the vacancy rate in our area is 1% or less. My understanding is that the vacancy rate in Burlington is already decreasing, and I would submit to you that there is a concern that if there is no control on loss of affordable rental housing, it could potentially decrease the affordable rental housing in our area.

Just one other comment on repair. I know the recommendation in the paper is to eliminate a rent registry. That certainly is a concern because, as I've indicated, we already see landlords who charge illegally high amounts of rent. Tenants will not have that protection with the elimination of a rent registry. But also with respect to a regime where rents are more unlimited, with the assumption that landlords will do repairs and there's an enforcement mechanism to ensure repairs are done, if that fails and there is, for example, a work order out in place, a rent registry is a requirement for new tenants coming into a place so they can at least check to see if there's an outstanding work order. If not the rent, at least they can check if there's an outstanding work order and they will know that notwithstanding what the landlord is asking for rent, there is a history of work problems with that landlord. The tenant might at least have the option of being informed about whether they take the apartment or not.

We certainly see situations where there is an outstanding work order, the landlord doesn't do anything about the repairs and the tenants keep going on in there. We can't disclose that information because we would be breaching our confidentiality to disclose the information, but it's a very frustrating situation to see tenants turning over in shoddy apartments and little protection for them. If the rent registry is eliminated, there is no means for tenants to check and see if there's an outstanding order prohibiting a rent increase or an outstanding order that a landlord do repairs. A rent registry is required at least for that, although our experience has been that a rent registry is an essential element in order that a landlord doesn't abuse the situation. That is a concern, but it arises even more so with respect to tenants needing to know, if they're going to pay an escalated rent, that there aren't outstanding work orders on the building.

The Chair: To let you know, you are down to your last minute.

Ms King: I think those would actually be my comments. I think my conclusions are fairly self-evident on the last page, but the concern is that tenants are vulnerable. We deal with them every day. It is a reality that there are abusive landlords. The system has to be put in place for the worst landlords so that those worst landlords are addressed. That requires a strong enforcement mechanism and, I would submit to you, the involvement of the police and the administration of justice through that avenue to ensure that offenders are caught. If landlords are going to be able to put rents up, at least we need to keep harassment and abuse of vulnerable tenants down.

The Chair: Thank you very much. We appreciate your coming forward today and giving us your input.

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SHERKSTON SHORES

The Chair: Our next presenter is Ian Wilbraham, the divisional director of Sherkston Shores. Good afternoon, sir. Welcome to our committee. The floor is yours, sir.

Mr Ian Wilbraham: Thank you. My name is Ian Wilbraham. I'm a director of the company which owns Sherkston Shores. Sherkston is a campground in Port Colborne. First we'd like to thank the members of the standing committee on general government for providing us with the opportunity to address you today. We certainly applaud the government's efforts to streamline the current legislation governing landlords and tenants.

The campground industry is a large, thriving business in Ontario, employing some 8,000 people. There are approximately 1,200 privately owned campgrounds in the province, with a total of 110,000 camping sites, of which two thirds are occupied seasonally. Generally that would be May 1 until the end of October on an intermittent basis. In many cases the seasonal trailer remains on the campsite also during the winter months for storage purposes but is only physically occupied during the summer months.

Last evening in Peterborough you heard a presentation from Sheron Burgis, the president of the Ontario Private Campground Association, of which we are a member. We fully support the association's suggestions and are here today to reinforce these suggestions and introduce our business to your committee.

Sherkston Shores has approximately 1,100 fully serviced campsites, plus up to 600 partially serviced and non-serviced sites. It is located in Port Colborne and is privately owned by an experienced campground operator who also operates campgrounds in the UK and one in Sarasota, Florida. Sherkston is an ideal vacation setting, catering to families by providing activities for all age groups. The highlight of Sherkston Shores is the beautiful beach, two miles on Lake Erie, boasting every form of water sport, as well as an enormous variety of non-water-related activities, from horseback riding to mini-golf, from ballroom dancing to discothèque, from children's programs to craft shows.

Accommodation at Sherkston Shores is provided in park model trailers, travel trailers and tents. Sherkston Shores provides affordable camping vacations to families from Ontario and western New York. In fact, 40% of our customers are from the USA, providing American tourist dollars to this province's economy. We specifically do not offer sites to mobile homes; in fact, mobile homes are prohibited from the site by local bylaws.

Page 3 of my presentation contains definitions of "mobile homes" versus "park model trailers," and from these definitions you will observe that mobile homes provide permanent accommodation to individuals as a primary residence, whereas park model trailers provide temporary vacation accommodation.

Just to give you some statistics, Sherkston provides employment opportunities in the Port Colborne area for 125 direct employees plus 45 full-time and 30 part-time people working either in the park concessions or for contractors on the park.

The Sherkston Shores site was acquired, in 1988, by its current owners for $8.5 million, and the total investment so far in the resort exceeds $12 million. This additional investment has provided resort-style amenities consisting of a main street, four tennis courts, a basketball court, a roller hockey court, a swimming pool, a mini-golf course, a baseball diamond plus park model trailer and RV sites and extensive landscaping.

Our concern, the concern of Sherkston Shores and similar private campground operators, is the ambiguity and lack of clear definitions in the existing legislation which leave the legislation open to interpretation. Specifically, the legislation is ambiguous regarding the vacationing and travelling public and mobile homes versus park model trailers and other types of trailers.

Sherkston Shores is a campground. Trailers on the site are not actually used or intended as year-round residences but are sited on campsites for which a seasonal licence fee is paid. Our business is in the tourism sector of the economy. As business operators we have no desire to run residential communities, nor is it the desire of our local municipality, and they have defined this in their official plan and bylaws, specifically because the local infrastructure -- schools, roads, hospitals etc -- is only designed to meet the needs of our customers as vacationers and not as though they were permanent year-round residents. Further, the Landlord and Tenant Act lists as an exclusion "accommodation provided to the travelling and vacationing public in a hotel, motel or motor hotel, resort, lodge, tourist camp, cottage or cabin establishment, inn, campground, trailer park, tourist home, bed and breakfast establishment or farm vacation home."

The Landlord and Tenant Act, regulation 705, lists classes of accommodation deemed not to be residential premises for the purposes of the act. This regulation says, "Premises rented as a vacation home for a season or temporary period not exceeding four months."

Accommodation at Sherkston Shores is clearly of the seasonal type. The park operates for six months of the year. Services are cut off between November 1 and April 30. Trailers are available to the trailer owners during this wintertime, only with special permission of Sherkston, for a maximum of three days. Industry-wide practices define a six-month camping season, therefore reference to four months is unrealistic and confusing in this context.

As you can see, the above leaves some confusion as to whether or not Sherkston Shores or other similar campgrounds should be regulated by legislation which is designed to deal with residential tenancies. Accommodation at Sherkston Shores is of the park model trailer type and does not fit the definition of a permanent residence, taking it outside the jurisdiction of the Landlord and Tenant Act. Sherkston Shores clearly fits the exclusion where it says "...accommodation provided to the travelling and vacationing public."

We request that the committee recommend that exclusions in definitions regarding mobile homes, as distinct from park model trailers, vacation homes, campgrounds and trailer parks, in the legislation be more clearly explained and efforts be made to eliminate any ambiguities.

We would also like to draw your attention to the fact that these requests reflect what is already being done in a multitude of city bylaws across the province. It is our belief that the landlord and tenant and rent control legislation was never intended to protect campground owners and their vacationing customers, and we ask that the clarity with which the legislation is being rewritten be extended to include the definition and exclusions pertaining to mobile homes, campgrounds and trailer parks.

I appreciate the opportunity today to place our concerns before you, and now would be happy to answer any questions that anybody may have.

Mr Sergio: Thank you for your presentation. I think we have received the same presentation a couple of times from other members of ORTA. Are you a member of ORTA?

Mr Wilbraham: Of the OPCA, yes, and also of ORTA.

Mr Sergio: They have expressed similar concerns. I can only make a comment that this is an area that I think deserves some attention as it affects you in a particular way that is different from the way it affects tenants in a high-rise. I hope the government members are listening and I will be able to recommend to the minister some revisions, at least to have a second look at the legislation as it affects your type of business.

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Mr Marchese: We did hear from another person yesterday and we didn't realize there was a problem until the person came to us explaining exactly what you've said here today, so obviously some of you have had this problem enough to get into this committee to fix the problem. As a solution I guess you would see a reduction of the time period as something that might help, or is there some other type of language that you're looking for?

Mr Wilbraham: What we see that would help, and I think the lady last night also mentioned this, is that the four-month time period should be removed from the legislation on the basis that the exclusion in the legislation already talks about vacationing public and vacationing activity which by definition, and certainly in the camping context, could be any time period. Four months is a rather arbitrary time period.

Mr Marchese: It seems to me to be something that can be corrected. I was going to ask the ministry staff. Perhaps Mr Hardeman wants to comment. It seems to me it is a matter that can be dealt with by some language that can accommodate this particular problem they are raising. I'm not sure whether Mr Hardeman has thought about it or whether he would like to ask the staff how that might be accomplished.

Mr Hardeman: I think it has been brought to the attention of the staff, and in writing the document it is important to recognize that the description of camping and recreational uses be made clear so it protects all the tenants but not necessarily the vacationing public. Having done that, it would not require a length of time at all in the legislation, so I hope that's what the government would be looking at.

Mr Marchese: So it appears that we will not be able to solve your problem.

Mr Maves: Thank you for your presentation. It's rather obvious that the Landlord and Tenant Act and other acts weren't meant for campgrounds. I think it's kind of disappointing that some people have tried to take advantage of those acts for whatever reasons. That is something that should be dealt with.

I would like to thank you for your company's contributions to the Niagara region economy. You've made several capital investments, it appears here, up to $12 million, since you've acquired the site. When you make those capital investments, do you pass them on to clients for renting a site?

Mr Wilbraham: Yes. Basically the cost for renting a seasonal site is a licence which is renewed annually, so the trailer owner would pay annually for the use of that site. Our charges, like any business in the tourism sector, are based on the market, what the marketplace can bear, and as a responsible business owner and operator we have to take into account the capital we've invested in the business, which is considerable.

Mr Maves: Right, and some of the investments, as you say, are substantial: swimming pool, mini-golf course, part of the tourism package. Had you been kept to 2% or 3% increase in the fees you charge, would you have been able to afford to make some of these major investments?

Mr Wilbraham: We have looked at our increases since 1988 when we acquired the site, and because of these problems that have arisen particularly elsewhere, we have reviewed the increases in our charges together with the capital that we have spent over the years just to see where we would stand if rent control did apply. What that analysis has shown, taking into account the capital expenditures over the whole period since 1988, is that, broadly speaking, in any event we would be within rent control guidelines, not necessarily on an individual year-by-year basis, but as a whole we would actually be within the guidelines.

Mr Stewart: I can't understand why it would even be under the Landlord and Tenant Act, period. Why would it not be under municipal guidelines? Depending on the municipality, they have extended times in various ones. Why would we not put it under the sole direction of municipalities? Would that work?

Mr Wilbraham: I think that would be helpful, and certainly under the recent bill the government has introduced, with licence fees and user fees, a lot of municipalities, including Port Colborne, where we are, have now introduced a licence for campgrounds. Within the terms of that licence the municipality has dictated a lot of things as to how we operate the business, lengths of stay and those types of things. So yes, that would seem a sensible way for the business to be controlled, and the same with zoning. Zoning is very specific to what we can do and what we can't do on the site.

The Chair: Thank you, Mr Wilbraham. We appreciate your attendance and your input here today.

UNITED SENIOR CITIZENS OF ONTARIO, ZONE 14
SENIOR AND FAMILY NETWORK OF HAMILTON-WENTWORTH HOUSING AUTHORITY
STEELWORKERS ORGANIZATION OF ACTIVE RETIREES

The Chair: Our next presenters represent the United Senior Citizens of Ontario, Gwen Lee and Bill Fuller. Welcome to our committee. You have 20 minutes. The floor is yours.

Mrs Gwen Lee: We're going to use every one of the minutes. First of all, I'd like to introduce myself to you. My name is Gwen Lee, and I'm here to speak on behalf of the United Senior Citizens of Ontario, zone 14, and also the Senior and Family Network of Hamilton-Wentworth Housing Authority.

I will tell you what I have prepared. One of the very few things I have to thank this government for is being able to be present at this hearing. In 1975, Bill Davis promised to introduce rent control if he became Premier. Once elected, he kept his promise, and for that I respected him.

This present government promised in the Common Sense Revolution that they would not hurt seniors and the disabled. Either their vision is impaired or they just don't want to see the hardships they are causing. Obviously they don't believe in honesty and integrity, since the only promises they have kept have been the ones hurtful to the most vulnerable.

The Progressive Conservatives said they would get out of the housing business. Because of the present state of the economy, we need more, not less, rent-geared-to-income units. Governments have an obligation to help those who need it.

A report released in March of this year mentions that public housing costs the government -- that's the taxpayers -- $190 a month per unit in Toronto. Here in Hamilton the final cost to the taxpayer is, on average, $160 per month per unit in public housing. If public housing is sold, it would cost many times this amount to subsidize a tenant in a decontrolled unit.

Seniors would be protected as long as they don't move, but seniors do move for reasons such as when their family moves and their support system is no longer there, when their spouse dies, when they become disabled or to be closer to doctors, hospitals, shopping etc. Under this deregulation proposal, seniors may then be forced to accept less desirable accommodation.

A save-rent-control initiative spearheaded by Barbara Hall in Toronto resulted in 11,600 postcards delivered to the Legislature from tenants in her area. Prior to this, Hamilton, with only 5,200 public housing units and no funding or financial help from any political party, sent 2,859 letters protesting the sale of Ontario Housing Corp units. This means that over 50% of Hamilton's public housing tenants were concerned enough to take action against this government's proposals, knowing that the sale of their homes would force them into a rent decontrol situation.

Vacancy decontrol will have an adverse effect on every tenant, including those in care facilities. Care homes are not retirement nor nursing homes. A care home is housing for people, including seniors, with differing disabilities, who are independent but who have some care needs. A care home can be a unit where a tenant pays rent that may or may not include some care options. The tenant should have the right to purchase the level of care that meets their needs. The landlord should never be the caregiver.

Entry -- this is entry of the unit they live in. The rules should be the same for care homes as in any other tenancy except where there is a written agreement between the care home tenant and the landlord. Entry by a caregiver or caregivers should be the result of a written agreement between the parties concerned.

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Shorter notice of termination by the tenant may be acceptable in some cases, for example, entering a long-term facility. Short-term absences should have provision for security of tenure for the tenant. For instance, if someone goes into hospital, they should have the option of retaining their rental unit so long as the rent is paid in a timely manner.

Transfer to alternative facility: A landlord must not be the one to decide that there is a need for more or less care. This decision must be made by the tenant in conjunction with their doctor and the appropriate care agency or agencies.

Appeal tribunal: I feel the court system is the best, but if a tribunal is set up it should be comprised of competent, independent individuals serving staggered terms of up to five years when first established. This will ensure that all terms do not end at the same time. A dispute resolution system could save time and money, but whatever system becomes law, there must be something in place so that tenants have the same clout as landlords when facing this procedure. Otherwise, how can seniors and others on lower fixed incomes pay for agents, user fees and research, when there is no rent registry, for an appeal to a tribunal?

As a tenant in Ontario, I am entitled to quiet, peaceful enjoyment of my unit. This is impossible due to the continual pressures and uncertainties imposed upon me by this government's policy, and this government is my landlord. Thank you.

Mr Bill Fuller: My name is Bill Fuller, and I do the coordinating for the retired seniors of the United Steelworkers of America throughout the province. I'm also the vice-president of United Senior Citizens of Ontario, zone 14, which is located in Hamilton. Both Gwen and I are members of both of those organizations, and our concern primarily centres on the senior citizens and certainly the low-income earner.

The Steelworkers Organization of Active Retirees is an international organization of retired Steelworkers members and their partners or spouses. The organization was created in 1985 and currently represents 65,000 members in Canada and the United States. SOAR chapter 10 is located in Hamilton at the steel centre on Barton Street.

The United Senior Citizens Organization of Ontario is a provincial organization, and they're an organization of retiree clubs throughout the province. They cooperate with other provincial organizations whose aims and objectives are the welfare of senior citizens. Zone 14 is also located in Hamilton.

We are of the opinion that the government's tenant protection legislation will take away the rights that seniors have under the Landlord and Tenant Act, the Rent Control Act and other rights afforded by other legislation. We're concerned that the bottom line is to eliminate rent controls and have some landlords charge as much as they can as soon as they can. We're concerned that seniors will be forced to move to permit some landlords to implement dramatic rent increases. These revisions will be yet another loss in available and acceptable housing as we now understand it.

Senior citizens and citizens at the low end of the income scale will undoubtedly be most affected by the revisions. Care home residents will also be at the mercy of the landlord, with economic, easy and speedy evictions.

Care home tenants should continue to enjoy security of their accommodation as defined in the Rent Control Act and the Landlord and Tenant Act. Care home operators should continue to be responsible for providing both the services they provide and for any meals etc that go along with that in accordance with the Rent Control Act.

The province, in terminating the cooperative and non-profit housing programs in Ontario, has denied thousands of seniors their option for housing in their retirement years. Housing is one of the basic features that determines the quality and the standards of its citizens. Ontario, under the current government, seems to be intent on totally eliminating all the structures that have been in place to provide the level of housing we are accustomed and entitled to. This is one area that Ontario residents should continue to enjoy, particularly the residents in the low-income brackets.

We in Ontario must keep a comprehensive strategy in place on housing, one that fulfils the needs of all citizens. The government of the day has that obligation to its citizens. Low-income seniors will be put at risk of losing affordable housing in our province. Expensive rental housing will ensure more poverty, ill health and social isolation for low-income citizens.

The current rent control system is a safeguard against unscrupulous landlords and should not be dismantled. We believe the Rental Housing Protection Act should remain in its present form with no changes whatsoever. This is the only protection low-income seniors and tenants who are forced to rent have for their housing needs.

Many seniors are of the opinion that the government has turned its back on them. They looked at Bill 26, the omnibus bill, that gave to the government and its staff the right to pick and choose which hospitals would close or continue to operate. Seniors looked at the drug benefit revisions with the user fees for seniors and the low-income citizens, and I might add that in their haste to put that program into effect, let me assure this government that there are many thousands of seniors who are forced into the position of being accountable for that $100 deductible. You did a very poor job in putting that in place. I think you deferred it for a period of a month or six weeks; you should have taken, I don't know, maybe another four or five or six months and done it right. A lot of people, a lot of seniors, a lot of low-income people just can't afford that $100 deductible and you've put them at risk of not getting the medication they should have, and I think that's important.

There's another change that affects seniors and that has to do with the change in the legislation that affected the RRSPs that some seniors are fortunate enough to have -- not all of them, but some of them have them. That revision forces a senior to withdraw money from that fund at age 69 rather than 71 or 72.

We think it's high time the government took a closer look and listened to the citizens. Health care and housing are key ingredients that make our province and our country what they are today. It's a shame to watch our province systematically disintegrate at the hands of the Harris government. Seniors and low-income citizens have a vote and a long memory, and I'm sure at some point in time they'll equate those. Seniors in particular will increase dramatically in the next few years. One should take a look too at their major role in the election and the election campaign in the United States between the Bush and Clinton camps. Seniors played a very integral role in that, and the Steelworkers were a very integral part of that campaign. I am confident that they will take these into consideration at the ballot box in the future.

Thank you very much for the opportunity to make the presentation.

Mr David Christopherson (Hamilton Centre): Thank you very much, Bill and Gwen, for your presentation. For the benefit of the committee, both Bill and Gwen are well known in this community as leaders in terms of representing seniors' issues and issues for the disabled and other vulnerable people in our community. It's good to see you both here again consistently representing your members and our fellow citizens.

I also want to make quick reference to a comment Andrea Horwath made, that the title of this as any kind of tenant protection is a misnomer. I've just spent two weeks on the road travelling all across Ontario with another misnomer, An Act to "improve" the Employment Standards Act, and inside that act once again this same government is taking away rights of the most vulnerable in our community. They've done it with the 22% cut to the poorest of the poor. They're going after the disabled in terms of WCB. The $8-billion tax cut is felt mostly by working people and those who are most vulnerable, and here basic rights of shelter, the rights of protection from any outrageous rent increases are now going out the window.

I want to focus on one key area that Rosario has said he's heard over and over across the province, and that's the fact that so many people, particularly seniors, I think, will feel trapped; that if they want to move into an available apartment, that place will now be open for uncontrolled rent increases, and in many ways seniors will not have the option to move because they can't afford what those new rents are going to be. Do you see that happening to seniors here in Hamilton?

Mrs Lee: Yes, definitely.

Mr Fuller: Yes, I believe it will. When working people retire, most working people have a drop in income -- not all people, but most people do. A lot of people still don't have pensions. When that happens they take a look at their income, and certainly the income goes down. If they're fortunate enough to have a house that's paid for and they don't have any RRSPs or a great many resources, that house can be the key to the longevity they expect in their latter years, and certainly that's getting longer, so one needs more money. If one doesn't have it, one has the option of selling the house and going into rental accommodation. I think that's an important factor that for the most part may be overlooked.

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Mr Wettlaufer: Thank you for your presentation. One of the things I would like to comment on before I ask you a question is that the $2 co-payment on the drugs -- we were the last province in Canada to do that. It's one of the few things that is allowed by the Canada Health Act. What it did was allow us to add 140,000 previously ineligible people to the Ontario drug benefit plan, the Trillium drug plan, without adding any additional cost to the plan. Also, the low-income seniors are protected under that.

I want to ask you about care homes because this is a particular interest of mine. Last year during the election campaign I called on a number of them in my riding in Kitchener, and one of the comments I heard most often was that the privacy provided under the existing legislation did not permit these people to have the security they wanted and that their families wanted. Could you comment on that?

Mrs Lee: I just don't understand how people can say that the system needs that much change. I've been to conventions and workshops and all kinds of things where care home tenants have been. They talk about garbage-bag evictions. We don't need to cover that; you've heard that everywhere you've been, about garbage-bag evictions, and you all know what that means. It can be as simple as somebody saying, "I don't want that toast; it's burned." The other residents are sitting around the table and they're accused of being a disturber, and when they come home they find all their possessions outside the door and out they've gone.

As far as privacy is concerned, as I said in my submission, there should be an agreement. If the tenant wants and the landlord thinks they need the option to go in almost at will, that should be written in the agreement.

Mr Wettlaufer: But that's not allowed.

Mrs Lee: No, but it should be in.

Mr Sergio: Thank you, Mrs Lee and Mr Fuller. A previous presenter this afternoon from the community legal clinic of the region of Halton, I believe, said that the vacancy rate in north Halton is 1%, in Burlington 0.9%, in Oakville 0.5%. Would you say that in those areas, let alone Toronto, because that's another kettle of fish, there are many seniors and people in high need?

Mrs Lee: I think Hamilton is just about on a level with those. I believe it's 1% vacancy. I'm not sure on the figures, so I wouldn't want to commit myself.

There's another comment I'd like to make. When I came to Canada in 1946 -- that's almost 50 years ago -- I lived in Toronto and I lived in one room, with an orange crate, if any of you younger people know what that is, nailed to the outside of the window to keep my food in. I'm afraid if this keeps up it'll be either living like that in one room or else living in a tent in a park. I'm not being facetious. Hamilton-Wentworth Housing Authority tenants are now paying 29% of their gross income for rent. The next lease, it will be 30%; the NDP put it at 1% over the five-year period. I wouldn't be surprised if you people put it up too. You've got to recover costs, we realize that, but that's getting close to a third of our income, and there are a lot of very low-income people.

The Chair: Thank you very much. We do appreciate your coming forward this afternoon and giving us your input.

Mr Fuller: We're of the opinion that if the controls are off, there will be more accommodation available but at a much higher rate.

HAMILTON MOUNTAIN LEGAL AND COMMUNITY SERVICES

The Chair: Our next presenter is Hugh Tye, executive director of the Hamilton Mountain Legal and Community Services. Good afternoon, sir, and welcome to the committee. You have 20 minutes.

Mr Hugh Tye: I appreciate the opportunity to appear before you this afternoon. We're one of the over 70 community legal clinics funded by the Attorney General's office and the Ontario legal aid plan operating in the province. We serve the Hamilton Mountain region and some of the outlying communities, including Stoney Creek, Dundas, Ancaster and parts of the municipality of Haldimand-Norfolk.

We are predominantly mandated to serve a client base of limited income, including those who are in receipt of social assistance and who received a 21.6% cut last October.

Since our inception in 1985, we have provided summary advice to thousands of tenants and representation to hundreds, if not thousands, both in the courts and the administrative tribunal dealing with rent review, and more recently rent controls, and on appeal in Divisional Court.

I would like to focus my presentation today on that client group, that constituency, as we did in our written submission, which has been distributed.

Our tenant clients are feeling genuinely threatened by this proposal, and I think that needs to be understood. We felt obligated to comment on the proposal and to speak out on behalf of those to whom we provide service. This is why we have provided the written submission, and I hope you will have the opportunity to note some of the comments we have made.

I know that most of what I'm going to say you've heard before. You're looking at me as another tenant advocate who's going to drone on against this proposal. With all due respect, I must confess that when I was told I was going to appear on Friday afternoon at 3 o'clock, the end of the second week of hearings, heading into a long weekend at the end of our short summer, I was a little worried. Again, I mean no disrespect, but after two weeks, I'm sure you think you've heard it all if in fact you haven't. I wasn't sure that what I was going to say was going to be anything new, and if you read my brief in fact it probably isn't.

I thought, how can I make an impression? Unfortunately, I don't tap dance, so with your indulgence, I would like to make a very short audio-visual presentation which, if nothing else, may provide some unwanted stimulation to keep you awake for the rest of the afternoon. The presentation is entitled Exploding the Myths. The document you're very familiar with, of course, New Directions, contains many myths. I'm going to limit my discussion to five.

The first one is that the proposed omnibus legislation will protect tenants. Our analysis is that there are minimal, if any, protections provided that are new. In fact there's a great deal of erosion, if not the elimination, of protection. As many people have stated before you in the last two weeks, vacancy decontrol, although perhaps more palatable, doesn't get us past the fact that the aim seems to be to abolish rent control in the long run. The message to tenants is, "You move, you lose." The protection is gone. The evidence came to the ministry from the Lampert report of last year.

The message also for tenants who are going to be held captive within their apartments in order not to pay more rent is that they indeed are going to continue to pay larger increases than under the existing system, which is also contrary to promises made to tenants by the current government. I refer directly to the suggested increase to 4% of the cap on capital expenditures and the fact that the costs-no-longer-borne policy will be eliminated, and also passing through the extraordinary costs in all cases.

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For those on a fixed income, and certainly that's the client base I'm talking about, people can't afford to pay even the 1% increase. This is not protection. The language suggests it is, but it clearly isn't.

The second point is that there is the incentive to harass tenants. I think much has been made of that. We are deeply disturbed by this recommendation, given that the ministry acknowledges that these changes will encourage illegal activity. We see it now. This isn't new, but it's going to escalate. For many of us who advocate on behalf of tenants, there is no practical remedy in many cases even now to deal with this sort of harassment. As an example, on a Saturday morning, if the landlord has turned off the power, what is a tenant to do? The food in the freezer is thawing. There's no one to contact. Yes, the legislation says this is illegal and you can bring a charge. This is well after the fact and it doesn't get the power on Saturday morning when there's no one available.

The third point under this myth is that the rent registry is going to be eliminated. This is a critical protection and I hope this government is not going to remove this protection. With regard to that, it invites discrimination, and again much has been made of this.

I'd like to draw your attention to a resolution passed by Hamilton city council this week, August 27, 1996. It's the appendix to my written submission. The city has called upon the province to leave in place the Rent Control Act, the Rental Housing Protection Act and the Landlord and Tenant Act. However, if it continues, they have a number of recommendations, including that there be protection for tenants from discrimination during the negotiation period. Clearly we recognize in this area that there is going to be some discrimination as a result of this change.

That brings us to the second myth, that abolishing rent controls will stimulate construction. As you're fully aware, the Lampert report doesn't suggest that the removal of rent control is sufficient to stimulate construction. The minister has admitted that in presentation to this committee, as have a number of landlords. Also, I understand that a landlord lobby group, the Fair Rental Policy Organization of Ontario, has admitted that it is not able to build affordable housing for low-income tenants. This isn't a good/bad thing; it's a reality. The factors that lead to this are purely economic: the land costs, the taxes, the development charges, the construction costs -- the list goes on. Rent control is not a major disincentive with all those other factors taken into consideration.

The city of Toronto did a study and they came to that conclusion. Here in Hamilton-Wentworth the housing report of 1995 certainly reached that conclusion and said it would be naïve to assume that the private market is going to be able to fill the gap. There is a five-year moratorium, as you know, under the existing legislation for new construction, so this has not stimulated construction. In other jurisdictions where they have eliminated rent controls, there's been no building boom. The housing that provides accommodation for a significant portion of low-income tenants was that built in the 1960s and 1970s and it was built because of significant government incentives.

Given this analysis, you have to ask the question, why decontrol the market? Who is this really going to help? Certainly it's a withdrawal of the key protection for tenants and that's what this whole discussion paper is supposed to be designed to do.

I would ask that tenants not be made pawns in a very academic exercise in order to test a very unfounded theory. Real people are going to suffer because of these proposals if they're implemented.

The third myth: The proposed system will increase tenants' choices. Again, not true. There are dwindling options for affordable rental housing right now. There is no new social housing that's going to be built. Some government housing may be sold. There's less support for services to low-income tenants and, as I've argued, we do not believe there's going to be any new construction.

On top of that, the Rental Housing Protection Act it's proposed should be eliminated. The fear is among tenants, and our belief, that there will be demolition and conversion to other means of earning an income and the idea that there is a choice for tenants who want to buy their units is not realistic. Few can afford to purchase and what will result is that stock will disappear. The existing units will become unaffordable and for our client group what this results in of course is homelessness at great social cost to our community and our province as a whole.

The vacancy rate in Hamilton, according to the CMHC estimates, is approximately 1.8%. The Hamilton city council resolution speaks to that and also made reference to the fall 1995 regional report on housing which states that one third of social assistance recipients spend over 70% of their income on shelter, that that would become worse with the reduction in benefits in October 1995, and they feel that you need a 3% vacancy rate as a minimum in order for tenants not to become captive in their units.

The fourth myth is that this proposal will improve maintenance. The city of Hamilton resolution on the second page is a call to the province to have more detailed consultation with municipalities throughout the province before going ahead with any changes to property standards and maintenance. Quite clearly, it's because the proposal is calling upon municipalities to take the burden and to enforce maintenance provisions. At the same time, of course, municipalities have received less in transfer payments and unless there is adequate resourcing, any of the new powers that are suggested in the proposals are going to be meaningless.

I would also question whether it's working now because of the time and the cost that's involved for the municipality and unfortunately there's very little deterrent in that many convictions lead to suspended sentences or minimal fines. We are also finding that justices of the peace are not taking charges seriously, so they're not getting into the process in the first place. Again, as other presenters have indicated, we would endorse a minimum fine as one mechanism to deal with this problem.

We'd also urge you to preserve rent freezes, which results from the orders prohibiting rent increases. Again, the recommendation is to abolish this very valuable deterrent which, in our experience, works. Why get rid of it? Why fix it if it ain't broke?

We would also suggest that notices or orders or any other documentation produced by the administrative offices that enforce the standards be given to tenants, as currently it's very difficult for tenants to know exactly what has been ordered, what the deadline is, what the risk is to them and ultimately if they're going to proceed to court in order to enforce their rights, they need that information. Yes, it can be obtained with a summons, but it's time-consuming and expensive and it certainly doesn't lead to any resolution before getting to the ultimate stage in court.

Finally, there needs to be some forms under the Landlord and Tenant Act specifically for such things as repair issues so that tenants can be proactive and look after these problems themselves.

The fifth myth is that getting disputes out of the courts will expedite the resolution of many of these disputes. I'm sure you're glad I'm finished with that.

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The current administrative scheme is slow. The ministry document admits that. The question is, why is the presumption that the new system could be any better and why are courts being criticized? The clinics here in Hamilton operate a duty counsel at the landlord and tenant court every Wednesday. We have the benefit of participating and observing how quickly or how slowly that process works. For example, this past Wednesday there were well over 100 cases on the list. All of them were dealt with. I think at one point there were three judges dealing with it, but by about noon things were pretty much wrapped up, except for a couple of cases.

Notice is as little as four days to get into the court system. It's not a slow-moving process. Adjournments, when they're contested, are short. Our experience in this city is that they're about a week, maybe two, and also the judges are very strict. They're black and white when it comes -- if there are arrears owed and the money is not available to be paid, the tenant is evicted. I'm not necessarily agreeing with that, but that's the reality. In approximately a month, the landlord, if following the rules and proceeding through court at the earliest possible date, can evict a tenant. I don't believe that's an extraordinary amount of time. Without exception, the judges do want an expedited process.

The one element that judges can add to the equation is something called "equitable jurisdiction." They can exercise this discretion in order to attempt to balance the rights, obligations, needs of the parties, deal with the very specific issues that are presented before them. It adds an element of fairness that we don't often see in an administrative tribunal, as they are bound by fairly narrow and arbitrary interpretations of the provisions.

We are concerned that appeal rights might be affected and certainly we agree that additional consultation is required on this point. With respect to mediation, again there are pros and cons. We would ask that if it is implemented it be voluntary, that there be a sufficient training for the mediators in order to address power imbalances between the parties and that there be some attempt to allow for jurisprudence. Previous presenters have touched on this point, but again, the loss of some of the decisions would be unfortunate for parties on both sides if there is a privately determined settlement.

We have some concerns with the appointment process, but we would endorse the submissions of the Legal Clinics' Housing Issues Committee. I believe they presented on the first day or very early on in the process. We also have some concerns with increasing the default powers of the registrars within the court system. We would also caution against fees required to participate in the process as they may act as an economic discrimination or in fact economic eviction for those low-income tenants who don't have the means to file a dispute if there's money required in order to do so.

In conclusion, the myths that we've touched on this afternoon are effectively the goals of the proposal. They're laudable goals and tenants endorse them. However, tenants have been betrayed by the discussion which follows the enunciation of these goals. The language is inconsistent with that of protection, and we ask the committee to recommend to the ministry that this package not be adopted, that you consider and continue to consider this consultation process as necessary for any reforms that are going to take place and study the impacts of some of these notions that are being presented as solid.

The interests of low-income tenants in particular: Again, the constituency we speak for is too important. They are just too many people who are going to suffer if these proposals are implemented and for that reason we ask that it not proceed in its current stage and that there be full consultation. Thank you.

The Chair: You've effectively used up your 20 minutes so we thank you very much for your input this afternoon.

EFFORT TRUST CO

The Chair: Our next presenter is the Effort Trust Co, Arthur Weisz, Samuel Taylor and Ben Sander. Good afternoon, gentlemen. Welcome to the committee. You have 20 minutes.

Mr Arthur Weisz: Mr Chairman, for a change I would like to see that the panel ask me questions, because there are two sides to every story. One time two gentlemen had a very serious dispute between themselves and they went to a minister and asked the minister to help them out with their problem. John told his side of the story and when he finished his presentation, the minister said, "You are right." Then Mark came to the floor and he told his story. At the end of the story the minister said, "You are right." The third person in the room, who takes all this information, said, "How could both be right?" And he said, "You are right too." We heard this story over and over.

My personal feeling is the Hamilton scene is really different from Toronto, and you will be kind enough to read my submission, what I have, point by point, and there is a rental guide too. When you go to the end of this thing, right at the end, you will find here in Hamilton we try to rent a one-bedroom apartment for $495 with a month's free rent, and the building is a fine downtown building, and they have 30 vacancies from 200 units. The statistics that we have from Canada Mortgage and Housing, first of all are a year old, and the last six months in Hamilton went through a major change in rental. I am in the market for over 40 years. We build the building, we are managing a big portfolio and we have a serious problem.

I would like to see that this group of people read what I say, and I don't want to read it and go through. I am more than happy to answer any question that may be a valid question, but certainly there is always two sides to every story. I am not against or for rent control. I'd just like to see the system eliminated because there's no need for it. We are managing a large portfolio the last five years. We even have GST added to our cost, payroll tax added to our cost, insurance premiums, and for the last five years, we never went once to rent control. We were trying to get some information from the local office. They'll ask, "Who else is going?" They couldn't give us any information because they were almost ashamed to tell us what happened. This is a major expense to maintain rent control. To my knowledge, it's millions of dollars. They are not doing anything. Very capable people are sitting there and they are idle. They may phone tenants and ask them, that according to the rent registry in 1985 what was your rent, and they calculate the increases, and that's their function today because there are no hearings and no nothing.

We have also a provincial regulation, this so-called retrofit. What is estimated between $500 and $1,000 a unit, there is no fund for it. Let me give you a statistic just very quickly.

The Chair: Excuse me, sir, if you are doing that by yourself, for the record --

Mr Weisz: I'm sorry. My name is Arthur Weisz, representing Effort Trust. Ben Sander is one of our associates. Sam Taylor is an accountant.

But let me give you a little bit of information. I am not here to eliminate rent control. What I'm saying is: don't waste any more money. I think this whole thing is a waste of money. The province could use the funds for helping people who need help. The health situation: when somebody's income is less than $17,000 a year, he's getting free drugs. Anybody's income is higher, we pay first $100 and then he pays $6.11 every time he needs some help. I would say that the government could save a lot of money abolishing rent control altogether -- that's a great number of dollars -- and help the people who need their help.

Our experience is that well-located, very nice buildings paying less rent than the buildings that are not so well located and have difficulties. This person who is living in that building is not only getting low rent compared to his income, but that income that he receives indirectly reducing rent is a tax-free income. The landlord has two choices: either fix up the building and spend money, or pay taxes. Some tenants who don't pay enough rent are saving not only rent, but are saving taxes too.

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Just to give you a little bit of information, 110 buildings in Hamilton and the surrounding area are what we are looking after, and 43 of them are not increasing rent, or reducing rent, but are below the guideline. There is a building for sale in Hamilton right now, and the building has 90-some units. The selling feature of the building at the end is that the allowed rent according to rent control monthly is $59,038.69 a month, and they are now collecting $56,515. They are saying this is a good buy because the rent is much lower than the allowed rent control rent.

I would like to stop talking and I would like to see some of you ask me some questions. I would be happy to answer. But what I am saying is, the government would be far better off to use these resources for a much better way and not to count this problem up and up all the time.

We have a crisis in Hamilton, not only a residential crisis, we have a commercial crisis. The Hamilton population -- I attached a sheet -- is declining. The lower city in the last 40 years has 15,000 fewer people, and how many units have been built? It means we don't have to worry that anybody has a chance to gouge rent. Hamilton is not Toronto. Rent control could always be introduced when somebody's doing something wrong.

I'm really afraid -- it happened to us many times. We're getting letters from tenants, "Why do I pay $50 more rent for the same unit than my neighbour is paying?" With this new program that the government has in mind, this gap will be even bigger. There's no guarantee that the man who is paying a higher rent has more income to pay.

The rent should be allowed to go according to the market. Maybe Toronto has a situation where it's not so. But why should we hurt Hamilton and St Catharines and London? When rent control was introduced in 1975, Hamilton rent was $100 lower than Toronto rent. We had an 8% vacancy at the time. Canada Mortgage and Housing statistics are a year old. I spoke to them last week and asked them, "How do you get your information?" The gentleman said to me: "We go to the building. When we can't find the superintendent, then we look at the intercom and when they have two or three no names, that's three units vacant."

There's a little building on Main Street in Hamilton, very nicely kept, no parking, because that building is an older building, 56 units, 17 vacancies. And that should be a statistic? You can't.

The mountain in Hamilton, the upper level, maybe has a little bit of a tighter market, but down in the city you can do whatever you want. You're getting a big reduction in rent. So you can't look at the system. When Toronto needs at a certain part rent control, let's do it. When Hamilton will need some rent control at some part, let's do it. But the idea of spending all kinds of money just to maintain a system that is broken, is not working, and spending money to maintain it doesn't make sense.

I could answer a few questions. I will be happy to do so.

Mr Stewart: Thank you, sir, for your presentation. I was going to ask you a question, because we've been hearing it a lot of times over the last week or two: Are you a bad landlord?

Mr Weisz: I think we are a good one.

Mr Stewart: I thought so too. I'm not trying to be facetious.

Mr Weisz: We're very proud of our buildings. Our buildings are well maintained, within reason. I think we are respected in this community as reasonable.

Mr Stewart: I wasn't trying to be facetious, sir, by any means. But what my concern is, we've heard all around the province in the places we've been that most people aren't at maximum rent. The allowable increase has not happened over the last couple or three years. Then on the other side, folks are saying, "If it's taken off, it may go up," or there's the possibility it might go up, or if it goes up.

My concern is that you are right: There are two sides to this thing. I think that somewhere along the line, we have to find a level playing field. I've heard the old statement, "If it's not broke, don't fix it." There's not anything in the world that you mustn't do a little bit of preventive maintenance to it.

So what I'm saying is, we can't stay status quo. But in your particular case, what is going to stimulate building? Is there building required because there is enough vacancies of affordable housing? Because affordable housing is what we're all talking about here.

Mr Weisz: May I say this? You can't expect a group of people -- some people own a building for 30 years. Our inventory is old. We never had the chance. Our rent is lower in Hamilton than the average rent across the city. Why? Because we never sold anything. If we built something, we kept it. We've never sold a building in the last 35 years. It means we are in a little bit better position than somebody who bought the building in 1989 or 1990.

According to the statistics, even in Toronto a building that was worth $60,000 in 1989-90 because of the free market today is worth only $40,000, a $20,000 decline. You see, when we are not maintaining some value of the building, nobody can build.

But again, let me say one more thing, what is really the most serious thing: The same government that is maintaining rent controls since 1975 is charging to tenants indirectly in their rent two and half times more taxes than an average home owner. How is that possible? A townhouse that is worth $40,000 but is rented is paying taxes on a $100,000 market value. What kind of injustice is that? You reduce the taxes; we'll reduce the rent.

Mr Sergio: Mr Weisz, I believe the first presenter this morning said that rent control had nothing to do with keeping the rents down; it's the free market.

Mr Weisz: May I say this? Rent control helped us. You know why? Because nobody built anything. Since 1975, not one building has been built in Hamilton for rental -- not one. Really and truly, in one way rent control I wouldn't say really hurt the tenants, because Hamilton rent is low. But not one building was built.

Now, we had the previous NDP government which was very sympathetic to the need of housing, and I don't blame them. They built maybe a bigger share of non-profit housing in Hamilton than other places.

Mr Sergio: So you say rent control is helping keeping rents down?

Mr Weisz: No.

Mr Sergio: It's not?

Mr Weisz: At the present time it doesn't, and even at the beginning I would say the Hamilton market -- actually, indirectly the rent control --

Mr Sergio: One more quick question.

Mr Weisz: May I say this? Indirectly rent control maybe increased the rent a little bit. You know why? Because the increase was automatically accepted. It was like 8%? They raised the rent 8%. Some vacancy was created --

Mr Sergio: Mr Weisz, please? Minto, which I'm sure you know fairly well --

Mr Weisz: Fairly well.

Mr Sergio: -- Mr Goldlist, which I'm sure you know fairly well, they all said that rent control is not the problem.

Mr Weisz: Correct.

Mr Sergio: It's a number of other associated problems.

Mr Weisz: Yes, but rent control is a problem, because it's creating a huge administration and a cost for no reason at all.

Mr Sergio: If the system is not broken, just needs a little oil job, why don't we leave the total engine alone, just replacing the sparkplugs and just giving it a little grease job then?

Mr Weisz: I'll tell you something: Eventually we hope that the private sector could build something. There has to be some incentive.

Mr Sergio: What would you need from the government for you to go and build next month?

Mr Weisz: What I need from the government, first of all, on the rent control, no particular help. When the rent control is lifted, I say it again, a rent subsidy should replace rent control. When they are able to do it in the medical field, we should be able to do it in the housing field. Let's say that anybody whose rent is more than 20% of his income should be subsidized. But you will save a lot of money, you will save a great deal of money --

Interjection: On administration.

Mr Weisz: Administration, which costs a fortune, and many others. I'll tell you something: There is --

Mr Sergio: So are you saying rent --

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

Mr Marchese: Mr Weisz, I just want to make a few statements and then ask a question or two, if I can, quickly. I think you've heard everybody saying there are good landlords and bad landlords.

Mr Weisz: Don't give the opportunity to a bad one to become worse, because, again, this new law is creating a new problem, because really some owners may force out the tenants when they have a reason for it.

Mr Marchese: Mr Weisz, I didn't even get to make a statement. I wanted to make a comment too, if I could. There are good landlords and bad ones, and everybody agrees. There are good tenants and bad tenants, and everybody agrees with that as well. It just makes me feel a bit uncomfortable when some people create the impression that we are all against landlords in general.

Mr Weisz: I didn't say that.

Mr Marchese: I know you didn't say that. I didn't say that you did. What we wanted to do, as the New Democratic Party, was to make sure that there are basic protections for people who are vulnerable. Tenants are vulnerable to the landlord. It's not an even relationship. All the tenants speak about that, and many of the landlords that have come here speak differently. They almost make it appear like it's an even relationship: "We love tenants. They're my most preferred possession," or something to that effect. "We treat them well, we depend on them." They create the impression that the relationship is even. It's not.

We put into place, therefore, a legislation of rent control that protects tenants. Now, we know that most of you don't agree with that. Most of the tenants, however, do agree with us. They're very worried about your opinion and theirs that we remove rent controls. We're absolutely worried about that as well, because the basic protections of many vulnerable tenants will not be there.

So when you say, "Just get rid of rent controls and help those who need help," that to us isn't assistance. It doesn't build affordable housing and it doesn't accommodate those who really need to be accommodated, and there are no basic protections for the people that will make sure that they will get the money that is needed to be able to rent.

Do you really believe that your sector is going to build affordable housing? If you get rid of rent control, do you really believe --

Mr Weisz: May I say this to you? In the event the protection for the low-income people comes from the government not from the private sector, the government makes up the difference of the rent, and the people abusing the system, because they are big-income people and living in the finest units, paying 50% of the rent that should be paid -- when you buy a house, to be approved by Canada Mortgage and Housing to be able to get financing, they're using 32% to 33%. I have tenants who are paying 2% of their income on rent. Why should we protect these people? The landlord will pay taxes when he makes additional income or he maintains his building better or he builds. There is some incentive to build because you have depreciation, but when the system is protecting 75% of the tenants or 50% who don't need protection, why should we do that?

The Chair: Thank you very much, gentlemen. We do appreciate you coming forward this afternoon and giving us your input into our deliberations. Thank you.

Mr Weisz: Thank you very much.

The Chair: We're now going to take a five-minute recess out of necessity.

The committee recessed from 1514 to 1520.

DUNDURN COMMUNITY LEGAL SERVICES

The Chair: Welcome back to our hearings. We appreciate your indulgence. Is Mr Condon here yet? Greg Kaufman? I understand Judy MacNeil is here. Ms MacNeil represents Dundurn Community Legal Services. Welcome to our committee. The floor is yours.

Ms Judy MacNeil: Thank you for the opportunity to give these submissions. As Mr Tye said, I understand you've had a long week, and this is the end of a nice day outside, so I'll try to be brief.

Dundurn Community Legal Services is one of the three legal clinics in Hamilton. We've been around since 1981. During our history, we've represented many tenants. We're located in the downtown core, where the abundance of rental housing available is of an older stock. We find ourselves often in court representing tenants, as well as in tribunals and in Small Claims Court and Divisional Court.

We're concerned, with the other clinics, for the tenants we represent. The tenants we represent are mostly from what would be classed the hard-to-house tenants. Very often the people we represent are people who do not speak English as their main language, who are not often literate or eloquent enough to represent themselves or speak up for themselves.

In that regard, one of the things we're most concerned with, although all of the package gives us concern, is the possibility of entering a new tenancy and negotiating a new tenancy agreement with a landlord. It is anticipated, I understand, that landlords and tenants could negotiate not only the rent to a maximum of whatever the market demands but would be able to negotiate additional things like capital expenditures for a particular unit and so on.

Our tenants are not people who are replete with bargaining tools, who are good negotiators. They sometimes are not even aware of their rights, let alone able to exert their rights. While we assist tenants, there are many tenants like that who we do not even meet. If you do away with rent controls, there is some concern for tenants who are in the lower-income region. Perhaps there could be a sliding scale put in place so there would be protection for lower-income tenants.

We're concerned as well about the possibility of eliminating costs no longer borne in applications for increases above the guideline. If this were eliminated, I think there would be a tremendous imbalance set up. It's proposed that landlords would be able to claim for uncapped extraordinary expenses such as taxes and utilities, but there would be no corresponding reduction in rent in such changes as conversion of heating systems that entail a reduction in cost to the landlord.

It's presumed this would apply as well in situations where the tenant can volunteer to pay for capital expenditures to his unit. Certainly if there is a negotiation with regard to these types of expenditures, part of the negotiation should include that once the cost has been paid for through amortized payments under rent increases, there would be a decrease in rents.

One of the other concerns we have is the possible deletion of the Rental Housing Protection Act. The paper indicates that the philosophy behind this is that this has been a deterrent for building new rental housing stock.

I don't think the experience in Hamilton validates that assumption. I know from the submission made by the planning and development staff of the city of Hamilton that there have been over 30 applications since 1986, when the legislation came into place. Most of those applications, I understand, have been successful, and in most cases tenants have supported the conversions. Most of those applications, by the way, have been conversions to condominiums. Because the city has had control, as it were, of the applications, they've been able to negotiate conditions for approval on these applications, conditions whereby the tenant is secured tenure, in some cases of two years or more -- the minimum is two years. In some instances there have been payments, buyouts. In some instances tenants have actually stayed on as tenants along with the condo purchasers.

We feel that, as in the paper that's been submitted by the city of Hamilton, having the municipality have control of this allows the municipality to control its overall planning scheme as well as its microplanning scheme, if you will, since the city looks at vacancy rates, the supply of affordable housing, not only on a city scope but also on the area within which the application deals. We feel tenants have been well protected by the present scheme. We don't feel that it's not working. We have no evidence that it has discouraged investment into building new stock or upgrading present stock.

Finally, with regard to maintenance and repairs, I know a lot has been said with regard to the increased role of the municipality. I know we work hand in hand with the property standards/building departments to effect repairs being done. They are often very generous in providing us with copies of letters or notices or work orders that have been sent out. Our only concern is that presently there is a problem that when a tenant leaves the unit or the house, that's the end of the story, that because the department is overburdened right now, they call an end to their implementation of the repairs being done. It may be that their increased enforcement roles will be effective. We feel there are some problems with the present system, but not necessarily that an overall change is necessary.

One of the things we found very effective is the orders prohibiting rent increases. I know the philosophy behind removing that from proposed legislation is that it's an expensive procedure and adds an administrative burden on both the municipality and the present rent control programs, or whatever administrative body would be doing it, but actually it's a rather simple procedure. As you are aware, the property standards or building inspectors send out a number of notices to whoever is on title and this is just one more notice. In this age of computers where programs are available, I don't think the fact that an order would be issued as a consequence of a work order in place is an additional burden.

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One suggestion that is made in the discussion paper is the removal of notifying everybody on title. I don't think that necessarily will streamline the process, since title searches will be necessary in any event.

With regard to the dispute resolution system that's proposed, we support mediation as a viable means of resolving matters between landlords and tenants, but I don't think it's an answer to all problems. We have been trying to set up an independent mediation system here in Hamilton where tenants and landlords would have the option of settling their problems in this way. We don't want to see that this is a mandated adjudication; we'd like to see it as an alternative to adjudication. We'd like to see voluntary mediation and some clear indication to the parties that adjudication is available and that any unsuccessful mediations will not be used prejudicially against them.

Finally, we're concerned that the discussion paper is just a glimpse into proposed changes. We certainly would like the opportunity to see the legislation once it has been drafted. We'd like the opportunity to consult with further committees or this committee. We hope that public hearings will be scheduled that will allow concerned stakeholders to have some kind of input into the new legislation so that it is equitable to all parties. Thank you.

Mr Sergio: Ms MacNeil, thank you for coming down on a Friday afternoon and making a presentation to us. What got my interest at the beginning of your presentation was that I noticed a subtle approval of the city allowing conversion of rental units to condominiums. If I'm wrong, please tell me that. Is it because the city -- we call it the city but I think the owner of the rental building is more than happy to agree to a lesser rent for a particular period of time as long as he gets what he wants. If I'm wrong, please tell me. If not, do you think this is a good way to go about -- if I say "depleting" then I'm telling you how I feel. I want you to tell me if it's a good way.

Ms MacNeil: No, I don't think it's a good way to deplete the stock. What I'm saying is that the system we have in place now has taken into consideration the stock that we have here in Hamilton, and the city has been very careful in allowing applications, although there have been minimal applications in the past 10 years since the legislation. In fact, in some instances buildings have been involved in which there were not many sitting tenants. There were very few tenants.

Mr Sergio: Do you think municipalities should be given carte blanche with respect to conversions?

Ms MacNeil: I think the system we have, the rental housing protection, should remain in place.

Mr Christopherson: I just have a comment, and then my colleague perhaps has a question. Judith, thanks very much for your presentation. I just want to mention for the record and for the benefit of the government members that your comments regarding the Rental Housing Protection Act are exactly the way it happened. I was a member of city council when that law came into effect and served there for four years while that was in effect, and I can say it did not cause any undue hardship anywhere. We were not under pressure from landlords, developers, speculators or anybody. Everyone saw it as a fair piece of legislation that allowed the city to deal with the question of affordable housing stock in a fair way that took into account the importance -- sometimes we did allow it. We would allow demolitions, for instance, in certain locations if it made sense for the neighbourhood, but it also allowed us oftentimes to save important housing stock.

I emphasize that my experience here in Hamilton is that this is a good piece of legislation. I don't know what's driving the government to want to remove it, but I think they're making a big mistake. I don't think there's any particular itch that you're going to be scratching by withdrawing this protection.

Mr Marchese: Thank you as well for raising other issues that many have raised around costs no longer borne, the rent registry, the order prohibiting a rent increase as an effective tool in effecting maintenance and so on; all that is something of concern to many.

Many landlords believe that the present system is tilted towards the tenant, that there's no balance, and that this proposal effectively brings back some balance to the poor landlord who has been hard done by, as it were. Do you think there's such a problem?

Ms MacNeil: Is this the rent control system or the whole housing package?

Mr Marchese: The whole thing.

Ms MacNeil: Certainly any system demands some improvements. I don't see this as being particularly unfair to landlords. I deal with a lot of landlords and I haven't heard the cry from them. I voice Mr Tye's submission with regard to the equitable discretion of the judges right now. The courts have traditionally protected contracts and protected property owners. I think they bring that background with them when they adjudicate on landlord and tenant matters particularly and balance with the discretion they have.

Mr Smith: Thank you for your presentation. I'm not sure if you were here for the previous presentation, but you raise the issue of negotiation in your paper. It's an issue that is obviously identified in the position paper that the government has circulated. The previous presenter appended to his presentation a letter from a tenant who had identified rent decreases for units similar to the one he was living in, and then followed with correspondence that indicates that the landlord was prepared to recognize the lower rent and negotiated a new rental agreement that was less than what that individual was proposing to pay.

Perhaps this is an unfair question to you, but from your professional experience, is this type of informal negotiation taking place on a regular basis now? And is there a distinction that needs to be made between negotiation for monetary value of the rent versus terms of the agreement? I take it from your paper that you're concerned with the terms of the agreement, not necessarily with the monetary value.

Ms MacNeil: I mentioned in my paper, which I didn't mention in my oral presentation, that we're concerned that negotiations would be a whole contracting out of the legislation, which is what they have in British Columbia right now. I'm concerned that if negotiations are allowed, they be limited to the rent.

I didn't hear the previous presenter. I can't say that I have seen a lot of it. I saw some of it a couple of months ago, when we might have had a little higher vacancy rate. Our vacancy rate now in Hamilton is coming down. As apartments get more desirable, in that sense, then negotiations will change.

There have been some negotiations, and I think right now there's a protection on both parts. Presently the Rent Control Act has a stipulation that if the landlord is asking less than the maximum legal rent, he inform the tenant in writing that he is asking less: "This is the legal rent, and I can raise the rent to this amount." If he does not do that, he has to wait until two years have passed. So yes, there are protections presently for both parties.

The Chair: Thank you very much, Ms MacNeil. We appreciate your coming this afternoon and giving us your input.

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HAMILTON-HALTON HOME BUILDERS ASSOCIATION

The Chair: Our next presenter is the Hamilton-Halton Home Builders Association, Gabriel Desantis, Dan Condon and Anthony Dicenzo. Good afternoon, gentlemen. Welcome to our committee. The floor is yours.

Mr Gabriel Desantis: Before I comment on the specific paper, we as an industry are encouraged and delighted that this government has brought the issue to the table for all parties to discuss.

That said, my name is Gabriel Desantis, and I'm currently president of the Hamilton-Halton Home Builders Association, which is the second-largest association in Canada that represents a large number of developers and landlords in the Hamilton CMA. To my right is Dan Condon, presently the executive officer of our association, and to my left is Anthony Dicenzo, representing one of the largest landlords in the area, as well as a member of our association.

Following the June 25, 1996, announcement of the new Tory tenant protection proposals, the industry's initial shock and disappointment quickly gave way to alarm as the real implications of the package sank in. At our association, numerous committee meetings were held over the past several months to analyse the substance and prepare our response submission. But before getting into any detailed response to issues, every member and every ally must reconsider the following facts: Once again government is changing rent controls. Each time a change is made it is progressively worse for the landlord and tenant community.

Just like its predecessor, this policy starts off with the wrong foundation: private property for social policy. By that we mean the private rental sector is still being used to implement social policies to address the affordability problems of some tenants. Our prices are competitive, yet we are expected to subsidize all tenants, whether they need it or not, through rent controls. The government must be reminded that it is society's responsibility and government's role to redistribute wealth through the tax system and social safety net, not price controls.

The Tories recognized all this before the election and following their victory said they were going to do the right thing. They knew that the current system was not working and that changes were needed to generate new housing, create jobs and reduce government costs. That's why they were going to restore the market function.

This proposal is a far cry from what was promised. In taking away legal maximum rents on the first turnover, the Tories are retroactively confiscating capital expenditures and resulting rent increases previously earned. The NDP's Bill 4 only destroyed the segment of the market that had recently completed capital expenditures. This proposal hurts everybody. The tradeoff of losing legal maximum rents for decontrolled rent control is disastrous. In a soft market like today's, this one policy change would wipe out our asset values and condemn the industry to bankruptcy.

At our association we advocate a position that carefully allows for a transition from overregulation to market function, with vacancy decontrol and full negotiations between landlords and tenants. It advocates tenants' consumer protection through a complainant-driven arbitration process. This is the only way to achieve the government's goals of encouraging investment, jobs and choice in the market.

The following summary, which our executive officer, Dan Condon, will take you through, represents our major concerns which centre on (1) loss of legal maximum rents on the first turnover; (2) the inability for landlords and tenants to negotiate freely; and (3) more cumbersome maintenance provisions.

Mr Dan Condon: As Gabe pointed out, my name is Dan Condon, the executive officer with the Hamilton-Halton Home Builders Association. We will concentrate our comments on those three main areas, the first being rent control.

The main area of concern for landlords is the loss of legal maximum rent on first turnover, particularly in the soft markets we are currently in. Our written proposal will show how this disastrous change makes it impossible to accurately plan capital expenditures; also how this proposal makes it difficult to service tenants, as it will pit sitting tenants against new tenants.

Our alternative is the public position put forth by our organization, that the existence of a previous legal maximum rent higher than what is currently being charged should be an additional basis on which to receive an above-guideline increase, subject to the cap. This will protect tenants against large increases while allowing rents to be restored to legal levels in a reasonable time. Legal maximum rents should not be frozen. There is no reason to freeze maximum rents.

There is no need to maintain the rent registry, which is costly and inefficient. Landlords will be able to prove their maximum rent entitlement by means of previous orders and the final rent registry listing.

Above-guideline increases should also be possible on the basis of comparisons to similar rents for comparable units in the area, both within the building and externally. This will allow for addressing the problems of substantially below-market units and disparities within the building while tenants will be protected by market forces.

Capital expenditures should be able to extend beyond the two-year phase-in and maximum rents will need to be embodied in the order. Work ordered against a building should be exempt from any type of cap. This would include retrofit.

We feel there's a need for clearer rules for discounted rents; a need for minimum dollar increases as well as a percentage to avoid penalizing low-rent units and widening their gap from the market; and no cap on the ability of landlords and tenants to agree to a mutually acceptable rent increase.

With respect to rent reductions and abatement, in the case of inadequate maintenance applications, only conditional abatement should be possible, with the rent penalty removed once the problem is rectified.

Permanent rent reductions will apply only for permanent withdrawal of service or tax decrease. Rent reduction applications should require a filing fee and result in a separate hearing from any application for rent increase to reduce the incentive for frivolous applications.

With respect to the Rental Housing Protection Act, we support the proposal to eliminate the RHPA. Some older stock would be worthless without the RHPA gone, because owners cannot refinance.

Tenure: Give tenants extended security of tenure on condominium conversion, meaning the right to remain as tenants if they do not wish to purchase, but paying rent at market rentals; also, right of first refusal for re-rental at the new rent; and in the case of renovations, one-year notice of demolition with the right to leave at any time.

The province must ensure that landlords will have the option to convert, demolish or renovate as a right. That means not just the elimination of the RHPA, but preventing municipalities from blocking through planning requirements, refusal to issue permits etc.

With respect to maintenance, our main areas of concern are the loss of the requirement that a notice of violation be issued prior to a work order. Violating a property standard will be an offence, rather than a failure to comply with the work order. Owners of a substandard property would be ticketed on the spot. Maximum fines should be increased.

There must be a clear requirement that tenants notify landlords of maintenance requirements and allow a reasonable opportunity to rectify. Legislation must also provide landlords with the statutory right to inspect units with 24 hours' notice in order to be aware of and able to address any potential problems.

Finally, with respect to the Landlord and Tenant Act, we support the government's proposal to allow a landlord control of subletting and assigning. In order to speed up the process and remove the incentive for delay, rent arrears must be paid into court if there is a dispute. Set-asides must be on notice and only on certain grounds. Landlords and tenants can agree on separate and additional services and charges, and a tenant majority, 51%, could be required for security of common area services.

That summarizes our position on those particular ones. There is some mention of care homes and mobile parks, and our submission basically will follow the guidelines of those who have a little bit more expertise on that: the Ontario Manufactured Homes Association and the ORCA respectively. That's it. Thank you.

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The Chair: We have about three minutes per caucus for questions, beginning with Mr Marchese.

Mr Marchese: You guys are a bit unhappy with this particular proposal because it doesn't go far enough. Is that fair?

Mr Condon: We're happy in that it's on the table and it'll be discussed. If a couple of issues are rectified, we would certainly be satisfied with it.

Mr Marchese: We've been hearing in Toronto and all parts of Ontario from tenants -- individuals and tenant organizations -- legal clinics, organizations that serve vulnerable people, seniors, people with disabilities, people of low income, abused women. They're concerned about this proposal in terms of the lack of protection it gives to tenants. Do you think they should be concerned?

Mr Condon: With respect to our association, we have always been on record as saying there are instances where, for whatever reasons, there are people who cannot afford to house themselves, and by all means there should be a safety net system there for them. However, to take the entire market and put it under a safety net we feel is not appropriate.

Mr Marchese: We've heard from many who say that 80% of the people who are on social assistance are in private rental accommodation and many of these people pay up to 70% of their income on rent, which leaves them very little to survive on. So they have a big concern about the removal of rent control that could increase rents even further and they are asking, "Where is the basic protection for people like us?" -- not just them, but so many others in a low-income bracket.

Mr Anthony Dicenzo: I suppose the answer to that would have to address whose function it is to protect those individuals and the availability of their housing. Is it the function of private enterprise to subsidize social assistance essentially, or is it the function of government outside of private enterprise, through whatever taxation mechanism etc, to protect those individuals?

Mr Marchese: This is where we disagree, obviously --

Mr Dicenzo: Obviously.

Mr Marchese: -- you, me and the other group over there. We believe governments need to be there to regulate aspects of life which are essential to them. For us, housing is a right. You're saying, "Please don't let us subsidize them," as if somehow all of you are poor as a result of housing these people and if you didn't have rent control, you would be able to survive. As a result, you're barely making it.

Mr Dicenzo: So you're defining the right to function in society as a function of whether you're rich or poor, an owner of property or a renter of property. You have said that as a consequence of the landlord not being poor, he should be the one subsidizing these tenants.

Mr Marchese: No. You're making 10% profit.

Mr Wettlaufer: Thank you, gentlemen, for your presentation today. One of the things we have to arrive at is that, first of all, this is a discussion paper designed to obtain input and it's an attempt by our government to put some fairness back into the system. I don't think we as a government want to give full protection to landlord or tenant. We already have an adversarial situation existing in the province, and personally I'd like to see some of that eliminated.

You talk about eliminating the maximum legal rent altogether -- no mention of it -- that you feel it's a hardship on the landlord. I think if we don't eliminate it, we are creating a hardship on the tenant. I would say you can't have your cake and eat it too. We in politics have to achieve the art of compromise and that is what we are attempting to do here.

In so far as rent controls are concerned, we've heard a lot of input about the amount of intervention by governments at all levels, whether it be taxes, whether it be the controls. Would you suggest that the elimination of rent controls, as provided in this discussion paper, would be a first step to building more units?

Mr Dicenzo: To building more units? So we're not focusing on the entirety of the proposal, we're focusing on a subset, which is, will it increase housing stock within Ontario?

Mr Wettlaufer: Will it be a first step to that?

Mr Dicenzo: I would say yes, it would be.

Mr Condon: It might be a first step, but I don't think you'll see a shovel go in the ground with it, if you want to get technical.

Mr Wettlaufer: I have another question which ties into that. Eighty per cent of the buildings we have in Ontario now are four units or less. Do you see that there could be more construction of buildings of four units or less?

Mr Dicenzo: In order to ensure construction to one extent or another, you have to ensure that the landlord and its financer are going to be provided with some comfort that they will get a return on their investment. Your earlier question was whether this would be a first step. In its existing form it would be a first step in terms of addressing that, that you have to look at that consideration, look at the landlord and its ability to make a return on its investment. Would you see more actual housing starts because of it, whether it be four units or less or more? I wouldn't think so, only because the same concerns under the existing legislation as to the inability of the landlord to guarantee a return based on his expenditure, based on capital improvements, based on market influences. All those things will not exist in a free market. It will be still controlled by this legislation.

Mr Kennedy: I'd like to ask you what you think of a quote the minister made. He said he thinks that the landlords right now at the present time are in an upper-hand position where, because of the total lack of supply, they don't particularly have to be concerned about the wellbeing of tenants because there are a lot more tenants than there are apartments. That's the Minister of Housing, Al Leach. I wonder if you could comment on that.

Mr Dicenzo: Has he seen the vacancy rates currently? Typically, if there's not zero per cent non-vacancy, it suggests there are more apartment units available than tenants. I think the statement itself has some concerns to it. But the landlord is not in a better position than the tenant, because the landlord is in a position to act freely based on the demand that's created by tenants.

Let me give you an example. The one thing I haven't seen in any of these papers is the term "vicious circle." Back when rent controls were introduced, they were introduced to ensure that some degree of affordable rental accommodation was afforded tenants. Great. Immediately that had the result. It also had the result that landlords can no longer be assured a return on whatever dollars they were putting into the building. They were curtailed to an extent. Because of that, they were curtailed in the extent to which they can maintain, upgrade, improve their building, no matter what the market influences.

Mr Kennedy: The minister is saying that the only way tenants should look at this is as a way to equalize their position because you will build more units. This is what the minister said in the opening statement. The whole reason for these proposals is so that you will build more units, yet you've just told us previous to this -- the gentleman said there won't be a shovel in the ground. You said you need to know if you'll get a return. There's not going to be long-term stability if we have this chronic changing, as I think you mentioned in one of your presentations already, of the rules over and over again. How can you invite investment, how can you get financing if these rules keep changing?

I can tell you, and there are a lot of tenants here who will reaffirm for you, that this is a conflict position being opened up. Why, instead, isn't there some way to find -- for example, if taxation is a barrier to things, why can't we look at some of the common ground? But I think people want to know, do you believe you'll be able to increase rents if rent control is lifted? I think that's a key question for tenants. Will you be increasing rents?

Mr Dicenzo: At the present time, the only way --

Mr Kennedy: No. I understand not at the present time, because there's some flexibility in the market, but overall.

Mr Dicenzo: Let's not get too many laughs when I say this, but I'm a true believer in free market enterprise. The only way a landlord is going to be able to increase rents is if the unit justifies it. If, because of whatever number of years of rent controls, units have been falling into disrepair, apartment buildings fall into disrepair, what have you, and those units dictate a certain level of rent, he's not going to be able to increase it because suddenly he has no rent controls on him. He's going to have to do something to those units.

Mr Kennedy: You understand the fear --

The Chair: Thank you very much, gentlemen. We do appreciate your coming this afternoon and giving us your input.

Is Greg Kaufman from McMaster Student Union in the audience? Okay, is Angie Tomasik here? Are you prepared to go ahead? Okay, come forward then.

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ONTARIO RESIDENTIAL CARE ASSOCIATION

The Chair: Paula Jourdain and Laurie Johnston, welcome to the committee. The floor is yours.

Ms Paula Jourdain: Thank you for this opportunity to share our position on the proposed tenant protection legislation. My name is Paula Jourdain and I am president of the Ontario Residential Care Association. I'm joined by Laurie Johnston, our area president for the Burlington, Hamilton and Niagara regions.

Our association represents about 250 retirement residences providing personal care for more than 15,000 seniors. You should also know that membership in our association is contingent upon passing and maintaining strict quality standards. We also operate a public information service and routinely advocate on behalf of residents and families.

You have heard some association viewpoints in previous committee presentations, so I'll limit my comments to some highlights. Laurie and I welcome your questions at the end of the session.

First of all, I would like to say that we strongly support the abolition of the Residents' Rights Act, including the removal of care homes from the Rental Housing Protection Act. This legislation was totally flawed and looked at people as if they had no needs at all. Care homes serve a valuable function in the continuum of care. It's not an apartment and it's not a nursing home but it combines aspects of both. By just plugging care homes in like apartments, which deal with units, it doesn't reflect the changing needs of our residents. By taking things out and recognizing that we are providing care, we can respond to changing needs of residents and meet their needs without having to move them or encumber them with bureaucratic paperwork, which was done previously.

We are against rent control of any kind. We know that deregulation benefits care home clients who are seeking quality personal care services. Prior to the Residents' Rights Act, our clients directly benefited from an intensely competitive market that forced care home operators to add value to their various service packages. This important consumer phenomenon is optimized in an open market. Full information disclosure provides the necessary consumer protection we all want to see. With rate increases, notice periods and service delivery commitments all detailed in a resident's contract and the care home information package, consumers are protected.

There is nothing that has occurred since the introduction of the Residents' Rights Act that suggests that consumers are better served under the current rent control laws. In fact, in many cases they are not served as well. This legislation means we have to do all our dealings with the residents, many of whom are incapable. In other situations, prior to this legislation, we were able to deal with the family or with an advocate. Here, everything has to be done with the resident, often someone who's confused. It's worse for the resident in a lot of cases.

We would suggest, however, that the residents would benefit from a more simplified agreement and care package. At the present time, the seniors come in, they have to sign a 20-page admission contract plus receive a CHIP, and the bureaucratic imposition at the time of admission is just ridiculous. We've suggested to the ministry staff that the two documents could be combined into a single user-friendly disclosure package. We offer our experience to assist in drafting that document, and we are working with the ministry at this time on that.

We draw to your attention an important omission. Neither the current or the proposed legislation recognizes the full range of short-term stays. We recommend they be exempt from the legislation. Many times people want to come into a retirement home just for a weekend while their family's on vacation. They also have to sign these 20-page documents and it's just incredibly complex.

We suggest that the terms "respite and convalescent care" be added to the emergency and rehab short-term categories. This allows care homes to respond to a common family request where an elderly parent is placed in a care home on a short-term-stay basis while the family is out of town.

We further recommend that residential care homes be formally recognized in the mandate of placement coordination services.

The Hamilton-Burlington area is just a prime area where we have huge waiting lists. I think it's like 2,000 on the nursing home waiting list at this point in time, and yet we have some retirement home vacancies. Much of this, up until the past three or four months, has been because there's been no cooperation from the long-term-care placement coordination service with the retirement home operators. Retirement homes deserve a place in the continuum and this needs to be addressed.

It's further complicated with the role of home care. That's not the mandate of this committee, but it is something that will need to be addressed by the government in the future: What is the role of home care vis-à-vis retirement homes and nursing homes?

We want to ensure resident protection to appropriate settings when care needs increase beyond our care home resources. We recommend that as a condition of admission to any care home, prospects be required to purchase a full-service agreement, including accommodation. There should be nothing in the legislation which could be interpreted to allow individuals to unbundle a basic service package.

Overall, we're very pleased with the new directions proposed by the government. Clearly a special care home section speaks to many of the concerns our members and their residents and family members have expressed these past two years. We look forward to continuing to work with the government in the best interests of our residents as well as the future residents who will require quality personal care services across Ontario.

Our handout features summary notes representing input from our members, their residents and families. We welcome your questions and any comments.

Mr Smith: Thank you for your presentation. We've actually heard a great deal about care home provisions and specifically some concerns around the transfer process. I'll come back to that in a moment.

Given your comments to add respite care and convalescent care to the provisions and recognizing your concerns about bureaucracy, what would you envision as the appropriate process to allow for respite care or those seeking --

Ms Jourdain: Perhaps we could have a shortened agreement that's just recognizing that it's a short-term stay, maybe a two-pager that outlines the services, what's included, what's not, and that this is less than two months or something and a full package could be provided after that.

Mr Smith: So it could reasonably be accomplished in some form of written agreement.

Ms Jourdain: I would hope so, yes.

Mr Smith: Yesterday in Peterborough we heard from the administrator of a care home who expressed concerns about her ability to enter where an individual might have fallen or had a stroke or heart attack. She suggested to this committee that she's prepared to break the law, because she's a nurse, in terms of providing that individual medical care. Do you share that same concern?

Ms Jourdain: Absolutely. In our other full brief we address that. The legislation does provide that we will be having an enhanced right of entry if it's signed by the resident. We believe that when the resident comes in, you sit down with them and they should sign: "Do you want the facility to come in?"

The resident has the right to risk. If they don't want anyone coming in and if they fall out of bed and die, that's their responsibility and that's their risk. They have the right to that. If on the other hand they come to a facility because there's 24-hour staffing and they would like someone to check on them, we think they should sign that, but that should be clearly indicated and we have no problem with stipulating that it be signed in a contractual arrangement.

Mr Smith: The one area that there has been some concern expressed about is in the transfer process. Have you given any thought as to what that process might look like? That is, as you're aware, a question that's been specifically asked in this position paper. Have you given any thought to that at all?

Ms Jourdain: We believe that PCS is the appropriate spot. They have a full mechanism for assessing residents and they can determine what's appropriate now, and 90% of the transfers would be going to a long-term-care centre. There are psychiatric transfers where people have to be discharged because they are totally disruptive to other residents; they may be unsafe. In that case, we're recommending that the house physician would make an assessment, subject to an appeal at a later stage, but I think in the interests of the safety of the residents, it's more important that disruptive residents be moved right away. Like I'm saying, these psychiatric residents are a very small portion; 90% or more would be to PCS through a long-term-care placement.

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Mr Hardeman: Just going on with Mr Smith's question about the change of care required and the transfer of the patient or the individual, you suggested that the care home should be under the placement coordinator's jurisdiction. Would that also then deal with the transfers? Would the transfers be done through the coordinators?

Ms Jourdain: We would want to be recognized by PCS so that when they're doing referrals, when they look at someone -- right now they say either you stay in your home or you go to a nursing home. They don't suggest a retirement home as an option, and in many cases a retirement home is an appropriate option, especially if someone wants institutional care and there's a long waiting list.

Mr Hardeman: But in the transfer, when there was a transfer required because the individual required more care, if you were put into or directed to the care home through the placement coordinator, would you then also not be directed elsewhere through a placement coordinator?

Ms Jourdain: Sure. If you're in the care home now and you need more care, you'd go to PCS and get assessed. What we're saying is we need a fast-track mechanism if someone really fails quickly.

Mr Hardeman: I guess my question --

The Chair: Thank you, Mr Hardeman. Mr Agostino?

Mr Agostino: Just on process, when some individual is on the list and then there is a replacement that comes on, who makes that decision and who is the request made to?

Ms Jourdain: The list for what?

Mr Agostino: No, I'm sorry, the list here. If, for example, an individual is on the schedule for 4:20 and all of a sudden we're told the individual is not here but someone else is replacing them, how is that decision made?

The Chair: If the person on the list decides to send someone to speak in their place, that's their call.

Mr Agostino: Just as an observation, and it's not a reflection of this organization but maybe a coincidence, it's the second time it's happened today with an individual being replaced by organizations that strongly support the legislation. I would think that somehow that's not happening by accident.

The Chair: Mr Kennedy.

Mr Kennedy: I wonder if you could explain. You're against any rent control of the retirement facilities. Could you tell us why you think it would be an impediment to your operations? You suggest that the market was providing good choice and good prices anyway, so why would rent control get in the way of that?

Ms Jourdain: Most of us have charged less. Many retirement homes have vacancies, and retirement homes are geared to people who have independent funds. They are not assisted seniors' housing. It's a choice people make. They vote with their feet. If they don't like the service, they go somewhere else. It's just another bureaucratic -- it's like rents in Toronto. They haven't gone up more than the rent control because there are vacancies.

Mr Kennedy: At the moment, but obviously everyone's very mindful that those rents are quite high. How do the costs for retirement homes here compare to those in other provinces?

Mr Jourdain: I beg your pardon?

Mr Kennedy: How do the costs for members of your industry in this province compare to other provinces?

Ms Jourdain: I really don't know.

Ms Laurie Johnston: It depends. The different provinces have different means of legislating retirement homes. For example, in British Columbia there can be no nursing component in a retirement home. Therefore their rates are a lot less because they do not have 24-hour registered staff on. It depends on what the retirement home is offering.

Mr Kennedy: We did have information from a legal clinic early in the hearings that there were higher prices prevailing in Ontario and that this would be one of the arguments why there should be a measure of rent control. Is that something you can comment on?

Ms Jourdain: Other than it's people's choice, it's the services we provide. Like we said, some provinces don't provide any care in the homes. We have registered staff on.

Mr Kennedy: Could you identify for us the amount of vacancy that exists in retirement homes? In other words, you mentioned that there are vacant units. What degree of vacancy is existing?

Ms Jourdain: I think it's about 15% vacancy province-wide, 85% occupancy.

Mr Kennedy: So a 15% vacancy rate prevails.

When you talk about the special provisions that you're recommending here, I think everyone appreciates that there will be some special considerations required. What kind of turnover rate is there for people in those?

Ms Jourdain: About 30% a year.

Mr Kennedy: So somewhat higher than what you'd find in other apartments.

Ms Jourdain: Substantially higher.

Mr Kennedy: We've learned that there's about a 20% rate prevailing for the general marketplace.

Ms Jourdain: And that's the reason, and people's needs change. Sometimes they'll come in with a spouse so they'll rent a room. You make a rate for two people. The spouse in a joint facility might go to the nursing home, so then you'll discount the room. There are all sorts of weird and wonderful things that happen as people's needs change.

Mr Kennedy: I just want to bring you back to my original question. In what way does rent control really then constitute a constraint if you have 15% vacancy and you have lower prices you feel are fair market prices?

Ms Jourdain: It's administratively a nightmare. It's just another paperwork exercise.

Ms Johnston: The rent registry used to be a page long. There are now 20 pages. When you're dealing with residents who don't understand the legal jargon etc, it's very cumbersome.

Ms Jourdain: It's not the rate increase that's the problem of rent control; it's the legislation and the fact that you've got to go to the registry, you've got to submit forms A, B, C, D. It's double staffing and it costs more people. You've got to have full-time secretarial staff to do all this paperwork and more photocopying. It's higher cost.

Mr Marchese: Thank you both for coming. One of my concerns, or at least an ongoing concern of mine, is what happens to frail people once they are in the care of other people. I often worry about some abuses that might go on. We know that there are some good ones and bad people in terms of the kind of care that you provide for them. I take my guidance from people who are in the field in terms of the kinds of concern I would have for them. This morning we had the Housing Help Centre for Hamilton-Wentworth who came in front of this committee and asked several questions or made several points around this. I'd like you to respond to some of them.

She says: "It seems that second-level lodging homes tenants don't actually want to deny their landlords entry into their rooms" -- with respect to issues of privacy and access -- "they only want the right to be asked before someone comes in their room. While second-level lodging homes landlords continue to make objections to the access requirements in the legislation, we have only heard of hypothetical problems with the regulations. No second-level lodging homes landlord has told us of an actual experience where the legislation hindered their ability to enter a tenant's room to maintain a safe home or to provide care services."

Ms Jourdain: Technically, it's against the law and you get the one out of a million who decides to take you to court because you went in their room, and you can go to court. Why have a law that's silly? If someone does not want you to enter their room, we are quite prepared to have that in a contract. Have it in the entry contract. Tick the box: "Do you want us to enter? Do you not want us to enter? Under what circumstances?" Fine. But don't make it against the law. That's why they're there, to provide care.

Mr 0Marchese: It seemed from what she said the tenants were glad to have their right to privacy enshrined and to have a mechanism for complaint.

Ms Jourdain: Then tick off that they don't want it, but just have it as an option. And with regard to your comment that there are good and there are bad operators, there's no question about that. Our association has a very strict set of standards. We inspect homes and we've advocated to the government that our standards be recognized, because we do need standards. I mean, everyone wants to go in: "Oh, a lot of people are getting old. Let's go build a retirement home." So, yes, there should be standards. We don't want problems.

Mr Marchese: Let me ask you on the issue of transfers -- they say: "We are concerned that decisions about transfers will be made by landlords and not by tenants. It is essential that a tenant's changed need for care services be determined by the tenant and/or his or her doctor and family members where appropriate. This is not an assessment that landlords should be making, especially in isolation."

Ms Jourdain: That's correct. There are some situations -- and we agree it should be a doctor's recommendation. But there are times when an individual and even a family might be stubborn and not want to move. You want to provide more care and they will not accept more care. So then it should be a physician's decision and we recognize there should be a right of appeal.

Mr Marchese: They also add: "As it appears from the New Directions paper that these transfers will be based on a changed need for care services we would urge that transfers between care facilities should not be dealt with in the Landlord and Tenant Act, but rather through regulation of care services."

Ms Jourdain: We have recommended to the government that standards be recognized across the province and we agree. I mean, we are not landlords and tenants; we are caregivers and residents.

Mr Marchese: I understand. They understand too.

Ms Jourdain: That's fine. The NDP are the ones who did this. I don't know why.

Mr Marchese: On the fast-track evictions, they say, "It is essential that tenants be given notice of the problems with the tenancy, the required remedy and the landlord's intention to evict if the problems aren't resolved." Is that something you would agree with?

Ms Jourdain: Sorry, could you read that again.

Mr Marchese: When a tenancy is not working out, it is in the best interests of tenants and landlords if the tenants be terminated quickly. So I think they agree. Then they say, "However, it's essential" -- if you're going to do that -- "that tenants be given notice of the problems with the tenancy, the required remedy and the landlord's intention to evict if the problems aren't resolved," as first steps.

The Chair: Thank you very much, ladies. We do appreciate your attendance here this afternoon and your input.

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SMAR HOLDINGS LTD

The Chair: Our next presenters are Kim Carter and Arun Pathak. Good afternoon. Welcome to our committee. The floor is yours.

Miss Kim Carter: Good afternoon. I'm Kim Carter. I'd like to introduce Arun Pathak, from Smar Holdings Ltd.

Mr Arun Pathak: Good afternoon. My name is Arun Pathak, and I'm a minority shareholder and the property manager for Smar Holdings Ltd.

Before I tell you how to protect tenants and keep rents down, I have to tell you that the proposals in the discussion paper do have some good points, but they're not going to achieve the results required unless there are some meaningful modifications. These proposals do not stick to the concept of the market setting rents, which is necessary for new construction.

I'm not going to ask you to protect me from Sears or K mart or Wal-Mart and other retailers. Most of them treat me like a customer, and the customer is always right. I get good service and low prices. The reason for that is they want my business, and if I'm not satisfied, I'll take my business elsewhere. Consumer protection is not necessary, because the market provides it.

When the same happens in rental housing, I will instruct my superintendents that the tenant is always right, and his needs and wishes are of the utmost importance. That will give better protection for tenants than any legislation. You cannot legislate excellence or quality. In the late 1980s vacancy rates were very low. Many apartments were rented on an as-is basis. In the 1990s vacancy rates are much higher, and therefore many of the same apartments are painted and many landlords do what they can to dress up the units and the common areas. No legislation is going to make a landlord work as hard in improving his building as vacancies in a free market in housing will.

In recent visits to the USA, I've looked at apartments for rent in areas where there are no rent controls. They're in excellent shape compared to Ontario, and when you walk in the rental office, you're treated like a special customer.

Regarding rent levels, I'm not collecting legal rents on most of the units I manage, and the discounts range up to $125 per month. Is rent control protecting those tenants? No, the market is protecting those tenant. It has been estimated that the majority of tenants are currently paying market rents and being protected by the market rather than rent controls.

What the proposed process of vacancy decontrol and recontrol will do is, first, perpetuate rent control. We must find a way for the new legislation to be a process of phasing out rent control. Another possible bad effect of the decontrol-recontrol system is that the landlords will not know when the unit may turn over again. They'll want to get the maximum benefit from the turnover. For example, a landlord may be happy to get $600 a month for a unit today, but if he's going to be stuck with a guideline until the unit is vacant again, he may feel that he has to hold out for a rent of $625 or $650 to compensate for subsequent low increases. I don't see that as an advantage for landlords or tenants. Also, the decontrol-recontrol system may create a situation where landlords give a rent-free period at the end of a year's lease. If a lot of buildings are giving rent-free periods, then tenants will have to move every year to get the benefits from that. It would be much better for everybody, including the tenants, if on turnover, rents are decontrolled and remain that way.

I want to make it clear that any new legislation that keeps the concept of long-term rent control is doomed to failure. In the 1980s we had a lot of office buildings built in Ontario, especially Toronto. Even when office vacancies were climbing towards 10% and apartment vacancies were only 0.5%, people were building offices. This tells me that the money was available for investment in real estate. Land, bricks, mortar, workers were all available for construction. Condominiums were going up everywhere. Rental buildings had rent control and Landlord and Tenant Act problems, which I'll get to later, and nobody would look at building apartment buildings.

Some people think that landlords are making a reasonable profit. This year I've heard that RRSPs were at record levels. Just recently, the newspapers reported record investments in mutual funds. Why doesn't some of that money get invested in apartment buildings? Because many landlords are not making a reasonable profit. If any of you think that profits are good, then I can sell you a nice building.

I want to take a moment and consider who exactly is helped by rent control. As an example, let me tell you what happened a few years ago when I managed a building with rents substantially below market. The building was full and I had received no notices. I received a phone call from one of the tenants that his brother-in-law wanted to rent apartment number such-and-such. He told me the brother-in-law and his wife were working, they had good incomes, no children, good references and would make good tenants. I tried to explain that the apartment was not available, but the caller was aware that it was going to be available before I was. I had no reason to turn down the brother-in-law, and the apartment changed hands. This incoming tenant was not poor, and the poor people looking for apartments never had a chance to apply for this cheap apartment. This situation is repeated hundreds of times across Ontario every month. To get a cheap apartment, you have to have a good income and contacts and references. Poor tenants are not helped by rent control. The most affluent tenants get the cheapest apartments.

All recent governments in Ontario have changed the system of rent control, but it has not helped, because the concept of rent control leads to a lack of investment, no competition and deteriorating housing. It's like pushing on a rope. You can't achieve anything pushing on a rope and you can't help poor people with rent control. Rent controls hurt poor tenants and help well-off tenants. Once this is understood, the solution is obvious: end rent controls.

The proposals suggest making a violation of property standards an offence. Extend this to all real estate, and it may be one way of eliminating the deficit, because almost every property in Ontario, including owner-occupied homes, have some flaws. Many tenants do not want the landlord in their apartment, especially if they have caused damage, are dirty, untidy or doing something they should not be doing. Do you want to fine the landlord for that?

There is currently no requirement for a tenant to notify a landlord about a problem before he or she contacts the building department, health department or property standards officers. I had one example where an ex-superintendent contacted the health department about insufficient heat. I had to go and shut his window. Is that the sort of thing the health department's time and our tax dollars should be wasted on? This system is wrong. Ninety per cent of the time tenants contact these departments, it's a case of either they're behind with the rent or they've been asked to follow the rules of the building regarding noise or something. A few tenants can be very vindictive and may try to get the landlord fined because they've been reprimanded for noise or something else. Tenants should be required to file a copy of the work request they gave to the superintendent before an inspector does an inspection. Also, landlords should be invited to all inspections.

The correct way to handle repair problems is for the tenant to notify the landlord, then for an inspector to inspect the problem with the landlord and then a notice of violation should be issued, followed by a work order, and the landlord should be taken to court and fined if necessary. The proposals for a fine of up to $50,000 for a minor violation of a property standard which was caused by a tenant and of which the landlord is unaware is in my opinion sheer stupidity, and I hope you'll agree with me. How am I supposed to know that last night my tenant got drunk and kicked a hole in a wall or a door? Of course, in a market situation, landlords will do repairs to retain tenants and prevent vacancies and the requirements of enforcement of standards will be largely unnecessary.

The discussion paper also states that courts will be given the power to issue prohibition orders to prohibit violation of property standards. I have prohibited my roof from leaking. I have prohibited my car from breaking down. I have even prohibited myself from making mistakes -- or did I mistake myself from making prohibitions? If a contractor makes a mistake, then the landlord is in contempt of court? I think this can only make sense to somebody on prohibited drugs.

The Landlord and Tenant Act is a major disincentive to new investment. This legislation is very strongly biased in the favour of the tenant, and more specifically, the bad tenant. I must add that all good tenants suffer due to this. For example, the process for evictions for non-payment of rent is a licence for bad tenants who are on assistance to rob the landlord and make other tenants suffer.

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I've had a number of people who have robbed me. The way it starts is with a sad story about the tenant's problems. A compassionate landlord will often allow a tenant to carry forward a small balance which is to be made up next month. Next month the tenant gives a post-dated cheque for the 18th or the 24th of the month. The cheque bounces, but the landlord is not aware of it until the 25th or the 28th. Up to now the landlord has not served a form 4. The compassionate landlord does not serve a form 4 for a small amount carried forward or when he has a post-dated cheque. A form 4 is served on the 26th or the 29th of the month. After 15 days the landlord applies to court. In some areas you can get before a registrar on the first possible date. In other areas the first available date is in three to four weeks. The tenant is no longer making any promises or talking to the landlord. The tenant has phoned every government department. Up goes the deficit.

On the date of the hearing before the registrar, the tenant may have a dispute and the matter has to go in front of a judge. In some areas the next available date to go before a judge is three, four or five weeks. In some cases the tenant will let the landlord get a default judgement, serve it, wait the seven days, get a writ of possession, take it to the sheriff, who then visits the tenant and says, "Be out in one week." On the day before eviction the tenant will lie to a judge and have the judgement and writ of possession set aside.

In one case the judge gave the tenant 15 days to file a dispute on a matter that had been going on for three months. The dispute that was filed said the tenant was laid off from work and had no money. When the matter went before the judge, she did not appear and phoned to say she'd been in hospital, another lie, "Therefore, please adjourn the matter," which the judge did. The tenant did not appear the following week and moved out soon, owing thousands of dollars. The only thing a landlord can do to speed up the process is to serve a form 4 earlier and show no compassion. The rest of the delays are out of his hands. I could have had new carpets in half the building from the bad debts of one tenant.

Some people make a profession of robbing landlords. They pay first and last months' rents, maybe one more month, then they drag out the eviction process for three to six months. These people get government assistance cheques 12 months of the year but only pay rent for four or five months every year. One sheriff told me he had evicted the same person four times in the past two to three years. This sort of thing is also done by working people, but fewer working people do it, because with them you can go through the process and eventually garnishee wages, although often the process is more effort than it's worth.

With people on government assistance there is no way to recover anything. It can be quite profitable for tenants and they have no consequences to face. The Landlord and Tenant Act has to be amended to make it non-profitable for tenants to spend their rent money elsewhere and wait to be evicted. To do this the process should be changed so that the matter is dealt with within two weeks of the service of a form 4. Delays should only be possible if disputed money has been paid into court. Motions to set aside judgements should not be ex parte. If disputed amounts had to be paid into court, in my opinion the caseload of courts would drop to below 25% of current levels. If this was done, we would not need to take these matters out of the court system to another system, because any new system will have a lot of delays while it's being set up.

Also, you must understand how hard it becomes to trust people after you've been fooled a number of times. Because of a few bad people, it can be harder for people on assistance to rent apartments. It may actually help them find suitable apartments if their rent was deducted from their benefits and paid directly to the landlord. I spoke to a landlord from England who only rented to people on benefits because he received the rent direct from the government.

One problem often faced by good tenants is a noisy or bad tenant. Good tenants don't want to be kept awake for weeks while the landlord evicts the bad tenants. The process should be much quicker.

Another problem with the current eviction process is that the landlord may recover the court application fee. He has no means of recovering his time, gas, parking, photocopying, paper, ink etc. Court judgements, including default judgements signed by a registrar, should include for court costs a rental per diem until the apartment is vacated and also some amounts set by regulations, maybe $50 or $75, for the landlord's other costs.

In closing, I just want to say that the current legislation discriminates against landlords in favour of tenants. To give you a couple of examples, first there are late-payment charges for hydro, gas, phone, water, property taxes, mortgages, credit cards etc. Almost everything has a penalty for late payment except rent. This makes a landlord a second-class citizen. Even a small late payment fee of $5 or $10 or 1% set by regulations would show some fairness. Second, all institutions that accept cheques charge a fee for a bounced cheque, which includes the cost of handling the cheque. I think the government of Ontario charges $35. Landlords can only charge what the bank charges them. Maybe a fee could be set by regulations, because under the current system landlords are second-class citizens. These sorts of things may seem minor, but the perception in our society and around the world is that landlords in Ontario have laws against them, and that must change for investment to come to this industry.

I've attached a newspaper article I wrote recently. I hope you will take the time to read it. Thank you.

Mr Kennedy: Thank you for the stories that you've related. I want to ask you about the part where you talk in terms of low-income people. How would you see low-income people getting apartments? Rather than being protected by the system, where would you see affordable apartments for them coming from?

Mr Pathak: First they should be able to have their rent paid directly from the government to the landlord. This will give the landlord an incentive to rent to these people and make him secure that they won't leave him three months later owing him $3,000.

Mr Kennedy: Some agencies have tried to arrange that and have been able to because the government was unwilling. More importantly, if rents go up, if there's no rent control and market forces prevail, how would low-income people be able to find rents? That's what this is really about, how we'd be able to house people whose incomes have gone done, who recently had their rents cut 22% by the government. How do we provide for those people? How would you see that done?

Mr Pathak: If those people don't have enough income, that's not my problem. I shouldn't be paying for their heat, their housing and their lights. That's something for the government to do, for the welfare system, for mother's allowance whatever it is, not me. It's not my bill.

Mr Marchese: Thank you, Mr Pathak. Just a statement, and then a question. Even the Conservatives in 1975 realized that the market was failing them. That's why they introduced rent controls. So even they, under certain economic pressures, were bound to do something to protect tenants.

Mr Pathak: They weren't aware of our situation at that time. They weren't aware of how bad --

Mr Marchese: I have a question for you. You argue differently, of course, that consumers' best protection is the market, and tenants don't agree with you, but you and others made an interesting point. You said, "We're protecting many tenants who have a lot of money but are paying very little, and those people are not going to move out." The others, who are paying a lot, are being hurt. Are you suggesting that if somehow we could develop a system whereby we could fix that, those people would be paying more but you would give a break to those who have been paying a lot? Is that the kind of thing you might be suggesting? Or would they all be getting an increase?

Mr Pathak: No. I would say that poor people are not getting a break under the current system. People who are better off are getting a break. When they have to pay market rents, they'll go out and buy a house because then it's worth it for them. At that time we'll have more apartments available.

Mr Hardeman: Thank you very much for the presentation. I just want to go to the enforcement of property standards. You expressed some concern about the fact that the violation will be the infraction as opposed to not fulfilling on a work order. My question relates somewhat to the other issue. You go to great lengths about the process, that to evict a tenant takes too long and we have to shorten that process. I think we also have a problem in the violation of property standards. Tenants are telling us that a lot of landlords are using the system not to make corrections that need to be made to shorten the time frame. Do you see it as a problem that the municipal official would come in and lay charges for a small infraction?

Mr Pathak: It's possible if you set out the law, especially if cities are under pressure financially. My mortgage company is in Vancouver. They pay my tax bills, and property standards infractions go to them. I've asked the city of Hamilton to phone me. I said, "If there's a problem, give me a call." They said, "No, the process is that we have to write to whoever is getting the tax bill." So instead of giving me a call, "Can you just take care of this?" they send it to Vancouver, Vancouver sends it to me and I don't hear about it for two months.

The Chair: Thank you very much, sir. We appreciate your input this afternoon.

Mr Pathak: Any other questions, my phone number is there. I'm available any time to anybody.

The Chair: Is Greg Kaufman from McMaster Students Union in the audience? No? Okay.

A couple of things: Mr Lampert will be appearing before the committee for 45 minutes at a quarter after 11 on Thursday morning in Kitchener -- 10 minutes for a presentation from Mr Lampert plus 10 minutes per caucus to question him. That will be Thursday in Kitchener.

Thank you very much to the people of Hamilton for hosting us here today. We appreciate that.

Mr Kennedy: I would just like to raise a concern for the subcommittee. It seems very clear that there's been a systematic use and maybe even abuse of the lottery system. Today we had three people chosen out of the lotteries who were all substituted for by landlord organizations. I think we want to look at that to see if it carries out the intent of the subcommittee -- I don't wish to discuss it here -- in terms of arranging fair and equitable access, because people we wish to put in and individuals have been substituted for. We're going to look and see if that is in some way skewing what we're hearing.

The Chair: If I could just clarify, the one group over which we had a dispute this morning called and notified us they would not be here. Everyone else --

Mr Kennedy: I'm referring to three other instances.

The Chair: Everyone else all through the week, two weeks, Mr Kennedy -- if you had been with us all the time you would understand. On many occasions a presenter is not the same as the person whose name is on the form. It's not a perfect system, but it is the one we agreed on. We will take a look at it.

Mr Kennedy: We will raise it in the subcommittee then?

The Chair: Yes.

Mr Kennedy: Thank you.

The Chair: We are now adjourned until Tuesday at 1 pm in Windsor.

The committee adjourned at 1642.