Tuesday 22 January 1991

Residential Rent Regulation Amendment Act, 1990, Bill 4

Ontario Public Service Employees Union

Parkdale Tenants' Association

860 Pharmacy Avenue Apartments

161 St George Street Tenants' Association

Afternoon sitting

Parkdale Community Legal Services, Angry Tenants' Association, Phil Wynn Tenants' Association of Parkdale, West Lodge Tenants' Association

Committee information

Waterloo Regional Apartment Management Association

Kay Gardner, Richard Fink

Realstar Management

Steve Kewin and Associates Inc

Donald Fox

Goldlist Property Management



Chair: Mancini, Remo (Essex South L)

Vice-Chair: Brown, Michael A. (Algoma-Manitoulin L)

Abel, Donald (Wentworth North NDP)

Bisson, Gilles (Cochrane South NDP)

Drainville, Dennis (Victoria-Haliburton NDP)

Duignan, Noel (Halton North NDP)

Harrington, Margaret H. (Niagara Falls NDP)

Mammoliti, George (Yorkview NDP)

Murdoch, Bill (Grey PC)

O'Neill, Yvonne (Ottawa Rideau L)

Scott, Ian G. (St George-St David L)

Turnbull, David (York Mills PC)


Mahoney, Steven W. (Mississauga West L) for Mr Scott

Tilson, David (Dufferin-Peel PC) for Mr B. Murdoch

Ward, Margery (Don Mills NDP) for Mr Bisson

Marland, Margaret (Mississauga South PC) for Mr Turnbull

Clerk: Deller, Deborah

Staff: Richmond, Jerry, Research Officer, Legislative Research Service

The committee met at 1008 in room 151.


Resuming consideration of Bill 4, An Act to amend the Residential Rent Regulation Act, 1986.


The Chair: The first delegation before the committee this morning is the Ontario Public Service Employees Union. I would like the representatives to take their seats in front of the room. Your organization has been allotted 40 minutes before the committee, 20 minutes of which you can use for an oral presentation to the committee and we will reserve 20 minutes for questions and answers. Without taking up any more of your time, I turn the floor over to you. I just ask you to identify yourselves and the positions you hold in your organization.

Ms Whitehead: Good morning. I am Carol Whitehead and this is Nick DiSalle. We are both research education officers at the Ontario Public Service Employees Union. We are speaking to you today on behalf of OPSEU, which represents over 100,000 working people in Ontario. We would like to express our strong support for Bill 4 as an interim measure to help retain the current limited stock of affordable housing for working people in Ontario.

The lack of affordable housing in Ontario is a problem of which we are all well aware. Transitions, the report of the Social Assistance Review Committee, named unaffordable housing as one of the two main causes of poverty in this province.

The CMHC has estimated that over 30% of people in Toronto and other metropolitan areas spend more than 30% of their income on housing. With this overspending on housing, little is left for other basic needs. Thus we are seeing an increased use of food banks and, further, an increase in the number of economic evictions of people who simply cannot afford their rent.

It is OPSEU's position that housing should be viewed as a basic right, as are health care, education and essential social services. Consequently, we feel that the government has a responsibility to protect the current stock of affordable housing. We view Bill 4 as an excellent interim measure to assure tenants some protection from economic eviction and other hardships caused by exorbitant housing costs.

The housing crisis in Ontario has many faces. It includes single parents on social assistance using food banks because of high rents, families of low-wage workers living in cramped and overcrowded apartments and an increase in homeless singles and families. In the final analysis, the effects of overspending on housing impact not only on adults but on children who live in poverty due to high housing costs.

In the past few years, periods of near-zero vacancy rates have increased the rents in many units beyond the levels many can afford, especially in large urban centres like Toronto. The current rent review system has led to a situation where tenants are often forced to pay illegally high rents. However, under the current rent review system the onus is on tenants to prove illegal rents, not on landlords to obey the law.

Another factor contributing to the current housing crisis is the inability of non-profit housing development to keep pace with the loss of affordable units through demolition and conversion. The private sector seems to make the development of affordable housing a priority only when large profits are guaranteed.

Further, the fact that our whole country is facing a recession means that more and more people will be losing their jobs and their homes and will need affordable housing.

The onset of the current recession has also led to high unemployment in many areas of the economy. Blaming Bill 4 for an increase in unemployment is ludicrous. Unemployment in areas related to housing has been high since long before this bill was even proposed. High unemployment levels make it even more important to ensure the availability of affordable housing. Under the current rent review system, tenants in Ontario have been subject to rent increases which many simply cannot afford.

Under current guidelines, maintenance costs are factored into the annual automatic rent increase. However, if landlords prove to the rent review board that they have costs above and beyond the guideline, further increases are granted. Tenant advocates recognize that landlords are asking for, and often getting, financing for capital expenditures which have often become necessary simply due to years of landlord neglect or for unnecessary cosmetic work which will improve the resale value of the building but not the lives of the tenants who live there.

In speaking to some of our members in preparing this submission, we were told of cases where tenants are sure that their landlords' claims for increases are unjustified, but because the current system does not facilitate tenant involvement and consultation in the rent review process, their views are often unheard. The lack of tenant input into the current rent review process is another issue that must be addressed.

Finally, the current system promotes housing as a commodity rather than a right, and encourages landlords and speculators to make a profit at tenant expense. It is our view that the government should intervene to protect the availability of affordable housing when market forces of supply and demand are undermining it.

We support Bill 4 as an interim measure to protect tenants from economic evictions, to help ensure the supply of affordable housing and prevent the regressive distribution of income from tenants to landlords. It is important to remember here that what we are talking about at the most basic level is the right of people to adequate, affordable housing.

Landlords have been making appropriate and sometimes exorbitant profits for years, and if the choice is between profits shrinking and people using food banks, we think the choice is clear. It is one thing to have profits suffer, and another to go hungry because rent costs are too high. Landlords can choose their investments, but tenants cannot choose their need for housing.

We also think it important to remember that the current government was elected on a platform that included rent controls, and we urge you all, government and opposition members, to listen to the strength of the popular vote and begin, with this interim bill, the development of a strong housing policy which includes the protection of adequate affordable housing. We look forward to participating in this process.

Mr Turnbull: You raised several interesting points. You speak about illegal high rents. Can you tell me how you believe Bill 4 will address that?

Ms Whitehead: Bill 4 is being proposed as an interim measure to protect tenants while further housing policy is developed. I do not think it addresses it specifically, but what it will do is protect tenants in the short term while they very much need protection.

Mr Turnbull: It does not address it at all, actually. It has no bearing on it whatsoever. You speak about profits of landlords on the backs of tenants. Do I take it you are against private ownership of property?

Mr DiSalle: No, we are not against the private ownership of property. Our membership is very varied and it works in many different sectors of the province. About 1,000 of our members work with the very poor. We have seen that in fact they are being charged exorbitant rents for buildings that do not merit that type of rent.

Mr Turnbull: So really your argument is that you have certain buildings that do not merit that kind of rent. It seems to me that there is very little bearing between the buildings that warrant a high rent or not and the people who are living in there. What about the people who live in low-rent buildings and have very fancy cars in the basement? I am not against tenants. I emphasize this. We are very supportive of tenants and we are supportive of the right of people to have decent accommodation. We are objecting to this particular law because of many of its features, particularly the retroactive aspect of it, and I ask you, what would you do if the government were retroactively to reduce your wages?

Mr DiSalle: Governments have done that in the past to civil servants.

Mr Turnbull: Have they taken the money back that you have already spent, going months back? I am not talking about reducing your wages. I am talking about actually saying: "All of those increases you've got in the past are now illegal. We're taking it back." That is effectively what is being done here.

Mr DiSalle: Sir, at this point I think you have to understand the circumstances of the people in Toronto. I speak of Toronto because I live here. I have worked in public assistance for 12 years and, let me tell you, there are thousands of people who are being gouged by rent already and they end up in food banks every month.

Mr Turnbull: I want to understand what your definition of "gouged by rent" is.

Mr DiSalle: I think we have to look at what can be affordable housing and we have to keep that in mind. When people are paying way beyond 30% of their income, some are paying as much as 50% and 60% of their income, I think that is being gouged.

Mr Turnbull: That has absolutely nothing to do with this kind of legislation. It is not going to roll it back.

Mr DiSalle: No, but I think it is an interim measure that will protect them while they work on a more permanent bill.

Mr Turnbull: There was a discussion of non-profit housing being one of your solutions. Can I ask you, is it reasonable that this government is spending in subsidies the equivalent per unit that it is subsidizing of co-ops: $245,000 per unit in one particular case that was announced in Scarborough, which is more than the price of the average new house in Metropolitan Toronto today? Is that a reasonable way of spending government funds when other people are, as you say, being gouged in paying 60% of their incomes? Does it seem reasonable that you select a small portion of society and subsidize it and ignore the other people who are paying 60% of their income?

Ms Whitehead: I would just like to clarify two things. One is, you stated yourself that what we are here today speaking in support of is Bill 4 as an emergency interim measure. We are not here to debate the other aspects of housing policy. We very much look forward to the discussion paper that is expected to come out, I believe, in the middle of February, and to taking part.

Mr Turnbull: You actually brought up non-profit housing. You are the one who brought it up.

Ms Whitehead: Yes, in the context of the current lack of affordable housing and the need for interim emergency measures to protect tenants.

Mr Turnbull: There is going to be an ongoing lack of affordable housing if the government misspends taxpayers' hard-earned money on selecting a few people to have exorbitantly high subsidies while other people suffer from lack of affordability. Surely, shelter subsidies would be more appropriate so that it addresses in a more evenhanded way the people who cannot afford proper accommodation.

Mr DiSalle: As my colleague mentioned, these are two different issues, but the shelter subsidy you are referring to must be protected and I think the interim bill will do that. If you do not protect it, it will just pass from the tenant into the landlord's hands.

Mr Turnbull: There is no shelter subsidy.

Mr DiSalle: I am referring to people on public assistance who get shelter subsidies. What has been happening is that the increases in rent are just eating that subsidy right up and they end up at food banks. As far as affordable housing and the unit price you are talking about, I think we have to look at the way land is made available for nonprofit groups and how speculation on land forced the price of land so high that it made non-profit housing very expensive. I think we have to look at the way we provide land in order to address the issue you are talking about.

Mr Turnbull: How would you provide land?

Mr DiSalle: I think it is a broader issue and we are not prepared to discuss that at this point.

Mr Turnbull: You have raised it, that is why I am asking what you mean by it.

Mr DiSalle: We responded to you.

Mr Turnbull: A final question, OPSEU -- is it not correct that several members of the government are in fact ex-union officials of yours?

Mr DiSalle: I believe there are one or two, yes.

Mr Turnbull: Is there any pressure from them to get support?

Mr DiSalle: Absolutely not.


Mr Turnbull: Is it correct that the government is considering extending rights in elections to you that you have not enjoyed before?

Mr DiSalle: What has that to do with the interim bill?

Mr Drainville: Mr Chairman, what kind of question is that? Come on.

Mr Turnbull: I suggest this is the government's agenda being pushed forward to --

Mr Mammoliti: We are here for the people.

Mr Drainville: On a point of order, Mr Chairman: As far as I am concerned, sir, in terms of the questioning of the witnesses who have come before us, we are talking about Bill 4 or we are talking about larger housing policy. The kinds of things the member opposite has raised are totally unessential to this discussion and I think he needs to be given some direction as to how he is moving in his questioning.

Mr Turnbull: Mr Chairman, we have had lines of questioning from the NDP which were totally irrelevant to Bill 4. We have had witnesses such as these who have rambled on about illegally high rents, non-profit housing and so forth, which have nothing to do with Bill 4. They are the ones who raised the issue so I am the one who pursued. If we want to confine ourselves to purely discussing Bill 4, I am very happy to do that.

Mr Drainville: What did your last question about the NDP government have to do with housing?

Mr Turnbull: You did not follow what I have just said. I said if the NDP agrees to totally confine itself to the discussion of Bill 4 and we insist that the people giving submissions confine themselves to Bill 4, then we will be happy to confine ourselves to it.

Mr Mammoliti: On that point of order, Mr Chairman: If you make a rule, I hope you realize that if you accept that line of questioning, then you are opening up the door for that sort of thing in these hearings in the future. We have restrained ourselves. We have stopped from asking questions that we have wanted to ask in and around that area, so please keep that in mind.

The Chair: Is it just because I have returned to the chair that all this happens?

Mr Mammoliti: I was not here yesterday either.

The Chair: I just want to remind all committee members what they have been telling me from all sides since the hearings first began. All committee members have implored me to try to keep the questioning and the answers basically towards Bill 4, so I am going to give the same advice to all committee members. Do the best you can to try to keep questions, answers and our work towards Bill 4. I do not mind a little bit of latitude. There is no magical line in the sand. But, yes, we are straining to try to justify some of the questions that I heard this morning. We are straining, Mr Turnbull, so I would ask all committee members to try to be more to the point and closer to Bill 4.

Ms M. Ward: I do not think that response addresses the question of what I see really as abuse of people who are essentially our guests here. No matter what their response is, they are here responding to our invitation and I do not think we should have insinuations made against them.

The Chair: The Chair cannot develop questions for the members and the Chair wants the proceedings to go along as smoothly as possible, to give some latitude, and I offer each committee member the same advice that was offered to me the first week of the hearings. Let's try to keep our questions and our answers to Bill 4. It is going to be difficult and on some occasions we are going to annoy each other, but I think that is part of the process. Yes, a couple of Mr Turnbull's questions were straining the advice I personally received from the committee members, and I think there have been numerous occasions from all sides where that has happened.

Mr Brown: Say it's not so.

The Chair: It is so. The people before us are very experienced people. I met Nick many years ago, so he is familiar with the political process. I am sure he can defend himself if it absolutely comes to that, but yes, you are right. The witnesses are our guests and we have made time for them to be here and we should do the best we can.

Mr Turnbull: Mr Chairman, I am happy to accept the advice of the Chair. However, I will have to ask that when we are hearing submissions from people bringing forward information, they should restrain themselves and keep relative to Bill 4. Illegally high rents have nothing to do with Bill 4. Non-profit housing has nothing to do with Bill 4.

The Chair: Mr Turnbull, I did not rule you out of order; I did not rule your questions out of order. I just made note of what some of the committee members have been saying today, before, last week. Let's proceed, please.

Mr Mammoliti: I have only got a short period of time. I think other people want to ask some questions. So I am going to ask you two or three questions and I would like you to respond as quickly as possible, if that is okay. I want to relate this to workplace stress and I want to relate Bill 4 to workplace stress.

Mr Turnbull: On a point of order, Mr Chairman: I fail to see what workplace stress has to do with Bill 4.

Mr Mammoliti: If I may respond, I have not even asked the question, so how can there be a point of order? If he were to hear my question and then perhaps proceed with his point of order, I could understand it, but I want to relate workplace stress to Bill 4 and what I see as being relevant.

The Chair: Let's give it a try.

Mr Mammoliti: Good.

Mr Mahoney: The rate of suicide.

The Chair: Let's see how it works.

Mr Mammoliti: Workplace stress: First of all, stress is caused by all different things. Does stress affect a worker and the productivity of a worker in the workplace?

Mr DiSalle: I do not have any specific evidence of that. I would just be speculating, so I do not think I should answer that question, to be fair. I have not looked at it from that aspect.

Mr Mammoliti: Okay. In your opinion, when somebody is suffering because they cannot pay the rent, for any reason, whether it is an increase in rent or whether it is because their rent is high at that point, do you believe, in your position with the Ontario Public Service Employees Union, that will have relevance to the effect at the workplace? Is their mind on the job, basically?

Mr DiSalle: I suppose if someone is expecting a rent increase or cannot afford where he or she is living, then obviously that is going to impact on his ability to perform at work. I would not say that I have evidence to that effect, but I suspect it would probably have an impact on people's behaviour.

One thing I can tell you, in my experience as a public assistance worker, is that many times I would visit clients and go over their budget with them, and you would always be in the position of trying to be an apologist for the rents and for the amount of public assistance. That did provide a lot of stress for people I saw who felt trapped and unable to escape from this particular circumstance. That would be my experience as far as stress is concerned.

Mr Mammoliti: So having a piece of legislation in there that would stop somebody from having to think about not paying the rent at the end of the month and being able to afford it will certainly stop some of the stress at the workplace.

Mr DiSalle: I would agree. If someone is confident in his own mind that he is not going to get an unexpected rent increase come his lease renewal, I think that would provide peace of mind, of course.

Mr Mammoliti: Which means more productivity at work?

Mr DiSalle: It is hard to say, but I imagine if someone has peace of mind he probably would work better.

Ms Harrington: I would like to thank Ms Whitehead and Mr DiSalle for coming. I think your organization and ours would agree that this rent review system we have had in place is definitely not working and that what we are attempting to do is to fix the system to make it a fair system and to make it an efficient system also.

What you brought up were the effects of poor maintenance as well, which is something that has been a problem in the last legislation and that we want to address for the future. You also mentioned that some of your members work with the poor and that you have sort of a close, hands-on type of knowledge of what is going on there. You mentioned some of the effects of the housing rents that are paid, the food banks, the homeless singles and the overcrowded apartments. This is something that many of us in Ontario, the average person, say the middle class, is not aware of, that connection directly with housing prices and the situation that is there because very often it is so easy to just ignore it.


My question to you was with regard to a point that you brought up about the philosophy here. We know that we need private enterprise to provide housing and some help from government to make sure the system is fair and that it is working for everybody. You mentioned somewhere in your submission that housing is a right. Do you think this has been so in the past and how can we get it to be more of a right as seen by everyone?

Mr DiSalle: I do not think it has been a right in the past because from our experience, from my personal experience and that of my colleagues in the public assistance, you would find people doubling and tripling up in apartments because they just simply did not have access to affordable housing. I think the bill will at least attempt to protect what affordable housing is out there. In that sense, I think it is helpful.

Mr Mammoliti: On the issue that Mr Turnbull brought up, I would like to just clarify that. He asked you whether government has ever taken away increases. Did something not happen in 1983 or 1984 where there were all kinds of collective agreements --

Mr Mahoney: Point of order, Mr Chairman -- the same point of order the honourable gentleman raised earlier: What in the world have collective agreements in 1984 got to do with this bill?

Mr Mammoliti: Mr Turnbull wanted to know whether or not the government has ever taken away something, I guess to prove a point that he was trying to make.

Mr Mahoney: You said he was out of order.

Mr Mammoliti: No, not on that point, Mr Mahoney. I did not say he was out of order on that point. It was another point that he was out of order on. Obviously you were not listening.

The Chair: You have time for one very quick question, Mr Mammoliti.

Mr Mammoliti: The question is, has the government ever taken away collective agreements that have been signed in the past through legislation?

Mr DiSalle: They have, but I am not an expert on negotiations. I know for a fact that they have rolled back salaries of civil servants in the past, but to get into that argument we would have to bring in our negotiating department.

Mr Mahoney: I really did not realize the significance of this bill until I heard this morning that it is going to increase productivity in the workplace and solve stress in the province. It might even help us win the war if we keep going along this line.

I appreciate OPSEU coming before us and accept the fact that OPSEU has a vision that is very much in line with the NDP government. I am not at all surprised at the presentation and think it was a good presentation from the perspective of the constituents that you represent. I do not accuse you in any way of rambling or doing anything but stating what has philosophically been your position, the position really of most organized labour and the position of the NDP government.

Having accepted the fact that philosophically perhaps some of us are on a little different wavelength, I would like to have you put on the record some of your positions with regard to the overall housing issue, and I am going to try desperately to keep it within the framework of Bill 4.

We heard yesterday many quotes from the Premier that would seem to indicate he really believes the private sector should not be in the housing business at all. I just wonder if you feel that the scenario of devaluing current rental properties -- we always refer to them as our stock; I find that interesting -- the devaluation of existing housing will lead to a simple takeover of those housing units by the government and, if so, is that appropriate?

Mr DiSalle: I am sorry; I do not understand what you mean by devaluing.

Mr Mahoney: I think what we are attempting to do is take people right out of the private sector housing business. Do you think the private sector has any role in developing and maintaining rental accommodation?

Mr DiSalle: I believe they do, and I think the government also has a responsibility to protect affordable housing stock and to provide housing for those who need it. As we stated earlier, we think access to housing is a right, but we are not saying that the private sector should not be involved in it. Of course they should be involved in it.

Mr Mahoney: I do not know if you had an opportunity yesterday to view these proceedings on television, but how do you feel about the lady from Sudbury who was here who broke down -- if you want to talk about stress -- because she has lost her life savings? I mean, she is not Greenwin Properties or, as the Premier says, 12345 Ontario Ltd. She is simply an individual who has taken a risk under the rules of the game that were in place prior to 6 September, knowing what the rules were and believing this to be a fair and democratic province. How do you feel about the position she has been put in of virtual bankruptcy?

Mr DiSalle: I did not hear the woman you are referring to, but this is an interim bill and I think the government is looking at developing a more permanent bill. I think those are the types of things that we would like to address at that time.

Mr Mahoney: Do you think it is fair that any government -- forget political philosophy -- in the free world could come along and simply say, "We are going to go back three months" or whatever period of time "and change the rules"? Would you like them to do it to the labour movement?

Again, you have said you are not an expert on whatever Mr Mammoliti was referring to in 1984, nor am I, but it is simply a question of fairness. Is it fair to go backwards and say we are going to make this retroactive when you consider the fact that it is illegal, for example, for municipalities to do that? You are not allowed to go back under provincial law and yet the provincial Legislature, under the new socialist government, can just come along and, boom, go backwards. Is that fair to you?

Mr DiSalle: We are here to support the interim bill. A discussion on jurisprudence is something else.

Mr Mahoney: I asked you for an opinion. I want to leave some time for my colleague. Do you think it is fair?

Mr DiSalle: I have to have a chance to study that, perhaps, in more detail.

Mr Mahoney: No. The question is, is it fair to go retroactively back and change the rules that people have been operating under? Just philosophically, do you agree with that?

Mr DiSalle: It depends on a lot of circumstances --

Mr Mahoney: You should have run in the election. You are very good at dodging questions.

Ms Whitehead: If I could just make a point, for landlords buying housing as an investment, it is an investment and with all investments there is risk involved. Yes, it is unfortunate if a few landlords suffer.

Mr Mahoney: Is it unfair?

Ms Whitehead: I think the question of fairness has to include tenants in the province who are suffering so much that they are having to go to food banks. That is truth; that is happening. I think the question of fairness has to be looked at in a larger context.

Mrs Y. O'Neill: I just want to remind the committee of the statement made in the throne speech, "We must build a society in which all Ontarians can achieve the best of which they are capable." I am having a lot of difficulty with your presentation and some of the questions that were placed by the government members. "We must build a society in which all Ontarians can achieve." Mental health of workers is important and I have worked in that area, but mental health of investors is also important, and certainly small investors. I see a difference being made and that bothers me a lot.

I also see a difference in what is considered a right. A right to housing, I believe in. I have many public housing units and co-operative units in my riding, which I support in every way I can. But I also think investors have rights, and certainly small investors like the ones who have had difficulty presenting their cases to us in front of this committee.

I ask you again, as Mr Mahoney has asked, do you feel this Bill 4 is fair, particularly in its retroactivity? Retroactivity, as we have not mentioned in this committee, also involves tenants who are under appeal.


Mr DiSalle: Let me say this about your question, I have met people who have had rent increases that were illegal and never redressed, so there is a lot of unfairness out there.

Mrs Y. O'Neill: Are you telling me there are appeals that have also been halted by Bill 4?

Mr DiSalle: Nobody polices it and so it goes unchecked and it goes without redress in many instances, and it is mostly the poor, those who are least able to defend themselves.

Mrs Y. O'Neill: I do not think you are answering my question.

Mr DiSalle: We are talking about fairness. There is a lot of unfairness everywhere.

Mrs Y. O'Neill: Do you know if there are appeals --

Mr DiSalle: I think this is an interim bill.

Mrs Y. O'Neill: Would you please listen? Are there appeals of tenants that you know of? I think this committee should be made aware of where there is unfairness. Where you say there has been illegal rent and they are under appeal, are there tenants caught in this catch-22 as well? If you know of them, I think you should present them to this committee.

Mr DiSalle: What I would like to talk to you about is that those are not even brought to appeal. A lot of the people we are talking about are unable even to access the system.

Mrs Y. O'Neill: You will not answer the question.

Mr Mammoliti: On a point of privilege, Mr Chairman: I just want to state for the record that my comments were addressed to workplace stress and workers and I --

The Chair: Order. That is not a point of privilege.

Mr Mammoliti: What is it then?

Mr Mahoney: It is not even a point of interest.

The Chair: It is an opinion. It is a point of information. Order, please. That is a point of information, Mr Mammoliti.

Thank you very much for coming before us today. Your brief was quite interesting and we appreciate your taking the time to appear before the committee.


The Chair: The next organization to address the committee is the Parkdale Tenants' Association, so we would ask that organization to please come forward. You have been allocated 40 minutes; 20 minutes can be used for your presentation to the committee and a further 20 for questioning. We would ask that you state your name for the record and any position you hold in any organization. The floor is yours.

Ms McCabe: My name is Penny McCabe, I am the past chairperson of the Parkdale Tenants' Association.

Ms Lee: I am Jeanie Lee and I am a member of the Parkdale Tenants' Association.

Ms McCabe: The Parkdale Tenants' Association is the oldest area tenants' association active in Canada. Founded in 1970 to respond to the pressures on the large tenant population in the area of the former village of Parkdale, which is in the west end of Toronto, our membership is made up of tenants whose homes are large apartment buildings, flats in divided houses and rooms in both legal and illegal rooming houses. Our mandate is to help tenants in the area get organized in order to better defend their rights, to lobby for better rights, and to represent the opinion of tenants in the area in order to ensure that they are considered as full members of the community in different levels of government.

In general meetings of the Parkdale Tenants' Association, which have an average attendance of between 150 and 200 tenants, since the summer of 1986 when Bill 51 was introduced the tenants of Parkdale have unanimously condemned the Residential Rent Regulation Act. The condemnation has come from having seen the rents they pay for their homes rise astronomically while seeing maintenance and other services decline at a similar rate. Thus the PTA welcomes the freeze imposed by Bill 4.

We believe that strong measures are absolutely necessary now in order to protect access to affordable housing by the vast majority of tenants in the province of Ontario. The existing system of rent review has proven to be extremely prejudicial to tenants and has served the single purpose of enriching landlords. The freeze on residential rents is the only measure that can benefit tenants in the short term while a permanent solution is being worked out.

The statistical record of the 1980s is a shocking story of the total failure of the private market, heavily subsidized and assisted by the variety of regulatory legislation, to deliver up-to-standard affordable housing to tenants.

Since 1980 the average market rents have increased faster than the rate of inflation. The bulk of this increase has occurred since 1984. The Social Planning Council of Metropolitan Toronto estimates that between 1980 and 1986, the cost of living has increased by 49% while the cost of renting an apartment in the same period has increased by 61%. The statistics also clearly indicate that the poor are paying more for shelter in 1989 as a percentage of their income that at any time in recent memory. Since 1975, rental cost increases have outpaced increases in income by 11%.

Simply citing statistics such as these provides only a glimpse of the real crisis tenants are facing every day in order to cope with exorbitant housing costs. As housing costs eat up a bigger and bigger percentage of income, more and more tenants are forced to turn to food banks and charities to get by and to cut corners in terms of health care and the educational needs of their children and themselves.

In Parkdale this has meant the establishment of food banks at our churches and drop-in centres, food banks that cannot keep up with the demand for services. One food bank at a parent-child drop-in centre this fall had to close its doors for a number of weeks because there was not enough food. At another food bank the lineup begins three hours before the stores open, even in the coldest weather. Parkdale has even seen the establishment of a special restaurant, St Francis Table, where people can get a served meal for $1. The food banks and the restaurant are bandages that cover up the bleeding and do not quite stop it.

In Ontario the Canada Mortgage and Housing Corp estimates that 254,000 rental households are currently in core need; that is, they cannot afford adequate suitable rental accommodation without paying more than 30% of their income on rent. In 1987 the report of the Minister's Advisory Committee on the International Year of Shelter for the Homeless stated that the increase in the numbers of homelessness and those households in core need in the past decade has been huge and that in Ontario 25.2% of all renters are in core need. This figure is believed to be much higher in Parkdale.

It is distressing to hear the landlord lobby talk about wealthy tenants who can afford their own houses but find it cheaper to live in rent-controlled apartments. That is not true of our community. Rather, the more typical story is that of Jane, a single mother with two children who has a total income of $1,125 a month and whose rent eats up all but $75 of that income. Because of her enterprising nature, the children are not suffering from malnutrition but there is no money for extras such as school trips or brand-new clothes.

The 1980s has been a decade of record increases in rent, with landlords receiving the highest rents ever per rental unit, particularly in the large urban centres such as Toronto. Despite the record level of rent received by landlords, the number of rental households requiring major repairs has fallen only 2.4% between 1982 and 1987. This decline is not the result of reinvestment on the part of the landlords of a portion of the enormous surpluses they have been collecting. This drop is evidence of the effect of the decline in the supply of low-rent housing, which has typically been physically inadequate housing during the past decade.

The 1970s and 1980s have witnessed the influx of people into the city rather than the suburbs and the consequence has been the conversion of single-room occupancy units into single-family dwellings. The truth here is that landlords have not reinvested significantly in the repair and upkeep of rental units and that the supply of low-rent units has fallen markedly. Hence, tenants at the end of the 1980s have hardly advanced at all. They are paying more than they ever did collectively for substandard housing as the supply of that form of housing declines. The best a tenant can hope for when housing is a commodity is poor accommodation at a higher cost.

The situation in Parkdale follows the above trends and is perhaps even worse. In the heart of Toronto, Parkdale has traditionally been a low-income community. Old, run-down high-rises and rooming houses have been a refuge for many tenants over the years from the escalating rents associated with the city. That there can continue to be a place for tenants in Parkdale is a question that every tenant is asking himself now. The total failure of the existing rent review legislation and the reconversion of older buildings to single-family dwellings have put intolerable pressure on the low-income tenants in Parkdale.

The capital expenditures done under the Residential Rent Regulation Act, the cost of which has been passed on to tenants, often did not deal with the basic maintenance problems that the tenants needed to live in safe accommodation but were items that made the building look better. A particularly horrendous example of this is a building at the corner of Queen and Jameson. In this building, tenants paid a rent increase to cover the cost of a video camera security system. Before the year was out, an elderly woman was found raped and murdered in the stairwell. This, of course, is an extreme case. Much more normal has been to see new windows, balconies and lobbies in buildings where the tenants want their faucets fixed and holes in the walls filled.

Jeanie, who is beside me, has a story of how renovations of this type have affected her building. I wish I could say it was an exceptional story, but unfortunately it is quite average.


Ms Lee: I live in Parkdale, in a property that consists of two three-storey apartment buildings of one-bedroom units. Since 1987 these buildings have undergone three rent review applications three years in a row. I and my fellow tenants endured massive renovations in 1988 that had very little to do with maintenance and everything to do with making money. I believe what happened in these buildings I live in is a direct result of the extremely unfair, poorly conceived and poorly drafted Residential Rent Regulation Act of 1986.

What happened in these buildings is not unusual for Parkdale. On my street alone, seven buildings ranging from three to seven storeys have undergone extensive renovations and, ostensibly, extensive rent increases. Throughout Parkdale, there are an additional 15 to 17 apartment buildings ranging from 3 to 10 storeys that have also undergone these massive renovations. These are only the buildings I know about.

I want to outline to this committee just how the present rent regulation act has singlehandedly raised the rents in the buildings I live in an average of $200 to $250 per month within three years and disrupted the lives of tenants, a disruption that continues to this day. First of all is the financial loss pass-through of the current act. This provision encourages speculation and shifts the burden of risk in rental property investment from the investor on to tenants. To illustrate this, I will use the building that I live in.

This property was sold for the first time in January 1987 for approximately $700,000. Within two months it was sold to the present owners for $1.2 million. Anyone looking into the average rents of $350 per month in a 38-unit building would realize that the rents just do not support a mortgage of over $1 million. Nevertheless, our landlord bought the property, anticipating correctly that rents could be increased to pay for his huge mortgage. As a result, rents were increased 12% the first year and we still do not know how much for the following years, since it is still under appeal. In short, the $500,000 in profit given to the first buyer had to come from somewhere. The Residential Rent Regulation Act allowed it to come from tenants.

Second is the capital cost allowance. The resale value of rental property largely depends on the amount of revenue it generates. The act does not authorize rent review administrators to determine whether or not expenditures spent on a building are legitimate or not. In effect, the more money a landlord spends, the more costs can be passed to tenants, the higher the rent increases, the higher the resale value of the property. In 1988, approximately $340,000 in capital expenditures were spent in the buildings I live in. The renovations lasted six months. Kitchen cabinets were replaced, kitchen sinks, all faucets, toilets, windows, electrical wires were moved for no apparent reason, fuse boxes were replaced, the plumbing was overhauled. Very few of the items replaced were faulty or needed replacing. The one item that desperately needed replacing was the roof, which for some reason was completely ignored. This roof now leaks and has been damaging ceilings and walls for the past year. The landlord has done nothing about it because he has spent all his money.

Because of the scale of the work, tenants quite literally lived in a construction site for six months. Workmen came in and out of apartments at will several times a day from 8:30 to 5, five days a week, for six months. Garbage, debris, materials and tools littered the hallways, apartments and lawn. Some units were used for storage of windows for weeks at a time. Tenants' furniture and belongings were shoved aside without care. There were not drop sheets. Tenants' belongings were not protected. Some units were left without a functioning toilet for more than one day. We lived with five-foot by six-foot holes in the walls and ceilings for months, holes from which we could see into the bedrooms and washrooms of units above or below us. Tenants got sick from the debris, dust and gas fumes that filtered from the underground garage through improperly sealed holes.

There was little cleanup in the apartments at the end of each day. One elderly tenant severely sprained her ankle while reaching to clean dirt off her walls. Retired tenants and tenants working night shifts just simply had no place to go during the day and had to suffer through this work eight hours a day for the whole of the six months. One tenant who worked a night shift and had been subjected to several days of renovations decided that just for one day he needed to sleep and refused entry. The workers were not deterred and instead went to the adjoining apartment to smash a hole through his kitchen wall.

Tenants who complained, who tried to protect their right to 24-hour notices and to gain some protection for their property, were harassed, told to stay in their apartments and intimidated with eviction. In the course of those six months and the months afterwards, the landlord initiated at least five eviction proceedings. He was successful with none of them.

Third is the 7.5% management allowance that the legislation allows landlords to claim on capital expenditures. This allowance encourages and rewards inexperienced landlords to manage large and complicated renovations, to the detriment of the building and to tenants' lives. Seven and a half per cent of $340,000 is a lot of money, and to gain that my landlord, who had no experience in supervising contractors or major electrical and plumbing work, declared himself the general contractor. As a result, the work, which was to last a few weeks at the most, lasted a few months.

The work was disorganized and totally unpredictable. Work went on that violated safety standards. Windows were removed by literally throwing them out of the windows from as high as the third floor and smashing them on to the lawn below. Shattered glass was strewn about the apartments. This was reported to the Ministry of Labour. The common hallways were used as storage, which violated fire regulations. This was reported to the fire department. A fire broke out in a unit due to improper use of a blowtorch. The tenant, as a result, had to spend the night in a hotel. Sparks from a Skilsaw were allowed to fly near inflammable material. The tenant in that unit had to tell the worker of the danger.

Holes were open in ceilings for no apparent reason. There were continuous leaks from improperly installed plumbing. Unskilled and casual labourers were employed who were hired and fired from day to day. There was little or no quality control on the work done. Tenants themselves had to monitor the work to ensure that it was up to the building code. Front doors were left open, as well as doors of individual units throughout the day. There was uncontrolled access to apartment keys. Workers admitted to taking keys home at the end of each day. Since these renovations, there have been three robberies at this property. With each of these, there has been no evidence of break-in.

Fourth is the phase-in allowance, which allows costs that have been passed on in one year to be carried over to subsequent years without having to go through the rent review process. In other words, if the costs of one year were so excessive that one rent increase above the guideline was not enough to cover the amount, landlords are allowed automatic rent increases above the guideline for an indefinite number of years to come. This provision of the rent regulation act encourages and rewards property investors to spend as much money as possible in as little time as possible. There is a large financial incentive to launch large-scale, extremely disruptive and expensive renovations regardless of need. In short, it is lucrative to turn tenants' homes into construction sites. On the other hand, the legislation gives no incentive for, nor does it enforce, ongoing maintenance once all the money has been spent.

As a result of our six-months' renovations we have had to pay a 27% increase for 1988. Our landlord was also granted a phase-in amount, which means that if there is no moratorium on rent increases, we have no idea what rent increase above the guideline the landlord will be granted next year and for the years to come. The only certainty we have is that our rents will continue to go up and up above the guideline year after year.

The rent regulation act does allow tenants to oppose a rent review application, but the complexity of the act and the many regulations that govern the rent review process is incomprehensible to most tenants. You really have to be a lawyer, chartered accountant and detective to understand and argue against a rent review application. Aside from legal aid clinics and overburdened tenant associations, there is really little support for tenants. While the Ministry of Housing gives out detailed brochures on how to file cost revenue statements, there is very little literature available on how to go about rebutting a rent review application. While landlords are allowed to pass on the cost of hiring consultants to tenants, tenants have to pay for just getting a copy of the landlord's rent review application. All this inhibits tenants from participating in the rent review process -- except of course to be at the receiving end -- and participation is crucial.


In our case, because we scrutinized our landlord's application, we found that a bill for $60,000 was invalid and discovered errors made by rent review administrators that could amount to thousands of dollars. We also had rent increases reduced by making a presentation at the rent review board level. This aspect of the rent review process is especially damaging to Parkdale tenants, many of whom are single mothers, labourers, elderly, immigrants or people of low income who just do not have the inclination, the education, the time, the resources or the language skills to fight a rent increase.

In closing, I just wish to impress upon this committee that the present act not only costs tenants in financial terms but in other terms as well. I cannot begin to tell you the emotional stress we experienced as our rights to quiet enjoyment, 24-hour notice, privacy, and our expectation of responsible workmanship were simply ignored. I cannot begin to tell you the level of anger, frustration and helplessness we felt as we saw money being poured uselessly into these buildings, knowing that in the end we would have to pay for it. I cannot begin to tell you the fatigue we felt as we came home --

The Chair: Order, please. I have given you extra time and I have to draw your attention to the clock. The rotation this time will be NDP, Liberal and Progressive Conservative.

Mr Mammoliti: I just want to note that this is another tenant organization that has come in front of us that is crying for some help and giving examples such as you have given, and we appreciate it. It is obvious that you have done your homework and that you know what you are talking about.

There is one item, however, that I want to clarify and perhaps you can elaborate on it. That is on the second page, the second paragraph. You say: "The statistics also clearly indicate that the poor are paying more for shelter in 1989 as a percentage of their income than at any other time in recent memory. Since 1975, rental cost increases have outpaced increases in income by 11%." Can you elaborate for us on that particular statement?

Ms McCabe: They are Social Planning Council statistics. I do not remember the name of the report -- I can get that to you if you wish -- but I think it sort of fits with what we are seeing in our community, the people who come to us who are saying, "I have $50 left over at the beginning of the month after I have paid my rent, and that is what I have to live on this month." Again, the lineups at the food banks, the fact that the food banks are actually having to close down because they have no food to give out.

You have to realize that this is not impacting just on the tenants in our community, it is also impacting on the merchants in our community. We have had more businesses close down in the past year -- and I will say in the past year we have had the greatest number of rent review decisions come out in our community; backlogs of two and three years suddenly hit the tenants -- than at any other time in the history of Parkdale. We are talking small grocers, we are talking small clothing stores, we are talking very small businessmen who are really seriously hurting.

The Chair: I am going to ask you to keep your answers short because there are three people on the list. If you do not mind, I would like to move right along. Mr Duignan, Ms Harrington, Mr Abel.

Mr Duignan: Thank you for coming here this morning. I will just ask a couple of questions. One of the effects of Bill 4 will be that the speculators who are in the rental business to make short-term money will basically be driven out. Do you believe that is a bad thing for tenants?

Ms McCabe: We at Parkdale Tenants' Association are very clear that we do not believe speculation should be part of the rental housing market. These are our homes. This is not the Toronto Stock Exchange we are talking about. If you want to go speculate, then my suggestion -- and I think I would be speaking for most Parkdale tenants -- is, "Go speculate on the stock exchange, not with our homes."

Ms Harrington: In your presentation, you made very clear the kind of situation you are living in. One of the statements made there is: "We are a proud, multicultural, multi-ethnic, working-class community. We are not looking for handouts." In our discussions in the last week, that idea of how much government money goes where has been part of this discussion. I would like to take what you said one step further. These people want to be proud, they want to be independent, they want to have a decent life and they are not asking for a lot. They are asking for a fair deal in housing, and that is what we want in Ontario. I think that is why you saw this government move so quickly after the election to say, "We have to reassess this whole situation and we have to look for a much better way of dealing with housing." What you are saying, that housing is not the Toronto Stock Exchange, is a whole change in philosophy that we have to very carefully think through on all sides.

I just want to go one step further in our thoughts over the past week and put this suggestion forward to the people on the committee. Many of us, the middle class, the upper class, in buying our own homes have much greater subsidy than the poor do. This is something you do not obviously see at the beginning, but the amount one makes over the past 10, 15 or 20 years on your home is tax free. You get a $100,000 capital gain, and that is a huge bonus. In many other small ways, the government supplements or gives advantage to the middle class in housing, and I think we have to look at the big picture.

Thank you very much for coming. I also thank you, Penny, for that little tour of Parkdale last week.

Mr Mahoney: Thank you for your presentation. Obviously, you have lived through some rather traumatic experiences in your community, but I guess I am a little lost as to how Bill 4 is going to solve those. Maybe you can help me. First, I think the goal of the government is to move towards a green paper which will be dealt with some time in the not-too-distant future, hopefully to establish a comprehensive housing policy that deals with the provision of social housing, the provision of affordable housing in co-operation with the municipalities on a percentage basis. Some of the things we actually tried to implement may reappear in that green paper, I do not know.

I am just curious how Bill 4 provides any incentive to your landlord in the case of the building that was just used; perhaps that is not a good example, but it is the one you have brought forward, so I will deal with it. Do you think that, all of a sudden, they are going to start solving these problems as a result of Bill 4?

Ms Lee: I think a new act has to be in place to solve these problems. However, I just want to emphasize that the present act encourages the kind of experiences I have gone through and makes it profitable. I guess the reason I came here today is to impress upon you that what my landlord did is not illegal. He only applied and implemented what the regulation allowed.

Mr Mahoney: My point, though, because I do not think you answered it from the point of view I want to get to here -- I certainly do not intend to badger you -- is that we have a bill that has been put forward as panacea to a number of problems. In your own presentation, you refer to the tragedy of an elderly woman being raped and murdered in a stairwell, obviously a disgusting and unacceptable situation in this city and this province, and many other examples of irresponsible contractors, landlords, terrible treatment of tenants, etc. I do not dispute any of those occurrences or instances and I do not dispute or argue with you about the lack of acceptability.


What I am asking -- let me give it to you in two parts -- is how Bill 4 in any way resolves any of those problems that have been enunciated by you today. The second part of the question is, would we not be better to forget about Bill 4 and look for real solutions to the problems you have outlined and get right into a green paper, get right into a comprehensive strategy discussion in this committee, instead of just wasting time on what amounts to pure politics, with respect to the government, in attempting to say to people: "We're wonderful. We're the newly elected government and we're dealing with this"? I have read the bill and I do not understand how it solves your problems.

Ms Lee: I think it solves it by removing the financial incentive to do what they have done.

Ms McCabe: Many of these problems are not going to be solved. Unfortunately, I did not get to it. Bill 4 is not the be-all and end-all, but maybe it is going to give pause and give us as a community a chance to take a deep breath and say, "Okay, now we can start thinking about what's going to happen in the long run." That is what we are hoping for, because at the moment we are running around putting out fires.

Mr Mahoney: You made some valid points about the complexity of dealing with rent review, and of course we as MPPs and our staff have had to try to wade our way through those complexities as well. If you read the bill, I find it just as complex. It does not address the types of problems tenants are talking about in the provision of affordable housing and shelter. We use the term "housing" when in many cases we should be using the term "shelter."

When you read through this and get to the extraordinary costs, the refinancing costs, the interest costs that will be acceptable to be passed on to the tenant as part of a rent increase to be set by the minister under this legislation, rather than having any kind of independence or any kind of opportunity for an unbiased, non-political, non-philosophical review of the situation, I see nothing here that would give -- you used the term "incentive." If I accept the fact, and I do not, that the current legislation creates an incentive for someone to do what they have done to your building, I find it difficult to understand where the incentive would be under Bill 4 for them to change; obviously we, I, my party, and I am sure all parties, want that change to take place. Where is the incentive under this legislation and why do we not get on with the job of establishing a policy?

Ms McCabe: What I would say is that the incentive is already very obvious to us. On the day the bill was announced, we saw a landlord pulling his crews out of a building in our community who were in the middle of a renovation. The incentive is to stop unnecessary renovations, because they no longer will be able to pass on the capital costs. I think the landlords have demonstrated that very suitably in their ads in the paper.

What we would very much prefer and, I will be very honest, what I am hearing from the tenants is, "Let's stop all rent increases for the next two years." That is what the tenants need to even start to catch up to the amount of disposable income they have lost. In our community that is what they need.

Mr Mahoney: I could use that myself, by the way, and stopping all cost-of-living increases.

Mr Tilson: You just touched on what is probably our party's main objection to the legislation. With this legislation and the legislation before it, when you specified specific rent increases for the two years, that in fact the rich get richer and the poor get poorer, the benefit of rent controls, when you look at it, proportionally goes more to well-off tenants than to poor tenants. In other words, there are a number of wealthy tenants out there who are really ripping off the system. This legislation allows them to rip off the system even more, and this legislation creates even more hardships for tenants. That is why our party is opposed to it, because it is not fair. It does not solve the real problem.

Ms Lee has described situations, and we have had other people describe similar situations. There are terrible, terrible things being done to tenants out there, and they cannot afford it. They cannot afford what is going on and their quality of life is decreasing. That is what the previous legislation has done, and this legislation is perpetuating that.

It has been suggested to me in writing by different individuals, not so much at these hearings but somewhat, that to prevent this unfairness, which is what this legislation is doing, the government should really be targeting financial assistance to these tenants as opposed to allowing wealthy tenants to rip off the system. I guess that is my question to you.

Ms McCabe: "Do you want your mortgage subsidized?" would be my question.

Mr Tilson: But that was not my question. We have wealthy tenants ripping off the system. How do we stop that? Do we perpetuate it by allowing the rent increases to continue? What do we do, as opposed to the real problem where we have these people who cannot even afford to pay any rent? You said it yourself. Many people cannot afford to pay any rent. The percentage incomes are not going up and they are in dire straits. Bill 4 is perpetuating that problem.

Specifically, should government, as opposed to doing what Bill 4 is doing -- I am not saying I advocate it; I would like to hear your response -- get into more financial assistance to these people who are really in deep trouble, with the deep social problems you have spoken of?

Ms McCabe: We already have a number of rent-geared-to-income subsidized units, and they are not solving the problems in our community. They are in private buildings and those private buildings are disgracefully maintained.

Mr Tilson: That is not what I said. I am talking about --

Ms McCabe: The other thing I will say is that I do not want to have to go and beg for a subsidy. I want fair --

Mr Tilson: Will you allow the wealthy tenants to continue getting wealthier?

Ms McCabe: They are not an issue in our community.

Mr Tilson: But they are an issue across the province. They are an issue in the city of Toronto.

Ms McCabe: I am here to speak for my community.

Ms Lee: Are there statistics for how many wealthy tenants are ripping off other tenants?

Mr Tilson: I am just looking at the situation of tenants who are paying a certain rent compared to their income. Clearly, if you look at those percentage increases, their incomes are increasing not in proportion to what they are paying for rent, as opposed to other tenants who are paying a large percentage of their income for rent and cannot afford to do that. This legislation perpetuates that. If you do not have an answer, I understand. That is why I am opposing the legislation, because the legislation does not solve that problem.

Let's move on to another area. My question is to Ms Lee. You have described some terrible situations in your apartment in reconstruction. I guess I am getting to the same line of questioning of Mr Mahoney; that is, that clearly someone out there -- the landlords or others -- is breaking the law. Did you pursue these matters with the police or the Ministry of Labour? I think you also indicated the fire department; I do not know whether you mentioned the health department. Did you pursue it with any of these ministries or organizations?

Ms Lee: Oh, yes. We have had numerous meetings with the landlord, with our alderman -- our MPP did not respond -- with building inspectors and with Ministry of Housing officials. It just did not seem to do anything.

Mr Tilson: With respect to the municipal inspection authorities, the way you have described it, in my view the municipal property standards bylaw has been blatantly violated. Did your organization assist tenants in proceeding to ask that the municipal property standards bylaw be enforced?

Ms Lee: I did not ask the tenants' association at the time, but our building had its own association and we did hold several meetings with Mr Jennings, who is the manager of building inspections, with the landlord and with the contractors I think at least three times in the course of these renovations. For some reason we just could not seem to enforce proper work.


Mr Tilson: Did you formally make an application under the property standards bylaw to ask that the property standards bylaw be enforced, or did you simply meet with some of the municipal authorities?

Ms Lee: We met with them. I suppose we had the naiveté to think they could do something. What eventually happened was that we refused entry and were brought into court, and we made a settlement that they had to complete the work within one week using all the responsible workmanship one would expect. They did do that, but it took that measure.

Mr Tilson: I would recommend --

The Chair: Sorry, Mr Tilson, your time has expired. We want to thank the organization for coming before the committee today.

Ms McCabe: Thank you for hearing us.


The Chair: The next delegation is 860 Pharmacy Avenue Apartments, Andrew Zarnett. You have been allocated 20 minutes: 10 minutes for your oral presentation and some time for questions. I would like you to identify yourself for the record and who you are representing.

Mr Zarnett: You might have to bear with me. I have not had much experience at making speeches before.

The Chair: Just take your time. This is a very informal committee. We are here to listen to what you have to tell us.

Mr Zarnett: My name is Andrew Zarnett, and I am representing 860 Pharmacy. I am here today representing my father and my mother who you, by your actions, have financially threatened with the introduction of Bill 4. Let me explain.

On 28 November 1990, your Housing minister, David Cooke, introduced legislation that will prohibit rental increases for most residential rental units in Ontario to no more than 4.6% in 1990 and 5.4% in 1991, without regard for circumstance or quite simply ethics, the basic principles of honour and morality, the accepted rules of conduct. I come before you to appeal to you that in my parents' particular situation this is unfair and unjust. The financial effects to my parents will be devastating.

On 15 January 1990 my father's company, Grand Mile Holdings Ltd, with regard to our building at 860 Pharmacy Avenue, a 30-unit, 40-year-old building, received a conditional order under section 89 of the Residential Rent Regulation Act which states that:

"In an application under subsection (1), the minister shall consider the proposed capital expenditure and shall by order declare the amount that will be allowed in respect of the expenditure in a subsequent application made under subsection 74(1) (whole building review) or subsection 86(1) (part building review), and where on the subsequent application the actual expenditure is substantially higher or lower than the projected expenditure the amounts allowed shall be decreased or increased proportionately."

Throughout the process of gaining government approval, the tenants had ample opportunity to be heard and were heard in full. You will see that this order, and I have attached a copy of the order for all to peruse, clearly declared by the Rent Review Hearings Board, an institution created by the government of Ontario under RRRA, the amount that will be allowed in respect of the expenditure in a subsequent application, was signed and dated by the minister's representative, Marijana Brala, member of the Rent Review Hearings Board. This was and continues to this day to be a binding agreement between my father's company and the government of Ontario.

A short time after receiving the order, we took the steps to make the necessary capital expenditures to the building, which included kitchen renovations, washroom renovations, appliances, new gas-fired burners, installing new windows, pavement repairs, parking lot lighting, painting, parquet floor repairs and removing milk boxes. We did the work with due diligence and complete co-operation from the tenants. Since I was responsible for the renovations, I can tell you that an active communications program with all tenants was initiated and followed. Over 10 newsletters were issued over the six months of renovations. That is not all. I worked closely with every tenant to determine the capital repairs that were needed for each unit. Co-operation and customer service prevailed. Everyone who wanted a kitchen got a new kitchen; those who did not, did not. The work was 90% completed by the end of July.

On Friday 30 November 1990, we found out that we would not be allowed the increase previously approved by the government because the new legislation disallows it, since our first effective date of increase is after 1 October 1990. That weekend and the weeks that have followed have not been restful ones for my parents, who have worked hard in this country. Over 30 years ago, my parents purchased the apartment building and, like everything they do, stuck with it. There was no flipping here.

My parents are careful people. All their savings have been gained through, plain and simply, hard work. And like all their past actions, they went about renovating the apartment building with the same cautiousness. That took them the route of the conditional order -- "Get an order that says what will be allowed, do the work, come back to us and we will allow it." -- and now you are changing the rules, after my parents have followed them, made financial commitments and spent approximately $385,000.

It should be emphasized that these moneys were financed via the Royal Bank of Canada through a type of financing which it refers to as interim construction lending, which is paid out through permanent financing first mortgages. In providing the moneys to renovate the project, the bank clearly relied on the conditional order issued by the Rent Review Hearings Board pursuant to section 89 of the act. The bank relied on the conditional order and upon the projected revenue of the building.

Without the conditional order gained under section 89 of the act, neither would the bank have advanced us the funds nor would we have carried out the capital improvements. The improvements would not have been undertaken if the law had not provided for the recovery of those capital expenditures from an increase in revenue. We, alongside our bankers, in doing the work, relied explicitly on the state of the law as it then was and relied on the conditional order issued by the government of Ontario. If we did not have the conditional order assuring us of the rent increase, we would not have done the work, because we could not have afforded the cost of renovations.

If Bill 4 moves forward as is and my parents are not able to increase the rents, they will be ruined. The bank and the mortgage companies have said they will not finance the additional $385,000 unless the rents go through as per the conditional order. For my father, this will mean selling the building in a depressed market at a loss or possible bankruptcy.

All governments clearly have the right to change their minds, to change their policies and to change the direction they will follow, but no government has the right to be unfair. The proposed legislation is retroactive and the general rule is that retroactivity is wrong and unfair. In this case, not only was there no timely prior notice, there was a prior promise by the then Minister of Housing that the rent increases would be accepted if my parents completed the work. The law has been said to rest upon an implicit social contract between the state and the citizen. We enter a new Dark Age of mutual distrust if the contract is shattered not by the actions of an individual but by the arbitrary actions of the state itself.

In the words of my mother, who quite frankly has been shattered by the whole event: "Is it just to punish and economically destroy people who got a written and signed order by their elected government? Do you think it is morally fair to punish and ruin people whose only crime was to follow the law of their province? If you can allow such an injustice, then I have lost faith in our democratic government in this province and find myself with a very heavy heart."


For an activity which is lawful at the time it is carried out and for which activity my parents relied explicitly upon the then existing legislation, regulations and representations from government officials, to be made unlawful by the stroke of a pen in a retroactive clause in a piece of legislation is quite frankly immoral, unethical, shameful and totally unacceptable.

Ladies and gentlemen of the committee, I appeal to you to do what is fair and allow those who complied with the act, the rules of the day, to be treated under that act and, in that regard, amend Bill 4 to exempt those parties who were granted conditional orders under section 89. On behalf of my parents and myself, thank you very much for the time in allowing me an opportunity to explain these circumstances before your committee today.

Mr Mahoney: I almost feel I do not need to ask a question actually. It was such a really eloquent presentation and obviously a very emotional situation for you and your mom and dad.

First of all, let me tell you that our party strongly supports your request and we will be attempting to deal with an amendment along those lines. Whether or not we can convince the majority members of the government to really listen to your appeal and to recognize your situation -- which is not the only one in the province, as I am sure you know -- remains to be seen, but we are going to attempt to fight in whatever way we can to try to have this injustice corrected.

Can you tell me a little bit briefly of the history of the repairs or the renovations were done? You obviously had the co-operation of the tenants, but is the building falling apart or what?

Mr Zarnett: The building is 40 years old and regular maintenance has been followed over the time that my parents have owned the building and even some capital expenditures were done, but with rents the way they were set, a person can only do so much. In 1982 $30,000 was spent to redo the roof. In today's dollars that is probably $60,000. In 1984 the front of the building had extreme damage from the sun and the wear and tear over the years and you could not let it go.

My father does take very good care of his properties. A principle of his is longevity. He has stuck with this building for 35 years, has been in the same house for many years, has been married to the same woman for 30 years and he believes in that principle and he believes in doing the best. He has been taking care of his building on an ongoing basis.

Mr Mahoney: Are your mother and dad wealthy?

Mr Zarnett: They are well off, but this will ruin them. I mean, where can a person come up with $385,000, money that they were supposed to get through rent increases? The mortgage companies have said they will not finance it unless the conditional order goes through, because there are no funds in the building.

Mr Brown: I would like you to know, if you have not been following these hearings carefully, that you are certainly not the only person in this province in this situation. We have had a number of people come before this committee and we know there are many more who will not have the opportunity to come before this hearing because this government has not provided enough time for people to come before this committee.

I really do not have a question. I just want to assure you that, as Mr Mahoney said, we find this the most regressive, draconian part of this legislation and we will work our hardest to see that the government takes some steps to rectify this. I would ask the government members to make some indication they will entertain that kind of amendment.

Mr Zarnett: I appreciate that.

Mr Turnbull: During all of these submissions we have heard some very heart-tugging submissions from both tenants and landlords. I have always believed that two wrongs do not make a right. There is no doubt about it that we were warned during the election, when you read An Agenda for People, that the NDP intended to move with very aggressive rent control legislation. However, I do not think anybody in his wildest dream could have conceived of this type of legislation that is retroactive in its working. It goes to the fundamental rule of law and how you can rely on government if you comply with the law in every respect.

I am delighted to see that the Liberals seem to be coming along in our direction now, although I will point out that they voted for it on second reading. Be that as it may, I think they seem to have seen the error of their ways now.

In terms of this retroactivity, let's just talk about your particular instance. Is there any of the work that you did that would be considered of a luxury nature?

Mr Zarnett: Absolutely not.

Mr Turnbull: Can you say that there was any intent of working the system?

Mr Zarnett: Not at all. My father found out that you could get rent increases if you did capital improvements to your property, went to the professionals for advice, because a small landlord, believe you me, does not know. The law is so complicated, they have to go and rely on people.

Mr Turnbull: Because time is so limited, let me move on. Do you think it would be reasonable, if the NDP wanted to move forward with this legislation, if it were to take out the retroactive aspect of it? Is that something which you can conceive of as being more reasonable?

Mr Zarnett: The best way I can answer that is to read this again:

"All governments clearly have the right to change their minds, to change their policies and to change the direction they will follow, but no government has the right to be unfair. The proposed legislation is retroactive and the general rule is that retroactivity is wrong and unfair. In this case, not only was there no timely prior notice, there was a prior promise by the then Minister of Housing that the rent increases would be accepted if my parents completed the work. The law has been said to rest upon an implicit social contract between the state and the citizen. We enter a new Dark Age...."

Mr Turnbull: I am sorry, I do not want to seem as if I am cutting you off. It is just that time is so limited. Would your parents, in the present climate, in view of this legislation, conceive of investing any other money in Ontario, if they had it, if they are not completely wiped out?

Mr Zarnett: Absolutely not.

The Chair: Ms Harrington, Mrs Ward, Mr Mammoliti, Mr Abel. I do not know how we are going to get four on in three minutes.

Ms Harrington: I would just note that when you say no government has the right to be unfair, certainly you may agree with me that there has been a lot of unfairness going on in the history of this province. All I want to assure you personally is that we will give every consideration to your situation. We will be looking at your case in some detail. I thank you for coming.

Ms M. Ward: I have a question regarding the statement on page 3. I wanted to ask about the financing. You say the money is refinanced by a type of financing which they refer to as interim construction lending, which is paid out through permanent financing first mortgages. Are you basically saying that this is a first mortgage on the building? I understand your parents have owned it for over 30 years.

Mr Zarnett: When you go and do capital improvements, you go to the bank and you ask it for moneys to do the project. You do not exactly know what the final costs will be.

Ms M. Ward: Is it a mortgage? That is my question.

Mr Zarnett: It is a bank loan right now and it has to be paid out. Interim construction lending is a bank loan. It is paid out through a mortgage, but the mortgage companies have said: "We cannot give you a first mortgage because there is not enough net rental income in the building to support financing such a mortgage. So you are stuck with the $385,000. You better find a way to pay that on your own."

Like I said, economic ruin and financial disaster for my parents is imminent unless support is forthcoming from your government to reverse the retroactivity of this law.


Ms M. Ward: I do not want to take too long. Two other people have questions. I will leave that there and give the other people time to ask questions.

Mr Mammoliti: Mr Mahoney and Mr Brown gave you the assurance that they will do everything to get Bill 4 changed for you. I just want to remind you that they voted for the bill as well. I think that is important.

Mr Zarnett: I am looking for your assurances.

Mr Mammoliti: The question I have for you is this: Are you aware that there are thousands of people being forced out because of high rents and being forced to shelter homes and food banks?

Mr Zarnett: I agree that the law needs to be changed, but the retroactivity of this law is grossly unfair. It is immoral, it is unethical, it is shameful and it is totally unacceptable, like I said.

Mr Mammoliti: But you are aware that there are thousands --

The Chair: Order. Thank you. Mr Abel.

Mr Abel: I can certainly sympathize with the situation you find yourself in, and any other landlords. I agree with what Ms Harrington has said, that we should look into those matters and give it some consideration, but I do have some questions, some issues that you brought up in your presentation.

The Chair: You have time for one question.

Mr Abel: Did the tenants oppose the renovations? Did any tenants oppose that?

Mr Zarnett: I think there was one tenant who opposed certain renovations, but when we went --

Mr Abel: When you applied for the conditional rent increase, did they appeal? Let's put it that way. Did they appeal your conditional order?

Mr Zarnett: The one tenant did.

Mr Abel: There was some opposition.

Mr Zarnett: As I might say, when the work was done, I went around to every single apartment and asked the tenants what needed to be repaired. If the tenant said he did not need a new kitchen, we left it at that. If a tenant said, "Yes, I definitely need a new kitchen," we did it for him.

Mr Abel: Okay.

Mr Zarnett: Please. We did the same thing with faucets, shower controls.

Mr Abel: I get your point. I just wanted to know how much of an increase would that impose on the tenants.

The Chair: Order. Mr Abel, I am sorry. I wish I could give everybody more time. I am following the rules of the committee.

Thank you for coming before us. We appreciate the information you have left with the committee. I think you have heard that everyone is going to consider the situation that you brought forward.

Mr Zarnett: One last question. Maybe you can explain to me the procedure of the committee from here towards its completion and how that works so that we all have a better idea of that.

The Chair: My understanding is that the committee is going to continue hearings and also have discussions on a green paper or a consultation paper which will be tabled by the government soon. We will have further discussions of maybe a similar or of a different nature on that. Then this bill will receive clause-by-clause study, which means the committee members at that time will go over each and every section of the bill. At that time, they can make amendments to the bill.

When we have finished that process, the committee will report the bill to the Legislature when we reconvene, when we have finished our process, and then the Legislature will in fact redo the process of clause-by-clause approval of the bill in the Legislature, probably this spring. Amendments can at that time be put again and voted on again until we have completed that process. Then the bill will be put forward for final and third reading, for final and third vote. If the bill carries, then the Legislature will present the bill to the Lieutenant Governor for royal assent.

Mr Mahoney: On a point of order, Mr Chairman: Without being defensive, I feel I must respond that everyone around here knows the process of getting bills out to committee requires a vote to take place in the Legislature. Then it goes out for amendment at committee and I really think it is unfair that witnesses who come before us are subjected to the kind of political nonsense that we just saw from members of the government side.

The Chair: That is not really a point of order.


The Chair: We have 161 St George Street Tenants' Association. Please come forward. You have been allocated 20 minutes. You have 10 minutes for your oral presentation, followed by approximately 10 minutes of questioning from the committee members. I would ask that you state your name and position in any organization you are representing, for the record of the committee.

Ms Ilkow: My name is Martha Ilkow and I am a member of the tenants' association at 161 St George Street. We gathered around and we were talking about why we oppose the rent increases, so I would like to read off what is sort of a summary of our objections to the current rent review system.

We have found that we have really no control over the costs which our landlord claims to incur for the work done on the building. The costs that are incurred and passed on as capital expenditure costs seem to very ineffective in terms of costs and the final results are rather poor. We found, for example, that carpeting was listed at a cost of $22.50 per square yard. We received quotes from two other companies for carpeting of a similar nature at a price of $13 to $15 per square yard.

We had smoke detectors installed which cost us an average of $95 per unit and we found prices to be as low as $15 to $35 per unit. We received a new washer and dryer and the price to do one load of laundry has gone up 166%, yet these new washers and dryers are less efficient in drying and taking care of a load of laundry and people now pay an increased price and they have to rewash or redry their laundry.

Not only do we not have control over the costs that our landlord is taking on and passing to us, but we have even less control over what type of repairs are being done to our apartments. For example, most tenants who received new fridges claimed that they did not need one and their current fridge was working fine. We also found that there was no need to repaint the hallways, which barely had a mark on them, or replace an almost new vacuum cleaner again. We did, however, find that most of the tenants' needs are actually being ignored in terms of complaints about lack of heating, gaps around the windows, holes in the walls of the apartments and paint peeling inside the apartments.

In general, we find one of the major flaws of the current rent review system is that 25% or more of the units must be affected in order that the landlord can claim this expense as a capital expenditure cost. We feel that this decreases the incentive for the landlord to undertake repairs and make improvements unless it affects 25% or more of the units. As a result, the small problems are left to fester for years until the landlord can claim 25% of the units having had the repairs done. The needed repairs and basic maintenance are being neglected and work which is needed on a day-to-day basis is being ignored.

We feel that a portion of our annual rent should be used for ongoing maintenance; therefore, the landlord would be able to maintain the capital value of the building rather than classifying large-scale repairs as capital improvements. We found that the capital expenditure costs grew by 141% between the order we received in 1987 and the order we received in 1990. This seems to be an unholy coincidence between the amount of repairs done in our building and the Liberal government's rent review system. Another flaw with the current system is that tenants should have to pay this increased rent year after year once the costs have been paid off. The system should allow for a decrease in rent after the work is completed and the costs are recovered.

Another problem with the existing system is that it makes the tenants fear major renovations as they know this will lead to large rent increases, as has been the case in our building. In 1987 we received an order for a 14% rent increase and in 1990 we received another order for a 14.85% rent increase. There is work on the elevators and the windows which has been proposed as part of a five-year plan, and yet it has not even been written out in terms of the cost estimates which we will have to cover.


Tenants in our building have been complaining of the lack of heat in the winter for the past three years since they can no longer regulate the heat in our building. As a result of what appears to be cost cutting by the landlord, there are tenants in our building who find that they have to sleep with their stoves on at night while other tenants find it too hot and have to sleep with their windows open.

In response to our complaints about the problem, our landlord sent us a letter in February 1990 stating tenants' complaints about the temperature being too cold in their apartments was due to the cold air draughts which came in from our windows and that there were "a lot of window cranks which would have to be replaced and window-locking devices repaired. As well, a number of balcony doors did not lock or close properly. As a result of this ice collects on the inside of the tenants' windows."

To take care of this problem, the landlord suggested that he would replace our windows at a cost of 3% to 4% on our next annual rent increase. The problem is not that there is a need to replace the windows, but that the windows have not been properly maintained. It has been such a long period of time since they were washed. You can see that the caulking has all dried out around the window panes. The weather stripping is almost of no use. So we go back to the basics: the maintenance and repairs which should have been done by the landlord on an ongoing basis have not been done.

There are some expenditures which the landlord claims are capital and are made necessary because there is insufficient maintenance there. We have had a problem with our elevator, for instance. The controls do not work very well and, as a result, the tenants are unable to get off because the doors of the elevator do not open on certain floors if the number of people in the elevator exceeds three. It seems there has been very little maintenance done on our elevators over the past few years and this is probably why they are in such bad shape. The only work that will be done on the elevators is proposed under our landlord's plan for the 1991 capital expenditure cost and it will be passed on to us in part as tenants. We feel we should not have to pay for repairs long after the elevator, for instance, has been depreciated and is written off. These repairs are not of the original quality of the building and they are going to be extremely high. The onus should be on the landlord to provide the most efficient repairs needed for the building and to make them cost-effective for us.

Mr Tilson: Ms Ilkow, I understand what you are saying and I hope the government and the Minister of Housing will listen to what you say. Most of your comments appear to be directed towards the overall plight of the tenant and the problems the tenant is having with landlords who appear not to care and appear to be taking advantage of the situation. Hopefully, the new green paper which the minister is preparing and which will be introduced next month will address some of those concerns.

I guess my question is dealing specifically with problems that have been coming to this committee specifically on Bill 4, the problems of the interim legislation. The last speaker, for example, zeroed in on the retroactive feature. Submissions have been made to us about how the retroactive feature will hurt not only the landlord but the tenant. It will hurt the people of this province who are losing jobs because of it, who are supplying contracts. Landlords are not ordering, for example, new appliances that are needed in buildings that might be more than 20 years old.

I do not know whether you have read Bill 4 or not, but I am sure you have been listening to some of the proceedings. Looking at that specific area, do you think the retroactive feature of this bill is fair?

Ms Ilkow: Yes, I personally do think it is fair. I think what we are looking at is similar to what you look at in the business world. The landlord is an entrepreneur, he is a businessman and, if there is not very closely monitored legislation, an order to follow that he gives the tenants what they are entitled to, he will of course abuse the system.

When things are put on retrodate and they are held back, I think it is because we are taking a second look at the situation. We are trying to decide: Is this a fair system or is it working against the tenants? You have to understand it is everyone's desire to have his own home, to have his own land. It is the basic necessity, but for those of us who cannot afford it, our alternative is to rent an apartment. When we rent these apartments, this should be regulated just as the government regulates businesses. Otherwise they will take advantage of bad times or the economy. For instance, in the late 1980s when it became very good, all the prices skyrocketed and tenants just had no choice.

Mr Tilson: I agree with what you are saying, but my question zeroed in specifically on the retroactive part of it, and I guess I go beyond that and ask whether this legislation helps, in your view -- I am talking about Bill 4, not the green paper -- whether this legislation helps existing and future tenants in improving their quality of life. How will Bill 4 specifically improve the quality of life of the tenant?

Ms Ilkow: If they start to put a limit and perhaps an audit is set up on what is being done to our buildings, I think --

Mr Tilson: Bill 4 does not do that, though.

Ms Ilkow: No, but I am saying I think it will lead towards that.

Mr Mammoliti: We have been hearing consistently from tenant organizations and others that landlords have neglected the maintenance of the buildings and then, taking advantage of the legislation, want to recapture the money from the tenants when they have to replace everything.

Ms Ilkow: Yes, this is very true.

Mr Mammoliti: The example that you gave was elevators, and it struck me that elevators are very important for the obvious reasons: whether there is a heart attack, a fire or whatever there is in the building, you need elevators.

Ms Ilkow: Yes. Sorry, we did have an example of that. A man had a heart attack on the seventh floor of our building and it took 25 minutes to come up by elevator. It was dangerous.

Mr Mammoliti: In your particular case, do you think it is fair for the landlord to recapture the moneys for the new elevators or whatever he planned on doing and basically ask you for that money? Do you think that is fair in your particular case?

Ms Ilkow: No. I have been trying to review it and see it rationally from the two sides, the landlords and the tenants, and having gone through what I have over the last few years, I am trying to see what the solution is. I do think in part that the landlord should be forced to put aside part of this money that he receives from the tenants to take care of repairs and maintenance on an ongoing basis. It seems ludicrous that he should not take care of this and then, suddenly, when we should get what we are needing, we have to pay so much more for it.

The Chair: Any further questions? No further questions. Thank you. This side is finished and now we are going to the Liberals.

Mr Mahoney: You had me all upset. I thought you were hungry and going to lunch.

The Chair: No, this committee never adjourns before 12:30.

Mr Mahoney: We may today. Thank you for your presentation. I was interested in the statement you made in closing. The last part of it was that the repairs should be cost-effective for us. I think that is what you said. So you should do good repairs and it should be cost-effective for the tenants. Are you suggesting that you are not objecting to reasonable rent increases for these repairs when they are necessary?

Ms Ilkow: No, and I say on the behalf of all the tenants in our building, everyone said we do not disagree with paying a small percentage rent increase to cover repairs on an ongoing basis, so that if there is a fire, if there is some hazard in our building, we don't have to find out later, much too late.

Mr Mahoney: I guess my concern is that we have heard people say landlords should do repairs on an ongoing basis. I do not know the specifics. I think you said some people got new fridges when they said they did not need them and certain painting was done when it was not apparently necessary. But I wonder if these are not sort of examples of ongoing maintenance.

Ms Ilkow: No, none of these jobs commenced until after the Liberal government came in, and in 1987 we got this first major increase of 14%. Since it has continued, it seems to be very obvious that, as I said, a major fault with the system now is that if 25% or more of the units are affected, it is legitimate, so if they are actually needed or not, it is not defined, it is not specific enough.

Mr Mahoney: How are you going to determine that those things are needed, and what incentive is there at all under Bill 4 for any landlord to do any repairs? We have heard some nightmarish stories today and in past days about what would certainly appear to be irresponsible landlords, bad landlords. First, how is this Bill 4 going to create good landlords, and second, should we really not be scrapping Bill 4 and moving on to the green paper to try to put something in that is long-term cost-effective for us, to use your words?

Ms Ilkow: I think you have to put everything on hold for now because under the present system the landlords are making out very well in terms of costs that are passed on, and we as tenants are just having to continuously move out of buildings and leave. The system has to be amended. There is just no question. It has gone to the worst it can. There is no way you can just continue it and decide to change it all of a sudden. It has been done through a process to work for both parties.

Mr Mahoney: You have heard some of the comments from some people today about the retroactivity and the damage that is doing to some private individuals. Do you support, in a sense of fairness, making this bill retroactive?

Ms Ilkow: As a tenant myself, if I feel there is work to be done and it is commencing on a certain date and I am residing there, then this is the issue. We are looking at that date. It should be going back retroactively. If the work was done properly, I think it should be looked at. If it was done cost-effectively and it was not needed --

Mr Mahoney: That is not what the bill does. It is not a question of whether the work was done properly, it is question if whether the individual had approval to go ahead and do the work. In the previous case they even had the concurrence of the tenants, for goodness sake. Now, as a result of this legislation, that has all just been taken away. Is that fair to you?

Ms Ilkow: This concurrence of the tenants is very deceiving. Our landlord went about saying how we had all agreed to getting new windows. Of course, when we have our heat cut down to almost nothing and we are told we cannot regulate the heat and people are getting sick, people are going to ask why not. It is a very deceiving way of saying you get a concurrence of tenants.

Mr Mahoney: Can you just answer me -- I do not mean to cross-examine you -- yes or no: Is it fair that one government gives approval to someone and another one retroactively simply takes that away, or do you think that should be looked at?

Ms Ilkow: Could you say that again?

Mr Mahoney: Do you think the retroactivity is fair?

Ms Ilkow: I think it is.

Mr Mahoney: Thank you.

The Chair: I would like to thank the witness for coming before the committee with your brief. We found it quite interesting.

I want to inform committee members that the schedule for this morning has been completed and we will adjourn until 2 pm. Thank you for your co-operation.

The committee recessed at 1205.


The committee resumed at 1404 in room 151.

The Chair: The Chair sees a quorum. I call the standing committee on general government to order. As everyone knows, we are holding public hearings in response to and in consideration of Bill 4. The first presenters this afternoon --

Mr Tilson: On a point of procedure, I guess, Mr Chairman, I had brought a motion which this committee passed with respect to government officials providing the members of the committee with details on the various cities that we were attending. Has that come out yet? Have I missed it? Has that been made available?

Mrs Y. O'Neill: In the same vein, Mr Chair, I thought we had asked that we have the ministry officials return to the committee. Have you and the clerk been able to arrange a time for that?

Clerk of the Committee: I have been going through the agenda, Mrs O'Neill, and I have to run it by the committee, but it will have to be the week of 11 February, possibly lunch on 12 February, if that would be agreeable. The alternative is after the hearings on 12 February.

Mrs Y. O'Neill: So we are firming that up now, are we? I would certainly have liked this sooner.

The Chair: Do you want to do it sooner?

Mrs Y. O'Neill: I guess it is impossible. I trust the clerk has explored every waking moment that we have.

The Chair: We will get some documentation to the committee on a little more formal basis soon. Maybe we can draw up a memo and distribute it to all members. I do not think we dealt with your point yet, Mr Tilson. Do we have a ministry staff person to answer that? Why do you not come up and identify yourself for the record and help us, please? If you could answer the question, it would be helpful.

Ms Richardson: My name is Dana Richardson. With regard to the information about the cities the committee is going to visit, that will be delivered to the committee this afternoon. We are just preparing it.

The Chair: Is that all right, Mr Tilson?

Mr Tilson: Yes, that is fine. I have one other question on procedure, because I know you are trying to schedule things. You will recall that I introduced a motion, which was defeated, with respect to asking a number of government officials to come and provide us with comments from different aspects. That motion was defeated with the caveat that officials from the Ministry of Housing hopefully would provide that information.

There was a final name on that list. I guess I have it here somewhere in the scads of paper, but the name was Mr Thom, who of course did a very extensive report on rent control for the last government, which cost the taxpayers of this province a considerable amount of money. We are now into a similar type of rent control system, perhaps a little bit more rigorous. I still feel that with all of the information Mr Thom has in his report, as well as information that may not be in that report, it would be useful for this committee to hear from him.

I do not know whether the previous government simply received the report or whether there is any committee which had him make any specific comments, but I think that is a new game. We now have a new piece of legislation and I still believe that individual should attend before this committee.

The Chair: You are asking that we get concurrence of the committee to schedule Mr Thom.

Mr Tilson: Yes. I understand the government's position on having all the various ministers or people from the various ministries, that this might get cumbersome, but this is a different individual. The Ministry of Housing will not have Mr Thom's personal comments. I mean, we can all read the report, but it would certainly be useful and would be interesting, in light of the new legislation, to hear Mr Thom's thoughts. Since the previous government did pay such a substantial amount, I am sure Mr Thom would be only too pleased to come. Hopefully, he could be scheduled at a time which would be convenient to him and to us.

The Chair: What are the wishes of the committee on the suggestion that we have Mr Thom?

Mr Mahoney: Agreed.

The Chair: Agreed. I am asking all members.

Mr Mammoliti: I would like to discuss this a little further, if possible.

The Chair: Certainly.

Mr Mammoliti: I thought we had discussed this already, and it just keeps coming up. Again, I do not know what the practice has been with the committee, but once you discuss something, is it the practice to bring it back again to the table two and three times?

The Chair: Yes, the practice has been that members from all sides feel that as time and as hearings go by circumstances change and warrant discussion of matters that may have been brought up in the past but are being brought up presently under different circumstances and in a different way. In terms of schedule, what Mr Tilson has said is that previously he had provided a long list of individuals and officials he wanted the committee to hear from, but now that he is not interested any longer in that long list, he wants the committee to consider only one name.


Mr Tilson: It is not that I am not interested; the committee did not agree with me.

The Chair: I am sorry I put it that way. I did not mean to say that.

Mr Mammoliti: We also said we would accept submissions or written proposals from anybody and if we had time we would deal with them.

The Chair: I am asking for a consensus. If there is no consensus, we will continue to do as we are doing.

Mr Abel: I would like to move that this motion be tabled.

The Chair: You do not want to have a discussion?

Mr Abel: Actually what we are looking for is time so we can have our own discussion.

The Chair: Do you want to defer the discussion?

Mr Abel: I would like it tabled.

The Chair: Was that an official motion you were making?

Mr Tilson: No. I am going to raise it again, but I am glad that the government is at least considering it. With respect to the remarks from my friend here, I am not repeatedly raising it. I raised it once. It was raised in the context, as you said, that I expressed an interest for a number of people to hear it. This individual, Mr Thom, does not fall into the category of the other ministry officials; he is quite different.

I might say that I am disappointed in the hesitancy of the government in taking the position that it is, because I know that the NDP, at the time this report was presented, was most interested. I would hope they would want to hear an unbiased opinion as to what someone of Mr Thom's expertise in rent control would have to say with respect to this legislation. I do not know why you need time, but if you need time to think about it, I have no problem with that. I am disappointed because of the difficulty we have in scheduling.

Mr Drainville: Obviously, finally Mr Tilson has indicated that we shall have the time to think about it. As to his disappointment, Mr Tilson has indicated his disappointment on many occasions and probably will in the future as well. I might say that since we have people ready, the deputation, perhaps we might move on, Mr Chair.

The Chair: Okay. The consensus on the matter is that we withhold further discussion for the time being and we will get back to it.


The Chair: The first presenter this afternoon is the Parkdale Legal Services. They are duly seated before us, ready with their presentation. We have allotted 40 minutes for your presentation, ladies and gentlemen, 20 minutes for an oral presentation and a further 20 minutes for questions and answers from the committee. I would ask that all people at the table please introduce themselves or have one spokesperson do that and also the positions they hold within your organization.

Mr Poesiat: Good afternoon. My name is Bart Poesiat. I am a community legal worker at Parkdale Community Legal Services. I am here this afternoon to introduce three tenants' associations, representatives of three tenants' groups in the Parkdale area. These groups and the people who will be deputing today represent approximately 5,000 tenants in the Parkdale area. Parkdale Community Legal Services has had a long involvement with these tenant groups. They are client groups and we have also acted in an organizing and an advocacy capacity.

Luke Utti is the president of the Phil Wynn Tenants' Association of Parkdale. This tenants' association represents tenants living in six buildings in the Parkdale area owned by Pajelle Investments, the principal owner of which is Phil Wynn, hence the name. Mr Utti will be saying a few things about the state of disrepair, the conditions in the buildings and the extraordinary rent increases that the landlord has been getting in spite of that situation under the Residential Rent Regulation Act.

Next is Joyce Routley. Mrs Routley is the treasurer of the West Lodge Tenants' Association, representing approximately 3,000 tenants living in 720 apartment units in two related complexes, 103 and 105 West Lodge. The building is a disaster zone. It should probably be condemned. In spite of that fact, the landlords have been getting large rent increases due to a financial loss situation due to the acquisition of the building, so there again these tenants have their own horror story to tell.

Next is Judy Rintoul. Ms Rintoul is the secretary of the Angry Tenants' Association, representing tenants living at 96 Jameson, 109 Jameson and 166 Jameson Avenue. Those buildings, as some of you may recall, originally belonged to an organization known as Toronto Apartment Buildings Co Ltd, or TABCO, which company for a long time charged very high rents for quasi-hotel suites.

After this illegal venture was stopped by action of the tenants, a new landlord, the Franklin Group, bought these buildings and applied for two successive rent increases in 1989 and 1990. Both were financial loss propositions under the act as well as a lot of unnecessary renovations, so the prospect is that these tenants will face rents that will go up by at least 100%.

Each of these tenants and these tenant groups has its own story to tell. To point out that in front of you, you have some fact sheets that briefly describe the facts and also each individual tenant group has some material it will present when it starts making its submission.

Behind me are a number of tenants from all three groups who have come here in support in spite of the fact that it is a working day and it is 2 o'clock in the afternoon. I should also point out that it was unfortunate that these three groups could only get 40 minutes to make their deputations or their submissions, but we understand that at the particular point we put ourselves on the list it was impossible to get any more time. We will try to hurry as fast as possible. Without much ado, I will introduce Ms Rintoul from the Angry Tenants' Association.

Ms Rintoul: I am Judy Rintoul from the Angry Tenants' Association. I am representing three buildings on Jameson that Bart spoke of; 96, 109 and 166. We support the changes in Bill 4. The saying "If it isn't broken, don't fix it" sure does not apply here, for it is very badly broken and needs fixing and we are glad that someone is about to do that. The previous system allowed landlords to rake in tons of money and tenants had to pay through the nose. That system allowed landlords to speculate and flip buildings and purposely allow excessive deterioration and a variety of scams and schemes, all of which we have lived through.

Now a short history of our horror story. Since the early 1980s under the previous landlord, TABCO, we had, as Bart mentioned, hotel-like accommodation that was rental by the hour, day or week with lots of money being made and none put back in the building -- never any maintenance, no upkeep, no nothing -- and illegal rents, lots of them, were proved in court and fines given to the company, which did not stop it. It is still going on now under the landlords that we have.

Those furnished suites had cheap furniture -- and that was several years ago; it is now worn out -- up until before this renovation scheme. Most tenants had already thrown it out, but they have been paying then and now for furniture that is either too old, too decrepit or is already gone. They are still paying and they cannot get out of paying that $100-plus a month.

The buildings were allowed to run down into a slum condition long before Mr Franklin made his little public outcry about how they would be slums if he could not do what he wanted to do. In November 1989, Mr Franklin and his group bought the three buildings, which appeared to be a flip. On this they intend to make up to about $1 million each and that is per building, not total. Since then we have gone through two proposed rent increases, one 35% and another 94%. That is over a two-year period, and this totals 124%.


The wholesale renovations then started. The operative words there are "wholesale" and "fire sale" because that is the type of equipment and activities that were used to get this thing going.

We had a security system -- $40,000, they said, in this one building; in other buildings, it was more expensive -- which has not been programmed and does not work. That was two years ago. Riser renovations to change the pipes in the building: there were holes in our building for months but they were finally done. At 109, Mr Franklin walked off the site and left the holes in the walls. That was November, and the holes are still there. Replacement of sinks, toilets, taps, showers, cheap paint jobs, counter tops that did not match or did not fit but were put in anyhow. They took out relatively new carpets and put in ones that looked to me not as new as the ones they took out.

Fire doors with deadbolts: these deadbolts were billed at one place, someone told me, for $176. They were actually $5 at Lumber King, where most of the stuff has to be bought for these renovations. Very abusive, unskilled and underpaid workers, break-and-enters: they just walk into your apartment whether you are there or not. One lady went to the laundry room, came back and her apartment door was gone. They were replacing it. Cockroaches, mice, bats, two fires that I know of in my building, water shutoffs, heat shortages and heat shutoffs, very poor quality and sloppy work that not one of you would pay for.

We also had to go through this other scenario: press conferences, different types of press, rent strikes, threatened suits against us, injunctions and now this hearing. It is not easy for regular people who are not used to the turmoil and public speaking, while Mr Franklin and his high-profile friends are crying the public blues with the $20,000 ads in the New York papers, the rent-a-construction-demos you see outside here and other various Saddam-like tactics. His intention is to double the rents in these buildings and resell by 1995 at double the price he paid for it; once again, that is per building, not all together. Would you sit through any of this?

Mr Poesiat: Next we have Mr Utti from the Phil Wynn Tenants' Association.

Mr Utti: Since Bill 4 was first introduced, there have been a lot of negative remarks about the impact the bill will have on the standard of maintenance and repairs. But the irony is that little or nothing has been said with regard to the horrendous rent increases our tenants have been subjected to over the years. We as tenants cannot afford to take out ads for thousands of dollars as the landlords can.

Under the previous legislation, the landlords have been able to apply a lot of the money invested in so-called capital expenditures to the tenants' rent. The only recourse we have is to go back to the rent review office and ask them to give us the opportunity to present our case in a way that we will find some justice, but this has not been the case. Under the old legislation, we found that rather than just paying our rent, we have been contributing to the cost of running most of these buildings.

Little or nothing has been said about the conditions our tenants are currently facing. The Phil Wynn Tenants' Association was formed after years of trying to get our landlord to see things our way. We tried on several occasions, by letters, by telephone calls, to tell the landlord of the various problems we have, such as cockroaches in the building, ceilings falling in, bathrooms not working properly, bathroom faucets falling off -- we have floods in the bathroom.

I could go on and on, but the problem is time. I do not think there is much we can enumerate in under five minutes. I will tell you one thing, though, if the current legislation is allowed to stay, you are going to find a lot of our people on welfare rolls. This is not what the province wants to see happen to the innocent tenants in this province today. If Bill 4 is allowed to pass, at last in this province we will be able to say we have recourse to justice.

I ask you, Mr Chairman, and all members of this panel to take one thing into consideration: the fact that a lot of the members of our association are not making a whole bunch of money so that they can afford tomorrow to go buy their own homes. Keep in mind also that over the years, on account of the past legislation, this landlord has millions of dollars stashed away but has not put it back into maintenance of the building. I have copies of work orders that were issued, dating back three, four, five years, with 60-day compliance notices that have not been abided by.

In conclusion, all I can say is that our only hope lies in Bill 4.

Mr Poesiat: Next we have Joyce Routley, from 103 and 105 West Lodge, the West Lodge Tenants' Association.

Mrs Routley: My name is Joyce Routley. We, the tenants of 103-105 West Lodge Avenue, totally agree with Bill 4. We hope it will be passed. The landlords cannot then flip their properties and claim "inflated mortgage payments." We do not have to remind you of the now infamous Cadillac flip which cost the government, and therefore the taxpayers, thousands of dollars. The then government promised to put a stop to these practices, yet they still occur, over and over again. The buildings at 103-105 West Lodge have been flipped many times since 1980. The result: large rent increases.

Since 1987, there have been 407 work orders outstanding in the common areas alone at 105. Since then, 103 has another 491 work orders outstanding. These include the garages and the grounds. These do not include the individual apartments. I have copies in front of me, which you may have, of the outstanding work orders; also, some pictures of the deplorable state of apartments.

Mice are putting out the welcome mat in the front lobby. Roaches are doing the Mexican hat dance, which means no proper health maintenance. No elevators, or very sporadic, for the past three years. The roof leaks, plumbing is falling apart, walls and ceilings are falling down, no window screens, which is against the law, stoves and fridges are dilapidated, laundry facilities are practically non-existent, garbage rooms not cleaned, guards harassing the tenants -- the list is too long to mention in the limited time permitted.

Yet we still got a 10.2% increase with another 9.8% phase-in increase. This comes, if my calculations are right, to 20%. Yet Zaidan Realty applied and was granted a tax reduction of $250,000 a year retroactive to 1987. I also have papers for that. Will that profit the tenants? No, it only enriches the landlord's pockets. Furthermore, Zaidan is suing the Ontario government for $2 million for delay of rent review. I also have papers on that.

Since May 1990, approximately 45 of the tenants of 103 and 105 went on a rent strike, and now Mr Zaidan is suing the rent collectors of West Lodge Tenants' Association and Parkdale Community Legal Services for $1.5 million. This shows you the character of Zaidan, our landlord. The tenants believe some people should never be allowed to be landlords, and Zaidan is one of them.


Mr Poesiat: I would like to point out in closing that it is very difficult to come up with concrete proof in a beautiful committee room like this about the state these apartments are in and have been allowed to deteriorate to under a rent review process. So we have made voluminous copies of work orders, orders from the standards board, things which date back in the past and never got repaired or took three years to repair. I have submitted them all; it is just a small sample.

There are also some pictures there. They are just small samples. In order to bring in every bit of evidence, which we could have done, we would have had to bring in a few boxes. That really makes little sense. I do not think your committee has time to go through all that. Also, there are some pictures there which, unfortunately, we have to take back because we need them for court. They are illustrative of the disrepair conditions at 103 and 105 West Lodge.

This ends our submission. We are ready for questions.

The Chair: Could I have everyone's attention for a moment? We have an overflow of visitors today in the committee room. I made plans for an overflow. I want to tell those who are standing who wish to obtain a seat to watch our proceedings that we have made arrangements for room 230, on the second floor of the west wing, to be made available, and there is live TV coverage of the proceedings. Also, on this floor, next to room 180 there is an open room -- that is in the east wing -- and we have live coverage there. You are all welcome to stay or you are welcome to obtain a seat in those two other rooms we have made available.

Ms Harrington: I would like to thank you very much for coming this afternoon. I just looked at those pictures you passed around. I did go to West Lodge two weeks ago. It is the kind of building you go into and feel you should be turning around and leaving right away. Living under that kind of lack of maintenance and lack of care must get to your very being and influence your total feeling about your life, because even if you try to take care of your own apartment there is no way you can avoid that disaster around you.

This morning we heard a quote from one person saying that no government has the right to be unfair. What I am saying is that your presentation has shown that there is a total unfairness in this society, and that is what we are up against. That is what we are trying to get at, that this system we have had in effect for the last five years has been totally abused. Those buildings, particularly the West Lodge, are three huge buildings, a complex which was probably built about 20 years ago and at that time were luxury buildings.

Mrs Routley: Twenty-five.

Ms Harrington: Twenty-five years ago. Total abuse of that situation by the landlords to get as much money out of that as possible has led to the situation now. There is no way the tenants are responsible. It must be the people who own that building who have led to that kind of situation. The total injustice of the financial loss provision in the bill has done this, and probably even before that as well.

We are here to try to address this total injustice, and I would like your help in the long run to get some better legislation. Maybe you can come back and give us some input on that. I think what we are looking at now is a change of philosophy, because the question really is -- to everybody, not just people in the Legislature who are on this committee -- what is housing? Is it just an investment or is it a home? If it is a home, is it a right? And if it is a right, then we have to change things.

I would like you to comment to see if there is any way out for these particular buildings you are talking about. It is going to be a long haul to try to change the situation in those buildings. We have to get people there.

The comment was made about trying to run co-operatives. That is maybe one way out, but certainly we need the private sector and responsible landlords. We cannot just have everything turn into a co-op, even though we would like to, because that way people have an input, just like owning a home. That is how I see co-ops; you have that pride of ownership. Nearly everyone in this province wants to own a home. If you cannot do it, then I say being part of a co-op is a wonderful experience. We do need the private sector as well and we want to work together with it. If you have some further comments about what we can do in the future, I would appreciate it.

Ms Rintoul: One solution is not to allow renovations, because I went through that one and that is not the solution. They need renovations, but not under the present system or they will be paying --

Mrs Routley: We do not need the renovations; we need repairs.

Ms Rintoul: Repairs. Sorry, I made a mistake.

Mrs Routley: There is a great deal of difference between renovations and repairs.

Mr Drainville: I want to say two things. Again, we have the opportunity to speak with tenants who have had a severe impact on their lives in terms of the accommodations they have had and the difficulty of trying to make those accommodations into places that are homelike. What has been very helpful, and I want to commend you for this, are the photographs we are passing around the committee at this time and the other documentation that indicates the battles, the struggles and the fights you have had to try to ensure that you have an acceptable place to live.

In some of the documentation, letters you have received from the property managers, particularly Curtis Property Management, I saw a letter to the tenants dated 1 March which said that the owner intends to spend the total budget they had set aside for renovations. This was an indication that counter tops, windows, a new fridge and stove, balcony panel repairs, etc, were being done. We see in some of those photographs an indication of some of the kinds of renovations that are brought about by the owners. I think the distinction you are making here between repairs and renovations is a very important one.

There have been tenants who have come here, and I would like to get your view on this, and indicated that they too believe there are times when there needs to be a new roof. But what happens is that when it goes through the present system and legislation to get that new roof, you are paying for the rest of your lives in that building. Some people have said that rather than that, when there is a major capital expense that has to be put out, why can it not be that after that has been paid for, rent goes down appropriately.

There are two views on this, and I am not taking one or the other. Some people say that as far as tenants are concerned, it is up to the landlords to make all sorts of repairs; it is their responsibility and they should take money out of the rent they receive to do that. There are other tenants who have given us the view that they believe it is fair for major capital expenditures like a new roof. They do not mind helping as long as at the end, when that has been paid for, their rent goes back down to a reasonable amount, and that once it is paid for they are not paying for the rest of their lives money out of their own pockets. Where do you stand on that particular issue?


Ms Rintoul: I do know about that, but I want to tell you about 109 Jameson, where Mr Franklin walked off. There were orders for the garage to be repaired for, I think it was something like 10 years. So among his renovation schemes he repaired the garage. He spent, I have no idea how many millions there, how much of his millions of dollars he said, but as it turns out it was better before than it is now. It is the quality of work; a lot of stuff is being done and it is overcharged, overbilled and inflated to make it look really good at rent review. Once the bills hit rent review they see nothing else, they just see the grand total. They do not come downtown or down to Parkdale and look and see that you have an absolute mess left.

Mrs Y. O'Neill: Mr Chairman, I find this presentation very difficult. It is very difficult to know that so close to where we are sitting conditions like this exist. In fact, I used to spend a lot of time on Jameson Avenue because that is where I met my husband, but that is a long time ago and I guess things have changed somewhat since then.

I do find that things you have brought to our attention -- and I certainly am pleased that you brought the pictures -- and in the Angry Tenants' Association brief are indeed described in the way in which they are. They are unlawful. They are not anything to do with existing legislation. They are the result of irresponsible behaviour on the part of landlords in this city, who I hope, and from what you have said you have, through extensive legal and political action in at least one case, the ones on Jameson Avenue, brought to task. There is a Residential Rent Standards Board that I hope has been of help to you in some of that and no doubt you have had input from MPPs.

What I would like to ask each of you to respond to, if possible, is how Bill 4 is going to help you.

Mr Poesiat: The tenants feel that where Bill 4 will help, and each of the tenants here will respond to that, is that the rent increases that landlords have been able to get for absolutely nothing -- that is one of the points of the presentation here and it is hard to bring that out in a few minutes. Take as an example the West Lodge buildings or the buildings belonging to Pajelle Investments, for that matter. These buildings have been run totally into the ground, but the landlords have been getting their rent increases every year. Where did that money go? That is why these tenants support a freeze on extraordinary rent increases, because what did Mr Wynn do in 1989 and 1990? He applied for 55% to 65% rent increases. I should point out these have not been determined yet, but they will not be affected by Bill 4. He applied for these large rent increases because he put in new windows and video camera systems which do not work, and if they did work, I guess it was to keep track of the mice and the cockroaches in the building, because there are no locks on the door.

Mrs Y. O'Neill: Are you telling me Mr Wynn had conditional orders?

Mr Poesiat: No, these are not. These are orders that are still basically sitting in the pipeline.

Mrs Y. O'Neill: Have they got a first effective date of 1 October or previous to that?

Mr Poesiat: The first effective dates for all the applications are previous to 1 October 1990.

Mrs Y. O'Neill: Are you suggesting that these are under appeal by tenants?

Mr Poesiat: They are not under appeal by tenants. They have not been determined yet because they are still backlogged at rent review, but they will come through. The tenants at least know that under Bill 4 this kind of thing will not be allowed to happen again. That is why the tenants support it.

Ms Rintoul: I am still in the same boat, where both of our applications are due before the moratorium deadline. So whatever rent review gets, and I hope it is less because of things like this, there is no way I can afford to double my rent. Jameson was nice when you were there probably, but now it is changed. You have drug addicts, you have vagrants coming up and down the stairwells, all of this sort of stuff.

Mrs Y. O'Neill: I know of the conditions on Jameson. If I personalized too much --

Ms Rintoul: If I am going to pay $800, $900, $1,200 rent, I am going to a condo on the lakefront. There is no way that I am going to support Mr Franklin and his buddies down in the Bahamas or wherever they are going to be.

Mrs Y. O'Neill: I just wondered, more directly, how Bill 4 would help.

Ms Rintoul: Bill 4 should stop them from these excessive renovations and the inflated bills, the flip-flops of the various buildings, like this lady said, three and four times. Those financial costs cannot be passed on. I have not got all the fine details. I am not a lawyer, so maybe I am a little off whack.

Mr Brown: My questions really are following along Mrs O'Neill's. I am also wondering how this specific legislation is going to help. Do you see that your building at the end of this year or perhaps next year, because this is a two-year moratorium bill, will be in better shape or worse shape that it is today?

Ms Rintoul: It could not be in any worse shape.

Mr Utti: If you will excuse me, if I might comment on that again, there is this notion that Bill 4 will have an impact on the standard of maintenance, but the reality is that a lot of these landlords have walked away from maintenance and repairs over the years. So what they have done on that -- I will not say the old one is still in existence -- is that any time we have a whole-building review, they spend a whole bunch of money correcting a lot of things that could have been done as per the work orders issued three, four years ago. When you look at the cost-revenue statements, a lot of these figures are applied on a new application for rent rebate above the stipulated guideline, so it would not really make any difference. These guys have walked away from the maintenance over the years, so this is one thing I cannot understand. If you say that if this goes through the landlords will not carry out more repairs, they will not do this, they have stopped this for years, so it really will not make any more difference.

Mr Brown: What you are telling me essentially is that they have not done anything, so it is not likely it is going to change anything?

Mr Utti: That is right.

Mr Brown: I wonder if you are aware in your own particular part of the world, in Parkdale, of buildings that are maintained with reasonable rents, that have good tenant-landlord relationships and why you think that is occurring in particular cases and not in others.

Mr Poesiat: I happen to know a particular example of a landlord in Parkdale, because I am lucky enough to live there, and the address is 22 Close Avenue. It is close to Jameson. I was lucky enough to move in there 9 or 10 years ago and I guess I will never leave. The landlord has not applied for large rent increases for the last eight years. The building is well maintained and recently some risers were renewed, new boilers were installed and it all comes out of the rent because we pay our guideline rent increases every year.

This is a long-term investment for our landlord. He has got a cleaning staff of four people and it seems to operate quite well. All the tenants I am working with are asking me, "When can we move into your building?" There is a long waiting list and nobody can move in there and the people who are in there sit tight. I am afraid that this building, at least in the Parkdale area, is a bit of an exception. But there are other buildings like that. Those landlords have never asked for large rent increases.

The Chair: Sir, thank you for your answer. We have to move right along.

Mr Tilson: I too have some connection with the area. My grandparents owned buildings that existed before the apartments arrived, so it obviously would have been a completely different neighbourhood for a young boy growing up in that area, but as a result of that personal connection with Parkdale, and specifically on Jameson Avenue, I have always followed it. I am simply amazed as to what you people have gone through and how you are continuing to go through it. I think that gets to the real question of the last piece of legislation that the previous government had and this legislation. This is temporary legislation and we know there is new legislation coming. We do not know what it is going to say, but will it solve your problem?

I guess I am following along the same line of questioning. Yes, it will effectively freeze rents. There will be no more phase-ins. There will be no more pass-ons for capital expenditures. I understand where you are coming from with that, and obviously the stories that you are telling have been in the press and I sympathize with you. It is terrible, what you are going through.

But at the same time, landlord after landlord is coming to this hearing and saying: "Why would we do anything? We don't have the money. If we don't have the money, we go to the financial institutions. The financial institutions won't provide us with the money to do even maintenance." One can say there is enough money in the rent they are getting to do maintenance, but the landlords are disputing that. Maybe they are lying, I do not know.


Ms Rintoul: They are.

Mr Tilson: Maybe they are in specific cases, and that is the difficulty of course, that you have listed flips and luxury apartments. The Ministry of Housing has given the government's own statistics as saying that these examples do not appear to be in the majority of applications that have come through. There is a small percentage. They have given landlords a bad name, probably. There are a lot of good people. We have had people weeping in here who are literally going bankrupt.

I guess I am going to ask the same question to you. I trust you have all read Bill 4. Will Bill 4 solve the problems that you are raising, the horror stories that you are raising of probably breaking municipal, provincial and probably every law under the sun? Will Bill 4 resolve that? In fact, if you do say yes I will dispute it, because it does not, but I will give you a chance to comment on what I have said.

Mrs Routley: You did not give me very much of a choice there, did you? We have lived under those horrible circumstances for so long that we can live another year under those circumstances and Mr Zaidan will still have to provide us with the basic necessities, will he not?

Mr Tilson: Do you think he will or will he use this as an excuse not to provide it?

Mrs Routley: This is what I am saying to you. If landlords were supposed to have a licence I would never give him one.

Mr Tilson: They are going to use this as an excuse not to provide it for you, this bill. It is not going to work for you.

Mrs Routley: I do know, but at least we are only paying 4% and not 20% and 40% and 50% and 200% increases.

Mr Tilson: I understand that.

Mrs Marland: First of all, I want to say that I sympathize very much with the presentation you have given from the standpoint of what it is that you have been putting up with and what it is that you have to endure. You mentioned work orders outstanding for years and you mentioned that every law possible has been broken. I do not think any one of us in this room can accept or permit those things to continue. I notice one headline you have given us here is "Rent Hikes up to 128% Scare Tenants." Any excessive rent hike scares everybody because everybody is budgeting today generally almost to the margin.

What really concerns me is that there are tenants, not only in Toronto but around this province, who think that Bill 4 is going to be their salvation, who think it is going to solve the kinds of problems that you have got these excellent photographs illustrating very well, that it is going to solve those problems and it is going to remove the kinds of conditions that you are paying for at any rent. For the conditions you are putting up with, the fact is that you are paying excessive rents today if you never had another increase for 10 years. The fact that you have work orders outstanding which are probably in contravention of municipal bylaws under the property standards act, and I am assuming what some of those infractions are, but what I think is so sad is that you are here illustrating a very grim situation for which this current government is not giving you the answer. All they are saying is that your rent increase will not go up. But is it really fair to sit back and let you live with and endure the kinds of conditions that you are paying any good money for?

Ms Rintoul: Some step is better than no steps.

Mrs Marland: And what is that "some step"?

Ms Rintoul: At least something that is positive. It gives you something to look for, it might help. Everyone is so astute out there, they are probably going to find loopholes as are found in everything in the world, but hopefully they can be rounded out and straightened out in time and things will all work out. I know that is heaven and all that sort of stuff and I do not expect to quite reach there, but at least it is a step in the right direction.

Mrs Marland: But can you tell us how it is going to help? That is what three people in a row have asked you.

Ms Rintoul: If I knew --

Mrs Marland: Let me ask you the question another way.

The Chair: Very quickly please.

Mrs Marland: Is it fair that you have to pay rent and live with the conditions and the problems that you have?

Ms Rintoul: It never was before, so it is not now.

Mrs Marland: It is totally unfair, it is totally unjust, but do you really believe that only limiting the rent increase is the answer? That is my question to you.

Mr Utti: If I may say something, we are by no means under the illusion that Bill 4 is going to solve all our problems, but it is good to know, though, this is about the first time in the history of this province that some government has taken a stand to protect the rights of the tenants.

The Chair: Thank you very much. I want to thank the delegation for coming before the committee today. Your information was very useful and we appreciate the effort you put into your presentation.


Mrs Y. O'Neill: Mr Chairman, we have had a lot of handouts in this committee but we have had one that is of interest and I would like to put you on notice that we have a letter from a cabinet minister to this committee asking about our hearings and I want to speak to that. I am looking for direction from you as to when you want me to do that.

The Chair: As has been my practice since the early days of the committee, my requests to staff and others and committee members' requests from staff and others and other information that I have received have been made available to the committee. We have four handouts this afternoon, one from the Ministry of Housing dated 21 January, signed by Anne Beaumont, the assistant deputy minister; a second handout from Robert K. Glass, Re: Standing Committee on Residential Rent Regulation Amendment Act -- that is the title; another document dated 18 January addressed to myself by Mr Glass; and last night by fax I received a copy of a letter sent by a member of the Legislature concerning the committee's decision on not going to Thunder Bay. I want to let the committee know what response we are receiving by not going to Thunder Bay. I am not at liberty to change our schedule. I can only try to get a consensus from the committee and do as the committee orders me to do. Is there is any question on any of the four documents that I have handed out?

Mrs Y. O'Neill: I have a question certainly on the one of the cabinet minister, the Honourable Shelley Wark-Martyn, and I do not know when you want me to speak to it, but I am on your advice.

The Chair: I am willing to hear what you have to say now.

Mrs Y. O'Neill: Ms Wark-Martyn, as you know, represents the riding of Thunder Bay, and she wrote this letter on 18 January, at least that is what this states, and I feel that we made the decision on 16 January as a subcommittee and then as a committee -- it was either the 16th or 17th -- not to go because at that time we only had four people appearing and I know it was an all-party decision.

I would certainly like to have the clerk verify for us if Ms Wark-Martyn has new information for us. There seems to be a need that she is expressing to let this week proceed, which is what I have always said from the beginning, that January 25 is a very important date in this committee and we have tended to rather forget that there are still ads and that the ads have stated that they can come before us and make a request to come before us until the 25th of this month.

I therefore feel that I would like to have an update. I would like to have somebody, the clerk preferably, contact the minister and find out what her concerns are, if she has more knowledge about deputations that want to be heard, if she feels that people from the north are getting a very bad message. I would like a further explanation to this letter.


Mr Mahoney: Was there a vote on the committee to go to Thunder Bay? As you know, I have just come into this committee the last two days, so I would like to hear, Mr Chair, if you can help me.

The Chair: It was a consensus. Thunder Bay was originally on the list of the communities. My information is that four delegations were prepared to meet us in Thunder Bay and we felt that the minimum requirement should be five. Therefore, we offered the Thunder Bay delegations travel at the expense of the committee either to Toronto or to Sudbury. I am told by the clerk that there has been some upset about this and that one of the delegations has refused to accept our offer. That is about all I can tell you right now, Mr Mahoney.

Mr Mahoney: I think this statement should be addressed. Perhaps Ms Harrington will address it since this letter is addressed to her from the Minister of Revenue. The statement is that we, and I assume she is referring to the government majority on this committee, will be seen as cutting off the political process and it could be, as she goes on to say, very damaging to our government. I think those are very important statements.

I have just, in my short time here, heard that a request put by my colleague in the Tory party to have additional people come forward has been defeated in a vote of the committee, and there was a request to have one additional person come, which has been deferred. I would hope, Mr Chairman, that the majority members on this committee are not shutting doors on people. That certainly appears to be what is happening.

Ms Harrington: I just got this letter I believe yesterday, or read it just yesterday. I do not know if Ms Wark-Martyn is aware that there were just the four delegates who wished to appear in Thunder Bay and what the resolution of that was. I would ask for consensus on this committee to have the clerk contact Ms Wark-Martyn and find out the situation and see if that can be worked out.

The Chair: I think that is a good suggestion.

Mr Tilson: I must confess the paperwork is coming fast and furious. I have not quite had time to read it all, but it is piling up here.

The Chair: It is two days. I wanted to give the committee members time to read. Maybe it was a good idea.

Mr Tilson: I agree. I appreciate your humour, Mr Chair, but at the same time I keep asking the government members because they have got the votes here. They can do what they like. I keep emphasizing that. I think these hearings should be extended. We put one set of advertising out for Thunder Bay, Sudbury, Ottawa, Toronto and Windsor, and that was it. Then we agreed to extend that to Hamilton, and it is regrettable that only half a day is allowed for that. I think there are many people who are appreciative. Peterborough seems to have been cancelled in spite of this list of names.

I do not know whether these people are not being heard and I guess that is getting to my point, Mr Chair. This is an up-to-date report from the clerk as to what the numbers have increased to, if any, who wish to be heard. If those numbers have increased, for example, in Peterborough, I am willing to bet that there are people who are in Toronto who would be prepared to drive to Peterborough, which sounds crazy but if that is what we have to do, that is what we have to do.

In other words, if an opening is available, I am certain there are tenants' groups and landlords' groups and others who would be prepared to meet the at least 50 applicants. I guess my question to the clerk is for an update on some thoughts about those 50 people -- I know we sent them a letter, but that can always be reversed -- as to the possibility of expanding these hearings, and her recommendation.

The Chair: Just for more information for the committee, the committee members asked the clerk to prepare a list of individuals and organizations whom we could not schedule in, and we have now distributed that to the committee. You have a list entitled "Out of Town," and those are the people in the communities outside of Toronto who had requested and whom we could not schedule for the committee.

Clerk of the Committee: The out-of-town list, the scheduling for Ottawa and Sudbury, has not yet been completed. So on that out-of-town list there will be people from those areas who are still to be scheduled.

The Chair: Then we have what we have entitled "Toronto," because our hearings have been centred here. This information has been compiled at the request of the committee and you now have it.

Mr Tilson: Could I ask the clerk to comment? I am specifically concerned because the committee had agreed, for example, to go to Peterborough if numbers warranted.

The Chair: Mr Tilson, we are unable to go anywhere else, no matter what the numbers warrant, unless there is consensus in the committee to schedule more hearing days.

Mr Mammoliti: We agreed to talk about it, not to go. We said we would talk about it if there were more people, not that we were going to go to Peterborough.

Mr Tilson: I guess if we are going to talk about it and not do anything, that is fine. I think there is sufficient information before us this afternoon to warrant the extending of these hearings and I would like to know, from the government side of this committee at least, why it is not prepared to support that.

Mr Duignan: Mr Chairman, on a point of order: This has already been decided by this committee and it keeps coming back up again.

Mr Drainville: Let me just say, in terms of bringing up this issue again, I have consulted with a number of people who have been on standing committees before, and I have talked to the Chair of a committee, and there have been many committees that have had more people apply to come to speak to those committees than could be accommodated. In the experience I have heard, there has only been one bill put forward by a government which went to committee where everyone was told that everyone who applied would be heard. That was Bill 30, having to do with the separate school funding. But there have been many standing committees that have had --

Mrs Y. O'Neill: Your statistic is not correct.

Mr Drainville: That is fine. Let me be clear about the point I am trying to make. I tried to be clear a couple of days ago when we dealt with this issue. We have spoken about this in committee. The disposition of time has been made. We are not going to increase the time we have for this committee. That has been clear all along.

We have decided that we are going to be looking at the consultation paper when that comes up. We have tried to accommodate people by sitting on Mondays. If you want to sit on Fridays, the government side is saying we are willing to do that. If you want to sit more evenings, the government is saying we are willing to do that. If you want to set those other times, we are willing to do that, but we are not -- I repeat not -- going to be moving into adding additional time to the schedule we have already set. If that is not clear, then I am afraid that is just too bad.

Mrs Marland: I think, with respect, I can speak in this committee this afternoon as one of the longest-serving members who happen to be in this room other than yourself, Mr Chairman. I want to say that there are lots of precedent examples of committees, because of a response from the public, expanding and extending their sittings.

I am not talking about extending into evening sittings because, quite frankly, if a committee has sat all day, it is pretty ludicrous to insult presenters to committees by having them come before a committee which at that point is not productively able to listen because of the fatigue of the sitting and travelling combination. So when you do it is very important, if you are going to be very much a participating member of a committee and able to listen and ask questions to presenters.


The fact is that there is precedent for extending hearings and if this matter is so serious to so many people in this province that you have a very extended list -- and I am a substitute member here this afternoon and I have not seen the list of people who have not been given time before the committee -- if there is that kind of demand and if your government is really sincere about wanting to hear from the public, then I cannot understand why you would just arbitrarily say it has already been decided.

I would suggest it was probably decided before you had the response from the public. If that is the case, since there are six government members on this committee, it is a very straightforward routine proceeding for you to agree to making a request to the three House leaders to extend the sitting time for this committee. That can be accommodated very well if that is the wish of the government members. I think it is all to do with whether it is something you sincerely want to do for the public of Ontario.

Mr Mammoliti: I just do not understand why we have to keep talking about this. It has been brought up three times -- this is the third time, and it is the third time that we are saying we are not prepared to do that. We also explained how important it is for us to pass the legislation and how important it is to us to discuss the green paper.

There are a couple of people here who are new to the committee and I can understand them asking questions. However, we have somebody who is waiting here and wants to explain his situation to the committee and I would like to defer this particular item. If not, it is up to you, but I would say to you that it is even more important just to forget about this because we have talked about it. To continue talking about this would only prove to be exhausting to all of us.

We have to expedite things. It is important to us. We have explained that to you and to the opposition. In order to do that, we have to listen to the people and that is what we are here for, not to talk among ourselves and to repeat ourselves constantly. I would suggest that we continue the proceedings, Mr Chairman.

The Chair: Mr Mammoliti, I have a short list that I am going to finish up and then we are going to get back to our regular proceedings. I want to tell the committee that the Chair has no control over what particular member wishes to speak. As the committee clerk gives out information requested by members, it is normal to assume that this is going to evoke some particular discussion whether we had that discussion or not.

Now the feelings here are very strong on both sides. I have listened to them as best I can. There is one point of view which says we should extend hearings based on data, based on belief, based on circumstance, and there is another point of view that sees it in a different light.

As Chairman, I cannot arbitrarily cut off discussion. If I were to do so, then I would not and could not lead this committee. It would be impossible if a significant minority of members on this committee felt that the Chairman was arbitrarily cutting off discussion. Then I could not be an appropriate Chairman. I have to say that to you.

Ms Harrington: On a point of order, Mr Chairman: I think it might be appropriate, because we have invited guests here, to go ahead with the agenda and then have the discussion when the guests have finished, without cutting people off.

The Chair: I have three on the list. I have Mr Tilson, Mrs O'Neill and Ms Harrington and I drew a line under the list because I was not entertaining any more.

Ms Harrington: That is all I would have to say.

The Chair: Mr Tilson and Mrs O'Neill, you have the feelings of the committee. Let's please get right to the point so we can move along.

Mr Tilson: I will simply say, in response to the members of the government, that new information has now arrived before us. There are now 95 applicants who want to be heard and you do not want to hear them. You say that you are prepared to hear them, yet you will not expand the hearings. Obviously these hearings are going to have to be expanded. I think there are a number of expert witnesses you may want to hear.

This is very difficult legislation and it is very heated on both sides. I think this committee has an obligation to hear as much as possible, particularly from the people of Ontario. That is why this committee is set up. It is called a public hearing. I am a new member to the Legislature and I have sat in the House, I have listened to the Premier of this province and I have listened to the Minister of Housing saying over and over that they are prepared to consult, that they are prepared to listen. I ask you to listen and I have asked you to consult with the people of the province.

The Chair: Mrs O'Neill, and we are going to wrap it up.

Mrs Y. O'Neill: I do feel we are doing our job as MPPs when we bring forward in these hearings that there are so many not being heard.

I want to bring up one other thing. I do hope the clerk will phone the Minister of Revenue as early as this afternoon to get an update of what her concerns are. Apparently Ms Harrington has agreed to that, and I am very happy with that. The students of Ontario, many of whom I deal with often, 210,000 post-secondary students, have not yet been given a slot. They are also objecting. They are the young people. They are the most important resource of this province.

These are not infinitesimal requests that we are bringing. We are very concerned as MPPs that the people of this province are not being given an opportunity -- the first opportunity, by the way, under this new government -- to make presentations. I am willing to sit as often as we can. I have not seen too many adjustments to the schedule. Perhaps you and the clerk will adjust the schedule even further than you have at this moment.

The Chair: No, I do not want to leave any misconceptions in the committee. The clerk and I can no longer adjust the schedule.

Mrs Y. O'Neill: You have made all the adjustments you can. Okay, I did not know whether you had re-examined it with the new information, but if you say we are working to every hour we can, then I will accept that.

The Chair: The clerk and I are following to a T the advice of the committee. We can only change with the advice and consent of the committee.

Mr Tilson: I wish to place this committee on notice that I will be bringing a motion in due course to allow the government to reconsider its position to expand these hearings to allow for more applicants and to allow for more expert testimony.

The Chair: Very good. We will proceed.


The Chair: We have before the committee at this time the Waterloo Regional Apartment Management Association. I believe Mr Eby is here. Could you please identify yourself and whom you represent for the record. You have been allocated 40 minutes, 20 minutes of which can be used for an oral presentation and 20 minutes will be reserved for questioning.

Mr Eby: My name is Robert Eby and I am fortunate to be the president of the Waterloo Regional Apartment Management Association. Thank you for allowing me to appear before you on behalf of the association. At first I thought I would have to travel to Windsor.

The Chair: I have to interrupt you for a moment, because something has been brought to my attention that the committee members must be made aware of. I will add time to your particular presentation.

I have known for some time, I want to tell committee members, that there was a possibility that on certain days we would have more visitors to our committee than we have chairs for, as can be seen in this particular room. The committee rooms in this Legislature are all approximately the same size. That is why more than a week ago I asked the clerk to make arrangements so the overflow could be accommodated in two particular rooms that I mentioned just a few moments ago.

We probably will get a request to adjourn our hearings and move to a bigger room. That request will not be able to be accommodated because we have already accommodated an overflow. Second, the committee must finish its work today and travel to London tonight in order to be ready for 9 am hearings in the morning. I want all committee members to be aware of what is going on and requests that may be made, but at this time I do not think we can just up and move someplace else. It is not possible.

With that little bit of information, Mr Eby, perhaps you would continue.


Mr Eby: As I was saying, at first I thought I was going to have to travel to Windsor and I was more than happy to do it because all the spots were booked in Toronto, but I guess because of the overwhelming number of people requesting to speak, you have added a day, thereby saving me an extended journey, and for that I thank you. From what I understand, with 95 more people wanting to speak and perhaps no place for them, it would be nice if they could in fact be heard on this very important situation.

To give you a brief description of our organization and its membership perhaps will enable you to understand the number of people who are united in this joint effort to attempt to convince you that Bill 4 is being proposed in the wrong place at the wrong time.

Our association has been in existence since 1973 primarily as an educational group helping the smaller landlords cope with running their buildings in a fair and equitable fashion, assisting them with understanding how to deal with the everyday operation of their property, particularly with landlord-tenant matters, and then in 1976 with rent review advice and interpretation of the rules.

We have a mailing list of about 200, most of whom are proud owners of approximately 5,000 apartments. The largest landlord that belongs to our association owns more than 3,500 apartments, and the smallest owner owns a single unit. Ninety per cent of our association members own less than 10 units.

We believe Bill 4 is unnecessary, unfair, draconian, unreasonable and perhaps even illegal. Bill 4 is directed at every rental unit owner in the province of Ontario regardless of the size of his building or the rental amount of her apartment.

By passing this legislation, do you really think you are going to protect those for whom it is intended? Do any of you believe that you are going to affect the landlords you most want to stop? All you will do is halt them temporarily with your Scud missile and they will shortly develop an effective Patriot missile to counter your attack. Unfortunately, though, the hundreds of thousands of workers of this province who own the small apartments do not have the same anti-missile resources to combat the mighty blow the NDP is about to deliver in a blanket-like manner, and we cannot survive the impact of the government's bomb.

To simply tell you the bill is rotten and should be rescinded is obviously just as bad as you proposing the bill in its present form. Therefore, I must also give you some examples of the points I am trying to make, including compliments where they are deserved. For example, the prospect of the Notice of Rent Increase form being changed to eliminate complicated, unnecessary information is an excellent idea and my compliments to the minister.

In the amendments, subsections 83(6) and 83(7) seem to be a little unfair in that the delay is being caused by the government, not the landlord. The landlord has asked the tenant to pay the increased rent with the intention of repaying any overpayment once the order is issued. It is the minister's direction to the tenant that he need not pay more than the guideline and at the rent review office they tell the tenant he should put aside the money so that when the order is issued he can pay the landlord the money he owes. If this is the case, there is absolutely no reason the tenant should be given another 12 months to pay money he owes from one or two or more years ago. Does the government propose a law to make the tenant responsible for the debt he owes, or will you simply tell the landlord, "Go find the tenant," after he disappears?

If you must implement such an amendment, would you accept the suggestion that it be applied to any application submitted after 1 October 1990 and that the tenant be advised to bank his increase or pay it to the landlord, who must put the money in a trust account? This would be an excellent method for the tenant to budget more accurately for the future and get used to paying the full rent every month, either to the landlord or the tenant's bank account.

If the tenant intends to remain in the building after he receives an order, he then has the funds to pay the debt owing and will not be forced to pay the new rent plus an additional monthly amount to make up the arrears. The landlord will not be forced to chase a tenant who leaves, and if the tenant decides to leave then the landlord still receives the money owing. You are making it so the landlord has to find the tenant after he has left, because in most cases the tenant refuses to give the landlord a forwarding address.

Would you not agree it is much easier for the tenant to find the landlord and that it is much easier for the tenant to collect from the landlord than the other way around? Also, does the government plan to become the collector of the bad debts it has created and the collector of the future bad debts it will create? Why are rent review orders now being issued before any amendment is passed with the order that states, "The tenants may choose to pay the full amount of any money owing as a result of this order to the landlord immediately, or in 12 equal monthly instalments." If you want to see that order, there are a number of them and I have a copy of one here.

I was informed yesterday by the manager of a rent review office that the rent review administrators already have the authority to make an order for the repayment of money owing to a landlord to be paid over 12 months. They claim that subsection 34(1) of the Residential Rent Regulation Act gives them that authority. It states, "The minister or the board may include in any order terms and conditions the minister or board, as the case may be, considers proper in all the circumstances."

Do any of you sincerely believe this section gives the administrator the right to order a 12-month repayment privilege to all tenants, and if you do, then why are you attempting to amend the act? Apparently a package of information handed out at a meeting of area managers contained a memo stating that as of 29 November 1990 all orders that are more than three months in arrears are to have the choice given to the tenant to pay now or take up to 12 months to pay. So by this example, an order that was delayed by the rent review office, and is six months late in being issued, that increased the tenant's rent by $6 per month over the guideline, the tenant who owes $36 could pay the landlord $3 per month for the next 12 months. Sounds like you are really protecting the tenant from the jaws of bankruptcy. Would you not agree?

Part Vl-A is simply not acceptable. There are, however, the contents of part of one section that we can accept, subsection 100e(8). It states, "In determining the total rent increase that is justified on the application, the minister shall determine as a matter of fact the real substance of all transactions and activities and the good faith of the participants."

Let us go on. Where is the fairness if you wipe out section 85? You are talking about the tenant's and landlord's right to have an order adjusted if errors were previously made. Would anyone disagree that if the government made an order based on some estimates and the true amounts became known, the party to whom money was owed should not lose his right to have the error corrected?

For example, a landlord applies for a change in service. He installs electric meters and asks for a rent reduction according to the costs to the tenants and the costs to the building. If the application is processed on time, there is no scientific way to establish the exact amount of each party's share. So the administrator makes an order based on what information is before her. One year or so down the road the landlord now has the exact figures and it seems the error is in favour of the landlord and he is really entitled to $15 more per month from each apartment. The amendment to the act would effectively disallow the landlord from having the order corrected and thereby loses $180 per month per year. The error could possibly go the other way and you would then cheat the tenant from his right to have the error corrected.

Who wins? One side should never win over the other side. It should be fair and reasonable to both sides. You do not cheat the landlord simply because he is the landlord and you do not reward the tenant at the expense of the landlord if it is an administrator's decision that sets the rents. You would be just as wrong if you told rent review to make their orders based on the material submitted, including the estimates, and not go to the actual amounts, because two years have passed and actual amounts are now known.

Could you also please explain what is wrong with a conditional determination as in section 88. Why is it being deleted?

Please take a minute to look at section 92 and let me ask you this: You were a union person and you had just waited two years or so for your union to negotiate a pay raise for you, or you went on strike for some time and your union negotiated a five-year contract that paid you back wages for the last two years and increases over the next three years. Let's assume you were asking for a 5% increase over and above the cost of living and you were successful. You signed the contract and collected your back pay immediately. Then, all of a sudden, the NDP came along and told you that your contract was no longer going to be honoured and you would only get less than the cost of living. Do you believe you would be treated fairly? Would your union accept this treatment? Please have the minister explain why he would do this to his union people.


What will you accomplish if you remove section 86 from the act? This will mean the tenants and the landlords cannot agree together to do specific improvements to their apartments at an increased rent. The application is a joint application where both the landlord and the tenant agree to the work and agree to the rent. Could it be possible that the system is not going to allow landlords and tenants the privilege of agreeing?

Where is the fairness in using 1 October 1990 as the date to wave the magic wand when it comes to cutting off capital expenditures? Let me give you a hypothetical example of three landlords who all spent exactly the same amount of money on capital expenses. All borrowed the money from the same bank at the same terms and conditions. All followed the rules concerning capital expenditures. All did exactly the same work. All anticipated an increase of 5% above the guideline. All completed the work on 15 May 1990. All completed applications to rent review.

Landlord 1, however, submitted his application to rent review on 15 May 1990 with a rent increase date of 1 September 1991. Landlord 2 submitted his application to rent review on 22 June 1990 with a rent increase date of 1 October 1990. Landlord 3 submitted his application to rent review on 25 November 1990 with a rent increase date of 1 March 1991. Bill 4 will allow landlord 1 to collect an increase of 9.5%, landlord 2 will only receive 4.6% and landlord 3 will receive 5.4%. Is this fair? Is this protecting the tenant? Is this protecting the future of our rental stock?

May I suggest that if any amendment must be made, it allow all applications where the money was committed or the work started or where the work contracts were signed prior to 29 November 1990, notwithstanding the first date of rent increase in 1991. Think about it. How would you feel if this law is allowed to pass and your son or daughter or father or mother or even you stood to lose your entire life savings because of an illegal retroactive piece of unfair legislation being passed in the disguise of protecting someone who pays less than 15% of his income on rent? If you want to protect tenants paying 35% or more of their income on rent, then bring in some legislation that will protect them. They deserve the protection.

You will not find landlords complaining if what you do is sincere and fair and just. Let the landlords and the tenants get together to decide how they can be fair. There is a good possibility it might bring some satisfying results to amend the Residential Rent Regulation Act according to those it affects, not simply amendments to get everyone upset.

Under section 90 of the act, the minister was allowed to order a rent higher than the amount asked for in the application so long as the material submitted justified the increase. The amendment, subsection 100f(5), will forbid the minister from doing this. Why? The only thing you will accomplish here is that the application will be for a considerable amount more than it will justify, so if an error is made in the landlord's calculation on his increase, it will not penalize him. What will you tell the thousands of owners who cannot afford to hire a consultant to advise them of the amount to ask for? Most small landlords only want to make enough to pay the bills and have a little left over for their work, but for some reason Bill 4 ignores them again and again. I cannot see any justifiable reason to eliminate this section. Can you?

Why would the minister rule equalization to be void? For example, if you had two tenants in identical apartments, each paying different rents, would it not be fair that both should pay equal rents? One tenant's rent would be lowered, the other tenant's rent would be increased by the same amount and eventually both tenants would pay the same. The landlord does not benefit from the equalization. Only the tenants with the higher rents benefit.

What about mobile homes? How much thought went into this rental market area and the proposed amendments? Does the minister realize he has effectively stopped every tenant who owns a mobile home in the province of Ontario and resides in a mobile home park from adding to his mobile home? For example, if taxes are billed to the landlord and the landlord cannot increase a tenant's rent on an individual basis, do you believe the landlord should pay the increase in taxes out of his pocket, or would you suggest he ask for an extraordinary operating cost increase in taxes and have all the tenants in the park pay for the additional rent for the addition that was put on by one tenant? I guess we have already seen several instances where the minister puts himself above the law, so it is no surprise that he would do it again when it comes to mobile home parks.

An example of what I mean can be found in a decision that upon appeal was upheld by the Divisional Court of Ontario. In Cartwright v Justasi, it was decided that in the case where the tenant rents the land but owns the residence situated on the land, rent controls do not apply. Now in Bill 4 they want to pass an amendment retroactive to 1 January 1987 that puts a rented site for a mobile home on a single-family dwelling under rent control, even though the tenant of the land owns the dwelling. So with the wave of his magic wand and the stroke of his pen, the minister bypasses the courts and sets himself up as the judge of the land and makes a law nullifying the court's decision. Is this legal? What happened to 1 October 1990?

Our conclusions and recommendations are:

1. Bill 4 is an extremely bad piece of proposed legislation and should be scrapped in its entirety.

2. A new bill could be introduced to protect tenants from large rent increases and allow fairness to prevail. For example, the date for all amendments being 29 November 1990; a cap on rent increases, for whatever reason, to be not more than 5% above the annual guideline until such time as new permanent legislation can be enacted; a consultation process put in place to have landlords and tenants and any other affected parties get together and agree on the future of rent review in Ontario.

We at the Waterloo Regional Apartment Management Association sincerely believe that those problems concerning a very small number of landlords can be solved by negotiations, and that it is totally unnecessary to use a gigantic sledgehammer when a fly swatter will solve the problem.

Thank you for listening to our presentation and we truly hope our concerns will allow you to make changes, to defeat the proposed legislation and bring in more suitable amendments.

Mrs Y. O'Neill: I really appreciate your presentation. You are one of the very few presenters who have gone through the bill clause by clause. I trust that will be very helpful to us when we do the same ourselves and I do hope that some of your amendments will be put into place, because there are certainly many that I can agree with.

First of all, I want to thank you for your flexibility on where you were going to present to this committee. I am very happy that something clicked and we did have you as witness.

I think you have shown as well as anybody -- certainly, as I say, with more attention to the actual bill -- that there are two sides to this issue. There are indeed two sides and two perspectives on what is fair. There is one part of the bill you brought forward and a group of people who are affected by this bill. You have brought forward those who are living in mobile homes. For the most part, these are people on very limited incomes. They are, as has often been talked about, real people. They are people who do not have a lot of flexibility and this bill certainly, as you have shown, gives them very little in the way of incentive, indeed in the way of a licence, if I may use that word in this context, to put improvements to their very modest shelters. I want to thank you, and I know that your witnessing will be helpful to this committee.


Mr Mahoney: I wonder, Mr Eby, if you could provide us with a little more information on the group you represent. The concern I have is that there has been an attempt to paint the landlords as all either numbered, secretive corporations or huge corporations with millions and millions of dollars. I have no argument against groups like the Parkdale people who were here showing us examples of the terrible kind of conditions they have been subjected to, but I would like to know, particularly outside of Metro, in an area like yours, what a cross-section might be of the type of person you represent, the landlord.

Mr Eby: The Waterloo Regional Apartment Management Association, as I indicated, our mailing list is about 200 people, 90% of whom own less than 10 units. So the largest majority of our people are very, very small landlords, one unit, two units, three units, five units, six units, that kind of thing. There are only a very, very few of them who own large numbers of units. I think the only reason why the few large landlords actually joined our association is that we put out a very nice newsletter called Suite Talking, for which some of you, I believe, are on our mailing list. They want that newsletter, so they joined to get it.

Mr Mahoney: We have seen examples here, the last couple of days particularly, of people who have emotionally broken down. We have had actually during the committee to allow for composure to be regained, and it has to do with obviously individuals. We had a young man here earlier this morning speaking on behalf of his mother and dad who have put their life savings, and not only their equity dollars but their sweat equity, into the building that they own. They had some $385,000 in outstanding orders that were given a conditional approval and now of course it is just retroactively stripped away by this legislation. Do you have examples of that in your group and in your area, where people had either conditional approvals or spent money anticipating that they would be able to get rent increases to cover those costs and now face potential disaster?

Mr Eby: We have a number of landlords who have done work and are faced with this 1 October deadline. We have recently had a meeting where there were some, a large number, of letters written. I believe Mr Cooke, Mr Tilson and Ms Poole all have copies of those letters from members of our organization, several of whom are in the same predicament as the gentleman who was here this morning.

Mr Mahoney: I think Mr Brown has a question, so I will defer to him.

Mr Brown: If in fact Bill 4 does become law in its present state, can you conceive of your membership investing in or building new apartment units over the next year or two?

Mr Eby: I believe that large numbers of them will probably want to take Mr Rae up on his offer to buy us out. They will not build, no.

Mr Brown: So in your opinion Bill 4 will restrict or cause even more shortages in affordable units in this province than it will create.

Mr Eby: Yes, it will definitely do that.

Mr Tilson: Sir, I appreciate your thoughts on this. As

Mrs O'Neill indicated, I think we will all be using some of your comments in reviewing the clause-by-clause amendments. I think your paper and presentation will be most useful in that regard. I think you have said it all: Where is the fairness? I think that is really a summary of what you are saying, and that is what our party has been saying too.

I have one specific question which you did not really deal with, but in your communications with various landlords in your community, last year's guideline was 4.6%. The current review provisions state that 1% of that would be for normal maintenance. I do not know what knowledge you have of rental income among your membership -- you probably have some idea -- but based on that, can you inform this committee of your thoughts as to how much money under the current system a 1% increase would provide for general maintenance and repairs?

Mr Eby: You got me at a loss. I have no idea what the cumulative amount of income is to our members in their units. But if you take a building that generates an income of $100,000 a year and you take 1% of that, then obviously $1,000 of it will go towards maintenance.

Mr Tilson: That is my point, and I think that is the concern that tenant after tenant is talking about.

Mr Eby: Sure, we could replace the roof and the walls and all that other stuff with a thousand bucks.

Mr Tilson: Right, and of course this legislation is even doing away with the encouragement of capital expenditures. Again, it gets back to your general question: Where is the fairness?

Mr Eby: If you change the rules and change them tomorrow, we can deal with it. If you change the rules and make it yesterday, we cannot deal with it.

Mr Mammoliti: I am just going to respond to some of your comments in your presentation here, sir, and then I am going to follow up with a question. First of all, I want to respond to your stating that Bill 4 is unreasonable and perhaps even illegal. Sir, just so you know, the government has checked with its lawyers and feels it is not illegal. We have gotten some advice that we are happy with, and as far as we are concerned it is not illegal, it is legal.

Second, I want to address the point you made with the jaws of bankruptcy, and you referred to $36, sir, and $3 per month. I can give you hundreds of examples where people literally look forward to $3 a month and rely on $3 a month for two meals. So $3 to them could mean bankruptcy, and this government certainly cares for those people, obviously, because this is the sort of legislation that is needed to help them. That rent has impact when it comes to $3, and $3 could mean life or death for some people. I just wanted to point that out.

On the aspect of negotiations and how we would feel if we were union persons, I come from the labour movement and the previous government did do this to us at one point. I believe it was 1984, if I am not mistaken -- 1985. So it has been done, sir, and the previous government did it to the people out there. When you talk about contracts that have been signed and sealed and delivered, it has been done.

You say that Bill 4 is detrimental to you and your colleagues. Are any of you looking for shelter or perhaps out on the street because of this legislation? Are you relying on food banks because of this legislation? Are you aware that there are thousands of people out on the streets because of previous legislation and are seeking shelter and food banks?

Mrs Marland: Wait till the ones are out on the street because of this legislation.

The Chair: I just remind all committee members of what they have been telling me right along about keeping everything as close as possible to Bill 4. I am going to allow as much latitude as members wish.

Mr Mammoliti: I am referring to his comments in here.

The Chair: I understand that. I am going to be reminded in the near future, so I am reminding committee members.

Mr Mammoliti: Those are the two questions I would like to ask.


Mr Eby: When you talk about our suggestion that your bill was illegal, we would like perhaps that you put it to the test. When you talk about $3 a month needed by those people, we totally agree with what you are saying, that there are thousands who require that $3 a month, absolutely, and we are also saying that you have to bring in a system to give them the three bucks. But it also goes on to say that you do not go and bomb the whole bloody province because of a very few people. You help the few people who require the assistance and you stop the sons of guns who are doing the wrong stuff, but you do not do it to everybody.

The Chair: Thank you. Ms Harrington.

Mr Eby: He also had something to say about unions and I would like to respond.

The Chair: Order, please. Ms Harrington.

Ms Harrington: Mr Eby, thank you for coming. With regard to that last point about there being very few people who need help, 30% of the tenants in the province pay over 30% of their income for housing, so there is a broad spectrum of people in this province who do need help. I want to thank you for your in-detail work on the bill. I see our staff people here having a very good look at what you have proposed and we will certainly look at all of those angles you have proposed. I did read your bulletin on the weekend. It was most interesting and I understand that tomorrow morning you are having a breakfast with the minister, so you are able to get at him even if we cannot, so you are quite lucky.

I wanted to assure you about Bill 4 because, in here, you very strongly put in a couple of places the same thing, that landlords and tenants get together to decide how they can be fair; I guess the whole situation can be fair. Then again on the last page you say that a consultation process must be in place to have landlords and tenants and other affected parties get together and agree on the future of rent control in Ontario. I certainly 100% agree with you and that is why we have this interim Bill 4 as merely a breathing space so that we can get everyone together.

In fact, just when you were sitting there and we rudely interrupted you a half-hour ago, the idea of this legislation right now and stopping this discussion of the bill and going on so that we can get into the long-term legislation discussion is why we are trying to proceed so rapidly, so that all spring and all summer we can get all the parties together and try to get this permanent legislation in place before the end of the year. So we do need your help.

Mr Eby: The suggestion that you make that Bill 4 is there for the purpose of an interim situation, I fail to see where the justification is to backdate your bill to yesterday. If you want to put in something to stop something from happening as of right now, then you make it for tomorrow. If we took the video cameras on Highway 401 and spotted every car that was speeding back in November and then you made legislation that said speeding as of 28 October was illegal and you sent all of those sons of guns tickets, are you telling me that is fair and reasonable? That is what your Bill 4 is doing.

Ms Harrington: I would just like to tell you what Bill 4 is in fact doing. We took 1 October 1990 as the date, and as of that date 130,000 rent increases are still going through. That is not fair either. I wanted to ask you, in your particular building, how much have your increases been?

Mr Eby: I am one of those landlords who has had to wait for the system. I have had three applications in. I have just received in the last month the order for an increase which is three years old. I have two more applications still in the system.

Ms Harrington: What would be the per cent of that increase?

Mr Eby: One is at about 9%, the next one is at about 12% and the last one is at about 10%, I believe.

Ms Harrington: Those, all three together, are now retroactive and people have to pay that amount, which would total something around 40%.

Mr Eby: Before we ever instigated the orders, we went to the tenants and said: "Pay us the money. We will put it away, and if in fact it doesn't come in where it is we will pay you back the money." The first one came back $3 more per month than what we had asked for.

Ms Harrington: But I would like to make it clear that you had a 40% increase.

The Chair: Order. Thank you very much.

Mr Eby: And we have given them 80% more building than they had four years ago.

The Chair: Actually, I have added two minutes to the questioning time because I knew that your brief had generated great interest. Thank you for appearing before us today. We have to move along and hear the next delegation. We appreciate the time and effort you took in compiling your brief.

Mr Tilson: On a point of information, Mr Chairman: I guess I am looking for some sort of response from Ms Harrington, as the parliamentary assistant to the Minister of Housing. It has to do with these hearings.

Today there was a news release by the Minister of Housing wherein he announced an expenditure of part of the $700-million anti-recession initiative that the government has been speaking about and, specifically, a $35-million package towards the housing industry.

One of the areas had to do with $15 million to upgrade, and I am reading from the press release: "$15 million to upgrade as many as 3,000 private rental units in older low-rise apartment buildings." The minister states, "This is necessary work." Then he proceeds by saying: "Rehabilitation of low-rise buildings: Under the ministry's low-rise rehabilitation program, landlords can apply for forgivable loans. The loans cover up to two thirds of the cost of repairs up to a maximum of $5,000 per unit. Only essential repairs to such things as plumbing and replacement of defective wiring will be considered. Private rental buildings of four storeys or less that are at least 25 years old are eligible. Rooming houses are also eligible."

The Chair: What is your point?

Mr Tilson: My point is whether Ms Harrington, as the parliamentary assistant, can tell this committee if this means that the government now realizes that the work we have been hearing about for the past two weeks is indeed as necessary as the ministry says.

The Chair: Order. I do not particularly see that as a point of privilege or a point of order.

Ms Harrington: I plan to respond quickly.

The Chair: If Ms Harrington wishes to respond, I will allow it and then we will continue.

Ms Harrington: Certainly we agree that this necessary work should be carried out and this statement that the minister has released today shows the obvious goodwill of this government to the small landlords who need necessary repairs.

Mr Tilson: If the minister wants on the one hand to freeze these expenditures, on the other hand to give loans out, I do not know why we are sitting at these hearings.

Ms Harrington: We are not trying to freeze renovations or restorations.

Mr Mammoliti: On a point of order, Mr Chairman: I still do not see how this is relevant to Bill 4. We are here to discuss Bill 4 and hear the public. It is not relevant, as far as I am concerned.

The Chair: I believe the first point was relevant and the response was relevant, but we cannot have lengthy debate on this, Mr Tilson. I have allowed you to make your point to the full extent possible. I do not see where we would get by continuing the debate at this point in time. I think everyone has heard your comments and they have heard the response. I would like to continue.

Mr Tilson: I think that because of this press release, in view of the government's recognition -- and it certainly is recognizing the need to encourage capital expenditures in the private sector, and specifically apartment buildings -- I would think this committee should recommend that Bill 4 be repealed.

The Chair: Order. We are going to continue. I believe at my request the clerk has distributed two further pieces of information which were requested by committee members. One is dated 22 January, signed by Anne Beaumont. It is a short document with a one-page attachment. The second is a similar document dated 22 January, signed by Anne Beaumont but much lengthier in its contents. We are trying to get to all committee members all information as quickly as possible and we really appreciate the effort that the Ministry of Housing staff have put into providing this information in detail as quickly as they have.



The Chair: We are at the stage in the agenda where Councillor Kay Gardner is scheduled. I would call the councillor forward and would ask all those before the committee to please identify themselves and any organization they may be representing. The clerk has scheduled you for 40 minutes, 20 of which can be used for an oral presentation and 20 minutes will be reserved for questions and answers from committee members and presenters. The floor is yours.

Mrs Gardner: Before I begin, I want to tell you that there are about 200 people upstairs in a room, tenants who came here from my ward wanting to be part of this meeting, but unfortunately they are left upstairs.

The Chair: Order. No one is being left out. The people upstairs are watching the proceedings live. That is why the room upstairs and the room in the east wing were made available. We have had overflow. This is not the first time. It was at my instruction that the clerk made overflow available early in our hearings. We are very happy to have you and all those who came with you. We hope all will be pleased with the presentation this afternoon and with the committee's questions and answers.

Mrs Gardner: Thank you for providing that room, but as you can understand, it is not quite the same. Thank you, in any case.

The Chair: Order. Just so we do not leave a misunderstanding with the general public, because these are public hearings, there is no room in the Legislative Building set up for committees which is much larger, if any larger, than this room. We have television cameras here in this room, which means that tens of thousands of people can participate in our hearings by watching the proceedings. We have French translation available for people who wish to hear the proceedings in the other official language. And there is no other place to do it, so please proceed.

Mrs Gardner: I have come here today with some of my neighbours, more than 200 of them, from ward 15 in the city of Toronto, to express our strong support for Bill 4 and the moratorium that will curb huge, unreasonable rent increases. As our signs say -- and we had our signs on the bus but we could not bring them in -- "We're for Bill 4."

This is a new role for us, because in the past we have come not to praise new rent legislation but to bury its worst aspects. We were here in September 1986, more than 200 of us, to criticize harshly the present rent review legislation on the eve of its passage. We said then it would be a disaster for tenants. Our warning was ignored, and indeed it has been a disaster for tenants, and for some tenants a catastrophe.

Now we have a new government. This time, we believe, tenants as well as landlords are to be given a fair deal. Yes, we, too, are for a fair rental policy, but fair not just for landlords but also for tenants.

Under Bill 4, landlords will still take in plenty of money to maintain their buildings and to pocket a healthy profit.

The most eloquent description of what has happened to tenants under the present legislation has come not from a tenant advocate but from a judge of the Ontario Supreme Court, Mr Justice Allan Hollingworth. After hearing the now well-known case of the Balliol tenants, Mr Justice Hollingworth said, "Tenants are terrified of substantial increases in their rents which they cannot afford."

Indeed, tenants are terrified. So many seniors who have come to my meetings, who have phoned me or written to me, do not know how they can make ends meet when so much of their income must be spent on rent. The continuing impoverishment of tenants, young and old, is a sad reality. In December, a report from the city of Toronto's commissioner of planning quoted from a study made in 1986 which revealed that 68,600 tenant households in the city of Toronto faced affordability problems and that the situation today was "relatively worse," which means they really cannot afford to pay their rent. The tenants were in fact spending more than 25% of their income on rent. Some poor people are paying 40%, 50% and even 75% of their incomes just to keep a roof over their heads. And people wonder why, in this rich society, we must have food banks.

There are thousands of elderly men and women whose savings have been ravaged by inflation and who are forced to skimp on other necessities because of the high rents they pay. They have been robbed of the peace of mind that should be their right to enjoy in their old age.

I could spend a whole day recounting harrowing stories of distress told to me by tenants young and old. One woman of 90 was completely bewildered by 24 pages of documents sent to her by rent review. It was a masterpiece of the bureaucratic art, column after column of numbers and arcane headings only a chartered accountant could understand. One item included in the tables is entitled "Relief from Hardship." That is relief for the landlord, hardship for the tenant.

"What did it all mean?" she asked me. It meant that the rent had been increased by roughly 10% a year each year for the next three years. Her rent had increased by $254 a month from $780 to $1,034 and she had more than $1,000 in back rent to pay. "All I want," she told me, "is a little peace of mind. Why must they be so greedy?"

Why these yearly increases amounting to more than double the annual guideline? They are attributed to the so-called financial loss. And what is the cause of this loss? Let me read from the rent review order: "The financial loss amount of $193,896 is due to increased financing costs resulting from a purchase of the residential complex."

My elderly friend asked me: "Why should I have to pay $3,000 more a year in rent just because I have a new landlord? Has my apartment become larger? Has it been painted? Has the building been repaired or renovated?" The answer to all these questions is, of course no, no and no. The sorry fact is that none of this money, not a penny, will be spent to improve her shelter. This building is in fact poorly maintained and neglected. Yet the rents have not been neglected. One fifth of the 85 apartments rent for more than $1,000 a month and rents go as high as $1,470, a disgrace considering the condition of the building.

This building has been flipped six times between 1975 and 1988, the purchase price rising from $1,740,000 to $5,890,000. Each time the price has escalated mortgage costs have escalated, and the tenants have had to pay for these. This speculation in people's homes and lives creates poverty among single mothers, families and old people.

The Tenant Advocacy Group, which did appear before you, describes the worst aspects of the present situation so well in its brief to your committee that its words are worth repeating: "The financial and economic loss allowances rewarded land speculators, penalized tenants and raised rents at double or triple the rate of inflation."

The wounded cry of the landlords is that Bill 4 provides no money for maintenance and repairs. In no time at all, they claim, buildings will decay, creating instant slums. What nonsense. What utter nonsense. This is the howl of the wolf deprived of another attack on his prey, the almost powerless tenant. It is a naked scare tactic, which some landlords have escalated into a cold war against tenants by the unprincipled threat of a maintenance strike.


The truth is that tenants have a legal right to a properly maintained home. The truth is that they have always paid enough rent to cover the cost of proper maintenance and the truth is that they will continue to pay enough even under Bill 4. The trouble is that not a few landlords have pocketed the money intended for maintenance, fattening their profits and letting their buildings go to pot.

Tenants are the best authority on how their homes are to be looked after. Let me quote from two letters I received from tenants on the same day last week. A woman wrote: "I've lived here more than 13 years and they have done absolutely nothing about upkeep. They just pocket the money." And a man wrote: "The owners haven't done any repairs for 20 years except to fix elevator breakdowns and absolute necessities. The building was paid for many years ago. Some gravy train!"

Landlords have been treated generously by rent review. Average increases granted landlords who sought amounts above the guideline during four years of the present legislation are 11.1%. Of course, tenants may always appeal the initial increase, and that is another sad story. During its last fiscal year the hearings board heard 573 appeals. The initial increases in these cases averaged 10.54%, and the appeal board increased the average by more than 1% to 11.64%. It raised the rent in 244 cases and decreased the rent in only 109, a victory rate of 2 to 1 in favour of the landlords. Some appeal system. Rent review gives tenants a life sentence and the appeal board increases the penalty to death by starvation.

Ontario landlords collect $8 billion a year in rent -- let me repeat this: $8 billion a year in rent. According to the Minister of Housing, about one third of that amount is left over to pay for maintenance, repairs, financing and profit after operating costs have been paid. This amounts to more than $2.5 billion a year. Think of it. For the last 15 years of rent review these billions of dollars have poured in, providing fat profits and plenty to pay for repairs.

Responsible landlords have recognized this and have looked after their buildings. Bill 4 will not penalize these good landlords, but Bill 4 will call to task those operators with an eye only on the fast buck who neglect their buildings and their tenants. Indeed, Bill 4 will bring new stability to the apartment industry, which will be good for those owners who wish only to conduct a principled, profitable business.

It will hit those landlords who play catch-up, a game that forces tenants to pay double for maintenance. These landlords neglect their buildings for years and then get huge increases to carry out major work. My almost 15 years of helping tenants has taught me that the owners of the best-kept buildings in my ward and in Toronto as a whole are the least likely to seek rent increases above the guideline.

A word about the latest gimmick for raising rents, luxury renovations. How wasteful this can be. One owner in my ward ripped out all 132 stoves in his building as part of a renovation project for which he seeks an increase of more than 30%. Across the street is a building that is identical. There has been no wholesale scrapping of stoves.

Bill 4 will put a stop to this outrageous waste and the fleecing of tenants. We support Bill 4 because it is fair, fair to tenants and fair to landlords. The present legislation is tilted wildly in favour of landlords and against tenants. Bill 4 will help to restore a balance. Bill 4 means healthy profits for landlords and plenty of money for maintenance. We cannot afford to go on with this present unfair system. "Indeed," a tenant wrote to me last week, "most of us who work do not get wage increases to match the yearly rental hikes." We risk the most cruel social consequences if we do not stop this widening abyss between income and the cost of shelter.

I can assure you that the tenants of North Toronto and Forest Hill not only support the moratorium but demand it be enacted. In the last 10 days I have sent letters to my ward and have received 1,700 replies, which I have brought to show you. I will turn them in to the minister. All these people individually signed and mailed to my office -- they had to buy a stamp and put it in an envelope, 1,700 in 10 days -- all supporting the moratorium from one ward, ward 15 in North Toronto.


The Chair: Order. There will be no outburst in the committee room. Mr Fink, you have about a minute and a half left for the presentation.

Mr Fink: I will not introduce myself, because I do not have any time. I have sent in a written submission; I hope you will have a look at it. I made it double spaced, only two pages long. I only have one important point for you.

Section 100g of the amendment act, Bill 4, contains a very important provision. It allows tenants, where their buildings are falling down, where there are work orders against their buildings, to bring their own application to rent review for an elimination of even the 5.4% increase. This is a section designed to allow tenants to try and force landlords to do repairs even in the current situation, where there are no bonuses for landlords who do such repairs.

Currently, we represent 3,000 tenants in our office who had all work stopped on their building on necessary concrete and structural renovations. They are facing buildings which are literally falling down. Section 100g allows these tenants to apply to rent review and ask that the rent increase be decreased from 5.4% to 0%. Some of its provisions are new. Unfortunately, tenants throughout the province do not know about this provision. It has not been advertised and the time limit for making the application, even as I speak, is expiring for many thousands of tenants.

Finally, the landlords in the past have blocked a similar provision under section 94 by bringing a landlord counter-application. In other words, you bring a counter-application and it blocks the tenants' application. Counter-application is a loophole in the law. If the landlord brings an application for rent increase, he blocks the tenants' application. This loophole should be eliminated. The tenants' application should stand on its own. If the tenants bring an application saying there are serious deficiencies in their building and they want the rent increase lowered to zero, the landlord should not be allowed to block that application. Current legislation should be amended slightly to stop those blocks.

Mrs Marland: Councillor Gardner gave a figure of $8 billion in rent in this province. Do you have a figure of the investment by the private sector in rental buildings in this province also?

Mrs Gardner: I do not have it here, but it is available at my office if you wish me to send it to you.

Mrs Marland: You talked about responsible landlords and wanting to be fair to landlords and tenants. The position I am coming from is that I think it is terribly important that landlords and tenants are protected. The concern I have is that this bill does not protect even the tenants you are here representing today. Can you tell me -- and certainly from your position on council you are faced with issues on a daily basis more than average people are -- where Bill 4 will protect your tenants from the major problems and issues of tenants today which you know at first hand exist?

Do you feel, as I do, that Bill 4 in fact misleads the tenants in this province into the security of thinking that because they do not have to pay any increase above the set rate in their rent, they then will not have to face the continuing problems of those buildings which even today, without this legislation in place, they should not have to face?


Mrs Gardner: Bill 4 is a moratorium which will keep the lid on all further rent increases above the guideline. I have presently two buildings in my ward, one I mentioned in my brief, the building where the landlord ripped out all the stoves. They have gone for a 30% rent increase, 15% each year. They have paid the first 15%, but Bill 4 will stop the second 15% so it will help those tenants. Another building just up the street from this particular one is a building where the landlord has gone for a 50% rent increase. He did a lot of work illegally. He ripped out tenants' locker rooms, put in illegal basement apartments and so on. Those tenants are not going to pay the 50% increase now. The moratorium has stopped that.

I hope the moratorium will give us time, for landlords and tenants, to create some new legislation that will be fair to both parties. The present legislation does not work. It punishes the tenants. Everything is passed through. What upsets me so much is those landlords who come here screaming that no money is allowed for renovations. Since 1975 they have had plenty of time to renovate their buildings. The moratorium has only been here since 1 October. Those landlords who are really serious in renovating the buildings and keeping them up to date have done so until now. The ones who have not done so are the ones who are the gougers and the flippers and the ones who are not good businessmen.

The best buildings in my ward, and I could take you on a tour, are buildings beautifully maintained that have not gone to rent review. I am a tenant. I have lived in the same building for --

The Chair: Thank you. That is a full and complete answer.

Mr Tilson: You stated several weeks ago that you believe the province of Ontario should take over all residential units in the province, maintain them and rent them out as affordable housing. Is that correct?

Mrs Gardner: No, I never said that. That must be somebody else you are quoting. I have never said that. I have never believed that. I would never say that.

Mr Fink: I have said that.

Mr Tilson: Mr Fink said that. Maybe I will ask your solicitor, Mr Fink.

Mrs Gardner: He is not my solicitor. He is solicitor to the tenants who pay him and hire him.

Mr Tilson: Mr Fink, can you tell us at what cost that would take place? How would the province of Ontario do that?

Mr Fink: Tenants today are paying for their own buildings through these large rent increases. Tenants in some cases have paid for their buildings three times over. The rents already have within them a large cost basis to pay for the cost of buying the buildings.

Mr Tilson: I can tell you I do not think the majority of the tenants in this province want that sort of arrangement, because their taxes would go sky-high. I guess my question is to you, Mrs Gardner. Are you not the councillor who was involved in an apartment building in the Bathurst and Eglinton area several years ago where the city of Toronto took over that apartment building?

Mrs Gardner: I was the one. I was a happy lady when some tenants came to me and said their building was going to be torn down and turned into a condo. I spent five years fighting for that building, saving it, and embarked on a new career.

Mr Tilson: Good for you, Mrs Gardner. I wish you well in your political career. I will say, though, I also recall full and complete reading that after the city of Toronto did that, the rents doubled.

Mrs Gardner: Not true.

Mr Tilson: Okay, I pass.

Ms Harrington: It is indeed a pleasure to meet you and Mr Fink. I would like to start off by apologizing to the very many people who are here and who could not be in the room. It is much more a part of the meeting to be here and to be part of the whole proceedings. It is unfortunate this whole building does not have a room to accommodate us. Maybe we should look into that.

Mr Mahoney: Renovate.

Ms Harrington: Yes. The suggestion was made to renovate.

I would like to start off by thanking you for a very powerful and most eloquent presentation. You have said it all. I do not know what else I can say. It echoed what I heard yesterday and it just reinforced it. That was the statement that, "I feel as though this city where I lived all my life is being raped by speculators and developers." There are very many people, I guess, who do feel that way. I want just to make one other little remark. As you were going through your presentation I thought to myself, why do we not have a course in how to be a landlord? Do you not think we need some training or even maybe a licence or a degree to be a landlord? I will pass to my colleague.

Mr Duignan: Thank you, Councillor Gardner, for coming here today and expressing so forcefully and so well the need for Bill 4 and the protection of tenants to restore that balance that does not exist there today. Hopefully your presentation today and the tenants who came with you will impress it upon my colleagues across the floor to wholeheartedly support Bill 4 and to restore some fairness to the tenants of this province.

Mr Mahoney: That was quite a show. I was impressed with the forcefulness of the comments. Obviously it is an issue that you have been actively involved in for a number of years. I would like to ask you, though, let me put it this way, the capping of the rent increases is quite obvious in Bill 4. The moratorium on that I understand. That is basically what I have heard you speak to, the fact that this bill, in your view, puts a cap on and the moratorium and protects your tenants from unconscionable rent increases.

You say, however, and I refer to page 13 of your proposal, "But Bill 4 will call to task those operators with an eye only for the fast buck and who neglect their buildings and their tenants." Leaving aside the operators looking for a fast buck, because I am sure we would agree that that is not something we want to support in this province, I am concerned about how tenants will be protected from the unscrupulous developers, some examples of whom we have seen here in this committee. Parkdale has been very representative in our hearings. We saw photographs earlier today of the type of living conditions that no one would want to live under.

Yet I see nothing in the bill, and your exuberance for the bill leads me to believe that you must see something, that allows for the government to get at those landlords who are not maintaining their buildings properly on behalf of their tenants. What I would like you to do is leave the rent increase issue alone and tell me how Bill 4, to use your term, "calls to task" those landlords such as the ones we heard about earlier.

Mrs Gardner: I believe Bill 4 is only a moratorium to give us a chance to bring in some new legislation that will protect both landlords and tenants. I hope that you will invite us perhaps, Richard and I, to help you when you are drafting that legislation, to make it fair to tenants. Bill 4 is a breathing period. Stop these unconscionable rent increases, now 40% and 50% and more, and let's go to work on something that will be fair for both parties.

Mr Mahoney: So we agree that Bill 4 indeed does not call to task those --

Mrs Gardner: Yes, it does. It has deprived two landlords on my street from getting huge rent increases.

Mr Mahoney: Just a moment. I asked you --

Mr Fink: Under section 100g.

Mrs Gardner: Under 100g, as Richard has pointed out. Do you want to answer that question, Richard, seeing as you know the legal implications of it? But sure it has.

Mr Mahoney: If I want to ask a question of him, I will.

Mrs Gardner: Okay, I am sorry.

Mr Mahoney: I asked you specifically how Bill 4 -- and if you can show me I would be delighted -- calls to task landlords who are not maintaining their properties. I am trying to separate it into two distinct issues if I can, the one being the rent increase cap, the other being your suggestion that these people are being called to task. Tell me how.

Mrs Gardner: Okay, tenants who have paid a lot of money in rent increases and who have not received the maintenance now can go to rent review and ask that a zero amount be given in their rent. That is one way it can work now, immediately.

Mr Mahoney: With respect, and I am not attempting to cross-examine you --

Mrs Gardner: No. It is all right. I do not mind.

Mr Mahoney: I respect the fact that you represent your constituents. Obviously you do so with vigour.

Mrs Gardner: Thank you.


Mr Mahoney: I was a councillor for 10 years and know a little bit about what you go through.

But with respect, that answer refers to the rent increase. What we are hearing and have been hearing from some tenant groups is about the terrible living conditions that they are enduring. In my view, they are coming here and being very directly misled by the government that this bill in some way is going to force the landlord to fix their problems. It may stop the landlord from getting a rent increase, but tell me how it is going to force the landlord to fix the problems?

Mr Mammoliti: On a point of order, Mr Chairman: I take offence to that statement.

The Chair: Order, please.

Mr Mahoney: If you take offence to that statement, I must have said it correctly.

The Chair: What is the point of order?

Mr Mammoliti: The point of order is, I take offence to that statement.

The Chair: That is not a point of order.

Mr Mahoney: It is a point of offence.

Mr Mammoliti: Mr Chairman, listen --

The Chair: I am listening.

Mr Mammoliti: I do not think that is called for in these hearings. We are not misleading the public. We are representing the public.

Mrs Marland: That is not a point of order, and this is the real world.

Mrs Gardner: I will answer the question here.

The Chair: Order, please. Mr Mammoliti has the floor on a point of order.

Mrs Gardner: Sorry.

The Chair: He is not finished and, when he is finished, we are going to decide if it is a point of order.

Mr Mammoliti: We are representing the public with this piece of legislation, Mr Chairman. We are not misleading the public, and I take offence to that statement. So does the government, for that matter.

The Chair: Thank you, Mr Mammoliti. That really is not a point of order, but you have made your point just the same.

Mr Mammoliti: Thank you.

The Chair: We are going to add about a minute to your time, Mrs Gardner, for this series of questions. Please proceed.

Mrs Gardner: It says here: "An order may provide that no rent increase is justified." Tenants may dispute increases permitted under section 100c.

"100g(1) A tenant may apply to the minister in the prescribed form to dispute an intended rent increase that does not exceed the amount permitted under section 100c....

"(3) The minister shall consider the following factors on the application:

"1. A deterioration in the standard of maintenance and repair that affects the rental unit.

"2. A discontinuance or reduction in the services or facilities that are provided to the rental unit.

"3. The degree to which the rental unit complies with the maintenance standards for the municipality in which the rental unit is located if maintenance standards have been established by bylaw.

"4. The degree to which the rental unit" --

Mr Mahoney: Mr Chairman, with respect, I can read the bill.

The Chair: Order, please.

Mrs Gardner: So all these are reasons for not giving any rent increases. That will help.

Mr Mahoney: I guess I am having some difficulty in getting the understanding of my question out. I understand that the bill deals with rent increases.

Mrs Gardner: Right.

Mr Mahoney: Okay. I have read the bill and I understand that the minister can turn down a rent increase, give zero rent increase, reduce the rent increase, go with the cap, and do all of those things. You have stated that we are going to be called to task and other people who have come before this committee have stated that they are in support of the bill because it is going to alleviate all of the problems of maintenance in their buildings.

I would like to see someone of your stature put forth an amendment that would indeed do that, an amendment that I just might be able to support if it was put forth properly, that would indeed call unscrupulous landlords to task. It has got nothing to do with whether or not they get a rent increase. It has got to do with the mice and the cockroaches and the terrible conditions that these people are living under.

These people are being led to believe that this bill will somehow affect that. With respect, I do not understand how, and I am asking you not to deal with the rent increase and not to read me the section of the bill that says what a minister can or cannot do, but to tell me if this bill, yes or no, provides some mechanism either to the municipalities to help them enforce their property standards or to tenants' associations to help them take action in some way in the courts and use the bill as an example of why the court should rule in their favour. Does it in any way, anywhere, in any section address that issue?

Mrs Gardner: The bill is a moratorium which has helped many tenants already to freeze huge rent increases, two on my street right now, and of course many others in the ward. I am hoping that the government will in this time bring in such legislation that will deal with the problems that tenants have been faced with.

Mr Mahoney: In other words, this bill does not do that.

Mrs Gardner: This is a stop to give us time to draft a new bill.

Mr Mahoney: But it does not address those issues.

Mrs Gardner: I hope my confidence is not going to be misplaced, but I believe this government will bring in a bill. If I am correct in assuming that in fact that low-rise rehabilitation program has been reinstated, I am very delighted to hear that because it is a valuable program and we are glad --

Mr Mahoney: Am I out of time?

The Chair: I am glad that everybody knows what this means. It means keep on talking, I guess. No, that is for all the committee; that is for everyone, Mrs Gardner. It was not just for you. I really appreciate your coming today. We have enjoyed your brief, and the gentleman who is with you also gave the committee some very important information. Thank you for coming. The committee has to move along.

Mrs Gardner: Thank you, Mr Chairman. I was very happy to come, and if I can be of any help in framing the new bill, I am available.


The Chair: No public demonstrations are allowed.

Mrs Y. O'Neill: There was a statement made just at the close of the remarks that the low-rise rehabilitation program has been reinstated and there were nods of heads from the government. I asked that question last week when the ministry officials were before us and I was told that the low-rise rehabilitation program's funds were depleted. May we please have an update from the ministry officials about the status of that program? My constituents arc very interested in that program.

The Chair: That is a good point of order. Can Anne Beaumont come forward, please?

Ms Parrish: I am not Anne Beaumont, but I can come forward.

The Chair: Anne has been sending all the letters. Just identify yourself for the record.

Ms Parrish: My name is Colleen Parrish. I am from the Ministry of Housing. It is my understanding that increased funds to the low-rise rehabilitation program were announced as part of the $700-million program that the Treasurer spoke about earlier. I am afraid I do not have the exact details right here, but I can phone back to the office and try to get the material for you this afternoon or first thing tomorrow morning.

Mrs Y. O'Neill: I would certainly like to have a breakdown. It is a program that was taken up in my riding quite extensively. It seems to be new information today. I would like to see it broken out from the $700 million.

Ms Parrish: I believe it is $15 million.

Mr Tilson: On a point of order, Mr Chairman: I raised this issue and I was told it was irrelevant. That is what I read. That is the very subject that I read this afternoon.

The Chair: I did not say your point was irrelevant. I allowed discussion on your point.

Mr Tilson: I read the very information that she is talking about in the press release that the Minister of Housing gave, and the government officials told me: "That's irrelevant. Let's not talk about it. Let's get on with the hearing."

Mrs Y. O'Neill: One of the things I would suggest that maybe our witness could provide us with is a copy of the press release, if Mr Tilson thinks that is what we are being referred to. I would certainly like to have an update as of 22 January of what the status of this very popular program is.

The Chair: I would just like to say to Mr Tilson that I allowed you to read completely from the press release.

Mr Tilson: You did.

The Chair: There was some discussion and then we moved on.

Mr Tilson: Mr Chairman, I am not berating you. That is the last of my wishes.

The Chair: Any further discussion on that point of order? I guess there is consensus that we are going to obtain this information requested by Mrs O'Neill.

Mr Tilson: I have the press release if members of the committee want to look at it. I thought everyone had it.

Mrs Y. O'Neill: Maybe we could ask the clerk to copy it.

The Chair: Maybe the clerk will make copies of that press release and we will distribute it.

Mr Tilson: Marked up with my little notes.

Mrs Y. O'Neill: But we should still get the verification from the ministry officials.

The Chair: Very good. That information will be forthcoming from ministry staff.



The Chair: The next presenter is Realstar Management. Sir, please come forward and identify yourself and your organization for the record. I believe you have been allocated 20 minutes, 10 of which you can use to make an oral presentation, and we have been reserving 10 for questions and answers from the members of the committee.

Mr Prince: My name is Jonas Prince, and I am a co-founder and director of the Realstar Group of Companies, established in 1974, on whose behalf I appear today. I would like to tell you, there is ample room here for the one person who came with me from my office today.

Realstar is a privately owned Canadian enterprise in the business of providing residential accommodation through an extensive rental portfolio which provides quality accommodation to more than 14,000 families, most of whom are located in Ontario.

Realstar has built and invested in apartments throughout Ontario. Outside of Metropolitan Toronto you will find us in Windsor, St Thomas, London, Kitchener, Guelph, St Catharines, Fort Erie, Welland, Brockville, Niagara Falls, Peterborough, Owen Sound, Collingwood, Barrie, Bradford, Richmond Hill, Newmarket, Brampton, Oshawa, Whitby, Port Hope, Ottawa and Sault Ste Marie. As well, we are represented in Metropolitan Toronto, including the city, North York, Mississauga and Scarborough.

In short, Realstar has worked hard over the past 17 years to construct, acquire and manage apartments primarily throughout Ontario. We have a major stake, needless to say, in this province. We are not in the business of the quick flip. In fact, we have never sold an apartment building. On the contrary, because we regard the apartments as long-term investments, we have a high level of interest in making sure they are maintained to a status commensurate with tenants' expectations and needs. Until now we have always considered ourselves as long-term and responsible owner-managers.

I am here because I am concerned about the reputation landlords are receiving and because of a concern regarding the future of our business in Ontario. A lot of time, effort and money that have gone into building our business are being seriously affected, and I would like to express my personal views, which may be more subjective than those you may have heard from landlord groups or associations who have appeared or will appear before you. You will certainly not be hearing many statistics from me.

Who are our tenants? From our first project of 33 suites which we constructed in Bradford, Ontario, in 1974 -- in respect of which we borrowed the money from the local bank -- to our most recent acquisition, our tenants are ordinary, middle-class working people who, I would suggest, typify middle Ontario. They include a cross-section of people, but outside of Metro in particular there was a high preponderance of seniors, many of whom are on a fixed income.

We also have a significant number of units which are leased to various local housing authorities. We were one of the first landlords to support this program. In fact, of all the programs we have seen, it is in our view the best. Over the years, we have also worked closely with CMHC. We were also among the first to establish handicapped units in our buildings.

You see, although we are not a non-profit organization, we do pride ourselves in the quality and maintenance of our buildings, which are comfortable, but they are certainly by no means luxurious. Most important, we pride ourselves in our relationship with our tenants. With respect to this landlord-tenant relationship we ask ourselves, what does the tenant want of us? The answer must be a clean, well-maintained building at a fair rent. We all know what clean and well-maintained is; the issue is what is fair. Our average rent across the portfolio is about $600 a month for a two-bedroom apartment. We consider that more or less fair.

We have endeavoured to maintain a good relationship with our tenants. We have found, however, over the years that landlord and tenant legislation in general has the effect of polarizing landlords and tenants as if into two armed camps. This proposed legislation, I suggest to you, has the potential to worsen this. Comments and actions on both sides have been extreme and inflammatory. I both disagree and regret this outcome for tenants and landlords to this date. Nevertheless, as a responsible and responsive landlord we are put in a difficult, if not an impossible, situation. Here is why.

Under this Bill 4 we do not have the ability to finance improvements beyond ordinary repairs and maintenance. In these remarks I am not dealing with ordinary repairs and maintenance. There are two reasons why this is so. First, there is no source of cash flow under the existing proposals to do this. Second, lenders will not lend. Our tenants tell us they do not mind paying moderate increases, provided they are reasonable and provided the work has been done to justify the increase. Our average annual increase since 1985 has been about 6.9%. This is in fact 2.1% less than the amount we could have legally charged under orders we received through the proper procedures. This is also consistent with our long-term philosophy of maintaining low turnover in our buildings and keeping tenant relations paramount.

To translate this into a dollar amount, this increase that we have obtained over the statutory limit is about $12 a month. I do not belittle $12 a month. It has to be commensurate with the improvements performed. These operating increases have been used to fund the capital improvements and other extraordinary expenses in respect of the property.

How many tenants have appealed these increases we have obtained? In all our applications, which total about 260, there have been four applications appealed. We regard this as a good test as to whether the amounts and the applications have been fair. What did we spend the money on? Of $6 million that were spent throughout 1989 and 1990, about 60% was on garage restoration, about 12% was on common-area painting, decorating and carpeting and about 11% related to brickwork and repair, hardly luxury items. These in themselves total over 80% of the amount spent.

What is the result of this, the impact of the bill? We have stopped and cancelled everything planned or in progress, except for obligatory or what we would call mandatory repairs and maintenance that are absolutely required. We would never jeopardize the security or welfare of our tenants. But discretionary matters are not being attended to. By discretionary I mean the painting, wallpapering and carpeting the tenants would like us to do because of the pride they take in their apartments because they are their homes, and which we would like to do, but we cannot. Members of the House have said that the cancellation of millions of dollars of work by landlords does not have anything to do with the legislation. They have said it is the economy that is causing these layoffs. They are completely wrong.

On the other hand, I will tell you what the economy is causing. It is causing vacancies, the likes of which I have never seen since 1975 to 1977, or 1981 to 1983. As a result of the combination of the slump in the housing market, the economy in general and the overbuilding of condominiums, vacancies were opening up in the marketplace from the beginning of this year. Frankly, this means that even if we were allowed to get the slight pass-through beyond the 5% maximum we have obtained, we probably could not charge it in the marketplace anyway.

The second result of the impact of this legislation is that we cannot continue to build new apartments. We are one of the very few who have been building apartments for rent, not for sale as condominiums, over the last two years. In St Catharines in each of 1989 and 1990 we built 100 units. The next 100 units in this project are almost ready to go. Under the new proposals, the rent obtained during the first occupation becomes the basis for ever, without regard to cost overruns we may incur, without regard to interest rates, strikes or market conditions. The project is now on hold and we have laid off our crew.

We would like to go ahead but we cannot get financing because the lenders are scared. Why are they scared? It is the "R" word, but "R" in this business does not stand for recession. I suggest to you it stands for retroactivity. From a lender's perspective, if a government is capable of retroactively changing the rules, what is to prevent it from doing it again? This part is very simple. I say to you that retroactivity in a democratic society is repugnant. There can be no confidence in an economic regime or system when the rules can be changed after the fact.

From a personal perspective, the retroactive proposal is simply not fair. We borrowed in excess of $6 million to fund improvements under the existing system and now you say to us that we have no ability to increase the rents in accordance with that system and in accordance with orders obtained in order to pay back that money. There is no other way of repaying for those extraordinary repairs.

Furthermore, if you wish to be philosophical and argue that retroactivity is warranted in the face of a competing good, what is that good? Where is the urgent competing social benefit? Where is the danger to life or liberty that requires that dangerous action? I suggest to you that there has been an overresponse to the actions of a few landlords who have been irresponsible.

In conclusion, I would summarize my comments in the following five points. First, I suggest that retroactivity be dropped. There is no social ill worthy of its cure. Second, with respect to the capital issue, I am against large capital increases. We have personally not passed them on when we had the right to and I have no objection in the business to have a cap on pass-throughs. Third, if you want to eliminate the quick-flip artists -- and I am totally in favour of doing that -- legislate holding periods. Fourth, depolarize the political process by making the consultative process more meaningful. Finally, my belief is that landlords and tenants have, generally speaking, coexisted in a satisfactory and responsible fashion and that there has been abuse by some on both sides of the coin, but these abuses do not warrant the broad-reaching measures proposed in this legislation.


Ms Harrington: I think you have made your position quite clear and I thank you for coming. You said your company owns buildings in all of these various cities that you mentioned.

Mr Prince: That is correct.

Ms Harrington: You also indicated that all of your buildings are in good condition. Do I understand you correctly?

Mr Prince: Yes, generally speaking.

Ms Harrington: What increases have you got this past year?

Mr Prince: On average, 6.9% has been our average increase since 1985.

Ms Harrington: Okay, that is over those five years. What would it be just in the last year?

Mr Prince: I do not have that statistic here.

Ms Harrington: What would be the nature of complaints from your tenants, if you have any?

Mr Prince: Quite frankly, we have from the beginning taken great lengths to be receptive to the needs and requirements of the tenants, to the point where before we built in St Catharines, for example, which was a project where we owned a number of buildings and we had the ability to build further, we asked the tenants what types of amenities they would like to have: the sizes of the bedrooms versus the size of the living room; would they like a balcony or not like a balcony?

These certainly are not luxury units. As I say, we have a lot of seniors. They are the kinds of units your parents would be happy to live in. We have tried to be very responsive. For the large number of tenants we have and the buildings we have, we have a lot of tenants who are there for a long tenure. I do not know what the average turnover is in the city of Toronto any more, but we had certainly a tremendously high proportion of the tenants who were there, the unit was their home. I cannot tell you how many, but certainly dozens have told me that the only way they are going to leave is when they are carried out of the building. I cannot generalize about the complaints. We just do not receive that many.

Ms Harrington: I certainly agree that, because you are in this for the long term and you say you have never sold a building, this is the type of business people we need, who are there for the long term and who know how to manage things. As I was referring to with the last presentation, maybe we should have a degree course in how to be a landlord.

Mr Prince: I agree that we are not licensed and maybe that concept should apply to other professions as well.

Ms Harrington: Going back to the nature of complaints, you are saying you do not really have complaints.

Mr Prince: We are not perfect. There is no question we receive complaints. There is no question that when you have so many apartments, people will complain that a parking lot may not be lit well enough, their parking place is too far away, they would like to see a swimming pool added, they would like to see some particular matter done or they have had a fight with the resident manager or something to that extent. But certainly we do not have any mass petitions from tenants. We do not have large matters.

Mr Mahoney: Thank you for your presentation. I did not hear you say this, and if you did address this, I apologize, but have you analysed what might be the reason for the state of affairs we see in places like Parkdale? You may not have seen that presentation this morning. I do not like continually to use just Parkdale, but that is the one area where we have had the most people from in the last couple of days.

Why, in the city of Toronto and certain areas, would the buildings get run down to the extent that they have, and yet you are able to operate in other centres quite effectively and maintain, as you say, a reasonable level of maintenance and obviously a reasonable level of happiness with the majority of your tenants? Can you explain to this committee, and most important to this government, why that might be?

Mr Prince: Not having heard the presentation, I cannot really answer any particular points that were mentioned. However, I am sympathetic to some of the issues that were raised by Mrs Gardner before that there is certainly, in the existing landlord and tenant legislation, the ability to pass through financing costs, the quick flips, the ability to raise rents without improving the apartments themselves and it certainly may be one reason why rents go up and you do not see the corresponding benefits.

I cannot comment particularly, but there is no question that the legislation we have now is far from perfect. My concern has been that we go from one extreme to another extreme. The reason I am here, as I said, is that I would not like to see the buildings we have today become like the buildings in Parkdale because when we want to improve the buildings we do not have the ability to do so.

Mr Mahoney: One of the concerns I think a number of us have and we have talked about is this hidden agenda. There have been suggestions that some people, notably the Premier and others, would like eventually just simply to devalue the apartment stock in this province to the point where you would simply sign a quit claim. That may sound absurd to you now, but if a building indeed becomes a negative cash flow on a constant basis and you are annually losing money, you are only going to do that for a certain length of time before you want to, in some way, bail out.

Have you had anyone approach you about buying you out and turning all of your units into some form of public housing? Do you see that as a feasible scenario?

Mr Prince: I can tell you, we have never been approached. Whether it is feasible or not, I will pass along something Mark Thomas Jefferson said when he founded the Democratic Party in America -- not the New Democratic Party. He said, "We are all in danger of losing our life, liberty and property whenever the legislature is in session." The government may decide to legislate us down. I was reading a statistic that in Phoenix 50% of the apartment stock is now in foreclosure. That is not because of legislation; that is because of the economy.

I suggest to you that without this legislation the effect of the marketplace right now is that rents would not be going up significantly because you cannot get them. We are quite prepared to spend the $6 million, having identified the increased stock because of the condominium stock in the city and because of the large problem in the housing market. That stock will come on to the city. It will be rented. It will be rented at whatever the lenders can get for it. We know we cannot recover by way of the rent, notwithstanding an order, the extra $6 million in the monthly component.

However, our basis for allowable rental increases at some point in the future, if the market warrants it and if legislation permits it, allows us to go to the lenders to finance their improvements. Under the current legislation, we could not have made those improvements.

Mr Tilson: Do you have written comments or has this all been with notes?

Mr Prince: These have been my own notes.

Mr Tilson: Some of your suggestions with respect to amendments, it may be difficult to copy what you have, but if you do have --

Mr Prince: I cannot now, given the form of my notes. At a later date I will be happy to circulate my comments if they are of any help to you.


Mr Tilson: I would appreciate it because we will be going through clause-by-clause and some of your suggestions for amendments I think we would like to take under consideration.

Has the damage already been caused by Bill 4 -- and I am referring specifically to some of the amendments you have made -- or is there room for some salvage?

Mr Prince: There is always room. I would never say that nothing is irreparable. Certainly the major economic issue occurred prior to Bill 4, in the sense that you do have vacancies in the marketplace. You cannot get increases in any case, and that is as it should be. That is the market effect taking hold because of the oversupply of the condominiums and so forth. We just do not have a source to finance improvements we would like to see made and the tenants would like to see us make. Certainly, as soon as we are able to know we are back to a stabilized environment, we will be able to continue.

The other thing, of course, is that you have uncertainty. The longer an interim situation lasts the longer it is before we can make any kind of commitment to the buildings. We can play under any set of rules, but you have to have rules and right now we do not have rules. So long as we have an interim session, you do not have certainty and lenders are refusing to invest.

Mr Tilson: Or the rules change in midgame.

Mr Prince: Or the rules change. That is why I have the problem with retroactivity.

Mr Tilson: Which leads to my next question with respect to financing. You have commented on the effect on your own investing in the province. With other investors you deal with, either within or without the province, can you relay your thoughts on the effect Bill 4 has had on those investors?

Mr Prince: Yes. There certainly will not be construction of rental apartments by the private sector, I can tell you that. Second, there is no motivation for someone to buy somebody else's apartments and fix them up. We have done that. We have taken apartments where an owner has been in trouble and where they have been run down and we have tried to fix them up. Even in those cases, the rental pass-throughs have always been single-digit numbers, because we tried to spread it out; even when we were not legislated we did that.

But right now, why would anybody invest? That is the fear of retroactivity, and whether it is a hidden agenda or the possibility of a hidden agenda or whatever you call it. I do not believe that. That would be so extreme, frankly, I cannot believe any regime would do that, but who knows? We live in extreme times, I suppose. There would be no reason and no motivation for anybody to acquire an apartment building today. In fact -- and this is speculation on my part because I do not track the data -- I doubt if there has been a purchase and sale of an apartment building since this legislation has been announced.

The Chair: Thank you very much for your presentation. Your time has expired. We appreciate your coming before the committee. You have generated a lot of interest. We are going to move along.


The Chair: The next presenter is Steve Kewin and Associates Inc. You have 10 minutes for an oral presentation, followed by 10 minutes of questioning.

Mr Kewin: Good afternoon. My name is Steve Kewin. I would like to thank the committee for offering me this opportunity to speak in this forum on the issue of the NDP's Bill 4, the interim rent control legislation which in my view and in the view of so many affected by this bill will cause severe financial hardship to Ontario's residential rental property owners, Ontario landlords, to Ontario's financial institutions and secondary private lenders -- a bill that ultimately will reduce the living standards of Ontario tenants, some three million people.

I am 38 years old and I have been married for nearly 12 years. I have four children aged three to eight. Both my wife and I were born and raised in Ontario in the areas of Toronto and Brantford. Both of our families, particularly in the early years as we were supported by them, could be described as being very ordinary Ontario and Canadian families. I also happen to own a couple of medium-sized apartment buildings in a small city in southwestern Ontario.

I have given you some personal background, because I think sometimes the public in general but more particularly some tenant groups and the general populace of the NDP, view landlords as Donald Trump types arrogant: insensitive to their tenants and all too willing to take and not give back. Landlords are often thought of in terms of large corporations with hundreds of employees whose only goal is to increase rents at every opportunity and, in the process, not put anything back into their buildings and the communities in which they live and do business.

I would like to dispel that myth. The average Ontario landlord may own 10 apartment suites. He or she is likely to have very much in common with a typical tenant in his building, including being of similar early economic background. They are people, not numbers and statistics. In most cases, they have come to own apartment property through unusually hard work and a willingness to take calculated risks with their total family financial assets.

What may distinguish the typical tenant from the typical landlord is the landlords' deep trust in real estate as a means to achieving some form of economic freedom, freedom from having to depend upon government, their fellow taxpayers, for their retirement livelihood. This is not intended as a criticism of tenant beliefs nor a pat on the back to landlords. Both should have their right to live their lives as they please, to follow their own internal lights without burning the other or demanding from the other that which is not rightfully theirs, that which is unfair.

The typical tenant, I believe, has no dispute with the owner of the building that provides his shelter. The relationship, for the most part, is harmonious. My problem is not with my tenants. It is with this government. There are exceptions to this, of course. There are landlords who are irresponsible, who take and do not give back, but there are also irresponsible tenants, those who demand more than their rightful share of taxpayer-sponsored rental housing and who do not appreciate the value they receive for their rental dollar. But these landlords and tenants do not represent the norm.

I am finding it very difficult to believe that Bill 4 is anything more than a shameful kick at landlords by a ministry that appears set to demonstrate that it has no compassion for those who have invested their livelihoods in the provision of rental housing to Ontario tenants. Let me be more specific. The NDP has told us that it introduced Bill 4 as a way to provide adequate rent protection to tenants. In doing so, David Cooke was quoted as saying in the House that he was going to be fair to landlords. Let's be serious, Mr Cooke: How do you rationalize your objective of fairness to landlords by proposing to retroactively eliminate rent increases already awarded by an order of the previous government and, further, to eliminate the entitlement of the landlord to rent increases based on millions of dollars already spent on capital work, decisions made by landlords to spend that capital based upon existing Ontario law, if the first effective date of the landlord's rent increase under order or under application just happens to be on or after 1 October 1990? How can this kind of treatment be fair to landlords? In many cases, the moneys spent have been borrowed and the ability of the landlord to pay the moneys back is dependent upon the landlord receiving the increase he is entitled to. I ask both the government and the tenants of this province, how would you like to find yourselves in this predicament? It is just not the way ethical business people do business with each other.

Many falsely believe that the Bill 4 proposal is retroactive only to 1 October 1990. In fact, there are many orders out there that were issued as early as 1987 that required financial and economic loss increases to be phased in over several years. This bill will void those orders. Let's be clear about this and put the issue of retroactivity into proper perspective. The former Minister of Housing issued rent review orders, contracts, to be adhered to by landlord and tenant. Each was given certain rights and obligations they would be responsible for living up to. The landlord and tenant now find that with a change of government that contract is proposed to no longer be valid. If you or I tried unilaterally to terminate an agreement of such importance to another's livelihood we would find ourselves in the courts attempting to defend this totally indefensible position, exactly where I expect we will see this government on this issue of retroactivity if it proceeds as planned.

I urge the NDP to think about the financial hardship that would be caused to tenants when the courts rule that the retroactive nature of this bill is illegal. All those tenants who had not been paying rents as per existing orders for three, maybe four years, as we awaited the court ruling will be forced to come up with thousands of dollars. I know you do not want that. Think also of the political damage this will cause your party as you move towards the next election. The amount of money at stake here is in the billions, real equity that will vanish. It is just inconceivable that a government in this day and age in Canada could act or intend to act with so little respect to its own people, in fact a minority group, Ontario landlords.


Let me draw an analogy that I hope will make this very important point more clearly. As a new MPP you take your seat in the House with great pride and satisfaction in knowing that not only will you be able to serve your constituents, as is your greatest pleasure, but you also take comfort in knowing that as you temporarily leave your private professional lives your family will have some measure of economic security as a future payoff in the form of a very respectable pension plan. But much to your surprise and your spouse's dismay and anger you find that your employer, the government, and in direct effect your own constituent taxpayers, have changed the pension rules just 30 days after you arrive in office: you get nothing. There is not much fairness in that, I would not think. It is not something you would support as a government either, I doubt.

The other major impact issue in Bill 4 is how the government intends to solve what it perceives as unfair rental increases due to what it calls the flipping of apartment buildings. In some cases this has been a problem, but it is not the norm. The government has tried to make the public believe that this is a dominant practice in the marketplace. This is simply not the case. I say this confidently, as my primary business is the sale of investment property, including apartment buildings, and I am very active on a daily basis in the marketplace. My clients, with very few exceptions, buy the asset to hold and improve. Most never sell. In fact, I have been in this business for 11 years and only once have I sold the same building twice. I am afraid, however, that some of those very same clients who thought they were making a very conservative investment for the long term will now be forced to sell their buildings because of the effects of Bill 4. In many cases, they will sell them at huge losses. Believe me, asset values have fallen 20%, perhaps 25% already as a direct result of the Bill 4 proposals. In financial terms the loser here will not only be the landlord but also the Ontario taxpayer, as both levels of government forgo millions of tax dollars as landlords sell at losses instead of gains.

I know this government has heard all of the arguments for rent subsidies as the best way to address tenant rent protection, and I suspect it agrees that it is the answer to the problem. Politically, they do not see it as an attractive alternative, because that may not endear them to the strong political body to whom they believe they owe a great debt, the large tenants' associations, particularly here in Toronto. I understand, too, the pragmatics of politics and I accept that we may well have some system of rent control in this province for ever. If we must have it, then let it be fair, and any changes you make to the present system I encourage you in fairness to grandfather any provisions that would put at risk capital invested in good faith by property owners who made their investment decisions based on current regulations.

I urge you to reconsider your thoughts on capital work intended to improve existing buildings. Surely the landlord has rights too, including the right to exercise control over decisions that affect the value and structural integrity of his asset. If the owner needs to replace the roof, paint the balconies, re-carpet the hallways or repair the leaky parking garage, encourage him to do it. Offer him a fair rate of return on capital spent, and yes, give him that return by allowing him to increase the rents. Change the present rules which allow increases based on capital to be passed on to tenants immediately in the first year so that the rental increase is phased in with some maximum yearly limit, perhaps 10% or 15% a year. Tenants seeking long-term quality housing will enjoy and appreciate the benefits, the improvements. You are losing sight of the big picture.

As to those buildings in a financial loss position, continue to allow landlords to eliminate their loss by phased-in rent increases. Put an end to abuses caused by the flipping of buildings; do not permit a financial loss increase on a building if it has already had one in the previous three years from the date of the applicant's purchase.

In summary, I urge the Minister of Housing to think of landlords as people too. I urge him not to disregard their rights and to act on some of the suggestions I have put forward here today, even though to do so may conflict with his stated fundamental beliefs on how the shelter needs of tenants in the province should be met. I urge him to strike a balance between his ideological beliefs and the pragmatic and bold solutions demanded of him to ensure long-term quality rental housing in this province.

Mr Mahoney: I want to thank you for coming. One of the frustrations of opposing something like Bill 4 has been the attempt to paint the landlord into either a numbered corporation or a huge corporation where millions of dollars flow on a regular basis, and I appreciate hearing from smaller, more independent landlords such as yourself in trying to put a face to that problem.

As to the suggestions you make, however, I must tell you that we are going to try some various amendments but I am afraid we are probably in an uphill battle. The retroactivity, in my view -- and, frankly, to any thinking, caring resident -- is repugnant. If the minister wished, he could use the graces of this committee to allow amendments to come forward and be tabled and voted on in a democratic fashion. I have my doubts. I do not mean to be totally negative or to discourage. We are going to fight in some of those areas to see those amendments, because the process is such that here at Queen's Park these committees hopefully are constituted to make some kind of difference.

Could you, for the record, expand a little on the description of your role as a landlord, in terms of numbers and any difficulties you might have experienced in the past in relationships with tenants and how you resolved them? Many of the complaints we get deal with large urban centres where perhaps landlords are more impersonal, and very often government legislation is drafted to react to the most negative aspects of a particular problem. They try to use the proverbial shotgun to solve it when a fly swatter would do, which is a quote from some presentation earlier today, I believe. I think that is valid. Could you tell us a little more about who you are, what you are, the types of people who are your tenants?

Mr Kewin: Yes, I can. I own a 57-suite apartment building in Chatham, Ontario. I have had it since late 1986. My tenants are, I would say, 60% seniors and 40% young and middle-aged working people. My two-bedroom rents are in the area of $525 a month and my ones are in the high $400s. The building is what we used to call a post-1975 property. Presently, there is certainly no need for rent control in Chatham. I have seven vacancies coming up in February. That is unusual for me. It is normally full. Obviously, we are in a recession in Ontario. There are manufacturing jobs being lost.

I think it is very important that the NDP and this committee, if it is to make any recommendations on Bill 4, not paint all of Ontario and all landlords with one brush. Toronto is different from Chatham. It is different from Sarnia, where I own another building. Some of the problems exist, and we hear from Kay Gardner and others in Toronto that they exist, surely, but they are not always created by landlord and tenant relations or high rent increases. Sometimes the sheer size of the projects creates those tensions.

The Vice-Chair: I am sorry to cut you off, but we are under constraints. Mrs Marland?

Mrs Marland: I want to say at the outset that it is good to put the face of a small businessman on this scene as a landlord. I also want to emphasize that my objection to Bill 4 is that it does not treat the tenants fairly, because it is misleading. It is not going to give them the solutions to the severe problems they face. It also mistreats businessmen and I think you have given an example in a personal sense of your own business.


One aspect of the legislation that frankly just terrifies me is the fact that if there is something major in an apartment building, whether it is a large complex in Metropolitan Toronto or in my own riding of Mississauga South or a small building, if there is a major safety hazard in terms of construction, even to make that building, if it is an older building, comply with the building code in terms of the safety aspect -- it might be balcony railings, it might be the roof of a parking garage, it might be a ramp and it could be the roof of the building -- how are landlords going to deal with complying even with the building code requirements in terms of safety if you cannot get the money for those major capital expenditures under this bill?

Mr Kewin: I think your point is very good, obviously. I think what you are going to see, really and truly, are landlords who will forsake capital improvements on matters of safety: parking garages, balcony railings. They are going to foresake capital expenditure on all discretionary items: painting hallways, improving tenants' kitchen cabinetry.

Those landlords who are perhaps new or small, who simply do not have the financial resources, will be hiding a lot of deficiencies. I think probably we will see nothing more than a continuous fight with some higher body, which I suppose this government may establish to try and force landlords to make these repairs. But if they do not have any dollars, if there is no money to do it, how will they do it?

Mrs Marland: You see, one of the arguments that has been given to me by the government members is that the landlords do have the money out of their regular rent. Is there not a comparison here? Most of us who buy homes buy homes as an investment. I speak just of a single home of our own, not an investment property. We buy our own home and we base our affordability of that investment on how much our mortgage is going to cost and how much general maintenance will cost. Then if it comes along that we have a major expenditure, very often even though we have perhaps budgeted for something to be put away on a gradual basis, the money simply is not there and we have nowhere else to get it.

The Vice-Chair: Could you ask your question, please.

Mrs Marland: Is the comparison not the same for landlords? If that is the case for a landlord, then how can we ever expect, with this kind of regressive legislation, more units to be built around this province to help the problems of tenants around this province?

Mr Kewin: I do not think there will be. In fact, I am sure there will not be any new buildings built in this province. There is absolutely no trust in the government right now. I think your analogy of the home owner is absolutely valid. One of the things that rent review --

The Vice-Chair: Thank you. I am afraid we will have to go to Ms Harrington, Ms Ward and Mr Mammoliti.

Ms Harrington: Mr Kewin, thank you for coming. The RRRA that you have been operating under, do you agree with that legislation, that it is working?

Mr Kewin: I think it has some problems, certainly. I think it needs some amendments, yes. But I think one of the things it has done, much perhaps to your chagrin, is that it has increased rents and rents in this province had to be increased.

Ms Harrington: Okay. I will get to that in a second. Has routine maintenance in your buildings been included within the guideline?

Mr Kewin: The guideline will not allow me, will not give me enough money, to maintain the buildings the way I want to maintain them.

Ms Harrington: At roughly 5% this year?

Mr Kewin: No, it will not. Let me give you a specific example. I own a building in Sarnia which is about 15 years old. The prior owners were very responsible landlords. The Sarnia marketplace from 1983 to 1986 was topsy-turvy to the rest of the Ontario marketplace. They have a different cycle than we do. The landlord there was unable to get rent increases even to statutory guidelines. He was not able to get his rent increases because of the marketplace. You certainly did not need rent control there.

I came to own this building. He, being very responsible, maintained it as best he could. Now that I own it, I find that certainly with a 5.45% increase for 1991, if I am to do what I really want to do for the tenants -- and I do want to do for the tenants; I have mostly senior citizens there -- I cannot do it. I have a capital budget for 1991 of $50,000, and right now all it is a budget. That money is going nowhere.

Ms Harrington: Okay. So what you are saying is that the original problem was low rents at the very start of this whole process. We want to work with you and find a system that works, because we need landlords too. I want to ask you one little question --

The Vice-Chair: Maybe your colleagues would like to ask some questions.

Ms M. Ward: I want to ask you to clarify something you said. I might have misunderstood or might have not heard you correctly. I thought you said you sold only one building twice. Could you explain what you meant by that?

Mr Kewin: I am sorry; perhaps I was not clear. My primary business is the sale of investment properties. I sell apartment buildings and other investment properties throughout Ontario. I also am a landlord because I believe in what I sell and I believe in real estate and I like the apartment building business as an owner, up until now. My point was on flipping. With my clients and all the business I have done, we have sold only one building more than once. In other words, flipping is not a real issue. It is very small.

Mr Mammoliti: I have only one question. You touched on it earlier and I was not sure exactly what you meant by it. Are you from Chatham?

Mr Kewin: I am from Guelph.

Mr Mammoliti: You said that different areas of the province may not deserve this legislation. Is that what you said, in and around there?

Mr Kewin: Different areas of the province do not really need rent control because the market simply controls rents and that is the way it should be. Again, rent control with a broad brush paints every town and city in Ontario just like Toronto, and that is why broad, general legislation is not specific enough.

Mr Mammoliti: That leads me to another question.

The Vice-Chair: Thank you very much --

Mr Mammoliti: I have not even asked my question.

The Vice-Chair: I have been most generous, Mr Mammoliti.

Mr Mammoliti: Incredible.

The Vice-Chair: Thank you very much for your presentation. We appreciate your bringing your views here. We all wish there was more time to discuss it, but in order to get everyone before us -- I sometimes feel like I am a hockey timekeeper on this and I do not like that role, but that is what the Chairman is required to do.


The Vice-Chair: The next presenter will be Donald Fox. Welcome to the committee, Mr Fox. As you are aware, you have 10 minutes to make your presentation and the committee will discuss your presentation with you for 10 minutes. Perhaps you would just introduce yourself and any group you may represent.

Mr Fox: This article in the newspaper will be my philosophy. The heading was, "Donald Fox Learned His History Lesson and Now Encourages Others to Follow Along."

"When Donald Fox was a young man he saw things much differently, or rather, maybe it was what he didn't see. He didn't see any value in the boxes and boxes of musty old books that had belonged to his grandfather, Samuel Fox, brick manufacturer and MPP from Lindsay. He threw the books in the garbage. Many years later, he saw a book about the Boer War in an antique store, very similar to one of his grandfather's volumes that he'd thrown out with the trash. Its price tag was $85.

"That's quite an admission from someone who eventually spent seven years as president of the Oshawa Historical Society. But Fox got involved with the society because he wanted and needed to learn more about history and preservation -- about local history, his own family history, and how to take care of the material legacy and the 70-year-old house his parents built.

"Restoring the family home and its possessions has been an exhaustive, lifelong project for Don Fox. Everything from the wallpaper to the upholstery has been carefully chosen to recreate the proper historical period. Working mainly on his own, it took him years to rectify the damage done by the passing years and by presumptuous painters who had encouraged his parents to `modernize.' Gradually, the original character of the house returned.


"When a relative was about to pitch out his grandmother's massive leather-bound Bible that no one wanted, he jumped at the chance to restore it. Nothing more was going in the garbage if he could help it. The huge Bible now rests on its own side table in the front foyer of the Fox home, in front of the Canadian flag and the Loyalist banner, the Grand Union flag of King George III.

"`Years ago, the first thing you saw when you came into a person's house was the family Bible; today it's the cocktail bar,' he explains. `It's the only thing people had in those days to give them strength and courage. Death was always so present. It was one of the few things they had for comfort and to ease their agony.'

"But there is so much to learn in order to preserve older homes, antique furniture, books and paintings -- never dip-and-strip furniture, never use shellac more than six months old, leave the piano keyboard cover up so the ivory keys don't yellow -- `and if you don't know more than the workman who walks into your house you're not going to get a good job,' Fox stresses.

"`The skilled trades just aren't what they used to be. Everything they put up today I don't think is going to last. Young people just don't want to do the long apprenticeships for low pay any more.'

"Within a historical home there are often dozens of items each with a history that can require researching. Don Fox inherited one very heavy lamp with a shaft made from a World War One shell casing. His father had obtained it while working at Defence Industries Ltd in Ajax that churned out munitions. Fox wrote to the Royal Military Institute to request information about the markings on the shell case. The institute complied with a full package of information. Many institutions are more than willing to answer public inquiries about personal artefacts and give advice on preservation, including the Royal Ontario Museum and the Ontario Museum Association. It's even possible to send in layers of wallpaper from an old house for historical analysis. All it takes is a little perseverance on the owner's part.

"Renovating and refinishing a house can require not just perseverance but the patience of Job. And unless you're willing to do much of the work yourself, it can be outrageously costly. Fox has beavered away at his house for most of his life and spent most of his life savings on it.

"`I guess I do it because of the memories that are here and because of the age of manners that we're so quickly losing,' he says. In his dining room, the antique glassware and his grandmother's silver calling card tray have a place of prominence. Boxes of old family pictures, some faces now anonymous, are kept safe and dry. Yet how many times do valuable historic photographs end up in flea markets?

"`Look at the clothing, the jewellery, the hair, the furniture and the baby carriages and the way they dressed the children,' Fox observes. `These pictures tell more about...these people than anything I can say.'

"Don Fox feels compelled to help preserve this tenuous bridge with the past. `I'm just a custodian, a link in a chain from one generation to the next. I'm just here to take care of these things until I pass them on,' he says. `But young people need the skills and the knowledge to look after things and preserve them. I'd like older people to leave the skills with the younger people.'"

Here is my presentation.

The rental stock of this province should not be used as a political football to garner votes. Disruptive to rental stock have been many province-sponsored programs that have placed a crushing blow on the taxpayer by increasing costs and increasing taxes, such as regional governments, regional boards of education, dual educational systems, bilingualism, multiculturalism, removal of the industrial/commercial/residential tax ratios that were a tradition in urban centres, development of nuclear energy, work of equal value and so forth. I have cut out a file of clippings from the newspapers within the last week to support each one of these.

When you have great difficulty getting affordable skilled help and replacement materials are extremely difficult to find, landlords who own buildings built previous to 1940 should receive every encouragement possible to maintain worthwhile buildings. Promising young people who might be future responsible landlords are going to be dissuaded from entering such a vocation fraught with adversarial confrontation.

My opinion is that when government sets rigid guidelines for a base year, determines the hourly rate for landlords, determines what per cent of a landlord's time will be considered, what per cent of some expenses will be considered, when some expenses are amortized over 25 years without considering amortized expenses of the last 24 years, when the act is extremely difficult to comprehend with its continual additions and deletions, it is almost impossible to invest wisely under such regulations.

Ownership of a triplex, the former early-20th-century home of my grandparents, was lost to the family due to rental regulations. We could no longer stand the financial strain of having extremely low rents. Buildings with low rents will not attract dependable landlords. Rental buildings in this province have deteriorated due to government rental regulations. Landlords should not substitute as agents of public assistance. Building deterioration or bankruptcy could follow if landlords are not given a fair opportunity to make a profit.

Any high-rise provincial public housing that I have visited has left me deeply depressed at its condition of maintenance. My health has been permanently impaired by Bill 51. The struggle to maintain my fourplex and hand it on to the next generation in good repair has left me extremely weakened financially.

Too much of the landlords' time is spent trying to keep abreast of political trends. An informed public could have benefited from hearing experts on conservation of rental housing stock, low-rise rehabilitation program, energy conservation, retroactivity and outstanding real estate loans, deterioration of the rental housing stock on municipal property tax assessment, and Stuart Thom's views of the effect of Bill 4 on Ontario's rental housing stock. The long-term goal of the provincial government should be to dismantle rent regulations gradually for the small landlord and use the cost of administering the act to build affordable housing.

The cost of having rents reviewed and appealed can be unbelievably costly. There are tenants extremely inconsiderate of the welfare of the landlord and his building as well as the welfare of other tenants.

One other factor that propelled me here was that when I was 10 and older, I used to go around delivering papers over most of the city of Oshawa and I took great pride in the apartment buildings where I delivered these papers, and today I do not see the sense of care that used to go into these and it depresses me considerably.

Mr Tilson: I, too, would like to hear some experts such as Mr Thom, as I have indicated today and I will be bringing a motion to that effect in due course. Hopefully, the government members will agree with you and I because I think that person should come to us. I also congratulate you on your analogy of history and preserving our past as far as preserving our existing housing stock is concerned. Obviously, I quite concur with you that an effort should be made by any government to encourage landlords to maintain and improve our buildings.

I have no questions for you, other than to congratulate you on your presentation. It is a different approach and I know our party appreciates it.

Mr Fox: The only other comment I have to make, if you look at my age, my concern is who is going to want this building when I am done with it, because to date I cannot find anybody who is willing to work as hard as I have.

Ms Harrington: I think you will agree with our government that the Residential Rent Regulation Act or rent review act that was in place is not very healthy for this province, from your experience as well. What we are trying to do is get a system that will be good for the future of this province, that will allow landlords and tenants to maintain buildings. I have not seen your fourplex, but it sounds like it is very interesting, probably historically as well.

Mr Fox: A friend of mine on city council in Oshawa had a triplex and she went before this rent review. She wanted nothing more than just the cost and when she went before rent review, she did not get it and she did as I did with my grandfather's home. I gave it away. She gave hers away too.

Ms Harrington: I wanted to just see if you might agree with me. One of the earlier speakers today said that the best landlords and those with the best-kept buildings are those who probably do not need to go for more than the 5% guideline. When you look around Toronto, at least in that particular ward of Toronto, that was the experience there, that if landlords care, they obviously attract good tenants and then the buildings do not have to go for rent review.

Mr Fox: I know with my grandparents the rents were set back in the Depression when you could not even rent an apartment. You could not sell your property and could not rent it. We offered them for rent. There was nobody there to rent them. Then I remember I went back in about 1977 and I said to the man in the back apartment who was paying $60 a month rent, "Would you consider an increase in rent?" He said, "No." So I just said, "We just can't keep this up any longer." So I just stood on the street and gave the place away. I said, "Anybody can buy who wants this place." The second man said he did and I said, "It's yours." We did not even quibble over the price.

The Vice-Chair: Thank you, Mr Fox. We appreciate your presentation.



The Vice-Chair: The next presenters are Goldlist Property Management, Gary Griesdorf, president. Welcome to the committee. You have been here for a while, so you know what the ground rules are. Introduce yourself and identify your position within your corporation.

Mr Griesdorf: Thank you. I am Gary Griesdorf, president, Goldlist Property Management, a division of Goldlist Construction Ltd.

Paul Gouveia, an apprentice plumber employed by Goldlist five years, laid off; Henry Prosper, labourer, employed by Goldlist four years, laid off; Remigio Pupilin, plasterer, employed by Goldlist 12 years, laid off. These are some of the 23 people laid off at Goldlist as a result of Bill 4.

Goldlist Construction Ltd is a company that has always been in the business of building and managing apartments. In 1975, at the time rent review was first introduced in Ontario, we had 3,500 apartment suites in our portfolio, all of which we still maintain. Since 1975, we have built an additional 2,000 units, all of which still remain in our portfolio. As you can plainly see, we do not fit into the category of a company that is flipping buildings, one of the factors the government claims fuels large increases.

In 1985, I was appointed to be one of the nine landlord representatives on the Rent Review Advisory Committee. This process allowed us an opportunity to understand the real concerns of tenants.

The tenants agreed that they were prepared to pay for necessary capital expenditure work that was done and reviewed by an independent party. They did not want luxury renovations such as gold-plated mirrors in the lobby, but did want aging roofs permanently fixed, aging electrical wiring systems and plumbing risers replaced. They also wanted regular maintenance to continue. The formula of the statutory increase was intended to include 1% for small capital expenditures so that the rent review process would not be slowed down for small items.

On RRAC both tenant and landlord representatives believe that the regular operations and repairs of the buildings should be allowed to continue free of political influence. They recognize that if attention is not given for any extended period of time, the results of this inattention could have serious long-term effects.

The government has stated that landlords do not need extra money to do repairs and renovations because enough money is already provided for in the rents. In 1975, when temporary rent review was first introduced in Ontario, the original theory was that whatever annual cash flow existed before rent review would remain, leaving the landlord in the same cash position as before. The annual 8% statutory increase was supposed to cover increases and operating costs only. In our Thorncliffe Park buildings, realty taxes and utilities alone account for 42% of our tenants' rent.

The tenants and the landlords on RRAC worked together specifically to make sure the statutory increase did not cover major repairs and renovations, except for the 1% meant to cover sundry capitals. RRAC specifically endorsed the concept of separate justification for increases covering capital expenditures.

Tenant advocates have stated that capital expenditures would not be required if landlords conducted regular maintenance and that capital expenditures were merely luxury renovations. Capital expenditures are costs incurred that have a useful life longer than one year. Back in 1975, there was concern that such longer life expenditures should not be treated as ordinary operating costs, because a claim for them would result in large rent increases. Instead, by amortizing these capital expenditures over a longer period, the resulting rent increase would be lower.

Previously, you heard from Kay Gardner commenting that good, long-term, responsible landlords are not affected by Bill 4. I beg to differ. We are seriously affected, mainly because we want to do a good job. I would like to give you an idea of the type and cost of capital expenditures we are doing in 1990. Many of these programs started as early as 1987 and are continuing.

This list relates only to the portion completed in 1990 in buildings over 20 years old: $3.7 million in six buildings for repair and replacement of delaminated concrete and steel in underground garages -- this is the damage caused by salt on our roads; $800,000 in three buildings for roof repairs; over $2.6 million in four buildings for conversion from galvanized to copper plumbing; over $300,000 in three buildings for new hot water vessels; almost $900,000 in two buildings for exterior concrete cladding and balcony repairs; close to $765,000 in one building for fire safety retrofit; $1 million in four buildings for appliance replacements. These costs could hardly be considered luxurious. This and other work totalled over $11.4 million for six buildings, for which applications were submitted and even one decision already granted. All were deemed void by Bill 4.

Surely capital expenditures of this nature cannot be considered as regular maintenance. All of the apartment buildings in Ontario were built in accordance with building codes that existed at the time of original construction. Building and municipal codes have changed over the years and deadlines are often set for adherence to these codes. The statutory increases cannot possibly cover such extraordinary expenses.

The government has stated that it felt it was necessary to introduce Bill 4 because of the abuse of the rent review system by landlords, as evidenced by the significant number of applications recently submitted for increases. But the only way for a landlord to receive any increases for capital expenditures is to do the work first and then make application. If there are so many applications, it is because more landlords did their work. Is this an abuse of the system or merely an indication that so much work is necessary to maintain our aging apartment stock? It makes no sense to change the rules governing capital expenditures just because there are more applications.

Often long-term landlords plan major capital expenditures to be completed over a number of years for the purpose of managing both their cash-flow and borrowing capabilities. This has the positive result in lower annual increases for our tenants. Using our own company as an example, in planning the capital expenditures for seven buildings, we spread out the work over three to four years for each building. With the changes in regulations announced in the summer of 1990, we sent out letters to our residents in those buildings informing them in detail of work that had not yet commenced.

We at Goldlist are part of those who built the backbone of apartment stock in Ontario and thought we would be part of tomorrow's programs of building the much-needed affordable housing.

Most of the work in our 1990 program started as early as October 1989. Because the regulations require that capital work must be substantially completed to be eligible for any relevant rent increases, applications were submitted in the late summer of 1990. The unfairness of Bill 4's retroactive aspect alone has enraged the landlord community, especially the long-term owners, since over the past 16 years we have had to adapt to the questionable wisdom of each changing government's Band-Aiding an already ailing rent review policy. It is exactly the opposite that the government should be proposing -- the promotion of good long-term care and maintenance of our aging stock, just as the tenant representatives in RRAC so advocated. Instead, the government has introduced sudden retroactive changes that negatively affect landlords, lending institutions, tradesmen, as well as both long-term and future tenants.

As we had previously informed our residents what capital expenditures we were going to do, we felt it was our responsibility to inform them that we had to stop our program in midstream. Many of our residents told us that they did not agree with the government's drastic and potentially dangerous legislation, as they were concerned that our buildings would not be maintained at the same quality level as before. Some residents gave us copies of their letters to the Ministry of Housing expressing their concern.


I would like to read one letter to you from Margaret Duff, of 35 Thorncliffe Park Drive, who stated:

"As a tenant in a well-kept building at the above address, this letter is to register my disappointment in and objection to the proposed legislation to disallow the landlord the right to apply to the rent review services for appropriate increases to help cover the costs for necessary major repairs to their rental property.

"This proposed measure seems draconian, and already the effects are being felt by tenants, presumably the very people the legislation is hoping to protect, not to mention the myriad of workforce personnel indirectly affected by the cancellation of repairs, alterations, etc, already contracted for and in some cases now cancelled. They also will suffer if this legislation is enacted, while many of us tenants will endure minimal maintenance and/or repair to the buildings we live in. Already the managers of our building have notified us they are cancelling all capital expenditure programs they had anticipated, most of which were reasonable and welcome to us, with appropriate increases as decreed by the rent review board.

"Obviously no one is in favour of gouging tenants. Nor should trustworthy and conscientious landlords be made to suffer undue loss on their investment. We here under the Goldlist umbrella have come to enjoy a fine standard of maintenance and necessary improvements and it will not be a welcome development to experience a lessening of those standards, which inevitably must ensue if and when this unfortunate legislation is passed.

"Therefore, this is to add my strong objection to the proposed legislation."

Certainly many recognize the long-term effects this legislation will have on their homes.

To further enrage the landlords and renovation tradesmen, the government announced and had the Ontario Federation of Labour agree that no one has been laid off as a result of this legislation. Unfortunately, our company has already had to lay off 23 people after 28 November only as a result of Bill 4. We were able to save some other jobs by shortening the regular work week of about 50 employees. We could not, however, save the jobs of our suppliers' and subcontractors' workers. Although we have always taken a long-range view in the planning of our capital program, the government's actions forced us to immediately stop all work, especially when the lenders told us they would not finance any more capital expenditures.

The Vice-Chair: Are you just about finished?

Mr Griesdorf: Yes. Because we cannot afford to continue with our capital expenditure program, these workers lost their jobs. I was going to quote Mr Rae's speech, which was just about a week ago, where he stated, "I'm saying that everybody, including the financial institutions, has to understand that jobs are important." Mr Rae must listen to his own words. Rather than promoting work, his policy is leading to the elimination of jobs.

Afterwards, I would like to comment on the announcement today to see who it helps and who it does not help.

The Vice-Chair: Well --

Mr Griesdorf: My last two comments, if I could, Mr Chairman, since I may be the last person. I have just about a minute left.

It is not only the retroactive aspect that bothers me, but also a capital expenditure might not be done in the next two years. We remember well the temporary two-year rent review introduced in 1975 that became permanent in 1979. Also, we remember the promise that rent review would never apply to post-1975 buildings and how that changed in 1985. Now we have a further temporary two-year freeze, including retroactivity, on increases due to capital expenditures. How can the government expect the landlord community to have confidence and make plans based upon existing legislation, even though it came as a result of extensive landlord and tenant negotiation, when it not only can be changed but changed retroactively at the whim of a new government?

The Vice-Chair: You are quite a bit over time. We have some questions on the government side. Mr Duignan, Ms Harrington, Mr Mammoliti.

Mr Duignan: Thank you for coming and making a presentation here this afternoon. You operate three buildings at Thorncliffe Park, numbers 53, 49 and 65.

Mr Griesdorf: No, 65 is not one of ours, but I would be happy to add that we have 26, 27, 35, 43, as well as 47, 49, 53 and 85 and 95.

Mr Duignan: In 49 Thorncliffe Park, what are the type of rent increases over the last couple of years in that building?

Mr Griesdorf: I am sorry, I have it in my notes back there. In one of the buildings it was 10.6%, and in another one I think it was about 12.5%. That was one increase. Another one I believe was 16% and the third one was being held up because of this Bill 4. That, of course, includes statutory. I am sorry if I am out on my percentages, but I believe those are the two amounts.

Mr Duignan: Do you have any outstanding work orders on your buildings?

Mr Griesdorf: Not that I am aware of. The only ones that we have been approached on by the borough of East York are the lighting in garages and in the corridors. What we have been doing is planning our fire safety retrofit program and our underground garage work program so that we do one building at a time. We have completed 53 Thorncliffe, we have just completed 49 Thorncliffe, and it was our plan to do 47 Thorncliffe, followed by 43 Thorncliffe and 35 Thorncliffe. These are the major ones that the borough of East York has met with us on. To my knowledge, there is no outstanding work order that we have not addressed or satisfied the commissioners so that we could do a nice, orderly program of repair.

Ms Harrington: You were originally on the RRAC, which agreed to the RRRA five years ago. Would you agree that it is now a bureaucratic mess?

Mr Griesdorf: Part of it may be considered a mess, but I can tell you from our viewpoint, it is working in order that these capitals can be completed. I think this was the concern that the tenant representatives had. They were worried that capitals would not be done, and we think we addressed that.

Ms Harrington: Just to follow up from Mr Duignan, according to the RRRA, routine maintenance is included in the guideline increases.

Mr Griesdorf: That is correct.

Ms Harrington: I am wondering if you have outstanding work orders on your properties.

Mr Griesdorf: I am not aware of outstanding work orders, apart from the aspect that they talked about, increasing the lighting in the underground garage. We are repairing the underground garages first, and following completion of the membrane, we are putting the lighting in and painting all of those garages white, as those guidelines have. We felt it did not make sense to paint the garage and put the increased lighting in, then take it out when we had to repair the underground garage.

Ms Harrington: Okay, I understand.

Mr Griesdorf: Do you understand the sequence of work? It makes sense to do it in an orderly fashion, and that is what we pride ourselves on, trying to do this in an orderly way.

Ms Harrington: And getting it all done.

The Vice-Chair: I am going to have to go --

Ms Harrington: Mr Chair, I am going to take a little bit of Mr Mammoliti's time, if that is all right.

The Vice-Chair: He does not have any.

Mr Mammoliti: That is fine with me.

Ms Harrington: I would like to make the committee aware --

The Vice-Chair: You will have to take some of Mrs O'Neill's, and I am not sure that is fine with her.

Ms Harrington: Okay. Goldlist did send out a newsletter to all the tenants, asking them to write to the ministry. On behalf of the ministry, I would like to say that we have received many replies --

The Vice-Chair: Order.

Mr Griesdorf: Yes, that letter is attached in the brief, Ms Harrington. Mr Chairman, did you want me to respond to that?

The Vice-Chair: No, I was looking for Mrs O'Neill to ask her question.

Mrs Y. O'Neill: Mr Griesdorf, you have brought before us a very good brief. I particularly feel it helpful that you brought forward very explicitly the categories of major expenses. Are any of the ones that you have brought to our attention in your brief under conditional orders or were they under conditional orders as you proceeded with them?

Mr Griesdorf: None of them was under conditional order. The only thing I am concerned with is the reference about the emergency lighting. We do put the emergency lighting and the painting of the garage following completion of the work. If this is what the reference was by Mr Duignan, then I am concerned that maybe there is a reference to that. But the underground garage was not under any order and the roofs were not under any order.

Mrs Y. O'Neill: I am talking about conditional orders that you would have worked out with the Ministry of Housing regarding pass-through.

Mr Griesdorf: No, no.

Mrs Y. O'Neill: These were just things that you were doing.

Mr Griesdorf: That is right. As a matter of fact, our whole fire safety program was one that has not been completely enacted by law yet, although it followed Judge Webber's commission.

Mrs Y. O'Neill: It seems to me that these repairs, roof repairs, plumbing repairs, hot water vessels and fire safety retrofit, would be some of the things that most tenants would want. Certainly the tenants who appeared to us earlier in the afternoon would find they would be necessary repairs.

You seem to have had a lot of history of dealing with tenants. Would you be able to give us a description of a good tenant and then, if that is possible, a bad tenant? The parliamentary assistant, at the end of the last presentation, talked about good tenants and bad tenants. To this point, we have only talked about tenants. Would you be able to help us a little bit about good tenants and bad tenants?

Mr Griesdorf: We are very fortunate. About 95% to 98% of our tenants are good tenants. Some of them may not like to have any increases in rent beyond the statutory amount but, by and large, all of our tenants are responsible. They are interested in their buildings, and a lot of them do assist us even in making suggestions as to what to do.


Mrs Y. O'Neill: Have you had any experiences with what could be categorized as bad tenants, and could you give us some characteristics?

Mr Griesdorf: The only bad tenants that we feel might be involved are those who disrespect the property or other residents. We are concerned where there may have been tenant-versus-tenant type of problems. The only type of bad tenant, I would say, is anybody who does not pay rent. But apart from that, we do not have problems. We work them out with our tenants. We are in this long-term business. Our tenants are our customers.

Mr Mahoney: I am sure I do not have much time, so I will be brief and go to the point, on page 11, of the $11,000,000 that you invested in work that you are now not going to be able to address as a result of Bill 4. What are you going to do about that? Would you consider continuing in the business that you are in now and are in in very many parts of this province, including my municipality, and where do you go from here?

Mr Griesdorf: There are two parts to your question. The first one is, what are we going to do? We have had to stop our capital program. We will not leave buildings in any hazardous state. If some emergency has to be looked after, we will look after that. Our program has stopped, to all intents and purposes. We will have to go back to the patching that I was concerned with and that we in the long-term landlord business are not happy about. We will have to re-examine every one of these capitals to see what can be put off for two or three years, hoping that whatever comes out of this legislation, we end up with something that considers the problems of long-term capitals.

The other question was about staying in the business? We are re-examining our staying in the business. We would like to build, but we are a little worried about that.

Mr Tilson: You commented on the minister's news release today, which I referred to. I would like you to direct your thoughts specifically towards the issue of capital expenditures. I think the minister has acknowledged that he has goofed by this announcement and I would like to hear your thoughts specifically in that area.

Mr Griesdorf: The first comment is that I am always worried that the government comes out with something to offset something else that it has done in its wisdom. They did not have to do a lot of this, because the landlords were prepared to pay for it, to finance it through long-term borrowing. Over a longer period of time -- this is the amortization I referred to on capitals -- yes, tenants would eventually have to pay for it. Instead, what we have got is perhaps the province, all the taxpayers, paying for it in this case.

The low-rise aspect of course will fund two thirds of the capital expenditures, but the landlord still has a problem with the other one third. If he is a small landlord without borrowing capacity, he has a problem. Of course, this does not have anything to do with the landlord who owns a building larger than the low-rise. I am not sure if it is four or five storeys that is considered low-rise, but larger buildings, six storeys, are not affected by this proposal.

Mr Tilson: Do you believe this is the start of the government simply taking over the payment of capital expenditures?

Mr Griesdorf: It is a concern of mine. If this is the direction the minister is taking, I am concerned that this is what he has in mind. This is not satisfactory, especially for the long-term maintenance of stock in the province.

Mr Tilson: I guess the general, overall effect on our taxation, what this will mean to our tax dollars if the government does it, is that astronomical expenditures could be involved, particularly when the ministry has given us specific examples of the percentages of buildings over 20 years old.

Mr Griesdorf: I agree with you. The previous speaker talked about buildings before 1940 he wants maintained. A lot of money is going to have to be spent on those older buildings.

Mr Tilson: I have one other question, Mr Chair, and that has to do with the comment, mainly by the government, on the subject of capital expenditures. They are saying, on the one hand, that landlords are premature in asking for capital expenditures. They are asking, for example, for complete overhaul of refrigerators where it may not necessarily be needed. On the other hand, they are saying that where you have given examples, perhaps wiring, plumbing and these sorts of things that have gone back 20, 30 years that are needed, you should have been doing this. It is a dilemma, I suppose, from the government's point of view. Have you any thoughts on or a response to those remarks?

Mr Griesdorf: I agree we have the dichotomy of, on one hand, keep capitals as a separate item from ordinary rent and, on the other hand, let's include them in the ordinary rent. All of these things you have mentioned do require attention. The replacement of appliances eventually has to take place because the parts are no longer available. We have a program of trying to replace condensers and other matters in our own company. However, eventually, we just cannot replace them any more.

I think we have gone overboard when we heard about a lot of luxury renovations and all the tenant advocates were very concerned that that is all that was being done. I would appreciate, and I am sure it is happening through these committees, if all of the representatives are finding out of what type of capitals are being done. They are not luxury renovations.

Mr Tilson: That was my question.

The Vice-Chair: Thank you very much for appearing. For the information of committee members, this concludes today's public hearings on Bill 4. They will recommence tomorrow morning at 9 o'clock at the city hall in London. For your information, the clerk tells me that Fred, the bus driver, is waiting outside the main door. We were supposed to board the bus six minutes ago. Likely, however, he will wait for us till 6:30. I would suggest to the members that they assemble their belongings and meet at the bus as soon as possible.

The committee adjourned at 1806.