Thursday 28 November 1991

Election of Vice-Chair

Rent Control Act 1991, Bill 121 / Loi de 1991 sur le contrôle des loyers, projet de loi 121


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

Vice-Chair: McClelland, Carman (Brampton North L)

Abel, Donald (Wentworth North NDP)

Bisson, Gilles (Cochrane South NDP)

Drainville, Dennis (Victoria-Haliburton NDP)

Harrington, Margaret H. (Niagara Falls NDP)

Mammoliti, George (Yorkview NDP)

Marchese, Rosario (Fort York NDP)

Murdoch, Bill (Grey PC)

O'Neill, Yvonne (Ottawa-Rideau L)

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

Turnbull, David (York Mills PC)


Gigantes, Evelyn (Ottawa Centre NDP) for Mr Mammoliti

Tilson, David (Dufferin-Peel) for Mr Turnbull

Winninger, David (London South NDP) for Mr Drainville

Clerk: Deller, Deborah


Baldwin, Elizabeth, Legislative Counsel

Richmond, Jerry, Research Officer, Legislative Research Service

The committee met at 1018 in room 151.


The Chair: The first order of business is the selection of a vice-chairman. Do we have any nominations for vice-chairman?

Mr Abel: I would like to nominate Mr McClelland.

The Chair: Are there further nominations?

Ms Poole: I move that nominations be closed.

Motion agreed to.

The Chair: Thank you, Mrs Poole. Carried. Congratulations, Mr McClelland.

The Vice-Chair: May all my elections in the future be so easy and straightforward. Thanks. I look forward to this.


Resuming consideration of Bill 121, An Act to revise the Law related to Residential Rent Regulation / Projet de loi 121, Loi révisant les lois relatives à la réglementation des loyers d'habitation.

Section 15:

The Chair: The business of the committee is to conduct the clause-by-clause examination of Bill 121. Presently, members will be aware, we are discussing a Liberal amendment to subsection 15(3).

Ms Poole: Although I was not here last week, I understand that we are in the midst of debating a Liberal amendment to subsection 15(3). Is that correct?

The Chair: That is correct.

Ms Poole: I think this amendment is very important and gets to the crux of the matter when dealing with tenant protection. In my riding of Eglinton, one of the most contentious issues that came up was that of luxury renovations, of tenants having things replaced that did not need replacing. They had perfectly beautiful cabinets in kitchens and bathrooms that were in excellent condition, and the landlord tore them out to put in pre-fabricated cabinets, inferior products. It became an issue of, was it necessary to replace or repair that item?

This is what this goes to the heart of. If we are looking at the issue of neglect, it is extremely difficult to prove neglect. I have a great deal of problem with the government having a provision in this bill that rent reductions can occur because of neglect; however, it does not define it. This makes a lot more sense, because it makes the "necessary" component the test, as opposed to "neglect." Tenants in the past have expressed great reservation about the criteria for neglect. The government has changed it, but what it has done is say: "We're not going to define `neglect.' Instead, we are going to leave it up to the rent review officer to determine whether it is neglect."

I can tell the government that tenants are not happy with that. Landlords are unhappy with that. They say: "We want it defined. We want to know what we're dealing with before we get into this." The type of test we have proposed in subsection 15(3) is a much more realistic test. It is one that can be verified, that can be documented. You can use amortization tables, but certainly you could use expert testimony about whether something needed to be replaced or not.

When it comes right down to it, the Liberal caucus is saying, "Either define `neglect' or remove it from this act." We are saying: "Make a test that is enforceable so that tenants and landlords will know the ground rules before they go to rent review. It is unfair to expect anything else."

I can tell this ministry that if you are relying on rent review officers to make those types of decisions, the people of this province do not have faith they can do that. They do not have faith about consistency. They do not have faith in their training and that they will make the right decisions. I think you are going to find there are going to be widely varying precedents established by different rent review officers because you are not giving them the guidelines they need.

If you are then going to say, "Okay, we'll do it through regulation," I again have a problem with that, because regulations are at the whim of cabinet. Certainly the legislative process has no part in making the regulations. They come to us as a fait accompli, an order in council, and the Legislature has no opportunity to have input or debate or anything else.

What the Liberal caucus is saying with this amendment is, "Define `neglect' or remove it, and put in a reasonable test," and that is what our amendment is all about.

Mr Marchese: I have some sympathy for the idea, but I argue differently, however. What they are arguing is to substitute something else for subsection 15(3). In my view, there are two different notions here; both need to stand separately. Subsection 15(3), in my view, needs to remain, because neglect is something that needs to be there, and if something is being replaced as a result of not having been done over a period of so many years and it should have been, then it needs to remain as it is.

The whole point of what they are arguing should be added is, in my view, also worthy of being considered, that a system or thing that is replaced does not require replacement. I believe their substitution reads differently, but it has the same effect.

To argue for substitution is a mistake, but to include the addition is a reasonable thing, because it gives tenants double protection from something that could become vague in the legislation. Although it is quite possible others will argue that it is quite clear, I believe it could result in some vagueness, to the extent that some things could be replaced and would be eligible. The point of including by addition, as opposed to including by substitution, I would argue is useful because it does not take away from what is there in section 15, and it adds to subsection 15(3).

I would like to ask the minister whether or not she believes that by adding what the Liberals are suggesting would give tenants more protection and would not take away from what is already there. Therefore, why not include it?

Ms Poole: On a point of order, Mr Chair: I have to go up to the House in approximately two minutes to speak to a resolution. I wonder if, since it is a Liberal motion, I would be allowed to respond now, since I may not be here when we complete the vote.

Hon Ms Gigantes: That is fine with me.

The Chair: I think we have unanimous consent for that.

Ms Poole: Thank you. I appreciate the indulgence of my colleagues.

I perhaps should clarify that I have absolutely no problem in supporting the government concept of "neglect" as long as you define it. I concur that they could march side by side with having both neglect and the matter of replacing something if it is necessary. What I would really like to clarify is that we cannot accept your amendment regarding "neglect" unless it is defined. If it is in addition to it, that is not a problem, but the definition must be there for us to support it because we do think it is fair to the tenants and landlords of this province to have to go to rent review and not know what the rules of the game are. That is what it comes down to. I appreciate your comments in the spirit in which they are meant, but we do insist the definition be there.

Hon Ms Gigantes: I will try to address this very briefly. To begin, our experience of the determination of "neglect" comes out of Bill 51, where "neglect," in order to be a determinant of a decision by a rent review officer, must be "ongoing," and there is another phrase that modifies it which I have forgotten.

Ms Parrish: "Deliberate."

Hon Ms Gigantes: "Deliberate" and "ongoing": Those are the phrases that have made it so difficult for tenants to get any redress under the term "neglect." It is those modifications in Bill 51 that we know about, and the Liberals, having brought in Bill 51, now complain about experience under that bill.

To follow up your point, Mr Marchese, I have no objection to the addition of the Liberal amendment, but I do strongly object to the substitution of that clause, "A capital expenditure to replace a system or a thing is not eligible if the system or thing does not require replacement." I will not accept it as a substitute for the intent of this subsection 15(3), which is that we want to take account of neglect.

We believe that we can call upon rent review officers to determine neglect as long as it is not modified by "ongoing" and "deliberate." We think that is a very important part of what we are proposing to do here in terms of providing protection for tenants. If the Liberals want to amend their resolution to say that they want to add it to section 15, I have no objection. However, I do have an objection if they are trying to substitute it for subsection 15(3).

Ms Poole: As a point of clarification just before --

Hon Ms Gigantes: I thought you were gone.

Ms Poole: I should be up there right now, but if the minister is saying that she has no objection to our amendment if we renumber it, I would be delighted to make a friendly amendment to my own motion to renumber it.

Hon Ms Gigantes: No. That is not what I said. I said that if you remove the first part of your motion, which says that subsection 15(3) of the bill be struck out and the following substituted," I have no problem with the addition which is the essence of what you are adding.

Ms Poole: That is right. I have no problem with that, with renumbering it as paragraph 15(3)1 and taking out the part that says subsection 15(3) be struck out. We will still vote against subsection 15(3) because we cannot accept it without a definition. That is basically the position.

Hon Ms Gigantes: Could I propose the compromise suggested by Colleen Parrish. We had originally taken out the clause which would now be added, ie, "A capital expenditure to replace a system or thing is not eligible if the system or thing does not require replacement" precisely because we felt it was covered by the cost no longer borne amendment we are bringing in. We felt there would be absolutely no incentive on the part of landlords to replace a thing that did not need replacement with the cost no longer borne clause in there. However, there is no harm being repetitive. I do not think it is redundant to any extent at all.


All we would have to do then is revert. We would withdraw our amendment, which is to delete the extra section that we felt had become additional and unnecessary. That would take us back to the original bill which includes the phrase, "A capital expenditure to replace a system or thing is not eligible if the system or thing does not require replacement."

Does that make everybody happy?

Mrs Y. O'Neill: I understand.

Hon Ms Gigantes: It suits me fine.

The Chair: Thank you, but we also have some more speakers on this bill.

Hon Ms Gigantes: That is fine; just testing.

Mrs Marland: The previous comments by both the government member and the minister point out the concern I was speaking to a week ago when we met to deliberate over this poorly drafted piece of legislation. I think Mr Marchese was saying that the Liberal motion would result in some vagueness. The whole problem with the government amendment to subsection 15(3) is that it is vague. We are trying to get a definition of "neglect." Nowhere in this bill is there a definition of "neglect." The minister in her response a moment ago just said, "It is `ongoing' and it is `deliberate.' It is ongoing and deliberate neglect."

Mr Marchese: That was taken out.

Hon Ms Gigantes: That is the current system, Margaret.

Mrs Marland: Then you are taking out "ongoing" and "deliberate?"

Hon Ms Gigantes: Yes.

Mrs Marland: That gives even less support or description for what "neglect is." I ask you again to give a definition in this bill as to what is "neglect."

Hon Ms Gigantes: "Neglect" is something that will be determined by the rent review officers.

Mrs Marland: Okay, so we are back to the determination by another person or persons.

Hon Ms Gigantes: As opposed to whom?

Mrs Marland: As opposed to the bill determining what "neglect" is. The government brings in a piece of legislation that is as powerful as this to the future of rental housing in this province and then says: "I can't answer that. It'll be determined by the rent officer." If you cannot give the answer, how is the rent officer going to give the answer?

Hon Ms Gigantes: By the facts of the case.

Mrs Marland: From this piece of legislation, that rent officer does not even have any guidelines towards the description of "neglect." It simply says "as a result of neglect." A week ago you said that if the rent officer does not have the qualifications to make a decision on neglect, then we call in the municipal authorities. I can assure you that I have discussed this legislation with the mayor of the municipality where I live, Mayor Hazel McCallion. Mayor McCallion assures me they do not have the number of staff that would be needed, nor is it their jurisdiction to run around arbitrating between landlords and tenants as to what is defined as "neglect."

Hon Ms Gigantes: No, it is not.

Mrs Marland: A week ago when I asked what kind of qualifications rent officers were going to have, or the rent policemen or whatever we want to call them, you said, "They're going to have some training," but you could not be very specific about what kind of qualifications they would have to have to make a decision that has tremendous implications for the people who have invested in this property. If you are saying to your rent officers, "Come into the ministry. We'll train you for six weeks or whatever it is, and then you can run out on the road with this bill and listen to complaints about neglect and you're going to be responsible for deciding what is neglect and therefore what is eligible for one type of expenditure or another," I just do not think that is being realistic.

I think it is being unjust. The tenant may be totally right about claiming an example of what he thinks is neglect, and it may be very severe neglect in that tenant's mind, but because the bill does not define "neglect," you are leaving the interpretation to a number of third parties, and not only to your rent officer because you have already admitted that the rent officers may not have the qualifications to define it. I think a week ago -- I obviously do not have the benefit of Hansard because we do not get Hansard within a week for committees, unfortunately -- I asked if, in a case in which they are talking about the structural integrity of a building, they are going to be structural engineers, and you said, "They may have to call in experts and it will have to be expert evidence."

Hon Ms Gigantes: I do not like to be misquoted.

Mrs Marland: Then please correct it. Please tell me what you said.

Hon Ms Gigantes: I never discussed this issue.

Mrs Marland: I am sorry. Then it was your parliamentary assistant. Maybe you were not here at the time we were discussing it.

Hon Ms Gigantes: I do not think you were here.

Mrs Marland: I beg your pardon?

Hon Ms Gigantes: I do not think you were here if you thought I was saying this.

The Chair: Perhaps the committee would come to order for just a moment.

Mrs Marland: Excuse me; let's be clear about this. Minister, when you are not here and the parliamentary assistant sits in your chair, who is speaking for the government? Who is giving me these answers? Are you saying that if you are not here you are not responsible for the answers? Those were the answers I was given a week ago.

Mr Tilson: Maybe this is all a mirage.

Mrs Marland: If you are sitting there now and saying, "I didn't say that," I respect that. Perhaps you did not give that answer to that specific question, but when your parliamentary assistant sits there in your chair and receives the same advice from your staff, are you saying that does not stand? If that is so, I accept it.

Hon Ms Gigantes: I am saying I was not here and if you thought I was you are mistaken.

Mrs Marland: All right. Then let's deal with it today. You are here today. Would you like to tell me today what qualifications the rent officers are going to have to define "neglect"? Would you like to tell us how this bill is going to work around this section?

Hon Ms Gigantes: Yes. It will be defined in practice based on the facts of the case by rent officers who are trained in the application of this bill. If there is controversy about the first two or three decisions that are made under the bill, then there will be a request, I am sure, for an additional judgement on the facts of the case. Then we will very soon have precedents set, very much as we do under all kinds of legislation. We do not tell people who are making decisions, whether they be rent review officers, pay equity officers, any kind of delegated authority decision-makers, exactly how to make judgements, because judgements are judgements and they depend on the facts of the case.

I think a question of neglect in terms of the maintenance and the physical structure of a building is something that can be verified. This is not a question where a rent review officer wades into a situation, talks only to impressionable tenants, never inquires from a landlord what the situation is -- not at all. The officers are paid to make a balanced judgement based on the facts of the case.

Mr Tilson: It is going to be multiple choice.


Mrs Marland: Since you did not answer the question last week, could you just clarify the process for me here? When you are not in the chair and your parliamentary assistant answers the questions with the help of the same staff you have, is that an answer on behalf of your ministry?

Hon Ms Gigantes: Yes, of course it is.

Mrs Marland: So when we get the Hansard of what the answers were from last week to my questions and it is not the same as you are saying today --

Hon Ms Gigantes: Do you mean that Margaret Harrington did not use the same words I used today? Is that what you are suggesting? Do you not think a rent review officer would ask for advice on a particular case of neglect? Does that not seem reasonable to you? What kind of weird world do you think is out there?

Mr Tilson: We are afraid.

Mr Winninger: You should be afraid of yourselves.

Hon Ms Gigantes: Mr Chair, I do not think this member is convincible on this question at all.

Mrs Marland: Mr Chairman, I am sorry the minister is getting so exercised because she is being questioned on her bill. That is her prerogative if she wants to get exercised.

I am simply saying there is no definition in this bill for the word "neglect." This is a very pivotal section. This section is very significant, because around that word "neglect" whirl thousands and thousands of dollars, maybe millions of dollars if we are talking about a major structural piece of work to be done on a huge apartment building. When the minister said a few moments ago that there would be additional judgement, would the minister please clarify for us what "additional judgement" means?

Hon Ms Gigantes: We will be getting to sections of the bill which the member should be aware of where we will be getting into the question of reviews of decisions and the possibilities for reviews. If I could, I would like to read the words of Ms Harrington from last week in response to Mrs Marland:

"Certainly your point is well taken that, you know, if a structural engineer -- the opinion has to be a valid decision. It has to be someone who knows exactly what has to be in the building, structurally. Now, I would like to ask Colleen to comment on whether municipal inspections are going to be involved in this or whether it is going to be from the rent review office. Definitely, we have to have people who are qualified."

Mrs Marland: Excuse me. Could I have a copy of the Instant Hansard?

Hon Ms Gigantes: If the member is pretending that there is a huge rift in the government position on this, it is just a time-wasting device. Obviously, if there is a question of structural integrity that causes danger to the health or safety of tenants, notwithstanding the mayor of Mississauga, it is a matter that the building inspectors of Mississauga will be interested in.

Tenants certainly have a right to call upon them in such cases and I am sure the decision of a building inspector would be taken into account by the rent review officer as he or she makes a determination in such a case. In cases where there is a simple question of neglect that may not affect health and safety, I think even a person of Mrs Marland's capabilities might be able to listen to a landlord, listen to tenants and make a fair determination.

Mrs Marland: She is being pretty insulting. Minister, I take personal exception to your comments.

Hon Ms Gigantes: Yes, you always do.

Mrs Marland: For you to say, "even a person of my abilities," is a very insulting statement. If that is the way you want to play, I do not plan to lower myself to that kind of debate. I have never had a minister be so insulting, Mr Chairman, as to say, "even somebody of my ability." That is pretty low for a minister to say something like that.

If the minister thinks that my questions are time wasting, then that is her opinion. If this legislation was so terrific and so comprehensive, it would not have required 99 changes by the government after it brought it in, nor would we have a minister who says she personally needs to give more thought to some of the matters that will be associated with the act. Can you imagine a minister bringing a bill into this Legislature while she is still thinking about it? I think that is a reflection of what we are dealing with.

Hon Ms Gigantes: It is a misquote.

Mr Tilson: Hansard is wrong.

Mrs Marland: I am sorry; it is not a misquote. This is a Hansard I have, and for the benefit of the minister I will read it.

The Chair: Perhaps we could return to the debate on the amendment to subsection 15(3). To be helpful, Mrs Marland, your party has an additional amendment to this section.

Mrs Marland: That is true, but I just want to clarify the record, Mr Chairman, so that there is no question. The minister said, "Some of the matters that will be associated with the act I personally need to give more thought to." That is an accurate quote.

Hon Ms Gigantes: We were discussing the regulations, not the legislation.

Mrs Marland: The legislation refers to "neglect." I am asking for a definition of "neglect." You referred a moment ago to receiving additional judgement. Where will the additional judgement take place, in court? Are you going to set up a tribunal to deal with additional judgements on this bill? Can you answer that question?

Hon Ms Gigantes: Yes, I can answer it by suggesting you read the amendments we have tabled.

Mrs Marland: It does not matter how many amendments there are dealing with how the judgement or where the judgement will take place, if we do not have a definition against which to measure neglect, so I am asking for a definition of "neglect."

Hon Ms Gigantes: It will depend on the facts of the case, as I said before.

Mrs Marland: So you do not have a benchmark for how those facts of the case will be measured; it is just the facts of the case.

Hon Ms Gigantes: Both sides will present their views. A rent review officer will make a determination.

Mrs Marland: Are they called rent review officers or rent officers?

Hon Ms Gigantes: They are called rent officers now.

Mrs Marland: Okay, that is what I thought. The rent officer is going to make the determination in the case.

Hon Ms Gigantes: That is correct.

Mrs Marland: If it is something involving the structural integrity of the building, something major, like concrete balconies for example --

Hon Ms Gigantes: I would hope that --

Mrs Marland: I have not finished the question.

Hon Ms Gigantes: You have asked it five times, so I thought I might answer it a second.

Mr Abel: I thought it was six.

Mr Tilson: On a point of order, Mr Chairman: the question was not asked. She was in the process of asking the question and I find it most rude of the minister and Mr Abel to interrupt her while she is asking her question.

The Chair: That is not a point of order. Mrs Marland.

Mrs Marland: If it is something requiring an interpretation of the structural integrity of the building -- we are talking about something that could involve thousands and thousands of dollars -- to determine whether the structural integrity of that building today is at risk because of neglect is not something the rent officer could determine, unless the minister was willing to tell us what kind of training she is going to give her rent officers. Can you answer that question, Minister?

Hon Ms Gigantes: No, it is not my job to train rent officers. What I know is that the rent officers who will be employed to carry out the measures in this bill are people who have had experience, some of them now with three pieces of legislation that affect rents in this province. They have built up a fair amount of experience. They will build up new experience and make new decisions under this legislation.

While those decisions may not please Mrs Marland, I would like to suggest that in the case where the structural integrity of a building is in question, it might be advisable for both Mrs Marland and Mayor McCallion to think about whether a building inspector is not an appropriate person to call in. If that is the case, then the question becomes for the rent officer, is there a problem here and what has created the problem? Has there been neglect which has created the problem? Certainly a building inspector would be very helpful to that kind of decision. The landlord will have information which he or she will wish to provide to the rent officer, as will the tenants in their experience with both the maintenance and the capital expenditures that have been made in the building. That is how neglect will be determined.


Mrs Marland: You said it is not your job to train the rent officers. I think when I asked the question last week about who was going to train the rent officers, I was told that you were going to.

Hon Ms Gigantes: Me, personally?

Mrs Marland: Do you represent the ministry or not? On whose behalf do you answer these questions?

Hon Ms Gigantes: The question is rather semantic, is it not?

Mr Abel: This whole line of questioning is unbelievable.

Mr Bisson: Quite right.

Hon Ms Gigantes: I am not going to continue answering questions which have no meaning.

Mrs Marland: Who speaks for the ministry, Mr Chairman? Whom do I ask these questions? Obviously when I ask the minister if she is going to train the rent officers, she knows it is her ministry.

Hon Ms Gigantes: Mr Chairman, I will make an offer right here that if Mrs Marland wants to come to a training session for the rent officers so she can see who physically trains them and what they learn, I would be delighted to make sure she has access to the session.

Mrs Marland: That is not the question I am asking. I am asking who is responsible for training the rent officers. I asked what training they were going to have. The answer I am getting this morning from the minister is that they have a fair amount of experience because of their work with previous legislation. She said it is not her job to train them. She knows that the question is, whose responsibility is it that those people are trained? Who is going to set the criteria, Minister, for who those people are and what qualifications they need? Maybe you could answer that, if they are going to make a judgement.

Hon Ms Gigantes: I will just repeat my offer to the member that if she would like to make suggestions or participate in the session, I will make sure she is welcome.

Mrs Marland: No, that is not my job. I am not the Minister of Housing and I do not wish to take part in training the rent officers or setting the criteria for who they are. That is your job. You are the Minister of Housing. I am simply asking you, if somebody wants to be a rent officer and you want that rent officer to enforce your legislation, what kind of qualifications do you want that person to have?

Mr Chairman, could the minister answer the question? A lot swings on her rent officers. When I say a lot, I am talking about the future of whether tenants are going to be able to live in some of these buildings that are under challenge or in question. If the minister thinks it is humorous and all she can do is laugh, which is what she is choosing to do, then obviously the legislation is not significant enough.


The Chair: Point of order, Mr Bisson?

Mr Bisson: It is quite all right; we will let the verbatim continue.

Mrs Marland: The significance of this legislation is that the future accommodation of tenants in this province is going to depend on some of the aspects of this legislation. The future investment in rental accommodation and the existing investment in rental accommodation is going to depend on this legislation. The minister has chosen to have rent officers enforce this legislation. I am simply asking what the criteria are for those rent officers to be selected and trained to enforce the legislation. What makes them equipped to enforce this legislation? What kind of additional training will they have? These were all questions that I asked last week. Since the minister feels, as she said, that it is not her job, then I assume there is somebody in her ministry under her direction. If this bill is under the sponsorship of the minister and part of the bill is to have rent officers, then this minister has to say who they are, what their training will be and what their required attributes have to be before they apply. What makes them eligible to be a rent officer? It is a very simple question.

Hon Ms Gigantes: If the member would like a piece of paper on which is written the job classification and job duties of a rent officer, I would be happy to provide that. If she would like a course outline of what previous rent review officers have been trained on, I would be glad to provide that. We do not have a course outline yet, I would suspect, for the training that will be additional to the mandate of the rent officers under this bill, because the bill has not passed yet, and at the pace this member is proceeding it may never get passed. However, if all these things would ease her mind, we would be glad to give her the paper.

Mrs Marland: After all the months you have had this draft, you do not yet have a course outline, yet you want to rush this bill, have it passed before Christmas, and you are going to turn the job over to rent officers perhaps on January 1. We are talking about a month away and you do not have a course outline. Are you going to train them in the next month over Christmas?

Hon Ms Gigantes: What we have to train them on will very much depend on what happens on clauses like this. If we could get to it, we can decide it. We have said we hoped to be able to proclaim this legislation by April.

Mrs Marland: I would like to see what the requirements are for a rent officer. I would like to see that in writing. I would like to see what training they will be given to make these kinds of judgements. I would like to see the prerequisite for their hiring. I also would like to see it in the next two weeks.

I asked for reports during estimates on shelter subsidy which I still have not received, Minister, which I was promised in estimates. You promised to send me something then which I still have not received. I would appreciate receiving that definition of who it is you will be hiring, what kind of training they will have and what kind of expertise they will have. If that is what you are willing to give me, that is fine.

Hon Ms Gigantes: You have to understand that this will not tell you what will be the course outline for rent review officers under Bill 121, because Bill 121 is not passed.

Mrs Marland: It is not passed, but you know it is going to have a section referring to neglect.

Hon Ms Gigantes: We very much hope so, Mrs Marland.

Mrs Marland: With the balance of government members on this committee, you can have anything you want in this bill. You know that as well as I do, so I do not think we need to play games about that.

Mr Bisson: We do not play games.

Mrs Marland: It is certainly nice to have the government members prattling away. Why do they not ask their own questions, instead of interrupting other people?

The Chair: Directly to the Liberal amendment on subsection 15(3), please.

Mr Tilson: They are here to vote.

Mrs Marland: Yes, I think that is what they are here for. I am supportive of this amendment by the Liberal opposition members of this committee.

Mr Tilson: Before some questions that I would like to ask the minister -- or the parliamentary assistant, at least -- just to clarify what is now before us, are we on the verbatim amendment put forward by the Liberals, or are we talking about a combination of what was proposed by the government and the Liberals? Mr Chairman, I am just asking you to tell me what specifically is before us now.

The Chair: Specifically before the committee is a Liberal amendment to subsection 15(3).


Mr Tilson: The issues raised by Mrs Marland are most relevant because the act clearly does not define "neglect." There are no regulations that define "neglect." We have been told that unnamed, untrained, undescribed rent officers will in due course tell us what "neglect" is. It is most difficult to create some sort of certainty for the housing industry, whether it be the tenants, the landlords or anyone else involved, as to what neglect is. I would go further than Mrs Marland and ask for information as to what the training requirements of rent officers are. Since it is so tied in with the issue of neglect, I do not see how we can possibly vote on this section until we get from the government either a definition of "neglect" or specifics as to what the qualifications and training of rent officers are. If it is to be the position of the government that the rent officers will decide what neglect is, we need to know whether they are qualified to tell us what neglect is. I think her line of questioning is most relevant, although I honestly believe the information should come to us before we vote on the section.

I am going to ask a series of questions of the minister, getting back to the issue of neglect. The minister has informed us that in due course, through time, through precedent, the rent officers will determine what neglect is. What is that? Does that mean it is the luck of the draw if you are a tenant or a landlord? What sort of guidelines are going to be put forward so the tenants and landlords will know what neglect is? Case law, as you well know, could take a considerable period of time to develop. There may be all kinds of variations as to what neglect is. I think it is relevant that you tell us exactly what neglect is.

Hon Ms Gigantes: I believe I have responded to that question in this sense: Neglect is what it is determined to be, using a kind of dictionary definition of "neglect" that you and I would use in everyday language, once a rent review officer has informed himself or herself about the facts of the case and made a reasonable and considered judgement, as a rent review officer is both mandated and required to do.

Mr Tilson: You have told us what it does not include. You have told us that it will not include something that is "ongoing" and "deliberate." Did I understand you correctly?

Hon Ms Gigantes: No, you certainly did not. What I pointed out is that the existing legislation defines a decision to be made as a very narrow scope of neglect which is extremely difficult to determine; that is, either "deliberate" -- as you know, determining whether somebody did something deliberately makes legal judgements very difficult -- or "ongoing," the modifying word "ongoing," persistent. That makes the determination by a rent review officer very difficult, much more difficult.

Mr Tilson: Could you elaborate?

Hon Ms Gigantes: We are providing here what we believe is a much more reasonable scope for determination of neglect.

Mr Tilson: That is what I am trying to determine, because you have said that "ongoing" and "deliberate" is too narrow and that you wish to widen it. Can you tell us what you feel it should be widened to? I need your clarification. If that is too narrow, what is it being widened to?

Hon Ms Gigantes: If I read a piece of legislation that says something has to be deliberate before it is determined to be a matter to be decided, then I know I have to enter into proof of whether somebody purposefully set out to do something or not. However, if what is to be determined is the effect, which is neglect, whether that effect is achieved by a summoning of purpose and slow advance on the object is not relevant at all. What we are looking at is a pattern that really points to something that in common sense, in a practical kind of decision, we could determine is neglect.

If the member would be interested we could draw out piles of correspondence from the ministry where tenants have found that the restrictive operation of a decision around "neglect" that exists under Bill 51, the current legislation, has not provided them with satisfactory protection in terms of their maintenance.

Mr Tilson: How will a rent review officer know what to do? What guidelines will a rent review officer have? You have now removed the definition in Bill 51.

Hon Ms Gigantes: Which never worked. There were no cases.

Mr Tilson: You can say that, but there is now nothing. Someone makes an allegation that there has been neglect. How is the rent officer, or the director -- I suppose the director could do it as well -- going to determine what neglect is? You can say it will depend on the facts of the case. So a set of facts is given which, from a landlord's and tenant's position, or anyone else's position because you may get into a third party's positions -- the rent officer hears these position. How will he or she determine that there has been neglect? You have no guidelines.

Hon Ms Gigantes: By using common sense. We could argue cases. I could cite you hypothetical cases. You could cite 14 hypothetical cases that would presumably cause me to scratch my head and think some more. I think what we are calling upon our rent review officers to do in these circumstances is to make a judgement, based on the information from both sides, that is practical and commonsensical. What is being determined under this section is whether the landlord may go ahead and make an application for extra guideline rent.

Mr Tilson: That is exactly why Mrs Marland was going into the issue of the qualifications and training of rent officers, because we may disagree over what we think is common sense.

Hon Ms Gigantes: The world is like that.

Mr Tilson: You can make all the smart remarks you like.

Hon Ms Gigantes: That is not smart. It is true.

Mr Tilson: There is no question, that causes a great deal of problems, particularly if you have a number of rent officers. Does that mean that for an individual making an application to try to determine that there is neglect, it is a matter of luck what rent officer he or she gets? They will be all over the map.

Hon Ms Gigantes: Any time we delegate authority for decision-making in law, we are opening ourselves to the hazards of particular judgements. That is the way the world works and it is going to continue working that way. We cannot define how people make judgements, given information. We give them access to information. We require that they look at information, that they review information from both sides and make a determination with all the experience they can bring to bear on it.


Mr Tilson: This is a whole new issue for me because I do not know of one piece of legislation anywhere in the democratic world where someone says that you are breaking the law -- the bill says you are breaking the law. It tells you exactly how you are breaking the law and that is called statute law. It has been passed by the Legislature. Those laws are then interpreted by judges and that, as you have said, is exactly what case law is.

In your case, you are not telling the judges, namely the rent officers, what law is being broken. You are using the word "neglect" and not defining it. I think you are going to create a great deal of difficulty for those initial decisions. You are delegating the passing of a law to non-elected people of this province who may not have any training in the area, as suggested by Mrs Marland, and she asked quite a serious series of questions. We have no idea who these people are. We have no idea what their training is. We have no idea whether they are qualified to make those statements. We have no idea whom they are going to seek their advice from. Indeed, are they required to seek advice from someone? They could say, "I think that is neglect," just because. That is not good enough. It is irresponsible to ask us to support this type of law when we do not know what it means.

Let's assume you continue with that and ignore the suggestions made by me and Mrs Marland and you say, "Okay, eventually case law will be determined." What does that mean? Will there be a series?

Hon Ms Gigantes: I did not say "case law."

Mr Tilson: Will you be publishing decisions of cases so landlords and tenants will be able to look up what the definition of "neglect" is?

Hon Ms Gigantes: I did not use the term "case law."

Mr Tilson: I wrote it down. You did.

Hon Ms Gigantes: I probably referred to precedents, which means that something happens in the same field of activity and you expect that over time the determinations will build up a kind of framework in which people can look up the public record, because these are public decisions.

Mr Tilson: That is my question. Are you going to publish reports that landlords and tenants can purchase, or attend some public facility to look up these reported decisions?

Hon Ms Gigantes: Could I ask Ms Parrish to describe to us exactly what is done currently and what will be done under Bill 121.

Ms Parrish: I am not aware of any published system now, but all these decisions are public record decisions and you can certainly obtain copies of them if you want. There is the capacity to publish, if you want.

Mr Tilson: I do not want any of this. You are the one who wants it -- not you, Ms Parrish, but the government.

Ms Parrish: The Statutory Powers Procedure Act allows you to have reports and it may very well be that members of the public will say that would be a good service the ministry could provide, and could be considered, along with other forms of client service that might be helpful to people.

Mr Tilson: We now have a statement by the minister that we are going to find out what "neglect" means through time. If that is the position you are going to take, it will take years to determine what the word "neglect" means. You are quite right, there are many different cases, many different varieties of situations. It will take years to define what "neglect" means, as well as other definitions. If you are not going to put it forward in the regulations -- it appears you are not even going to put it forward in the regulations -- it is going to be eeny, meany, miney, mo as far as the rent officers are concerned. Therefore, when you say that the issue is precedent, I think it is a legitimate question, because landlords and tenants are going to want to know what that and other words mean. If you say it is public knowledge, how can they find that out? How can they find out all the decisions made with respect to the word "neglect"? How will they find that out? That is a question to either Ms Parrish or the minister.

Hon Ms Gigantes: The rent review offices are open to provide information for anybody who may require it. I am sure all staff at the rent review office would be most pleased to try and give an appreciation of decisions that are being made to anybody who would like to know.

Mr Tilson: Will all the decisions involving neglect be indexed and kept in a record somewhere so that --

Hon Ms Gigantes: No, it is certainly not my intent to order that.

Mr Tilson: If you are relying on the issue of precedent, how will the members of the public know what that precedent is if you are not going to do that?

Hon Ms Gigantes: I am sure we will find ways without running a complete library system, indexing, cataloguing and the whole thing.

Mr Tilson: That is what you are proposing. You are proposing a library system.

Hon Ms Gigantes: No, I am not.

Mr Tilson: How in the world am I going to find out what the word "neglect" means if you are not going to publish these decisions?

Hon Ms Gigantes: There is a point at which trying to answer Mr Tilson's questions reaches diminishing returns.

Mr Tilson: I am sorry; I did not hear your answer.

Hon Ms Gigantes: I said there is a point at which attempting to answer your questions reaches diminishing returns.

Mr Tilson: All right; if you do not want to talk about that, let's talk about something else. You have already used the words "structural integrity," tying that into what "neglect" means. We have heard throughout these hearings, and I appreciate you have not had --

The Chair: Just to remind you, we are dealing with the Liberal amendment to subsection 15(3).

Mr Tilson: The whole issue of neglect is tied in with all of this.

The Chair: I would also remind you that your party has an amendment to this section.

Mr Tilson: Yes. We will be submitting that in due course.

The minister has talked about the issue of structural integrity and that it has an effect on the subject of neglect. Let's just talk about specifics. We have had many delegations come to us around this province that have talked to us in particular about the housing stock that is 20 years or more in age, which is 75% of the housing stock of this province. We have heard that there are many situations -- whether it is wiring, plumbing or concrete work -- that are not discovered, that simply cannot be discovered until there is a problem on any of those examples. Dealing with those specific areas, problems that cannot be discovered -- it is physically literally impossible to discover those areas until a problem occurs -- is that neglect under your bill?

Hon Ms Gigantes: That would be determined by the facts of the case.

Mr Tilson: I am going to create a factual situation for you.

Hon Ms Gigantes: I am not willing to engage in those.

Mr Marchese: She was asking for you to continue, I think.

Mr Tilson: Let's take a building where the plumbing, which is behind plaster or behind drywall, has been there for 20 years or more and a problem occurs. Is that neglect?

Hon Ms Gigantes: I do not think it advances our understanding for hypothetical questions to be raised and for the member and I to sit and discuss hypothetical situations which might arise. First of all, we are making up these situations, and how they are framed then becomes the matter of the debate rather than what the question purports to be about, which is the definition of "neglect." It is clear to the member that the government does not intend to provide a definition of "neglect." All his vain attempts to try to create cases which do not exist in order to make me -- I am not a rent officer -- make a determination of neglect just do not advance civility at all and are not going to answer his problem, which is that he does not wish neglect to be part of the consideration by the rent review officer when an application by a landlord is made for a rent increase over guideline.


Mr Tilson: You can say that all my remarks are in vain and I find that discouraging. Mrs Marland and I are talking about an area where we do not understand what the government's position is. We are asking you to change it, and hopefully you would at least give us the courtesy of listening rather than saying it is all in vain.

You have made a comment that the definition put forward under Bill 51 was unsatisfactory, that it was too narrow and you were going to widen it. You will not give a definition of "neglect." You say that will be determined. The reason I am creating a hypothetical situation is just because I do not understand how you are widening that definition. I do not understand what it is being widened to. You say it is being widened. I do not know what that means. Does that mean simply that someone, a tenant, could come forward and say, "The landlord isn't doing something; therefore that's neglect"? Are you telling me the rent officer has the discretion simply to accept a statement like that and say that is neglect? Is that what you are telling us?

Hon Ms Gigantes: I told you exactly the opposite. I said that the rent review officer has both the mandate and the responsibility to receive information from tenants and landlords and make a determination. That is exactly the opposite of what you have just suggested I said.

Mr Tilson: I am sorry. If I am wrong, please correct me, but you have told us that the definition of "neglect" is going to be completely discretionary on the rent officer. That is what you have told us.

Hon Ms Gigantes: I said the rent officer will make the determination.

Mr Tilson: That is called complete discretion. That is what that is.

Hon Ms Gigantes: No, the rent officer has the mandate and the responsibility to talk to both sides in such a case.

Mr Tilson: Based on what facts, what determinations, what criteria?

Hon Ms Gigantes: Based on the facts of the case.

Mr Tilson: But what are the criteria, having heard the facts, that will determine neglect?

Hon Ms Gigantes: That will depend on the case.

Mr Tilson: Again, they listen to the facts. What are the criteria for those initial cases?

Hon Ms Gigantes: I suggested, if you had been listening --

Mr Tilson: I have been listening.

Hon Ms Gigantes: -- that a practical kind of commonsense judgement is to be used.

Mr Tilson: How will they determine that? How will they determine the practical common sense?

Hon Ms Gigantes: They will have to make a judgement, as indeed any number of hundreds of thousands of delegated decision-makers do, not just on behalf of government operations but on behalf of business operations, day in, day out. In dealing with activity in human society, we do not require everybody who makes a decision through delegated authority, either in public service or in private service, to be hidebound by 1,400 clauses determining the scope of judgement.

What we do know is that the past legislation, the legislation under which we are still operating, has provided such a narrow scope of decision-making by rent review officers that it has been totally ineffective. We wish to broaden the practical area of decision-making of the rent officers under Bill 121 so that they have the authority, delegated by this Legislature, to make a commonsense and practical determination of whether a landlord should be allowed to proceed with an application for a rent increase that will be above guideline. If the rent officer determines that there is neglect which has caused this application, then the application shall not proceed. That is what was proposed.

Mr Tilson: I suggest that what you are saying is similar to suggesting in the Highway Traffic Act that you are speeding and it is up to the police officer to determine whether you are speeding. Under the Highway Traffic Act, there are sections that say what speeding is in specific areas. It is quite specific as to what speeding is. Making that comparison, you are saying: "We are not going to say how many kilometres per hour establishes what speeding is. We are going to give that simply to the discretion of the individual police officer." I would suggest you take a long, hard look at this, because what you are doing will create absolute chaos. As Mrs Marland has indicated, we are talking thousands and millions of dollars where landlords will have no idea what is neglect and what is not neglect.

Let me just talk about another area which again was raised by Mrs Marland, because it certainly concerns people in my riding, which is a semi-rural, semi-urban type of riding. We do not have rent officers. We have bylaw enforcement officers. That is all we have.

Hon Ms Gigantes: I am sorry; you do not have what?

Mr Tilson: Rent officers.

Hon Ms Gigantes: You do not have rent officers.

Mr Tilson: I guess we are getting down to the question of, who is going to enforce all this?

Hon Ms Gigantes: There are no rent officers yet. As Ms Marland pointed out to me, I made a mistake in calling them rent review officers. We only have rent review officers at the moment.

Mr Tilson: I am quite aware of that. I am getting to the question of residential units throughout this province. How many rent officers are you going to have in the province to enforce this type of legislation?

Hon Ms Gigantes: Can you make an estimate?

Ms Parrish: I think the entire staffing of the current rent review process, including the board, is somewhere around 515 people. The proportion of people who are administrative officers who make decisions or are members of the tribunal that makes decisions, are probably about 100 of them in total, somewhere in that neighbourhood.

Mr Tilson: When Bill 121 is proclaimed -- I hope it is never proclaimed, but it will be because the government appears to have more votes than the opposition -- how many rent officers do you anticipate will be available to administer this type of situation?

Hon Ms Gigantes: We do not have a fixed number on that yet. There will be a period in which unfortunately we will have to deal with a lot of cases under the existing rent review legislation, and we will therefore require the services of people who will have to carry out the work attached to Bill 51, the existing legislation. We expect that period to continue anywhere up to 20 months, I guess.

Mrs Marland: Twenty months?

Hon Ms Gigantes: Yes, 20 months, right. Yes, the legacy of Bill 51 seems never-ending. That is a result of many of the sections of Bill 51 which have created a large measure of contention and great access to drawn-out legal procedures.

Mr Tilson: I finally agree with you on something, Minister.

Hon Ms Gigantes: We will have to administer Bill 51 cases for quite a while to come. I wish it were not so. In the meantime, to try and answer your question, we will have to build up personnel to begin work on Bill 121. The exact number of people who will be associated with that effort will in some cases be decided by the decisions, such as this one and others in the bill, which will make the workload more or less heavy.

Mr Tilson: That is the point I am getting at. Because you are not going to define what "neglect" is, and because you are going to be relying strictly on precedents, just in my municipality -- my riding has very small municipalities. The town of Orangeville, the town of Caledon, the town of Shelburne and the town of Bolton all have residential units. I am not counting even the individual units of houses. I am just talking about apartment buildings as such, and that is an example of what occurs across this province. If we get into the types of situations you are talking about, even for my riding, how many rent officers would be required to administer this bill in a municipality in a riding as small as mine, as far as residential accommodation is concerned?

Hon Ms Gigantes: It is not possible for me to determine how many will be required, but if I could answer in a general sense, I would suspect very few under Bill 121. We expect Bill 121 is going to be a piece of legislation which, once in operation, is going to very quickly lead to a much less complex method of administration than the existing legislation. That is one of the beauties we wish to share with members of this committee.


The Chair: Mr Tilson, I have allowed a lot of latitude in the questioning here, and I understand how important this issue is.

Mr Tilson: This is one of the most important issues of this bill.

The Chair: I fully understand that. All I am suggesting is that I have looked at the next amendment that is to be put forward by your party and some of this discussion may be more appropriate to that section.

Mr Tilson: I would like to ask one more question and then allow other members of the committee to participate on this amendment.

I am concerned with respect to the lack of definition of "neglect," about the fact that it is now going to be carried on by an undetermined amount of rent officers. You say it is going to work much smoother, but the rent officers do not know at this stage -- I know the rent officers have to be appointed, but when they are appointed -- and they have no guidelines, unless they all have little meetings and decide among themselves what the definition is going to be. It is going to take a period of time. It is going to take a large number of rent officers.

Dealing specifically with this area, have you had any form of feasibility study to determine whether this will work, because this is a major move away from what Bill 51 has suggested? Have you had any feasibility study to determine whether it will work, and anticipating how many rent officers will be required?

Hon Ms Gigantes: Yes, indeed we have. We have had discussions with the people who are providing the service of rent review office under Bill 51, and we have discussed with them what the government proposals in this legislation would mean. We have discussed with them their assessment of how these measures will be interpreted on the ground. What we have been told is that once we get past the period where we are dealing with Bill 51 hangovers, if I can call them that, we can expect we are going to have a more simple and less work-intensive piece of legislation. That is my belief.

We expect the number of inquiries about the new legislation in the short run will increase the workload for the ministry, but that is as it should be. We feel it is very important that as many people as possible in Ontario come to understand the new legislation. We will have the workload left over from Bill 51, so in the short run there will be an increased workload associated with rent regulation. However, in the longer run, we think this bill is going to be clearer and better understood by all concerned.

In spite of your concerns about potential ambiguity in "neglect," I do not believe that is going to be a problem. We expect in the longer run it will lead to faster determinations of cases and a lower number of people employed in effecting rent regulation. Am I correct? Tell me I am correct.

Ms Parrish: The minister is correct, but in the long term. There is a transition period where you are running two statutes.

Mr Tilson: Could you make a copy of your feasibility study available for members of this committee for the next meeting?

Hon Ms Gigantes: When I say we have had a feasibility study, what we have done is consulted in a very in-depth way with many of the people who have the experience in the field -- both under the previous Conservative legislation and then under the subsequent and now operative Bill 51 -- about what would be involved, what the likelihood of applications and questioning under certain sections proposed would be, and therefore, what the workload would be.

I do not know that anybody has actually written up a long report on that, but it was certainly something that was taken into consideration, both in the framing of the bill and in the subsequent proposal of amendments. When we received requests for amendments and we considered amendments during the summer committee sessions, we discussed with personnel in the field what the workload implications would be and what they could predict from their experience about increased demand for which kinds of services: phone calls, information, requests for determinations of this or that matter. It was on that basis I indicated to the member we have made a very serious attempt to understand the feasibility.

Mr Tilson: But there is no formal feasibility study and no written report that you know of?

Hon Ms Gigantes: I do not know of a written report. There are some written materials.

Mr Tilson: Could we have that for the next meeting?

Hon Ms Gigantes: I do not know if it will be available for the next meeting. We will do it as quickly as we can.

The Chair: The next meeting is this afternoon.

Mr Tilson: I thought it was one big, continuous meeting. Could you have it available for us next week?

Hon Ms Gigantes: We will do our best.

Mr Winninger: It is indeed unfortunate that I could not attend the earlier sessions of this committee for clause-by-clause. Unfortunately I was travelling with another committee, and Mrs O'Neill can testify to that. However, I am thankful to the clerk for providing me with transcripts of the earlier sessions, which I read with avid interest, although also with dissatisfaction at the slow pace this clause-by-clause review seems to be taking.

I would like to address the Liberal amendment to subsection 15(3). Having had to advocate in the courts and use these statutes has been a very beneficial background. We often find that words like "neglect" are not defined, simply because a body of case law has been built up. If a judge is called upon to adjudicate a landlord-tenant matter, typically he refers back to the precedents. It is the hallmark of the English common-law system that you look to precedent. If you look at some of the common textbooks on landlord and tenant law -- Lamont springs to mind; there are many others -- those cases are listed in a convenient fashion. You look up the wording of the legislative section you are dealing with and the concept is defined in the body of the case law.

The same applies when we have rent review officers adjudicating cases and rent review services. You may recall, under section 74 of the Residential Rent Regulation Act, there was a section that said rent increases can be reduced if there has been a decline in standards of maintenance or services. The act did not define exactly what a decline in standards of maintenance or services was. It was left to the rent review officer or a member of the Rent Review Hearings Board to decide, if it went there on appeal. They would look to other decisions of rent review officers for guidance. Often they would invoke decisions made by judges within the court system as to what might constitute a decline in standard of services or maintenance.

We also have another example in section 96 of the Landlord and Tenant Act, which members will know enabled a tenant to apply to the court to have a repair done when the premises was not maintained in a "good state of repair." Section 96 of the Landlord and Tenant Act was very concise and succinct. It did not define "good state of repair," because there was a body of case law that judges could turn to in deciding whether, based on the facts and the evidence, there was a failure to maintain premises in a good state of repair.

I would respectfully submit it is not advisable to bind the hands of our rent review officers or the hands of those who have either a quasi-judicial or judicial function, because they are the people who are hearing the evidence from both sides. In a fair, level playing field, those sides can be heard in a fair and just manner. For that reason, we do not bind the hands of the rent review officers and we do not bind the hands of our judges. We give them the flexibility and the discretion to make a fair, just and equitable decision under the circumstances.

I realize time is of the essence here. Things have moved slowly enough, so I am going to move right along now to a subamendment, if I can call it that, which my colleague Mr Marchese hoped to introduce. He is not here at the moment, so I will state the amendment. I think it is a fair amalgam of the government --


The Chair: I do not think we can entertain that particular amendment at this time.

Hon Ms Gigantes: But this would be a subamendment, would it not?

Mr Winninger: We are talking about a subamendment here, an amendment to the Liberal amendment.

Hon Ms Gigantes: It is all connected, as far as I can see. One flows from the other.

The Chair: All right. We have come to a determination that you are in order, Mr Winninger.

Mr Winninger: Thank you for that consensus. I think this represents a fair amalgam of the Liberal motion and the government motion with respect to subsection 15(3), as you will see.

I move that subsection 15(3) of the bill, as reprinted to show the amendments proposed by the minister, be struck out and the following substituted:

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

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

"(b) a system or thing that is replaced does not require replacement."

That is the end of the subamendment, if I can call it that. Not only would it preserve the word "neglect" and allow the adjudicators to interpret "neglect" based on the facts, the circumstances and the evidence, but also it would go on and specify in clause 3(b) proposed in the resolution that where a landlord replaces a system or thing that really does not need to be replaced, that would also constitute an ineligible capital expenditure. We have the two circumstances: one is neglect, the other is unnecessary capital expenditure. It meets the concerns of my Liberal friends and also the concern of the government that we have the best possible wording in this section.

The Chair: I have some good news and some bad news for you, Mr Winninger. The good news is that this amendment can be placed on the floor. The bad news is that I was right the first time; it cannot be done now because we are actually amending subsection 15(3) and not the Liberal amendment. We will continue with discussion on subsection 15(3). You may place that amendment following the Conservative amendment.

Mrs Marland: Can I ask a question on process?

The Chair: My advice is that we deal with Mr Winninger's amendment after dealing with the Liberal amendment.

Ms Poole: Could I speak first, before Mrs Marland? I am willing to withdraw our amendment to facilitate.

The Chair: Unfortunately, you cannot withdraw the amendment because you did not place the amendment.

Ms Poole: I wrote it.

Mr Winninger: I have not lost the floor, have I? I did not think I had lost the floor.

Mrs Marland: David, as far I concerned, you have not lost the floor. I am just trying to ask a question on process here. Do we have a copy of this subamendment?

The Chair: Momentarily.

Mrs Marland: It is impossible for me to either support or disagree with the Chair until I see where the amendment fits in.

The Chair: I am looking for all the help I can get here, Mrs Marland.

Mr Winninger: May I continue?

The Chair: Just on the process: we are dealing right now with subsection 15(3) and unless you have some problem with where we are right now --

Mr Winninger: Yes, I do have a problem with it.

The Chair: Okay. I want to hear it if it is about which amendment we should be dealing with right this moment.

Mr Winninger: I can go back since you have indicated that we cannot deal with my proposed subamendment now. I am quite pleased to return to our discussion of the Liberal amendment, which I find unsatisfactory. I will just briefly conclude as to why because I know my colleague Mr Bisson also has a few words.

The Chair: So does Mrs Harrington before Mr Bisson.

Mr Winninger: Oh, I am sorry; Mrs Harrington as well.

I would suggest that the Liberal amendment is unsatisfactory. I know the minister has alluded to this earlier. It would delete completely the reference to repairs that have become necessary as a result of ongoing neglect. We all know of situations where there could be a leaky roof, for example, or an unsafe parking lot. Instead of carrying out the necessary repairs that should have been carried out by the landlord, the landlord waits and waits until the problem gets a lot worse and a lot more costly to remedy. Passing on these kinds of unconscionable cost-of-capital repairs to the tenants at that time would be unfair.

You could say that if the landlord ignores or neglects his or her or its responsibility to carry out repairs in a timely fashion, at some point we have to close the door and say to him: "You could have moved on this earlier but you neglected the situation. These aren't the kinds of repairs that justify an increase above the guideline in the rent." For that reason we need to maintain, as the minister has said again and again -- The critics of the Liberal and Conservative caucuses should know better because they display a great deal of knowledge of the way this act operates. I cannot understand why they do not save their ammunition for the more important issues. I read that in the transcript. Sometimes I cannot believe that they quarrel over the insignificant issues that they do.

I am sure they are well aware of the case law on the concept of necessary repairs. I think they should also know that it is an important principle and that we keep it in there. It is a concept quite distinct from the concept of a system or thing that is replaced that does not require replacement. We have seen that under the RRRA. We have seen a lot of cases where the landlord will put in renovations to increase the value of his property, for example, install renovations and marble lobbies. They are certainly notorious, but we also have the kitchen case where new double sinks were put in, where kitchens were renovated that did not have to be just so that the landlord could perhaps attempt to evict the tenants for substantial renovations and double the rents. We have all seen cases like that.

These are the kinds of unnecessary replacements that tenants should not have to bear the extra costs of, above the guideline. There may be systems or things that are replaced but do not require replacement. We acknowledge that. I am quite indebted to the Liberal critic, I think it was, for bringing forward this subamendment, but I cannot agree that we have to delete the unnecessary capital expenditures due to neglect. That is all I have to say on that.


Ms Harrington: I want to let you know briefly how important this section is. I believe all of us here in this room understand that, and that is why the discussion has taken a long time. It is important.

First, the bill as a whole wants landlords to maintain their buildings and we want tenants to be able to live in those buildings. We have the capital expenditure for necessary repairs passed through to tenants by the landlords. We feel that is an important part of this bill because we want the buildings kept up. On the other hand, we want safeguards for tenants in two areas: first, the rent stability, and second, maintenance.

All of us understand that maintenance of buildings is very important. Although we want landlords to be able to pass through the necessary capital expenditures that we have defined, the landlords have to be assured that all expenditures cannot be passed through if in fact the landlord does not keep up that building. The upkeep of the building is what is so important. The onus through this piece of legislation is on the landlord, to make sure that the building is kept up. This is what tenants need. It is what tenants want. Whether it is a Liberal government or a Conservative government or our government, we all understand this. We have been out there talking to tenants. You know what the problems are. There have been problems of maintenance and neglect in many buildings and this is why this clause is in there. What it says directly is:

"A capital expenditure is not eligible if it became necessary as a result of neglect in maintaining the residential complex or a rental unit in it."

We understand from the discussion of the past hour and a half that this is a difficult clause. I just want to say that under the RRRA, which has been in effect for the last five or six years, there was the same type of definition, only it said "ongoing and deliberate neglect." As the minister has pointed out, this was very difficult to define to get any kind of redress for tenants who were in this situation of neglect.

What we are saying is that we have taken out those problems. We are going to give it a try with a clearer, more workable -- and the word is "commonsense" -- definition of what neglect is.

Mr Tilson: What is it?

Ms Harrington: Mr Tilson brought up about half an hour ago the problem of wiring behind a wall. Surely any home owner knows whether his home has been neglected or whether the repairs are in a reasonable type of upkeep. It is common sense. The same thing would apply to a landlord and tenant relationship.

What I am saying is that under the RRRA we have struggled with a very difficult definition, which was "ongoing and deliberate neglect." We are saying this is going to be a better way of dealing with it. We are absolutely committed that tenants have to know the onus is on the landlord to keep up the buildings before any capital expenditures can be passed through to them. I believe this is a very important part and this is why we have to have it in there.

Mr Bisson: Let's see if we can recap a little bit where we are at here. I will just read the amendment so that we know what we are getting at. The objection is that what is proposed is that capital expenditures, as written in the amendment, are not eligible "if it became necessary as a result of neglect in maintaining the residential complex or a rental unit." What is at question is the word "neglect."

The opposition parties are saying that we need to somehow define the word "neglect." I guess the premise is that if you define it then the rental officers would be able to go by some sort of guideline and say what constituted neglect. So I am the rental officer. I go into the building. I take a look and I say, "Where does it fit inside these criteria?" If it fits in the criteria for "neglect," I can then say that this rental increase is not applicable under this particular amendment. I think all of us understand --

Ms Poole: On a point of order, Mr Chairman: Particularly because these hearings are being publicized, it is not wise to let any inaccuracies be aired.

Mr Bisson: Inaccuracies? I have been listening to them all morning.

The Chair: That is not a point of order, Ms Poole.

Ms Poole: It is, in that rent review officers do not go to buildings to look at them, period.

Mr Bisson: Mr Chair, I draw the line at this point. I have been listening to inaccuracies all morning.

The Chair: It is not a point of order, Ms Poole. It is maybe a valuable piece of information, but not a point of order.

Mr Bisson: I am just going to recap. I will try this one more time. What is at question is the word "neglect." What is at question, what the opposition parties are saying, both the Liberals and the Tories, is that we need to define the word "neglect," because if we do not define it, how can the rental officer do his or her job in defining what constitutes neglect within the maintenance of a building? Correct?

Landlords and tenants are asking, "What do we do in the event we have to upkeep our buildings and put them into good shape?" That is the problem, in my mind, and I think in the minds of a lot of people, because I have been talking to people in my riding about this particular issue, where as in any other riding in Ontario we have rental stock where we have landlords and tenants.

When you come to the question of neglect, if you define it in the bill you are really handcuffing the rental officer. What you are doing at the end of the day is that you are taking away any ability we have as tenants, or even as landlords in some cases, to be able to do anything about the situation. With any legislation, my experience has been that once we start defining things per se, as to what exactly that means with regard to neglect, we do not give any flexibility to the rental officer and we will end up in a very bureaucratic system.

I would speculate that we will end up in a situation where nothing will be able to be done to determine what neglect is because it will be defined as such, so all these expenditures, even though due to neglect, would be allowed because they do not fit the criteria, and after that the rental increases would be passed on to the consumer, on to the tenant. Is that fair? If I have to pay the cost in my rent because my landlord did not do the property maintenance on his or her building, is that fair? I say no.

Mr Winninger: I agree with you.

Mr Bisson: Thank you very much. My colleague even agrees with me. I love that. That is the question. They are saying, "We don't have a problem in dealing with this clause altogether, but we want to define the word `neglect.'"

All it comes down to and all I am saying is this: To define "neglect" you are handcuffing the hands of the rental officer and any flexibility he or she has, because there is no way you can sit down and define, in every situation, what constitutes neglect in the maintenance of a building. I would really challenge anybody to be able to write that down. If you can come down and prove to me beyond a shadow of a doubt that you can cover every situation and write it down, I would challenge you, because it would be very difficult, because each situation is different.

If you tried to define what "neglect" is, there is no way you are going to be able to write it in such a way that at the end of the day you will be able to do justice to the tenants and also, I may say, to the landlords of this province, when it comes to constituting what neglect is. You have to give that flexibility to the rental officer, and that is what we are trying to strive for. When I listen to the people in my riding, they are saying, "God, don't tie us down in a bureaucratic system, because we want to have some flexibility."

Where there is a little bit of a grey area, or there is a situation that calls for listening to both sides to determine what the situation is, based on the facts, you have to give that power to the rental officer. At the end of the day, the rental officer will sit down with the tenants who raised the complaint, or with the landlord who raised the complaint, and say, "What's the situation?" A rental officer will then go in and investigate, and will make sure to take a look at the building in question, and if need be call in the building inspector from that municipality to take a look at what the situation is, and then sit down and make a determination based on all the facts. If we try to determine on paper a definition of what "neglect" is, we take that ability away.

If we really try to define it, if we really try to put it down on paper, I think we are tying the hands of the rental officers. It will be extremely difficult for them to do their jobs. What will happen at the end of the day is that most expenditures having to do with neglect will go through. Is that fair to the tenants of this province? I say no. If that is what you are advocating, I have to disagree, and I will vote against your amendment. I will say that publicly.

I know you are about to do your little hammer trick, Mr Chair. I do not if you were going to pitch it at me or put it on there. I take it that it is 12 o'clock and that we would adjourn until after routine proceedings, and I would put that forward.

The Chair: I think that is a very good suggestion.

Ms Poole: I would suggest we go on until we hear the bells for the vote. The House is still in progress, and some of us have been waiting for one hour and 15 minutes to speak.

Mr Bisson: Well, I will take the floor back. I was just trying to be nice to people.

The Chair: I think Mr Bisson will have the floor when we reconvene at 3:30 this afternoon.

The committee recessed at 1201.


The committee resumed at 1537.

Mr Bisson: Mr Chair, I ask the unanimous consent of the committee to have the minister, Evelyn Gigantes, replace me or sub for me in the committee this afternoon as I have to get back to my riding for fairly pressing matters in regard to a situation developing in my riding. Can I have unanimous consent?

The Chair: Is there unanimous consent?

Agreed to.

Mr Bisson: I will pass on to the clerk of the committee a substitution slip.

Section 15:

The Chair: We will now pick up on the discussion we were having this morning regarding subsection 15(3) and a Liberal amendment to that motion. Mr Bisson had the floor when we adjourned.

Mr Bisson: If we recap what was happening this morning, in the Liberal amendment there was some discussion on the part of both opposition parties in order to have the government define what the word "neglect" meant in regard to subsection 15(3). Let me read what is proposed by the government: "A capital expenditure is not eligible if it became necessary as a result of neglect in maintaining the residential complex or a rental unit in it."

What we are saying there is that if for some reason the landlord decides he is not going to maintain his building and lets the situation go on for too long, we are not going to allow that to be passed on to the tenants. The argument on the part of the opposition is that we should take the word "neglect" and try to define it in the context of this particular act. The difficulty in doing that, and what I was pointing out this morning, is that if we try to define it, what we will be doing in effect is handcuffing the ability of the rental officers to be able to do their jobs, because what we do not want, I think, is a system that is very rigid and not flexible enough to recognize circumstances that would never be determined if you tried to put it down on paper.

What I was saying this morning as a member of this committee and as a member of this Legislature was that I will not vote in favour of what the opposition is talking about. I think we cannot define "neglect." If we define it, we will really get into a situation where we will not have the flexibility necessary to allow the bill to work in the context in which it has been put together.

Ms Poole: I am glad that at the end of his remarks this morning Mr Bisson clarified what the opposition was saying, because for a while I felt there was not a member of the NDP, including the minister, who was accurately portraying the opposition's point of view. It is not a problem with the fact that you are saying that if there is neglect, the landlord should have a rent penalty. The problem is, as Mr Bisson outlined, that if neglect is not defined, is it going to tie the hands of the rent review administrator, the rent review officer, so that he cannot make an adequate decision, because he is relying on so-called common sense?

If common sense could be legislated, that would be fine. If people could be trained in common sense, that would be fine. If the people of this province, the tenants and landlords, had confidence that the rent review officers had, first, adequate training and, second, common sense, Mr Bisson's comments would make a lot of sense, so to speak.

Mr Bisson: I thought they did.

Ms Poole: Well, they did anyway, but there is a very problematic part to it. Instead of tying the hands by defining it, it would indeed assist the rent review officer to make a valid and valuable decision. I have worked with rent review administrators. Some of them are extremely good, and some of them, to be kind, are not extremely good. There is a great variance. It does not have anything to do with training. Some of it has to do with native intelligence, some has to do with common sense, some has to do with ability to interpret. Say the minister follows through and has a very rigorous training process so that these rent review officers are extremely well trained. That still does not mean these people have common sense.

Tenants and landlords spend hundreds and hundreds of hours preparing a case for rent review. It is very important. If you collectively added up all the time they spend on it, it would come to that, particularly as cases are complicated and there are more things being requested. I put it to you that you are expecting these people to put hundreds of hours of work into this case without knowing whether this rent review officer might happen to be one who liked tenants a lot and always happened to believe the tenant's side and always happened to rule in that particular way or a rent review officer who was not so sympathetic and always seemed to see it from the landlord's point of view.

As much as you say you try to eliminate bias, rent review officers are people. They are influenced by their background, by the type of training they have had, by the type of education they have had, by the people they associate with, by their life experience. Some of these rent review officers would have worked with tenants a great deal in their past life before they became rent review officers. They obviously see things from a certain perspective. The same applies if there are rent review officers who had extensive experience in building management. They have a perspective.

Ms Harrington: But they are professional people.

Ms Poole: They are professional, and I am not saying they would deliberately try to be biased, but I can point out examples of rent review administrators and appeals members under the current system who have vastly different perspectives. They all treat it very professionally, but you cannot legislate common sense. I would feel far more comfortable if, as espoused this morning -- at great length, I might add -- by the member for Dufferin-Peel, there were basic criteria a rent review officer was to look at. They do not have to be rigid; they can provide for some flexibility. But those guidelines and criteria should be in place. I am appalled at the idea of people spending all their time and energy preparing a rent review case and then being at the whim of the rent review officer, tenants and landlords both. Guys, this is something -- sorry, guys and gals --

Mr Bisson: That was a sexist comment.

Ms Poole: It is not any more; I said, "guys and gals." Ladies and gentlemen of the jury, may I say to you that this is one issue that both tenants and landlords have reached consensus on. I do not agree with Mr Winninger, who called it an insignificant issue. His colleague, Ms Harrington, minutes afterwards said it was a very important issue. I agree with her.

Mr Winninger: On a point of personal privilege, Mr Chair, I do not recall using the word "insignificant."

Ms Poole: I copied it down.

Mr Winninger: I suggested there were other issues that might be more compelling.

The Chair: It is not a point of privilege.

Mr Winninger: It is a point of personal privilege if I have been misquoted.

Mrs Marland: I heard "insignificant."

Mr Mammoliti: Then that's it.

Ms Poole: We have my rather insignificant point that I copied it down as you said it. We have Mrs Marland's significant point. She's the definitive --

Mr Winninger: If I said it, I must have meant it.

Ms Poole: At any rate, I agree with Ms Harrington that it is an important issue. It is not fair to tell people that they are to take a case to rent review and not to give them the criteria under which a decision will be made. I am more than willing to concede to Mr Bisson that flexibility has to be built in, but that does not mean there should not be basic criteria.

Mr Bisson also brought forward the viewpoint that there should not be criteria, that they would tie rent review officers' hands. I submit to him then, let's take out the criteria for capital expenditures and what is eligible and what is not eligible. Why not leave flexibility there? The reason we have criteria is not to tie people's hands but to ensure that tenants and landlords are given a fair and impartial opportunity to bring their case forward, so that if they bring it to rent review officer A, rent review officer B or rent review officer C, they will come up with the same or a very similar decision. Particularly when this government has chosen to severely restrict the right to appeal, it becomes even more important. It becomes vital that criteria be established in the first instance.

I cannot support the section on neglect. I could support it if you were to define it, if you were to provide those criteria. I am glad that Mr Bisson, in his final comments this morning, did give an analysis which recognized it is not that the opposition members are against having neglect as a provision. We have a lot of problem with the fact that it is out there wide open for anybody to interpret however he or she chooses.

The last point I want to make in closing is that this morning the minister referred to the current system as Bill 51. The current system is not Bill 51; the current system is Bill 4. It may seem like a moot point, but for those of us who endured four months of Bill 4, we feel very strongly that we know what the current system is. It is not Bill 51.

Hon Ms Gigantes: Bill 4 is simply an amendment to Bill 51.

Ms Poole: That was my last comment. Bill 4 was called An Act to amend the Residential Rent Regulation Act, 1986. However, it is now the law. Bill 51 -- legislative counsel can feel quite free to correct me if I am wrong -- is now a previous piece of legislation that is no longer in effect and force in this province.


Mrs Marland: Are we speaking to the Liberal motion at this point or to Mr Winninger's motion?

The Chair: The Liberal motion to subsection 15(3).

Mrs Marland: This morning the minister said that this bill, under subsection 15(3), was removing the description of neglect that was in the RRRA. Apparently, in the RRRA it says "ongoing" and "deliberate." The parliamentary assistant, Ms Harrington, said this morning that they were taking that out because it was "unenforceable." I would like to know from the minister how, if it was unenforceable to describe neglect as ongoing and deliberate --

Ms Harrington: She explained that this morning.

Mrs Marland: No. I have not finished my question. How, if it was impossible to enforce when it was ongoing and deliberate, now when you leave the word "neglect" standing alone in subsection 15(3), which obviously was an amendment of the government and is now in the bill in this reprinted form, is that going to be any more enforceable than it was in the RRRA?

Hon Ms Gigantes: Very briefly, and once again I will resist the temptation to try and enter into hypothetical cases, if the law says something is not applicable in the case of neglect, that is one thing to have to determine; but if the law says something is not applicable -- in this case an application for an increase in rent above guideline -- in the case where neglect is persistent and ongoing -- sorry, not persistent. That is an amendment coming from your side.

Mr Marchese: Deliberate.

Hon Ms Gigantes: Deliberate and ongoing. It is much more difficult to determine the degree of deliberation and the degree of ongoingness.

Mr Marchese: Yes, absolutely.

Mrs Marland: I think it is going to be interesting to read this answer back to the minister when we deal with the next section. I accept the answer as being her answer. It is obviously not acceptable to me.

Those are all the questions that I have on the Liberal motion.

Mr Tilson: Mr Bisson seems to feel that having a set of criteria will tie the hands of the rent officers. It seems to be the philosophy of the government that, by removing the ongoing and deliberate type of definition, this is unenforceable. In fact, they are replacing it with nothing. There is no definition as to what is neglect. It would be interesting. Mr Winninger said, "Well, look it up in the dictionary."

Mr Winninger: On a point of personal privilege, Mr Chair, I did not say, "Look it up in the dictionary." I said, "Look at Lamont on residential tenancies for a nice summary of the common law." I did not say, "Look it up in the dictionary."

The Chair: Thank you, Mr Winninger.

Mr Winninger: You look it up in your Funk and Wagnall's.

Mr Tilson: Whether you look it up in Lamont or in Black's Law Dictionary or in any number of dictionaries, it would be interesting if we all, in this room, wrote down on a piece of paper our definition of neglect. My guess is that there would be at least half a dozen to a dozen different definitions. That is the concern I have.

I believe, contrary to what Mr Bisson has suggested, that you could have some set of guidelines. If the ministry wants to provide some discretion to the rent officers, that can be worded now. We have very competent counsel in the government to put forward definitions, and I am certain that some sort of guideline would assist the rent officers in determining what this is.

There could be instant neglect. It is possible that something happens this afternoon and it is not repaired by this evening. There could be long-term neglect, neglect that has been going on for a year or two years. In fact, what is long-term? Is a week long-term? Is a year long-term?

There could be neglect that the landlord does not even know about, and I have given some examples. I guess the trouble is, is the landlord going to be given reasonable opportunity to repair these matters? If the landlord has been advised once, maybe twice, maybe three times, whatever criteria are being suggested, all of that would assist the rent officers in determining what neglect is. But there are no guidelines. The rent officers will not have a clue as to how to determine the issue of neglect. I will say that our caucus will continue to oppose anything that does not define the issue of neglect.

The Chair: Shall the Liberal amendment to subsection 15(3) carry? All those in favour will indicate by saying "aye."

Ms Poole: Could we have a recorded vote, Mr Chair?

The Chair: We certainly can.

The committee divided on Ms Poole's motion, which was negatived on the following vote:

Ayes -- 3

Marland, Poole, Tilson.

Nays -- 5

Abel, Gigantes, Harrington, Marchese, Winninger.

The Chair: Mr Marchese moves that subsection 15(3) of the bill, as reprinted to show the amendments proposed by the minister, be struck out and the following substituted:

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

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

"(b) a system or thing that is replaced does not require replacement."

Mr Marchese: Could we vote on that ad seriatim, Mr Chair, (a) and (b)? I think the members would like that.

Mrs Marland: I did not hear what he said.

Mr Marchese: Ad seriatim? One at a time.

Mrs Marland: I know it means that, but I did not hear what you said.

Mr Marchese: Oh, I see.

The Chair: What is being asked here is that we have a government motion before us amending subsection 15(3) and we will deal with clauses (a) and (b) separately.

Ms Poole: I think we have pretty well exhausted all the discussion on this matter that one would want to have. We have already talked about it for two and a half hours today, plus whatever time you spent last week.

I just wanted to make one point and that is, I appreciate the fact the government has agreed to allow separate votes. Ironically, this now is in the identical form it was before the government made its amendment, so we are voting on something that was originally in the bill in the same form. But I do feel more comfortable with the fact that you very clearly specify that if something does not need to be replaced, then it cannot be considered to be an eligible capital expenditure.

As the minister said this morning, there is a debate as to whether it is necessary to add this or not, but it takes nothing away from the legislation to add it and it might take something away from the legislation to delete it. So I am very pleased that we have reached this accommodation.


Mrs Marland: May I ask Mr Marchese a question?

Mr Marchese: Absolutely.

Mrs Marland: In clause 15(3)(a), "it became necessary as a result of neglect in maintaining the residential complex or a rental unit in it," I have Webster's dictionary here and under neglect it says, "To give little attention or respect to."

I am asking you this question since we heard this morning from the minister that the rent officers are going to be responsible for interpreting neglect, since the act does not interpret neglect for them. "To leave undone or unattended...through carelessness...to pass over without giving due attention." Could you tell me what you think that means in terms of neglect in the legislation, if you are talking about eligibility for capital expenditure, which is what this section refers to? This section is not referring to everyday maintenance. Subsection 15(3) is not referring to operating costs, it is referring only to a capital expenditure.

Mr Marchese: I think the definition is in fact quite good and quite clear. Different dictionaries would probably give different definitions, but I suspect it might be the same. Everything you have mentioned that the dictionary defines, in my view defines perfectly what we mean by neglect. "Little attention to or respect to," is exactly what neglect means, or "anything undone or unattended," or "pass over without due attention," all of the things we mean by neglect, if the member is listening.

Mrs Marland: I am listening.

Mr Marchese: You are? You have an incredible ability to listen with one ear and speak with the other.

Mrs Marland: Yes, I do. I have noticed you speaking with your ear as well.

Mr Marchese: I think the definition of neglect, as you have defined it, fits exactly into (3) quite well.

Mrs Marland: Okay. Could we agree, as members of the committee then, that this definition can go into the act?

Mr Marchese: I would not be prepared to do that, because I think --

Ms Poole: The minister would be very upset with you.

Mr Marchese: I do not think she would be. I do not think it would be useful to define neglect in the way that you are proposing.

Mr Tilson: You said it is a good definition.

Mr Marchese: When we talk about the people who will interpret it, my view is that they will interpret it exactly in that way, but I do not know that it would be useful to have to give all the possible different definitions, as the minister was explaining a number of times over in attempting to answer the same question you are asking me.

Mrs Marland: I have only given you three interpretations of the word "neglect." I am simply saying to this committee, if so much pivots on the word "neglect" --

Mr Marchese: Not really.

Mrs Marland: I am sorry, you cannot shake your head that so much does not pivot. So much pivots that the right of tenants to have a living environment that is well maintained, is a safe structure, is all of the things that they pay rent for, pivots on a rent officer interpreting the word "neglect."

You are the party in this province which claims to protect the rights of tenants, so let's talk about tenants for a moment. Let's talk about the tenant who has the act in his hand and knows he can discuss an item of neglect because it says that in the act. It says that he may have to pay an increase in his rent if a capital expenditure qualifies, as long as it is not neglect. Would you agree that is what this section is saying?

The Chair: Before you respond, Mr Marchese, the minister has indicated to me that she wishes to respond also.

Mr Tilson: She will have to wait her turn.

The Chair: No, she does not.

Mrs Marland: At the moment, Mr Chairman, I am speaking to Mr Marchese, and I asked if that was permitted, through the Chair.

The Chair: The minister has indicated that she would like to respond.

Mrs Marland: Which is fine, and she may follow Mr Marchese, but I asked if I could ask Mr Marchese a question and he said yes. I think Mr Marchese, as a former minister, is just as capable as this minister of answering this question. I feel that as a former minister, Mr Marchese is willing to answer a question. Is it not fair for me to continue?

The Chair: Mrs Marland, you must direct all questions through the Chair.

Mrs Marland: I am.

The Chair: And the responses can come from the government side, whether that is Mr Marchese or the minister or both.

Mr Tilson: On a point of order, Mr Chairman, the motion was made by Mr Marchese and I think therefore Mrs Marland is quite clearly asking for his clarification as to what he means by his motion, and only he can answer that. I think it is quite reasonable for Mrs Marland to direct the question to him. Many of us could make our interpretation as to what he means by his motion. I think she is quite in order for that.

The Chair: Thank you, Mr Tilson. Any member has the ability to ask someone else to answer the question for him for purposes of clarification. I have had no indication Mr Marchese does not want to answer the question. I have just had an indication that the minister would like to participate.

Mrs Marland: Through you, Mr Chairman, I do not mind the minister participating. I do not know why she is interrupting in the middle of my questioning.

Mr Abel: She hasn't said a word.

The Chair: Order.

Mrs Marland: I am questioning the mover of this motion.

The Chair: Ms Poole, on the same point of order.

Ms Poole: On this particular point of order, Mr Chair, I do not think it is good to waste the committee's time by going on and on about this. I mean, we can get into technicalities such as, "Mrs Marland asked Mr Marchese if he would answer a question and he has already answered a question, so she shouldn't have another one," but I think that is just getting down to silly points. Why do we not just get on with it, and also give the minister an opportunity to respond, if Mr Marchese would like it?

Mrs Marland: Was that a point of order?

The Chair: As much as the others. Do you wish a response, Mrs Marland?

Mrs Marland: I would not have asked the question, with respect, Mr Chair, of the mover of the motion. He uses the word "neglect" in his motion. I am asking him if the definition of neglect fits the word "neglect" in his motion. He said, if I recall correctly, that those were three good definitions I gave him.

Mr Marchese: I would like to comment for the final time, because I think it is very circuitous. The point of not including the definition is that if you do that, then the problem becomes, what is "little attention," what is "pass over without due attention"? Then you have a fight over what is due attention, what is little attention, and that is a problem. Rather than doing that, it is best that the review officer makes a determination based on common sense, based on long years of experience in the field and makes --

Mr Tilson: They have not even been appointed yet.

Mr Marchese: -- that kind of determination, where the person might say "because of little attention," or whatever it is. But the person makes that determination, as opposed to having to define it and fight over such terms as "deliberate," "ongoing." Is it a year, is it two months, is it 10 years, what is "due" and so on? That is the difficulty. The word "neglect," in my view, is exactly what we need in order for this to be dealt with adequately, and effectively. But I cede now to the minister, if she wants to respond further.

The Chair: Thank you. Mrs Marland?


Mrs Marland: Mr Chairman, is it not interesting that Mr Marchese has just confirmed for me my argument?

Mr Tilson: Congratulations.

Ms Poole: I was going to say the same thing.

Mrs Marland: You see, the thing is, you are not willing to have a definition of "neglect" at all.

Mr Marchese: No.

Mrs Marland: The very things you have just said --

The Chair: Through the Chair, Mrs Marland.

Mrs Marland: Mr Chairman, to describe neglect as to give little attention or respect to, to leave undone or unattended through carelessness, to pass over without giving due attention -- on the one hand, the mover of this motion has said those are very good interpretations of the word "neglect."

Mr Marchese: Yes.

Mrs Marland: Now he is saying he cannot put them in because they are too definitive. You cannot say both things. Either they are too definitive and would help make it work or you just do not want to have any definition of neglect because you want something so wide open that it is going to be --

Mr Marchese: That it will fit.

Mrs Marland: Excuse me. Mr Chairman, the member is saying that those definitions on the one hand are very apt. On the other hand he is saying, "Well, they might not cover everything," and yet we want to revert to a word like "neglect" that has tremendous latitude of interpretation.

If you happen to be the person who owns the property, whether it is a duplex that you live in and in order to afford it you rent the other half of the duplex, or whether it is a 600-suite apartment building, whatever the amount of money you have to spend as the owner of that property to remedy something that is qualified as neglect, is a very critical point.

Either they can remedy it as a capital expenditure and be allowed maybe a 1% or 2% or 3% increase in their rent, or they have to fund it totally out of whatever their income is from the other half of that duplex. Since the majority of rental accommodation in this province is in buildings of eight suites or less, we are not talking about the big, wealthy landlords that your socialist party seems to have it in for; we are talking about people who are average Joes who made an investment in a building. If the interpretation of neglect means they either can access an exemption as a capital expenditure or not, that is why the interpretation of neglect is so critical. You are asking us to support this motion where you are saying something is necessary as a result of neglect and you will not even agree with the Webster's dictionary. You are not willing to include an explanation of it. Your argument is very confirming. It is exactly what I thought you might say.

Mr Marchese: What I said is not what you said.

Mrs Marland: Fortunately, it is in Hansard.

Mr Marchese: Absolutely, and I am happy that it is.

Mrs Marland: Fortunately for all of us, what I have been saying all morning about the word "neglect" has just been confirmed by your argument.

The Chair: Minister?

Hon Ms Gigantes: Very briefly, Mr Chair, I think it will help us to look at this clause as a tool of one thing, which is to determine whether capital expenditure will be allowed above the guideline and passed through to tenants.

I should also point out just in passing that it is not true to say that the majority of rental units are in apartment buildings of eight units and less. That is simply not the fact.

What we are looking at here is a question that a rent review officer must decide. Item X has been undertaken as a capital expenditure by a landlord. The question in this clause that the rent review officer must determine is, was the investment in item X brought about as the result of neglect to item X? It is really that simple. It is not a hugely complex matter. It does not have to do with anything but that simple question. To try to affix or suffix or prefix that determination with a whole bunch of other phrases, definitions or otherwise, is simply to complicate and bedevil the whole question.

I think it is relevant to note that in the collective memory of the ministry, under Bill 51, where neglect was something that could be a matter of consideration for the rent review officer only if it were something called ongoing and deliberate neglect, nobody can remember a case that ever had a determination that said there had been ongoing and deliberate neglect, which leads us inevitably and very forcefully to the conclusion that when we try and define neglect -- and we will take the same position when Conservatives finally bring forward their motion on this subject -- we are inhibiting the usefulness of the consideration of neglect in the protection of tenants.

It is our view that tenants should not have to pay for a capital expenditure if the need for the capital expenditure was created by neglect. That is the question in this clause, and that is all it is. I think we should vote on it.

The Chair: Thank you. I have Ms Poole on the list.

Ms Poole: I really dislike agreeing with Conservatives. I find on this committee I do it far too often and it is very worrisome to me. But again, Mr Chair, I have to agree with Tories, as painful as it is to me.

I think Mrs Marland made the point really well, and Mr Marchese was trying to make an opposite point, but what he did was confirm exactly what Mrs Marland said earlier. When he used the words, "Well, it could be a little, it could be a lot; it depends on perspective," when he advanced that viewpoint, that is precisely what we are talking about. Is not our goal to have a fair, impartial rent review system where it does not matter which rent review officer you go to, you are going to get the same result? Is that not what you really want? How can you get the same result when you are leaving so much to discretion? It is an important point.

I do not think there is any point belabouring it, other than to tell you that I think the government has not put in a definition of neglect because the government is unable to put in a definition of neglect; therefore it is just opting out. I do not think that is going to benefit anybody. When we start seeing rent review decisions with very similar situations but with varying orders, very dramatic differences, that is when you will admit -- or that is when you should admit, but you probably will not admit -- that there should have been criteria. To use the minister's own words, "There should have been a tool given to the rent review officers to help them make the right decisions."

Mr Chair, I call for the vote.

The Chair: Ms Poole has called for the vote. Shall government amendment to clause 15(3)(a) carry? Those in favour will say "aye." Opposed?

Motion agreed to.


The Chair: We are now discussing the government amendment to clause 15(3)(b).

Ms Poole: I move that we call the vote.

The Chair: All right.

Mrs Marland: Are we voting on the motion to call the vote? Technically, you should.

The Chair: You are correct. Those in favour of putting the question now? We shall put the question. Shall the government amendment to clause 15(3)(b) carry? Carried.

Shall the government amendment to subsection 15(3) carry in its entirety? Opposed?

Motion agreed to.

The Chair: We now have, I believe, a Conservative amendment to subsection 15(3).

Hon Ms Gigantes: Mr Chair, I think you will rule on this, but I suspect you will find that the Conservative motion would become redundant at this stage.

The Chair: Let me have just a moment to read this. I think the first thing we should do is have Mrs Marland or Mr Tilson formally make the motion.

Mrs Marland: I would be happy to read it in. I move that subsection 15(3) of the bill, as reprinted to show the amendments proposed by the minister, be struck out and the following substituted:

"15(3) All or part of a capital expenditure is not eligible to the extent that:

"(a) It became necessary solely as a result of persistent neglect in reasonably maintaining the residential complex or a rental unit in it; or

"(b) A system or thing that is replaced does not require replacement having due regard to its age, useful life, cost of repair, cost of replacement or its functional obsolescence."

The Chair: According to the standing orders, section 49, "No motion, or amendment, the subject matter of which has been decided upon, can be again proposed during the same session." I suggest to you that it has been voted on and decided by the committee, so I rule this motion out of order.

Mr Tilson: If we could speak to that --

The Chair: It is not debatable. We are moving on then to subsection 15(4).

Mrs Marland: On a point of order, Mr Chairman, the motion we dealt with did not say "all or part of," so the motions are different.

The Chair: This is not a debatable motion. I have made a ruling. We will move on to subsection 15(4).

Mrs Marland: Is there a provision in committee to challenge the ruling?

The Chair: Yes, you may. The clerk will explain it.

Clerk of the Committee: A challenge to the Chair's ruling is made to the Speaker and a report has to be made by the Clerk, based on the views of all three parties. The committee, if it cannot proceed any further, must adjourn until after that challenge has been dealt with by the Speaker in the House.

Mrs Marland: Thank you.

The Chair: I believe there is a Conservative amendment to subsection 15(4).

Mrs Marland moves that subsection 15(4) of the bill be struck out and the following substituted:

"15(4) If there is an advance determination under section 29 respecting a capital expenditure to which this section applies and the work done or thing purchased is substantially the same as that anticipated in the advance determination, the rent officer shall make an order permitting a rent increase based on the amount actually expended."

Mrs Marland: Mr Chairman, this amendment ensures that those landlords who, in compliance with Bill 51, obtained advance determination for this work and commenced capital work will not be subjected to the caps imposed in either Bill 4 or this legislation.

The Chair: Further comments or questions?

Hon Ms Gigantes: Yes, I have a question. How does this relate to section 29?

Ms Poole: If I might attempt to be helpful, I think this relates to the conditional orders that were granted under Bill 51 and given partial relief under Bill 4 but not total relief.

The Chair: I would feel more comfortable if Mrs Marland or Mr Tilson could clarify the minister's question.

Ms Poole: The Conservative critic just confirmed to me that this is the rationale.

Hon Ms Gigantes: I am not at all clear what this clause is doing. I can understand what is being claimed for it, but I do not think it accomplishes the purpose stated. I think if you look at subsection 15(4) as in the bill, it is quite clear what this subsection is doing. It is saying that the rent officer shall consider any difference between the actual amount expended and the amount approved in the conditional order or in the advance determination before making a decision on the capital expenditure allowed. I do not really see how the Conservative amendment to subsection 15(4) relates to what is happening in section 15 and I do not see that it is going to accomplish what the mover has said it will. Perhaps she could explain further.

Mrs Marland: I do not see under subsection 15(4) as printed in the minister's bill where it refers to the problem that has arisen with conditional orders. In your wording, that is not addressed.

Hon Ms Gigantes: What is the problem you are trying to solve here, if I could ask?

Mrs Marland: Were you at the public hearings?

Hon Ms Gigantes: I was at some of the public hearings and I read the transcript. I would like to understand what your understanding is of what you are trying to accomplish.


Mrs Marland: As I understand it, one of the major concerns that were brought to this committee -- I was not a member of the committee at that time; that is why I asked if you were here then; I did not know whether you were or not -- a major concern was where owners of the property had been given permission to make capital expenditures under RRRA, Bill 51; and then Bill 4 came in and, with its retroactivity, it negated those approvals. It is my understanding that the necessity for this amendment is to address that concern.

Hon Ms Gigantes: If the member would take a look at section 29, it sets out how advance determinations are to be made, how they will be treated and disposed under Bill 121. It makes no reference to Bill 51, which is my difficulty in understanding why this motion is worded the way it is. The printed subsection 15(4) in the bill deals with section 29 in the bill and those clearly relate to each other, but there is nothing in the printed section 29 to which this amendment refers which refers to Bill 51. So I do not know really what is going on here.

The Chair: Mrs Marland has the floor, and following Mrs Marland we will go to Ms Poole and Mr Winninger and then Mr Tilson.

Mrs Marland: I am trying to read section 29 that the minister has just referred me to, so I am happy to relinquish the floor while I go forward in the bill and reread section 29.

Ms Poole: This is really becoming frightening. First I agree with the Tories, and now, horror of horrors, I am forced to agree with the socialists.

Mr Abel: You are just an all-round person.

Ms Poole: I think it is a step worse.

Mr Tilson: No, a flip-flop.

Mr Abel: Those are your words.

Ms Poole: No, it is called being forced into very unenviable positions.

The Chair: I think you are teasing all the bears.

Ms Poole: I think so, Mr Chair. To get back to this motion, I have some sympathy with what Mrs Marland is trying to accomplish as far as its stated intent is concerned, that is, advance determinations would be the same as conditional orders under the previous legislation. I think what Mrs Marland is trying to do is to provide that there would not be a cap.

But I agree with the minister. I am not sure this amendment actually does that, and I would like the advice of legislative counsel, because it would seem to me that under Bill 121 there is a decision on the spot and there is no advance determination. If they are subject to the cap, even if Mrs Marland puts in this amendment, it will still be subject to the cap. I would ask legislative counsel if that is her interpretation, because I do not think it accomplishes what the Conservatives intended to accomplish.

Ms Baldwin: If your question is, assuming the Progressive Conservative motion carried, would any finding made with regard to the capital expenditure be subject to the cap when you get into the provisions dealing with the order, the answer is yes.

Ms Poole: Therefore I do not think it does accomplish what Mrs Marland had hoped it would and I would be willing to move that this matter be stood down until such time as Mrs Marland has an opportunity to consult with legislative counsel and her research to see if she would like to change the wording.

The Chair: Do we have unanimous consent? We do not have unanimous consent. Mr Winninger.

Mr Winninger: I can be very brief on this point, because I have looked at this amendment very closely and what I see is this: Pursuant to subsection 15(4) and pursuant to section 29, the landlord comes forward and asks for pre-authorization of a capital repair that would be above the guideline but, as has been mentioned, subject to the cap. The landlord says, "Look, this repair is going to cost $50,000." The rent review officer looks it over and it seems reasonable, it seems appropriate, it is necessary for the structural integrity of the building and $50,000 seems like the right price. The landlord, maybe through inadvertence, maybe deliberately, might have underestimated the cost of that repair, and indeed it costs $200,000 when the amount is actually expended.

Our subsection 15(4) allows the rent review officer to say, "Look, there is a difference here between the amount you predicted and the amount actually expended. Perhaps we should consider allowing you more on it." However, your section makes it mandatory for the rent review officer to allow the amount actually expended, the $200,000. I think that would be of great concern, not only to the rent review officer whose hands are tied, but also to the tenants who have to pay the inflated cost down the road.

What we need is a certain flexibility here. If there is a range of difference between the amount projected and the amount expended, certainly it has to be considered. The existing subsection 15(4) meets that requirement, but your amendment would not be acceptable because it is mandatory and requires that the amount actually expended be allowed by the rent review officer. For that reason, I find it unsatisfactory. It does not solve your problem with the caps anyway.

Mr Tilson: Under Bill 51, landlords could rely on that advance determination and proceed with certain capital expenditures and certain expenses knowing full well that under Bill 51 they could recover certain expenses.

One of the most common criticisms we heard of Bill 4 when we were going around this province and here in Toronto was the concern of landlords that they relied on the rules put forward by Bill 51 and they made applications for advance determinations. Then along came the NDP with Bill 4 and it put caps on it. They said, "Sorry, it doesn't matter what the Liberals do; we're going to change the rules in midstream." Your government, and Mr Cooke in particular, stood in the House and made representations that he was going to deal with issues like this and with this type of problem.

You have come along with subsection 15(4), and what can the rent officer do? The rent officer "shall consider" any difference. He does not have to do anything. That is no change at all. What we are trying to do is assist you in honouring your commitment to all the landlords and tenants of this province. You changed the rules in midstream and we are trying to give you some credibility. That is why this amendment has been put forward. With this amendment, with an advance determination, it would be subject to the caps put forward either by Bill 4 or by this legislation. That is the intent of the amendment.

The Chair: Shall Mrs Marland's amendment to subsection 15(4) carry?

Mr Tilson: A recorded vote.

The committee divided on Mrs Marland's motion, which was negatived on the following vote:

Ayes -- 2

Marland, Tilson.

Nays -- 7

Abel, Gigantes, Harrington, Mammoliti, Marchese, Poole, Winninger.

The Chair: Shall subsection 15(4) carry? Carried.

Mrs Marland moves that section 15 of the bill, as reprinted to show the amendments proposed by the minister, be amended by adding the following subsection:

"15(5): Subsections (2) and (3) of this section do not apply to capital expenditures to which section 16 applies."


Mrs Marland: This amendment ensures that transitional capital expenditure, as defined under section 16, will not be subjected to the eligibility tests described in subsections 15(2) and (3). The application of these tests to transitional expenditures is unfair since these tests did not exist at the time of their undertaking.

The Chair: Questions and comments? Seeing none, shall Mrs Marland's amendment known as 15(5) carry?

Motion negatived.

Section 15, as amended, agreed to.

Section 10:

The Chair: We stood down clause 10(1)(b). I think it would be the appropriate time to move back. There is an amendment on the floor in the name of Mrs Caplan.

Hon Ms Gigantes: Mr Chair, I think we are going to find unanimous agreement on this amendment.

Ms Poole: As hard as it may be to believe, I think we are going to find unanimous agreement. Mr Chair, if I am correct, last week Mrs Caplan, in my absence, introduced an amendment to 10(1)(b). The government indicated it might be a good idea to include "permissible" in the definition in the act, but would have preferred that the wording be slightly different. We have agreed that happened. Now, if my understanding is also correct, because Mrs Caplan substituted for me that day and is not here, I cannot withdraw this motion, so we should defeat the one that is currently on the floor and then reintroduce the new one.

The Chair: Shall Mrs Caplan's amendment to clause 10(1)(b) carry?

Motion negatived.

The Chair: Ms Poole moves that clause 10(1)(b) of the bill, as reprinted to show the amendments proposed by the minister, be struck out and the following substituted:

"(b) All increases that were required or permitted to be added to it and all decreases that were required to be subtracted from it under this act, the Residential Rent Regulation Act, 1986, or the Residential Tenancies Act during the period from the initial rent date to the given date."

Questions or comments?

Hon Ms Gigantes: It is perfect.

The Chair: The minister says it is perfect. Are there other comments?

Ms Poole: I am pleased to acknowledge that what the Liberals are doing is deemed perfect by the minister. Thank you, Minister, for that accolade.

Hon Ms Gigantes: You didn't do it all on your own.

The Chair: Shall clause 10(1)(b) carry? Carried.

Section 10, as amended, agreed to.

Mrs Marland: I am voting against it, as amended.

Section 12:

The Chair: We should go then to section 12, which, as the committee will remember, was stood down at our meeting last Thursday. Dealing with subsections 12(1) and 12(2), I see there is a government amendment.

Hon Ms Gigantes: There is a government amendment.

The Chair: It is as printed?

Hon Ms Gigantes: This is as printed.

The Chair: We are dealing then with the Conservative amendment to subsection 12(1). Mr Tilson has moved it.

Ms Poole: Mr Chair, is it not the usual precedent that the official opposition's amendments come first?

Hon Ms Gigantes: This is on the floor. It was on the floor, was it not?

The Chair: I do not believe, Ms Poole, you have an amendment to subsection 12(1).

Ms Poole: Yes.

The Chair: You do?

Ms Poole: I was told that it was stood down.

The Chair: Perhaps legal counsel could help us out here.

Ms Baldwin: Yes, the Progressive Conservative motion deals with paragraph 1. The Liberal motion deals with paragraphs 3, 4 and 5, and they come after that.

Hon Ms Gigantes: Actually, it deals with paragraph 2 also, in striking out "55%."

Ms Baldwin: Yes, it still is after paragraph 1.

The Chair: Mr Tilson's amendment is on the floor. Comments or questions?

Hon Ms Gigantes: Mr Chair, as I recall, we had quite a good discussion of this item and I had, on behalf of the government, pointed out that federal and provincial taxes are already included in the construction of the guideline used under the bill because they are included in the service charges which form the base for the calculation of the guideline. The one question that was left unaddressed in the government clause was garbage tippage fees, and at this stage we think this is a matter normally dealt with by municipal taxes. If it becomes necessary later to add garbage tippage fees, we will do that.

I would also like to point out that what the amendment does is put into the legislation all the matters that get covered in the guideline. The government position is that we want to have that guideline described in regulation. It will in fact cover all these items except, as I say, the tippage fees. I think the tippage fees make the point that, as services provided change and landlord costs change, it is much easier to deal with them in a timely way and in a representative way within the regulation rather than to have to come back to the Legislature and ask to amend the guideline in the body of the bill each time.


Mrs Marland: My understanding of this section is that, in establishing what the rent control index will be based on, the government wishes to acknowledge that obviously the index has to be based on the operating costs of the building. When the minister says it will be dealt with in a timely way, I do not think, unless she can explain what she means by that -- maybe I should let her explain that.

Hon Ms Gigantes: I meant that any changes to the elements that are taken into consideration as landlord costs can be adjusted in a timely fashion if the description of the guideline and the elements involved in the guideline are spelled out by regulation. That means we do not have to come to the Legislature to change the elements which would be taken into consideration. It may be that some time in the future some other costs that landlords will be bearing -- and it might be garbage tippage fees -- should be added as an element within the costs to the landlord reflected in the guideline. If that is the case, we can do it by regulation in a timely way.

Mrs Marland: I would suggest that does not give any security to the people who have to pay to operate the buildings. Garbage tippage fees are being added all the time in municipalities around this province because of the costs the municipalities are facing in trying to deal with their waste management. If we are not willing to acknowledge that the garbage tippage fee is just as relevant a cost to operating the building as cablevision, the superintendent's salary, insurance, water and sewage fees and municipal, provincial and federal taxes, I do not think the minister is being very realistic.

Are you saying that we will deal with it in regulation when it happens? The fact is that it is happening now and there is no security for the owner of that property when he goes to apply for an increase measured against the rent control index. If the rent control index does not include all the real costs of the building, I suggest it is very unjust. If you are sincere about what the rent control index is, how could you ignore one aspect of it? Maybe you could tell me what you see the rent control index as being.

Hon Ms Gigantes: The rent control index is a summary of those operating costs which landlords pay. The composition of those costs within the guideline is determined on a survey basis, with which, I might point out, landlords have not had trouble in terms of the content for many a year since the guideline was established way back when. How far back does that go? This particular one goes to 1986. I do not think we heard any complaints about the composition of the guideline or its existence in regulation during committee at all.

Mrs Marland: No, and I could believe the minister is correct when she says there has not been a problem, because in the past the cost of the management of garbage has been included in the municipal taxes. However, that is changing, and I can give you an example. Even in my own community, the municipality no longer picks up the garbage at my constituency office. That has now become a cost for the landlord to address. The landlord is now having to pay for commercial pickup of the garbage. You said the rent control index is the operating costs which the landlord must pay. In fairness to landlords, if they have to pay a garbage tippage fee over and above their municipal taxes, which is what is happening today, why can we not be fair and realistic and include it with these other costs?

Hon Ms Gigantes: I feel that, first of all, the intent of this amendment is to place the matter in legislation, and I have explained why that is not the position we are taking.

Second, we are in the process of consulting on the composition of the guideline as it will be used under this legislation. If indeed we get widespread reports that this creates a special new problem for landlords facing their costs, obviously we will want to take that into account in setting up the composition of the new guideline.

I think the member has to recognize that the government feels it should not be in the legislation but in the regulations, and that is the real and practical difference between our position and the one being advanced in this amendment.

Mrs Marland: Can you explain to me why cablevision or water and sewage fees or insurance is not dealt with by guideline?

Hon Ms Gigantes: They are. Take a look at bill 51 and you will see that they currently are. We are, as I said, consulting on the makeup of what the guidelines should be under Bill 121, but they currently are.

Mrs Marland: Are you saying that currently everything in the rent control index is there by regulation?

Hon Ms Gigantes: Yes, and everything that is mentioned in your amendment, except garbage tippage fees, is currently included in the regulated guideline.

Mrs Marland: Can you tell me, Minister, when you say you are going to be consulting, with whom you will be consulting?

Hon Ms Gigantes: We have consulted, in fact, with members of this committee. Members received notice of the beginning of consultation a good two months ago, I would think, and we have been in touch with a long list of interested parties around the province. In fact, I keep bumping into people and encouraging them to be involved in the discussion when they express interest in this matter. The consultation is not complete; we have not got a report out of it yet, but we expect it fairly soon. I would be glad to share the result with members of the committee. I think I made this commitment the last time we discussed this particular amendment.

Mrs Marland: I do not know the backgrounds of the people on this committee and whether they have residential property that they operate. Maybe they do, but as a member of this committee, if you were to consult with me on the operating costs for a residential building, I would not have a clue. I am not a landlord.

Hon Ms Gigantes: Well, you might say, "I think you might take a look at garbage tippage fees." I would suspect that from the amendment you are putting forward. Then we would be encouraged to look at garbage tippage fees as a matter to be regulated within the guidelines.

Mrs Marland: This is not a complex amendment. I suggest that cablevision, for example, is something that fluctuates in cost, and insurance changes in cost. If you are willing to look at all these other things in terms of the rent index in the past, I am simply asking that you include garbage tippage fees. Why would you not even be willing to look at it?


Hon Ms Gigantes: Mr Chair, if the member is ready to hear me when I say it for the third time, if she, as a member of this committee, thinks that garbage tippage fees should be considered as we look at the composition of the guideline to be used under Bill 121, I certainly will be glad to assure her that it is something that will be considered.

I think perhaps she is not completely familiar with how the guideline has worked until now, which is that we currently have a number of elements included in the guideline. They are superintendents; salary and rent; insurance; heating; hydro; water; municipal taxes; management and administrative overhead; interest and bank charges; bad debts; maintenance, including a whole long list of things; accounting and legal costs; cablevision, and miscellaneous.

Each is given a different weight, depending on what we are finding out in the annual surveys that we take, and there is a three-year rolling average that creates the weight of the cost within the guideline as it is applied each year. That is, for example, the reason why, in spite of the fact that inflation generally is going down, the guideline is moving from 5.4% in 1991 to 6% in 1992. On a three-year average of costs, municipal taxes, among other costs that landlords bear, have been high over the last three years. Heating costs have also been rising over the last three years, and there was one other component, I remember, which was a little bit higher than --

Interjection: Hydro?

Hon Ms Gigantes: No, it was not hydro.

Interjection: GST?

Hon Ms Gigantes: That was it; it was GST. So that is how it operates. That is how we intend to continue operating. We are consulting about the specific ways the guideline can be constructed. We are glad to take the advice that we look at garbage tippage fees. I hope the member will not pursue the matter of trying to get it into the legislation itself any further, because that really does mean it is going to be much harder to accommodate any new costs which, like garbage tippage fees, may be a thing of the future.

Mrs Marland: I am not going to lower myself to enter into this debate with the minister and her sarcasm. If she wishes to be sarcastic about my knowledge of anything, that looks good on her, but I am not going to lower myself to continue this debate. I simply will ignore her comments and will not respond to them. Since I am outnumbered on this committee by government members, I have no chance of getting anything in this legislation that the minister does not agree with, so I will withdraw from further comment on this section.

Ms Poole: I found it quite interesting when the minister said she received no complaints and that during the hearings there were no complaints about the composition of the guideline. I have to agree with her. I have over 35,000 tenants in my riding, and any number of landlords, and not once in the past four and a half years have I received one complaint about the composition of the guideline. I am basically saying, if it ain't broke, why are you trying to fix it? But that debate is for another day.

I do not want to be too helpful to the minister, because then she will rely and depend on my assistance, and if one day it is not forthcoming, she will be devastated. However, I would like to mention that I did ask, as one of my series of 20 questions, literally, to the ministry, why garbage removal costs, including tippage fees, were not included as a category in the rent control index used as the basis of future guidelines. The ministry gave what I thought was quite a good answer and a very extensive answer. I do not know if I will read all of it, because it is almost two pages, but I will just read the summary at the very end. It says:

"However, for the following reasons, these costs have been excluded as a separate building operating costs index category:

"1. For many landlords, garbage removal costs are not an issue. Most small landlords and some large ones have the option of municipal pickup. Some can apply for rebates for costs incurred. Therefore, including these in the index would be a compensation for many who do not experience the cost increase.

"2. In cases in which garbage removal fees are covered by municipal taxes, these costs have already been reflected in guideline calculations.

"3. For those who experience such costs separately from municipal taxes, any increases would have been reflected in the miscellaneous category in the rent control index."

I just thought I would share that with the committee. Neither the minister nor the Conservative critic had the advantage of sitting through a lot of hearings on Bill 4, where this was quite a contentious issue. I think all members have a copy of the ministry's answers to the questions. I believe they were distributed by the clerk. You might like to review that in more detail at your leisure.

The Chair: Shall Mr Tilson's amendment to paragraph 12(1)1 carry?

Motion negatived.

The Chair: We have a Liberal amendment to subsection 12(1).

Ms Poole: Just to make sure I am doing the right one, we have two relating to subsection 12(1), one that relates to paragraphs 4, 5 and 6 and one that relates to paragraphs 3, 4 and 5. I think one was a substitute for the other.

Hon Ms Gigantes: I just have one.

Ms Poole: You have one of mine and one from the Conservatives. They had the same type in their motion so I thought it was one of ours. I apologize for that. I do not want to take anything from the Conservatives.

The Chair: Ms Poole moves that subsection 12(1) of the bill, as reprinted to show the amendments proposed by the minister, be amended by striking out "55 per cent" in the second line of paragraph 2 and substituting "three fifths" and by striking out paragraphs 3 and 4 and substituting the following:

"3. The part of the guideline allocated to eligible capital expenditures is equal to 1%.

"4. The part of the guideline allocated to additional operating and capital costs not otherwise covered by the guideline is equal to 1%.

"5. The guideline is the sum of the amounts determined under paragraphs 2, 3 and 4."

Ms Poole, do you have some comments?

Ms Poole: When have you ever known me not to have comments, Mr Chair? The short answer is yes, I do.

The Chair: I will not editorialize.

Ms Poole: The effect of this is to do a number of things. First is that under the old guideline I just referred to, the landlords were allowed 66 2/3% as an allowance, when you are looking at the degree to which the costs of running a building were affected by inflation. This guideline seemed to work extremely well for a number of years. But when the government came out with its so-called new, improved rent legislation, what it did was to have two different rates, one for small buildings and one for large buildings. A lot of people said this did not make any sense. Finally, after every witness, whether tenant or landlord, said this did not make any sense, the ministry came up with one guideline instead of two. In its wisdom, it decreed that 55% was going to be the compromise number.

I have a number of problems with the way this all happened. The first is that the ministry did not have any comprehensive study which related specifically to these costs that it could rely on to say that this number should be changed at all. When it did choose a number, it chose one on the low end of it. I am particularly concerned by this because our older stock is in jeopardy of not receiving the proper maintenance. If the money allocated to landlords in the guidelines is reduced significantly, these older buildings are going to suffer and, probably more important, the tenants in those older buildings are going to suffer. You have to keep an adequate amount of money flowing in the guideline to ensure that there are sufficient moneys going into the older buildings to keep them well maintained.


When the Fair Rental Policy Organization of Ontario was here at the hearings, I asked what would be a fair figure. They said the average was 58% but in a new building the costs were quite different than with the older stock. With the older stock it would not only be 66 2/3%, it might be 70%, 80% or 90%. We have tried to strike a balance by getting a more reasonable figure.

I have many regrets, but one in particular relating to this section is that the Liberal caucus does not have sufficient funds to do an appropriate study to determine the right figure to use, so we are going on the testimony that was available to us and trying to come up with something that would best serve the interests of the people.

The second part of this guideline amendment is that we have divided the capital allocations for the guideline into two separate sections. Instead of saying 2% for capital, we have said 1% would be allocated to eligible capital expenditures. Those are the types of expenditures that are related in section 15 of Bill 121. The second part of it is that we have allocated another 1% of the guideline amount, which would be to additional operating and capital costs not otherwise covered by the guideline. You might ask what that is. That refers to costs the landlord would no longer receive any moneys for because of changes to the act. This would include things such as painting, changes to the superintendent's wages, new fridges and stoves, which are no longer deemed to be an eligible capital expenditure, and the continuous upkeep of the building.

Members of the government may not appreciate the subtlety of dividing it up, but I can tell you that if you do not make any allowance for things such as continuous upkeep and painting and fridges and stoves, then in many cases the tenants will not get that done. You may say, "But elsewhere in the act we're going to hammer the landlords over the head if they don't abide by the rules," but I have a lot of problems with that theory. Do you not want to solve the problem before it begins? Again, you have to make sufficient moneys flow. Part of the reason for the separation is that at a later date there is another amendment by the Liberal caucus, which I do not want to go into right now, which separates out the deductions from an application as to whether it is for necessary, eligible capital repairs or for these other costs.

I really think this is a balanced amendment. It does not jeopardize in any way the government's avowed aim of tenant protection. In fact, I think it will do the opposite. I think it will enhance tenant protection, because it should go that extra measure towards making sure those additional costs are taken care of in the building. It might also be some relief to landlords who cannot claim any longer many of the costs they could claim previously under the other system, those who have suffered financial loss. I had problems with the way the former financial loss provisions worked, but on the other hand it is not fair to take it away and say there is no provision whatsoever in any way, shape or form for financial loss.

Again, separating this out will give a little bit extra to those landlords who are suffering, yet less than they were given before under the old guideline which the minister said worked so well. They are being cut off, but make sure you are giving them enough funds flowing into that building to keep it up or we will rue the day that we did not.

Subject to the fact that some of the government members may want to comment on it, I do not have any further comments on this particular resolution. I would like to take this opportunity, though, to table with the committee a new, improved explanation of Liberal amendments to Bill 121. This is revised from the one that was provided to you on the first day of hearings. We have renumbered it to coincide with the government amendments and with the new reprinted act, so if you would take the original explanation of Liberal amendments out of your binders and substitute it with this, it would probably be helpful to you.

The Chair: Thank you, Ms Poole. Are there further questions and comments on Ms Poole's amendment?

Hon Ms Gigantes: Mr Chair, if I could, I would like first to ask Colleen Parrish to comment on some of the issues that were raised in Ms Poole's presentation of the amendment, specifically having to do with what we know about the elements of the guideline touched on in this section.

Ms Parrish: The current guideline in Ontario is calculated on two thirds, essentially, of the rent control index. That number did not really come from any sort of comprehensive study. Essentially that number was derived from a survey done of buildings that came to rent review, a sort of best guess based on those buildings that had come through the previous legislation, the Residential Tenancies Act, for instance. There was the suspicion that it would be a high number, because buildings that tend to request above-guideline increases tend to have higher operating cost ratios. They often come because they have financial or economic loss. However, that was the best evidence they had at the time, so the idea was, "Let's pick that and then later on we'll study this more."

Hon Ms Gigantes: That was 1986.

Ms Parrish: That is right. That was part of the Bill 51, the Rent Review Advisory Committee debate. But everyone knew at the time there was nothing magic about two thirds. It was just an educated guess or the best we could do. Subsequently there has been better evidence because we have had more cases coming through the system. What happened was that we looked at our own cases and noted that certainly there are buildings that have very high operating costs, but that two thirds tended to be higher than was usually the case, certainly higher than the average. We looked at the Royal Lepage study. It said generally that these have been below 50%, as low as 42% or 48%. We then looked at the study that the Fair Rental Policy Organization of Ontario did, which was very helpful. Essentially it said it benchmarked between 51% and 58%, with some variations on both sides -- you will always get outriders -- with an average coming in at about 56% or 58%.

It seemed to us that 55% was not unreasonable, given the evidence, and in fact I have never seen a study that shows that two thirds is the right number. The evidence is pretty clear that the appropriate number is probably between about 51% and 58%, in that range, so 55% seems not unreasonable.

We then tried to think about how much money was being generated in the system, and that is why we have distributed this chart. As members of the committee may recall from earlier presentations, the estimates of the amount of capital needed to pay for repairs in Ontario buildings over the next 10 years is between $4 billion and $7 billion. This chart tells you how much this new system will likely generate over the same 10-year period with the new, one-size-fits-all guideline. All buildings get 55% plus 2%, and buildings making capital applications get an extra year of carry-forward.

If you add up all these numbers, what you see is that this will generate about $8.5 billion over the next 10-year period. This is actually more money than would have been generated under Bill 121 as it was originally printed in terms of the total amount of capital, because our earlier estimates for the sort of differential guideline and the more restricted carry-forward would have generated somewhere around $7.4 billion in this same period.

Looking at all that information, it seemed 55% was a pretty fair approach that creates a little bit of a cushion in terms of the amount of capital and operating costs the system can generate over this 10-year period.


Ms Poole: My recollection of the FRPO brief and report was not the same as Ms Parrish's, so I just went to check with the source, as the president of FRPO happens to be sitting in the audience right now. He confirmed what I said earlier that the average was actually the correct version and it was not that FRPO said it was between 51% with 58% as the highest limit. What they said was the average was either 56% or 58%, depending on whether it was based on a per-unit or per-building factor.

The interesting thing is that the FRPO study was based on its membership, which is primarily the large buildings and also primarily newer buildings. Their membership does not, generally speaking, comprise a lot of the older stock. The figures for the older stock would be significantly higher than the figures I just quoted.

The second point I would like to make is about the Royal LePage study. I think it became very clear during our deliberations that the Royal LePage study was not formulated for this purpose, and it did not serve this purpose. The other factor about the Royal LePage study is that the ministry gave them seven days' notification -- not seven working days, but exactly one week's notification -- that it wanted an update of the report prepared for this committee. There were empirical problems with the Royal LePage report, including the fact it was not designed for the purpose for which the ministry was using it and the fact there was not a proper balance of the older stock.

When we are talking about older stock, I think the minister corrected Mrs Marland earlier and said the majority of units in this province are high rise, not low-rise. Mrs Marland was correct. I asked for a document to be sent over, which is lost in the myriad of papers on my desk. The ministry's own figures showed that 60% of the units were low-rise and 40% were high-rise. When you are looking at the fact, generally speaking, that many of your smaller units are the older stock, I do not think they were --

Mr Winninger: On a point of clarification, how do you distinguish between the low-rise and high-rise? What is the cutoff in units?

Ms Poole: These were the ministry figures. If you wait just one moment I will get them for you. I am referring to low-rise with the ministry's designation in the bill when we first started working with it, where it was six units or under, or over six units.

Hon Ms Gigantes: The numbers are 620,000 in buildings with six-plus units and 432,000 in the smaller buildings. If you look at it in terms of five storeys, you could get a different split. I think you will recollect you talked about eight-plus units.

Ms Poole: I have the first page of the ministry's brief right here, page 1.1. This was the ministry's brief of January 15, 1991, from the Bill 4 hearings. It says 40% were high-rise -- that is five-plus storeys -- and 60% were low-rise.

Hon Ms Gigantes: I did not refer to a high-rise or a low-rise, and neither did you in your earlier comments. I think you used the cutoff of eight units, if you will recollect.

Ms Poole: Actually, it was Mrs Marland.

Hon Ms Gigantes: On that basis, I know it is not the case that the majority are in buildings of less than eight units. It was that issue to which I was speaking.

Ms Poole: I thank the minister for her clarification. The point is that in this province we have a huge number of smaller buildings, many of which comprise the older stock. I gave the figures, in the House and to the committee on several occasions, of the makeup of our older stock. It is very germane to this discussion because we are looking at an average that is suitable for both our older stock and our newer buildings. You have to take both into account. In my mind, 55% is not adequate to take care of our older stock. I would ask Ms Parrish right now if she feels 55% would be a suitable cash flow to take care of the older stock.

Ms Parrish: On average, yes, but there will be cases where the landlords will have problems because they are overfinanced or they have an unusual building. There are cases too where 55% is too much. I agree that when we are talking about 56% or 58% we are talking about averages, and because you can have only one index you have to pick an average number. I think there are cases where the operating costs are as little as 30%, and certainly there are cases where they are more. What the guideline attempts to do is to pick a number which seems to be representative, fair and in the middle. I think the evidence shows 55% is a reasonable number.

I have to say, in all honesty, I have not been able to see any evidence that would demonstrate that two thirds is in fact the number. The evidence just is not there to support that number. I agree any numbers between 51% and 58% you could justify on an average basis.

Hon Ms Gigantes: I think we may be confusing the issue. This is why I suggested, not wishing to be disruptive, the age of the buildings is not really relevant to this question. I think there is a type of building that has particular problems. Just because a building is 30 years old does not mean it is going to cost more in repairs or to operate. A well-built and well-maintained 30-year-old building can be very cheap to operate, particularly if it has been held by the same owner for some time and the financing costs are low. The age of the building is not the real question.

Both in public and in private landlords have made it very clear the buildings that are causing the greatest difficulties to operate and that also need the greatest capital repairs are buildings that were built in the mid-1950s to early-1970s, which are the first generation of high-rises with balconies and underground parking where design and technology really had not reached the level either have today or in the recent past. I think it is that generation of building where there have been real difficulties in terms of maintenance and in terms of capital investment. I think Colleen's contribution really indicates that 55% is a pretty good operating guideline, plus 2% for ongoing capital costs.

Ms Poole: I really cannot believe I just heard the minister say the age was irrelevant.


Hon Ms Gigantes: It is not the relevant factor.

Ms Poole: Is is an extremely relevant factor if you think of a building that is 50 years old and has plumbing that is 50 years old and requires constant repair, electrical work that is 50 years old and requires constant repair, a heating system that is probably based on oil and boilers that break down constantly and 50-year-old windows. You know how much heat they will let out. Every witness we had -- these are people who deal with it. They know what they are talking about.

Hon Ms Gigantes: I live in a 65-year-old house.

Ms Poole: You do not operate it.

Hon Ms Gigantes: I sure do. It does not cost any more to maintain a certain age of building if it is properly maintained all the way along. If you tell me somebody buys a building that has not been maintained and expects to be able to operate it at an average operating cost, I think that is true, there are going to be problems.

Ms Poole: In that 65-year-old house, have you replaced the windows or the doors?

Hon Ms Gigantes: They have been replaced. Obvious maintenance would require that.

Ms Poole: Have you put in a new heating system?

Hon Ms Gigantes: There has been a new heating system. That has taken place over decades and the costs have been borne over decades. That is normal, and those are not operating costs, they are capital costs. You do not run a building and expect it not to cost money. Of course it costs money. What we are doing here is trying to determine what is a normal amount for operations, and the age of the building is not the most relevant factor. I think the landlord groups will tell you that.

Ms Poole: Nobody has told us that.

Hon Ms Gigantes: I am telling you on behalf of landlords who have said it to me.

Ms Poole: I am sorry, you are wrong. At the very end you made a differentiating factor between capital and operating.

Hon Ms Gigantes: Yes.

Ms Poole: I have been in a lot of old buildings in my riding; they have the old plumbing and the old heating system. And there has not been neglect; they are clean, the landlords are taking care of them. They fix the boiler when it breaks down for the 15th time.

Hon Ms Gigantes: But at some time you get a new boiler. That is a capital expense and that is provided for within this legislation.

Ms Poole: Do not mix apples and oranges. In the guideline we are talking about the operating expenses, whether it costs more to have an older building or a newer building.

Hon Ms Gigantes: Who asked about capital expenses? First, we are discussing operating, then you put to me questions that relate to capital, and then you accuse me of mixing them up.

Ms Poole: Because you used a personal example of your 65-year-old house where you find everything hunky-dory.

Hon Ms Gigantes: No, there are operating expenses.

Ms Poole: I said the reason it does not cost more to operate --

Mr Mammoliti: I did not hear her say hunky-dory.

Ms Poole: No, the minister did not say hunky-dory.

Hon Ms Gigantes: I did say that the age of the building is not the relevant question here.

Ms Poole: Mr Mammoliti, if it makes you feel better, I will withdraw hunky-dory. She said it did not cost any more to operate her building than it did a new one. Of course it did not because in effect it is a new building. It has had everything replaced in it. I am saying, if you have a building that has received relatively little renovation -- and that is the reality whether you know it, whether you appreciate it, whether you admit it, that is the reality. We are dealing with buildings like that and those are the ones we have to protect with this legislation.

You are saying that is irrelevant. Why do you think your government changed what you originally put in as the guideline? Because those witnesses came and said it does not make any sense to have two guidelines. Those same witnesses said if you want to have a different guideline based on age, older and newer stock, that makes sense. They said they did not like it because it confused the issue.

Hon Ms Gigantes: It sure does.

Ms Poole: It does. I am not objecting to the fact that you have one guideline to cover all. I am saying you have to ensure that the guideline figure you have picked is going to be sufficient to protect the aging housing stock. I do not see how you have proven in any way, shape or form that 55% is sufficient. When you say nothing has been proven that the two-thirds figure should have been used, I can point out a couple of things.

First, that guideline was perfectly adequate and we did not have complaints about it for years. If you look at the figures comparing what the annual guideline increase was compared to CPI, compared to the inflation rate, you will find the guideline was very much in keeping. If you look at the guideline from 1976, when we first had rent review, to today, you will find on the average that tenants have fared relatively well with the guideline.

If you add up the guideline increases compared to inflationary increases or CPI increases, you will find tenants have received an extremely high level of protection with the guideline we have in place. Arbitrarily using words like, "suspicion," "it was high," "this seemed like a reasonable figure" -- The minister said, "This figure is pretty good," and that is a direct quote; I copied it down, George. Well, pretty good is not good enough. I think if we are going to come out with something that is going to stand the test of time, it has to be accurate, and proven that it is better than what went on before. I do not see how you have proven your case.

Mrs Marland: I totally support the amendment placed by the official opposition. I am just as amazed as the official opposition critic by the minister's comments, which have just reinforced her incompetence as the Minister of Housing.

Mr Winninger: Harsh words.

Mr Mammoliti: What is this, Margaret?

Mrs Marland: It is incompetent for a Minister of Housing to sit in this committee and say the age of the building is not the question when we are dealing with the operating costs. I do not think it takes a rocket scientist to understand that the age of a building is very relevant to the cost of operating that building. In fairness to the official opposition critic, I think she made her argument very carefully.

When you visit an older building and sit in those apartments, you feel the draught coming through the windows if they have not had the money to make the capital improvement by replacing windows. I suggest to you that for a building I am familiar with, which is only 33 years old, the cost of replacing those windows is a major capital expenditure. If you are going to look at operating costs and try to reduce your operating costs as a property owner, you are certainly going to look at what is driving the operating costs, and loss of heat through poor windows is the first thing. It is pretty elementary.

If you have not been able to make that capital improvement on your building, then your operating cost is far greater than a newer, more modern building that does not have single-pane glazing. Of course, with an older building you have greater breakdowns with plumbing and electrical equipment. Old, rusty pipes in an old apartment building cause all kinds of problems with the appliances in the kitchens and bathrooms of those buildings, and if you are talking about steam water heating -- any of those examples -- I think for this minister to say the age of the building is not relevant is an incredible example of the absurd.

For her to assume that people have had the money to renovate those systems in older buildings that make the operating costs so high, I think, is totally unfair. It is fine for her to say she lives in a 65-year-old building; then we hear everything in it has been upgraded. The operating costs would be comparable with a modern building because she actually now has a modern, renovated building. She may have a 65-year-old house but she certainly does not have a 65-year-old house that functions the way a 65-year-old house does that has not had the benefit of the replacement of those components that drive up the operating cost. I think it is very unfair to the thousands of tenants who live in older buildings in this province that the kind of limitation being talked about here -- because it is very obvious that the socialist government is not going to support the amendment to make the operating-cost ratio more relevant. It is unfair because, with the limit of available alternatives for people who live in the older housing stock in this province, we know there are no alternatives for those people to move to.


We know that for the most part a lot of them are on fixed incomes and do not have the option of moving out because their building does not have the maintenance that is needed. You are saying this is the limit you will recognize as an operating cost. It is totally unfair to those tenants, but if this socialist government is happy to sit back and let the housing stock in this province deteriorate because you say the age of the building is not a question when you are dealing with operating costs, then I think it is the most rotten situation you could be part of.

The irony, of course, is that we are sitting here spending time on this bill when we obviously have no leverage on the government. Perhaps we should ask the government which of the 190 amendments it is willing to support. Are we just going through an exercise where each of the two opposition parties' amendments are going to come up and you are going to argue against them with such tremendous knowledge that you would say the age of a building is not a question in terms of operating costs? If that is what we are going to go through, and the majority of votes are with the government members on this committee, then the whole process is an exercise in futility.

Perhaps if there are amendments the minister is willing to consider and has aligned the whip of the committee with directions about -- amendments by the opposition parties that you are going to support -- maybe we should get to those, because obviously this minister has a closed mind. I could understand somebody who did not have the responsibility for housing in this province or who had no knowledge of the subject, saying the age of the building is not the question, but if this minister does not know better than that, it is unbelievable.

We are in a worse situation with the Minister of Housing in this province today than I thought we were. It is no wonder we have a minister who brings a bill to this Legislature, brings in 99 amendments or changes to that bill and then says, "Some of the matters that will be associated with the act I personally need to give more thought to." No wonder we are in such a mess. It is totally unbelievable and unacceptable from this minister.

Hon Ms Gigantes: Mr Chair, if I could --

Mrs Marland: I think it is great when the staff all think everything is so humorous that they do not face their responsibilities. I think it is pretty significant.

Hon Ms Gigantes: I would like to take this opportunity to remind members of the opposition what is included in operating costs under the guideline. I am going to read out the weights as they apply now. If the guideline now is taken as 100%, the superintendent's salary and rent is currently 7.73% of that 100%. What makes that more expensive in an older building? The insurance is currently 1.93% of the 100%. What makes insurance for an older building more expensive? It may in fact be lower. Heating makes up 13.82% of the 100%. It may, in fact, be more costly in an older building. Hydro is 7.41%.

Ms Poole: What about that?

Hon Ms Gigantes: That will likely be the same in an older building as in a new building. Water is 3.3% of the 100%. It is unlikely to be higher in an older building. Municipal taxes are 38.4%, which is the largest single component. Municipal taxes for an older building are likely to be lower. Management and administrative overhead constitutes 8.96% of the 100%. I cannot see why it should be more in an older building. Interest and bank charges currently are 0.6% -- less than 1% -- under the guideline. Again, I cannot see any inherent reason why they should be more in an older building than a later-built building.

Bad debts are allowed 0.5%. Under maintenance, which totals 14.92%, we have items such as painting and decorating, which is allowed 1.72%; cleaning and janitorial service, which is allowed 1.24%; elevator maintenance, which you do not often find in these older buildings that you are talking about, old low-rises do not have elevators, 0.76%. Plumbing and electrical repairs, a big item, is 2.58%. That is an average across all the buildings we are dealing with.

General building maintenance is 7.36%. It might vary for an older building; it might be higher for a newer building. There is no predetermined way of knowing that, except to know the design of the building and how it is being maintained. Snow removal and grounds-keeping are allowed 0.67%, less than 1%; appliance repairs, 0.2%, less than 1%. Then we get to accounting and legal costs, which are permitted 0.6%. Cablevision costs are 0.5%, and miscellaneous, which might include garbage tippage, is 1.33%.

Clearly, the biggest item in this list is municipal taxes. Currently, as we have revised the guideline for next year under the existing calculation, we are almost at 40% as the municipal taxes component in the 100% of the total guideline. So I would like to suggest there is very good reason for saying there should not inherently be a reason to expect higher operating costs in older buildings than in more recently built buildings. Again, I do not think that is a relevant consideration when we are looking at this question.


Given the information we have placed before the committee -- which the Liberal critic may not have noticed as she was having another discussion when we put this before the committee, and we would like to table it with the clerk -- the estimate of the potential capital to be generated under the guideline we are proposing, along with the capital allocation and the eligible capital applications landlords can make, will generate enough money within the total system to be able to overreach the highest estimate anybody has made of what the need for capital availability will be.

For all those reasons, I think the proposal we are putting forward as we move to one guideline in this amendment, as opposed to the two which had earlier been proposed by my predecessor -- I did not table this legislation, in spite of what Mrs Marland had to say -- we think the 55% plus the 2% in an ordinary year for the ordinary landlord is going to provide more than enough money.

Also, where the landlord faces the boiler that has broken down 15 times or the windows that need replacement after 50 or 60 years, we are providing an element within the legislation where the landlord can, over a period of time, do work that is allowed above the guideline, at the level of 3%, but the landlord will have to apply and justify that application for an additional capital expenditure. Frankly, I think any landlord who cannot make this system work has more troubles than any legislation is going to solve.

Mrs Marland: Not nearly as many troubles as the tenants are going to have. The tenants are the people who are going to suffer.

Mr Abel: At least they will have a place to live.

Mrs Marland: No, they will not have a place to live.

Mr Mammoliti: I have sat here all afternoon and listened to both opposition parties. Everything they have said adds up to one thing, and that is that they want the tenants to pay more. I cannot accept that argument. I think that, as the minister has just said, 55% plus the 2% is sufficient.

Ms Poole: What do you base that on?

Mr Mammoliti: If it is not, if the landlords do have to dish some money out of their own pockets, I do not have a problem with that. I have said that from day one. We have heard consistently in this committee from landlords --

Mrs Marland: Welcome to Russia.

Mr Mammoliti: She is talking out of her ear again, Mr Chairman.

We have heard consistently in this committee from landlords telling us they want to make a profit. We have toured the province and they have told us consistently that they want to make a profit. They want to make a long-term profit. They want to retire to Florida. They want to retire to Europe. They want to retire and they want to make a hefty little profit on the side.

Hon Ms Gigantes: George, we all do.

Mr Mammoliti: Of course we all do.

Mrs Marland: I am really glad this is on the record.

The Chair: Mrs Marland, you will have your opportunity.

Mr Mammoliti: Yes, so am I. I am glad it is on the record and I am glad everybody is watching, because I have not hidden my feelings from day one. If the landlords have to pay a little out of their pockets, so what? In the long run, they are going to make a profit on the building. The tenants know that, the landlords know that, everybody in Ontario knows that. What we are hearing here from both opposition parties is, "Let's see how much we can scrape out of the tenants. Let's try and scrape as much out of their pockets as possible." That is incredible.

Mrs Y. O'Neill: It is incredible that you should think that.

Mr Mammoliti: You should be ashamed of yourselves for even considering that argument. Tenants have had enough; 53 years of Conservative rule -- 43 years.

Mrs Marland: You do not even have your figures right.

Mr Mammoliti: My apologies. Another five from the Liberals. Close to 50 years of torture. That is enough. I say this on behalf of tenants in my riding of Yorkview: It is enough.

Ms Poole: You are sounding like an idiot, George.

The Chair: One at a time. Mr Mammoliti.

Mr Mammoliti: I may be sounding like an idiot, Ms Poole, but I tell you, the tenants in my riding want to hear from this idiot. They do not want to hear from that idiot over there, that is for sure. I have to make the point that the injustice the official opposition and the third party want to put upon the tenants of Ontario is ludicrous. I cannot accept that.

If the landlords cannot face up to the fact that they may have to dish out a little bit, then, as the minister says, there is no piece of legislation that will make them happy. There is not a piece of legislation that this government -- well, maybe the Conservatives and the Liberals can. Bill 51 certainly made a lot of landlords happy. But in terms of legislation, I agree with the minister that nothing would make them happy. We are fair. We are trying to be as fair as possible. You have seen amendments come out of this government. You have seen us listen. We have listened from day one. If you look back at our original proposals, our original pieces of legislation, both Bill 4 and Bill 121, you will see that we have made significant changes. The argument that both have used this afternoon in saying that we have not listened, I am sorry, I cannot agree with that. We have; just a few minutes ago we agreed to one of the Liberal amendments.

Hon Ms Gigantes: Two this afternoon.

Mr Mammoliti: Two. There you go. That is significant and that is probably more than any other government has done in an afternoon.


The Chair: One at a time. Mr Mammoliti has the floor.

Mr Mammoliti: Our critic put forward in front of the previous government, I believe, 51 amendments. All of them were turned down by the previous government. If I am mistaken, tell me. Just this afternoon alone we did one hell of a lot more than the Liberals did with our critic back then. That is significant.

I am going to close. I will continue these proceedings and I will continue fighting for the tenants because that is what the tenants want. They want to hear again from this idiot, which you called me earlier, Ms Poole. Frankly, I hope a lot of my tenants write to you and tell you how much they object to your calling me names, because I do.

Ms Poole: I apologize for calling you names, George.

Mr Mammoliti: I was going to close, but that brings me to another topic, Mr Chairman. I have never seen anybody so insensitive as Mrs Marland and Mrs Poole, continually insulting the minister and insulting the people on this side of the committee.

Mrs Marland: We learned from your party when it was in opposition. Just read some of the old Hansards and you'll find out what your people did.

Mr Mammoliti: She is talking out of her ear again, Mr Chairman.


The Chair: Order.

Ms Poole: You should have had to sit through what Peter Kormos had to say to witnesses, calling them slime and scumbags. It was disgusting. Then maybe you'd have a point.

The Chair: Order. Mr Mammoliti.

Mr Mammoliti: I cannot accept the insults that have been dished out from day one, the first day we met with Bill 4, especially from the Conservative Party.

Mrs Marland: Oh, especially from the Conservative Party.

Mr Mammoliti: You know, you are a welcome addition to this committee because you are filling the shoes of individuals who are just as insulting and insensitive as you are, Mrs Marland.

The Chair: Ms Poole on a point of order.

Ms Poole: We have been subjected to a barrage of insults.

The Chair: What is the point of order?

Ms Poole: Mr Chairman, this was from the man who told us we would solve all underground parking problems if the landlord did not use salt on his driveway.

The Chair: I do not see a point of order there, Mrs Poole. Mr Mammoliti has the floor.

Mr Mammoliti: Wake up.

Hon Ms Gigantes: George, calm down.

Mr Mammoliti: There is one person in my caucus who can calm me down, Mr Chairman, and that is the minister. The minister has done a wonderful job of keeping me in line and saying, "George, you've gotten your point across," and I think I have. If there is somebody in caucus who can do that, it is the minister, who Mrs Marland said was incompetent. I do not agree with that. She is doing a wonderful job. I say thank you from the tenants in the riding of Yorkview and across Ontario. I will close, Mr Chairman. Thank you very much.

The Chair: Thank you, Mr Mammoliti. It being 6 o'clock --

Mrs Y. O'Neill: Before we close, Mr Chairman, may we ask the minister to table with us the document from which she read regarding the costing components.

Hon Ms Gigantes: Sure thing. We would be delighted to do that.

The Chair: I still have three people who have indicated they wish to be heard on this particular amendment: Mrs O'Neill, Ms Poole and Mrs Marland, in that order. We will take that up next Thursday morning.

I have a letter from the chief government whip who tells us that the whips of three parties are preparing for the winter sitting schedule and would like to know how much time we will require. If I can, I will try to get a meeting of the subcommittee arranged at a mutually convenient time for next week and we can talk about that.

The committee adjourned at 1802.