LEGISLATIVE ASSEMBLY OF ONTARIO
ASSEMBLÉE LÉGISLATIVE DE L'ONTARIO
Monday 15 May 2006 Lundi 15 mai 2006
RESIDENTIAL TENANCIES ACT, 2006 /
LOI DE 2006 SUR LA LOCATION
À USAGE D'HABITATION
The House met at 1845.
ORDERS OF THE DAY
RESIDENTIAL TENANCIES ACT, 2006 /
LOI DE 2006 SUR LA LOCATION
À USAGE D'HABITATION
Resuming the debate adjourned on May 11, 2006, on the motion for second reading of Bill 109, An Act to revise the law governing residential tenancies / Projet de loi 109, Loi révisant le droit régissant la location à usage d'habitation.
The Acting Speaker (Mr. Michael Prue): Further debate?
Mr. Garfield Dunlop (Simcoe North): On a point of order, Mr. Speaker: Do we have a quorum?
The Acting Speaker: Is there a quorum present?
The Deputy Clerk (Ms. Deborah Deller): A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
The Deputy Clerk: A quorum is now present, Speaker.
The Acting Speaker: The member for Kitchener-Waterloo.
Mrs. Elizabeth Witmer (Kitchener-Waterloo): Thank you very much, Mr. Speaker. I do want to thank the member from Brant for arriving here so that we can get started in order to have further debate and discussion on Bill 109, the Residential Tenancies Act, 2006. It was introduced on May 3, 2006, by the Minister of Municipal Affairs and Housing, John Gerretsen.
I want to compliment, before I begin, the remarks that were made by our critic, Mr. Ernie Hardeman, the member for Oxford, who did provide the leadoff speech on May 9 for our Progressive Conservative caucus. He indicated at that time, after going through all of the documentation, that what we were basically dealing with was a replacement of the Tenant Protection Act that we had put in place in 1998. Of course, the Tenant Protection Act was a very significant piece of legislation which did deal with tenant protection as well, and apparently about 75% of what is in this bill is in fact the Tenant Protection Act. There isn't as much change in this new bill, Bill 109, as certainly the Liberal government had promised people in the last provincial election, and I hope I'll have an opportunity to come back and speak to that at another time.
This was a bill, however, that the Liberal government had promised to introduce within the first 365 days of their tenure, if they were elected, but I think now we've seen two and a half years of time elapse since then, and finally we now have this act.
Anyway, if you take a look at the commitments that were made during the last provincial election, We have here a bill that, I think in recognition of the fact that certainly vacancy rates are up, rents are down, is really a very weak attempt to probably fulfill an election promise. That's why many of the commitments that were made at that time have been watered down.
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I think there is a recognition on the part of the government -- in fact I think everybody realizes that the market is actually working quite well right now. As I said before, vacancy rates are up, rents are down, and certainly if the government were at this point in time to follow through on the promises they had made and introduce more regulation and other requirements, it probably would severely destroy the system that, as I say, to a large degree seems to be working for people if you take a look at vacancy rates.
There is within this bill a broken promise on behalf of the Liberal government, which promised tenants that they weren't going to allow landlords the right to hike rents on vacant units. There are certainly a number of issues in here that demonstrate that the Liberals have broken the promise they made during the election campaign. I think there's also in here, though, on the flipside, some more rules for landlords regarding rent increases, and there is some additional red tape as well.
But let's take a look at the current rental housing market in the province of Ontario at the present time. It's interesting to note that there are 1.35 million renter households in Ontario, and this represents 32% of all households in the province. Of course, if I think of my own family -- I think of my children and my mother -- three of the four of us are renters. It speaks to the fact that certainly within our midst we all have people who rent, and obviously their needs need to be taken into consideration. On the other hand, you have landlords. So somehow you always have to find a balance in any legislation that is brought forward.
As I say, Ontario's vacancy rate is currently very high. In 2005, the rate was 3.7%. The projections are that it's going to remain high until about 2009. As well, at the present time, vacancy rates are highest at the low end of the market in Toronto. The 2005 vacancy rate for the least expensive apartments, the lowest 20% of the housing market, was actually 5.5%. At the same time, average rents are currently static or they're even falling, increasing by only 0.7% in 2005. That's obviously good news for tenants. For the least expensive units, as above, the 2005 average rent was just one dollar above the 2004 average, so I think it shows you how rates are staying very static at the present time.
Allowing market rents on vacant units contributes to investment in renewal of our existing housing stock. Of course that's important to keep in mind, because we need to make sure that, as we look forward, we're also always going to have an adequate supply of rental housing available for people in the province of Ontario.
I just want to take a look at the background of the whole issue related to rent and what has happened as far as rent controls. In 1975, it was actually Bill Davis's Conservative government that introduced rent controls. Rent hikes were initially limited to 8%. New buildings, however, were exempt. Rent controls were scheduled to end almost two years later, on July 31, 1977, but they were actually extended. Then we had a green paper in 1978, which concluded that eliminating rent control might be the best option. There was a suggestion that a tribunal be set up to mediate some landlord-tenant disputes. In 1979, we had new landlord-tenant legislation, and the decision was made that rent control would stay indefinitely. Increases were now limited to 6%, unless landlords could prove to the new Residential Tenancy Commission that they needed more to recover their costs.
Then, eight years later, in 1986, the Residential Rent Regulation Act established a new formula for rent increases. This was based on inflation and on landlords' operating costs. We now saw control being extended to all rental units in the province. Then, in 1988, we have a royal commission, which recommends that we scrap residential rent controls. Then, in 1992, we have a new government, the NDP, and we have new rent control legislation and guidelines based on inflation plus a new 2% allowance for repairs, with any increases above that limited to 3%. Again, there was an exemption on new buildings; at that point it was for five years.
Then, in 1998, we of course had the introduction of the Tenant Protection Act by our government, which actually removed rent control on newly vacant units. For existing tenants, landlords were allowed to raise the rent based on a government-set guideline, plus amounts required to pay for repairs, cost increases, capital expenses, etc. The law made it easier to evict tenants, and rent controls were not applicable to buildings built after 1991.
So that brings us up to 2003, the time of the last provincial election. At that time, the Liberal Party put out their platform. They made many promises, and many of those promises, regrettably, have been broken since then. One I mentioned earlier today: The Premier indicated that he wasn't going to raise people's taxes. He also said he wasn't going to lower them. Certainly, in one of their very first budgets, in 2004, the Liberal government under Premier McGuinty announced that they were going to force Ontarians to pay a health tax. This health tax that is being collected today amounts to about $2.5 billion. It is a huge amount of money. Unfortunately, not only did they raise taxes and ask people to pay more for health care, but they delisted three very key services. Of the people who were surveyed, 91% expressed a concern. Again, we see this government breaking a promise, just as they did break a promise when it comes to rent control.
Not only do landlords have to deal with legislation like this, landlords and tenants also have to pay the new health tax. In fact, people might be paying $100, they might be paying $500, maybe $750, maybe even $900 extra per year. I know a lot of people said to me, when they filed their income tax this year, that they went through the document and they realized that they were paying a lot of money for health services which they were not receiving, because as I say, three key services -- chiropractic, optometry and physiotherapy -- were delisted.
Let's take a look at the Liberal platform of 2003. What did they say about rent, and affordable housing and protection? They said, "We will provide real protection for tenants and we will invest in affordable housing." They went on to say, "We will introduce real protection for tenants from excessive rent increases," and then, "In our first year in government, we will repeal the ... Tenant Protection Act...." That's what I talked about. They broke the promise. They did not repeal the Tenant Protection Act. They did not, as they promised they would, replace it with an effective tenant protection law in their first year. They said, "Our law will protect tenants by making unfair rent increases illegal." They also said, "We will encourage the construction of more rental units to reduce upward pressure on rents. We will ensure that municipalities with low vacancy rates have the right to protect existing rental housing from unreasonable demolition or conversion to condominiums."
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Since that time a few things have happened. Let's take a look at what has happened in Ontario. There are a couple of concerns we have heard from the Ombudsman that I think need to be put on the record. He expressed concern in his 2003-2004 annual report. The Ombudsman found it "unreasonable and improperly discriminatory" that tenants were not able to receive rent reducetions when utility costs decrease, although landlords can receive rent increases when utility costs rise. Good point. With regard to tenants being evicted under the Tenant Protection Act's default eviction notice without a hearing or mediation, the Ombudsman wrote that "such evictions may have disproportionate and oppressive consequences for vulnerable tenants." You can see that the Ombudsman in the province of Ontario is looking out for tenants.
Another impact we've seen on rental property in recent years is the Energy Conservation Responsibility Act, 2006, because it establishes in a legislative framework the installation of smart meters in Ontario homes and small businesses. The government says that they're going to install 800,000 smart meters by 2007, and they want to ensure that smart meters are installed in all homes and small businesses by 2010. The proposed Residential Tenancies Act, 2006, includes provisions to enable installations of smart meters in rental housing while protecting tenants.
Again, we have certainly seen bills, legislation, that have been passed that impact rental properties and rental housing in the province of Ontario. Of course, some of this legislation does impact both landlords and tenants.
Let's go to where we are today. We have the government now introducing this Residential Tenancies Act, 2006. They say that they're doing this to reform Ontario's rental housing system and because they want to promote investment in the rental housing market. As I've said before, there are 1.35 million renter households in Ontario. This represents at least 32% of the population that is going to be impacted by this legislation, plus we have all of the landlords.
It's interesting: I've heard from a few of the groups but I haven't received a lot of feedback on this legislation to date. I have one from a landlord in Waterloo, Raymond Vander Veen, dated May 15, who says, "It has come to my attention that the Ontario government" is making these changes. He is concerned about the changes and also the fact that he believes that the playing field needs to remain level and protect both landlords and tenants. We have another one here from somebody who was concerned before the legislation was passed and again expresses concern about the government getting it right. Then we have another one here from a local landlord. He says that he's concerned about the legislation and that perhaps it won't be balanced. He says that "dramatic reforms are not warranted given that Ontario tenants are enjoying the most favourable rental market they have seen since the early 1970s in terms of price, availability and affordability." These are some of the issues that we have going forward.
I haven't heard a lot from people who rent. In fact, I don't think any of these letters that I have in front of me speak to that. I seem to be getting more letters at the current time from people in my constituency who are landlords and who are concerned about the impact this legislation may have on investment in the province of Ontario, or the impact on Ontario's aging rental stock. Again, people are asking me just to make sure that I get these concerns on the record in order that when this legislation goes to committee, there's an opportunity to ask for some amendments that can indeed be done.
I think it is important, when we take a look at this bill, to keep in mind that we need to ensure that both landlords and tenants are treated fairly. In each and every instance, we need to make sure that we do have adequate rental stock in Ontario and that there remains the opportunity for tenants to have choice. Obviously, at the same time we need to make sure that both landlords and tenants are protected within the legislation.
I think we're at a point where there will be further debate and there will be further discussion on this bill. I'm certainly pleased that I've had an opportunity to speak to this bill despite the fact that the government is probably a couple of years late in delivering on their promise.
The Acting Speaker: Questions and comments?
Ms. Shelley Martel (Nickel Belt): It won't be a surprise to the member from Kitchener-Waterloo, or to others in the House who were here before, that New Democrats opposed the previous government's so-called Tenant Protection Act. We called it something a little bit different. We opposed it primarily because of the provision in that bill that allowed for vacancy decontrol.
What that meant at the time was that when someone in the province leaves a unit and it becomes available to be rented to someone else, rent controls don't apply to that unit. It means that a landlord can charge whatever he wants for that unit. It allows for the possibility that some landlords will use any number of tactics to try and get their tenants out of the unit in order to be in a position to do just that: have them out, jack up the rents and go from there.
It shouldn't be a surprise to anybody else watching this debate tonight that we also are opposed to the Liberal bill that has come before us because it keeps in place this very same provision, the one that was so obnoxious under the previous Conservative act, and this despite the fact that Dalton McGuinty very clearly said before the last election, and I'm quoting, "We will get rid of vacancy decontrol, which allows unlimited rent increases in a unit when a tenant leaves." That's what happened under the Conservative legislation. That's what's going to happen under the Liberal legislation.
What happened to the promise that Dalton McGuinty made to three million tenants in Ontario before the last election? What has happened to the government that promised to do one thing for tenants before the election and is now doing something quite different; in fact, the same thing that the Tories used to do with those same tenants?
Mr. Khalil Ramal (London-Fanshawe): I've been listening to the member from Kitchener-Waterloo for the last 20 minutes. She started in the right direction. I thought she was supporting the bill. She was describing how many different governments came to this place and changed bills and legislation to react to the market. Then she went on and criticized the government because it is moving on this bill and she went against the bill. In the end, she finished her talk and said that the government is almost two and a half years late. So I don't understand where she stands, whether she's supporting the tenant or supporting the landlord.
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I think it's very important. We in this place got elected to protect all people, regardless of whether they're landlords or tenants, to create some kind of fairness, to create some kind of balance between the tenant and the landlord. When I was listening to her at the beginning, I was delighted to explain why the bill came about, why we introduced the bill in this place: to react to the marketplace. We understand. When we came to govern Ontario, we introduced this bill to protect and put a cap on rents in order to create stability in the market. Now that the market is saturated and we have a lot of vacancies, I think it's our duty as a government not to be hypocrites. As a matter of fact, we have to react to the marketplace. We have to create fairness, to protect some kind of investment, to protect landlords.
The main thing is to create protection for the most vulnerable elements in this society, which are tenants; to create some kind of board to create that balance. If any problem happens, people can go to the board and the board will decide whether the tenant's right or the landlord's right.
It's all about fairness. This is what the government is all about: creating fairness and protecting the people of Ontario, whether on this side or the other side or the middle side. It doesn't matter which side they are on; it's our responsibility to do it.
Mr. Ted Arnott (Waterloo-Wellington): I was glad to hear the comments of the member for Kitchener-Waterloo when she made her presentation with respect to Bill 109 this evening. This member has served in the Legislature with distinction for some 16 years. She represents an urban riding in Kitchener-Waterloo. She has thousands of tenants. I've had the privilege to work with her during that time, and she's always supported laws and policies that would create a system of fairness for landlords and tenants.
I would like to once again return to what the Liberals promised in the election campaign of 2003. Let's recall what they promised: "We will provide real protection for tenants" and invest in affordable housing.
"We will introduce real protection for tenants from excessive rent increases.
"In our first year of government, we will repeal the misnamed Tenant Protection Act and replace it with an effective tenant protection law.
"Our law will protect tenants by making unfair rent increases illegal." We will encourage "the construction of more rental units to reduce upward pressure on rents.
"We will ensure that municipalities with low vacancy rates have the right to protect existing rental housing from unreasonable demolition or conversion to condominiums."
Anyone looking at Bill 109, even a cursory review of it, would conclude that it has not been brought forward in the first year of the Liberal government, and they would conclude that in many respects it does not reflect what the Liberals promised. But of course, it's a constant refrain around this place that the Liberals have broken promises, some 50 promises that we've kept track of since 2003. We know that when we go forward into the next provincial election campaign, when the Liberals make promises to the people of Ontario, no one -- literally no one -- will believe them. I would suggest it might be good advice for them to make no promises whatsoever, but I'm not sure they're going to take advice from me. But the fact is, this government is so incredible in terms of its record of broken promises that literally no one in my riding believes them anymore.
Mr. Peter Tabuns (Toronto-Danforth): When I was considerably younger, when my hair was much darker than it is now, I had recently arrived in Toronto, and my girlfriend and I at the time saw an advertisement in a paper for a sewing machine that was available in a store in the west end at a phenomenal price. My girlfriend, who was a very good seamstress, thought, "Here's an opportunity to actually start a little operation where I can make clothes, bring in a little income, make clothes for myself and cut my operating costs." So we hopped on the Dundas streetcar and went out to somewhere at Dundas and Ossington to this store that had this fabulously priced little sewing machine.
When we got there, we saw this sewing machine that was extraordinarily cheap -- low in cost -- but the quality was even worse than the price would suggest it would be. In fact, at that point the shopkeeper immediately turned to another very beautiful machine and said, "You may not like that one, but this one here is available. It's just a little bit more -- a hundred bucks more. Why don't you buy it?" That was one of my earlier experiences with bait and switch: You offer one thing; you give another.
What we're debating tonight, vacancy decontrol, is an example of a bait and switch much bigger than a simple sewing machine offered in a broken-down shop in west Toronto. We are looking at a situation where the McGuinty government promised to end vacancy decontrol, a crucial item, something that matters to tens of thousands of people in this province, and didn't deliver. The reality coming out of that lack of delivery will be higher living costs for people on the lower end of the income spectrum in this province. That's the reality of the bill before us.
The Acting Speaker: The member from Kitchener-Waterloo has two minutes in which to respond.
Mrs. Witmer: I do want to thank the member for London-Fanshawe, the member from Nickel Belt, the member from Waterloo-Wellington and the member from Toronto-Danforth. Since he's a relatively new member, I don't quite have the riding the way it should be. But anyway, I do appreciate all your comments.
I would still maintain that when you bring forward legislation related to tenants and landlords, it's very important that it remain balanced. I have, within my constituency, both landlords and tenants. I have a substantial student population at the two universities and I have a lot of seniors in my community, as well, who are renters. But I would say that, in the case of the Liberal government, they have certainly not kept their promise to the people in the province of Ontario, particularly the tenants. They promised that -- and I mentioned this in my remarks. Their platform of 2003 said:
"We will provide real protection for tenants" and invest in affordable housing.
"We will introduce real protection for tenants from excessive rent increases."
Then they said, "In our first year of government, we will repeal the misnamed Tenant Protection Act and replace it with an effective tenant protection law. Our law will protect tenants by making unfair rent increases illegal. We will encourage the construction of more rental units to reduce upward pressure on rents.
"We will ensure that municipalities with low vacancy rates have the right to protect existing rental housing from unreasonable demolition or conversion to condominiums."
I think you can see that the Liberals, in particular when it comes to a new law, have not lived up to their promise.
The Acting Speaker: Further debate? The member from Toronto-Danforth.
Applause.
Mr. Tabuns: I appreciate the unbridled enthusiasm from the government benches on this. Thank you.
There's no question that tenants in Ontario need protection. Tenants, on average, have about half the income of people who own their own homes. These people and, frankly, as a tenant myself over a large part of my life, need to have housing that's affordable, that's stable, that's well-maintained; housing that they can live their lives in, raise their children in, grow old in. There are things in this bill that some people will see as necessary: action to reduce arbitrary evictions -- not perfect, but a move forward. There are some elements, like action on arbitrary evictions, in this bill that act as a sugar coating that make the rest of the bill far more palatable.
There are fundamental problems with this bill that I alluded to in my earlier comments that are of tremendous concern to tenants. The most significant, the most problematic, is the lack of action on vacancy decontrol. As other speakers have said before me, in the last election Dalton McGuinty promised to bring real protection to tenants in this province -- real protection. "Real protection" means that the affordability of the housing stock is preserved. It means that people who need those rental units have an opportunity to find a place that they can afford, that they can cover with their paycheque. What we have are immigrants, new Canadians in this country; we have seniors; we have working people from a variety of sectors who need this housing to be preserved at a cost that they can afford.
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I've gone through many apartment buildings in this city. St. Jamestown: People who have been to St. Jamestown at Wellesley and Parliament, who've gone through those buildings, know that the population of those buildings overwhelmingly is of new Canadians, people who have come to this country to establish themselves, to build a new life, to build this country, who in fact don't have the money to pay outrageously high rents. Those buildings are full of people who need stable, affordable rents, who don't want vacancy decontrol because they want units that they and other family members can move into years from now.
Crescent Town: Mr. Speaker, you're well aware of Crescent Town. You've canvassed through Crescent Town. You know who lives there: people from India, from Bangladesh, from Pakistan, from the Philippines, people establishing their lives who need stable rents in good-quality buildings. At 50 and 70 Cambridge in my riding; Gamble Avenue; Cosburn Avenue in my riding -- many people from eastern Europe, people who come here with credentials, with a willingness to work and an energy to work, who need stable housing at a low cost. They know that with vacancy decontrol, as people move out of those units, the protection for those units is lost and landlords are allowed to charge whatever they want. That means that we have overcrowding in those units because you have to pack families in for people to be able to afford those rents.
I've been in St. Jamestown at rush hour, when the lobbies are packed with people waiting to get on the elevators because multiple families live in small units so that people can pay the rent. That is a profound problem. That problem is not going to be addressed -- in fact, it's going to be exacerbated -- by this rent control law, this Bill 109 that's before us. This will mean that seniors, for instance, will be frightened, scared, to move because they can never be sure that they will find a unit at a comparable price. Vacancy decontrol means that for seniors their ability to control their housing costs, their ability to move around and find a better place if they're unsatisfied with the one they're living in, will be reduced. For newcomers, as I've said, this will mean a reduction in the amount of housing that's available to them.
I wasn't surprised that Mike Harris brought in vacancy decontrol. I thought he was wrong. I thought that he was acting against the interests of people in this province and people in this city, but I wasn't surprised because ideologically it was completely consistent with where he was at. For him, it was a question of, "Let the market decide. Throw it open to the market; things will be fine." But the reality is that things weren't fine. We didn't see an explosion of rental units being built. We've seen a growth in the building of condominium units, not rental units. So for this government, which professed tremendous opposition to the Harris agenda, to essentially carry it forward in this bill, to make sure that vacancy decontrol doesn't die, to make sure that vacancy decontrol gets to roll on for many years to come, is quite extraordinary.
The reason the promise was made in the 2003 election was because tens of thousands of people in this province depend on rental housing; they depend on housing they can afford. They expect the parties they vote for to take action to defend their interests, and the Liberals quite correctly perceived that it was important to say something to those people about how they would act in their interests. And they did not. The vacancy decontrol that they've put forward is going to bump up rents in this city; it's going to bump up rents in this province; it's going to create disadvantage to those people who voted for the Liberal Party because those people at the time thought they were being told the truth.
The minister talks about a long-term solution to the rental problem. He looks at the situation today and says, "We're in good shape." But the reality is that as time goes on, as more tenants move, as units are decontrolled, fewer and fewer units will benefit from the rent control protection that was supposed to be there.
Right now, Minister Gerretsen is relying on two things: low interest rates and a boom in condominium development. And those things have had a good run, a very good run. We've had hundreds, thousands, of units built in Toronto. We've had units built across Ontario. We've had low interest rates that have made it possible for people to buy new houses. Those have been very, very beneficial to people who need housing. But the simple reality is that all the security for tenants in this province is dependent on those two things continuing to roll on. There's no legislative protection. Vacancy decontrol -- the Mike Harris legacy -- has been preserved, fortified and continued by the McGuinty Liberals. If in fact this government were true to its own ideological roots, to its own conception of society, then it would not have had vacancy decontrol in this legislation. But the Harris legacy is apparently too tempting a target, too tempting a course of action, and thus they've been following it.
I should also note that one of the things Mike Harris did was say that units built in 1991 or later were not going to be controlled by rent control. Did this government, the McGuinty Liberal government, break with the ideological tradition of Mike Harris? Did they say, "Well, Mike Harris's common sense -- something we fought against for so long -- was useless. We're against it. We're going to get rid of it"? No. The reality is they continued it on. They made sure that the next mistake, the decontrol for buildings built in 1991 or later, continued on.
So we are in a situation where as time passes, as tenants move, as housing ages, decays, has to be replaced, as units are converted to condominiums, we see less and less affordable rental housing made available to tenants.
From 1996 to 2005, the average rent for two-bedroom units increased by 30%; one-bedroom units saw an increase of 32%; inflation was 21%. Clearly, landlords take advantage of the law, as it's written, to go beyond the cost of inflation, the cost of living, and protection is required for tenants, protection is required for the housing that the next generation is going to rely on. They're not getting that protection.
From 1997 to 2003, the number of one-bedroom units that rented for under $700 shrank by 85%; the number of two-bedroom units renting for less than $800 shrank by almost 90%. These are big losses. These affordable units are crucial to seniors, to young people, to new Canadians not protected by this government, ignored by this government. In fact, this government carries on the legacy of the government that they so profoundly opposed. I would say that's the biggest problem. These are the biggest problems with the legislation before us.
I want to speak as well to the question of smart meters. In years past, I was a property manager. I managed the Oak Street Housing Co-op in Mr. Smitherman's riding; a fine co-op, Mr. Smitherman, as you know. I managed the Bain Apartments Co-operative in Riverdale. I have to say that people in the Oak Street co-op, those who were on the lowest-income levels, faced profound problems with their heating bills through the winters. They didn't have the resources to heat those homes, and it became a profound difficulty with those families because through the winter they were facing huge and difficult choices about eating, making sure their kids were looked after and keeping their houses warm. They economized in every way. I didn't go into those units finding people wearing T-shirts; people were bundled up pretty heavily. They had their thermostat set above freezing but not enough for them to be comfortable. So as the government moves forward on this particular element, I want them to think it through, because I believe that what you put forward now is going to come back and bite you, and it's going to come back and bite tenants.
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The other part of this is that it's not just heating, it's now increasingly cooling. I used to leave at 10 Hogarth, at Broadview Avenue -- a fabulous building, good residents, well-maintained, but in midsummer a heat box. You've got a 25-storey slab of concrete absorbing heat all day long from the sun in the east in the morning and in the west in the evening. The units were extremely hot. People who live in Parkdale, some of the buildings down by the expressway, have the same problem, very hot concrete buildings. Many people have resolved it by buying a window-mounted air conditioner, putting it in and cranking it up because there is no mercy otherwise. They are hot.
We're going to find in the next while with this smart meter initiative, as proposed, that MPPs are going to be besieged with calls from people who are either freezing in winter and having to make decisions about food, clothing and heat, or people who are distressed by their inability to keep themselves cool in the summer.
This proposal has some virtue in it because if units are metered, to the extent they can, people will reduce unnecessary energy use. I think that's not a bad idea, but there's a fundamental problem in what's put before us, and it's the problem that people interested in energy efficiency have faced throughout the core of downtown Toronto. If you try to go forward with energy efficiency in many of the downtown office towers, you find that the owners of the buildings pay for the upkeep of the building and don't pay for the energy. The tenants pay for the energy but don't have any interest in capital investment. So the people who have capital but don't pay energy, the owners, have no incentive to invest. The tenants, who pay for the energy but don't really have a long-term concern about the building, don't have an interest in investing. It's a profound problem in the commercial sector.
It's been possible to overcome it in some ways here and there, but it continues to be a problem that bedevils energy efficiency programs, and that's why we're here. When we split those landlords away from the necessity to cover energy costs, the question that occurs to me is, how will we get them to ever deal with some of their energy problems?
The building I lived in at 10 Hogarth, basically well maintained, had single-pane glass -- a whole wall of single-pane glass facing east. The walls were not insulated that I could tell. They were pretty cold to the touch. When the wind blew, if we had a blizzard in winter, it would howl through my living room. You could hear the howling in the hallway. The reality was, if I had been responsible for the cost of heating my unit, I would have had tremendous bills because I couldn't have controlled the leakage of air; I couldn't have controlled the heat transfer at the windows or at the walls. If the landlords have the cost of energy taken off their backs and put on to the tenants, there will be no incentive to deal with poorly insulated, poorly glazed, poorly airproofed buildings. That's going to be a problem.
I think that there's some utility to putting on individual unit meters if in fact the landlord has made the investment to make those units energy efficient. If they've replaced the glazing, insulated the exterior walls and done the weatherproofing so that you don't have gales blowing through, under those circumstances then, yes, give tenants an opportunity. But I have to ask how much impact tenants are going to have, frankly.
CMHC did an assessment of energy use by tenants and condo owners. Tenants use 30% less energy, on average, than owners of condominiums. It reflects their lower incomes. That's a reality that's already there. There was a paper put out by the Ministry of Energy, the 2005 Regulated Price Plan Electricity Rates FAQ, talking about the transfer of energy costs from landlords to tenants. In their frequently asked questions the province said, "Well, most tenants use much less electricity than the two-tier system of pricing is going to affect. They're always going to be in the lower tier of pricing. We already recognize that they're using less energy."
If you put in time-of-use meters, I have to ask, what appliances are going to make a difference for them? They don't have washers and dryers in their units. Very few of them have dishwashers. They have stoves and they have fridges. Well, the fridge is going to run when it's going to run. The stove runs when they come home. They have to cook supper. It runs in the morning when they have to make breakfast. They're not going to turn on the toaster at five in the morning; they're going to turn it on at 7:30, when they're up.
I have real questions about whether or not time of use is going to have much impact in these buildings. Individual metering? Okay, I can see that, where you have people who are extraordinary users of energy, perhaps it will reduce their use. Perhaps for those who are fairly economical, it will be a benefit. But I think we're talking about very small amounts, because in fact on the electricity front, in apartment buildings most tenants are going to have very little to control, very little that they can shift until after 8 o'clock, because they don't have those dishwashers and dryers in their units.
This bill needs to be changed. The government needs to amend it to end vacancy decontrol. They need to end their continuation of Mike Harris's legacy. This government needs to impose rent control on buildings built after 1991 and they need to rethink the individual metering sections of the bill. They need to bring in something that helps with energy efficiency but makes sure that tenants are not put at risk, and continue to afford heating and cooling where necessary. This bill at this point doesn't address that, doesn't provide the answers that people need and is going to be a problem for many, many tenants.
The Acting Speaker: Questions and comments?
Hon. Christopher Bentley (Minister of Training, Colleges and Universities): It's my pleasure to respond to the comments from the member from Toronto-Danforth. From my perspective and from the perspective of the people in my community of London, this is a fair, reasonable and balanced bill. It's good for tenants in the sense that it provides strong protection and strong rent controls where appropriate. It's good for landlords because it preserves the backdrop of what we have now, which is a strong rental construction market. Before I comment further, I wish to pay tribute to the excellent work done, not only by the minister but by his parliamentary assistant, the member from Scarborough Centre.
The fact of the matter is that this bill was after a long period of discussion, consideration and consultation in all parts of the province from all groups. We had strong tenant groups and strong landlord groups from people as far away as Owen Sound, all the way down to Windsor, up to Ottawa and in every part of the province. That's what we needed. The result will ensure that we have a strong rental construction market at the end of the day. We need that.
We have a significant vacancy rate right now. In communities such as mine in London, that alone will be the strongest protection for keeping rate increases down.
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The bill provides additional protection. It provides protection to tenants when, for example, rents have gone up but the energy costs are reduced. The tenants can get that back. It provides protection for landlords who need to get rid of that problem tenant who not only destroys the unit but makes it difficult for the rest of the tenants in the building. It also ensures that landlords can recover their costs when they want to upgrade the building. At the end of the day, that's the best guarantee of the future housing stock.
Mr. Gerry Martiniuk (Cambridge): I have the privilege of commenting on the most lucid presentation of the member from Toronto-Danforth regarding this bill, and its non-merit in a sense, because after reviewing the bill, I was surprised at how little it did, after hearing the promises. I remember, during the election, promise after promise, and it all seemed to be built around the Residential Tenancies Act: that things were going to be revolutionized and the life of tenants was going to be -- well, they were going to be on Easy Street, because that was the promise. It was going to be free rents throughout -- I think in the city of Toronto there was a premium, but everyone else would get very, very low rents, and controls were being brought back in.
I waited with bated breath. I remember the first year when this government was first elected. I waited for a whole year, and I expected them to come out and really, really do the thing. And I thought, "Oh, it is a complicated matter. I can see why they're really thinking a long time about it. They really want to think about it and get it right because it was a lot of promises and there are a lot of people who are economically disadvantaged who are waiting for fulfillment of those promises and to make their life a lot easier."
Unfortunately, I don't have enough time, but the second year I waited too. Here we are in the third year and nothing's happened. It's not a matter of liking or disliking; this bill, in all its pages, doesn't do a lot.
Ms. Martel: The member for Toronto-Danforth did comment on this point and I'm sure he's going to want to comment on it again: the fact of how little difference there really is between the Conservatives' Tenant Protection Act and Bill 109 on the important issue of rent decontrol.
In fact, there's no difference between the Conservative legislation and Bill 109 on the important issue of rent decontrol. That is why we opposed the Conservative legislation when it was brought forward and that is why we are going to oppose this legislation: because it was wrong to have it in the Conservative legislation and it's just as wrong to have vacancy decontrol now in Bill 109. And not only is it wrong but it's an absolute contradiction of what the Premier promised before the last election, isn't it?
This is what the Premier said in the last election: "We will provide real protection for tenants." That's impossible to do when you continue to have vacancy decontrol on units built after 1991. The Premier also said, "We will get rid of vacancy decontrol, which allows unlimited rent increases on a unit when a tenant leaves." That's what the Liberals promised in the last election.
Here we have a bill where vacancy decontrol is alive and well yet again and some more, so that tenants are going to continue to get whacked by some landlords who think it's far more important to get them out of the unit and jack up the rent than they do to actually provide affordable housing to those tenants. So on this important issue of vacancy decontrol, no difference between the Liberals and the Conservatives.
Mr. Ramal: First, before I start to comment on the speech from the member for Toronto-Danforth, I think I will listen to the Conservatives; I will listen to the NDP. The Conservatives don't like it for some reason because they are protecting the landlords. The NDP don't like it because they think we're not going to protect the tenants. We support this bill because this bill will create a balance between the landlords and the tenants. We want to make some kind of balance because, in order to have a rental housing market, you have to have both: You have to have the housing and you have to have the tenants for those houses. That's why our approach is a balanced approach between both sides -- the NDP and the Conservatives.
The Premier said that we're going to protect the tenants, and also the member from Toronto-Danforth wants to protect the tenants. This bill creates a great protection for the tenants by creating some kind of mechanism with a board constructed from the tenants and landlords to look after disputes between them and to create some kinds of solutions.
I want to also commend the PA of the Minister of Municipal Affairs, the member from Scarborough Centre, who travelled the province of Ontario and collected a lot of information, listened to the landlords, listened to the tenants and came up with a great solution as a result: this bill.
I think we are taking the right approach and the right direction to create a fair market for both sides. That's why we were elected in 2003: to be fair, to respond to the marketplace and to be fair for both sides. Indeed, it's our duty, our responsibility, to create that balance; it's the government's job. That's why I'm supporting this bill.
The Acting Speaker: The member from Toronto-Danforth has two minutes in which to respond.
Mr. Tabuns: I appreciate having the opportunity. The Minister of Training, Colleges and Universities and the member from London-Fanshawe have both made very interesting speeches, and I was very appreciative of their comments. I think, in fact, that reflects their analysis. Their analysis is, "We need this balance between tenants and landlords, and what we brought forward is exactly that balance."
The question that arises is: Why didn't you make that argument during the last election? The member for Nickel Belt quoted your leader, and your leader was pretty straightforward, I thought; laid it on the line. I can tell you, going through apartment buildings, going through Crescent Town, going through 10 Hogarth, going through St. James Town -- take your pick of high-rise apartment complexes in this city; the position that was put forward by Dalton McGuinty in the last election was a winning position. Not the position we have today; not the position that's being put forward by the two members who've commented on my earlier remarks; what they're putting forward is a position that will be very tough to put forward in large apartment buildings in this city. If you go through those buildings, you will find that tenants don't want vacancy decontrol. You got votes because they understood that you were going to stabilize rents, give them opportunities, make sure that that housing, over the long run, was conserved for them so they would have greater ability to move, greater certainty, less incentive for landlords to move them out. They didn't think they were going to have to rely on the condo market and low interest rates to protect them; they thought this government would protect them. Well, it isn't.
The Acting Speaker: Further debate?
Mr. Ramal: Thank you for giving me the chance and more time to speak in support of the bill and explain to the people of Ontario about the importance of passing the bill.
I guess the people of Ontario have been listening for a long time, since a quarter to 7, to many speakers from all sides of the House talking about many different directions, supporting different directions, supporting different ideas; why they're supporting, why they are against.
People talk about protecting the tenants. Of course, the majority of tenants are students and seniors, and the member from Toronto-Danforth mentioned our newcomers, workers and limited-income people in Ontario. They have no ability to buy huge homes, big apartments or apartments, especially in Toronto, so they go to places they can rent. Since we were elected, we've created some kind of control of rent. We thought it was important to tie it to a percentage of inflation. We thought it was very important to the people of Ontario, so that people who are on a limited income are protected and have the ability to rent a place.
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After a while, the marketplace was saturated. There were lots of vacancies in different places across Ontario. We sensed different problems: places not being kept up to code or not being fixed properly and many tenants being evicted for many different reasons. They asked the landlord to fix their carpet, to change the fridge or the stove, or to fix the window -- many different reasons. That's why this bill came about: to enforce the law in this province and to create a balance between the tenant and the landlord.
Last week I mentioned a story about a lady from London. She called our office in London, and she asked our office to support her. She lived in an apartment with an old carpet. That carpet was dirty. It was attracting many insects and creating many different problems for her. She asked the landlord, and the landlord said no, "If you don't like it, you have to leave."
This bill will protect those tenants, especially if they're asking for changes, major changes, and if the health or rental inspector came to a place, inspected it, and it wasn't up to code, if the window was not properly installed or the fridge was not working well, if the rail on the stairs was not strong enough to protect the people using it -- whatever. So I guess the landlord is forced by the law to fix all this stuff; otherwise, they will be penalized. Also, the tenant in this matter will be protected. The protections in this bill say it clearly. The rent will increase, because the rent will be tied with marketplace inflation. I think it's a great protection.
On the other side, we also protect the investment of many people who invest in many different beautiful buildings in Ontario, whether in Toronto, London, Windsor -- many different places. Many people like to invest in that market. In order to invest in that market, sometimes they require some kind of extra percentage increase in the rent in order to protect their security, to have security in place in order to create a good lounge and a clean lobby, to create a good facility for the tenant, to clean the windows on a regular basis or to change the fridges to have modern fridges, or to paint the hallways, and many different things.
I think it's our duty as a government -- it's the duty of any government -- to react to the marketplace, study it very carefully, and then come up with legislation to create some kind of attraction in the marketplace. This bill will create some kind of attraction, create some kind of stability and create some kind of happiness between the two sides.
Our own statistics, after we created rental control, show that we have enough apartments and units until 2009. The vacancy rate will remain a little high. In economic studies, if you have a lot of vacancies, it means rent will be controlled automatically; it depends on supply and demand. I think the environment is very good for both sides. It depends on supply and demand. Our supply is huge -- it will give us until 2009 -- and the demand is very low, which means the rent is going to be low. So depending on this equation, we have some kind of stability; automatic and natural stability in the marketplace.
This bill also introduces and maintains stability by creating a board. The board will be composed of tenants and landlords. If there is a dispute for any reason between the landlord and the tenant, which happens on a regular basis, that board will meet, listen to both sides and make a decision.
I think it's a great approach. I think this bill will create stability for a longer time. I think this bill will create some kind of understanding among all the people of Ontario and also maintain the ability for many investors to keep investing to renovate many falling down buildings, many areas to be cleaned, to be up to code, to be fit in the neighbourhood.
If you come and penalize the landlord -- I'm not here to advocate on behalf of the landlords. I know landlords have a lot of money, have a lot of ability to make money. But in the end, if you don't give them the chance to make a profit, they'll move from that sector to other sectors. Then we'll have a lot of downtown core going down. We'll have a lot of buildings not maintained properly. We'll have a lot of places just looking ugly.
So in order to maintain the beauty of our neighbourhoods, in order to maintain the ability to have strong maintenance so places look good and fit with the neighbourhoods, we have to give those investors some profit in order to maintain what they have, to update it to fit the code, and also attract more tenants.
Now, because of our measures in the past, we have a lot of vacancies. We see now in many places like London, Toronto or many different small cities in Ontario that many landlords offer two or three months free in order to rent from them at a reasonable price. I think it's a natural balance because, as a result of high vacancy, the landlords want to rent their places, so they offer all these good things for the tenants. So I think it's good for the tenant too. The tenant now has a chance to choose between many different apartments in different locations, and he also can choose which rent level he can afford.
I listened to many speakers from the Conservative Party and also from the NDP. The Conservative Party tends to protect the landlord in this place and thinks the landlord is abused by this bill and not given enough of a chance to raise whatever rent they want; they don't want to be tied to inflation. Also, the NDP thinks this bill is going to create some kind of inability for many different people in Ontario to rent places because the market would be high, would be expensive. But this bill assures the people of Ontario -- both sides, whether the tenant or the landlord -- that there will be a balanced approach between them, there will be rent increases tied to inflation, which I think is normal, because everything is tied to inflation, and also that the landlord will be protected. If they have a bad tenant who is not going to pay the rent, is going to abuse the property, is not going to respect the property, they have a right also to go to that board and deal with him in a professional manner. This is what the bill is all about. This bill will create that ability for both sides to get dialogue among themselves and also to have stability in this community.
In the end, whatever we do in this place, it's all about creating stability in many different communities by creating places for many different people in this province, to have the ability to go rent a place, not for a week or a month or maybe a year, but maybe for a lifetime if they love it and they like it and they can afford the rent and then, the main thing, that the landlord will maintain the house and keep it up to date and give them the luxury of living with a good environment.
It's about putting two pieces together, because this market cannot live without landlords and cannot live without tenants. Landlords require tenants and tenants require landlords. They both have to work together, and it is the government's job to make that balance and make it happen by creating legislation to protect both, and to protect all the communities.
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The Acting Speaker: Questions and comments?
Mr. Dunlop: I'll be having an opportunity in a few minutes to make a few comments of my own.
It's always interesting to hear the comments from the members opposite and how they feel this is a piece of legislation will be the be-all and end-all to the Tenant Protection Act or to solve any problems between landlords and tenants. As you know, we've been trying to fix this problem for 31 years now: different governments, different pieces of legislation, different regulations.
I think the problem is we have to realize that one of the key problems we have is we don't need landlord and tenant protection for good landlords and good tenants. The problem is when we have people that are abusing the system either way, whether it be on the landlord side or on the tenant side. That's why we always come up with sort of a stalemate when it comes to what is really and truly the best legislation that's available to the public. I don't want to get into a lot of that right now because, as I said, I'm going to be speaking next on this bill. I do think that there's probably a bit of a problem in the fact that you promised this in the first year, but things like the pit bull legislation were far more important to your caucus than the landlord and tenant legislation. I'm interested in knowing, in your summary, why it has taken so long. Why did it take three years to get to this point in a promise that you had made during the 2003 election that you'd do it within one year?
So I look forward to those kinds of comments, and I also look forward to making a few comments on this myself in a few moments.
Mr. Tabuns: The member from London-Fanshawe, again, speaks in a very sincere and convincing way about his approach to this whole issue, but unfortunately, it's completely contrary to the arguments that were made in the last election. Those were the arguments that should have been made at that time so that people would know what they were buying, what they were voting for and what they were going to get. I think that's a profound problem with what has been put forward here, that this is directly not what was promised, directly not what was expected and directly not what was wanted.
But I want to speak, as well, a bit more about this whole question of sub-metering and smart metering. I think it's incumbent on the government, when the bill goes forward for discussion in committee, to talk about exactly how energy bills are going to be apportioned to tenants when landlords pass on those energy costs. Because I can say to you -- sorry, Mr. Speaker.
The Acting Speaker: If I could, this is questions and comments on what the member from London-Fanshawe had to say. I do not remember his mouthing the words, "smart metering" at any time, so if you would confine yourself to what he had to say.
Mr. Tabuns: Well, in fact, it bears directly on the matter, because if you talk about having a balance between the interests of tenants and landlords, you have to talk about energy costs. This bill is about to shift very volatile costs from the landlords onto the tenants. If you're talking about a balance, you have to talk about how that balance is going to be calibrated. Will the landlords be treating tenants fairly in that those who live on the north side of a building, which gets less sun, will get a lower cost or a better break on their electricity costs, or a worse break? I don't think what we have before us is going to be balanced at all.
Mr. Lou Rinaldi (Northumberland): I'm delighted to join a little bit in this debate and make some comments on my friend from London-Fanshawe. I think we sometimes tend to forget, from what I hear in the comments from the other side, about what we're supposed to be talking about here. We're talking about the balance. Yet they want to talk about what was said two or three years ago.
Well, I met with landlords and tenants in my riding over the last two years, and I don't have the apartment scenario that might be in Toronto, or London, or Ottawa or Kingston. It's not a big issue, but I want to make it very clear that it is an issue. The fact is, what was there three or four years ago with the occupancy rates and all those other issues has changed. It's incumbent on this government to look as we progress, and that means legislation put through today might have to be readjusted somewhere down the road because of the changes in demands, the changes in needs. I think we're very reactive to the needs of our communities, so we listen and try to find that balance, which we've heard about from both sides.
We've talked about the lack of consultation. My God, I know the parliamentary assistant travelled the province; we heard over and over again. The bill is going to go to committee. There are probably going to be amendments, as normally happens, but that's reacting to today and what we expect from the future direction we're going.
It's a piece of legislation that's well put together. I'm sure we'll make some adjustments during committee hearings, through amendments, but let's not talk about this being right and this being wrong and throwing it away, absolutely not.
Mr. Arnott: I'm pleased to have a chance to respond to the member from London-Fanshawe, who was given an opportunity tonight to explain the government's position and has certainly made the most of it. I would think, representing the riding that he does -- he does represent many thousands of tenants in London-Fanshawe -- that he would want to speak to this bill tonight, Bill 109. But we still, from this side of the House, have to point out a couple of serious problems with Bill 109.
The fact is, this is yet another broken promise by the McGuinty government. Based on the commitments that were made during the election campaign, the legislation is at least a year and a half to two years late, and we've observed that it's a weak attempt to fulfill an election promise by watering down some of those commitments.
What we know, if we study the rental housing market, is that the market is working quite well right now. Vacancy rates are up and rents are stabilized, by and large, across the province. It's not like the days in the 1980s, I guess, when vacancy rates were very, very low, tenants had few options, and rent controls, perhaps arguably, were needed more so than they are today. But we also know that further regulation requirements will dampen a system that is working.
We also know that for landlords and developers who have opportunities to invest money to create rental accommodation, their investment will be less and we'll have fewer units being built if the perception is that rent controls are being strengthened by the provincial government, which means that fewer new affordable rental accommodations will be built in the province of Ontario. I don't think that would be the government's preferred outcome, and yet it makes you wonder, because they have commitments on affordable housing as well that they are quite proud of and boast about. The fact is, if we establish a system of rent controls that is fair to both landlords and tenants, we can look to the private sector to build these units and ensure that rental accommodation is affordable for people in the province of Ontario, which was the case before we left office.
The Acting Speaker: The member from London-Fanshawe has two minutes.
Mr. Ramal: First, I want to thank the member from Simcoe North. When he was talking and responding to my comments, he said that so many different governments have come to this place and gone, and every single government tried to deal with this issue. I know it's very complex because the market changes from time to time. That's why we have to react to it. He also asked about why we didn't react right away. Well, we wanted to take our time and bring in a bill that's fair and good for many years to come.
The member from Toronto-Danforth was asking about why we're not protecting tenants. This bill is about protecting tenants. The aim of the bill is to protect both sides, especially the tenants, the most vulnerable element of that bill, who should be protected. That's why we're protecting tenants through this bill.
The member from Northumberland was talking about how the market changes. I want to thank him for bringing that very important perspective, because the market changes. We cannot bring one bill forever. That's why we are here: to react and to plan for the future.
We now have a lot of vacancies on the market, a lot of places empty, so that's why we have to create some kind of balanced approach. That's why we give flexibility to landlords to increase the rent according to inflation, not to abuse the system, just to maintain their ability to enhance their buildings and their apartments to keep them in good shape for new tenants.
The member from Waterloo-Wellington said that we broke a promise. I don't think we broke a promise; we maintained our promise. This is a very important element of our promise, which was to create a bill that's fair for both sides, tenant and landlord. That's why we are here. That's why we're looking through both eyes, not just using one eye and closing an eye to other things. We have to make it balanced; when you make it balanced, you have to understand the landlord and the tenant at the same time. I mentioned at the beginning of my speech that the marketplace consists of two sides, tenants and landlords, and you have to create that balance between them.
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The Acting Speaker: Further debate?
Mr. Dunlop: I'm pleased to be able to take part tonight in the discussions on Bill 109, An Act to revise the law governing residential tenancies. The short title of the bill is the Residential Tenancies Act, 2006.
As I said a little earlier in my brief comments, it's always interesting to discuss a Landlord and Tenant Act and/or a Planning Act bill, because I'm quite confident that any government that comes to power, the two things they always like to do for the municipalities and/or landlords and tenants is create new legislation, and it's always the Planning Act and the Landlord and Tenant Act, and we've seen quite a bit of that. In a lot of cases, we also like to talk about making amendments to the Municipal Act. I understand that, because parties of all political stripes certainly get pressure from different groups expecting changes, and I buy that. That's part of democracy. Our job of course when we're over here in opposition is to try to point out the concerns.
We've been saying as part of this debate that the government had planned on introducing this bill in the first year of its mandate, so we would have expected to have seen this bill brought in and passed some time by October 2004. Again, we're almost two years beyond that and we're still on second reading debate. From my discussions, I understand there's a chance that this bill will be time-allocated fairly quickly, that there will be no more debate, and it will go to committee.
It reminds me an awful lot of the Emergency Management Act, a bill that we're discussing as well right now, Bill 56. That's a bill that was already prepared right after SARS, and we expected to have debate fairly quickly. We expected to see that bill introduced because, after SARS, it was considered a high priority to get a bill that was comprehensive and inclusive and would actually give the government the power it required to implement a disaster plan in case of a major emergency. Again, with that bill, it has now been three years and we're on second reading debate -- sorry, we're in committee on that.
One of the things that's amazing as we go to committee on these bills -- I'm telling you, I was really surprised with the emergency management bill. In first glancing over that bill, the same as I did with this bill, I expected that if it went to committee, because we've taken three years to prepare the legislation, there would be very few amendments, that the consultation would have been completed by all the stakeholder groups and we'd have a bill that was fairly accurate and fairly good. I sat in today on Bill 56, I sat in last Thursday, the same as I would hope to sit in on some of these bills like Bill 109, and virtually every group is opposed to Bill 56.
I couldn't believe it, because I actually talked to my caucus members, and I thought it might have been a slam dunk for the government, but it's not. Virtually every group is opposed to it. They're looking for major amendments to the bill. I think this is likely the case we'll see when we get to committee hearings with Bill 109, and I mean that very sincerely. I thought Bill 56 was something that would be done fairly quickly in committee, and now I see major problems with it.
So far, we've probably had 25 recommendations for improvements. I think the same thing is going to happen here with Bill 109, because you may have talked to certain tenant associations across the province, but when we get to committee -- and I hope we do get to committee -- we get to listen to the concerns of everyone, not just the great big, large municipalities like the Torontos and the Londons. I hope we listen to everybody in the province on the landlord-tenant bill, because there's no doubt this is a major bill and we want to make sure that any changes are good for everybody.
We've been told that the system -- and I know the member from Guelph-Wellington mentioned it being market-driven. I think there's no question that the system right now is working fairly well, because in the last eight or nine years we've had substantial growth in the province. A lot of people have had jobs and they've been able to go out and buy a house. What's happened is that it has freed up a lot of spots in apartment buildings etc. As a result of that, rates have dropped a little bit, there's a higher vacancy rate and it makes it a little more competitive.
You'd almost think that was the perfect system right now. Why tinker with it? That's what I'm wondering, why it's become so important now, because when people are buying homes and they're now paying down a mortgage, as opposed to paying rent, it frees up quite a few spots in the province. As a result of that, though, you will likely see a lot fewer buildings being built. That's my understanding. I don't think we're going to see a lot of new development or a lot of new construction in that area unless the economy goes sour and people start to lose those homes. That's happened before; we've seen that on a couple of occasions at least where when people begin to lose their homes, they have to go back and find accommodation somewhere. What happens? They go back to being tenants again. That's an area that we have to be very, very concerned about.
I wanted to look at it from a more rural Ontario perspective, if I could, because in a riding like I have with Simcoe North, where we have a lot of small communities of interest -- hamlets, one city that's not a large city, and a couple of towns -- we have a completely different outlook on the landlord-tenant issue. I can tell you in all sincerity that the people who come to me to discuss their concerns about rental are really and truly the landlords in rural Ontario. That's who I hear from. Usually it's from people who have had a very, very difficult time collecting their rents and even evicting people from the apartments, or in some cases the whole house, that they may have accommodated or resided in.
I wanted to go back for a second, if I could, to talk a little bit about the history around the Landlord and Tenant Act. That was brought in by none other than the Conservative government in 1975 under Bill Davis. He introduced rent control for the first time. Obviously, there was a reason for that; he had to bring that legislation in. There are very few people in this province who I respect more than Bill Davis, and I knew that the reason he brought it in was justified. That was the beginning of many amendments and changes to the act and new legislation, as we said earlier in the debate.
At that point, rent hikes were initially limited to 8%. You can imagine an 8% hike in 1975. It was probably based on a very low income. Naturally, we don't see those kinds of increases today, but the fact that former Premier Davis introduced that bill in 1975 meant that there was a need for it. As we proceed in the history of this province, we need to think that we'll always need to have some kind of law in place to protect each other.
I have to tell you, I've got a couple of examples I wanted to put on the floor, because I know in my own family, I've been involved in a couple of small projects over the years. In one case, it worked out very well; in the other case, it was a sad situation. My wife and I, not too long after we were married, bought a rental house. It was a triplex. And you know what? It turned out to be a complete disaster. It was a case where there were very few controls put in place. We had tenants in the building when we took over who absolutely had no intention of paying rent. They wanted to use as much oil as they could, as much hydro as they could, and eventually we had to evict them. We remodelled the house and sold it because we wanted no part of that at that time. We just felt that there were not enough laws to protect the landlord at that time. I recall going down when we had it under construction, trying to remodel it, and we realized just how much cost we had absorbed as a result of the fact that people did not pay their rent and it was so hard to evict them.
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I still hear that today. I still hear that today in the small communities in my riding, people with fourplexes and sixplexes who are having a very, very difficult time collecting their rents. Quite often in a lot of cases, the landlord is stuck with the hydro bills, he's stuck with the water and sewer bills. As a result, we have people who are what you would consider to be very poor tenants trying to occupy houses. They stay in one place for a certain length of time and then move on to another. In a lot of cases, the landlords lose a lot of money. As I said a little bit earlier in my comments, it's happened a number of times in my riding. It's usually the landlord who comes to me who is very, very concerned and wondering what they can possibly do to change the laws and make them stronger for small landlords in rural Ontario. It has been a problem. I want to put that on the record.
Obviously, we have problems with bad landlords as well. I can say that the odd time it's happened where a tenant has come to my office and is complaining that the place is not maintained well -- probably needs painting, maybe the heating system is not up to par, that type of thing. We get those kinds of concerns as well.
So I think it's always going to be there. I think it's going to be very difficult for any government to come up with the perfect bill, because I don't think we always necessarily have the best tenants and the best landlords that we are dealing with. I think we often deal with people scraping at the bottom of the barrel, both in the tenant position and in the landlord position. I wanted to say that.
The government did make the promise to bring this in within the first year of their mandate. I know we keep talking about this government breaking promises. I think now that's just what I'm hearing continually. When I go around my riding and spend time at 15 or 20 events every weekend, that seems to be what we hear about Dalton McGuinty and his government: They break promises, no one believes a word they say, and whatever happens sort of happens. I think a lot of people right now are eager for the next election. I keep hearing this too: "It's only 14 or 15 months. Let's get the next election out of the way." People want to see it, because I think people are genuinely concerned about the broken promises. I think that's a brand that the Premier is going to have a hard time to get off himself.
People look at a string of promises made in the 2003 election platform. They look at the comments that were made in a series of letters to individual organizations, like the Parents of Autistic Children. I don't think these sorts of things are going to go away. I think that this government is going to wear those for a long time.
We say this is a broken promise of not bringing it in on time. I think what's really going to stick to this government will be this last budget, when there was a lot of money available to balance the budget, there was money to pay down some debt, and they still left a lot of money on the table. They sent out cheques for roads and bridges to municipalities that didn't even have roads and bridges, that sort of thing. People are hearing those kinds of stories, and I think they're genuinely concerned and tired of this long, long list of broken promises over and over again.
I'm going to wind up my comments here in a couple of seconds. I think it's important that we realize that, yes, there have been some interesting comments made in the House about the landlord-tenant act and the importance of it. Somehow this government seems to feel that the program we had in place under the previous government -- they're saying it's not working. Yet I would almost think that when you look back, when you look out there today and see 4%, 5% or 7% vacancy rates, when you see rents dropping, when you see more people able to afford new homes, you wonder why they would want to tinker with something that seems to be working as well as the system that seems to be in place now. I'm wondering what backups they'll have, what sort of safety net will be in place, if the new bill fails.
Now, they're telling me it's good for both. That's what this government is telling me tonight -- I heard the member from London-Fanshawe say it a few moments ago -- that this is a perfect bill for both the landlord and the tenant. I just can't buy that. It seems to me that any bill has to be lopsided one way or the other. I can't imagine a government creating the bill that's perfect. So I'm going to look at his comments very carefully over the next little while when I read them in Hansard, because I think it's the kind of thing I can use when it fails and people come into my constituency office. I'll just take his comments from Hansard, photocopy them and say: "Well, maybe you should write this gentleman. He's the gentleman, along with the Minister of Municipal Affairs and Housing, who developed this bill, wanted it put on the record." I'll just send that out to everybody, and they can actually use that and write letters to the parliamentary assistant, the minister and people like the member from London-Fanshawe, who are saying that this is such a wonderful bill. I think we'll find out very quickly that it's not. I think one of the problems we're going to find out is there's going to be a lack of investment. That's my concern here, that as the population grows in the province, we need those entrepreneurs who are in there to make a buck.
If there's a lower vacancy rate, if we have 7% or 8%, and people are not able to make very much money out of a brand new unit where construction costs are estimated at, let's say, $150 per square foot, they simply will not build those buildings. That's the concern I have. I think the Liberal Party is making an error in this area. I think it will fail, and then, when there are no more new ones being built, we'll see gouging taking place 10 years down the road when there are no units available for the public. That, of course, could mean times when the economy goes sour too, because I think we're probably in about the 12th year of a seven-year boom. That's one of the things that we tend to forget. There have been some signs around the world, with the high dollar in the United States, with the huge growth in development in the Far East, with overtaxation in Ontario, with less confidence in the governments. I think we've got some problems in keeping investment here in the province, and that may, in fact, drive down the economy. Certainly the high dollar is going to have a huge impact on the manufacturers here in Ontario. I think we've got to be very careful. I know the Minister of Economic Development and Trade was up today talking about job creation. It's funny he didn't have a speech on that back in February when we lost 30,000 manufacturing jobs in the month of January.
But anyhow, it's the business we are in here. We in opposition have to be critical of areas in which we see the government letting the citizens down, and although this bill was late in arriving, I don't really see it being a very effective tool in dealing with future increases in rental rates. It's certainly going to be a problem for individuals who like to reinvest in the economy. So the entrepreneurs, I think, are in trouble on this bill. For the time being, it's not too bad for the tenants, but overall, I think that it's sort of a stopgap measure at this point. There's no question that the next government in power will likely have another tenant protection act or a landlord protection act or whatever you may want to call it. But as we proceed further down the road, I don't think this is going to be the bill that solves all the landlord and tenant problems.
We look forward to those committee debates, committee hearings. We certainly look forward to amendments to the bill. I hope the government will look at the amendments. I hope they don't treat us all like the Minister of Finance treated me today, by name-calling when I asked him a question about animal welfare. I just found that absolutely unbelievable.
I look forward to further debate on this bill, and committee hearings.
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The Acting Speaker: Questions and comments?
Ms. Martel: I'd like to respond to the comments made by the member from Simcoe North where he said that things look pretty good now, that it was his perception that things are working pretty well, so why do we need some of these changes? I'm going to have an opportunity to speak next, and I'm going to talk about how significant rent increases have been in a number of communities and the share of income for rent that so many, far too many, tenants in the province have to pay to have a roof over their head at a time when they're also trying to meet increased costs with respect to hydro, etc. So I don't think all is well or very rosy with respect to far too many tenants in the province of Ontario, as I'll outline, which is why I continue to worry about the bill before us.
One of the huge problems I had with the Conservative bill and now with this one, of course, as I've said a couple of times tonight, goes back to the continuation of vacancy decontrol, a provision that was put into the Conservative bill and a provision that remains in Bill 109. That provision will guarantee that thousands and thousands of renters will continue to have no protection when it comes to rent. There will continue to be an incentive for far too many landlords to do what they can to try and evict tenants from their units in order to be able to raise the rents. This is what Dalton McGuinty promised he was going to put a stop to during the last election.
The commitment by the Liberals during the last election was very clear. I know there are some members in the Liberal Party who don't want us to talk about that tonight, but that is true. Here's one more example of yet another promise that has been broken by the Liberal government. In this case it has taken three years, instead of one, to break because they did promise new legislation after the first year. But the reality remains that here we are, and tenants will not have the additional protections they need and deserve.
Mr. Dunlop: On a point of order, Mr. Speaker: Do we have a quorum?
The Acting Speaker: Is there a quorum present?
The Deputy Clerk: A quorum is present, Speaker.
The Acting Speaker: Questions and comments?
Hon. James J. Bradley (Minister of Tourism, minister responsible for seniors, Government House Leader): The speech by the member indicates some interesting challenges that all governments have to face when dealing with landlord-tenant problems. He mentioned, for instance, that there's a difference between very, very large municipalities and smaller municipalities and what the input would be to individual members, and I think there is some validity to that. Though there is a commonality of interest right across the province, I think the member has appropriately pointed out that there are some differences that you're going to receive from people in his riding, which doesn't have large metropolitan centres in it, as compared to others.
The legislation does try to find a balance. We have received over the years, as elected representatives, representations made by tenants who believe that there are certain problems with existing legislation. We've tried, with the legislation we've brought forward, to meet some of the concerns they have, and there are a number of provisions within the bill that do that.
But also, there are landlords who have indicated their frustration. The member himself mentioned that he was involved in an investment, and what happened. We've all heard the story of, particularly, small landlords who have invested sometimes their life savings, sometimes a substantial amount, only to find that people will not pay their rent and do considerable damage to their rental property.
I think all of us in this House would be sympathetic to both those situations: tenants who believe they have been hard done by by landlords in some instances, and also landlords who have found themselves in difficult circumstances. The bill tries to address that.
Yes, there will be suggestions that come forth in committee that the government will consider. But the real purpose of this bill was to find that proper balance, meeting the needs of all the people of the province.
Mr. Norm Miller (Parry Sound-Muskoka): I'm pleased to comment on the speech of the member from Simcoe North to do with Bill 109, which is the Residential Tenancies Act, 2006. This bill is just a weak attempt to fulfill an election promise by watering down commitments and --
Hon. Mr. Bradley: Is that what it says in those notes?
Mr. Miller: Thank you for that, Mr. House Leader. You've got me really off track here now.
What I would like to say is that this is a weak attempt to fulfill an election promise. Really, the situation we have right now is actually a pretty good situation. If you look at the city of Toronto, the vacancy rate is 3.7% on average; that means that 37 of every 1,000 apartments are vacant at this time. That's a very good situation for people wanting to rent apartments. The interesting statistic is that 5.5% of the lowest-rental-price units -- those are the ones that rent for around $700; I didn't know such a thing existed in Toronto -- is vacant at this time. So I would say things are working fairly well. I would question why there's a need to build affordable housing if we have 55 of 1,000 of the most reasonable apartments available and free at this time. Why not give rental supplements to those who need the supplement to be able to rent those units versus building new units when there are so many units empty?
I would like to hit on the points made by the member from Simcoe North to do with the situation with landlords. I would say that in my riding of Parry Sound-Muskoka, it's mainly landlords that I hear from that have difficult situations with tenants who destroy the apartment and they have great difficulty trying to move them out. There are huge horror stories involved with those tenants. Also, problems with the frequency of the tribunal hearings is another thing I hear a lot about in a rural area.
The Acting Speaker: Questions and comments?
Interjection: Peter?
The Acting Speaker: Questions and comments? The member for Toronto-Danforth?
Mr. Tabuns: Thank you, Mr. Speaker. One should always be cautious with one's BlackBerry; it leads the mind astray.
An electronic device was confiscated.
Mr. Tabuns: Oh, no. The Chair of the committee I talked to today said she had suffered a number of scars in her early days in this House. I can see that I will suffer a few myself as well. I hope the BlackBerry is being tended to properly.
There is a difference, no question, between the situation of tenants in large metropolitan centres in 100-, 200- and 300-unit buildings and complexes of apartment buildings and those who live in smaller cities and towns. But that, to my mind, all the more means that in those large towns, where you have very large populations of low-income people, newcomers, seniors, young people, it is crucial that the promises made in the last election are kept. I don't remember caveats being attached to those promises about real rent control, no caveats attached to "We will ensure that vacancy decontrol is history, gone, disappeared, ended" -- none of that. There was no indication there would be a different law for large-city Ontario and small-town Ontario. I think that speaks to the weakness of the legislation before us.
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The Acting Speaker: The member from Simcoe North has two minutes in response.
Mr. Dunlop:. I'd like to thank the members from Nickel Belt, St. Catharines, Parry Sound-Muskoka and Toronto-Danforth for their comments on my comments on Bill 109.
I've heard a number of people mention the landlord issues in small communities. I was glad to hear the member from Parry Sound-Muskoka say that that was the same sort of concern he had. We'll be watching this very closely. There's no question that the government will pass the bill. There may be some amendments or there may not be. This is an area that I will look at very carefully, because under the previous bill, there certainly didn't seem to be enough protection for the landlord in small-town Ontario. I would never expect to be an expert on city-dwelling. It's something I don't know enough about and I'm not going to stand here and tell you I do.
In Ontario we depend an awful lot on entrepreneurs, and that means the entrepreneurs in small communities as well. If this bill truly does help everybody, then I'm hoping there will be no more of those appointments with landlords who say they have a tenant they can't get out or that they've been stuck with a huge water bill or a place has been destroyed. I'm hoping that will never happen again. That's what I'm looking forward to from this bill, if it passes. They tell me it does everything for everybody. If it does, then I will stand here later and compliment them on that. But I somehow don't think it's going to do the trick. I have a strong feeling that it just may not do that.
Anyhow, we'll look forward to other debate and we'll look forward to the committee hearings to see what the general public has to say about this bill as well.
The Acting Speaker: Further debate? The member from Nickel Belt.
Ms. Martel: It's a pleasure for me to participate in the debate tonight.
Applause.
Ms. Martel: I wait to see if you're going to be applauding when I'm done, Mr. Levac. I appreciate your support at the start of the debate.
I'm going to focus on one issue tonight, and that is the whole issue of vacancy decontrol. I know you're surprised to hear that. I want to do that and I want to raise a couple of very serious concerns I have with this proposal that remains in this bill. Without belabouring the point -- although I will refer it to a couple of times in the speech -- the fact of the matter is that vacancy decontrol seemed to be one of the primary reasons that the now government, when it was in opposition, voted against the former Conservative government's Tenant Protection Act. I wasn't the critic at the time, but I remember some of the tenor and the tone of the debate. My clear recollection is that the Liberal members in opposition who got up to speak against the government's legislation at the time focused on this issue and were very clear to make a point about how vacancy decontrol, as proposed in the Tenant Protection Act put forward by the Conservatives, would really be detrimental to tenants in this province. They spoke about that during the course of the bill.
Then we moved to the development of election platforms and to the election itself and, lo and behold, the same concern that had been expressed in this House by Liberal members during the debate on that particular piece of legislation put forward by the Conservatives resulted in a very concrete and specific promise made by the Premier. That promise was, and I'm going to quote it again, "We will get rid of vacancy decontrol, which allows unlimited rent increases on a unit when a tenant leaves." That was a pretty specific promise, and that went out in leaflets right across this city and other cities where there's a large tenant population. That went out in Liberal leaflets to tenants everywhere in those big cities. It was a very clear promise, and I think a number of tenants in the province voted for the Liberals based on that promise.
Now here we are, three years later. I hear some of the Liberal backbenchers get up and say, essentially, "That was then and this is now. Times have changed. Things have changed. We're trying to find a balance." I didn't see much effort by the Liberals looking for a balance when they were developing their election platform and when they put this forward as a proposal to tenants. They weren't talking about balance then. They were pretty clear about what they intended to do. That promise was pretty clear, and that promise was to get rid of vacancy decontrol.
So I'm surprised -- but I guess not very, given the number of broken promises we've dealt with -- that now, tonight, we'd be here with the Liberals talking about balance and the need to think about the landlords and the need to think about the tenants and, "We've had some consultations," and on and on and on. The promise was really clear.
The reality is that keeping essentially the same provision in this legislation that the Tories had in their Tenant Protection Act means that more and more tenants will be at risk of losing their accommodation and too many landlords -- not all, by any stretch of the imagination -- will see this as an ongoing incentive for them to try to evict their tenants in order to increase the rents on those units. I think that's where this bill is going to leave us at the end of the day. I don't see a balance here. I see an ongoing lack of protection for so many tenants in the province of Ontario, tenants who need protection when it comes to the rent they are paying.
There are three million tenants in Ontario. In a report that was actually done under the Conservatives and for the Conservatives by a gentleman by the name of Greg Lampert -- and many of the things he has to say in that report I disagree with, but one of the things he notes in that report I think is worth mentioning again here tonight. In that report, called The Challenge of Encouraging Investment in New Rental Housing in Ontario, Mr. Lampert noted that 75% of all tenants in the province of Ontario move within a five-year period. So you've got three million tenants and 75% of them are all going to move within a five-year period. That is a huge rate of tenant mobility, but I think it also gives you an idea of the potential that exists out there for some landlords to force evictions in order to jack up the rents on their units. That's a lot of people on the move, and when they are on the move, the opportunity arises, in units that were built after 1991, to increase the rent. That gives you, from my perspective, a clear idea of why we need protection for these tenants, because so many of them end up moving, for so many different reasons, in a five-year period, and of why I remain so concerned that the provision that would protect them the most -- that is, an end to vacancy decontrol -- doesn't appear in this legislation.
I've listened tonight to a number of people say, from the government side primarily, but some from the Conservatives, that there really isn't a need for rent control because when you have more vacant units, rents go down; that the law of supply and demand is that when you've got an increase in supply of units coming on the market, the rents are going to go down, that's going to be lovely, and we don't have to worry about rent control because the vacancy rate is increasing in a number of communities and tenants are going to be looked after as a result. Well, I'm going to make the point to you that it doesn't matter whether vacancy rates are high or low; the fact of the matter is that rents continue to go up.
I want to use an example out of London, because both members from London here tonight talked about the law of supply and demand and how control wasn't really a problem because, with vacancy rates going up, constituents in their riding are going to be well looked after in terms of getting rental units. Let me tell you what has happened in London with respect to rents. In 1998, rents in London were $637 and the vacancy rate was 4.8%. In 1999, rents were $639 and the vacancy rate was 4%, so it was going down. In 2000, the rent was $657 and the vacancy rate was 2.4%. In 2001, the rent was $683 and the vacancy rate was 1.8%. In 2002, rent was $705 and the vacancy rate was 2.4%. In 2003, rent was $736 and the vacancy rate was 1.9%. In 2004, the rent was $758 and the vacancy rate jumped right up to 4.7% again.
So in 2004, when you had a vacancy rate higher than it had been in the last three or four previous years, the rent was up to $758. It wasn't going down; it was going up. The rent went up to $775 in 2005 and the vacancy rate was 5.2%. So you've got a vacancy rate that's going up, which should, as the Liberal members have said here tonight, cause rents to go down, but the reality in the London area is that at this point the rate is up to $775. So the trend over that whole period from 1998 was for rent to go up. Whether vacancy rates were going up or down, the rent was still continuing to go up. That's what's happening in London.
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London is not the only area. Let's take a look at Kitchener. Rents for two-bedroom apartments in Kitchener increased by 26.5% between 1998 and 2005, while during that period the vacancy rate mostly increased, or rose, as well. So you had a vacancy rate that was rising, which should, if you listen to the Liberals tonight, cause a decline in rent, when in fact through that whole period, between 1998 and 2005, rents increased by 26.5%.
Let's look at Kingston in the same period. Between 1998 and 2005, rents for two-bedroom apartments in Kingston increased by 23.6%, and the vacancy rate fluctuated. It went up through the course of that time, and it went down. But rents just kept going up.
In Sarnia, the same thing: During the same period, for a two-bedroom apartment, the rental rates increased by 20.4%, and again, like in Kingston, the vacancy rate through that time went up, and it went down.
The point is this: It doesn't matter whether vacancy rates are low or high; rents continue to go up. And rents continued to go up in that period from 1997 to 2005 even higher than the rate of inflation.
So do rent controls matter? They sure do. They sure do, because if you let the free market decide, there is no proof whatsoever that a high vacancy rate is automatically going to result in low rents so the system will take care of itself. That is not what has happened in the most recent years that I have put on the public record. These figures come from CMHC. So it's very clear that it does matter about having rent control, and that the Liberals' refusal to change the vacancy decontrol provision that was present in the Conservative legislation will continue to have a dramatic negative effect on far too many renters in the province of Ontario.
The next problem is what units are vacant. You hear members talking about, "We've got high vacancy rates. That should normally result in lower rents." That's not happening. I've just given you the proof of that. What are the units that are vacant? Is that vacancy rate increasing in affordable units that tenants can actually afford to rent? Or is it increasing in units that so many tenants in the province will never, ever have a chance to actually rent, because the rent is so high?
If you look in Toronto, for example, the number of lower-rent units in Toronto continues to decrease. Between 1997 and 2003, the number of one-bedroom units with rents below $700 a month shrank by 85%. The number of two-bedroom units with rents below $800 a month shrank by 89%. In October 2005, there were only 1,575 vacant three-bedroom units in multi-residential buildings, according to the most recent market survey done by Canada Mortgage and Housing Corp. Most of those units had rents that were clearly well beyond the reach of low-income families, low-income tenants.
There were 124,785 low-income households across Ontario on the active waiting list for social housing at the end of 2004. So I suspect if you took a look what the rent is in those vacant units, where members have said the vacancy rate is increasing, you will clearly see that they are units that are well beyond the financial ability to pay of low- and modest-income tenants in Ontario -- well beyond their ability to pay.
So, again, we need to be extremely concerned about rents and units, and the price of those units, because my concern is that the units we are talking about that members have referred to that are vacant are ones that the majority of tenants in this province could never afford to rent in the first place. We should be concerned about affordability for those tenants.
The fourth problem is that under vacancy decontrol, the average rent of all of Ontario's rental units went up. According to statistics provided by the Canada Mortgage and Housing Corp., which does annual surveys on rental unit costs, rents increased by 26% between 1995 and 2003. During that same time period, between 1995 and 2003, the consumer price index rose by 18%, less than the increase in rents. So during that time period under which rent controls were put in place by the Conservatives, rental increases outstripped the CPI in Ontario.
If that's the experience after a number of years of the Conservatives' Tenant Protection Act being in place, with vacancy decontrol being a major feature of that legislation, then I fully expect and I fully fear that we are going to see the same kind of increases in rent under the Liberals' Bill 109, because nothing is changing with respect to vacancy decontrol.
So we had a 26% increase in rents between 1995 and 2003, when the consumer price index was 18%, quite a bit above it. That's the trend that's going to continue if Bill 109 remains unchanged with respect to vacancy decontrol, and those are the kinds of significant increases that far too many tenants -- and there are three million of them in Ontario -- are going to face.
Another problem is, what is the financial ability of tenants to rent in the province today? This goes back to an earlier concern I raised about what units are vacant in the province. Let me give you some idea of how much more difficult it is becoming for tenants in the province to actually pay their rent. Some 42% of Ontario tenant households, that is, 564,000 out of 1,338,000, pay 30% or more of their household income on shelter costs; 20% of Ontario tenant households, or 265,995 out of 1,338,000, pay 50% and over of their household income on shelter costs. Some 265,000 tenants are paying 50% and more of their household income on shelter costs.
That is a lot of people at great risk of becoming homeless, and that should be a significant concern for all of us in this Legislature -- more than 265,000 people paying over half of their household income just to try to keep a roof over their heads.
The issue of why we need vacancy decontrol becomes even clearer when you look at those statistics, when you look at the inability of so many people to have any money left after they pay for their shelter, to look at the edge of the cliff that we are pushing people to because their rents are so high. If we don't do something about vacancy decontrol, that situation is going to get even worse.
I think it's those problems that I've outlined with vacancy decontrol that have led Kathy Laird, who is the director of legal services at the Advocacy Centre for Tenants Ontario, to say the following: "Rent increases will continue to be unregulated when a tenant moves, creating an incentive for landlords to evict and raise the rents. We have an affordability crisis in this province with rising rents and fewer units." And she is right.
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In the short time that I have, I also want to mention that another promise this government has failed to live up to with respect to housing has to do with the number of affordable units of housing this government promised to create in the last election. The last public figures that we had about the creation of affordable housing units was in 2003-04, and the ministry figures showed at that time that only 65 new units of affordable housing had been created in the province. What's even more interesting is that since that figure was released in 2004-05, the government has not provided the annual figures that we used to get even from the Conservatives with respect to the creation of affordable housing units in the province. I wonder why that is, and I think the reason is that this government is failing so badly in terms of meeting its promise to build affordable housing too. I believe the promise was in the order of 15,000 to 20,000 new units during the course of their mandate, but in 2003-04, only 65 of those units were created. It would be interesting to know what the real figures are and why we can't seem to get those figures released by the government in that regard.
In closing, let me say I regret that this government has not lived up to the promise that it made to tenants in the last election. That was to end vacancy decontrol. It is something that absolutely has to be done.
The Acting Speaker: Questions and comments?
Mr. Ramal: I cannot not respond to the member from Nickel Belt. She was talking about many different issues, especially when she mentioned London. She mentioned London many different times. London is a great city. We are all proud of London. We're here to defend, protect and be the great advocates on behalf of every riding in London: London West, London North Centre and London-Fanshawe -- London and Middlesex county. All Londoners are great people.
But the main thing is, I was interested in her cost-of-living index, vacancy percentage and the cost of rent. I agree with her. It was a great thing that she said. But the member, I think on purpose, didn't mention -- the price goes up with inflation -- how many months free they get in order to rent. Due to a mortgage sometimes, due to a lot of complex issues, the landlord will give you this apartment or that House for a certain price. But, on the other side, what do they give you? They give you two or three months free in order to rent. That's what makes the balance. That's why many landlords across Ontario do this stuff: to protect their mortgage, to protect the value of their homes, houses or apartments. This important fact should be told to the people of Ontario, especially the people of London.
I think this bill will protect them. It will protect the landlord, and it will protect the tenant. We brought this bill forward because we believe strongly it is our duty as a government to protect the tenant. I know the Conservative Party doesn't like to protect the tenant. They think the landlord is the lord, that they should be protected and given more incentive, more money than they have, and also they forget about the tenant.
This bill, as we mentioned, is about balance. It's about creating balance, fairness.
Mr. Miller: I'm pleased to add some comments to the speech of the member from Nickel Belt on this tenant bill. I'd just like to review the history of rent controls in this province briefly in the couple of minutes I have to speak. Of course, rent control came in in 1975. I believe that was a minority government. Bill Davis was the Premier and, I would guess, was probably under pressure from the NDP to bring in rent control at that time. It was a bad idea then, and it's still a bad idea.
I remember being at Ryerson and having an economics professor who, by that time, Shelley, had run twice as an NDP member. But by the time he got around to teaching me economics, somehow his philosophy in life had switched and he showed us very clearly that what rent control does is create a shortage of supply, because it's supply and demand. If you make it so the landlords don't make any money, you basically have no supply. That was borne out. In the ensuing years, we've had some real problems with availability of rental units.
But the situation we have now is one that's pretty good. We have 3.7% average vacancy in the city of Toronto; 5.5% for the lowest-cost rental units. This bill before us now is really not changing too much. It's kind of half fulfilling an election promise, a couple of years late, and that's really all it's doing. The good thing about it is that it's not messing up a situation that's working fairly well at this time, where we have a pretty good situation for renters, where there's good vacancy rates so the renters have a lot of choice out there and are able to negotiate rents. That's a positive.
I note that in 1978, a green paper concluded that eliminating rent control was the best thing to do. In 1988, a royal commission recommended scrapping rent control. This bill, luckily, doesn't mess things up too badly.
Mr. Tabuns: I want to comment first on the remarks made by the member from Nickel Belt, because I think she has pointed out quite clearly that with vacancy decontrol it has not mattered very substantially what the vacancy rate has been. We continue to see rising rents -- substantially rising rents.
The member from London-Fanshawe has talked about the balance between tenants and landlords, but the reality is, when you look at the numbers and when you hear what rents are going up to, that balance is tilted very much towards landlords -- large landlords. I'm not talking about people who rent a unit out of their basement or second floor. In those cases, I would say you've got a pretty even balance. But in the case where you have large corporations renting out thousands of units, they're very powerful.
We're in a situation where I think the member is quite correct: very expensive units, a lot of vacancies; low-cost units, very much in demand and people who need that kind of housing are pushed hard. It's an issue that comes up in my constituency office and I know, Mr. Speaker, that it has come up in your riding in Beaches-East York: people very, very, very hard-pressed to pay rent, constantly looking for units they can afford, constantly searching because, as time goes by in this city, with vacancy decontrol fewer and fewer low-cost units are available.
This government continues to rely on the condominium boom and low interest rates to deliver the results they feel they need to put forward to tenants, but they can't rely on that forever. That's why we have legislation. That's why we elect governments.
Hon. Madeleine Meilleur (Minister of Community and Social Services, minister responsible for francophone affairs): It's my pleasure to speak about this proposed Residential Tenancies Act, 2006. This is an act that I'm going to support because it will benefit my community. It will benefit both the landlords and the tenants.
I remember when vacancy was very low in my riding. It was very low because there was no construction for rental. Why was there no construction? Because of the controls on the price of rent, the owners didn't believe it was a good investment for them. The effect was that there were few apartments for rent, fewer than 1%. What would happen in my riding was that when there was an apartment for rent, they would invite three, four, five, six persons to visit the apartment, and even if the rent was $750, let's say, it ended up being rented for $900 or $1,000 because there was no availability.
This proposal today will encourage landlords to build more apartments, and it will also be beneficial for those who need to rent the apartments because more availability on the market will keep the rent at --
The Acting Speaker: Thank you. The member for Nickel Belt has two minutes.
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Ms. Martel: I want to thank all the members who made statements. I want to focus on two of the statements in particular.
With respect to the comments made by the member for Muskoka-Parry Sound that things are pretty good, I've got to tell you that I don't think there's very much that's good if 265,000 tenants pay over 50% of their household income on shelter. I think that's a crime. I think that's a disgrace. These people are close to the edge and they're going to get pushed off if there is any more increase in their rent or an increase in food, etc. No one should be paying 50% of their income to keep a roof over their head, and that's what happening to far too many people.
Secondly, I don't think there is anything good in the fact that 124,785 low-income households in Ontario are on the active waiting list for social housing as of the end of 2004. That's 124,785 low-income households looking for social housing because they can't afford to pay their rent with the income that's coming in. There's nothing good about that either. That certainly speaks to the need for this government to live up to the promise it made to build affording housing, which they have failed to deliver on.
With respect to the comments made by the member from London-Fanshawe, who said in his remarks during the rotation that rents go down when vacancy rates go up, it's just not true. That's what I pointed out with respect to the figures that I related in his community. The figures I used were for two-bedroom apartments. Between 1998 and 2005, the vacancy rate for two-bedroom apartments in London fluctuated, but rents for two-bedroom apartments increased by 21.6% over the whole period. The lowest vacancy rate right now is in London. The vacancy rates went up and the vacancy rates went down over that whole period, but the one thing that was constant was that rents went up every year. So it's not true to say that if there are vacancies, rents go down. That's just not what is happening in far too many communities in Ontario.
The Acting Speaker: Further debate? The member from Kitchener Centre.
Mr. John Milloy (Kitchener Centre): It's a pleasure to participate in tonight's debate on Bill 109 at this late hour. I want to begin, as so many of my colleagues have, by congratulating my colleagues: obviously the Minister of Municipal Affairs and Housing, but more particularly his parliamentary assistant, Mr. Duguid, the member for Scarborough Centre, who did yeoman work in terms of the consultations that took place across this province. He certainly came to my community. We had a very lively meeting with plenty of exchange, debate and discussion. For me, as a relatively new member, it was an opportunity to learn a bit about the different views of both landlords and tenants.
I've also benefited greatly from the two main organizations in my community. One calls itself RENT, which stands for Renters Educating and Networking Together, under the leadership of Mary Pappert. It's of course a tenants' group, which I meet with quite frequently, and they too have educated me on many of the issues under discussion tonight. On the other side is WRAMA, the Waterloo Regional Apartment Management Association, under the leadership of Glenn Trachsel. I've also met with members there and with the organization and learned a lot about what's been going on in the landlord side.
With this background and having heard these consultations, I was quite frankly a little bit confused by the tone of debate tonight from the opposition benches. We begin with my friend from Simcoe North, Mr. Dunlop, who stood up about 45 minutes ago and loudly proclaimed that rent control was brought in under Mr. Bill Davis, a Conservative, he told us with great pride, and that it was a great first step. About a half hour later, his colleague Mr. Miller from Parry Sound-Muskoka stood up and told us that Bill Davis was unfortunately forced to bring in rent control and what a horrible thing it was. First of all, I think the Conservatives should figure out whether they like rent control or don't like rent control.
Taking a step even further back, the opposition has to start to realize that this is not a bill about two sides in competition with each other, that hate each other and have acrimony between them. Mr. Dunlop stood up tonight and said, "It's impossible to pass a bill like this that is not lopsided one way or the other," that it's going to favour the landlord or favour the tenant, that you can't come to a situation like this with a degree of fairness and equity between two individual groups, landlords and tenants, that are trying to work together and have a business-type relationship. Well, that may be the way the Conservatives view the world, that there's acrimony and tension between the two of them, but that's not how we see it.
Let's start with landlords. All of us have met with landlords in our riding offices and have attended meetings with them. They are a key part of the economy. Not only do they provide shelter for individuals, but they provide jobs, and many of them, especially the smaller ones, are involved in other aspects of the community and bring a tremendous amount to the table. Are there bad landlords? Of course there are bad landlords. Everyone in this Legislature knows that.
Let's switch to the other side in terms of tenants. What is a tenant doing? A tenant is purchasing one of life's necessities: shelter. We as a society and as a government -- as I say, I was a little bit concerned by Mr. Miller's comments, but I think most of his party would agree that purchasing shelter, one of life's basic necessities, is something that requires some regulation by the government. Since the mid- to late 1970s, we've seen a situation where government has regulated that relationship between the tenant and the landlord, not because one is necessarily bad or not because there's always going to be a need, but because when we're talking about something as basic as shelter, we feel that we need to offer tenants protection and we need to offer landlords some guidelines and some protection so there is a properly flowing relationship between them.
It's the key balance that we're always trying to find through legislation. There have been various pieces of legislation passed on this since the mid-1970s. I'd remind my friends on the Conservative benches that despite the right-wing rhetoric of Mr. Harris, he never came in and got rid of rent controls. He fooled around with them. He brought forward changes that perhaps were not in the best interests of tenants, but he didn't move to get rid of rent controls, because he recognized that when we're talking about a basic necessity of life, we need to have some regulation.
So what have we done? We sat down, after much consultation -- and I began tonight speaking of the many meetings that were held -- and we've tried to come up with a package of reforms that is balanced, a package of reforms that is going to enhance the relationship between tenants and landlords, that recognizes that there are, unfortunately, bad landlords and also that there are, unfortunately, bad tenants.
What does the bill contain? Let's spend a moment. What does it do for landlords? Let's look at some of the benefits that this bill will bring in for landlords. As I said, it's wrong to characterize this as a relationship of great hate or acrimony between them. We're trying to strengthen the balance on both sides. First of all, how many of us have not had a landlord, especially a small landlord, come to our office and tell us of the problems they're having with a tenant who has caused damage, where there's a need for eviction but it has become mired in red tape? Under the proposed legislation, there would be a faster eviction process for tenants who cause deliberate damage. The new act would allow landlords to quickly evict tenants who cause deliberate damage to their unit or to the apartment building. The act would also speed up the eviction of a tenant who impairs the landlord's reasonable enjoyment of his own home. Again, Mr. Dunlop stood up tonight in criticizing the act and said that one of the things he finds is that landlords, especially small landlords, can't easily evict a tenant. Well, here is the first part of the bill, which addresses that concern directly.
Second, we have allowed for market rent on vacant units. In this atmosphere and climate of high vacancy rates, when rents are stable and, in some communities, even going down, this allows landlords, when a tenant leaves, to go out and market the unit as they see fit.
We have an exemption for units built after 1991. One of the concerns that has always been raised is how we are going to have a new supply of rental property in this province if people are concerned about some of the regulations, so this says, "Look, we're going to have this regulation in place, but if you want to build a new unit, you're going to have an incentive to carry on."
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Fair interest on rent deposits -- another concern that's raised with me by landlords all the time -- as well as lower fees: The new act would help, in particular small landlords, by reducing the fees they have to pay to bring a case before the Landlord and Tenant Board.
Then there's the flip side: the tenants. What does this do for tenants? First of all, as so many of the members have pointed out tonight, one of the concerns that's constantly raised by tenants is the maintenance of the building. This proposed act would allow tenants in buildings with serious maintenance problems to apply for a freeze on rent increases. This means the landlord would not be allowed to charge any rent increase until the serious maintenance problem is fixed, which I think is fair. It's not picking on a good landlord; it's picking on the type of landlord who allows some of the decay and deterioration in buildings, which is unacceptable.
We have a fair annual rent increase guideline. When you look at the formula to increase rents in the province right now, it's very complicated. I've heard complaints about it from both landlords and tenants. So we are going to base the guideline on the Ontario consumer price index, which allows tenants and landlords some fairness and transparency in understanding how their rents are going to go up.
We have new rules for above-guideline increases that involve utilities. Tenants who get a rent increase right now due to utilities do not receive a reduction in rent if there's a decrease in the cost of utilities for the building. It's a question of fairness. If things go up, the rent goes up; if they go down, the rent should go down. Under the new act, if passed, those tenants would receive rent reductions when utility costs decrease.
We have new rules for above-guideline increases when it comes to capital expenditures. Currently, landlords can apply for approval of a rent increase higher than the guideline to cover the cost of capital expenditures for a building, but similar to the case in terms of utilities, once that capital expenditure is paid off, you don't see a subsequent decrease in the rent. This corrects it. Again, it's an attempt at fairness. This is not something that's aimed at good landlords; it's something that brings fairness to the system.
Finally, we eliminate an unfair eviction process by increasing some of the tenants' rights. Right now, they are automatically evicted if a tenant does not respond within five days to an eviction application filed by a landlord. That doesn't mean there aren't cases where a tenant should be evicted; there are bad tenants. But it also means we have to bring a little bit of fairness to the system. Under the new act, there would be no more automatic evictions. Every tenant facing eviction would have access to a hearing at the Landlord and Tenant Board. Adjudicators would have to consider the circumstances that led to non-payment of rent and could decide to deny or delay the action, or the adjudicator could decide to proceed with eviction. Again, it's about fairness.
I think that when you look at Bill 109, you have to take a step back. You have to take a look at a system, a situation, this business relationship between a landlord and tenant that all of us -- I think all three parties, for the most part -- have decided philosophically needs to be regulated. We're talking about someone's shelter. We're talking about where someone is going to live, one of the basic necessities of life. We recognize this business relationship. Because there is this unique business relationship, we've recognized that there are responsibilities on the side of the landlord and that there are also responsibilities on the side of the tenant.
We're in a situation where rents are not going through the roof; in fact they've remained quite stable. The market supply is quite large in most communities. So when we sit down at the table with the landlords and tenants, our discussions aren't necessarily about rent increases. Our discussions are about this relationship, about fairness on both sides so that a tenant can live in a rental accommodation without being harassed by the landlord, and at the same time, a tenant has to respect the accommodation they live in and make sure that the landlord maintains his side or that the business relationship between the tenant and the landlord is maintained.
This is about balance. This is reflecting the reality of the market. That's why I believe Bill 109 reflects the principles of fairness and equity, which I think all parties in this House agree with, which is why I'll be supporting the bill.
The Acting Speaker: Questions and comments?
Mr. Arnott: Tonight we've heard a number of the government members offer their stout defence of the government's Bill 109 and the government's policy on rent controls, but what we haven't heard from any of them so far is an explanation as to why it took more than a year for the government to bring forward this legislation. In the Liberal Party platform, in 2003, there was a promise -- I'll quote from the Liberal Party platform from that election campaign -- "In our first year of government, we will repeal the misnamed Tenant Protection Act and replace it with an effective tenant protection law." The commitment was to do it in the first year.
I would like to hear, in the response by the member for Kitchener Centre, if he would please acknowledge to the House that the government broke this promise, and if he would explain why it took almost three years for the government to bring forward this legislation. We'd appreciate hearing that.
Ms. Martel: I listened to the comments made by the member from Kitchener Centre. I want to go back to the theme I have been emphasizing and reinforcing this evening, as much as people don't want to hear it, and that theme has to do with the promise that was very clearly made to tenants in Ontario by the Premier during the last election campaign, when he was the leader of the Liberal opposition. The promise was very clear indeed, that a McGuinty Liberal government would get rid of vacancy decontrol because it allows unlimited rent increases on a unit when a tenant leaves. I believe that. I believe that Mr. McGuinty believed it when he said it. The question is, what has happened since then, in the intervening three years, that would cause the leader of the Liberal Party, the now Premier, and many of his colleagues who ran on this particular platform, to make a decision to break this promise?
I think vacancy decontrol is a serious issue in the province of Ontario. I think it puts in place, regrettably, an incentive for some landlords to do whatever they can to force an eviction so that they can increase the rent on a particular unit. I tried very hard to describe this evening the very negative situation that far too many tenants are already finding themselves in in the province in terms of their ability to find affordable housing, in terms of their ability to use their income to keep a roof over their head. I think that for far too many tenants in the province, that situation is very unpredictable and very precarious.
The question remains: A very clear promise was made and it is being broken. The situation for tenants hasn't changed; it hasn't gotten any better. Why is the government not moving to keep their promise to end vacancy decontrol like they promised in the last election?
Mr. Dave Levac (Brant): The member from Kitchener Centre presents us with a very balanced and articulate dissertation about the bill, because he's read it and found out that there actually are the points that he's made. So I compliment and thank him for that.
The member from Waterloo-Wellington offers us a challenge. It's a very simple one and I'll give him a very simple answer. We've had to correct so much stuff the previous government left us with, and particularly a deficit so huge we had to change the direction of one of the things we wanted to do, that he should have been standing in his place and using the other half of the time he had to say, "But at least they're getting it done."
There's an acknowledgement across the board, which each and every one of the parties is saying, that we're putting that balance -- the pendulum that had swung one way, swung the other way, and now we're finding the middle pendulum that the member from Kitchener Centre is clearly articulating, and he's making a very good case.
One point I wanted to bring up that I don't think anyone has mentioned tonight is improvements. One of the things that is a rather unique change altogether in this is that when somebody puts in changes to an apartment, they used to be able to raise the rents forever. Do you know what we've done now? You put the improvements in, and when you pay for those improvements from the people who are paying the rent -- guess what? -- the rent has to come back down. I think that's an intelligent thing to do. So all that money you've captured from the people who are paying rent doesn't stay up there forever, because you've paid for it. It's got to come back down. If you put more money back into the apartment, you get to raise the rent. But once that's been paid for, you've got to bring that rent back down again. It gives the landlords an opportunity to recoup their money, but then it gives the tenant the ability to put the money back down where they should be in the first place.
I want to thank the member for being very articulate, straightforward and balanced, and I want to challenge the other members to do the same.
Hon. Mr. Bradley: I too found the speech by the member to be extremely poignant. It certainly captured the essence of the bill and explained that what we have here is a balanced approach. I think that in the long term this has a lot of positive effects for the reasons that have been mentioned by various other members.
No matter where someone is residing, whether they happen to be in a residence that is owned or a residence that is rented, I want to remind them that tomorrow the census form is to be filled out. It's the federal government that undertakes this operation. May 16 is the date that the census material is to be filled out and mailed in. Some people may have forgotten that deadline, so I just wanted to make that known, whether they happen to be in a rental property or a non-rental property.
I want to say that the consultations that went on are never easy. One of the reasons, in fact the major reason, for the length of time it has taken to bring forward this bill is that there was very extensive consultation. It's hard to develop a consensus on legislation of this kind because one particular person is going to have an entirely different view from another, if one happens to be a landlord or a tenant. But that isn't always the case. What we found in our consultations was that moderate, reasonable tenants were looking for the government to protect them from what they felt was unfair and unscrupulous activity on the part of a landlord. Landlords, on the other hand, were looking to be treated fairly as well. They wanted to see that the rent was paid appropriately, that there wasn't damage to the apartment, and that their investment could be realized as they had hoped. I think this bill has achieved that.
The Acting Speaker: The member from Kitchener Centre has two minutes to respond.
Mr. Milloy: I want to thank all the members who commented on my speech, especially the Minister of Tourism. If I can put on my hat as parliamentary assistant for intergovernmental affairs, I think you did a great service to our friends in Ottawa, the federal government. We appreciate that tonight.
I was particularly interested in the points that were raised by my friend from Waterloo-Wellington, who said that it took us three years to bring forward this bill. Considering the fact that we've only been in power for two and a half, he was obviously very optimistic for us when he was sitting in government.
The simple fact of the matter is that we undertook some very extensive consultation. I have some statistics here: 1,200 phone inquiries, 5,000 completed questionnaires, 250 written submissions, 10 town hall meetings; some were held in Toronto, in my hometown of Kitchener, and in London, Ottawa, Thunder Bay, Sudbury, Kingston and Hamilton. Over 1,500 people were noted to be in attendance in these meetings. In addition, 30 meetings were held with regional stakeholder groups across the province.
The other thing that concerned me about the comments from member from Waterloo-Wellington is that he did nothing to clarify his party's position on the issue of rent control, the issue of making sure that there's a limit in terms of the increases that a landlord can put forward. As I pointed out in my speech, the member from Simcoe North stood here in the House, proud as anything, to tell us all that a Conservative government had brought in rent control, and this was something that was great news, and great news for his party, and then his colleague from Parry Sound-Muskoka stood up and said it was a big mistake.
I think all of us are going to be looking forward to some clarification on that in the next election. I'm looking forward to Mr. Tory and others going out and telling renters across this province that it's going to be a field day, that there will be no regulation, the type of regulation, and balanced regulation, which at least we on this side of the House support.
The Acting Speaker: It being well after 9:30 of the clock, this House stands adjourned until tomorrow at 1:30.
The House adjourned at 2135.