POLITICAL OVERVIEWOF HOUSINGFOR 2014–2018

CORPIQREMEMBERS

In a May 2015 story by TVA, showing a shock-video filmed by CORPIQ and calling on the government to enact a law allowing security deposits, the journalist asserted that “Minister Moreau is now talking about creating a law this fall.” Pierre Moreau added, “We will have to see whether there would be adverse effects on people with a low income.” Two months later, his political attaché confirmed their receptivity: “We are not excluding any avenue that could improve the efficiency of the Régie du logement. However, we still have to be careful to make sure there’s a balance between the rights of tenants and of property owners.” In a letter dated October 2015, Minister Moreau responded to CORPIQ’s petition submitted to the National Assembly, saying, “It is my duty to listen to any proposal designed to improve the legislation on residential renting, be it proposed by tenants or landlords.” In 2016, his successor, Martin Coiteux, also said he would study the issue of security deposits: “Of course I will consider it, but I will look at all the aspects.”

The same was said by the third minister to head the rental board, Lise Thériault, at the end of the Liberal mandate: “I will have to take the time to come to an opinion. Would the deposit lead to fewer cases before the Régie? Honestly, I’m not there yet; I haven’t been in this position long enough to know the answer.”

In 2015, Blainville MNA Mario Laframboise agreed to submit to the National Assembly the CORPIQ petition with 12,483 signatures demanding a law to allow security deposits. “We are the only province in Canada that doesn’t have security deposits. (…) The Government has done nothing about it, absolutely nothing.”

The PQ is against allowing security deposits as it thinks low-in-come tenants wouldn’t be able to make a payment in advance. The MNA for Marie-Victorin, Catherine Fournier, says she is concerned by the state apartments are left in by tenants. The PQ seems open to the idea of security deposits, but is still afraid low-income tenants wouldn’t be able to pay the deposit up front, so the party’s official position is against.

The QS is against allowing security deposits since it fears low-income tenants would not be able to pay the deposit.

Member for Blainville, Mario Laframboise (CAQ), submitting the CORPIQ petition in September 2015

SECURITY DEPOSIT WHEN SIGNING A LEASE

MARIO

LAFRAMBOISE

Since the Government refused all CORPIQ’s requests to change the Regulation respecting the criteria for the fixing of rent, the time it takes to amortize major expenses (renovations) has continued to rise, going from 38 to 42 years between 2014 and 2018. Property owners’ indexation of net income from rent has also deteriorated, from 0.6% to 0.4%, much like the indexation of management fees, which has not kept up with inflation.

Minister Martin Coiteux stated in 2017 that “we must avoid raising rent quickly in significant chunks, since that would put vulnerable households at risk. We are also attentive to tenants’ needs.” In an interview with CORPIQ in April 2018, housing minister Lise Thériault said that “the rent-setting criteria should be reviewed, like everything else.”

Further, after the rental board decided in January 2017 to stop publishing fictional rent-adjustment scenarios (a long-standing request from CORPIQ), Minister Coiteux reversed the decision, ordering them to be published once again.

The PQ fought for a lease register that would help control rent prices. It also called for (and received from the Government) the return of the Régie’s press release containing fictional scenarios of rent-adjustment rates.

PQ housing spokesperson Catherine Fournier put the following to Minister Coiteux in April 2017: “We’re talking about approximately 40 years to amortize major work, while this took about eight years in the 80s. So we can easily understand that property owners don’t have many incentives to do significant renovations on their buildings, which may be deemed unsanitary or dilapidated in some cases. (…) Do you have a specific deadline in mind? Are these just some vague wishes or is there an actual plan?”

In an interview with CORPIQ, Minister Mario Laframboise, the CAQ housing spokesperson, explained that building owners must be allowed to recover their investment in the time that their mortgage lasts (in 25 years rather than the 40 resulting from the rent-setting criteria), or the Government should provide a program to help pay for renovations.

The QS also wants a lease register, to slow the general hike in rent prices.

Parti Québécois housing spokesperson in 2017, Catherine Fournier

RENT-FIXING CRITERIA

CATHERINE

FOURNIER

Yet during the current Liberal mandate (2014–2018), the four main political parties took more or less diverging positions on housing issues.

Of course, it’s easier when sitting with the opposition to criticize and politically exploit every misstep by a government forced to make sometimes wrenching decisions. The opposition parties also make mistakes, but they don’t have to suffer the consequences, until it comes time for electors to vote.

CORPIQ has prepared a summary of what the Government has done (and not done) and what the politicians have said over the past four years. It does not include their promises for the current election campaign. The goal of this summary is to give rental property owners food for thought in preparation for the October 1st polls.

After having formed the provincial government from 2003 to 2012, the Liberal Party took back power in the National Assembly on April 7, 2014, with a majority (70 out of 125 Members). Several days earlier, at the second live-televised leaders’ debate, the head of Québec Solidaire, Françoise David, challenged the leaders of the Liberal Party, the Parti Québécois and the Coalition Avenir Québec to prohibit landlords from repossessing an apartment occupied by a senior. Without thinking more than a few seconds, Philippe Couillard, Pauline Marois and François Legault all promised to do it. Their unanimous response led to the adoption of Bill 492 in 2016, sacrificing rental property owners and their historic property rights in order to gain political support from other electors: tenants and seniors.

QUEBEC LIBERAL PARTY FORMING THE GOVERNMENT FROM 2014–2018

PARTI QUÉBÉCOIS

COALITION AVENIR QUÉBEC

QUÉBEC SOLIDAIRE

The Quebec Government decided to prohibit cannabis cultivation in homes. In response to a request from CORPIQ, it also amended Bill 157 to allow property owners to add a clause to their leases, prohibiting cannabis consumption other than for medical reasons. However, Minister Lucie Charlebois refused to compel tenants to present medical proof to oppose lease modifications. This will force some owners to plead their case before the Régie du logement.

The CAQ asked the Government to require tenants who refuse the lease modification to show their medical certificate authorizing the use of medical cannabis.

The PQ supports cannabis cultivation in homes, including in rentalunits.

Minister of Public Health, Lucie Charlebois

LEGALIZATION OF CANNABIS

LUCIE

CHARLEBOIS

Despite the damning reports from the Québec Ombudsman and the Auditor General, and several campaigns by CORPIQ, the Government did not adopt any legal measures to improve the processing delays at the rental board. In 2015, Minister Pierre Moreau said he would study the possibility of requiring a tenant to deposit the rent owed with the Régie du logement before being allowed to request a revocation of judgement. In addition, in 2016, the Government told the head of the Régie that the legislative agenda was too full to attempt changing the law.

On the administrative side, a measure was taken in 2014 to appoint and authorize special court clerks (the number of whom rose from four to eight) to hear uncontested cases regarding unpaid rent. Further, a dozen commissioners were appointed between 2014 and 2018 and as many retired.

During the Liberal mandate, wait times for a first hearing have gotten even longer for unpaid rent and rent setting, but have gotten shorter for urgent and general cases. The total wait time for processing (from submission to ruling) went from 7.0 to 8.4 months. The percentage of pending cases compared to new requests dropped slightly (53% in 2015 compared to 47% in 2018), but is still very high compared to 20 years ago (22%). The rental board’s annual budget has remained stable over the past four years, at $22 million.

• Giving commissioners specializations by case type

• Holding remote hearings via technological means (videoconferencing)

• Recognizing the use of technological means to notify defendants of a request submitted to the Régie

• Increasing the power of special clerks, to allow them to hear uncontested general cases

• Offering parties the opportunity to participate in free mediation sessions to settle cases out of court

• Requiring certain supporting documents (evidence) to be sent before a hearing date is assigned, to

reduce delays and postponements

• Holding preparatory meetings between parties to better plan the hearing

• Requiring all parties in a trial to provide their change of address, without which the absent party cannot

request a revocation of judgement

• Giving the court the possibility of ordering parties who use delay tactics (to extend the proceedings) to

pay damages to the other party who is adversely affected

Housing spokesperson Catherine Fournier responded to Minister Martin Coiteux in the parliamentary commission in April 2017: “Think of all the time and money being lost. Think of the stress felt by owners, who often have to go without rent payments for several months while waiting for their case to be heard. And when it’s settled, it’s rare that owners receive full reparations. Think, as well, of the stress experienced by tenants stuck in unsanitary lodging.”

Her predecessor, MNA Carole Poirier, denounced the fact that unpaid rent cases took priority over tenant complaints of unsanitary premises. Ms. Poirier also made a public statement in Bas-Saint-Laurent, decrying the loss of services at the rental board’s regional offices.

At the end of its mandate, the Government announced that a bill would be tabled in May, but Bill 401 was only presented by Minister Lise Thériault on June 12, 2018. The bill was dead in the water given that the Legislature closed three days later. The bill contained the following legislative measures:

During the parliamentary commission in April 2017, the CAQ spokesperson for housing, MNA Mario Laframboise, addressed the Minister to criticize the wait times at the Régie: “The system is sick. (…) You’re gathering information when we’ve been hearing the same talk since 2014, the same exact thing, and nothing has been done.”

According to the QS, the rental board wait times benefit property owners more than tenants. The party called for a plan to balance the interests of both.

Pierre Moreau, minister of Municipal Affairs and Land Occupancy, responsible of the Régie du logement in 2014-2015.

WAIT TIMES AT THE RÉGIE DU LOGEMENT

PIERRE

MOREAU

QS MNA Françoise David had tabled this private bill giving senior tenants the “lifelong” right to occupation by restricting owners’ right to repossess a unit.

Since 2016, Section 1959.1 of the Civil Code of Québec has prohibited rental building owners from repossessing the apartment of a tenant aged 70 or over who has lived there for 10 years or more, even if the goal of the repossession is to house the owner’s own family (unless the owner is also 70 years old or more).

Note: A prior setback in owners’ rights occurred in 2011, when the termination notice required from certain tenants under lease went from three to two months. This law was put forward by Liberal Minister Marguerite Blais, who ran as a CAQ candidate in the current elections.

The MNA representing the PQ on Bill 492, Carole Poirier, wanted to restrict owners’ right to repossession even further. She said it’s “inadmissible” that a 70-year-old owner could repossess an apartment from a 70-year-old tenant. “We are here to protect tenants’ rights; we’ve never mentioned protecting owners’ rights… never.”

Bill 492 was supported by favourable votes from 109 MNAs, from all the parties. There were four abstentions, all from the CAQ: Mario Laframboise (Blainville), Sébastien Schneeberger (Drummond—Bois-Francs), Diane Laval-lée (Repentigny) and André Spénard (Beauce-Nord). Mario Laframboise stated in an interview with CORPIQ, “What’s wrong with Bill 492 is that this is the first time owners’ right to property has been taken away. I suspect that Québec Solidaire is quite pleased to see this right weakened. I can tell you that if Coalition Avenir Québec comes into power, there will be no such weakening. The right to property is sacred.”

First, Minister of Municipal Affairs and Land Occupancy Pierre Moreau stated during the consultations on Bill 492 in 2015 that he was afraid seniors would have a harder time renting an apartment. “I would be extremely upset to have been party to a parliamentary commission that settled on a legal solution causing a worse outcome than the current situation.”

Several months later, his successor, Martin Coiteux, secretly coordinated with Québec Solidaire to pass Bill 492. On June 2, 2016, Members were suddenly summoned to a parliamentary commission. They adopted a completely new version of Bill 492 that no one had seen coming and that was just as unacceptable for owners. “I think we’ve found an acceptable balance. We have different political backgrounds but we’re able to work together, and I think that Quebecers who see this kind of outcome have reason to celebrate.” Coiteux is one of the only ministers to have refused to meet with CORPIQ in the past 25 years.

Centre, MNA Françoise David (QS), author of Private Bill 492, and Minister Martin Coiteux, who supported her billand enabled its adoption. They are accompanied by Minister Francine Charbonneau, responsible forseniors, and MNA Manon Massé (QS).

MNA Carole Poirier (PQ) was disappointed that Bill 492 didn’t go further in restrictingowners’ right to repossession.

BILL 492 RESTRICTING REPOSSESSION

CAROLE

POIRIER

ACT R-20 AND VOLUNTEER WORK

In fall 2017, the Government relaxed Act R-20 in reaction to the uproar caused when a rural school was threatened with a fine for having parent volunteers paint the school. This law requires that workers with a competency certificate be hired and paid hourly at the rate set by the CCQ (Commission de la construction du Québec). CORPIQ made it possible for the owners of 270,000 duplexes and triplexes to benefit from the exemption to Act R-20 as well. Then, under pressure from unions and contractors, the Government backtracked somewhat, and made the option for owners to do renovations themselves available only to those living in their rental building. This means that one-half of all owners cannot take advantage of the relaxation of the law. Owners living in a quadriplex, however, are also exempt.

NOUVEAU FORMULAIRE DE BAIL

In 2014, the newly elected Liberal Government upheld and adopted the planned changes that benefit tenants, without considering the requests from rental building owners (CORPIQ). It also eliminated the electronic version of the lease, but nevertheless allows private companies the option of creating one if they purchase an expensive license.

Redesigning the lease form to focus more on tenants’ rights (including section G, which requires owners to declare the last rent price) was spearheaded under the Parti Québecois Government in 2013.

NEW LEASE FORM

HOUSING MINISTER POSITION

In October 2017, the Government created the position of Minister responsible for Consumer Protection and for Housing, now held by Lise Thériault. This responsibility used to belong to the municipal affairs minister, who was also responsible for public security. This appointment led to faster processing of certain files and to better communication between the government and housing organizations and associations. In an interview in spring 2018, the Minister stated she hadn’t had time to accomplish what she would have liked to.

LISE

THÉRIAULT

Minister responsible for Housing, Lise Thériault

On June 12, the housing minister presented Bill 401, which aims to reform the right to co-ownership and the operations of the Régie du logement, but it was too late in the session to be adopted. Apart from the second purpose (discussed above in the “Wait times at the Régie du logement” section), Bill 401 intended to require that all co-owned buildings (condos) be entered into a regularly reviewed maintenance book and that the co-owners’ contribution to the contingency fund be set based on a study. It also intended to control building inspectors’ duties and to require buyers to have a building inspected before purchase. Bill 401 was presented three days before the parliamentary session adjourned.

BILL 401 TABLED

In 2017, Minister Martin Coiteux gave more power to municipalities to clamp down on owners.

In 2017, the Government gave municipalities greater power in the housing realm through bills 121 and 122. Cities with a housing code can now expropriate buildings they judge dilapidated. However, the Government failed to recognize that the current rent-setting criteria discourage owners from maintaining rental buildings, although CORPIQ raised the issue at a parliamentary commission.

The Government also gave the City of Montréal the power to manage the public budget for social housing. Notably, the city can oblige real estate developers to include a certain percentage of affordable units in their new projects, thus funding housing assistance with private funds.

Invoking the constitutional right of ownership, the CAQ succeeded in amending the bill to limit the expropriation of a building by a city to cases where the state of the building presents risks to people’s health and safety. CORPIQ had presented this clarification in a brief read before the parliamentary commission because it thought some buildings (some of them unoccupied) might be expropriated solely because the City found them outdated and wanted the space for itself.

MUNICIPAL POWERS

MARTIN

COITEUX

The PQ stressed the importance of “forcing owners to take care of their deteriorating buildings.” It finally accepted the amendment to make expropriation conditional on health and safety issues. However, the PQ succeeded in linking this reason for expropriation to the safety of the public at large, not only that of the occupants.

In each of its five yearly budgets, the Government announced its expenses for building 12,000 social housing units (3,000, 1,500, 1,500, 3,000, then 3,000 units). When the Government briefly cut the number of budgeted units to 1,500, it redirected part of the saved money to 5,800 new grants, over five years, through Supplément au loyer (tenants spend 25% of their income on rent, and the municipal housing office pays the difference directly to the building owner). The Liberal Government has said it wanted to do three things in this area: build affordable social housing units to support an aging population, use the Supplément au loyer program in the private market when there aren’t any lots available, and encourage access to ownership.

The PQ called for reinvesting in building social housing (AccèsLogis) and relaxing eligibility criteria so more projects could take advantage of the program.

The housing assistance budget is mainly shared between two programs. The first, AccèsLogis, builds social housing (average production cost of approximately $200,000 per unit: 50% funded by the government, 35% by the developer and 15% by the municipality). The second, Supplément au loyer, provides personal grants to low-income households, including those in apartments on the private market.

The CAQ does not oppose the AccèsLogis program, but it did question the Government on the pertinence of building social housing in cities with a high vacancy rate, when the Supplément au loyer program could meet the needs of low-income families. “All new policies must include the private sector,” stated MNA Mario Laframboise in a 2016 interview. “Excluding the private sector is an approach that’s destined to fail.”

The QS called for added funding to the AccèsLogis program to build 50,000 affordable units over five years.

SOCIAL HOUSING

TOURIST ACCOMMODATION (AIRBNB)

After CORPIQ’s unswerving effort, Bill 67 came into effect in April 2016. This law prohibits renting a residence for 31 or fewer days on a regular basis, without certification from Tourisme Québec. Tenants can only receive this certificate if their lease allows this type of rental. Minister Dominique Vien did not, however, clarify the meaning of “on a regular basis,” thus leaving a fuzzy legal question over the definition of tourist accommodation. Further, the new law presumes that any building owner who receives a notice of offense is guilty, unless the owner can prove he or she attempted to stop the tenant from running a tourist activity without permission. For two years, though, violators have had no trouble at all: there have been very few inves-tigators, and no prosecutions. At the same time, the Government has come to an agreement with Airbnb to receive a tax on stays.

The CAQ voted in favour of Bill 67, yet qualified its support by adding that it is “too easy to catch the owner, who is not responsible for the activities that may have taken place in his or her building.”

The PQ voted in favour of Bill 67, but questioned the Government on the means available for landlords to defend themsel-ves from being charged for an activity done by a tenant.

While denouncing the loss of apartments for residential use, Québec Solidaire suggested another bill that would not require a certificate for primary residences being rented for fewer than 61 days (rather than the maximum 31 days in the law). In cases where a certificate would be required, only one per person would be issued.

Dominic Vien, minister of Tourism in 2015.

DOMINIQUE

VIEN

RENOVATION PROGRAM FOR RENTAL BUILDING OWNERS

The Minister of Finance, Carlos Leitao, never responded to CORPIQ’s request to expand the Réno-Vert renovation program (tax credit) to include apartment buildings. However, in the 2018–2023 Energy Transition, Innovation and Efficiency Master Plan, presented this spring, the Government wrote that the program offering would be improved and would include new components, particularly in the rental sector.

The Government refused CORPIQ’s request for a grant to help fight bedbugs, which in CORPIQ’s opinion is a public health issue that goes beyond housing. According to the Minister of Public Health, “it is not the MSSS’s job to give grants to landlords to pay for extermination during bedbug infestations. Building owners are required to provide an apartment that is livable and in good condition throughout the duration of the lease.”

BEDBUGS

After CORPIQ quickly intervened during the flooding of spring 2017, the Government expanded its compensation program for disaster victims to include rented dwellings. Only occupying owners could benefit from the program before the change.

RESTITUTION TO OWNERS AFTER FLOODING

The Government relaxed the Real estate brokerage act this past June. It is now permitted to act as an intermediary in a real estate contract for renting (for example, a real estate management company managing a unit’s lease), without requiring a broker’s license.

LAW ON REAL ESTATE BROKERAGE

The QS reiterated its desire to eliminate the 50% exemption on capital gains.

TAX ON CAPITAL GAIN

Minister Pierre Moreau had to respond twice in 2015 to petitions submitted to the National Assembly by animal-defense groups. The petitions called for forcing property owners to allow pets in all their leases. “I would like to stress again that the contractual freedom between a landlord and a tenant takes precedence. The owner has the right to decide whether animals are allowed, based on the specific characteristics of the building and the environment.”

LEASE CLAUSE ON PETS

Note : The political party denotes the allegiance of the Member or government mentioned. In some cases, the party itself has not officially expressed its position on the issue.

Note: Such a significant drop in school taxes has to be compensated for by another source of funding for school boards. When tenants end up paying less for school taxes in their rent, the fiscal load will be shifted elsewhere. The Government will have to take that difference from income tax and its revenue from Quebec sales tax. Thus, rental building owners, who typically have higher incomes and buy more goods and services than tenants do, will find themselves indirectly paying more to fund education.

Through the adoption of its Bill 166 in March 2018, the Liberal Government levelled down the school tax for all the school boards in each region, and implemented a tax exemption on a $25,000 tranche of a property’s value. Property owners will save $670 million this year. Owners in Greater Montréal, however, won’t see a significant reduction since the tax rates for the school boards were already standardized.

Coalition Avenir Québec suggested setting a single school tax for the entire province that would be lower than the amount stated in Bill 166. Owners would have garnered $1.3 billion in savings.

The Parti Québécois would rather have seen more money invested in education than lower school taxes.

SCHOOL TAX REFORM