2003 Guideline anounced and denounced

Friday, August 30, 2002, For Immediate Release

"Tenants will not be fooled by the lower rent increase guideline," the Federation of Metro Tenants' Associations said this morning. The Federation is the oldest and largest Tenant Organization in Toronto and in Canada.

The Ministry of Municipal Affairs and Housing is set to announce a 2003 rent increase guideline of 2.9% according to a published report. The figure is lower than last year's guideline of 3.9%, but still higher than the inflation rate which is running at 2.1% for the month of July according to Statistics Canada.

The rent increase guideline is the amount a may annually raise the rent without making an application to the government.

"This is another blow for tenants" said Dan McIntyre, a tenant organizer at the FMTA. "At the end of the day, a rent increase is a rent increase. For working people and those on fixed incomes this announcement simply means they will lose more money."

The average wage increase as reported by Statistics Canada in May is 2.1%, just keeping pace with inflation, but still below the 2.9% guideline to be announced today. Seniors are particularly hard hit. Pensions are already $6500 below the poverty line for the City of Toronto. Increases in the cost of living further deteriorate those meager incomes. There are approximately 185,000 seniors living in rental housing in the city, with almost half paying an average of 58% of their income on rent according to 1996 figures.

Rents in Toronto have increase by about 30% since 1995, the majority of that increase coming after the Conservative government introduced its landlord/tenant legislation, the Tenant Protection Act, in 1998.

The 2002 guideline generated a significant controversy after jumping to 3.9% from 2.9% the previous year. The reason for the increase was a short term spike in the price of natural gas, which raised heating costs in the winter of 2000-2001. Landlords were permitted the extra increase to cover this short-term expense. However, Toronto landlords applied for additional increases beyond the guideline on over 97,000 apartment units, pushing the total rent increase above 10% for many tenants. And since rent increases are permanent, tenants who fully paid for their landlord's heating bill in 2002 will pay for it again in 2003, in 2004 and so on in perpetuity.

Natural gas prices declined 34.6% in 2002 over the previous year according to Statscan.

Residents of 1305 Wilson Avenue recently challenged landlords' ability to receive permanent rent increases for one-time costs. That case was ultimately decided in favour of landlords in a decision released this week, but not before the court ordered the provincial government to take "a second look" at that area of the Tenant Protection Act.

"The fact that the guideline is lower this year is a partial admission by the Government of what we have been saying all along, and what the court told them this week: that the law is unfair," McIntyre said. "But it will take more than fiddling with the numbers to compensate for last year's increases. If the government wants to get serious about fixing this, they must change the entire guideline calculation formula."

The FMTA is also concerned about the timing of the rent increase guideline announcement, coming at the start of the last long weekend of the summer. "It is a concern not just for tenants, but for all Ontarians that this government appears to be developing a habit of making major announcements affecting half the population at times when few people are around to hear," McIntyre said. "We saw it with the nursing home rate increases earlier this summer, and we're seeing it again today."

"There seems to be a desire on the part of the Government to dampen public awareness and discussion of the real social impact of these rent increases. All Ontario taxpayers should be concerned. How are rent hikes going to impact on homelessness and the health of seniors and poor people? There will be significant costs for everyone."