HST letter to Finance Minister
The Honourable Dwight Duncan
May 21, 2009
The Federation of Metro Tenants' Associations has been a voice for tenants for over thirty five years. We wish to express some views on the Harmonized Sales Tax as it affects tenants.
We are writing to express our concern regarding the application of the new Harmonized Sales Tax (HST) to residential landlords' expenses. This is a decision that will negatively impact rents, at a time when many tenants are already struggling.
The Federation of Rental-Housing Providers of Ontario (FRPO), a landlords' lobby group, has announced that the HST will lead to an increase in rents of 2.5% to 3%. We do not agree with their numbers. However, FRPO is correct that Ontario law will allow landlords to download some of their HST costs onto tenants. Section 126(1) of the Residential Tenancies Act, 2006 allows a landlord to raise tenants' rents when it experiences an extraordinary increase in utility costs. Some landlords will likely use this provision to ensure that their tax burden falls on their tenants, who are much less able to pay it.
We also point out that an increasing number of tenants are paying utility costs directly. Tenants are lower income Ontarions, and this will add to their housing costs.
Tenants in Ontario rely on stable rents as a matter of housing security. Any rise in rents will have a harsh impact on struggling families, and will result in an increase in the eviction rate in the province. Even if landlords are not able to pass their HST costs on to tenants, they can still raise rents when tenants move out, resulting in higher rents for anyone who moves to a new apartment.
For these reasons, the Federation of Metro Tenants' Associations supports FRPO's call for exempting rental housing providers from the HST. We also call for an exemption for utility costs when paid directly by tenants. We would be happy to discuss the issue with you further.
Outreach and Organizing Co-Ordinator
Federation of Metro Tenants' Associations
Cc: The Honourable Jim Watson, Minister of Housing
Cc: The Honourable Bob Runciman, Leader of the Opposition
Cc: Andrea Horwath, Leader of the NDP
Cc: Vince Brescia, Federation of Rental Housing Providers Ontario